Judging by the two mail pieces I just received from my congressman, Tim Bishop, it looks like he has settled on his reelection strategy. After all, he doesn’t want to run on his record (ObamaCare, bailouts, Stimulus, trillions in deficit spending); with the demise of earmarks he can’t say he’s bringing home the bacon; since he is facing a re-match in his reelection bid, using the same smear tactics this time around will be harder; so let’s scare the bejeezus out of the seniors.

The Medicare system is going broke. Medicare consumes 10% of GDP today and is forecast to consume 15% of GDP in twenty years, that’s growth of 50%. Tim Bishop says we need to cut spending. Okay, Tim, we’re listening, what would you cut? …Tim?…Anyone out there? Nothing.

Seniors will pay more for care – Tim Bishop

Tim Bishop says seniors will pay more for care. If you are currently on medicare or are over the age of 55, nothing will change. So why is Tim Bishop lying about that? Tim Bishop voted for ObamaCare which has already taking $500 billion away from Medicare to pay for ObamaCare. Remember how they were struggling to get the cost of ObamaCare under $1 trillion? This is how they did it. What Tim Bishop, I believe, is trying to say without telling all the facts, is with regard to future generations, starting in 2021. But Tim Bishop doesn’t want to change Medicare at all and as the table below points out, Medicare will be bankrupt by 2021. So other than scaring people what is Tim’s plan?

In his mail piece Tim Bishop says that “according to the non-partisan Congressional Budget Office, a private health plan as good as Medicare will soon cost $30,000 per year.” Wow! But a little math will show how that is ridiculous. Total spending on all health care in the US runs around 16% of GDP. Total GDP for the US is about $14.6 trillion, so total health care spending comes out to about $2.33 trillion. There are 46.5 million people on Medicare. If they each paid $30,000 just for health care premiums, the premiums alone would total $1.39 trillion. So Tim Bishop wants us to believe that private health insurance premiums for seniors would cost 60% of all health care spending. It just doesn’t add up.

One of the techniques from ObamaCare to “bend the cost curve down” is to pay Medicare providers less and less. It is the same static thinking that the government can do what it wants and nobody will react to it. But in fact, here is one of the chief actuaries of Medicare testifying that 40% of service providers will stop serving Medicare patients. That means rationing and long waits. Who will decide? Not you, but a unelected panel of bureaucrats, accountable to no one.

http://www.youtube.com/watch?v=n1igPowGu6M

Seniors forced onto for-profit insurance market — Tim Bishop

Tim Bishop makes his plug for socialism by quickly pointing out “for profit” insurance companies. Horrors. Just think of all the damage those “for profit” companies have done to us.

Yes those, for profit companies have made our lives hell compared to the altruistic, benevolent government enterprises. But we all know what happens when a free market is allowed to operate. Calculators that used to cost hundreds of dollars when first introduced are now throw away items; mobile phones that hit the market at $4,000 per copy are now $39; GPS systems that used to cost thousands and require a substantial unit be installed in the trunk of your car, are now a standard feature on your phone. Costs come down, features go up, service improves. Here is the actuary Mr. Foster talking about this.

http://www.youtube.com/watch?v=Z__m5IYoJBg

The True Cost Drivers of Medicare

Despite Tim Bishop’s scare tactics that costs will continue to skyrocket, let’s look at the true drivers of Medicare costs.

• Spending other people’s money. No one is going to spend a lot of time looking int to waste, fraud, and abuse if it is not directly affecting you. But it is about $2,150 per person per year. It is not going to get someone reelected to Congress to fix it, and the individual doesn’t care. If it affects the spending power of their premium and the profits of the evil “for profit” company, you can bet it will be attacked aggressively.
• The Government keeps expanding the goods and services covered by Medicare. I have seen quite enough TV advertisements for “The Scooter Store” telling me how I can get a “free” scooter completely paid for by Medicare.
• The Prescription Drug Plan passed by President Bush had no revenue stream associated with it, so this is all deficit spending. Let drug companies compete for the seniors’ business
• Medicare overpays for many items, because it sets prices higher than the free market would. Are you listening Congressman Bishop?
• Fee for Service – this encourages providers to deliver too many services. When in doubt, add it.

