THE MASSACHUSETTS PLAN
Romney explains his successful plan for health care in Massachusetts when he was Governor. This plan was successful in inducing 97% of the population to join through tax incentives and penalties on both employers and employees and individuals who were unemployed. Seniors of course were already insured through Medicare. The poor already got healthcare through federal- state funded Medicaid.
By redirecting federal funds for Medicaid, inducing healthy uninsured people to buy health insurance (thus enlarging the insurance pool with better risks) and by a state subsidy for the very poor to help them to buy coverage according to their means, and by tax incentives on employers and employees the state was able to achieve nearly universal coverage at a cost of approximately $350 million to the taxpayer or about 1% of the budget. Federal Medicaid funds made this possible also so the cost to the taxpayer is really not as dramatic as he would have us believe.
The Massachusetts plan does not control the rising cost of health care in Massachusetts nor does it address the cost of catastrophic health care and who should pay. It did create a plan that was affordable to at least 97% of the population. (The Tea Partiers criticize him on this because of the tax aspects. However Romney should be commended for devising a plan that provided basic health care to the vast majority of his constituents.) Also the plan is recent so the jury is still out. If costs are not contained premiums will rise and people may opt out preferring to pay the tax penalty rather than the penalty. Also the tax penalties for not participating my be unconstutional.
FEDERAL HEALTH CARE
Romney states the Federal plan just enacted, Medicare and Medicaid will not work and are on the way to bankrupting the taxpayer and the Federal Government. The reason for this is that the incentives are all on the wrong people. Doctors are paid for the number of procedures performed. Patients have no incentive to control unnecessary tests and procedures because they are not paying for them. Also doctors are not paid for the quality of their work. Therefore the plans cited above are structurally deficient because they are not market orientated in rewarding and incentivizing health care for the best care at the most reasonable cost.
He gives numerous examples of various Health Care plans already in place in communities around the country that do work at reasonable cost. These include HMO’s like Kaiser (Kaisers premium costs are comparable to private insurance costs for the same coverage) and groups like the Mayo Clinic of Minnesota and Arizona. Also he fails to note many HMO’s are owned by insurance companies and are run for profit not cutting premium costs.
He cites and compares McAllen, Texas as one of the expensive places for medical care and gives an example of the number of tests given for one complaint (One time transitory chest pain in a woman with no prior history of heart problems.) where only one test would be given fifty years ago six would be given now.
He compares the single payer systems in Europe and Canada and finds that their statistics on satisfaction and costs are skewed. One example is infant mortalities. In many countries, including single payer ones, efforts to save high risk deliveries are not made and the statistics of babies born dead or who die in a few hours are not included in infant mortality rates. However in this country, with highly skilled doctors and nurses along with well equipped facilities, where extraordinary measures are taken, many infants survive but many die in a few days or weeks. As a result these high risk infants who die are entered in to our infant mortality rates thus making it look higher than some single payer countries or even third world countries. Another is the wait time for colonoscopies in England. 60 days according to his anecdotal account of his son’s experience. (This is not a valid comparison for many reasons including the age of his son. I doubt if any Englishmen die while waiting for a necessary test to be performed timely.)
Health Savings Accounts
Health Savings Accounts is another method Romney mentions where individuals are given a credit against Medicare taxes and place it in a savings account to pay routine medical expenses. They would back this up with a low cost catastrophic policy. (This is pie in the sky; while some people are disciplined enough to do this a Federal Plan covers all people from all walks of life. Many who live from paycheck to paycheck or borrow against the next paycheck at high rates of interest would raid these accounts to meet perceived necessities. Then of course there are those who live on food stamps and welfare and only see a doctor in an emergency room, how would they be provided for, subsidized accounts? A plan for disaster if there ever was one.
Would your friendly broker or financial consultant get into the act by alleging that he or she could increase the returns on these HSA’s. In a free and unregulated private market the sophisticated would soon make mince meat of the unsophisticated.)
