So, here we are, an aging population with a shiny new healthcare law and we value scrapbooking 100 times more than we do heart valves.

Maybe it’s not such a bad thing. At least we can all sit around and do really efficient, high-tech on-line scrapbooking of our old photos as our hearts give out.

1. Killing bin Laden

Give credit where it’s due, President Obama did say “yes” when it mattered. However, to call this a policy success of the Obama administration is laughable. Recall that our favorite community organizer came into office with the anti-anti-terrorism strategy, closing Gitmo, banning wiretaps on key persons of interest, etc. The only reason Obama gets to claim any modicum of success in killing OBL is because of the Bush era intelligence that enabled him to find OBL. This same intelligence he said we shouldn’t be gathering. And, Obama even managed to squander this little success with his reprehensible touchdown dance on the 1-year anniversary. He looked a lot more like Icky Woods than Lincoln. To further say that Mitt Romney would have said “No” when he said “Yes” made Obama look like a 5^th grader.

But, the more important failure is that our community organizer came to office with such naivety that he began immediately dismantling the anti-terror infrastructure that GWB put in place. We’ve been safe in this country for 11 years now thanks the Bush era measures. We won’t know for 10 more years the damage caused by Obama taking that apart. But, it scares the hell out of me, especially as a resident of the Washington, DC area.

2. Saving the US auto industry

This was one of the most colossal sell-outs of free markets in history and will haunt us for years to come. One of the most important things a free market needs is an efficient capital market, where debt and equity providers can be confident that the contracts they make with companies will be honored. The “saving of the US auto industry” was nothing more than “saving of the UAW’s contributions to my campaign coffers.” The lenders got left holding the bag, while the UAW got made whole and then some, in complete contravention to the way bankruptcy proceedings are normally handled. This is probably the worst example of corporate and union welfare I’ve ever seen.

Anyone who thinks this was a good idea needs to read the works of economist Joseph Schumpeter, who coined the term “creative destruction.” Old and failing industries must be allowed to fail and be replaced by ones that are economically viable. Pumping tax dollars into failed industries because the president likes their unions has a name. It’s called communism. If you think it works, I refer you to Union, Soviet for your research. If you think it can work going forward, I encourage you to look into the “green energy industry” and Google “Solyndra.” Folks, the only force that has ever successfully selected winners and losers, in any country in any era, is the free market. Obama set us back decades with the auto bailout.

3. Repealing “Don’t Ask Don’t Tell,” ending defense of DOMA in court, and supporting      marriage equality

If you think repealing “Don’t Ask Don’t Tell” was a success, you haven’t spoken to many servicemen. And, I don’t mean the guys sitting in Washington. I mean the guys sitting in foxholes. Most people would not consider weakening our military a policy success.

Confirming the sanctity of marriage as being between a man and woman has now passed in 30 of our 50 states. Kinda looks like a majority of opinion has spoken. I didn’t know a democratically elected president was supposed to go against the will of the people and I’m pretty sure the constitution leaves this decision to the states, not the president.  This announcement was nothing more than a political move because he has some very large donors in Hollywood who happen to be gay. I have no particular problem with a president shoring up his financial base heading into a tough election, but, please, let’s not confuse it with a policy success.

4. Supporting the overthrow of Gaddafi

Definitely a good thing that he’s gone, but letting France lead while we sat back and did nothing made us look weak and irrelevant. That will come back to bite us as our credibility around the world continues to wane. Obama’s misread on the Middle East has been astonishing. By the way, how’s that handshake with Iran working out for him?

5. Signing the Lily [sic] Ledbetter Fair Pay Act

Way too obscure for anyone to care about. Seems like a reasonably benign piece of legislation, but who knows because nobody has heard about it (I had to look it up on Wikipedia). Obviously a reach for something….anything he’s done that wasn’t completely destructive to our nation.

6. Getting us out of an expensive and destructive war we should never have started

The war was supported by both parties and ended in the removal of one of the world’s worst despots and provided a foothold for democratic governance and fair treatment of women in the Middle East. The final chapter on whether it was worth it won’t be written til long after my generation is gone, but the signs are good, as other despots fall around the Middle East. Does anyone really believe that Gaddafi would be gone (stated as an Obama success) if Sadam hadn’t gone first? More hypocrisy from the left. Likewise, it will take a while to understand the effects of cutting and running. Way too early to declare that a success.

7. Appointing two righteous women to the Supreme Court

Yes, it will be great to have more folks on the high court who will trample our constitution in the name of “progressive” government. Great success. NOT.

