Obamacare: 25,000 Lost Jobs and Counting

Bacon’s latest column in the Washington Times:

An Associated Press story sparked a small furor recently when it reported that the Obama administration’s ban on deep-water drilling would cost an estimated 23,000 jobs. With unemployment stuck near 10 percent, consternation over the avoidable job destruction was understandable.

But that’s hardly the only example of how Mr. Obama’s policies are devastating the economy. A little-noticed provision of the Affordable Care Act will wipe out an estimated 25,000 jobs that physician-owned hospitals were expecting to create within the next year or so. To keep the big hospitals on the sidelines of the health care debate, the authors of Obamacare cut a deal that effectively blocks physicians from building or expanding their own specialty hospitals – spiking 39 projects that were on the drawing board before the law was enacted.

The job-killing provisions of Obamacare are particularly ironic given that physician-owned facilities tend to be economically efficient and deliver superior medical outcomes. Stated goals of Obamacare are to tame in-hospital infections, reduce medical complications and cut readmission rates – metrics in which many physician-owned hospitals excel. But health care “reform” hamstrings the tightly focused physician-owned surgery centers while protecting generalist community hospitals with more political clout.

The larger hospitals have long nursed a grudge against the nation’s 265 doctor-owned hospitals. Accusing physicians of “skimming the cream” of the most profitable patients and referring patients to their own facilities, a supposed conflict of interest, the big-hospital lobby has pushed for years to restrict the ability of doctor-owned hospitals to compete. The restrictive proposals made little progress during the George W. Bush years, but tumultuous debate over health care reform put them back into play.

Obamacare architect Sen. Max Baucus, Montana Democrat, proposed to pay for Obamacare’s massive expansion of entitlements in part by imposing a 20 percent cut in Medicare fees for hospital services over the decade. Understandably, the American Hospital Association and the Federation of American Hospitals protested the arbitrary nature of the cost savings. So, the Baucus caucus threw the big hospitals a bone – the crackdown on physician-owned hospitals – in exchange for putting a muzzle on their opposition. Neutralizing the hospital lobby was crucial for the law’s passage. Read more.

Bacon’s Rebellion angle: Fortunately for Virginia, none of the canceled physician-owned hospital projects are located here in the Old Dominion. That’s because there are so very few POHs here. Why is that? Because Virginia has the Certificate of Public Need (COPN) process by which the general hospitals can block the creation and/or expansion of POHs.

Virginia hospitals justify the anti-competitive COPN on the grounds that physician-owned hospitals “skim the cream,” mostly treating patients with better-paying private insurance and forcing general hospitals to treat money-losing Medicaid patients and those with no insurance at all.

That argument bears revisiting. The Physician Hospitals of America contend that POHs have comparable Medicare/Medicaid patient mixes to many general hospitals and that they do provide some uncompensated care as well. Obama’s insurance reforms should bring about a large reduction in uncompensated care. If the uninsured population drops by 2/3 or so, as is predicted, the number of patients without any means to pay for their medical care is greatly diminished. In that case, general hospitals need no special protections from competing doctors’ hospitals.

It will be interesting to see if Gov. Bob McDonnell’s health care council takes up this issue — or just buries it.

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29 responses to “Obamacare: 25,000 Lost Jobs and Counting”

  1. Larry G Avatar

    Wow. this is so wrong on so many levels. where to begin.

    First – who says that Physician-owned hospitals are more economical, more efficient or "better"?

    Second, we all know what the problem is in health care and that is that more and more folks in the business concentrate on what is most profitable – not what generates the most cost-efficient outcomes.

    This is why we have more specialists than we have GPs and the trend continues that way.

    Third – the system is characterized by manual paperwork rather than electronic records.

    Records are generated on paper, copied, faxed, a blizzard of paper and yet when you go to a specialist you STILL have to fill our your medical history from memory and there is absolutely no guarantee that your specialist is going to see your full medical history.

    Why are their no POH in Virginia?

    The Certificate of Need process is anti-competitive?


    so … I"m trying to understand how Obama's concern about POH is not similar to Va. approach.

    At the end of the day… this more criticism of Obama's approach – which is imminently criticize-able compared to what other initiatives that have been or are taking place?

