Thoughts on Health Insurance Companies

Thoughts on Health Insurance Companies

Moving to a universal healthcare system with everything run by the Federal government might not solve all the problems in our healthcare system, and it might not really reduce all of our healthcare costs, but at least it would give us someone to hold accountable for rising costs, challenges with accessing care, and questionable quality of care. People across the United States are frustrated by healthcare providers and systems that seem to always be raising their costs and charging outrageous fees for basic medical care. Younger people today seem to find the idea of profiting on medical care to be slightly unethical, and health insurance company practices do a lot to increase people’s discontent with the current system and actors. In short, a lot of people probably just want to move to universal coverage provided by the government just to simplify the process and cut out insurance companies, especially when the average consumer can’t understand what benefit the insurance company provides.

 

These thoughts about our discontent with our current system came to mind this morning after reading the following passage that I highlighted in Dave Chase’s book The Opioid Crisis Wake-Up Call. Chase writes, “If you’re a fully insured employer and have higher-than-expected claims in one year, your insurance carrier will work to get as much back as possible in subsequent years through larger premium increases.”

 

What Chase describes is something that not everyone is directly aware of or able to explain, but it is something many of us have a vague feeling of or intuitive expectation of. Rather than existing as organizations to help us be healthy, rather than trying to solve a problem, rather than caring about our health needs, many people simply see health insurance as stealing a few bucks from them, their employers, their providers, and from people who really need medical care. Insurance companies are seen as morally unethical, powerful government lobbiers, and as bureaucratic machines that treat everyone like numbers.

 

If you are not in favor of a public health insurance program, and if you think that private insurance is the way to go, ask yourself what the industry could do better to actually provide value to patients. If you are in a health insurance company and think you do provide value to your patients, ask yourself, why don’t people see it? Perhaps we only see the games that insurance plays to limit access to care, to increase premiums every year, and to squeeze hospitals and providers, causing us to misunderstand the benefits that insurance provides. If private health insurance really wants to survive in the future, the industry needs to do better at showing its value, and minimizing its greedy tricks, otherwise, you can’t blame the public for wanting to eliminate insurance companies and have an accountable government take on universal coverage.
Black markets and Marijuana

A Thought About Black Markets

A line from John Hudak’s book Marijuana: A Short History is worth thinking about if we are someone who frequently thinks about public policy. Hudak writes, “The black market just has to deliver marijuana; the legal market must meet consumer demand.” 

 

Hudak’s line comes from an early paragraph in his book where he discusses historical trends in the strength of marijuana overtime. Marijuana strength is often measured by the amount of THC in the final product to be consumed. Dr. Mahmoud ElSohly, a researcher with the University of Mississippi, has been analyzing the THC content in seized marijuana since the 1970’s and has found that THC content has increased overtime from about 3% to 7-8%. However, marijuana that can now be purchased in dispensaries in states that have legalized marijuana often has a much higher THC content, closer to 20% or more.

 

My interest is not so much in the marijuana itself, although the plant and product is interesting (Note: I have asthma and can’t smoke and I have never tried any edible forms of marijuana). What is really interesting is the degree to which the black market under-served those who wanted to purchase marijuana from 1970 to today. Marijuana that could be purchased from a drug dealer or a friend was not as potent as people would have liked. If people were intent to buy marijuana, their only option was a product that we would consider inferior to the options available in states that have legalized marijuana today, a product that many likely wouldn’t chose if they’d been able to chose an alternative product.

 

The point I want to highlight is not that people were purchasing weak marijuana from the 1970’s until 2019 when Hudak’s book was published. Instead, the point I am trying to make is that the black market delivers sub-par products to people who use them. In the case I am writing about, illegal supplies of marijuana were simply less potent, not something that non-marijuana users are likely to care much about. However, if we think about other black markets, we should be more concerned about the products that people purchase illegally. Other black market products, that people cannot obtain legally and that cannot be regulated by a true market mechanism, likely come with more dangers than just being weak. Other illicit drugs can be even more dangerous and harmful when purchased on the black market. Health products, purchased on the black market where they might be cheaper than licensed and regulated products obtained legally, could also pose serious risks of harm.

