John Schwenkler

Whole Foods CEO Quotes Margaret Thatcher, Whole Foods Shoppers Horrified

by JL Wall

So they’re not quite as ridiculous as the town-hall crashers and Sarah Palin, but what we have here, ladies and gentlemen, is a failure of logic:

“I’m boycotting [Whole Foods] because all Americans need health care,” said Lent, 33, who used to visit his local Whole Foods “several times a week.”

“While Mackey is worried about health care and stimulus spending, he doesn’t seem too worried about expensive wars and tax breaks for the wealthy and big businesses such as his own that contribute to the deficit,” said Lent.

I’m beginning to believe that, for the purposes of the health care debate, we should use the “Athenian” version of free speech: Yeah, you can say what you want, but don’t expect us to not heckle you out of the Assembly once you make a fool of yourself.  (This does, of course, entail not lambasting those who attempt to engage in good-faith dialogue and debate for things they didn’t say.)

What bothers me most is the assumption that because he disagrees with their views, Mackey is obviously doing nothing more than promoting the status quo — which, by extension, means he is actively trying to harm Americans by writing an op-ed.  I think we’ve been seeing this mindset for some time now, on more issues than just health care: that a disagreement about means entails a disagreement about ends,* and that therefore anyone who disagrees with you cannot be acting in good faith.  Because their arguments and alternatives are proposed in bad faith, one need not engage with or listen to them or their proposals.  (In fact, there’s no need for discussion or consideration at all!  What’s up with this whole “legislative branch” and “deliberative body”** crap, anyway?)

*For the purposes of the above, I’m defining “ends” as broadly as possible.  For example: “We should try to avoid economic collapse”; “The present health care and health insurance system is not functioning properly and should be altered so that it does”; “Our foreign policy should be one that ensures America’s security”; etc.

**This is not to imply that I actually believe Congress behaves like a deliberative body.  Just that, in theory, it should.

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Maybe the Best Thing I’ve Read on Health Care Reform

The other day a commenter recommended David Goldhill’s article on health care reform from the forthcoming Atlantic, and let me now do the same. It’s a long piece, and not easily excerpted, but absolutely worth reading carefully and in its entirety. Here’s a quick summary of what I take to be its most important points:

1. We spend too much money on health care. 18% of GDP, a quarter of our total economic growth from 2000-2008, 20% of total government spending … you know the drill. And like the housing bubble, this is largely the result of misguided government policies that distort the market in the name of combating undersupply, on which more shortly.

2. We treat “health insurance” and “health care” as synonymous, but they shouldn’t be. Understanding the purpose of health insurance as that of paying for all of our health care expenses is a quite recent phenomenon, and it has a lot to do with the post-WWII policy of subsidizing employer-provided health benefits, which quickly became the norm (and was mimicked by Medicare and Medicaid) and crowded out alternative methods of payment. Among others, one consequence of this is the vast amount of money we spend – $500 per person, as of 2006 – just to staff the insurance bureaucracy.

3. There is a massive moral hazard problem. Patients have little direct financial incentive not to request whatever expensive treatments they see on TV, and doctors have clear financial incentives to provide them. Combine this with a massive informational asymmetry, and costs spiral perpetually upward; individuals with health insurance (or “insurance”; see #2 above) spend nearly four times as much of other people’s money on health care than do individuals without it, and in many instances the attendant benefits are marginal at best.

4. We’re the only ones who can pay. Not the health insurance or drug companies, whose profits would fund our appetite for health care for less than half a year. Not our employers, who just take it out of our salaries (and the would-be salaries of our would-be coworkers). And wouldn’t some of that money be better spent doing something else?

5. Governments can’t do enough reduce costs. Concerns about innovation aside, state bureaucracies aren’t actually very good at cost control; even the costs of Medicare have risen consistently (and their relatively low costs are largely the product of shifting costs onto non-beneficiaries anyway), while single-payer systems like those in France, Canada, and the U.K. have lately seen increases in per-capita spending comparable to our own.

6. Regulation limits competitiveness. State laws make interstate competition an impossibility. Licensing requirements form huge barriers to entry. Safety regulations are reshaped by powerful interests as a way to disadvantage their would-be competitors. Government laws and payment policies have encouraged a situation where large and powerful hospitals, rather than smaller specialty clinics, have a near monopoly on many forms of care. None of this is the result of a free market, and little if any of it works to our benefit.

