Today’s links to interesting news and analysis, collected from around the Internet. If you find this useful, pass it to a friend or colleague.
- Wasn’t this obvious during the election? “Barack Obama and The Parallel to Jimmy Carter“, Jim Merriner, Chicago Daily Observer, 24 March 2009
- Provocative thoughts from someone who knows what we’re going through: “Financial markets rocked by ‘Obama shock’”, Richard Koo (Chief Economist), Nomura Research Institute, 26 January 2010 (also on Scribd)
- “Origin of the Obama implosion: “No We Can’t“, Tim Dickenson, Mother Jones, 2 February 2010 — “Obama had millions of followers eager to fight for his agenda. But the president muzzled them – and he’s paying the price.”
- “Republicans are locked in a passionate embrace with a corpse and won’t let go“, Henry Banta (attorney), commentary at Nieman Watchdog, 11 February 2010
- One reason US health care is so expensive: “Rise of the Machines“, Merrill Goozner, The Fiscal Times, 11 February 2010 — “The overuse of pricey technologies in preventive medicine is driving up health care costs unnecessarily.”
- “How the Game is Played, Part 576“, Kevin Drum, Mother Jones, 12 February 2010 — How Republicans block any meaningful banking reform.
- First fruits of the Citizens United decision: “Is the Committee for Truth in Politics Legal?“, David Wiegel, Washington Independent, 3 February 2010
- Interesting but unrelated to this website: “Farm Fetish“, Kung Fu Monkey, 3 March 2006 — Are famers the “real Americans”?
Today’s Featured Articles
(A) Wimp in the White House, Jonathan Zasloff, 11 February 2010
(B) “Hold Onto Your Underwear – This Is Not a National Emergency“, Tom Engelhard, TomDispatch, 14 February 2010
(A) Do we have a wimp in the White House?
Wimp in the White House, Jonathan Zasloff, 11 February 2010:
Now that the Senate has graciously decided to approve less than half of the nominees that it had held up, President Obama has announced that he will make no recess appointments in the Senate’s upcoming recess. The NLRB still has no quorum. There are still several judges held up. The Senate did not even move on 3 key Defense Department appointments blocked by Richard Shelby (R-Romper Room).
At the same time in his administration, George W. Bush made several recess appointments, while constantly attacking pliant Senate Democrats for obstructionism and riling up the GOP base: he particularly relished appointing management lawyers to the NLRB. Obama seems to relish telling his most devoted supporters to STFU.
Rahm Emanuel cut his teeth working for Bill Clinton when he faced a Republican Congress. Obviously, Rahm seems to like it that way. But the fish rots from the head.
(B) This is not a National Emergency
“Hold Onto Your Underwear – This Is Not a National Emergency“, Tom Engelhard, TomDispatch, 14 February 2010 — Excerpt:
Had the 23-year-old Nigerian set off his bomb, it would have been a nightmare for the people on board, and a tragedy for those who knew them. It would certainly have represented a safety and security issue that needed to be dealt with. But it would not have been a national emergency, nor a national-security crisis. It would have been nothing more than a single plane knocked out of the sky, something that happens from time to time without the intervention of terrorists.
And yet here’s the strange thing: thanks to what didn’t happen on Flight 253, the media essentially went mad, 24/7. Newspaper coverage of the failed plot and its ramifications actually grew for two full weeks after the incident until it had achieved something like full-spectrum dominance, according to the Pew Research Center’s Project for Excellence in Journalism. In the days after Christmas, more than half the news links in blogs related to Flight 253. At the same time, the Republican criticism machine (and the media universe that goes with it) ramped up on the subject of the Obama administration’s terror wimpiness; the global air transport system plunked down millions of dollars on new technology which will not find underwear bombs; the homeland security-industrial-complex had a field day; and fear, that adrenaline rush from hell, was further embedded in the American way of life.
Under the circumstances, you would never know that Americans living in the United States were in vanishingly little danger from terrorism, but in significant danger driving to the mall; or that alcohol, tobacco, E. coli bacteria, fire, domestic abuse, murder, and the weather present the sort of potentially fatal problems that might be worth worrying about, or even changing your behavior over, or perhaps investing some money in. Terrorism, not so much.
Afterword
Please share your comments by posting below. Per the FM site’s Comment Policy, please make them brief (250 word max), civil and relevant to this post. Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).
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Everyone gets everything he wants. We wanted an election, and for my sins, they gave us one. Brought it up to us like room service. It was a real choice election, and when it was over, We’d never want another one.
