Something Never Discussed During the Health Care Debate: Supply

The House passed the Senate Health Care plan, as well as a series of Reconciliation measures designed to force those without health insurance to buy it (or face a penalty), as well as taxing upper income taxpayers to subsidize insurance for those who make under $88,000/year.

Regardless of whether you agree with this or not, and I clearly do not, there is one question that no one seems to be asking. Let's assume there are 45 million or so people in the U.S. who do not consume health care because they do not have insurance. This bill will insure almost all of them, so assume there will be at least 40 million new health care consumers in the U.S. in five years. Even with the influx of money that could be spent from the insurance premiums and payments by insurers to health care providers, who will be treating these patients?

As far as I can tell from cursory glances at the legislation and more in-depth study of the news reports on it, there is nothing in the legislation to support the creation of new medical schools. How will you increase the consumer base of medical care in the U.S. by 20% or more without any increase in the number of medical doctors, nurses, and other health care workers? How will the system handle all the new demand for services? Doctors are incredibly overworked as it is.

Money can build hospitals and buy equipment, but medical schools are the only way to tilt the balance of supply and demand. If the supply cannot keep up with the new artificially-inflated demand, the supply is going to get more expensive no matter what the government does. If the government was serious about cutting the costs of health care, it would provide incentives to universities to create medical schools and hospitals to create residency programs. After a few years with larger classes of new doctors, there would be more supply to meet the new demand for services, and costs would stabilize or go down.

That is how you solve a health care problem. Forcing millions more people into a health care system that operates at or near capacity on a regular basis is not going to solve any problem. Giving people insurance that they cannot use because the system is flooded with patients who cannot be seen is a disaster waiting to happen.

Just What the IRS Does Not Need, More Power

Under Obamacare, what will happen to your tax refund if you refuse to get health insurance?

The IRS may keep it and apply it to any penalty that the government decides to impose on those without health insurance. The IRS will be able to confiscate it under the House Health Care proposal. Of course, those who lack health insurance and are paying the penalty are likely not paying the penalty because they choose not to have coverage; they likely cannot afford it. Taking their tax refund is a horrible way to help people who need that money. After all, they overpaid the government in the first place!

Since the IRS will be given new powers of confiscation, they need $10 billion from the government over 10 years to separate tax refunds from hard-working people who need it. Oh, and another 17,000 employees to deal with all the new responsibility Obamacare would give them.

This scenario is likely just going to be compounded with all the new orders given to existing branches of government. Each department is going to need money above and beyond what the health care bill costs in order to implement it, as well as tens of thousands of employees, all at above market wages and union representation. So while the Democrats say health care is only going to cost so much, they clearly either ignore or discount the true cost of implementing this disgrace of a bill.

Anthem Under Fire For Lack of Common Sense

Anthem Blue Cross insurance has been under fire lately. The White House wants Anthem to explains its premium increases, and has been hit by a jury in California for refusing to pay for a liver transplant.

Ephram Nehme was approved by Anthem for a liver transplant in California, but his doctor told him to go to Indiana for a shorter wait. He did so, and Anthem refused to cover the transplant in Indiana, citing its contract with Nehme that stated all transplants had to take place in California. Nehme paid for the surgery himself, then sued Anthem and received the cost of his transplant and attorneys' fees.

While Anthem could be seen as proper for sticking to its contract language, contract language such as this is why people hate insurance companies, and why Democrats think people will support their reforms. Consumers don't understand contract language like this, and don't understand why an insurance company can approve transplants in one state but not another. It was not as if Nehme wanted to have his transplant done in Zimbabwe, he wanted it done in Indiana, another state in which Anthem sells insurance! Anthem could clearly determine whether a provider in Indiana meets its standards for payment. So while Anthem will say that Nehme, and others with Anthem insurance in California, can't leave California for transplants, consumers will only get angry with insurance companies, and become putty for the Democrats.

Insurance companies need to pick and choose their battles with consumers. Hiding behind contract language is going to get Obama's Single Payer System, and insurance companies (as well as Americans) will be the big losers there.

