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Yesterday, and the problems of modern politics
So the Republicans yesterday managed to do something that I hadn't actually thought possible: they made me sympathetic to Mitt Romney. Yesterday's pile-on was *so* cynical that I found myself feeling sorry for the poor bastard, and the way that a completely out-of-context remark turned into a firestorm.

For those who aren't following the blow-by-blow in the Presidential Gladitorial Stadium: yesterday in NH, somebody asked Romney about Obamacare, and specifically what he would do instead. A fine question, and his answer was that he believes that individuals should get their *own* insurance, instead of being indirected through company plans, so that they can make up their own minds. Unfortunately, the way he put it was (paraphrasing from memory): "I want to be able to fire my insurance company. I like to fire people, and the insurance company shouldn't be any different."

Admittedly, it was an incredibly dumb gaffe (especially because he committed the cardinal sin of confirming everybody's worst expectations of him), but it's been blown a tad out of proportion by the other candidates shouting from the rooftops, "Romney likes to fire people!".

That isn't really what annoys me, though -- he kind of walked into the firestorm, and should have known better. What annoys me is that, in the heat of the soundbite moment, everyone's ignoring the fact that he said something *really* interesting. I mean, saying that we should replace the current insurance system with direct insurance to individuals is not some sort of minor tweak -- hell, it's not even a patch the way the new healthcare law is. It implies a total overhaul of the system.

Consider: Romney is 100% correct that the key flaw of the current system is the indirection in it. You may hate your health insurer, but you usually have little say in the matter -- you get the insurance that your employer dictates. And the employer's considerations are a bit ethereal from your point of view, having only a modest amount to do with you personally: instead, they are focused on finding a reasonably good price for insuring a pool of employees, and providing enough quality of care that it is at least not a net negative in trying to hire people. This isn't exactly a recipe for effective and appropriate competition between insurers. Plus, since your cost of care has little to do with how much you pay, you have little incentive to use the service appropriately. What Romney is suggesting, essentially, is that we should really break this system down, and redo it in a way that promotes effective competition and provides better motive to use it well.

In airy economic terms, this is entirely sensible -- the economist in me kind of loves it. Unfortunately, it has a lot of fairly horrible real-world problems -- not least, the fact that insurers really do not want to insure anybody who really *needs* it. I suspect that it could be made to work, and it wouldn't actually surprise me if it could eventually work considerably better than what we now have, but not without a lot of interim pain and eventually a *massive* new regulatory framework.

None of which anybody is talking about. Instead, everybody is talking about the soundbite. The more highbrow networks are talking about the people talking about the soundbite. Nobody is talking about the incredibly controversial thing he actually said, which is far more interesting.

*Sigh*. It's going to be a long year...

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keep putting up what's going on. You're like my digest to the stuff i ignore because it sounds like old guys bitching.

Well, of course it *is* mostly old guys bitching. But I'll probably continue to comment throughout the year, at least when something more interesting than the usual playground politics happens...

Getting insurance through employers is also double-jeopardy: if you lose your job, you lose your insurance(*) at the time you can least afford to shell out money for a personal plan, and have a stressor piled on you when you can least afford stress.

Furthermore, relying on employer-provided insurance is *terrible* for the sort of "quit your job and start a new initiative!" individual entrepreneurism that the USA claims to cherish.

(*) = Or get hit with a massive jump in premiums for COBRA.

Yeah, that's one of my biggest complaints about the current system: it hinders job mobility, which is historically one of the US' greatest competitive advantages. It's a real drag on the economy.

This is part of what annoys me about the "Obamacare" mudfest. (I won't dignify it with the word "debate".) No, the new healthcare law isn't even remotely perfect, but it's not trying to be. It's trying to be an *improvement*, and in several important respects it is. This is chief among them: having a healthcare safety net (which is basically the main point) is a major boost for job mobility, and I suspect a net economic plus in the long run.

And this, in turn, is why I found the question and answer so interesting. It's a great question, and I was downright surprised to find that Romney actually was willing to give a non-pablum answer. I would *love* to see people press him on this, to see if he's actually thought at all about the ramifications...

I believe that insurance, as a concept, has caused our current problem in the first place. Rather, the ubiquity of it, to the point where no-one can realistically live without it for long. When we were kids, many people didn't have routine insurance (though hopefully major medical). Some providers didn't even accept insurance. The pricing structure ("we'll pay you less, but you'll have access to all our people") started to drive up costs because the reimbursement rate was lower than the normal fee. As a result, the non-insured payed slightly more, but as they were a significant chunk (if not the majority) people didn't really notice. Now it's such that the "usual and customary" rate is a farce, jacked up so that the providers can receive a reasonable rate in the reimbursement. And then the uninsured gets screwed because no-one expects anyone to actually pay that rate - because everyone has insurance, right? So the cost gets written off, spread amongst the other fees, etc.

At this point, though, we need insurance to survive even the small things. I couldn't pay $350 for a routine pediatrician's visit, and yet in order to have my two kids in school that's a guaranteed $700 every year. Sure, the cost of having kids. But the costs have been driven up by an industry we're increasingly beholden to.

Sure, I'd like to be able to "fire" an insurance company, but they know better. As long as they all have similar practices, there's no-where else for me to go. They have no incentive to change. Yes, someone who breaks that mold might get customers, but as long as the majority holds fast the upstart will go under due to economic realities. From my perspective, what we have really sucks, but it can't change without a fundamental re-write, and a change in societal attitude as well.

So I think Romney's intent with his sound bite was naive at best. He's in a position where he *can* do that, because he's got enough money to cover himself should insurance not live up to expectations, and he can afford the gold plan. Most of us can't, and thinking that somehow individual insurance would make that *better* is cute but really out of touch.