Where “for profit” companies are involved they watch the bottom line. A dollar saved in fraud, waste or abuse, goes straight to the bottom line. The company can decide to either increase profits or cut premiums to grow market share. Medicare is now soviet style centralized planning where a bunch of bureaucrats set prices on 30,000 items and somehow we are to believe they are smarter than all the doctors, hospitals, drug companies, and other health care providers.

Tim Bishop wants to kick the can down the road. Instead of making a contribution and working to fix the problem, he would prefer to scare seniors into voting for him so he can continue to draw his $174,000 salary and keep a low profile. It’s time to retire Congressman.

That’s my opinion; I’d like to know yours. Please comment below.

National Debt Clock A Long Time Ago When the Debt was Only $6 Trillion

Today the House of Representatives voted on a bill HR 2650, called the Cut, Cap, and Balance bill to get the runaway debt and deficit spending under control. The bill passed the house 234-190, will all but 9 Republicans voting for it and all but 5 Democrats voting against it. Tim Bishop voted no.

I had an opportunity to watch some of the floor debate and the Democrats wasted no time in going in to scare and distort mode. Almost every Democrat who rose to speak said the bill was an attack on Medicare and protecting the rich.

Medicare

But what are the facts on Medicare?

• Medicare is in dire need of reform. Medicare is the second largest federal program and is growing at a staggering 7% a year.  Its costing taxpayers nearly $500 billion a year, with long-term liabilities in excess of $38 trillion. Medicare spending is expected to double over the next decade.
• Conservatives have a plan to save Medicare. Rep. Paul Ryan (R-Wisc.) has offered a plan, which passed the House on April 15th, that would save Medicare for current retirees and future generations without rationing or benefit cuts. The Ryan plan would inject choice and competition into the program, and thus save money by making Medicare more efficient. The plan would take effect  in 2021, and would not affect current seniors. Everyone born before 1956 could keep their current Medicare, exactly as it is.
• The Democrats’ Medicare plan is rationing and benefit cuts. Democrats vehemently oppose the Ryan plan. Instead, their plan is to cut $500 billion out of Medicare, in order to fund their massive new ObamaCare entitlement. They created a rationing board of 15 unelected bureaucrats, known as IPAB, to impose these cuts. IPAB will slash what Medicare pays doctors and hospitals to the  bone. As a result, seniors will have trouble finding a doctor who will take them. Mr. Obama’s own Medicare experts predict 15% of hospitals will go out of business.
• The Ryan plan will allow patients to choose their Medicare plan. Starting in 2021, the Ryan plan would enroll new Medicare seniors in the same kind of health care program that Members of Congress enjoy today. Seniors will be able to choose the coverage that best meets their individual needs from a list of competing high-quality health plans. Why do Democrats oppose giving seniors the same good health care Congress enjoys?

Congress gave themselves a handsome $174,000 salary. Does anyone believe they would skimp on their own healthcare? So why is it a bad idea if seniors have the same plan as Congress?

President Obama’s Plan

The Democrats also talked about Obama’s plan. What plan? As several Republican lawmakers said, “If you have a copy of that plan on paper, slide it over, we’d like to see it.” But there is no plan from the Democrats, just like there has been no budget for the last two years. They say Obama is proposing $3 in spending cuts for each $1 increase in taxes. Where have I heard that before? Ah, yes, that was the deal Tip O’Neill negotiated with Ronald Reagan. They got the tax increases, but the spending cuts never happened. Reagan was lied to. So now President Obama is playing Lucy and he wants Speaker Boehner to be Charlie Brown. No thanks. If it’s not on paper, it doesn’t exist.

