Countdown to Medicare insolvency 2013

I finally got around to hitting the highlights of Medicare's 2013 Trustees report. The good news is that the report projects trust fund exhaustion two years later than last year's Hospital Insurance (HI) exhaustion date of 2024. The new date is 2026. Tax increases on high earners of an extra 0.9% increased income significantly. The fact that high income levels are unindexed at $200k for individuals and $250k for families means that inflation will drive more and more people into this new tax bracket. It buys some time, two whole years, to readjust to a sustainable formula. Hopefully we're going to have better luck doing so than in the past. We've got 13 years at present speed until things get very bad. That's plus or minus 7 years by my observation so if things go bad, Medicare could go pear shaped very soon.

Make stuff and I pay you

I like this Patreon idea. So long as they create, you support. If you fall out of love with a creator, pull your patronage. It's a 21st century business model for the arts but it makes you feel like an Italian renaissance prince. HT: Wired

Cruel Obamacare

Reimbursement rates are a core element in making any healthcare system work. If doctors don't get paid enough, they have to fire office staff, reconfigure practices, even close their doors. It's a heartrending process for those who have to go through it and it's worst for those office staff employees who, through no fault of their own, end up let go. The worst scenario is the pink slip coming out of nowhere, coming into the holiday season right after you've made a major purchase and drawn down your financial reserves. This is the scenario staring medical office workers in NY and likely across the nation as a New York State Medical Society poll finds that 77% of NY doctors have yet to get a fee schedule, a crucial document that lets doctors and office managers plan out future staffing and whether or not Obamacare is an insurance plan that they can afford to work with. Less than a quarter (23%) of doctors are participating in the exchanges. Existing contracts with insurance companies are forcing three fourths of those who are participating in the health exchanges to take these patients. There is no contractor failure here. This is not a technological glitch. CMS puts out Medicare fee schedules multiple times a year and has been doing so for many years via CD mailers and online downloads. Distributing the ACA fee schedule via the same channel that Medicare fee schedules are distributed would have given doctors a solid basis to proceed and make the staffing adjustments they need to do in order to make this new law work. Instead a majority of doctors are flying blind. This is cruel. This is unnecessary. This is going to negatively impact patient care.

The RBRVS must die, or why repealing Obamacare is not going to fix US medicine

I just saw a great explanation of the labor theory of value. Take some scuba gear and dive down to the sea bottom. Go bring up a seashell in one hand and a diamond in another. By the labor theory of value, both these objects are the same value. In terms of assigning prices in a modern economy, this simply does not work. Outside of certain anarchist and marxist circles the labor theory of value is dead as a doornail. The theory is not dead within the federal government. We spend almost a trillion dollars in Medicare and Medicaid using that system. In US bureaucratic speak, the implementation of the labor theory of value is the Resource-based relative value scale (RBRVS) system. This payment system is so convenient for private insurers that they offer contracts based on the RBRVS system. They often offer a blanket multiplier of what Medicare pays to incent doctors to join their networks. But if government is paying too much for one code and too little for another, the mistake gets passed through and applied to private insurance contracts as well. Medicaid also allows states to set prices as a percentage of Medicare's RBRVS pricing system. In Medicaid's case, the payment is generally less than Medicare. Pricing signals are being muffled and often outright ignored based on the whims of a small committee of the AMA whose recommendations on pricing are accepted about 90% of the time and another committee within CMS who make the final decision by law. We've organized much of our economy based on the principle that prices are emergent, built on supply and demand factors and that it is impossible for any central committee to manage prices. And then at the close of the Cold War, we set up exactly this sort of system to handle what is now trillions of dollars of public and private healthcare spending.

Window shopping Obamacare is hazardous to your rights

One of the hazards of fooling around with a website that is not functioning correctly is that you have no idea what it is doing on the back end. This is the reason why you haven't been getting healthcare.gov in depth analysis from me. I bailed right at the point where it asked for my credit card details prior to me having picked a plan. That viscerally seemed wrong. Now evidence is emerging that my caution was justified. A software analysis blog writer had his abandoned test application processed without authorization and he is now being told that if he does not appeal within 10 days, he cannot access the marketplace in future. He never actually submitted an application and he explicitly disagreed with the terms and conditions. Stay away from Healthcare.gov unless you have legal services on tap. It's not even safe to window shop. HT: Instapundit

34 days

My write at least once a day streak just busted at 34 days. Ugh. Time to start over. One post a day. At least.