    At the end of the day – there are TOO MANY people employed in the health care industry that are doing really dumb and expensive administrative practices and it adds tremendously to the costs.

    A fiscal conservative like Bacon ought to address what each piece of paper costs.

    Remember the banking industry reliance on paper? Remember paper bills? Remember how it now costs extra for an airline ticket NOT done online.

    All of this paper is costing us a mint in the health care industry and worse – because it's not electronic available on a central server – inevitably – despite tons of paper – some of it does not find it's way to where it ought to be and because of that redundant tests are order, bad diagnosis made and great gobs of dollars spent – finding out what was already in the medical records – not sent to the one doctor that did need them.

    Bacon could make the same argument about the military by the way.

    If we pull out of Iraq and Afghanistan – will we not create tremendous "unemployment" and yet.. what are we doing – we are paying hundred of thousands of soliders a salary and health care for them and their families on the credit card.

    but if we stop – we create unemployment and it would be Obama's fault – right?

  2. Anonymous Avatar

    The remedy for big hospital chains with market power is antitrust.

    I've read articles suggesting that small physician-owned hospitals have higher, and not lower, costs. But the opposite could be true. What are the facts? Where are the analyses?


  3. Larry G Avatar

    " What are the facts? Where are the analyses?"

    Not in Bacon's post…….

    employer provided health care has led to a distorted and uncompetitive market for health care.

    People who have health care do not care what a procedure costs.

    They do not care if it cost 10 times as much in this country as it does in other countries – like, for instance, MRIs which cost about $200 in Japan.

    Because we do not tax health care benefits – you cannot take the money instead and shop for your own insurance and you don't get the money instead if your spouse can cover you on their policy.

    Think how things would work if both spouses worked and one got the minimal coverage to include catastrophic or both of them and the other spouse could take the money – and shop for the best combination of quality and price.

    The problem with Bacon's general approach to this is like most who oppose Obamacare and that is they claim that a market-based system is what is lacking (and I agree) but then they don't provide the goods.

    The Republicans had 8 years to promote a market-based approach to health care but all they did was try out their thumbs in various orifices.

    Even now.. with the Repeal and REplace BLATHER – there is no real approach – no agenda but rather one thing in common – that Obamacare is bad.. and they are going to do "something" about it.

    You want to do "something"?

    I'm perfectly happy with a superior approach.

    Get on with it and stop complaining about what you don't like about the current approach.

    Republicans had 8 years to do "something". They did "nothing".

    I'm betting that once again – that "nothing" will emerge from the Republicans… only more divisive demagoguery and wedge politics.

    Fundamentally – the Republicans do not think the govt should be involved in health care to start with – and that's the bottom line.

    their job in their mind is to tear it down when they can, dismantle as much of it as they can get away with and in general vandalize it so that more and more people will end up agreeing that govt health care is a failure and we should abandon it.

  4. James A. Bacon Avatar
    James A. Bacon

    Sorry, Larry, there's only so much information you can convey in an 800-word column. I can't illuminate how to solve the entire health care crisis in that short of space. I do take a stab at it in "Boomergeddon."

    There is loads of research demonstrating that focused, specialty hospitals are more efficient, lower cost and have better outcomes than general hospitals. You can believe that or not, as you choose. Perhaps I'll have time to provide the citations…. Not that it would change your mind.

  5. Anonymous Avatar


    I think you make some valid points about Republicans in Congress not addressing health insurance issues. But I respectfully submit this is irrelevant and immaterial from the realities of today's political environment.

    From a 20-20 hindsight (at a bare minimum), Obama should have let HCR wait until the economy was working better. For good or for bad, Stimulus is not regarded by at least a plurality of voters as a success. Unemployment is high, and under-employment is higher. Even Senator Bennet (D-CO) has said we have very little to show for the billions and billions of spending.

    Moreover, HCR is largely viewed as a ploy to redistribute income to those who don't have insurance. As I've written numerous times, this particular plan created too many loser versus winners. Now you can criticize this as unfair, but people with insurance tend to believe that they earned it — either through work or by following LBJ's road map. Medicare has been sold as you pay your taxes while you are working and you receive health care when you retire. You've made sound economic criticisms of this program, but LBJ sold it differently. Unless his political heirs stand up and say, "hey, we cannot afford Medicare as usual, we need benefit cuts," I think we are stuck in the LBJ paradigm.

