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David frum says there's a line between determination and slavish devotion to a really bad idea. He says No single organization succeeds more at Iailure than governmental institutions. Even Keynesians economists admit the superiority oI a market system over centrally planned economies, he says. Frum: socialized medicine in the Iorm oI the CCOs is a good example oI
David frum says there's a line between determination and slavish devotion to a really bad idea. He says No single organization succeeds more at Iailure than governmental institutions. Even Keynesians economists admit the superiority oI a market system over centrally planned economies, he says. Frum: socialized medicine in the Iorm oI the CCOs is a good example oI
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David frum says there's a line between determination and slavish devotion to a really bad idea. He says No single organization succeeds more at Iailure than governmental institutions. Even Keynesians economists admit the superiority oI a market system over centrally planned economies, he says. Frum: socialized medicine in the Iorm oI the CCOs is a good example oI
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child, 'II at frst you don`t succeed, try, try again? And while determination is an admirable trait, there`s a fne line between determination and slavish devo- tion to a really bad idea that never had a chance oI success. Although perhaps despair.com`s 'demotiva- tional poster says it best: 'Perse- verance the courage to ignore the obvious wisdom oI turning back. No single organization succeeds more at Iailure than governmen- tal institutions. Take an idea like socialism, slap a new label on it, and oII they go on their merry way leaving a rose-petal trail oI millions, iI not billions, oI our tax dollarsand yet utterly convinced oI their superiority and determina- tion: 'Oh, but this time we`ll make it work! In this particular case, I`m talk- ing about socialized medicine in the Iorm oI the CCOsCoordi- nated Care Organizations. Socialism crashed and burned in the Iormer Soviet empire with such an almighty thud that most modern economists by and large have declared the Iree market sys- tem the clear winner over centrally planned economies. I say 'most because while even Keynesians economists will grudgingly admit the superiority oI a market system, they stubbornly cling to govern- ment-driven economies. Here too note that they admit the superior- ity oI 'a market system and not 'the free-market system because the question comes down to 'how Iree should the market be? It`s an important distinction because you`ll sometimes hear very Iar leIt economists praise market systems and, iI you`re not paying close atten- tion, you might actu- ally think that they`re agreeing with you. Just remember a little saying oI mine: simply because they`re speaking, it doesn`t mean they`re trying to communi- cate. A progressive, Ior instance, may talk W/ with earnest reverence about 'the market system. But the type oI market they`re envisioning is something along the lines oI carbon credit trading. These kinds oI markets are usually invented with the aid oI complex computer models, oIten originate Irom game theory, and are designed Ior a spe- cifc and usually artifcial purpose, wherein there would not otherwise be a call Ior such a market. In other words, participation is man- dated. And these markets can, in Iact, be wildly successIulmon- etarily and academically speaking. A Iree-market system has cer- tain characteristics. A Iree-market system recognizes individual Ireedom, private property, and the principle oI limited govern- mentand government interIer- ence (much more appropriate than 'intervention, which implies an ability to fx a situation) should be limited to punish rule breakers and insure a level playing feld. Most importantly, Ior Iree markets to work, participants mustby def- nition have Iree choice among various options and all buying and selling decisions must be vol- untary as well as the Ireedom to choose whether or not to partici- pate at all. This is why Iree-markets suc- ceed: when buyers are Iree to exchange money Ior goods or service Irom sellers, each side believes they are better oII aIter the exchange. A consumer buys a loaI oI bread Ior a dollar and is in a better position to Ieed their Iamily. The exchange has value to the buyer. The seller sold an item Ior a dollar that cost them 30 cents to make, giving them an ability to pay their workers and produce more bread Ior more customers. And iI the seller hires smart