MARKET DRIVEN APPROACH
Thus Romney believes that a market driven system of health care would out perform a single payer system or that the systems we have in place now will eventually bankrupt the country or cause severe political unrest. Romney is right about uncontrolled medical costs but even private insurance plans have never controlled costs and have no incentive to do so when their profits (usually 20%) increase with premiums charged. Also the private market is able to cherry pick insureds leaving the worst to self insure or to welfare. Also private insurance companies frequently find ways to avoid obligations by creating or finding reasons to rescind policies when an insured faces a serious loss.
Therefore a market driven private system has already proven itself to be inadequate at providing satisfactory coverage and claims procedures at reasonable rates for everyone.
(The plan to cover everyone through has some advantages. First the risk pool is greater so the advantages of insurance are better utilized (everyone pays for some part of a major loss. Thus spreading the risk. Everyone is paying except those that don’t pay taxes. We would no longer need state insurance commissioners at least for health insurance and that would take politics out of the equation at least at the state level. With electronic reporting more complete data comparison could be made for procedures and costs. Thus limiting opportunities for unnecessary procedures, overcharging and fraud. It will lessen the need for legions of lobbyists corrupting the political system. The Federal government has the US. Attorney’s office to prosecute egregious defalcations. This would put some downward pressure on unnecessary procedures and costs but it doesn’t create the incentive driven controls necessary to make the system work.
This aspect remains the central problem of all systems public and private and must be addressed. Romney says the solution is a single visit payment instead of a payment for each and every procedure. This seems inadequate as it would encourage medical providers to schedule more visits. (Instead of fifteen minutes you would get five, but more often.)
Lastly malpractice is not a cause of the cost spiral it is the profit motive of the medical profession and the lack of involvement in paying for the procedures by the patient that is the cause. Without malpractice remedies many egregious procedures would take place like the practice of administering hysterectomies to young women with good insurance. Further it has been shown many times over that most professions are reluctant to police their own members. If malpractice suits were taken out of the equation costs would likely go up as it would embolden the profit driven to do ever more risky procedures with disastrous results for the patient and subsequent costs.)
WHERE I COME FROM
The Flawed Analogy
In this chapter Romney attempts to analogize the American experience with other empires and civilizations that have declined in the past. This is a lesson in what we should do to avoid becoming a second or third rate power. For instance the Ottoman and the Portuguese Empires, built on conquest and pillage, declined as a result of the failure to embrace new technologies. China, once the most powerful nation on Earth, which invented paper and gunpowder and launched the World’s most powerful navy, turned inward sealing itself off from the world, new ideas, technologies and as a result declined intellectually and economically. Great Britain also once the World’s most powerful economy with the largest navy failed to embrace new technology. (Some say its colonial system was an unsustainable financial burden plus the fact it bankrupted itself in two world wars.)
The point he is that the empires’ either were unsustainable economically or in the face of advancing technology and changing conditions failed to embrace new ideas or adjust to changed conditions which others did more successfully.
He also points out that often the class in power was unwilling to embrace new developments and ideas because the status quo benefitted them but was detrimental as a whole to the societies they led. Kim Jong Il and the Castro brothers must know by now that the communist economic system is unsustainable and damaging to their countries yet they are unwilling to open their doors to free trade, democracy or capitalism in any form because this might lead to the end of their power.
Comparing the U.S. to these former empires and others is really not that productive. Empires rise and fall because the economic system that supports that power is unsustainable in the face of new technologies embraced by more open countries.
As expected the present day comparison is made between China and the Western Industrialized Societies led by the United States. Romney thinks that we must meet the challenge China poses head on or we will also become a second rate power . (However China’s power is based on its decision to open itself up to trade and more importantly providing cheap labor. It has not given up its political system. This move has benefited about 300 million of its people but another 700 hundred million remain in rural poverty.
How it will deal with this remains to be seen although it has many projects to embrace new technology and to improve the lot of the 700 million left out of the present boom. Otherwise it will probably face more internal, political unrest than there is at present.