Wikistrat Simulations - The Middle Class

Over at the consultancy Wikistrat, I'm a contributing analyst. It's an intellectually stimulating to be in the sausage grinding shop with hundreds of first rate minds putting out simulations on geopolitical trends and events and the business model offers flexibility and speed that traditional consultancies simply can't match. Currently there's an internal sim going on, "Global Middle Class Values 2033" which examines how this relatively new group of $10-$100 a day earners will be transforming the world. I wonder what would happen to the Democrat political coalition if the $36,500 was the US accepted high end of the middle class?

There are few things as stupid as NY Times stupid

Charles Blow is something of a guilty pleasure of mine and yesterday's column on the ACA did not disappoint in its vapidity, stupidity, and completely missing the point. Like it or not, the ACA, or Obamacare, is the law and so part of the job of the Congress is to oversee how the executive is spending the money that Congress appropriates. Congressmen do this both for programs that they approve of and disapprove of. It's part of the job. But in Charles Blow's mind this normal activity is a sign of illegitimate obstruction. It's utterly precious for Blow to say "If Republicans are correct, that the law is the abomination that they say it is, it will be borne out in due time with jobs killed and premiums raised" as premiums are being raised already and people are being thrown en masse out of full time status and into part time work. These bad things have been happening all this year and started happening even before then. If that's the standard, the law has already failed, but Charles Blow doesn't show evidence of any contact with this news. The idea that the health law is rising in popularity is another exercise in spin as the health law's polling chart on Real Clear Politics demonstrates. The most recent high water mark was in the second week of August, 2012 when support was only 4.7% below opposition with a support level of 42.6%. The most recent support level is 39.9% (October 21, 2013), which is behind opposition to the law by 10.6%. The general trend is a gentle slope downwards in support. Blow's major problem is that he hasn't come to grips with the fact that the world doesn't fit the worldview that wrote Obamacare and rammed it through Congress on a party line vote. Ludwig von Mises 1920 observation that government is incapable of calculating prices has not been refuted. The hollowing out of the US medical system since the 1960s when government started calculating prices for doctors continues apace and Obamacare only minimally helps that situation by at least partially switching from AMA owned CPT billing codes for which the AMA charges royalties and to WHO owned ICD-10 PCS billing codes for which the WHO only asserts copyright so that the system is not misused. It's not enough and people will continue to get hurt by the opaqueness of healthcare billing. In a nation that is rapidly heading for a cliff, progress is measured by how much you can slow down the headlong rush towards disaster. The refusal of the GOP to just give in and join in the lemming rush towards the precipice is one of its finer moments. Blow accidentally arrives at a bit of truth. The fact that the Obama administration managed this web site project like it was the early 1970s is likely not to loom large in history's judgment of this episode. What will loom larger is the Democratic party's adoption of unsustainable solutions to an economic sector that was already badly damaged by government intervention and price distortion.

1974 is calling and they'd like their software project dev methodology back

In a CNN interview HHS Secretary Sebelius admits that the preferred schedule for developing Healthcare.gov was 5 years, something that might have been discovered had Obamacare not been rammed through as it was. 1975 was, of course, the year that The Mythical Man Month was published, demonstrating why bringing in entirely new teams three years in to what should have been a five year development effort was a really bad idea. At the time, President Obama didn't notice the release of this book as he was a pot-smoking high school kid and apparently he's never run into it since. Had he read it, he never would have signed on to the idea of not only adding personnel but bringing in entirely new teams in a "tech surge" that is going to create very large difficulties in training up the new people and adding communications problems on top of the already challenging environment for this software project.

And now for something completely different.

Texas rapper Riff Raff.

I watched this and kept having a debate in my head through it all. Is this guy decadant or a neobarb? I still can't decide.

HT Susannah Breslin

Signed up for Startup Weekend Lafayette

It's reasonably close and for close to the price of a ticket in Chicago, I'm getting a ticket and a room at a nearby hotel (yes I'm frugal). I'm still deciding whether I'll pitch Citizen Intelligence there or sign on to someone else's team. I might just end up flipping a coin over it.

