Bacon's Rebellion

Creating jobs in this jobless economic recovery is the priority for every politician of either party. It was President Barack Obama’s major goal during his State of the Union speech as it was for Virginia Gov. Bob McDonnell who gave the rebuttal that was televised nationwide.

commentary in Style Weekly)

Here’s a fascinating online test being conducted by Jonathan Haidt and his colleagues at the University of Virginia that explores the differences in moral values between liberals and conservatives. You can take the “Moral Foundations Questionnaire” here. Here are my results.

Fairness values:

• Fairness as egalitarianism (e.g., “ideally, everyone would end up with the same amount of money)
• Fairness as equity or proportionality (e.g., “people who work the hardest should be paid the most”)
• Fairness as retribution (e.g., “an eye for an eye, a tooth for a tooth”)
• Fairness as personal responsibility vs. freeloading (e.g., “whether or not everyone is pulling their own weight”)

Liberty values:

• Personal liberty (e.g., “everyone should be free to do as they choose…”);
• Freedom from government (e.g., “the government interferes too much in our everyday lives”);
• National autonomy (e.g., “I want my nation to stay clear of treaties that will limit…”)

Take the test then post your results in the comments section. I’d be very interested to see how regular B.R. commenters (and anyone else who cares to identify him/herself) compare on moral values.

The speech President Obama will deliver in a few hours may be his last chance to make a difference over the next three years.

In order to get elected he had to offer hope and belief in a change for the better.

After an inspiring Inaugural speech, instead of taking on a thousand windmills, he should have taken stock and then a few weeks later started to prepare citizens for the future.

The current administration inherited a incredible number of problems that have been mishandled and made worse over the past 37 years by both political clans.

In addition, the current administration inherited the smoldering ruins from specific responses to crises that arose over the past decade. It is as if someone (Uncle Dick?) said: “What is the worst way to respond to this event?”

And THAT became the administration’s policy: 11 September 01 (“go shopping,” while we start two wars) economic stagnation (lower the interest rates to stimulate ‘growth’ and subsidize Large, Private vehicles); citizen well being (Buy more house than you need in places you can only reach with a Large, Private vehicle); protect health and safety (Do not enforce existing health and safety regulations); the list is endless…

Today’s WaPo has a nice one pager (A-4) that outlines seven broad categories of Obama promises and how far he has gotten. Not far.

There is a bigger problem:

Joel Achenbach nails that problem in “Americans are all for being against everything” also in today’s WaPo

Citizens are not prepared for the Transformations that will be necessary to achieve a sustainable trajectory for civilization. They want an economic ‘recovery’ that will take them back to where they think that they do not have to worry about anything beyond optimizing their short term profit and pleasure form Mass OverConsumption and Business-As-Usual.

After all, that is what both major political clans have promised would happen if you vote for “our” candidate.

We will explore why this is the case in more depth in “What the Future Holds” forthcoming, but here is a quote from the rough draft:

“Lets start with what is behind and beyond ‘The current fiscal status of nation-state, state and municipal Agencies.’ In the comments following Peter’s 30 November post “Going Vertical,” Groveton said:

“In the end, a nation only has so much wealth. We have overspent our asset base many times over. Our exploding entitlement programs get the current politicians votes at the cost of our country’s future.”

“From the example given, it appears Groveton is equating “nation” and federal Agencies. There is solid fact behind that statement but it is only the tip of the iceberg.

…………

“The problem with Groveton’s observation, the MainStream Media headlines (omitted here) and Ruth Marcus’ first grim reality (a brief paraphrase of Jim Bacon’s Boomergeddon) is that they are not comprehensive enough.

“It is NOT just nation-state Agencies or even ALL Agencies that have over spent. That is still just the first layer – to use the Hazel Henderson analogy. It is the tip of the only iceberg THAT IS NOT MELTING.

“Not just Agencies but Citizens, Households and Enterprises have overspent. They were led to believe “a growing economy raises all boats” regardless of what makes it ‘grow.’ Mass OverConsumption is sinking all boats. It is sinking the private boats of the vast majority of citizens and their Households. It is also sinking the collective boats of citizen’s Organizations – Enterprises, Institutions AND Agencies.”

EMR tends to agree with what Peter and the early comments on his Obama post (“Its Really Business As Usual”) but how is that grim reality going to change / Transform? Only if citizens believe it must change / Transform.

Can Obama pull it off? If he does not, it may be a decade before citizens are ready to listen again and in a decade how much of the once bountiful resource base will be left to support the Transformation?

As readers of Chapter 1 of The Shape of the Future know, Clinton’s State of the Union speeches play and important role in depicting why Clinton / Gore were not able to understand human settlement patterns or contribute to evolving a sustainable trajectory. Hopefully Obama will do a better job.