7. Medical providers work to serve the people who pay them, not the people in their care. With the exception of billing, hospitals and other health providers have little incentive to make IT improvements. Costs are hidden from potential patients, which of course is a perfect way to inflate prices and discourage real competition. And very little is done to encourage greater transparency with respect to cost or quality of care.

8. The costs of medical technologies are vastly inflated. In contrast to the open, competitive, and relatively transparent market for ordinary consumer goods and, say, services like LASIK surgery (with insurance seldom covers), much new medical technology is used in a way that involves little incentive to lower prices. And as per the above, this can’t be fixed through supply-side remedies; the only solution is to alter the way we make our demands.

9. The present push for “comprehensive” reform will do nothing to solve the underlying problems. Rather, it will only perpetuate many of the present system’s worst excesses, thus further solidifying the sorts of tendencies that have given rise to the present mess. (This is an important point to be made in response to those who argue, not unreasonably, that the present situation demands that we move quickly and not sacrifice the better for the perfect; as I’ve suggested before, the flip side of this is the risk that self-styled “reforms” are passed with much fanfare, and then the demand for truly necessary changes comes to an end with a whimper. Short-term gains can easily become long-term losses.)

10. The proper response is a shift toward consumer-driven care, with subsidies for the poor and a single program of truly catastrophic insurance available to all. In other words, pretty much what I’ve been saying.

Please note that Goldhill is a Democrat, and that he comes at this issue as a businessman who recently lost his father to poor hospital care, rather than an industry wonk with a line to toe. If anyone knows of any especially forceful criticisms that have been made of his argument, please do link to them in the comments and I’ll take them up in a future post. In the meantime, you should read the whole thing.

P.S. Here are the transcript and audio from an interview with Goldhill on NPR’s Morning Edition.

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The Mysterious Declining Birthrates of Industrialized Nations Explained?

by JL Wall

… by television?  And India is introducing electricity and late night TV to poor, rural villages — as birth control?

One such survey done in 2006 by an Italian sexologist reveals couples with televisions in their bedrooms had sex half as much as those without it.

Between the article as a whole, the word “sexologist” (doesn’t it just sound giggly?) and Pitino-gate schadenfreude I’m happily distracted from Cubs box scores at the moment — albeit in a way that makes me feel vaguely like a twelve year old, but what can you do, really?

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Crunchy Conservatism in Practice

Whole Foods CEO John Mackey’s health care plan sounds great to me.

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Can Americans Handle Shopping for Health Care?

Apparently they can:

Consumer-driven health (CDH) products [i.e., high-deductible health plans relying on HSAs or Health Reimbursement Arrangements to reimburse for qualified expenses] have been marketed in various forms since the early 2000s. While emerging data is [sic] not entirely conclusive, general directional conclusions can be drawn from the studies published to date. […]

With regard to first-year cost savings, all studies showed a favorable effect on cost in the first year of a CDH plan. CDH plan trends ranged from -4 percent to -15 percent. Coupled with a control population on traditional plans that experienced trends of +8 percent to +9 percent, the total savings generated could be as much as 12 percent to 20 percent in the first year. All studies used some variation of normalization or control groups to account for selection bias.

For savings after the first year, at least two of the studies indicate trend rates lower than traditional PPO plans by approximately 3 percent to 5 percent. If these lower trends can be further validated, it will represent a substantial cost-reduction strategy for employers and employees.

Generally, all of the studies indicated that cost savings did not result from avoidance of appropriate care and that necessary care was received in equal or greater degrees relative to traditional plans. All of the studies reviewed reported a significant increase in preventive services for CDH participants. Three of the studies found that CDH plan participants received recommended care for chronic conditions at the same or higher level than traditional (non-CDH) plan participants. Two studies reported a higher incidence of physicians following evidence-based care protocols.

The authors add that “no data-based study has emerged” to contradict the indication that CDH plans “can produce significant (even substantial) savings without adversely affecting member health status”. H/T to Alex Tabarrok, who adds that the effects of such plans would likely be much more significant if they were adopted more widely.