employees, they can fnd ways to reduce their costs even more, giving them increased profts or to lower their price ac- cordingly to attract more buyers. All oI this is driven by price and value. Buyers seek the lowest price Ior the highest value while sellers compete with each other on price and perceived value: quality, convenience, design, ease oI use, trust, and so on. It`s in this way that Iree markets are so exceptionally able to determine the most accurate price Ior goods or services and price determina- tion arises Irom within the market rather than being imposed Irom without by non-participants. This is an immensely important point to understand, because without an eIIective means to determine price and value, markets Iail. Consum- ers will pay infated prices while sellers will be unable to determine value Ior their customers. In the 1940s, Friedrich Hayek said prices refect the percep- tions oI large numbers oI indi- vidual players within a market: 'Economic calculation cannot be reduced to a set oI equations. because the knowledge underly- ing such calculations is the sum oI countless perceptions oI indi- viduals in the market. This is the advantage oI natural markets over centrally planned markets where prices are at the whim and specu- lation oI a Iew bureaucrats rather than thousands or even millions oI individuals all making buying and selling decisions. So how does all oI this apply to Oregon`s Coordinated Care Or- ganizations? Easy. They violate nearly every Iree-market principle. First oII, don`t let any Repub- lican claim they didn`t know this was going to happen. Paragraph 1, Section 1, oI Oregon`s HB 3650, which 29 of 3 Republicans in the House voted Ior (all but Jim Weidner), reads: 'It is the inten- tion oI the Legislative Assembly to achieve the goals oI universal access to an adequate level oI high quality health care at an aIIord- able cost (emphasis mine). Right there, it`s clear the intent oI this legislation is universal health care. Socialized medicine. Second, no selI-respecting 'fs- cal conservative should have voted to institute a monopoly and yet Section 22 oI SB1580 specih- cally waives antitrust laws Ior the CCOs, giving them a complete monopoly within their geographic boundaries. You can imagine what this will do Ior price and innova- tion. Perhaps even more interesting interesting in the sense that many Iormerly willing participants are about to get a rude wake-up call the CCOs are designed to do away with competition. According to Andis Robeznieks, writing in the May 7th issue oI Moaern Health- care, by law and by agreement iI one company within the CCO discovers a means to lower their costs, they are manaatea to share thateven with their competitors. Trade secrets will be a thing oI the past. 'II at First You Don`t Succeed, Fail, Fail Again by Mark Anderson. Copyright 2013 Page 2 of 4 II we weren`t playing with peoples` lives, this would be al- most laughable. On the one hand, the designers want to save money while on the other removing the best means by which to achieve it. Now, instead oI countless numbers oI transactions driving the most accurate price, as pointed out by Hayek, you`ll have bureaucrats with calculators simply guessing. Even iI CCOs miraculously 'pencil out on paper (which is actually easy enough to do when dealing with government money simply by hiding the actual costs), we`re going to lose value. As described in my June 2012 North- west Connection article, there is going to be a bevy oI lowpaid, low-skilled, Community Health- care Workers (CHWs) between you and your doctor. The basic belieI is that you can see these CHWs Iar less expensively than you can to see your doctor. Inci- dentally, these CHWs are not new. Prior to the passage oI Obamacare, they`ve been tried elsewhere andyou guessed itIailed. According to a study by Marti- nez et al. in the American Journal of Public Health, despite numer- ous eIIorts to integrate CHW pro- grams into the health care delivery system, they have been unable to secure long-term Iunding to do so, indicating that consumers haven`t perceived them as having any value. My Iamily has already witnessed what this will do to actual care. My 89-year-old Iather-in-law, who is blind and lives in assisted living, recently had surgery on his Ioot. As part oI his recovery he has to wear a stiII rubber boot to immo- bilize it that was to be treated like a cast, even though it was remov- able. The surgeon Iaxed orders to this extent to his care Iacility. His surgery was on a Tuesday and by that Friday, his boot had been removed no less than three times, and staII had repeatedly put a sock on his Ioot, causing his suture to bleed and disheveling the bandage wrappings, causing Iurther dis- comIort. He was also so heavily drugged that he didn`t know where he was and didn`t recognize my wiIe when she arrived to take him Ior a checkup and yet staII was bliss- Iully unaware oI his conIusion and was simply shoveling cereal into his mouth. The doctor then sent over a second, more IorceIul note that read, 'DO NOT remove his shoe Ior any reason! (emphasis theirs). 