 

This creates an argument for reasonably regulated markets, even of things we find deviant and would rather people be unable to purchase. We want some type of government oversight to ensure that products and services are safe, effective, and authentic, but we should be concerned about government regulation that drives a product or service into a black market. The market itself will find a way  to deliver the service or product, but it may do so in a dangerous and illicit manner. Government and regulation can be forces for good and bad within this dynamic. What is important is that we think critically of how regulation relates to markets, and consider the impact on people’s lives, including the lives of those who will still pursue a product or service once it is forced to a black market.

The Complement of Networked Governance

The last few weeks I have been writing about governance ideas presented in Bruce Katz and Jeremy Nowak’s book The New Localism. One idea I have brought up multiple times is the idea of new institutions at the local level formed from networks of public, private, and civic actors. Katz and Nowak argue that these networks are crucial for the development of plans and strategies to help cities grow, adapt, and thrive in a globalized economy. New institutions include structures and frameworks that bring together public, private, and civic leaders who have the ability to mobilize energy, capital, and people to actually get things done, rather than to just talk about doing things.

 

Katz and Nowak are clear, however, that these new network governance structures are not something they suggest as a replacement to traditional government structures and agencies. In their book they write, “In the end, however, networked governance is a complement to functioning government, not a substitution. As responsibilities shift downward in societies, capable local governments become a necessary component of problem solving and leadership.”

 

I previously wrote about the ways in which our denigration of government in some ways create a self-fulfilling prophecy, where talented and motivated people are afraid of the stigma of government work and chose to work in the private sector, leaving government with less capable and dynamic talent. A lot of rhetoric says that government is the problem and not a solution, but Katz and Nowak show that government has to be part of the solution.

 

City and local governments create the structures that can organize private and civic groups. They create the forums through which stakeholders can deliberate and discuss the problems that people in the region face. Agencies play a role in ensuring that projects and programs taken on with the support of private and civic groups follow legal precedent and sound administrative practices in an equitable manner. Without a competent public sector, the plans from governance networks would have nothing to graft onto, and could not be implemented nor developed.

 

New governance approaches through networks are efficient and effective because they bring in the people who have the expertise in a given area and invite them to be part of a larger solution than just maximizing their bottom line. They engage community members and actors in place-making, helping the region grow in a way that will in turn benefit each member of the network. The network fills the gaps in public action and strengthens the weakest parts of the public sector. Together, a competent local government combined with the nimble and expert private and civic sectors has a great advantage in the field of problem solving.

Culture Busting

In The New Localism Bruce Katz and Jeremy Nowak call for culture busting among city leaders who want to find new solutions to pressing problems. One of the challenges we face is that in general, the public doesn’t understand governance well. We operate with set ideas about what governance is, who sets rules and regulations, and the roles that private companies, local community groups, and formal government agencies play. In the future, as problem solving becomes more local and as we try to tackle major challenges we will need to get beyond these simple models from our high school civics classes.

 

This is what Katz and Nowak call culture busting, “culture busting is a form of risk taking and a fundamental shift in understanding that many responsibilities in a city and metropolis lie with the community broadly rather than with the government narrowly.” The role of government, the role of businesses, and the role of everyday citizens needs to change if we are to truly address the big problems in our societies. If we want to tackle climate change, if we want to reduce healthcare spending, and if we want to spark economic development, we have to realize how interconnected all of the challenges we face are, and we have to develop a community focused action plan to make the necessary changes. Thinking that problem solving is the role of government or that economic development is purely a free market phenomenon will not help us jump to be dynamic leaders in a globalized economy.

 

Part of what culture busting calls for is more education around governance and part of it is a reemergence of community action. A major failure of suburban life is that we drive from our homes to our places of work or commerce, and rarely interact with anyone else along the way. We let others deal with problems unless they happen to be unavoidably right in front of our face. We might get out for a sporting event or a conference, but otherwise we are just as content to watch Disney+ at home. Culture busting replaces this individual isolation with networks that want to see real change and are willing to own part of that change.

 

Culture busting requires that we re-imagine what is possible for governments and redefine the role of businesses and civic organizations. It requires that we think about the challenges our communities face, and ask ourselves what resources and advantages do we have that we can use to make a difference. Rather than waiting for government to make a decision, it requires civic and private energy to clear the path and display a public will for government to direct resources in the direction that the populace already wants to move. It shifts leadership from government back to the people and aligns actors to make the community a better place.