The best preparation for tonight’s speech may be to reread (surely you have read it at least once) Amitai Etzioni’s 17 June 09 The New Republic essay “Spent” that has been republished by Utne as “Get Rich Now” in the Jan / Feb issue.

Etzioni does an incredible job of laying out the difference between consumption and consumerism (aka, Mass OverConsumption) the Green Menace. In four pages he wraps up the Communitarian and Transcendental alternatives to Mass OverConsumption. The essay outlines the fundamentals of “A New Metric of Human Well Being” (PART V of TRILO-G)

We can only hope Obama read Etzioni when he was framing what he was going to try to communicate in preparing citizens for the future.

EMR

One of the troubling things about this blog are the perceptions revealed by some of the commentators, especially about economic policy.

There’s a scene from “Monty Python and the Holy Grail,” in which Eric Idle plays a corpse collector making the rounds of a plague-ridden village in the Dark Ages, crying “Bring out your dead, bring out your dead.” One peasant tries to pass off an old fellow as dead. The old guy moves, saying “I’m not dead.” “He says he’s not dead,” says Eric Idle. “Yes, he is,” says the peasant. “No, I’m not,” says the old guy. “Well, he will be soon,” says the peasant. “He’s very ill.”

I would hope that Title III of the Senate version of the bill, entitled “Improving the Quality and Efficiency of Health Care Act,” could be resurrected as a stand-alone bill. I believe it would gain bipartisan consensus and quickly win passage. Perhaps Sen. Mark Warner, who took a special interest in this aspect of reform, could lead the effort. Here is a section of a chapter from “Boomergeddon” that describes the benefits and limitations of Title III.

Bending the Cost Curve, Obama-Style

President Obama and his Congressional allies had two major preoccupations in approaching health care reform. First, they wanted to extend medical coverage to the 15% of the population that lacked it, a liberal Democratic priority since World War II. Second, they had a keen understanding that the nation could not long afford medical care if the cost continued to escalate some 2.5% a year faster than the general inflation rate over the next 40 years as it had for the past 40 years.

The tumultuous debate that ensued revolved mainly around the question of how to achieve universal insurance coverage, how to pay for it, and what impact the legislation would have on the federal budget. Different versions of the legislation were estimated to cost in the vicinity of $800 billion to $1 trillion over a 10-year period. Congress spent months identifying one group after another — the rich, the young and healthy, beneficiaries of high-cost health plans, consumers of soft drinks, cosmetic surgeons, tanning parlors — that could be shaken down for enough money to make the initiative “budget neutral.” But lawmakers faced a hard reality in this zero-sum game: For every winner (someone who gained access to medical insurance), there was a loser (someone else who paid for those benefits). And the losers raised hell.

The O Team cut deals with Big Pharma, Big Insura, Big Labor, the hospitals, doctors and even senators from Nebraska and Louisiana to buy their acquiescence. But in the end, it wasn’t enough. Health reform sputtered as Congress tried to reconcile the competing visions of the Senate and the House of Representatives. After the January election of Republican Scott Brown to the Massachusetts Senate seat previously occupied by Teddy Kennedy, the initiative collapsed. It was clear even to members of Congress: Far more Americans saw themselves as loser than winners from the legislation.

It’s a shame that the Obama administration tied the fate of the controversial universal-care provisions to the productivity-and-quality reform elements of the bill. Had those components been carved out in their own bill entitled, “Improving the Quality and Efficiency of Health Care Act” (as Title III of the Senate version the bill actually was slugged), it likely would have won bipartisan support and sailed to easy passage. The measures enumerated in Title III were not in themselves sufficient to “bend the curve,” as I shall explain, but they would have moved the U.S. health care system in the right direction and set the stage for the next round of market-oriented reforms.

Under the Obama plan, the commitment to efficiency and quality would start at the top. The Secretary of Health and Human Services (HHS) would develop a national strategy to measure results, identify best practices and goad hospitals, doctors and other providers into changing the way they practice medicine. In place of the current fee-for-service system, which reimburses providers on the basis of how many procedures they perform, regardless of the outcome, Medicare would reward them on the basis of how successfully treat the disease. Superior results would get more money; sub-par results would get less. Additionally, Medicare would pioneer the “bundling” of payments so that teams of medical specialists with different disciplines could be paid for delivering coordinated care over the course of a patient’s entire cycle of care, from prevention and diagnosis to treatment and recovery. These ideas are very similar to those propounded by Michael Porter and Elizabeth Teisberg, the business school professors whose analysis I have quoted admiringly [elsewhere].