    Also hurting Obama is the perception that he cares more about "outsiders" (e.g., illegal immigrants) than "regular Americans." Contrast Bill Clinton.

    Just as Bush blew his strong position after 9/11, so too has Obama blown his.


  6. Anonymous Avatar


    Since "There is loads of research demonstrating that focused, specialty hospitals are more efficient, lower cost and have better outcomes than general hospitals.", how about sharing a few of your favorite links with us. If you have a few also that respond to Larry's criticisms, that would be excellent as well.

    This all seems reasonable doesn't it, especially since we now have all of the comment space in the world, its 2010, and this is the internet.

    We are interested in a dialog aren't we? … and not just rhetoric.

  7. James A. Bacon Avatar
    James A. Bacon


    Quote: Congress … instructed CMS to conduct a separate study of specialty
    hospitals. CMS found that specialty hospitals provide high patient satisfaction, high quality of care, improved patient outcomes, as well as greater predictability in scheduling
    and services. Regarding referral patterns, CMS reported that physician owners do not refer their patients exclusively to the specialty hospitals that they own. They also refer
    patients to local community hospital competitors. CMS found that there were no consistent patterns of preference for referring to specialty hospitals by physician owners.

    Finally, CMS found that, “Overall, the proportion of net revenue that specialty hospitals devote to both uncompensated care and taxes significantly exceeds the proportion of net revenues that community hospitals devote to uncompensated care. Real estate and property tax payments stay in the local community, as does a share of sales tax payments
    in most areas.”

    Source: 2005 Report to Congress by the Medicare Payment Advisory Commission

    In the physician-owned specialty hospitals we studied, the cardiologists and surgeons want to admit their patients, perform their procedures, and have their patients recover with minimal disruption. Physician control, they believe, makes this possible in ways community hospitals cannot match. Control allows them to increase their own productivity for the following reasons:

    * fewer disruptions to the operating room schedule (for example, delays and canceling of cases that result
    from emergency cases),
    * less down time between surgeries (for example, cleaning the operating rooms more efficiently),
    * heightened ability to work between two operating rooms during a block of operating room time, and
    * more direct control of operating room staff

    These same features also minimize scheduling uncertainty and delay for patients and would also apply
    to non-investor surgeons and cardiologists. …

    We found that both the aggregate mean and median values for costs at physician-owned specialty hospitals are higher than the corresponding values for peer, competitor, and community hospitals. However, these differences were not statistically significant. …

    In comparing length of stay, we controlled for differences in the mix of patients treated among hospitals
    using the severity classes of the all-patient refined DRG. … Our analysis shows that specialty hospitals appear to keep patients for shorter-than-expected stays. Actual lengths of stay were 17 percent to 31 percent lower than regional averages, depending on the type of specialty hospital. Moreover, specialty hospitals’ lengths of stay were often significantly shorter, relative to the expected average, than those for peer hospitals.

    There is also a lot of proprietary benchmarking data that I don't have access to.

  8. Larry G Avatar

    I have lot easier time agreeing with, in not to the nth degree, the more general observations that TMT makes.

    As bad as it seems with Obama, he walked on stage at a very bad time and was too young and inexperienced to sense the toxic mood of the voters – as well as the ability of the right wing propaganda machine to gin up the mother of all misinformation campaigns to peel off the independent voters.

    Bush and the Republicans did not underestimate anything.

    They just ignored it.

    These were not problems that they recognized or accepted as their responsibility – and they don't know.

    I just don't believe the Republicans are really prepared to deal with the problems we have – which are even more serious than they were during the Bush years.

    So, we might get a Republican Congress in 2010 and a Republican President in 2012 and we'll get 4 or 8 more years of what they did not accomplish before when they were in office.

    The Republicans don't have a clue what to do about health care.

    The whole concept that the govt should be involved in it or SS or Medicare – is one that they philosophically reject.

    Obama screwed up. Bush and the Republicans just never did care as long as they got tax cuts and money to fight "terrorism".