A New Kind of Problem Solving

Bruce Katz and Jeremy Nowak’s third highlighted feature of New Localism in their book The New Localism is that it, “reflects a commitment to a new kind of problem solving that is distinct from the uniformity of policymaking.”  American cities and metropolitan regions are leaders in innovation, diffusion, and development in the United States. The networks formed between university researchers, students, business and industry, government agencies, and local non/not-for-profits or charities help new research translate into real-world applications and eventually into new innovations. Crucially, this is not just true of new technological innovations. In medicine, material science, and communications technology we see new devices entering the market to change the ways we live, but outside these areas we are also seeing cities and metropolitan regions innovate thanks to dynamic networks and united stakeholders. New Localism is helping to drive new forms of governance, new forms of funding for local projects, and even new ways of engaging communities.

 

Katz and Nowak continue, “It adapts the risk-taking and attitude of individual entrepreneurs and investors to the collective sphere. It is experimental and tolerant of failure. It is the twenty-first century embodiment of Franklin Roosevelt’s words in his famous 1932 speech: It is common sense to take a method and try it. If it fails, admit it frankly, and try another, but by all means, try something.”

 

Government is frequently criticized for being slow and unresponsive. Rules and regulations take over, and creativity, customer service, and improvements seem to disappear. Without a profit motive, it is hard to see why governments should feel a pressure to move quickly and why they should feel a pressure to be highly responsive to the public. Free markets on the other hand (and especially tech start-ups), seem to operate on a model of, “move fast and break things.” They feel pressured to always up the design and innovate, although they also face a pressure to provide gimmicks and overstate their level of innovation and fast-breakiness.  New Localism helps by finding a way to establish more of a common ground between these two extremes.

 

New forms of social and civic organization can help create quasi-governmental structures that provide the regulation and oversight necessary to protect citizens, but businesses can find profit and reward from working closely with those structures to innovate in a way that actually solves the local problem. Funding from associations and foundations help reduce the risk that government agencies would otherwise face, again providing a new avenue to help encourage innovation and development while avoiding typical roadblocks in a standard policy making process. These new ways to solve problems are a direct result of new networks and local action to address challenges in a cohesive manner.

The Location of Power

Power in the United States, at least the power to actually get things done and make changes, is transforming. National politics exist at such a polarized level that bipartisan lawmaking and any action in general is almost impossible. As a result, political decision making and dynamic policy changes are occurring at a different level of governance, the hyper-local level. From my vantage point, state governments are muddling through as normal, with some big legislation passing here and there in some states, but simultaneously a lot of state level legislation seems to me to symbolic and broad, and often hung up in courts.

 

The New Localism by Bruce Katz and Jeremy Nowak explores how and why power in American public policy is shifting to the city, municipality, and metropolitan arenas. Dynamic changes and transformations are not occurring nationally, are not occurring in all states, and are not occurring in all counties. Some regions of the United States are growing, booming, and adapting, while others seem stagnant and stuck.

 

The authors write, “The location of power is shifting as a result of profound demographic, economic, and social forces. Power is drifting downward from the nation-state to cities and metropolitan communities, horizontally from government to networks of public, private, and civic actors, and globally along transnational circuits of capital, trade, and innovation.”

 

The thing about city governments and metropolitan communities is that they can act with a sense of informality that large national governments and bureaucracies cannot. They can be quicker to respond and more targeted with their actions. We are coming out of a period in American history where policies and actions moved upward to the Federal government. Lobbyists moved from small town capitals across the nation to Washington DC, to be closer to the big decision makers. As congress has fallen into gridlock, local governments have taken up action to innovate and re-imagine their futures. New actors come into play at local levels, and connections in both public and private organizations are driving the changes of governance, economies, and communities.

 

It is important that we embrace these changes, but recognize the potential for inequality with these changes. We have to find ways to embrace the new drivers of innovation, knowledge, and development while equitably ensuring that our communities are strengthened and not fractured from this new localism. Metropolitan areas are booming, but they must not become exploitative or this shift in power can become dangerous and further the divisions in our country. In order for new localism to be sustainable, it must also become equitable to bridge the gaps we see in our current politics.

