Friday, March 24, 2017

Q&A - 24/3

American Medical Association

A [..] problem is that the uniquely American plethora of private insurance companies drives a squandering of resources. Legions of staff manage independent computer systems. Each insurance company devotes an enormous number of personnel to responding to emerging regulations from a variety of disparate governmental programs. The expense of this redundancy is considered “overhead” and passed along to the consumer. The intent behind those regulations could instead be implemented once, in a single system servicing the entire country [..]

A single-payer model would eliminate the inefficiencies of fragmentation by converting public programs such as Medicare, Medicaid, and CHIP into a single administratively efficient financing system. Streamlined billing under single payer would save physicians vast amounts in overhead.

In addition to reduced billing expenses, physicians would also enjoy a meaningful drop in their malpractice premiums. Roughly half of all malpractice awards are for present and future medical costs, so if malpractice settlements no longer need to include them, premiums would fall dramatically.

[Also the u]se bulk [of] purchasing [could be used ] to negotiate lower costs. We spend more but use less of most services than other member nations of the [OECD]. In other words, our prices are much higher. As health care economist Uwe Reinhardt noted, "prices for identical products or services in the U.S. tend to be, on average, twice or more than the prices of the same products and services paid in other countries…. Prices are high here because the payment side of the health system is so fragmented that few payers have sufficient market power to bargain for lower prices from an increasingly consolidated supply side."

Right

Question

But I believe everything is suitable for free market. You said some services like policing should be out, but I think policing would benefit from a free market approach, I'd like to see that.

Not unless,

.. it is year 2043 and you are in a movie called Robocop. Remember the movie's plot line? A corporation takes over the policing in Detroit, and robocop was a cost cutting measure. So the story is about the role of capitalism in public services (not about "a robot" who is "a cop", the same way Jaws is not about "a shark" - it is about the relationship between a father and his son).

Question

Is the job of the presidency the same as being as a CEO?

Yes

It is like being a CEO, but it's like being a CEO to a family firm whose family is not yours.

So now Trump is not the CEO of The Trump Org, he is the CEO of, say, Walmart. The board is composed entirely of family members, in this example, the Waltons. Half the board hates you, the other half wants your job, there are a few good supporters, most are lukewarm, the shareholders have a small voice, they mostly care about what they can get.

I guess it's clear who is who in this analogy.

Question

How does the executive take positions?

Stay away from "definitely-against" positions

The executive cannot withhold support for an issue based on the support s/he is getting from the public / thought leaders. It can't be like "be a supporter of mine, criticize less, I will give you X". It don't work like that. Systemically speaking the man-at-the-center is already an abomination (but a necessary evil, that's why US founders allowed it, but took great care limiting it),  people interact with this position in very disconnected fashion.

Here's how they do it: they look to see if any of their "definitely-against" positions are trampled on. If it is, they go to war. Simple as that. They don't tune, mix and match their laundry list of issues and gauge their "support level" based on these priorities, "hoping" they get thrown a bone if they remain in whatever position, etc..

So the burden is on the executive: the executive needs to judge what he can live with, offer concessions on those from day 1, veering away from everyone's negatives, at the same time trying to get what they want.

Also if there is uncertainty and too much horse-trading on basic issues, everyone around the man-in-the-middle will act to "tame" the executive. This is a potential headache area for MTBI SP Presidents.

If there is a need for a big policy shift, executive tries to convince others to forge a coalition, like Reagan did for his strategic shift on the Soviets. Arguing for the reverse in only a few years is a hard-sell. If convincing is not possible, you don't do it.