In the same vein, the national health care strategy also would tackle the problems of costly medical errors, infections acquired in hospital settings, and the all-too-frequent problem of patients being readmitted to the hospital for the same medical episode. These are all areas where cutting costs and improving quality go hand in hand. Another important initiative would devise more effective ways to deliver care to patients with chronic conditions, which account for more than half of all medical spending. To carry out the Quality & Efficiency strategy, the president would convene a working group, the Interagency Working Group on Health Care Quality, to coordinate the activities of some 23 federal agencies and departments and work with the private sector.

Among the specifics identified in the bill, HHS would establish a “hospital value-based purchasing system.” Each hospital would be assigned a “hospital performance score” based upon its quality and performance metrics. Medicare payments would be raised or lowered in tandem with the score, rewarding excellence and punishing failure. Scores would be posted on a “Hospital Care” website, where it would be accessible to the public.

Likewise, the bill would create a physician quality reporting system. Physicians would be required to submit quality data to HHS, which would massage the data and then inform physicians how their “patterns of resource use” compared to that of other physicians. To avoid punishing docs who took on the hardest cases, the data would be adjusted for the severity of the patients’ conditions as well as demographic factors such as income and ethnicity.

A Center for Medicare and Medicaid Innovation would create cutting-edge payment and service-delivery models with the potential to improve the quality of care for patients at less cost. Such experiments would include sending doctor-nurse teams to elderly patients at home rather than waiting for them to arrive in the emergency room, medical homes focused on women’s unique health needs, and primary care physician groups that took lump-sum or salary-based payments in lieu of fee-for-service reimbursements. Another idea, Healthcare Innovation Zones centered around teaching hospitals, would deliver a “full spectrum of integrated and comprehensive health care services” while incorporating novel methods for training future health care professionals.

The legislation also would have endorsed an innovation called “accountable care organizations” (ACOs), which are comprised of a hospital, primary care physicians, specialists and other medical professionals. Accountable for the cost and quality of care for Medicare populations of 5,000 patients or more, ACOs would employ quality and cost measures along with new technologies such as remote patient monitoring to continually ratchet up the quality of care. As incentive, ACOs would be eligible to receive payment for shared savings.

These ideas represent the best thinking of the medical establishment. If enacted, Medicare would evolve over time from its fee-for-service system, which reimburses doctors and hospitals regardless of results, into a system that paid providers based on results over the full cycle of care. Data would be collected, massaged to identify best clinical practices, and spit back to the doctors, hospitals and other health professionals to guide them in improving their results and their public standing.

The Limits to Top-Down Reform

Title III would bring real improvements to the U.S. health care system. But let us be honest. It would not represent a dramatic breakthrough. Many of the ideas embodied in the legislation are being implemented by forward-thinking hospitals and physician practices already, even without the carrot/cattle prod of Medicare reimbursement reform. More significantly, Congress would entrust the Department of Health and Human Services to lead the charge. In other words, reform would be top-down and it would unfold at the same lethargic pace at which the federal government moves.

… After law firms, health care professionals pumped more money into the system than any other industry — $13.6 million. (That doesn’t even include the vast sums donated to the presidential campaign.) One of the advantages of being an established player like a multibillion-dollar health plan, a Fortune 500 pharmaceutical company or a billion-dollar health system is that you have lots of money to hire lobbyists and spread around PAC donations. Start-up entrepreneurs who might challenge your market dominance don’t have big bucks to throw around — they plow every penny they’ve got into growing their business. So, when it comes to translating the law into the fine print of rules and regulations, whom do you think will dominate the process? The big guys with offices in Washington, or the little guys trying to meet payroll on Friday? To ask the question is to answer it.

Here’s the challenge: It does not suffice to collect quality metrics for the nation’s hospitals and doctors, as necessary as that is to building a transparent, market-driven health care system. It is not enough to redesign Medicare’s payment system, although that, too, is an important step forward. Missing from Obama’s health care reform was any recognition of how change is driven by entrepreneurial innovation. As I shall explain in Chapter 11, the only hope we have of “bending the cost curve” fast enough to avoid Boomergeddon is to radically restructure the health care industry, rejecting the idea that hospitals must provide all services regardless of how well they do so, and jettisoning the notion that physicians should organize their practices around functional areas like oncology, nephrology, orthopedics and the like. The way to achieve dramatic gains in productivity and quality is by reorganizing health care providers around medical conditions in multi-disciplinary teams with dedicated facilities that provide focused treatment across the full cycle of care and use data to drive continual quality improvement.

Here are some of the barriers that block the adoption of entrepreneurial business models in U.S. health care:

• The third-party payment system. With employers and insurers acting as intermediaries between patients and doctors, medical entrepreneurs have to gain the acceptance of bureaucratic insurers.