I also have little sympathy for the squirming he's doing. Yeah, the quote was out of context, but there was a connection. What's more, the quote does seem to reflect his prior actions. He may not have taken any joy in it, but he *has* fired many people. Remember when he ran for Senate in 1994? Remember the march that fired Staples workers organized during the election season? One reason why the quote resonates is because (for some people) it's believable.

I have little sympathy - less than none - for another reason. He and his campaign did their own little out-of-context quoting a little while ago against Obama, but they did one better (or worse). They took a few words from an Obama speech and threw it up all over the airwaves: "If we talk about the economy, we'll lose." And that resonates also, because the economy sucks and many people want to blame Obama for it. The big problem is that *Obama* was imagining a quote from someone else at the time (John McCain), so it's not that they were really even his words in any meaningful sense. It's beyond an out-of-context quote; it would be like if someone recorded Romney reading a bedtime story and only aired "I'll huff and I'll puff and I'll blow your house down." He _should_ be squirming, since his little trick was far sleazier.

I largely agree on all points. Including the latter: the point is that I was surprised to find myself sympathetic to Romney even briefly. I think the man's a somewhat scary monomaniac, helped mainly by the fact that he's not quite as crazy/evil/stupid as most of the Republican candidates. (I can't trust someone whose life has been focused solely on the goal of becoming President.)

That said, I found it refreshing that he was even willing to say something as concrete as he did. I don't actually expect any of these politicians to have fully workable plans, but I would *love* for them to get into a debate that actually had some substance. As you say, fixing things is going to require a deep re-examination of the system, so seeing somebody willing to open that particular Pandora's Box, even if I don't think their approach is fully plausible, is encouraging in its own way...

Thanks for posting on this; it is interesting, and I hadn't heard it.

You're welcome. I get most of this stuff from NPR on my evening commute, frankly -- All Things Considered and Marketplace make a reasonably informative view on current events. (Especially when later leavened with the Economist for perspective and detail.)

I am so hesitant to speak up here, but I need to kvetch to someone and you opened the door...

Romney is late to the game, bless his heart. I note he is still further ahead than anyone else has been who is currently running, second only to Obama himself. This is by no means a new idea. In the industry this is the long term anticipated Writing On The Wall. We have been working on understanding that this is the direction we must eventually go since the 90s.

The current system is not a proper "system". What I mean by that is that it has not been designed by anyone. Most gamers and Network engineers put more deliberate thought and structure into their systems than the current US Health Care "System". What we have is a hodgepodge of custom and history, expectations and traditions and if it does not serve the greater society we should ditch it. We are clearly not in a place where we can ditch it and use the European model. Ergo... this the "individual coverage" model is mostly what we got. It's more in keeping with how Americans think and feel and believe than the European Model.

Here is the deal though, it won't work (IE be affordable to the individual) unless pretty much everyone is in the system. Insurers don't mind insuring the people who really need the care, provided enough people who don't (currently) need the care are also enrolled to cover the costs of the people that do. That is how "insurance" works. Everyone pools their money and some people draw on that money pool a lot, and some people draw on it only a little. The math don't work any other way. Either everyone is in and the government pays for it, or everyone is in and the individuals pay for it... or everyone is not in and we try to keep the big money consumers of the product out.

So... individual coverage as a model can work, but it will come with Romney's stick... Everyone has to be in the pool or you get fined. And the fines have to go into covering the difference for the healthy people missing out of the pool. Romney the businessman gets this. The Republican Ideological candidates probably won't or will refuse to. This, as you say, comes with a massive new regulatory Framework...which as we all know means "big government". It's hilarious to me that the Republicans are talking about this at all. Most of them seem have all the outrage about it and none of the actual ideas or ability to shift their ideology to get it to work.

And as is always true when I comment on health care... these are my opinions and not the opinions of my company.
There. Rant sort of over....

Nicely put, and entirely agreed. It's curiously comforting to know that at least some people in the industry understand how this has to play out, even if the politicians are massively in denial.

And I concur that Romney is probably the only Republican who actually groks it. In that respect, I'm mostly astonished that he was even willing to whisper about it during this stage of the campaign...

While I agree with the political points of your post, I also agree with the article over at Salon (http://www.salon.com/2012/01/09/romney_defends_his_fire_people_gaffe_with_a_lie/singleton/) which points out how karmic a gaffe it is for Romney...

It’s also a form of karma that Romney’s being skewered over words being taken out of context, when he did the same thing to Obama in November. Remember the ad showing the president saying, “If we keep talking about the economy, we’re going to lose,” and implying it was a recent clip, about the current election cycle – instead of a 2008 clip quoting a John McCain advisor. Romney’s folks spun the ad by saying it was the kind of thing the president could have said recently, given the sputtering economy.

Oh, sure. Like I say elsethread, the startling thing is mainly that it made me sympathetic for Romney even briefly...

No, Romney is not 100% correct that the key flaw of the current system is indirection. The key flaw of the current system is that it is dealt with as *insurance*, instead of care and maintenance.

Insurance is what you use to cover yourself from damage from high-damage, but low-probability events. This is fine if what you're trying to cover is broken bones but it is entirely inappropriate for dealing with health maintenance - getting your vaccines, working with your doctor to prevent heart disease as you get older, managing your diabetes long term, and so on.

Paying for health care in this way is like expecting your auto insurance provider to manage your oil changes. It's fundamentally the wrong model.

A good point, and likely correct...

It's amazing how many things in our country's current state that would be so much better in the long term if we could just overhaul it, but would cause a ton of pain and suffering in the middle and how much people can't see those long term benefits. Like doing something to manage to rampant inflation in college education (my mother's generation paid approximately 2k for college at MIT. I don't think inflation is 20x what it was in the late 70's early 80's!)

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