India has many of the same problems as China; a rural society converting to an industrial and technological one although it appears to be less entrepreneurial than China. Despite the fact it is the world’s largest democracy it also has millions of people who have been bypassed by the improvements made when it abandoned a centralized economy for a free market one.)
Pure Democracy Is A Flawed System
Romney quotes Ronald Reagan who was quoting an unknown Scottish philosopher when he said that democracies have the seeds of their own demise because when the voters discover they can vote themselves largess from the public treasury this leads to financial collapse and then dictatorship. ( We don’t have this problem because we are not a pure democracy. The Senate among other factors does not represent the popular vote but the propertied interests. The Supreme Court answers to no one, apparently, for its decisions.)
(The Scottish allusion, vague as it is, apparently is a reference to Social Security and Medicare which are supported by taxes on the wages of eventual recipients as well as employers for today’s beneficiaries. Not exactly like a direct usurpation of the public treasury. However this sounds like another argument for tax cuts on the wealthy that are not conducive to preserving one of Americas’ greatest strengths, a large and prosperous middle class.)
Romney states a free and strong America will have leaders who will recognize the threats to our power and to take measures to meet those threats. Globalization, terrorism and the spread of nuclear weapons to hostile groups are some of the major threats facing the country. However another major threat is from politicians like Bush II and perhaps Romney and the crowd they bring into office with them who are intent on reducing taxes on themselves and exploiting the natural resources of the country for their own gain. The middle class shrunk and more people fell below the poverty line under Bush II. (Romney misses the point a free and strong America is based on a large, free and prosperous middle class who produce, educate and elect the best leaders not vice versa.)
Energy and Climate Change
(In the long run whether America remains the dominant power in the world is based on how we deal with energy and how we evolve from fossil fuels like oil a finite commodity, which is now in the control of hostile nations in the Mid East and Russia. Iran and Venezuela’s Hugo Chavez are major problems. These countries would have no role to play on the world stage if it were not for their oil resources. Then there is climate change caused by fossil fuels. How that condition plays out also will be a decisive factor in world leadership.)
Romney believes we have the resources to meet these challenges, a free press to debate the issues that confront us, a democracy to elect leaders to do the job that needs to be done and the intellectual and economic resources to do the job. (It appears that the Obama Administration is already meeting those challenges better than the last Republican Administration. Whether Romney would do better is a best doubtful.)
MITT ROMNEY “NO APOLOGY”. BOOK ANALYSIS. WHERE HE STANDS. Chapter One Pursuit of the Difficult. A Free and Strong America.
In 2010 Mitt Romney published a book of his political views and beliefs. Romney is a likely contender for the Republican nomination for the 2012 presidential campaign. He has approximately six million dollars in his federal campaign fund. The DNC has only seven million at this point. He also controls five state campaign funds to build his allies in bellwether states like Iowa, New Hampshire and Alabama which will be influential in the presidential nomination process. Therefore his views are important as they are bound to be influential no matter what transpires with his candidacy.
In the first chapter he briefly states his background. His grandparents were farmers in Mexico where they had fled to avoid religious persecution in the United State. They also had to leave Mexico because of threats by Mexican revolutionaries against the ex-patriate community. This caused his grandparents to move back to the United States where they went into the construction business. His father later became a successful businessman and eventually became President of American Motors
(Romney attended elite private preparatory schools in Michigan and went on to Stanford and finished college at Brigham Young University in Utah. From there he obtained a joint MBA/JD degree at Harvard. He did his required Mormon missionary work in France. Thereafter he was a venture capitalist and then governor of Massachusetts. These facts are not mentioned or only breifly alluded to is his brief outline of his back ground in chapter one.) He puts a lot of store in the lessons he learned from his father for instance when he made him weed the lawn often. “A difficult task that built character according to Romney? ” One wonders if weeding the lawn was more formative than his college years or his experience as Governor.
