The system Obamacare destroys.Jul 16, 2012, Vol. 17, No. 41 • By IRWIN M. STELZER
President Obama has one thing right: Obamacare will end the process by which insured patients, or those capable of paying from their own pockets (e.g., the rich Saudi princes who inhabit the best suites in our hospitals), subsidize patients who show up in the emergency room, are treated, and then cannot pay their bills. That raises the cost charged to insured and self-paying patients as hospitals recoup their bad debts from caring for the poor.
But let’s talk about what subsidization in health care is really like, or at least until now has been like. When I was a kid on the Lower East Side of New York City, the family doctor operated out of his apartment on the ground floor of what today would be called a brownstone. Some of his patients paid cash, at varying rates based on the doctor’s understanding of the financial circumstances of his neighbors. Those who were really strapped paid either in kind— chicken soup was one of the coins of choice—or not at all. Those in more comfortable circumstances paid fees somewhat higher than they otherwise would have been to support the neighborhood doctor. Call it subsidization.
Later, when creeping affluence enabled those who did not fully appreciate the romance of the neighborhood’s urban attractions (including sewer covers to measure the distance of stickball hits) to move to Queens—apartments with sunken living rooms in large buildings were the escape of choice—and the next generation of doctors took up offices in Manhattan (Queens had so few hospitals that almost no one died in that borough, permitting its boosters to claim a health-giving climate), subsidization took a different form. My doctor, alas no longer with us, having passed from this life taking with him the idea that a doctor can make a house call, considered it his duty to serve the poor at a clinic in a hospital to which he devoted at least one day every week. There I was, once again subsidizing health care for the poor, since the doctor had to make a living, and charge in four days what he would have earned in five had he not devoted some time to the needy. No intervening government penalty if I refused.
Now, subsidization takes a different form, the one that so vexes President Obama. My insurer and I, between us, pay whatever bills our “health care provider” renders. Meanwhile, in the emergency room of Johns Hopkins in downtown Baltimore, the urban poor are being treated—in one instance by the same physicians who once cared for my mother-in-law in that same ER. She and her insurer paid whatever bill Hopkins rendered, as did I for whatever was being done to me upstairs. In effect, I joined my 90-year-old, far from affluent mother-in-law in subsidizing the health care of those who could not afford to pay for their own care.
Fast forward to President Obama and the Patient Protection and Affordable Care Act, aka Obamacare. The act does not, as the president claims, eliminate subsidization of the uninsured. It replaces a system of private, willy-nilly subsidization with a government-organized system of subsidization that transfers income from small businesses to their workers, from healthy to less healthy people, from people with no preexisting conditions to those afflicted with such misfortunes. In short, from those groups from which the government believes it is only “fair” to extract money to a worthier group, needy by whatever definition appeals to the government of the day (those earning four times the poverty level until revised). That this division between subsidizers and subsidized will change with changing political winds there can be little doubt, there being a long history in other programs of increasing the generosity of eligibility requirements.
Nor can there be any doubt that the new government-run system of subsidization will be more costly than the informal system that has extended longevity without generating animosity between those who are, knowingly or unknowingly, helping out their less fortunate brethren; either overtly as has been the case with doctors, or covertly as has probably been the case with many paying patients. The act’s enforcers, the beloved agents of the Internal Revenue Service, are, according to the Government Accountability Office, requesting more than $300 million to “continue the development of new systems and modifications of existing systems required to support” Obamacare. Masses of new personal information will be gathered by the estimated 4,000 to-be-hired agents charged with enforcing the new system of subsidization.
from the capitalists.Jan 18, 2010, Vol. 15, No. 17 • By IRWIN M. STELZER
We have met the enemy and he is us. So Pogo might have described the situation that the business community has created for itself. There is no question that the Obama administration, and even more the Democratic leadership in Congress, harbor something between skepticism and hostility towards free markets.
The European Union wants to have a bigger economy than America and their welfare state, too.11:00 PM, Jan 26, 2004 • By IRWIN M. STELZER
THIS IS THE SEASON of high-level international meetings and, therefore, the season of many discontents. Europe's concerns about the fall of the dollar and America's fiscal profligacy were aired at the World Economic Forum in Davos last week, as were America's concerns about the inability of Europe's governments to stimulate domestic demand. The Europeans are watching their export industries suffer as the euro soars, and the value of the dollars their companies' U.S. subsidiaries earn drop like a stone, as the Euro appreciates to some 50 percent above its previous low.
Employment is a campaign issue, but what do the surveys really tell us about the jobs market?11:00 PM, Jan 21, 2004 • By IRWIN M. STELZER
IF YOU WANT TO KNOW why ordinary folks find it difficult to understand what economists are saying about the American economy, consider the question of jobs. We know a few things. We know that jobs are such an emotive political issue that one candidate for the Democratic presidential nomination promises that if elected his three top priorities will be, "jobs, jobs, jobs."