Collective Bargaining Agreements and the NBA

I like sports, a lot. All sports, from football to cricket. I was in New York City this past weekend on a rainy Saturday taking a nap while watching the Six Nations Rugby Championship on BBC America.

However, if you follow sports, the constant conflicts between the team owners and the player unions are always in the news. The NHL lost a season to a labor dispute in the early 2000's, and the NFL and NBA are potentially facing lockouts or strikes after the 2010 or 2011 seasons. The disagreements between the two groups is all about the Collective Bargaining Agreement, or the rules pertaining to signing players and offering contracts in each league.

The Collective Bargaining Agreements themselves are quite interesting reads for an attorney, or a sports geek. It is interesting to see the things negotiated on behalf of the players.

For instance, if you ever found yourself thinking how players deal with getting traded mid-season, the Collective Bargaining Agreement (CBA) in the NBA answers this. Players get hotel accommodation for up to 45 days, rent reimbursement of up to $4500/month for three months, and all reasonable moving expenses paid. Not a bad deal. Do NBA players have to pay for their own meals on the road? Not at all. They get $102/day meal money in 2005 dollars, adjusted for inflation using the CPI. That buys a lot of room service.

The NBA CBA also covers the completely mundane as well. The NBA Players Association also has the right to inspect any facility used by the NBA to conduct practices or games and can get a grievance heard within 24 hours. If players get the right to be given tickets, senior players have to be given better seat locations. Players with more than three years in the NBA have the right to buy two tickets to every game. And also, each NBA team agrees not to hold any player responsible for an injury in a fight to another player.

Also, if you're an NBA played demoted to the NBDL (see Thabeet, Hasheem), you are entitled to fly first class and not have a roommate in a hotel room, and you still get your $102+/day per diem. Not a bad deal at all, especially when considering all the other players will be jealous and angry with you for not having to suffer as they do.

All and all, for sports geeks interested with the rules of what perks players get, what sort of accommodation they are entitled to, and just the minutiae that needs to be negotiated for there not to be a lockout or a strike. It's not just about player contract size or length, it's how much meal money or how many tickets each player gets as well.

Sean David Moron vs. the SEC

The Securities and Exchange Commission is going after Sean David Morton, for allegedly collecting $6 million in money from investors in his "psychic" investment fund. Morton claimed his "psychic" powers could be used to substantial profit in the foreign currency trading markets. Morton collected $6 million from investors, but allegedly only placed $3+ million in trading accounts and used the rest of it for his "non-profit" and personal purposes.

The SEC has accused Morton of violating many sections of the Securities Act and Exchange Act, including Rule 10b-5. In the complaint, the SEC points out many false statements by Morton and numerous stories of Morton (allegedly) lying to induce investors to hand over money to him. Morton also allegedly failed to complete any SEC requirement in relation to registering his investment companies, and a statement he made to Coast to Coast AM appears to show that Morton did not think he was responsible for registering.

The SEC generally does not go after people it does not have an air-tight case against, with the notable exception of Mark Cuban. Additionally, Morton does not have the best litigation track record, particularly when you consider he calls himself "Americas' Psychic". UFOWatchdog.com exposed Morton repeatedly, pointing out every contradiction and fallacy that Morton stated about himself. Morton eventually sued the author of UFOWatchdog.com for defamation, but was found to have violated the Anti-SLAPP statute in California and ordered to pay legal fees of approximately $16K.

Morton also apparently sued the SEC in 2009 while the SEC was investigating him, claiming that the SEC was going after him solely to take taxpayer-paid trips to Disneyland and In-N-Out Burger. While noble goals of the SEC if they were true, the lawsuit was dismissed in December 2009.

Of course, Morton's psychic powers in dealing with the legal system and the SEC are comparable to his past predictions. Click the link to see some of the "psychic visions" of Morton, and you'll see that his only success is suckering people out of money. Hopefully the SEC puts Morton into a position where he cannot play PT Barnum anymore.