POINT OF VIEW RE: FOREIGN POLICY
Romney points out that Presidents like Truman and Eisenhower met the challenges of the post WWII period head on and established the United States as the political and moral leader of the World. They advanced the cause of democratic government and capitalism in the face of daunting challenges namely from the Soviet Union and its Marxist allies. Now we must seize the initiative if we are going to remain a positive force for democracy and free trade in the world.
He alleges that the Soviet Union collapsed in 1990 through the efforts of our presidential leadership including Ronald Reagan and George H. W. Bush. ( Most experts believe when oil dropped to ten dollars a barrel on the world market the Soviet Union no longer had the wherewithal to sustain itself economically. Gorbachev was intelligent and courageous enough to admit that Communism had feet of clay and dissolved the Empire.)
He now sees challenges for leadership from China, a totalitarian state, with a semi free market but little personal freedom; from Russia, which has reverted to totalitarianism under Putin, and its economy is not a true capitalist one but still dependent on oil. While there is more personal freedom than under communism the state brooks no criticism of its policies and actions and the KBG under Putin is the master of life and the economy; from Iran a religious theocracy whose aim is to overcome the West and through Islam dominate the World. Its economy is state controlled and is also dependent on oil.
The true force for democracy, freedom and capitalism or a free, lightly regulated economy is the United States which is supported in varying extent by the other Free World democracies. Democratic countries trading freely is the only system that appears to be sustainable according to Romney . Totalitarian states and controlled economies eventually collapse from their own inherent flaws. Just as the Soviet Union based on the Communist model collapsed, the British Empire, based on the mercantilist model broke down, the Spanish Empire based on conquest and transferring the wealth of the colonies to Spain withered away. Before that the Roman Empire based on slavery and conquest passed into history.
He points out that the United States has never sought to increase its power by conquest or colonies. Although we were the major victor in WWII we did not seek to expand the territory under our control. Indeed we undertook to rehabilitate our enemies and allies at great expense. (One guesses the accession of Northern Mexico is the exception that proves the rule and then there is Puerto Rico once a Spanish Colony and now a U.S Commonwealth which in the beginning was a guardian to that vital life line the Panama Canal when it was later constructed. This was probably the reason for the Spanish American War.)
The Premise of the book , No Apology, stems from the fact the United States has always been the champion of justice, freedom and liberty in the World and President Obama had no call to apologize for our conduct of the Iraqi and Iranian wars or our conduct of foreign affairs without consulting our long standing allies that occurred under Bush II.
(However the neo-conservatives in the Bush II administration had proclaimed the Twenty First Century the new American Millennium because we were the only super power in the world and therefore we could act in foreign affairs without seriously consulting our long standing allies as had been customary in the past. Thus except for Britain, always a stead fast supporter, we only received token support in the Iraqi and Afghan wars. Now we need the force of World opinion to stem the Iranian drive for hegemony in the Middle East. In part caused by the power vacuum in Iraq and the rise of Al Qaeda and the Taliban in Afghanistan. North Korea in the Pacific is another problem. )
Thus the book starts out with a hollow premise and harks back to the blind foreign policies of the Bush II Administration which cost 4500 American dead in Iraq, and thousands of American casualties. This is not to consider the countless Iraqi dead and wounded both hostile and friendly. This price was paid but the main enemy Al Qaeda and their supporters are still active and still a threat to the United States and our Allies.
Romney is adopting the neo- conservative policies of the Bush II Administration with a different cover and assumes the U.S is the only force for freedom and justice in the World and therefore we have to go it alone. ( However to be a leader we must convince our Allies and even our detractors that our cause is just, feasible and rational: i.e. the confrontation in Iran. )
The free and strong part is always a good idea because we can’t be one without the other. However the rest of his mantra is moth eaten ideas left over from Bush II . The Obama Administration’s foreign policy ideas and conduct are more sophisticated, realistic and more likely to achieve the results we want using diplomacy and force only as the last resort. The goal is a democratic peaceful World that is free and strong not American hegemony over the world.