Even as they tried to demonize the Republican proposal they couldn’t help themselves; they had to keep talking about the need for “investment” which to Democrats is just a code word for spending. They don’t invest anything. Investing is what the evil rich do, the Democrats job is to take it from them and give it to their backers.

The Democrats also attacked the Republicans for wanting to change the Constitution. How it would be hard to spend money in an emergency or in a time of war. Which is just another lie. There are provisions in the bill to exceed the limits with a super majority. But leaving these lifetime politicians, many of whom never held a job in the private sector, to curb their own appetites to spend their way to reelection, reminded me of budgeting in the private sector. When the business was facing tough times the word came down for everyone to cut. Inevitably people would push back and say, “everything in my budget is critical, I can’t cut anything, you’ll have to get it elsewhere.” That response was typically met as follows. “You can cut it, or I will, but it will be cut. If you cut it, you can decide how it will least impact your responsibilities, but being further removed if I cut it you probably won’t like it.” That’s how it works in the private sector and that is how it will work with the Balanced Budget Amendment. Tough choices have to be made.

In 2007 after the Bush tax cuts of 2003, the Treasury took in more tax revenue than at any time in our history. This is not a revenue problem. It is a spending problem. Congress cannot tax their way out of this and trying to do so will kill the already moribund economy. Tim Bishop, are you listening?

httpv://www.youtube.com/watch?v=NddO5yMxicw&feature=player_embedded

That’s my opinion; I’d like to know yours. Please comment below.

In article in the New York Times titled, “Squandering Medicare’s Money,” the article itemizes a number of procedures that are routinely perfomed under Medicare, but have little or no medical value. So why are they done? One reason is alluded to in the article while another is not.

The 800 pound gorilla that drives medical costs continually skyward are the personal injury lawyers. Doctors practice defensive medicine because of these lawyers since they don’t want to be sitting in a witness chair answering the question, “Well why didn’t you perform test or procedure X?” Since it wasn’t performed, no one can say what the outcome would have been. In the doctor’s learned opinion he may say that it wasn’t relevant. The lawyer will argue otherwise, but if the doctor can produce negative test results, well, there’s your proof it wasn’t relevant. So the tests get done and billed and medical costs climb.

In Texas, they are reforming the system there. The have put caps on personal injury awards, and are passing legislation that would have someone who brings a frivolous lawsuit pay the legal fees of the winner. Applications for new doctor’s licenses have risen 60% and malpractice insurance premiums have fallen 27%.

The odd thing in the article is it criticizes a number of tests that would be considered preventative. ObamaCare supporters have been pounding the drum for more preventative measures. But sometimes preventative measures are not the best idea. Having a colonoscopy when you are 85 years old, is probably going to be of little value and may actually increase the risk of infection or a perforation of the colon. But when the patient is not involved in the payment process, who cares?

Which brings up the point I make in my book, Liberty’s Lifeline, the need to eliminate third party payers. If you go to a restaurant that has an all you can eat buffet, and you know that someone else is picking up the check, do you not reach for that extra dessert? If you had to lay out the money, or at least part of it, you might question why the procedure was necessary or effective. Gee, that sounds a lot like the Ryan plan. Putting patients in charge of their health and their families, not a nameless, faceless, unaccountable panel of bureaucrats. Just imagine medical care modeled on the Department of Motor Vehicles instead of the doctor’s office that you know today. The former is ObamaCare, the latter is the Paul Ryan plan. Which do you prefer?

That’s my opinion; I’d like to know yours. Please comment below.

Maybe it’s just me. Perhaps not having lived in the rarefied air of academia or politics, I have a more roll up the sleeves, get some dirt under the fingernails approach to what a job entails. Today it seems that politicians like to get in front of the cameras, fire off a sound bite and then go do something more interesting.