'But it didn`t say not to put a sock on, staII said when we asked why they had been removing the boot aIter receiving the second order, even though to do so meant they had to remove the boot. The order also said to take him oII Vicodin, a pain medicine. That part oI the order read, 'Vicodin causes conIusion. Give Motrin Ior Ioot pain. Complaints due to Vicodin and included a prescrip- tion Ior Motrin. Most people can fgure out this meant to stop the Vicodin and give Motrin or at least the doctor`s intent seems clear to me (then again, I have a degree in English). And yet by the Iollowing Tues- day, he was again so drugged out he barely recognized me when I picked him up Ior a return trip to the doctor. StaII didn`t recognize (or chose to ignore) his conIusion, and simply dragged this blind man with a sore Ioot down to breakIast and plopped him in a chair. It turns out staII had continued to give him Vicodin because the order did not specihcally state to discontinue the Vicodin. So staII Iaxed a note to the surgeon, 'May we please have an order to D/C Vicodin 5/500 mg due to Iamily states it makes him conIused to which they received a simple, 'D/C VICODIN (again, emphasis theirs). These low-paid staII members, who have little iI any medical training, are a model oI what we can expect Irom CCO health care navigators, peer wellness special- ists, and the like. Fortunately Ior us, my Iather-in-law is literally three minutes away Irom us. I shudder to think what would hap- pen to him iI we weren`t constant- ly in there to care Ior and deIend him. So now that both Obamacare and the CCOs have been Iorced on us, where do we go Irom here? Opportunities abound. Already cracks are showing in the CCOs. AIter only three months in op- eration, the Marion-Polk CCO is being sued by the Salem Hospital. According to James LoItus, Stay- ton city councilor, Salem Hospital was oIIered Iour payment options, all oI which would have Iorced them to lose money on CCO patients. This is an opportunity: counties would be wise to back out now Irom a plan that has been proven time and again destined 'II at First You Don`t Succeed, Fail, Fail Again by Mark Anderson. Copyright 2013 Page 3 of 4 to Iail, despite the rosy promises Irom the Oregon Health Authority. And while legislative Repub- licans can`t by themselves do anything about the CCOs (inci- dentally, all Iour Republicans in the house who lost their seats in 2012 voted Ior the CCOs), this is an opportunity Ior Republicans to build some trust in their oII years. It would do them a world oI good to admit they screwed up. How reIreshing that would be! Who hasn`t messed up something on the job and yet it never seems to occur to politicians to admit Iault. Since the election, we`ve heard a lot about 'reIorming the Repub- licans, well, admitting Iault and trying to fx a problem they cre- ated would be a tornado`s worth oI Iresh air. This would allow them to spend the next two years repair- ing the damage with votersand rebuild trust. AIter all, no one will believe your next promise iI you haven`t apologized and rebuilt trust Irom your last promise. One other opportunity is that as more oI the CCOs and CHWs come online and Oregon continues to lurch down a path that`s been blazed by some oI the most spec- tacular Iailures oI all time, there will be plenty oI evidence oI the CCOs` Iailure, which will swing reasonable Democrats their way as they too personally experience the loss oI value. But to take advantage, Repub- licans need to be in a position to take advantage. And that means the course correction needs to begin right now. Mark Anaerson is co-owner of GRIP Proauctions, an MBA, a Doctorate of Business Aaministra- tion canaiaate, ana the host of the I Spy Radio Show, which is heara Saturaays, 11-noon, on KYKN (1430-AM) in the greater Salem area or anywhere via www.kykn. com ana on KAJO (1270-AM) in Grants Pass on Sunaays, 78.00 p.m. or anywhere via www.kafo. com. Poacasts are also avail- able after the show airs via www. ispyraaio.com. He can be reachea at markispyraaio.com.) 'II at First You Don`t Succeed, Fail, Fail Again by Mark Anderson. Copyright 2013 Page 4 of 4