The laughable HHS tech surge

Fred Brooks wrote the Mythical Man-Month in 1975 where he penned Brooks law, "adding manpower to a late software project makes it later". The Obama administration apparently hasn't caught up with that. It's embarrassing to watch a supposedly tech savvy administration fall for the software development equivalent of nine women can make a baby in one month. Now Brooke's law doesn't apply everywhere and at every point in a project. In a project that is perfectly partitionable, where a lot of independent tasks have to be done, it is possible to add people on to tasks that haven't even been started yet and not get into the problems of ramp up and communication that Brooks warned against. But that's not what HHS is facing. All the units are at least supposed to be done. This is a repair job and bringing in a new crew on an already built piece of software that has launched, has live data in it, and will be continuing to run as the programmers work to fix things is probably one of the cases where Brooks law applies. A portion of the existing team's time is going to have to be taken away from coding and testing to ramping up the new people who are added so that they know what they are doing. The additional people are going to increase the overall coordination and communication load of the project. There was enormous pressure to get this out the door on time for political reasons. An all hands call is a natural political response to a bad situation. In the case of a software development effort, this is a very bad idea.

Trying out Google plus comments

Things may look a bit different as I'm experimenting with Google plus comments and automatic sharing.

The government's war on the young

Peter Druckmiller is touring college campuses talking about how Washington is helping the baby boomers rip off generation X, Y, and Z. It's a compelling case. My sympathy for the college set is tempered by the fact that they young are getting what they asked for. They're voting for the generational warriors to rob them blind by pretty heavy margins.

Necessary brinksmanship

Right now the US is in an unsustainable position. We are increasing our debt faster than we are growing the economy. The inevitable result is default and global economic disaster. There is currently no combination of tax increases and spending cuts that the US public will accept that will solve this situation. The american public's Overton window is too narrow. This is no different than Greece or any of the other PIIGS countries. The major difference is that the Tea Party has put into Congress a number of figures willing to engage in brinksmanship and repeated efforts to push partial solutions, with the effect of each round moving the public's Overton window a little further in the necessary direction to make the fiscal changes politically viable. A little trip down memory lane regarding long term budget problems and the political strategy of partial solutions with the Democrats using the partial solution strategy and the GOP pushing a full blown solution (that eventually lost electorally in 2012).

Will we get smart enough to avoid accidental default next time?

Now that the government is funded again, it is important to take the opportunity to align government IT in the Treasury Department with the Constitution so that our systems are no longer dumb enough to get into a default by accident as Congress tells the executive to do things that Treasury's computers won't let the executive actually do. This means, paradoxically, that the TEA party is going to have to get behind some spending.

We are dumb enough to default

Yesterday I asked if we were dumb enough to default. Apparently Treasury Secretary Lew has already let the Congress know that being that dumb has been baked into the IT infrastructure of the Treasury Department. When we were paying checks by hand, the government was smart enough that such selective payments could be done but now that we've grown the government enough to automate the process of payment, we can no longer do selective payments. Literally we paid many millions of dollars to get that dumb. HT Jim Geraghty's Morning Jolt 10/16/2013 a National Review newsletter

Are we dumb enough to default?

The US Constitution's 14th amendment should put default out of serious talk in 2013. Section 4 explicitly takes the possibility of defaulting on the US debt out of the question. But what it does not say is how the government is expected to deal with the unprecedented situation of Congressionally passed spending exceeding Congressionally passed spending limits. Which yields, the spending or the limit? One of them has to go so that the US doesn't violate its own constitution but which will it be? I don't think that it's widely understood that the preferred GOP solution, that the spending stops, would necessarily give the Obama administration great leeway in cutting. The very predictable result is that Democrat party spending priorities would be protected while GOP spending priorities would bear the full force of the cuts. The preferred Democrat solution, that the debt ceiling be breached, would make any sort of debt ceiling legislation moot and would turn the politics of spending quite strange, very likely to the long-term detriment of the spending priorities of the Democrat party. So both parties see a conflict between their short term interests and their long term ones. Whichever one wins right now is likely to be in serious pain down the road. But what if we end up doing neither? What if this crew ends up being so incompetent that paralysis is the rule of the day and we just stop paying our debts? When I was younger, I scoffed at such scenarios. Surely they can't be that dumb. But yet, by all evidence, they are that dumb. It really is the stuff of nightmare, to be ruled by fools.