President Obama puts our troops in harm’s way and then jets off to Brazil to be photographed doing the samba, and saying he wants to be first in line to buy more foreign oil, this time from Brazil. Didn’t he just say that he wants to cut our imports of foreign oil by one third? Shouldn’t we be drilling here rather than lining up new suppliers?

We have a myriad of problems that include spending, the crisis in the Middle East, North Korea, unemployment, the budget, and yet the president has found time to play sixty-one rounds of golf, at last count. Who’s minding the store?

Newly elected Delaware Senator Chris Coons got on television to lament that he is holding a job fair at his Delaware office and if the government shuts down Friday night, he won’t have any staffers to run the job fair. This is very, very bad. Er, excuse me, senator but your job is to pass a budget not to be the local employment office. Cancel the job fair, as I am sure there are plenty of government and private agencies that handle that, and get back to work doing what you were elected to do.

In a similar vein, Congressman Tim Bishop is scheduled to kick off his 2012 reelection campaign this Sunday so that he can plan on continuing to pick up his $174,000 salary for failing to pass a budget. I am sure his quick retort will be that he is in the minority and therefore powerless to move those stubborn Republicans. But it was his failure a few short months ago when he and Nancy Pelosi were in the majority to pass a budget resolution for the first time since budget resolutions became standard practice. They also failed to pass the appropriation bills to fund the government until the end of the fiscal year in October.

A cynic might look at it as a designed power play. “Look, we’re going to get clobbered in 2010, so let’s not vote on a budget or spending bills and it will be a twofer. One, we won’t be held accountable for voting for higher spending and that may save a couple of seats in November 2010; two, it will dump this mess in the Republicans lap and if we hold the Senate we can force a government shutdown and blame them like we did in 1995. Then we can coast back into power in 2012.” Of course, you would have to be a cynic to believe that, wouldn’t you? Wouldn’t you?

In the midst of the current budget crisis we hear an announcement by Harry Reid that their staffs will be working through the night, and the politicians will be back in front of the microphones tomorrow.

I worked a number of years in Information Technology, specifically in the credit card business. I can remember sitting at my desk on New Year’s Eve 1999. Perhaps the biggest New Year’s celebration of a lifetime and I was at my desk. Why? Remember the Year 2000 software bug? Well, we had to be ready to respond instantly if anying we worked endless hours to prevent slipped through. Nothing did and around 3AM or so, we started to head home. On the day after Thanksgiving, known as Black Friday, in the retail world it was “all hands on deck” to make sure that things worked and if there were any hiccups, we were on top of them immediately. Although I was a VP, I was there on the floor with the first line folks. The same went for any major software releases. If a critical decision had to be made we were there to make them. That’s the way it was done. We didn’t make pronouncements and go play golf. We were there onsite. But that is in the private sector, where things like profits and losses matter, accountability is real, and lifetime employment is unheard of. We could be fired any day, not just one day every two, four or six years.

We have a right to that accountability from our political leaders. Instead of raising funds for the next run for office, these politicians should have their salary cut off and be dipping into their savings to pay for the skyrocketing gasoline prices that are a result of not exploring for energy here, and instead destroying the dollar. Instead of doing their jobs, those on the left are ramping up their slime machines to give every reason under the sun why they can’t possibly cut any spending. There was some Congressman on the news talking about how wonderfully efficient Medicare is and how those evil Republicans want to put that in the hands of private insurers, horrors! It is common knowledge that between $60 – $100 billion is STOLEN from Medicare every year. How is that for efficiency? As I point out in my book Liberty’s Lifeline Steve Kroft of Sixty Minutes reported that stealing from Medicare pushed aside cocaine as the major criminal enterprise in South Florida.

2012 is coming and everyone one of these hand wringing, overpaid, do nothing, politicians should be bounced out on the street, if they don’t want to step up and transform Washington in to an efficient and accountable government.

That’s my opinion, I’d like to know yours. Please comment below.