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Thoughts on Localism (or, the Need for Pulling My Head out of the Clouds)

by JL Wall

I, too, have been somewhat remiss in my bloggerly duties as of late — it seems that my weekly internet breaks have grown from Saturdays to include Sundays, Mondays, and occasionally Fridays and Tuesdays — unfortunately, all other productivity is usually shot on those days, also, so I’m getting nothing out of it.  Which makes me wonder what I’m doing with my time.

In the meantime, Nathan Origer put together a lengthy but worthwhile manifesto of sorts on localism, capitalism, trade, and the sort.  You should read it, but in case you don’t/haven’t, the conundrum, in short: “Can we reconcile free-trade economics to our quaint, but truly conservative, localism? If so, how? Or is ‘protectionism’ the answer?”

E.D. Kain has responded (again, choose the original over my summary, if you would), and concludes:

In the end, though, there are simply no palatable alternatives to free trade, to organic markets.  All that means, in the end, is that people are allowed to trade freely with one another without the long arm of the state getting in the way.  The supply is not kept from those who demand it.  The demand is not artificially created.  People go about their lives at liberty to do so.  Protection is the state, and it acts in ways that seek not to protect us but to protect big corporations or labor unions at our expense and without our consent.  Government intervention more often than not helps subsidize our shallow, consumerist culture, and there is very little to suggest the government can return us to any place of virtue – of “place, limits or liberty” as it were.  We are better left to our own better or worse natures, and to do as we see fit to shape our own way in the world.  Hopefully left alone, and diverted from the culture of entitlement and consumerism we’ve drawn about ourselves, we can build something better.

That’s a start.  Government certainly isn’t going to be able to induce the values of place and limits necessary to the establishment and survival of that late lamented “local(ist)” virtue.  Virtue and community, if they are truly virtue and community, are organic.  But it’s only a start, even though it’s usually the point at which I stop.  If there’s a broad vision of where things need to be — government withdrawing precisely enough to ensure that “[t]he demand is not artificially created” so that “left alone … we can build something better” — then the next step is to figure out how we get there.

Any “new localism” or “return to community” won’t — can’t — look like any previous incarnation of local values of place and community.  Certain things — like the interstate highway system, as a commenter at the League has pointed out — are here and not going anywhere.  Not only has national government power grown over the course of my life and yours, but the momentum seems to continue swinging in that direction: one major party clamoring for the federal government to assume its right to the power to provide massive new entitlement programs while the other demands that we all accept the government’s rightful assumption of its long-latent authority to torture and indefinite detention.

If government is to be limited along with appetite, then active policy prescriptions that recognize and engage the present situation are needed.  If (terribile dictu!) the magnetism of centralized power is not to be stopped or reversed anytime soon, then there needs to be a strategy designed to mitigate the damage to place and community, and even with that centralization, to strengthen them.  I’m all for nostalgia, and my romantic attraction to Lost Causes is going to bite me one of these days, but if the best policy offered by those who long for stronger local community and the restoration of place and limits is to be dragged kicking and screaming into the twenty-first century, then that is precisely what will happen — and at the end of the day, those so inclined will sit wistfully mourning the better days of the past while the rest of the nation continues to move farther and farther away.

This isn’t my strong-suit — I’m no policy-wonk or would-be wonk, have exceptionally limited knowledge of formal economics, and prefer the abstract a little too strongly to the practical — so I certainly include myself in that critique.  But if the localist and anti-(or even post-)modern critiques of society are going to move beyond lament — or simply beyond being easily caricatured as nothing more than lament — there needs to be debate about where we go and — more importantly — how we get there.  Nathan touched on it briefly in his original post and then in some more detail in the comments to E.D.’s by bringing up differential and land-value taxation.  But, like E.D.’s concluding paragraph and much of my daily read, it’s only a beginning.

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Ceding the High Ground on Health Care Reform, ctd.

I’ve got some further thoughts up at TAS.