Why don't big data people do holistic politics?

There is a whole industry out there that is involved in dealing with large data sets, and by large I mean millions of units. You would think that they would, at least some of them, get involved in politics and fill in the basics, the foundational data sets that we need to actually monitor our governments.

If they are, I'm seeing little evidence of it. Sure, there are data applications in the government sector that deal with big data. How could there not be in a country with over 300 million people. But nobody seems to be doing the foundations, the basics, that are necessary to manage the whole system without fudging or guesswork.

Pentaho, Hadoop, Jasper reports, experts in these technologies should be seeing that we're missing very simple, basic data sets that are foundational and then moving in to supply them. But nope, no evidence that it's happening.

Weird.

Capitalism failure

From a system perspective, not a human perspective, compensation for work in capitalism is the system's way of communicating to people that the system needs more or fewer people in a job. Not enough bricklayers means rising salaries and too many means lower salaries. The trend continues until the number of people doing the work roughly matches what is needed at the market clearing price and the people are generally satisfied with the compensation.

So what does that tell us about the US distribution of population in the labor market? The distribution of compensation is highly skewed and madly demanding more people get into the job of running companies. It's highly lucrative work that on balance tends to create labor demand. Our lack of labor demand and the resulting salary stagnation are not a harmless consequence.

But people aren't rushing into the CEO business anywhere near the numbers necessary to drive compensation down. It's not like the current crop of CEOs is uniformly magnificent and we simply cannot do better. The wrecked companies littering the corporate landscape around the country are a testament to that. And failure at being a CEO would seem not to carry the same penalties as a spectacularly public malpractice for a doctor or lawyer.

So why has CEO production not drawn attention of the same people addressing the "IT shortage"? Why doesn't the CEO grooming process create more candidates that drive costs down? Why is shareholder value being squandered in so many cases in highly compensating a stream of short lived, not very good chief executives, who drive the company into disaster time and again?

There's something wrong with our CEO system.

Cross posted Chicago Boyz

I love Susannah Breslin

How Improv Can Help Your Career is a pretty good article but the accompanying photo got me to write this endorsement

"Don't make this weird" is a bit too late. Breslin's not only a great writer, she's got a real eye for photography. 

Working my way through Seth Godin's ideavirus

I'm working my way through Unleashing the Ideavirus, a 13 year old work from Seth Godin and it's still a worthwhile read. It's also available as a free PDF from his own site. Darned if it doesn't work. I started off getting it free and am now thinking about buying the thing. I almost never do that but the man is right. When the product is remarkable, the way you look at it changes. This product is remarkable.

Normal legislative practice vs tea party terrorism

Normal Legislative practice:
Vote for this must pass bill even though we've loaded it with pork barrel spending and changed a few bits of unrelated legislation into it. You'll hurt the country worse if it doesn't pass.

Tea Party terrorism:
Vote for this continuing resolution to fund the government while we change/defund the Affordable Care Act.

See the difference?

Me neither.

cross posted on ChicagoBoyz

Gentry liberals anger inner city liberals

Tonight, for the first time in my life, I actually saw gentry liberal disdain of large families play out right in front of me as a white, self-proclaimed very bright public school teacher airly talked about how some parents have six kids when they could only handle one and that they were sabotaging their older kids, forcing them to work and/or skip classes to take care of their younger siblings. It was almost alarming watching the two black women across the table have steam come out of their ears. It got personal, fairly quickly, and quite knocked us off the topic of the focus group.

The liberal coalition has some very big fault lines. It was educational to watch one play out in front of me, even if it was by accident.

Should I stick to writing or should I branch out into video?

I'm considering adding video as another way to communicate. It would be part of the Citizen Intelligence project and look to advertise the project and explain the concept of 21st century, data driven government.

I'm hoping that adding video will net me more feedback and ultimately improve the project. I'm worried that the higher overhead of producing video is going to swallow up too much time. I used to also worry that I was not particularly photogenic. Then I watched some youtube commentary and stopped worrying.

The video overhead bit does remain a worry. If you have some experience on the subject, drop me a line or leave a comment.

Startup Weekend

Ulan Bator in Mongolia is getting a startup weekend before my home region of Northwest Indiana. Sometimes I wonder about this place.