There’s a commercial that has been running recently that shows someone considering the purchase of a consumer item and they ask question after question about the product.  In the next scene they are in the doctor’s office and when the doctor asks if they have any questions they hesitate and then say, “No.”  The message is that you should ask as many questions of your doctor as you would of the salesman selling you a flat screen TV.

What if the flat screen TV were free?  Or what if it was limited to a $20 co-pay?  Would the consumer ask as many questions?  The consumer is probably asking the questions because he or she is about to lay out $1,000 of their own money.  If the TV costs you only $20 do you bother with the questions?  If the TV doesn’t work, you can go buy another for $20, no?

For most of our health care plans we have what is called 3^rd party payer.  We go see the doctor and except for a nominal co-pay, someone else picks up the tab. But what if the health care consumer was put front and center in the process? How would that look?

Insurance as Insurance

We call it health care insurance, but it doesn’t look like any other insurance we may own.  We buy insurance to protect ourselves from financial catastrophe, not to cover everyday expenses.  If our house needs a paint job, we don’t file a claim on our homeowner’s insurance.  If we need gas for our car, we don’t ring up the gecko at Geico.  When we need food we don’t submit the grocery receipt to our life insurance company.  So why is virtually every expenditure related to health submitted to our insurance company?

I was once covered by a health insurance plan, through my company, that cost around $10,000 per year.  I was healthy and didn’t often need a doctor, but that didn’t affect my insurance premium.  I found a plan that was a “high deductable” plan with a Health Spending Account.  It worked like this.  My insurance premium was cut from $10,000 to $5,000.  In addition I opened a Heath Spending Account (HSA) that I could fund with up to $5,000 per year, tax deductable.  So overall, if I fully funded HSA, the cost was still $10,000.  So why do this?

The plan came with a high deductable of $4,000 per year, in other words, the first $4,000 were paid by me, not the insurance company.  I could use the money in my HSA to cover that.  But the kicker is that the money in an HSA rolled over from year to year and if I never used it, I could roll it into an IRA later.  Do you think there is a strong incentive there for me to be involved in my medical care?  Do you think I would ask more questions, before going to the doctor and when I met with him?  You bet I would.

The Broken Health Care System

But how does our government screw this up?  Easy.  When I left that company and was out on my own and tried to buy the same type of policy I found that many plans were available until I told them where I lived.  “You live in New York?  Sorry, that plan is not available in New York for an individual.  It is only available through companies.”  I checked with my state insurance regulator and they said, “Sure, we have a plan like that for individuals.  Do you make over $27,000?  Oh, you do?  Then it’s not available.”

So a plan that involves the consumer in making informed health care choices, which is the only way market forces can truly come into play, was not available for me by government dictate.  But the federal government wants to take over health care and give it to everyone on the model of 3^rd party payer where the consumer doesn’t care a whit what it costs.

Informed Health Care in Action

Fortunately, my experience being involved in health care choices didn’t evaporate with my ability to get the insurance plan of my choice.  I was advised by my doctor that I was of the age to start screening for colon cancer.  The most effective way to do this is through a procedure known as a colonoscopy.  I will spare you the details of the procedure. 

As an informed consumer I looked up the risk factors for colon cancer:

1. A personal or family history of colorectal cancer or polyps.
2. A diet high in fat and low in fiber.
3. Inflammatory bowel disease (Crohn’s disease or ulcerative colitis).
4. Obesity.
5. Smoking

Okay, I have none of the above.  What is the chance of dying of colon cancer?  In the U.S. the chances are 0.017% and that is based on the whole population, regardless of whether or not you have any of the behaviors listed about, or about the same chance as being killed in a car crash.  I decide to have the procedure.