8. Passing Obamacare

This is a fastball down the middle. The single biggest failure of this administration. Clearly our healthcare system needs reform. I’ve written about that numerous times and won’t repeat those arguments, nor my proposed solutions, here. Feel free to read them if you’re interested. But, what’s clear to the vast majority of our country, who vehemently opposed this bill and threw democrats out of office in droves in 2010 because of it, is that Obamacare is part of the problem, not the solution. Liberals like to say that conservative opposition to Obamacare means we don’t want poor sick people to be insured. That’s preposterous and they know it. We want a health system that works and is sustainable and affordable. We want to address the real problems with sustainable and affordable solutions. Obamacare isn’t about solving the healthcare problem; it’s about moving to a socialist government. Obamacare bends the cost curve…UP. Liberals only answer for how we pay for it is to “tax the rich.” Show me an example of where that’s worked. There’s not enough money there to pay for it (the Willie Sutton problem). They will have to tax the middle class and it becomes yet another drag on a flagging economy. If this policy were a success, they wouldn’t have had to ram it down the country’s throat with a shady backroom deal after Scott Brown got elected. That’s no way to run a democracy.

It’s also very interesting to note that liberals are now starting to backpedal as fast as they can from key parts of this horrid legislation. For example, one of the key ways they try to pay for all this crap is a 2.3% tax on the medical device industry. As an aside, the medical device industry is one of the very few that has not fled the US yet. In fact, in 2010, the medtech industry generated $40 billion in export revenue with a $3 billion positive trade balance. And, now, medical device CEOs have publicly stated that they have had to lay off US employees to prepare for this new tax.

This tax is so gallactically stupid that liberal icon Elizabeth Warren has come out against it, after she supported it, of course. Ms. Warren got religion around this topic when she decided to run for Scott Brown’s MA senate seat and realized that, oops, a whole bunch of people in MA are employed in this very successful industry.

Facts are so often inconvenient pesky little things for liberals.

9. Passing the Stimulus

I’m sorry, but ARE YOU KIDDING ME????? No serious person would ever state this as a policy success. And, I’m more than willing to acknowledge that GWB did it first. But, when it failed for him, why triple down on failure? We are sitting 3+ years later with 8% unemployment and an economy that many economists believe may be poised to go back into recession. We have NEVER had so much trouble pulling out of a recession. Yes, I know, the Barney Frank led housing bubble made this one worse than many others, but we have had no sustainable recovery and no job creation. Stealing more money from taxpayers to pay to build signs that say “This Project Was Paid for with Stimulus Dollars” will not build an economy back to health. Obama has laid waste to the federal budget, deficit, and debt for his “stimulus” and has absolutely nothing to show for it. Miserable policy failure.

10. Passing Wall Street Reform

Legislatively, it was close between Wall Street Reform and Obamacare for the biggest failures of this administration. As mentioned before, the most important thing capitalism needs to succeed is efficient capital markets. Dodd-Frank has so completely gummed up our capital markets that, before it has even had time to really go into effect, we have bipartisan groups of legislators talking about delaying the implementation of key parts of it. The last thing in the world a sluggish economy needs is to have a refrigerator thrown on its back as its being told to run faster. I do realize that this argument relies on the notion that we want capitalism to succeed. The Obama policies make it very clear that he has no interest whatsoever in seeing capitalism succeed. He holds fast to a 1960s vision of socialism and has designed policies to bring capitalism to its knees. Then government can rush in to save the day. He may want to do some homework on the success of other socialist countries. Greece might be a good place to start.

So, there you have it. 10 really good examples of the abject failure of this administration. The two biggest “legislative accomplishments” are already being undone by bipartisan groups of legislators. Thanks again for making it easy for me to put my list together.

Answer: They start trying to dig up “dirt” on opposing candidates by looking into their high school high jinks that happened nearly 50 years ago.

Seriously, the liberal hyperventilation over Mitt Romney’s high school pranks is the clearest sign yet that those folks are dead in the water. Their president’s policies have failed miserably and, in an effort to avoid any conversation about that, they have turned to utter desperation.

For those of you who were never a high school boy, let me share a revelation with you. We all did really stupid stuff. Every single one of us. Some more than others and some a little more egregious than others, but we all did it. I am absolutely confident that not a single Fortune 500 CEO in his 50s nor, for that matter, a college English Professor in his 50s, would want to be judged by the dumb crap he did in high school. Because I am now a reasonably successful businessman and value my reputation as an upstanding member of the community, I will plead the 5^th on sharing any specifics of my own foibles, lest you send them over to the dopes at the Washington Post. But, I will let on this much – there were many of them and sometimes they weren’t all that nice to other people. I regret that, but I was 16 and, like all 16 year old males, I was an immature idiot. Whatever I did, it has no impact whatsoever on my character today, nor my fitness for any job, including President of the United States (to relieve tension, I have no current plans to run. Note that I said “current” so I’m leaving the door open a crack).