The article “Rise of the Machines” creates a misleading impression. The author would like us to believe that CAT scans cost $1400 because the machines are so complex and so expensive. But that exact same CAT scan that costs $1400 in America costs $40 in France. Why is that? Does France use less sophisticated, less expensive scanners?
No, France uses exactly the same CAT scanners America uses. The difference is that in America, groups of doctors (or a hospital run by a group of doctors) get together and buy a CAT scanner or set up a lab to do blood work or put together a lab to do DNA workups, and then the doctors overcharge hospitals or the hospitals overcharge individual patients by a monstrous amount. Not just 10% or 20% more, but 5x to 7x more for the exact same scans and tests done in America as in France or Canada or Britain or the Netherlands, using the exact same equipment. See “
An insurance industry CEO explains why American health care costs so much“, Ezra Klein, blog of the Washington Post, 2 September 2009.
American medicine costs an obscene amount of money because doctors are encouraged to view themselves as little capitalists, and so they set themselves up as businesses and charge whatever the market will bear.
Stop letting doctors practice medicine as a business and the cost will come down. Until then, as this New Yorker article points out, whatever the market will bear is infinity. There is no limit to what the market will bear when your life is on the line.
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FM reply: Wow, that’s amazing. Klein’s WaPo article is well worth reading.
Of course an insurance industry CEO would say that the problem is greedy doctors.
About 10% of doctors take significant discounts for cash payment to avoid having to deal with the insurance companies. See this USA Today article, “Some doctors want cash payment — and their patients aren’t complaining.”
“Stop letting doctors practice medicine as a business and the cost will come down.”
This is not correct. Try NOT managing your household finances like a business and see what happens to your expenses. A market is just an information system that gives the price of goods and services. Given enough competition (now there’s an argument for not letting the AMA dictate how many doctors are allowed in the pipeline), there is nothing inherently wrong with a business model for doctors. Somehow we managed to survive until the last half-century using insurance for only truly expensive risks that we couldn’t afford.
Ever since employer-based insurance received favorable tax treatment in World War II, we have disconnected patients from the economic benefits and consequences of their health care choices. The insurance bureaucracy continuously adds costs because it’s not really “insurance.” We’ve known this for years, as in this 1994 Cato study.
Can you imagine how expensive your car insurance would be if it also paid all gas and maintenance? Add on top of that, every time you went to fill up, the gas station and mechanic had hired experts to fill out incomprehensible forms and submit most of them to the government (Medicare) and/or an insurance company for reimbursement? And the government had a whole bureaucracy for reimbursement? And then the station had to bill you for the part that the government and/or insurance didn’t pay? Now you are beginning to see where much of the extra cost is coming from.
Oh, and who decides how much to hold down doctors wages? Wage and price controls went out with Nixon and good riddance.
This is a great set of thoughtful articles that really got me (and others) thinking. Keep up the good work, FM.
CAT scan for $40 ? I think not . Add up what you’d need from car park , premises , communications ,reception , records , data protection , patient and staff facilities , counselling and nursing ,dealing with medical emergencies that might arise , equipment , consumables ,radiation monitoring and protection , maintainance contracts ,radiographers , radiologists , processing , insurance , security ,accountants , and most of all the consultant doctors . No CAT scan is an island complete in itself .
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FM reply: Agreed, the $40 is impossible for the current US system. Let’s do a back of the envelope calculation for the cost of the machine and labor, assuming the machine is well-utillized over a reasonable operating lifetime.
* A CAT machine cost $140-300 thousand (source). Assume $300,000:
* Assume 1,875 per year (one scan per hour, 40 hours/week, 90% utilization), 5 years.
* The machine costs $32/scan (ignoring interest and maintenance).
* If it requires 3 full-time people for the 40/hours/per week, at a cost of $350 thousand (wage, taxes, benefits), then labor costs $187/scan.
* Total aprox $220/scan, before overhead and insurance.
Arms Merchant claims “that is not correct” that removing the profit motive from health care reduces costs, and his claim is flatly false — and it’s easy to prove his statement is categorically and utterly false. Studies overwhelming show that the Mayo Clinic provides the highest quality lowest cost per patient health care in the United States.
The Mayo clinic uses a non-profit model.
As for annie’s assertion that the ancillary costs of a CAT scan in France somehow add up to $1360, that’s too ridiculous to deserve comment. If that were true, the French national health care system would be trillions of dollars in debt. It isn’t.
The ignorant foolish citizens of America simple refuse to believe that health care in America costs far more than health care in the rest of the developed first world countries to provide much worse care. But it’s true.
This should not surprise us. The ignorant foolish citizens of America also believe that crime in America is exploding out of control, while the actual observed reality is that crime in America has plummeted to record low levels and continues to decline.