Deficits, pricey oil, and a weak dollar--will the Fed keep interest rates low?11:00 PM, Jan 12, 2004 • By IRWIN M. STELZER
THE DOLLAR IS DOWN. Oil is up. America is running huge trade and budget deficits. The Japanese are intervening massively in the currency markets to prevent the yen from rising, and the Chinese show no signs of abandoning the renminbi's peg to the dollar. So the euro is bearing the brunt of the dollar's decline, making euroland goods less competitive and snuffing out any signs of a European recovery.
Economic models come up with two very different futures.11:00 PM, Jan 5, 2004 • By IRWIN M. STELZER
AS ECONOMIC FORECASTERS cranked up their models at the end of last year, many pored over the printouts and decided that Robert Browning had it right when he wrote, "Never glad confident morning again." The economy seemed in such bad shape that the Democrats looked forward to teaching another Bush that "it's the economy, stupid." The unemployment rate was 6 percent and rising; the president's tax cuts threatened fiscal meltdown; the trade deficit was heading for a succession of records; the chairman of the Federal Reserve Board was warning of "corrosive deflation"; and the president had just
OPEC has kept the price of oil above $28 for some time; there are a host of reasons it won't be coming down anytime soon.11:00 PM, Dec 15, 2003 • By IRWIN M. STELZER
THE PRICE OF OIL has jumped about 7 percent in the past two weeks. Under ordinary circumstances, and for most commodities, volatility comes as no surprise and is of little consequence. But oil is different. For one thing, its price is affected by a powerful cartel, OPEC, that tries to lock in price increases. For another, it is so crucial to the functioning of industrial economies that past price jumps have thrown America and, in some cases, the world, into protracted periods of sub-par growth.
Why the dollar continues to do well in currency markets and where it's headed next.11:00 PM, Dec 8, 2003 • By IRWIN M. STELZER
WE WERE TAUGHT in graduate economics classes that if a country runs large and persistent trade deficits, the value of its currency will decline relative to the value of the currencies of its trading partners. Oh yes, other things being equal, of course. Then we entered the real world and found that other things are never equal.
Americans are overweight and the extra pounds are going to cost Big Business.11:00 PM, Dec 1, 2003 • By IRWIN M. STELZER
BY NOW, we will have consumed the leftovers from our Thanksgiving feasts, which saw us dispose of 45 million turkeys, perhaps 200 million sweet potatoes, and at least 50 million pies of various sorts. Add in stuffing made from white bread, cranberry sauce loaded with sugar, and carrots roasted in brown sugar and butter, and you have a dieter's nightmare--one estimate puts the carb content of a typical Thanksgiving meal at what Atkins would call "a whopping" 200 grams.
While the economy revs up, the administration turns to protectionism and over-budget spending.11:00 PM, Nov 24, 2003 • By IRWIN M. STELZER
ONLY ONE THING can stall the U.S. economic recovery that is now underway: a major policy error by America's politicians. And, unfortunately, they have two such blunders in mind, namely protectionism and fiscal profligacy.
The economy itself continues to grow, although not at the breakneck 7.2 percent pace that has been reported for the third quarter (that figure will be revised upward this week to something like 8 percent). The housing market is a principal driver. In October housing starts rose 2.9 percent from the previous month's level.
From the December 1, 2003 issue: A grotesquely irresponsible energy bill nears completion.Dec 1, 2003, Vol. 9, No. 12 • By IRWIN M. STELZER
IF PORK WERE A FUEL that could produce electricity and power SUVs, America would now be independent of imported oil. Unfortunately, the pork contained in the first new energy bill in over a decade has more to do with a desire to please Iowa corn farmers and assorted auto and energy companies than with the urgent need to reduce our reliance on oil from the world's most unstable region.
Retailers are expecting a big Christmas season. Will they be zooming into the black?11:00 PM, Nov 17, 2003 • By IRWIN M. STELZER
IF YOU THOUGHT the report that the U.S. economy grew at an annual rate of 7.2 percent was good news, wait until you see the revised estimate. I am told that the final figure will be at least 7.8 percent, and might well reach 8.0 percent.
So much for the look in the rear view mirror. The more important question is whether the road ahead will provide a smooth ride to a sustained period of economic growth or prove as bumpy as the one over which we have recently traveled.
The economy seems to be right where the president wants it for 2004.11:00 PM, Nov 10, 2003 • By IRWIN M. STELZER
HERE IN WASHINGTON, the November 2004 election is not a year away--it's now. So the Bush team is trying to figure out how fast the economy has to grow to create political capital at a rate that outpaces the mounting death toll in Iraq.
The Bush administration brings out the heavy artillery in the hopes of closing the trade gap with China.11:00 PM, Nov 3, 2003 • By IRWIN M. STELZER
THE DEATH LAST WEEK of Madame Chang kai-Shek, wife of the Generalissimo who lost his battle to prevent the communist takeover of China, brings to mind the Republican accusation that communists in the Roosevelt and Truman administrations were responsible for that loss. "Who lost China?" was the accusatory question by critics who believed they had the answer.
Half-century later it is the Democrats who are in full cry.