Charitable Advertisements

Charitable behavior says something about us. It is a way for us to advertise ourselves to the world in a discrete manner, so that everyone can see us and take away a message without us having to tell each person something about ourselves in a direct manner. As Kevin Simler and Robin Hanson write in The Elephant in the Brain, “The most obvious thing we advertise is wealth, or in the case of volunteer work, spare time.”

It seems strange that we would use charity in this way. I hear arguments from time to time that we should just have higher taxes and use government systems and structures to address social problems. As a change to the current system, we could build more government agencies and provide more support for the kinds of programs and functions that we currently ask non-profits and charities to assist with. A frequent argument against this idea is that it would be inefficient and we couldn’t rely on government to consistently address the kinds of problems that charities and non-profits pop up to address. An argument that I don’t hear very often, but that I think plays a role, is that we would not be able to signal our generosity and extra wealth if we just expanded taxes and the role of government.

“In effect, charitable behavior says to our audiences, I have more resources than I need to survive; I can give them away without worry,” continue Simler and Hanson. The fact that our donations are often public and are often directed to causes that make us feel warm and fuzzy are evidence that we are not really using our donations to try to solve real problems. Asking the government to step in and play a bigger role might really address the problems that are out there, but it wouldn’t give us the warm fuzzy feeling we are looking for, and wouldn’t allow us to advertise to others about how charitable we are. This is why it is so hard to say no to people soliciting donations at grocery stores. We don’t know anything about the charitable cause they are asking us to support, but if we don’t take the chance to advertise how generous we are, we inadvertently advertise how inconsiderate we might be, or how little resources we have to spare. These little charitable behaviors end up being more about ourselves than about the good we are trying to do.

What Does “The People” Mean?

“We the people” is a powerful phrase in the United States. It conjures images of democracy, freedom, revolution, and the power to push back against illiberal governments and disinterested elites. The phrase has been a rallying cry in movies for civic motivation, has been a symbol in politics for grassroots movements, and occupies and idyllic vision of governance to many Americans.

 

The challenge, however, is that “the people” is not a very clear idea or concept. It is ambiguous, without real direction, and is not always used in all encompassing ways. The idea of a government governed by “We the people” is great in theory, but at the end of the day decisions need to be made and a final direction must be chosen. “We the people” is not actually a great approach to decision making when you get to the end of the line. Building a government based on “We the people” may seem natural to us today, but looking deeper reveals the challenges of setting up a government based on the public will that our founding fathers encountered after the revolutionary war. Joseph Ellis captures these challenges in his book The Quartet when he wrote about James Madison’s perceptions of the new direction he wanted the nation to go:

 

“Experience during and after the war had demonstrated beyond any doubt that romantic descriptions of “the people” were delusional fabrications, just as far-fetched as the divine right of kings.”

 

Ellis also quotes Jefferson and his doubts about the feasibility of a government built on popular will and fully democratic values, “a choice by the people themselves is not generally distinguished for its wisdom, that the first secretion from them is usually crude and heterogeneous.”

 

“We the people” is absolutely the spirit of government that we should embrace in the United States, but I think it is important to also be nuanced in how we think about the actual decisions that government must make. Popular will can be hard to gauge and impossible to decipher. When popular will does align, we must also be fearful of a tyrannical majority. Ultimately, “We the people” must translate into active participation in government that works to better understand, connect, and unify the American people. If “We the people” does not live up to this standard, it risks devolution into demagoguery and minority out-casting.

Jefferson on the Constitution

Joseph Ellis, in his book The Quartet argues that many of our founding fathers who actively participated in bringing us our constitution were not focused on creating an ever binding document that would hold in place the nation’s laws forever. They sought, Ellis argues, to build a constitution that would serve as a guiding document for the political thought and ideals of the time. They understood that the Constitution would have to change, and while thy hoped that it would be endearing enough to be well respected and to not be scrapped within ten years, they did not believe the Constitution to be beyond the scope of political discussion and change.