This is why health care reform and criminal justice reform prove futile in America. As Friedrich Schiller remarked, “Against stupidity, the gods themselves contend in vain.”
FM, the numbers on your CAT scan budget don’t add up. First, a CAT scan takes several minutes, not an hour, so you can easily do 2 per hour. The main time-waster involves getting the patient into the machine and settled so the patient is stationary and not moving. That only takes 10 minutes or so.
Let’s re-run your numbers to see what the cost is likely to be in the real world:
A CAT scanner costs somewhere between the min and max amounts, figure halfway twixt $140K and $300K, which gives $240K. 2 scans per hour yields 3750 scans per year.
You only need two people per scan, a radiologist and a low-paid orderly to move the patient around. Radiologists make circa $48K per year (you only need an A.S. 3-year degree certification and a state license) while orderlies get paid around $10 per hour to push the patient around in a wheelchair, zero skills required for that. That adds up to $350K for labor over the course of 5 years.
Now the fun begins: because the CAT scanner is a business expense, it gets depreciated as plant and equipment over its lifetime. Figure its lifetime runs 10 years, you depreciate the cost over that period. That gives you tax breaks on the profits from your CAT scans that adds back 25% to your coffers, effectively reducing your overall cost by 25%. Now let’s figure the total cost: (0.75*$590K over 5 years)/([3750/year]*5 years) = $23.60 per scan assuming the scanner is a business expense and wasn’t bought outright as a gift for Christmas (yes, hospitals run as businesses for profit in America, and yes, they do take tax depreciations on plant & equipment).
This yields even in the current American system a tidy profit of $16.40 per scan, which, at 16 scans per day, 365 days per year, adds up. But of course that’s not enough for American doctors and American hospitals. No, noooooooooooo, they need a profit of $1,376.40 per scan.
Keep on trying to defend this kind of indefensible greed, people. Your credibility is disappearing by the minute.
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FM reply: I could not find any estimate of CAT usage, so I used information about PET machines. Unless you have actual data, I don’t think guessing adds anything to the discussion.
“Radiologists make circa $48K per year”
Not in the US. A “CAT scan technican” is not a radiologist.
PET scanner differ radically from CAT scanners. A PET scanner requires a small nearby cyclotron to generate fast-decaying radionuclides which are then injected into the patient, and glucose metabolism gets tracked by its radioisotopic decay in the brain (the gamma radiation released is minimal and harmless).
By contrast, a CT scanner is just an X-ray machines which sprays X radiation through the length of a subject’s body to obtain a sequence of imaging “slices.” The process is fast and simple. As the source points out, “image acquisition typically takes 20 – 30 seconds.” Factor in 10 minutes or so to calibrate the machine, get the patient in, immobilize the patient’s head (sometimes required), and so on, and 2 CT scans per hour is ridiculous conservative. 1 CT scan per hour is simply off the charts for an imaging procedure that requires 20-30 seconds.
You’re right — I meant to say “radiological technician,” not radiologist. A radiologist reads the X rays, and requires an M.D. plus extra training. You don’t need a radiologist in the room to do a CT scan and there typically isn’t one present. All you need is a radiological technician and an orderly. You don’t need a nurse present because CT scans are non-invasive — unlike a PET scan, nothing needs to be injected (except in the rare case that contrast enhancers are required). The patient just lies down inside the machine. Here’s the proof that radiological technicians make between $25K and $59K.
*I run a private veterinary business so know you cannot ignore the ‘ overheads ‘.
From the land used for the car park to the various specialist waste disposal contractors , everything has to be costed in somewhere . Either direct to the unit or as a fraction of the operating costs of the hospital/medical centre .
*For every member of staff needed on duty you need to employ 2 . They have to have holidays , lunch , toilet breaks , training days , babies , jury service , compassionate or sick leave etc etc .
*The people having the scans are ill , worried , maybe disabled , maybe on trolleys with drip feeds , sedation ,oxygen etc . There maybe sobbing children with stressed out parents . You cant shove these people through like cans on a belt , and meet modern standards of compassion .
* You cant just record 10 random slicesan dreach a diagnosis . You have to target organ and angle , allowing for size and previous radiation dose , drugs and implants in the body etc . May need to use contrast media . The diagnosis is not provided by a computor screen . 1 , probably 2 , consultants have to the serously study the images . Then discuss their interpretation with the referring physician or surgeon . Flicking the switch may take minutes , the interpretation and liason may take hours. Between people who have undergone years of specialist training . The images on their own are useless .