    They no more want to deal with Health Care than the man in the moon.

    You can bet if they do something more about immigration that it will be done "off budget" and won't be pay-go.

    If we're not careful – they'll get us into a ground war involving Somolia Yemen and/or Iran – all "off budget".

    I just don't know where you get your belief that they'll do anything much different than they did the last go around.

  9. Larry G Avatar

    thanks for the cites Jim.

    Here's the issue:

    " Physician-owned specialty hospitals are hospitals that primarily perform cardiac, orthopedic, or surgical procedures and are partially or fully owned by physician investors. Two recent deaths of specialty hospital patients have raised concerns about the ability of these hospitals to manage medical emergencies. In both instances, a patient experienced complications following elective surgery. Neither hospital had a physician on duty at the time the emergency occurred, and both hospitals called 9-1-1. The patients were then transferred to community hospitals, where they were both pronounced dead."

    Department of Health and Human Services
    Daniel R.


    I think this points up the problem which is that there are people who want to make money providing medical care but basically try to cherry-pick the lucrative services and not provide the other necessary services that affect the bottom line.

    Essentially, we're talking about stand-alone clinics performing procedures and surgeries that can result in life-threatening outcomes and these guys response to that was to rely on 911.

    so they call them hospitals but they have no real emergency room capabilities.

    I think this really illustrates the difference between a Republican free-market approach and a govt-directed approach.

    In the Republican world they'd approve these kinds of facilities and at the same time they'd pass "tort reform" that would prevent victims families from holding them accountable for inadequate care for unexpected complications.

    Do we trust Republicans to do market-based health care "right"?

    I don't.

    and I'm betting if they get back in charge – that many independents that bought the "Obamacare is bad and Republican-health-care is good is only good if you are on the money-making side of the equation such as Physician-investor hospitals whose planned response to emergencies is to call 911.

  10. Anonymous Avatar

    Larry has the better position here.

    Fact: A group of Gastros built a -oscopy ‘clinic’ halfway between two ‘community’ hospitals. All the Dr.s can practice in both general hospitals. But they got a loan, leveraged their money and built a facility so they earn more from doing -oscopys in their own facility.

    When one insists on getting the procedure in their own community hospital the Dr.s ‘do not have an opening for a month…’ In the meantime the new community hospital (non-profit) -oscopy bays go un used…

    True story.

    VA is full of the sort of clinics that Larry describes. The certificate of need issue is not in play here.

    Larry is also right: Do you ‘trust’ the Elephant Clan to ‘regulate’ for the public good? If you do, I have a bridge…

    Peter is also right, the medical services issue is not easy to sort out.

    One clear reality, Per Dr. Risse:

    EVERY Alpha Community needs a Community Hospital and a Community Laboratory.

    Every Alpha Village needs a Village Walk-in dispensary…

    Every Alpha Neighborhood needs and EMT…

    Until there is an organic education, health and safety system for EVERY organic component of society, there will be no basis for judging efficiency or effectiveness.

    Just making it ‘private’ or ‘free market’ is no more a guarantee of efficiency or effectiveness than just painting the walls yellow.

    However, it will raise the chance of someone making an unearned profit.


  11. Anonymous Avatar

    Larry is alos right about the 'lost jobs' issue.

    More efficient and effective medical service delivery will require LESS works, not more.


  12. Larry G Avatar

    The problem I have with Jim and the Republicans general approach is they seem to have blind faith in the "market" approach that it can and will provide quality healthcare at a competitive price.

    If that would be their goal and they actually put the necessary time and effort to put forth such an approach – I'd drop the Obama approach in a heart beat.

    But it has not come even close to doing that.

    for instance, the investor physicians want a waiver of the emergency care requirement.


    Because it costs money.

    Are they proposing to provide these services for a lower price?


    They want the same reimbursement as hospitals get – but they want to evade the costs that hospitals have.

    That's not competition.

    And it's not better care.

    It's simply a way to make a profit by not providing the standard level of care.

    They want the easier, more lucrative cases.

    Gawd knows.. that you as a patient with possible complications would go to them in the first place because first they do't want you an 2nd if you do have complications, they're going to call 911 to send you to a "real" hospital.

    This exemplifies the Republican approach to health care in my view.