 

This sentiment is capture by Thomas Jefferson, who was not active in the process of writing the constitution and developing its ideas since he was in France during the Constitutional Convention of 1787:

 

“Some men look at constitutions with sanctimonious reverence, and deem them like the ark of the covenant, too sacred to be touched. They ascribe to the preceding age a wisdom more than human, and suppose what they did to be beyond amendment. I knew that age well; I belonged to it and labored with it. It deserved well of its country…. But I know also, that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered…institutions must advance also, and keep pace with the times. We might as well require a man to wear still the coat which fitted him as a boy as civilized society to remain ever under the regime of their barbarous ancestors.”

 

In my mind, the most clear modern example of what Jefferson described in the quote above is the debate in our country over the Second Amendment. In 1787 our founding fathers found it important enough for the nation to be able to be build a militia when needed and for citizens to be able to bear arms to for their protection from tyrannical governments both internal and external to the United States. But the firearms of the Revolution were unlike the weapons of today’s world. The original intent doctrine suggests that we should not limit people’s ability to own and use firearms. This seems very clear with the inclusion of the the Second Amendment, but it also feels to me, that we are forcing the nation to wear its boyhood jacket when we force the modern problems with guns into the framework of the Second Amendment. It is clear that the founding fathers did not write the Second Amendment with handguns in mind. The guns of the time were bulky, slow to reload, and inaccurate. A modern handgun is easily concealable, can be fired rapidly, and is deadly accurate.

 

Jefferson, it appears based on this quote from the end of his life, would argue that the Second Amendment needed to change, that there was not a superhuman view of firearms and democratic preservation written into the Constitution to which we should affix ourselves today. The technology of the world has advanced in unpredictable ways since 1787, and Jefferson would argue that our institutions for governing the nation should change as well.

The Bill of Rights, Factions, and the Power of the Government

One of the debates that took place before the 1788 ratification of our Constitution was whether or not the constitution should include a Bill of Rights, guarantees of freedoms that limit the power of government over the states and citizens. As written, Madison thought the Constitution was complete, and did not see the need for a Bill of Rights. The majority of delegates to the Constitution Convention, however, approved of amendments to the Constitution, and in the end, our founders added 10 amendments to create the Bill of Rights we know today.

In his book The Quartet, Joseph Ellis describes Madison’s thoughts regarding the Bill of Rights, an area where Madison and his political mentor, Thomas Jefferson differed in their opinions. Madison believed that a Bill of Rights would not be effective in stopping government from overstepping its authority, and he felt the amendments to be irrelevant. Ellis wrote the following about Madison:

“Jefferson’s problem, as Madison saw it, was that he believed that the primary threat to personal rights came from government. That might be true in Europe, “but in our Governments the real power lies in the majority of the community.” So the real threat came “from acts in which the Government is the mere instrument of the major number of the constituents.”

This is consistent with Madison’s thoughts as written in the Federalist Papers #10 and #51, in which Madison wrote about the dangers of factions and majoritarian groups of citizens. Madison did not see power as flowing from the government and did not see our political rights and stemming from government. He was developing a constitution and a framework of governance where “the people,” as ambiguous as the term is, held authority and power and a written bill of rights, he argued, was not sufficient to dissuade a majority of citizens from violating the rights of others. His suggestion was not to tie the hands of government with a bill of rights, but instead to ensure that power was divided among many factions so that a tyrannical few could not dominate the interests of the many.

What I find interesting here is that Madison is in effect arguing for what we today would call identity politics. The most basic definition of politics is “who gets what and when?” We will always lack the resources to make sure that everyone’s self interest and desires are entirely fulfilled, and some resources, such as status and prestige, cannot be evenly separated among men, women, and differing groups. Politics is about how we decide to distribute what we have, and it is inherently unequal and identity based. The term identity politics now refers to the distribution of resources based entirely on individual characteristics of certain groups rather than on the good of the majority, but as Madison may argue, operating on the basis of the good of the whole is impractical because you cannot give the whole the same opinion, and what you instead have is a tyrannical majority dominating the few. A bill of rights, paper barriers to liberty, are easily ignored when a powerful majority can silence the voice of a minority. Giving minorities more power and influence is a Madisonian idea that was formed in the founding documents of the nation, well before our current tussle of identity politics.