Dealing with politicians on health reform

Watching the sausage-making process of health care reform in both the U.S. House and the Senate, brings into sharp relief the following:

1. When markets such as health care fail, rational economics is replaced by the donny-brook of politics. Whether during the times of depression, recessions or inflation in an economic sector, the champions of the free-market must understand this is the penalty  they will pay for letting organic natural evolution occur without early intervention and remediation.  You don’t hear a clarion call for a take-over of the market for I-Pods, do you?
2. The normal players in supply/demand, such as the consumer and doctor have been pushed aside as a mob of lobbyists and special interests clamor to influence the situation politically. It ranges from chiropractors who want to be on the provider list to insurance companies who want protection. The compromise will ultimately prevent health care from ever being an efficient market and will likely make things worse. You can expect health inflation to accelerate as $1 trillion is injected for the uninsured and $36 trillion of unfunded liabilities come due for the baby-boomers.
3. The very notion that we would make the health care system more efficient( so as to free up savings to take care of the uninsured) has been bastardized in the typical fashion you would expect from government and a bunch of lawyers. There is no talk of strategic cost management along the value chain the way business must do to compete. Instead we talk about fixing prices, rolling back reimbursement, eliminating insurance company overhead. This is why no matter how tough the times, government cannot become more efficient. In the end, health care will cost much more than $1 trillion dollars and inflation and unfunded liabilities will wash over the system like the waves of a tsunami. Being the chumps we are, we will once again turn to the perpetrators of the destruction of the market to save us. If we do, we will get what we deserve.
4. The very thought that we would turn to financial intermediaries such as the health insurers to create competition and save money is absurd. If you find the cost and quality of a GM car out of line, you don’t turn to GMAC to fix the problem. You either buy a car from another manufacturer like Honda or Toyota or walk. The health insurance companies are money-changers and have little or no ability to make the health care system more efficient and of higher quality. They never did and they never will. In the end, we will return to the need to reform the efficiency, quality and productivity of health providers on the supply side and to make the consumer more rational and sensitive.
5. The longer health reform waits the more painful the result will be. It’s easy to watch Blue Cross lay off a few hundred employees but you watch the political fall-out when hospitals are getting closed and doctors exit the field. The fact is that health care should be 7% to 9% of our economy and only employing 5% of our workforce, not 16% of GNP and employing 14% of the workforce. By the time we stop the out-of-control locomotive (assuming it doesn’t derail in the meantime) health care will be at 20% of GNP and health care employment will be 18% of the workforce.  After we transition unemployed autoworkers to become nurse assistants, health care employment and services will both be viewed as an entitlement like some socialistic country. It will be necessary to pare that back to a lower level. Even at 8% of the workforce, which I think is 3% points too high,  we will have to migrate 10% of our workforce into some other area. By then, disruptive technologies will be impacting school teachers, government workers and all manner of folks who occupy perches in the old economy and will no longer be needed. An unemployment rate of 25% will be the new normal and that won’t count the people feeding off government transfer payments, chronically unemployed and no longer looking.
6. We can always allow our denial to overtake us and pursue the Chinese strategy of Wu-Wei: Do-Nothing. Business-as-usual will result in the United States having no wealth creation capability and we will import our food, clothing, shelter, autos and Christmas decorations from third world countries orchestrated by corporations domiciled in Dubai. We will be arbitraged and aggregated into the poorhouse as our supposed loyal agents in government and big business sell us into de-facto slavery and we are marched down the road to serfdom. Work will not set you free in an environment without jobs! In an economy where we trade dollars with ourselves, the middle class disappears and the gap between wealthy and poor widens. We become a passive culture sitting around waiting for the “Big-One” or for a “Perfect-Storm” from the convergence of multiple events. Natural disasters, terrorism, pandemics, economic collapse, and other threats(if they were to converge) will have the power to take us down. You don’t need to re-read Gibbons to know this; we all  know it from high school history. The wealthiest, most powerful nation can be brought down by Black Swan events and our enemies are counting on it.

At this point in our discussion, you are probably looking for a bottle of Scotch or that box of razor blades you bought at Wal-Mart last week. Don’t do it! There is hope.

I believe that the promise of change will come, but not from some charismatic lawyer with a silver tongue. It will also not come from the emergence of some spiritual leader such as Ghandi or Martin Luther King. It will come from the bottom-up as people of Independent minds begin to communicate with each other using the Internet and other new forms of media. We will cast aside the journalists, politicians, communicators who have not truly been serving as our loyal agents. There will be an annealing and collective consciousness emerge that is practical and concrete and based on the principles first articulated by our founder.

Even if you love the words I write, it is your words, your expressions, even if it is giving someone the middle finger when you don’t like what they say that counts. But you don’t have to be vulgar or become violent.

Now, some would urge you to get involved, buy a CB radio, take on a moniker like a truck driver or biker and start broadcasting fire and brimestone. I say No, that what we should be doing is SHUNNING these people; turning our backs on them; refusing to shake their hands and generally being silent when  they speak. I guarantee you that if 300 people turned their backs on the politicians holding their phony-town hall meetings to sell their schemes; and it we walked out and got in our cars and drove away, the politicians would get the word in a way that no amount of shouting would impart. Try it. Shunning trumps Ghandi.