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Talking Crime and Punishment

I know I’ve been a pretty awful blogger of late, but this afternoon I did manage to record a pretty interesting Skypecast with Scott Payne and my former Culture11 colleague Joe Carter, in which we took up the topic of policing and criminal justice, jumping off from this post of Joe’s on l’aiffaire Gates, which was a response to this post of mine re: same. (Could it get any more multimedia meta-bloggy?) Here is another post on community policing that I mentioned a couple of times. Worth a listen, if you have the time.

P.S. I sound ridiculous!

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Reading “Caritas in Veritate”: Notes on Chapter Four

This chapter begins with a discussion of the reciprocal relationships between rights and duties, arguing that the latter are necessary for the right ordering of the former, and indeed that the recognition of reciprocal duties provides “a more powerful incentive to action than the mere assertion of rights”. This is surely correct, and it seems to me that it ought to be getting significantly more play in a document asserting that human society is founded on love. In sec. 43 Benedict applies this framework to the topics of human sexuality, contraception and family planning policies, and the place of parenthood and family life in the social order, but unfortunately it is drawn on much less explicitly when he turns to issues of economics and the environment.

Sec. 45 repeats a point discussed earlier, namely that as “the economy, in all its branches, constitutes a sector of human activity”, it is essential that it be structured intrinsically by the logic of caritas:

Efforts are needed — and it is essential to say this — not only to create “ethical” sectors or segments of the economy or the world of finance, but to ensure that the whole economy — the whole of finance — is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature.

This point is further articulated in sec. 46, which spells out in more detail the importance of economic activity that regards profit “as a means of achieving the goal of a more humane market and society” and seems like it would have been better placed alongside the discussion of mutualism in chapter three; similarly, sec. 47 discusses development programs and the phenomenon of international aid, noting that in each case there is a real potential for abuse and bureaucratic waste and, consequently, a need for transparency, for a direct involvement of the people whose interests are at stake with the activities of those aiming to help them, and for a careful responsiveness to the intricacies of concrete situations.

Finally, secs. 48-51 take up the topic of human relationships to the natural environment. Benedict stresses the importance of recognizing the “inbuilt order” of non-human nature: “the natural environment is more than raw material to be manipulated at our pleasure; it is a wondrous work of the Creator containing a ‘grammar’ which sets forth ends and criteria for its wise use, not its reckless exploitation” (sec. 48). The consequent duties have political dimensions as well as individual ones: it is incumbent on technologically advanced societies to reduce domestic energy consumption to allow the distribution of resources to developing countries that lack them; on political authorities to “ensure that the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations” (sec. 50); and on the Church to build up a “human ecology” that will strengthen in turn a proper attitude toward the rest of creation:

The book of nature is one and indivisible: it takes in not only the environment but also life, sexuality, marriage, the family, social relations: in a word, integral human development. Our duties towards the environment are linked to our duties towards the human person, considered in himself and in relation to others. It would be wrong to uphold one set of duties while trampling on the other. Herein lies a grave contradiction in our mentality and practice today: one which demeans the person, disrupts the environment and damages society. (sec. 51)

As its title suggests this chapter is rather wide-ranging, and there is clearly a lot of value in it. What is frustrating, though, is that not much is done to explicate how these issues are supposed to relate to one another, let alone how they tie in to the document’s overarching themes. I’m happy to have someone show that these complaints are misplaced.

P.S. Here is the text of the encyclical, and here are my notes on the earlier chapters. For next Sunday we will read chapters 5-6 as well as the conclusion, because I’m going to be on the road for the week after that.

P.P.S. Maclin Horton has gotten around to posting some thoughts on the encyclical and the surrounding fuss, and they are well worth a read.

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The Recalcitrance of American Myth

I don’t recall having come across this quote, from World War II veteran Henry Fonda in a 1972 television commercial opposing the Vietnam War, before this afternoon:

When I was a kid, I used to be really proud of this country. I thought that this was a country that cared about people, no matter who they were or where they came from. But now, when I see my country engaged in an endless war, a pushbutton war in which American pilots and electronic technicians are killing thousands of Asians, without even seeing who they kill … when I see us each week stepping up the tonnage of bombs dropped on Indochina … then I don’t feel so proud any more. Because I thought that was what bad countries did … not my country.

Today is, of course, the 64th anniversary of a certain pre-Vietnam event that fits Fonda’s description rather well. I wrote late last year about the dangers of forgetfulness.

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