• Lack of price transparency. The Obama plan would have made performance data available. That’s half the value equation. But it’s only half. There is no price transparency in U.S. health care. Without quality and price transparency, patients cannot make informed consumer decisions. Instead, they rely upon referrals, usually from other doctors. If those docs are tied into integrated health systems that feel threatened by the competition, they make not refer patients to interlopers.

• Monolithic health care systems. The players with the most to lose from specialty hospitals are giant hospital systems, which provide a broad spectrum of health care services, usually excelling in only a few of them. As demonstrated repeatedly in the past, they will use their bargaining power with physicians and insurers to freeze competitors out of the market.

• Certificate of public need. Hospital giants can block new competitors in this bureaucratic forum by making the case that there is no “public need” for “duplicative” and “redundant” hospital facilities. They also can argue that the interlopers will “skim the cream,” leaving the unprofitable patients for the hospitals. The argument doesn’t have to be true to be effective.

• The Stark law. The law prohibits physicians from referring patients to a medical facility in which he/she has a financial interest. That could stymie physician/entrepreneurs from taking an equity position in a specialty hospital they set up.

• Tort law. Indiscriminate lawsuits against physicians imposes many costs on the health care system, the least of which is the cost of paying for medical malpractice insurance. A larger cost, as is commonly observed, is the cost of defensive medicine, as doctors order extra tests, often unnecessary, to protect themselves in the event of a lawsuit. The biggest cost may be the chilling effect that fear of lawsuits has on the corporate culture of healthcare organizations. What doctor or hospital would want to systematically collect data on misdiagnoses and medical errors for quality-improvement purposes knowing that it could be used to crucify them in the court of law?

None of these issues were addressed by Obamacare.

The United States has pioneered awe-inspiring breakthroughs in genetics, cell chemistry, medical imaging, non-invasive surgical tools and related technologies. But innovation in business management and delivery models has slowed to a crawl. Labor productivity has stagnated. Despite the massive amount of information that exchanges hands in the course of medical care, implementation of information technology lags that of other industries. And quality control techniques remain in a state of barbaric simplicity compared to best practices like Six Sigma and Total Quality Management in the manufacturing sector.

The corporate culture of the health care industry desperately needs to change. An entrepreneurial revolution that builds new patient-centered and quality-focused businesses from the ground up is far more likely to succeed than diktats handed down by the U.S. Department of Health and Human Services.

It used to be that Virginia is for lovers. Now it seems that Virginia is for shooters.

Fact One: Democrat health care negotiators have buckled to demands to exempt union contracts from the tax on high-end health plans until 2018, five years beyond the start date for other workers. The deal represents a giveaway to the unions of $59 billion. (See the Wall Street Journal coverage for details.)

Fact Two: Only 4.1% of Virginia’s workforce has union representation — the fourth smallest percentage of any state in the nation.

One of the initiatives that Gov. Tim Kaine fought hardest for was expanded access to pre-K programs for at risk children. It was an “investment,” you see. Pre-K programs would better prepare children for Kindergarten and 1st grade. The kids would do better in elementary school, fewer would get discouraged and drop out of high school, and fewer would end up on welfare or wind up in jails. Twenty years later, taxpayers would reap the rewards in the form of lower social services costs.

Eliminating the state corporate income tax sounds like a crazy idea when the commonwealth is facing $4.2 billion revenue shortfall in the Fiscal 2011-2012 budget. After all, the Kaine administration expects the tax to bring in $660 million, or 4.7% of all General Fund revenues.

But is it really so crazy? Only if you engage in static revenue analysis, assuming that cutting the tax — and putting $660 million back in the hands of Virginia businesses — would do nothing to stimulate economic expansion, job creation and revenues from other taxes.

A group of Richmond-area businessmen led by Bob Marcellus, a hedge-fund manager and global trader, has been working behind the scenes to get Gov.-elect Bob McDonnell on board with the idea, pushing the angle that the tax cut would stimulate job creation and, perhaps, even pay for itself. According to the Times-Dispatch, Del. Harry R. Purkey, R-Virginia Beach, has submitted legislation in the House, and Sen. Ryan T. McDougle, R-Hanover, has said he would do so in the Senate.

So far, McDonnell has been noncommital. “It’s an innovative idea and something that we are looking at,“ Eric Finkbeiner, director of policy with McDonnell’s transition team, told the T-D.

I can understand why McDonnell is cautious. He is obligated by the state constitution to balance the budget, and $4.2 billion is a big hole to patch, especially following the belt-tightening measures already instituted by Gov. Tim Kaine. Eliminating the corporate income tax would make that hole even bigger if it failed to pay for itself through extra tax revenues from accelerated economic growth. Unlike Barack Obama, McDonnell doesn’t have the luxury of borrowing money to finance the government. He has no margin for error.