Health Care Pt I

America spends too much on health care. We devote 16 % of GNP to medical services while our Japanese and European competitors spend only half that amount. Cost of American automobiles is inflated by $1000 a car to pay for autoworkers health care. This is just one reason the Detroit carmakers are taking Federal bailout money. We cannot afford any more health care costs and we certainly cannot afford extra taxes to fund more health care.

Of the staggering sums poured into medical care, fully one quarter goes into administration (paper shuffling) according to C. Everett Koop, ex U.S. Surgeon General. The insurance companies and medic(care/aid) try to discourage claims by demanding lots of paperwork from doctors. They hire lots of clerks to review this paperwork and reject as much as possible. The doctors and hospitals buy computers and hire specialists to fill out the paperwork so they can get paid. Each insurance company strives to make it's claim forms harder to accomplish to reduce it's payout. There ought to be a single nationwide ONE PAGE claim form, acceptable to all insurance companies AND the US government. It should be simple enough for a doctor's personal computer to fill out and file over the internet. Companies should be required to pay within 45 days from submission of claim form unless they file fraud charges against the doctor in court, or, the patient dies. Federal legislation or regulation can accomplish this much.

Levine vs Wyeth, The Supremes raise Medical Costs

Levine suffered a terrible injury, resulting in amputation of her arm, after administration of a drug by an approved-on-the-label but risky manner that went wrong. She sued Wyeth, the drug maker, for the label wording that approved the riskier manner of application. The label language was approved by the FDA, and in reality, nobody EVER changes FDA approved label language for fear of never ending million dollar lawsuits. Levine won in state court, Wyeth appealed to the Supreme Court, and lost. They are liable, for millions in damages.
The Wyeth lawyers argued the case on "preemption", the doctrine that federal (in this case FDA) law and regulations override state law, and thus Wyeth cannot be sued in state court.
In actual fact, Wyeth manufactured the drug in accordance with all FDA regulations. Any ordinary person knows the ultra cautious FDA won't approve anything with any real risk attached. By complying with the onerous FDA approval, inspection, and labeling requirements, Wyeth did everything an ordinary person would expect a company to do. Didn't do them any good, they have to pay off, big time.
This case will encourage more suits by tort lawyers against doctors, hospitals and drug companies. This kind of jackpot justice is one reason why US health care costs twice as much as health care in every other first world country.

Patent Reform

There is a patent reform bill before Congress. Reform is needed because the patent system now discourages new product development. It's common wisdom in the field that what ever it is, you will be sued by patent trolls, as soon as it makes any money. Research In Motion (RIM), the blackberry people, had to pay $600 million to a patent troll last year.
The reform is 68 pages long, written in old high lawyerese, meaning that only experienced patent lawyers can tell what it means. The bill's sponsors include Sen Charles Schumer and Patrick Leahy, neither of whom is confidence inspiring.
One needed reform is to disallow patents upon "business methods", which currently covers trivia like one click or two clicks to place something into your internet shopping basket. Another is to outlaw patents upon software. Software used to be considered a branch of mathematics, and mathematics was never patentable, it was considered natural law. Another needed reform is a cheap and simple process for throwing out patents that are prior art or obvious to anyone skilled in the art. The patents in the $600 million RIM case were all prior art or obvious. Plus they were software patents.
The normal way out of depressions, like the one we are in now, is thru technological invention. New desirable products (telephone, electric light, automobiles, radio, record players, TV, personal computers, cell phones, Ipods) come on the market and people start spending money on them. The current patent system discourages technological innovation by loosing patent trolls upon the innovators.

Cyber Security

According to MSNBC the plans for the airframe and avionics package of Marine One were found on the Internet at an IP address in Iran. The finder points a finger at a defense contractor who allowed a file sharing program to be installed on the machine holding the sensitive Marine One files.
Wow. First of all, it's a breach of security to connect computers with classified or sensitive information to the internet at all. It's a breach of security to have classified on computers that are not in a locked secured area. And it's a super breach of security to have a peer-to-peer file sharing program on any computer. Three strikes and you're out.
If this checks out, that contractor ought to have their security clearances revoked for cause.
And we would all be more secure if we didn't run Windows.

Pitch meets Snowy

Pitch is that black sticky stuff that builds up on circular saw blades. Once coated with sticky pitch, the blade slows down from the friction and is liable to grab the work and hurl it at you. Kickback it's called, and it is scary. Trees, having about a billion years of evolution to perfect their biochemistry, can make some really tough stuff. Pitch defies paint thinner, alcohol and WD-40. However there is an answer
Snowy Color Safe Bleach, a powder, comes in cardboard boxes. "Contains sodium perborate, sodium carbonate and sodium silicates". Works like magic. Fill a cookie sheet with hot water, add a generous amount of Snowy, and submerge the blade in the mixture. Only takes a couple of minutes and the pitch softens up and comes off with a little scrubbing with an old tooth brush.
Makes a blade cut like new.

Lies, Damned Lies and Statistics

We, the body politic, has been slammed by a number of alarming "scientific" studies over the past few years. There was the "hockey stick" graph "proving" global warming, the Emory university prof book claiming that colonial Americans didn't own guns,and the Boston Fed study "showing" discrimination against blacks in the granting of mortgages, and a bunch of others. All of these "scientific" studies were later proved false, but only after serious damage was done.
Frazier Institute members B.D. McCullough and Ross McKitrick described these and other sham studies in "The Case for Due Diligence".
A key finding, in every case, the authors of the study refused to release their data and the computer program that analyzed said data, making it difficult to impossible to check the conclusions of the study. Only when critics made Freedom of Information requests, or sued, did the authors reluctantly release the data upon which their conclusions were based. In all cases, critics were able to show the data had been edited (contrary examples discarded) or the computer program had bugs in it.
The McCullough & McKitrick paper is good, but somewhat heavy going. Take away, don't place much trust in "scientific" studies unless other scientists have checked the data and programming. "Peer review" prior to publication in a scientific journal doesn't mean any one checked the work. If the conclusion is politically controversial, watch out and hang onto your hat.

Wall St clings to "dirivatives"

Way back on page c3 of today's WSJ we have a headline "Controlling Swap's Risk is Still Vexing". These are credit default swaps, a crude kind of bond insurance. The buyer pays money, the issuer promises to pay up if so-and-so defaults on his bonds. This is the security that last year, destroyed AIG, largest insurance company in the world.
The real problem with "swaps" is that all they do is sooth nervous bean counters on Wall St. The bean counter can buy securities from risky or walking dead companies, and tell his boss, "It's OK, it's insured." A good deal of money that could be financing real economic growth is siphoned off to placate bosses. When the market crashes, the swaps become useless because the issuers go broke before paying off the claims.
But Wall St loves them. According to the writer all will be well after a central clearing house for swaps is constructed. Good luck on that one.
Then there is this:
" Many financial institutions that are large sellers of credit protection are themselves facing crises of investor confidence. That's limiting swap trades in the broader markets because hedge funds and dealers don't know if the can count on their counterparties to provide the protection they need."
Well. Sounds like some of the Wall St suckers are finally wising up.