    Always looking for the loopholes….

    always trying to make a profit…

    always trying to get exemptions from standards and negligent conduct.

    It's the "American" way.

    TMT apparently thinks these guys are going to do a better job than Obamacare.

    Good Luck.

  13. James A. Bacon Avatar
    James A. Bacon

    Larry picked up on what became a cause celebre for the general hospital industry in making their case against the physician-owned hospitals — a handful of cases in which patients developed complications, needed to be transferred to an acute care facility, and ended up dying. A tragic story, yes. But it's also argument by anecdote. How many people have died unnecessarily in acute care hospitals?

    As a rule, physicians refer patients at risk of suffering complications to acute care hospitals, even if they are owners in a hospital-owned facility. It just makes sense to maintain different levels of care, rather than to staff up everything to the maximum level for everyone. (Trust me, if all physician-owned hospitals had emergency-room facilities, the general hospitals, the Obama administration and Larry would be denouncing them for over-staffing!)

    The risk of a rare emergency event must be counter-balanced against the higher odds of getting an infection in a larger facility — the bigger the facility, the bigger the problem controlling infections. There's also greater risk of random screw-ups because there is not the intense focus on just a handful of related procedures.

    When you look at the numbers — as opposed to focusing on anecdote — specialty hospitals tend to outperform the general hospitals. (Let us remember, the driving spirit behind Obamacare is *evidence-based medicine*.)

    Now, there's one more thing to consider. Not all specialty hospitals are alike any more than general hospitals are. Some are better at what they do, some are worse, just as general hospitals are. Quality, cost and efficiency vary from facility to facility depending upon a variety of factors.

    How does it make sense to use the artificial criteria of physician ownership to be the deciding factor of who gets to expand and who doesn't? The right to expand or not to expand, if not driven by the market, should at least be driven by performance. But that's not what we got. We got a political power play because the Obama administration needed to neutralize the hospital industry.

    Just admit it and move on.

  14. Larry G Avatar

    If the physician-owned hospitals provided SUPERIOR care at a LOWER PRICE then you'd sell me Jim.

    That would indeed be a market-based solution.

    But you're right also.

    The hospitals that have ERs have to figure out how to pay for them and so they also depend on lucrative high-dollar medical procedures to help pay for the "loss-leader" ERs and the physician-investor hospitals are "poaching" the gravy.

    No where does the patient benefit from this unless there are credible metrics to demonstrate superior care at a competitive price.

    Otherwise it's a lot like two competing but predatory pay-day loan businesses fighting over who's going to be more successful at affecting the rules to their own benefit.

    If ObamaCare is so bad and this kind of alternative is so good then why not fix the parts of it that render it a bad solution?

    I note also that the folks who said Physician-owned hospitals were problematical was – none other than Medicare.

    Now I would have thought that Bacon's approach on this would be to attack the Medicare folks "big govt" command & control approach to this.

    I'd not be opposed to the non-ER facilities if there was a standard for 911 assistance.

    For instance, if the stand-alone facility was a quarter mile away and there was an on-site ambulance or …something… specific ..in the way of a standard to address to lack of on-site ER – which if you go back and read the IG report – is what they said.

    They were not requiring on-site ER. They were asking for documented facilities and procedures to assure that the availability of acceptable time response ER care was available.

    Again.. this is the kind of a thing that under ObamaCare would require one more page of regulation and under Republican-Care there would be no requirement but there would be a tort-exemption if something bad did happen.

    Which is the worst approach?

    more regs or less?

    If you don't have the regs, how many of these physician-owned hospitals provide truly competitive health care and how many would cut corners and how many patients would know which was which without the govt being involved in required disclosures.

    I fully admit that regulation is onerous command & control, expensive and bureaucratic but is the solution to it to let physician-owned hospitals run amok to the point where they are little better than a medical version of pay day lenders?

    When push comes to shove, the Dems will write another page of regs to add to the existing 1000 pages and the Republicans will disavow the regs …dismissing as Jim has.. the "anecdotal" reporting.

    why "anecdotal"? well heckfire, because we sure as heck don't want the govt requiring reporting metrics, right?

    so no regs, no reporting, and TORT exemptions so victims have no recourse.