The other thing the hysterical left misses badly, of course, is that times have changed, probably for the better, with respect to sensitivity training. My kids’ school (and probably most schools today) has intense training and programs around bullying and the like. For crying out loud, every school has a “Director of Diversity” to make it abundantly clear to every kid that looking sideways at another kid, no matter the reason, is unacceptable. Maybe the next generation of presidential candidates won’t have as many high jinks in their past as mine does. That’s probably a good thing. I say probably because the world is largely a rough and tumble place and putting kids in a 13 year educational cocoon may not prepare them for the vagaries of the real world. But, here’s what’s clear – this training certainly did not exist in the 60s and 70s and boys were mostly encouraged, implicitly by culture if not explicitly by parents, teachers, and administers, to settle things in the schoolyard. So, Mitt Romney’s actions in high school were 100% in the middle of the fairway for what all high school boys did and were encouraged to do.

So, here you have a president who can’t govern and whose policies have failed completely, leading our economy and our country to perhaps one of its weakest points ever. Greece has failed and he is trying to turn us into Greece. And, instead of focusing his attention on why his policies failed and making corrections, he’s got his operatives out creating Nixonian enemies lists (where’s the leftist media outcry on that?) and digging up irrelevant high school pranks committed by his opponents. That’s a sad state of affairs for democrats. Very sad, indeed.

Let’s start with technology. I always hesitate to write about technology in healthcare because it’s kinda what I do for a living. So, when one of my sharp readers corrects my erroneous thinking, it looks a lot worse for me than when I get the bathroom humor wrong. But, here goes nothing.

Stop for a moment and consider all the myriad ways technology has changed your life in the last 10 years alone. Through the wonders of my iPad (a technology I derided, then embraced like it was my third child) I have been catching up on episodes of HBO series I never watched (HBO Go is one of my favorite iPad apps). Most recently, I’ve been watching The Wire, a police/legal drama set in Baltimore. In season 2 (2003, less than 10 years ago), the good guys were eavesdropping on the bad guys’ cell phones. The bad guys figured it out and (literally) tossed their ancient flip phones into the Baltimore Harbor. Then, standing at the Harbor’s edge, the bad guy took out a huge clunky device with an antenna, yanked out a stylus and started tapping on the screen. Bad guy #2 said, “What are you doing?” Bad guy #1 replied, “I’m sending a text message.” Bad guy #1 was nonplussed. And, that wasn’t so long ago. Today, the average teenager sends 1500 text messages per day.

We’ve also made tremendous progress in many aspects of medical technology, particularly in drugs, medical devices, and diagnostics. And, by and large, we’ve made that progress in the face of a hostile and tectonically slow regulatory environment. We have whole new classes of targeted cancer drugs that have made it possible to live many years with what were once quickly fatal forms of the disease. We have new tools and methods for minimally invasive surgeries that have turned what were once life-threatening procedures accompanied by 10 days in the hospital into outpatient procedures with little risk. We have life-saving diagnostic procedures like the colonoscopy, which has made colorectal cancer far more treatable when it is caught early. (Quick diversion: to all my friends over or near 50 (or 40 with any family history), if you haven’t had a colonoscopy, I beg you to go get one. Yes, the prep the night before will make you want to kill yourself, but the propofol is fun (ask Michael Jackson) and it will save your life if you have precancerous lesions.)

All this technology innovation has dramatically improved healthcare, but it has done little to control costs and has, arguably, increased costs in some areas. I say “arguably” because I have not seen a comprehensive study of this issue and I think it would be hard to conduct. There’s no doubt that certain technologies (e.g., expensive imaging technologies that get overused) increase costs, but it is also true that many technologies dramatically decrease costs. The most expensive part of our healthcare system is paying for long hospital stays. Drugs (which account for only about 12.5% of overall costs – a good number to keep in mind when Obama is villifying the big pharma companies) that keep patients out of hospitals are very cost-effective. But, I’m willing to stipulate that technology has probably been, at best, cost neutral to healthcare.

The kind of technology innovation I’m thinking about is more on the delivery side of healthcare. We have done a very poor job of integrating all the phenomenal advances in information technology with healthcare. I actually find it pathetic that 90% of the discussion around “healthcare IT” involves electronic medical records. I mean, c’mon! No matter what airport I’m in, anywhere in the world, I can give American Airlines a 3 letter, 4 digit code (my frequent flyer number) and they can immediately pull up my entire flying history with American. But, if I go to visit my own doctor, who has been my doctor for 15 years, he pulls out a big paper file and flips through pages of handwritten reports. And, worse, when I went to a specialist recently, literally in the same medical office building as my primary care doc, he had none of that information. So, I understand we need to get the electronic medical records piece done, but it seems like little more than the price of admission.