The procedure gives me a clean bill of health and the recommendation is to repeat the procedure every 5-10 years.  In processing my insurance claims, to be paid by a 3^rd party, I noticed that the procedure cost $3,000 about evenly divided between the doctor performing the procedure, the anesthesiologist, and the hospital.  So if I have the procedure as recommended, it would cost $10,000 – $20,000 to screen for an illness for which I had low risk, no history, none of the bad behaviors, a current clean bill of health.  No thanks.  If I had the plan that I wanted that could be $10,000 – $20,000 in my retirement plan.  How many other possible diseases should I screen for and pay similar sums?  As a consumer I am making a risk/reward judgment and in doing so, I have reduced health care expenses in the United States by $10,000 – $20,000. 

In the ObamaCare plan, that money will be spent because the typical consumer doesn’t care if the procedure is done every year because it has no financial impact on them.  Do you think that is why health care costs continue to rise?  What doctor is going to take a chance that he did not recommend that procedure and find out that you and your trial lawyer are asking him why he didn’t because you contracted colon cancer?

The counter argument will be, “Well what if you get colon cancer and you could have prevented it if you had screened for it?  What is that going to cost and who is going to pay for it?”  Well, with my liberty still intact, I can make some further decisions.  I still have that money, and more of it, in my HSA that I can use.  If the cost of treatment exceeds $4,000 then my insurance company can use that premium money that I have been paying them for years without them having laid out one dime over that period due to my good health and good choices, to help with my treatment.  Or I can make the personal decision, if I am say 80 years old, that I had a pretty good run and I would rather leave my wealth to my family, if the government isn’t salivating to grab that, than to spend it all to eke out another few years.  I can choose to go quietly into that good night.

Liberty and Tyranny

I want to have the liberty to make those choices.  Everyone having the liberty to make those choices will bend the cost curve down.  The medical community, which is a business, will have the incentive to find a way to drive down the cost of a $3,000 procedure to say $300.  If they did so, I just might show up every 5 – 10 years at that price.  That’s how markets work.  If your flat screen TV set, or your medical procedure is too expense the demand drops.  If you find a way to keep lowering (get that?  lowering) the cost the demand will rise.  But if you don’t pay the bill, if you don’t see the bill, you don’t care about the bill.  If you don’t care about the bill and no one else does, then the government gets involved and the problem doesn’t get solved.  Your liberty gets taken away along with your money and the government tells all their stupid citizens what to do, because, after all, government knows best.  Right?

If you look at President Obama’s record on what he says one day and one he says later when reality sets in, are we really ready to believe him when he says,

“Whatever plan we design upholds three basic principles,” he said. “First, the rising cost of health care must be brought down; second, Americans must have the freedom to keep whatever doctor and health care plan they have, or to choose a new doctor or health care plan if they want it; and third, all Americans must have quality, affordable health care.”

He told us we absolutely had to pass his $787 Billion stimulus package or the unemployment rate would hit 9%, but if the package passed, the unemployment rate would be held to 8%.  It didn’t work.  Unemployment is at 9.1% and climbing.  He said bankruptcy for the auto companies would be disastrous for the economy.  After pouring billions into the auto companies, where are they?  In bankruptcy.  It is estimated that his health care “solution” would cost between $1 and $1.6 trillion. Why should we believe it?  What has he told us he would do that has actually come to pass?  North Korea?  Iran?

What confidence do we have that the government can do anything, other than national defense, better than private industry?  The postal service?  Amtrak? Farm subsidies? Earmarks? Speaking of healthcare what about Medicare and Medicaid?  In a report from March 2008:

“We need to act quickly and effectively to address Medicare’s fiscal health, including enacting the steps proposed in the President’s budget, which would postpone the insolvency date of the Part A trust fund for ten years,” said Health and Human Services Secretary Mike Leavitt.

A Modest Proposal

Before attempting to overhaul one-sixth of the U.S. Economy, why doesn’t the Obama Administration fix Medicare and Medicaid?  Show us your stuff Mr. President. Not your charm, not your winning smile. The campaign is over.   Prove that you can make these government programs work before you take on any more massive health care undertakings.