  15. Anonymous Avatar

    By Bacon:

    “How does it make sense to use the artificial criteria of physician ownership to be the deciding factor of who gets to expand and who doesn't?”

    It does not.

    “The right to expand or not to expand, if not driven by the market, should at least be driven by performance. But that's not what we got. We got a political power play because the Obama administration needed to neutralize the hospital industry.”

    True, BUT

    Until there is a distribution of medical facilities based on the scale of the territory served – Neighborhood EMT, Village clinic, Community hospital, SubRegional, Regional and MegaRegional Acute Care / Specialty hospitals.

    There will be no basis for establishing efficiency or effectiveness in medical service delivery.

    Stop the foolish suggestions about ‘the market’ fixing or rationalizing a broken system.

    There is no alternative to Fundamental Transformation. None.

    The longer the arguments go on about shuffling the deck chairs, the less the chance that civilization as we know it will survive the Anger of the Ignorant.

    Just admit it and move on.


  16. James A. Bacon Avatar
    James A. Bacon

    AZA, If it makes economic sense for there medical facilities to be based on the scale of the territory served – Neighborhood, villges, communities, regions, etc. — then you have to explain why that distribution does not exist today.

    Is it because "the market" failed to see the need? Or is it perhaps because regulations like Certificate of Public Need, the Stark Law and others support the antiquated concept of a centralized general hospital and make it difficult for competitors to compete on a neighborhood/village basis?

    Do you believe that health care should be delivered by a monolithic health care "system"? What if the system refuses to provides services in the manner you suggest? Wouldn't it be preferable to allow medical providers to compete and serve unfilled niches?

    Another question you need to answer: What happens if medical facilities failed to sustain themselves economically on the neighborhood/village/regional basis that you suggest is desirable? Should they be subsidized? Who should subsidize them? Do we violate the rule that all public services should pay their location-variable costs?

    The idea of making different types of medical services available at different geographic levels is an elegant one. But economies of scale will continually change with new technology and new delivery models. Who decides what is appropriate at which level on an ongoing basis? Whom do you trust to do that, if not the marketplace?

  17. Gooze Views Avatar
    Gooze Views

    What is curious is how things go full circle. Go back more than a half a century and you'll find many community hospitals that were physician-owned.

    Then, the Hill-Burton Act transferred hospital care, especially in small towns. This was generally seen as a good thing because the quality of the physician hospitals back then was spotty. Also, the owners of those hospitals tended to keep out competing doctors, putting the number of physicians in the the hands of the physician hospital owners. Hill Burton which funded community hospitals helped put an end to this practice.

    This was the case in Washington, N.C., a small town of about 9,000 where Hill-Burton money built the Beaufort County Hospital back in the 1950s. Before, the main hospital had been controlled by a family of doctors.

    The community hospital opened up areas of care and brought in more doctors from diverse specialties. Soon, BCH was serving people from 90 miles away from such remote swamplands as Dare, Hyde and other counties.

    The next shoe to drop was in the 1970s when East Carolina U in Greenville 20 miles away wanted to start a medical school. The docs all protested, but the hospital was built, adding greatly to medical care opportunities. One no longer had to drive two hours to Duke or Chapel Hill for open heart surgery.

    This is just a little history note.
    But my point is that physician-owned hospitals are nothing new, especially in rural, underserved areas.

    Peter Galuszka

  18. Anonymous Avatar

    Peter, speaking of history repeating itself, a number of knowledgeable people believe that some of the most effective and cost-efficient care can be delivered in the patient's home, using wireless broadband and electronic records. I vaguely remember a doctor visiting me when I was very young on a house-call.


  19. Gooze Views Avatar
    Gooze Views

    My late father ended up in Lil Washington in the 1960s after he retired from the Navy. He bought out a urology practice and loved the little town. He retired in the 1980s and died there in 2004.
    There were problems with decorum, however, when he arrived. Some of the home grown docs were Little Ceasars who used to throw scalpels at each other in the operating room. Not very professional! Dad had been head of his department at Bethesda Naval Hospital where things were a little higher level. He put a stop to the scalpel battles.
    Maybe that's question for Bacon who seems to be pushing doctor-owned hospitals for some reason or another. Do you really want these guys in charge? You might get stabbed.