The Startup Weekend I was going to pitch at is delayed

As of yesterday, Startup Weekend Valparaiso is delayed to April 4th, 2014 which means that I'm going to have to regroup and figure out what I'm going to do with Citizen Intelligence, wait for that event or try to organize a team elsewhere before that day. In any case I'm keeping my ticket.

Government Shutdown hampering freedom of religion

The Catholic Church maintains something called Archdiocese for the Military Services, USA to ensure that Catholic serving in the US military are able to gain access to priests and religious services. They are chronically understaffed. 25% of the military is Catholic while 8% of military chaplains are. To fill that gap, priests are brought in on contract and from outside the military but in the government (GS priests). According to the General Counsel of the Archdiocese in an October 3rd release, these supplementary priests face legal penalties if they continue to serve even on a volunteer basis.

You can't get much dumber or more illegal than this. Priests do their work as a job but they also do their work as a vocation. No priest has the financial resources to defend themselves against the Feds. They are being denied the right to practice their vocation with their accustomed flock. That means weddings, baptisms, confessions, all these things are put on hold or must be done with care to avoid arrest.

This is outrageous. This is evil.

It's Sally Jewell's fault old dying vets are denied access to the WWII Memorial

According to National Park Service representative Carol Jonson "We are part of the Interior. Interior gives us our instructions." which means that the travesty of increasing spending during a government shutdown to close down normally open to the public 24/7/365 monuments is Secretary of the Interior Sally Jewell's fault

This is the face of the lady that likes to beat up on our aging veterans:

She's a true innovator in attempting to injure the people to coerce political compliance from the other party. Shame on her. 

Obama Administration illegally forcing private businesses closed

Today's absurdity is the news that profitable businesses that lease federal land are being forced to close. These are campgrounds and day use parks that receive no federal funds, no government workers are employed there, and have contracts to pay rent to the government for the use of the land. In the dozen plus previous shutdowns that the US has had in the modern budget age, these facilities have remained open. At this point, they are being forced to close.

This is unjust. It serves no legitimate public policy purpose. It costs the government money it can ill afford to lose and reduces the faith in government being a reliable business partner. Profit making private businesses operating under lease cannot be shut down merely because the landlord is having some internal trouble with their budgeting process. That's no less true if the landlord is the federal government.

Giving up on Volokh Conspiracy comments

In the past 48 hours I've had over a dozen comments swallowed up over at the Volokh Conspiracy. That's enough. I'm giving them a rest, especially after reading another commenter complaining about the same thing.

Most fatuous government shutdown hostage analogy ever

Reportedly the Democrats are criticizing Republican efforts to fund popular parts of the government as a "release-one-hostage-at-a-time strategy". For a second, let's accept the premise that this is a hostage situation and the hostage taker decides to let a hostage go as a freebie. In what insane world would it be acceptable for the police to force the hostage back into the hostage taker's hands? It certainly isn't this one.

Hostage release negotiation is inherently a take what you can get peacefully first sort of deal. Police negotiators never turn down no-strings-attached hostage releases. The Democrats did, which raises the question of who, actually is holding these programs hostage?

Seth Godin does another right angle surprise today, taking on the crowd dynamics of events and trashing the 10 person banquet table. It is perfect for the servers, for the venue, and for efficient service but it absolutely subverts the purpose of the meeting. Instead he suggests that we seat five people at a table for four to promote conversation and connection. Proximity promotes conversation. The downside is that there will be scant room for the dinner rolls.

Who cares about the dinner rolls?

Occupy Monuments

I don't think that this is exactly what the occupy movement had in mind but it looks like we're occupying monuments. The World War II Memorial is closed and barriers were up but the ongoing program to fly veterans to visit their war's memorial kept up operations. The barriers were moved aside and veterans came to visit the WWII Memorial with hardly a hiccup. After all, who is going to get paid to stop them?

Now's the time that conservatives have to start stepping up and putting in stop gaps for the government operations that are legitimate and not getting funded during this standoff. Let it burn has to be replaced by something more sophisticated, more productive.

The left is tagging the tea party as a bunch of anarchists who want to blow up society, a bunch of terrorists. That has to get answered lest it starts to gain ground as conventional wisdom.