  20. James A. Bacon Avatar
    James A. Bacon

    You think doctors are bad — just look how hospital administrators act! Any episode of E.R. or House will send shivers down your spine.

  21. Gooze Views Avatar
    Gooze Views

    House is written in California or New York or maybe London. I am talking reality. If you had gotten to a hospital you would have known that.
    Peter Galuszka

  22. Anonymous Avatar

    Mr. Bacon asked:

    “AZA, If it makes economic sense for there medical facilities to be based on the scale of the territory served – Neighborhood, Villages, Communities, Regions, etc. — then you have to explain why that distribution does not exist today.”

    We would refer those who do not yet understand this to Professor Risse’s treatise The Shape of the Future (SotF). In Volume I he demonstrates that the organic framework does exist but human economic, social and physical activities are not distributed based on this organic reality for reasons that he spells out.

    Some Agency malfunctions result in bad regulations as you suggest. No sane person would disagrees.

    However, as eggs, hamburger and salad greens that humans eat, as deep well drilling to tap the last of the stored natural capital, and as the demise of Maytag – to say noting of the collapse of the housing finance structure – demonstrate it is Enterprise malfunction and rigged markets that are at the roots of many of humans worst disasters.

    As Katrina demonstrates some major disasters are a combination of malfunctioning Agency, Enterprise and Institutional actions in a context of human ignorance parading as ‘culture,’ ‘freedom’ or gods will.

    “The idea of making different types of medical services available at different geographic levels is an elegant one.”

    Yes and it is also a condition precedent for efficiency and effectiveness in the delivery of services upon which humans depend for health, safety and welfare.

    “But economies of scale will continually change with new technology and new delivery models.”

    That churn, flux and ‘innovation’ will continue or accelerate is a Myth. Natural systems do not work that way. They ebb and flow. Humans are running out of resources (including natural capital) to fund the luxury of continual change. Professor Risse addressed this 10 years ago in the Past Shock section in Vol II of SotF.


  23. Anonymous Avatar

    Good post AZA but Bacon only claimed he lost 25,000 jobs in the original post.


  24. Larry G Avatar

    IF the theory is that people will influence the necessary changes to governance, I submit the following.

    GOGGLE provides several times a day the top searches in GOGGLE which is an amazing insight into what is currently on the minds of most people – at least the ones using GOGGLE to "research" areas of interest.

    Here they are for this morning:

    1. teresa giudice nephew
    2. kyle massey
    3. danielle staub sextape
    4. bleach episode 286
    5. katie vick
    6. brandon spikes
    7. troy polamalu
    8. weeds season 6 episode 3
    9. dancing with the stars season 11
    10. oxymoron
    11. girl throws puppies in river
    12. lori michaels
    13. perla ferrar
    14. janmashtami 2010
    16. dwts
    17. dead rising case zero
    18. ffxi
    19. don johnson
    20. accuweather

    Now.. if you think that fundamental change is going to come from the folks doing these GOGGLE searches –


    The average young person in America is totally clueless about just about anything other than "celebrity"….

    and it even extends to older folks like Groveton who thinks that Cuccinelli is going to rewrite the U.S. Constitution!

  25. James A. Bacon Avatar
    James A. Bacon

    Let me ask you something, AZA, do you think the "Affordable Care Act" — and in particular the provisions restricting competition of physician-owned hospitals — will get the country any closer to the kind of health care system you envision?

    Here's the problem you need to wrestle with: The more centralized and monolithic the health care system becomes, the LESS likely it is to conform to your ideal system unless the people who run it happen to share your views. You want health care delivery to arise organically from neighborhoods, villages and regions, and the like. How will that happen when more and more power gravitates to Washington, D.C.?

  26. E M Risse Avatar
    E M Risse

    For an answer to Jim's question see At AZA Request post.


  27. Well, celebrity is where the money is.

    Which riases the question, why do we care that health cares costs us so much, and we don't care how much celebrity and sports worship costs?

  28. Anonymous Avatar

    Peter – I'm not arguing for big or for small health care providers. Small doctor-owned hospitals could be good or bad. Ditto for big chains.


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