We need to move very quickly to leveraging technology for far more innovative delivery of healthcare. In my blog post that laid out the issues with healthcare, I wrote of the adverse incentives in the payment system that encourage patients to visit doctors simply because someone else is paying for it. I also questioned a system whereby “routine maintenance,” akin to an oil change for your car, is paid for by a third party “insurer.” That’s expensive, inefficient, and totally devoid of the market forces that discipline most other markets. I gave the example of taking a kid to the doctor for an ear infection and having insurance pay for it. Let’s stick with the ear infection example for a moment. One of my kids had chronic ear infections as a toddler. Every time he got a cold, within a few days, he was tugging on one or both of his ears. We knew we had to take him into the doc, who looked into his ears with one of those little scopes that have been around since I was a kid, and said, “yup, he has another ear infection.” She would prescribe an antibiotic, which my son would take for the prescribed number of days and the infection resolved.

Question: was it really necessary to go to the doctor every time this happened? That’s a very expensive way to deliver a very simple service. Not only did we take up a 15 min appointment slot, but we used some portion of overhead for the office space, the receptionist, the nurse, etc. And, that doesn’t take into account the lost economic productivity of my wife and me (we were first time parents so we often both went with him) having to take time off work to take him to the pediatrician. On one of these visits, I asked the doc if she could just show me what to look for when she peeks in his ears so maybe we could buy a scope, do that at home to confirm the infection, and have her call in a script. She looked at me like I had just asked her to saw off one of my legs.

But, this idea stuck with me and we’ve had 17 years of technology advancement since my son was little.  So envision this: A two year old with a cold starts tugging on his ears. The parent takes a fully idiot-proof ear scope and puts the tip into the ear canal. The scope is connected to a high resolution video system (which most of us now have on our phones) that records what’s going on in the child’s ear. The parent takes the child’s temperature, blood pressure, and whatever other routine stuff the nurse usually jots down, and enters it, along with a brief description of other symptoms (just as the parent would in the pediatrician’s office). The video and other information is transmitted electronically in real time to the doctor. During a predetermined window of time, which, by the way, could be in the evening or on a weekend, the doctor will review the information, including the HD video of the ear and reply to the parent with a diagnosis and action (e.g., script for antibiotic). The doctor will have the ability to interact on-line or by phone with the parent for follow up questions. But, the doctor may well be conducting this “office visit” sitting in his home office…..in Bangalore. Very low overhead. Yes, I’m serious.

I probably have doctors all over the country (the thousands that read my blog) gasping for breath right now. I’m sure there’s a “look and feel” to a patient that can’t be fully transmitted using technology and might be lost. But, I’m willing to bet that a whole lot of office visits could be avoided with technology. I actually have a small window into this because I have a good friend who’s a doctor and I have sent him text messages with questions in the past, to which he has responded. Had I not had access to his texts, I would have had to set up a visit. And, without giving you TMI, I was texting about a potentially serious condition. His answer said, in essence, “this is not serious, don’t worry about it.” I get to do this because I’m lucky enough to have a friend who’s a doctor. Why shouldn’t everyone have such access to their physician? I understand that we would have to figure out ways to compensate docs for this type of service, but that’s where the innovation comes in and where government could actually help rather than mess things up with more syrup on crappy pancakes.

I want to use one more example that takes it up a notch. One of the leading causes of death and, thus, one of the highest costs to our healthcare system is heart disease. One form of heart disease is congestive heart failure. Patients with chronic congestive heart failure frequently have acute exacerbations of their ailment and end up in the hospital, often in the ICU for several days. That is a big cost to the healthcare system. Several technologies have been developed that are small implantable devices (think pacemaker) that detect these acute flare-ups before the patient feels the symptoms. This information can then be transmitted electronically to the physician, who can quickly alter the patient’s medication to avert the acute episode and, hence, the hospitalization.

This technology exists today – I’m not talking about some theoretical idea. So, why doesn’t every patient with CHF have one of these implanted? The principle issue is reimbursement. Our healthcare reimbursement system is designed to pay doctors and hospitals for treating sick people. It’s not well-designed for keeping people healthy and out of the hospital. In the arcane language of healthcare reimbursement, there is no “CPT code” to get paid for implanting such a device nor, more important, for the ongoing monitoring of the patient waiting for the next acute episode to be avoided. That’s really bass-akwards.

The good news is that this actually highlights an area where the government can get involved to improve our system. Many CHF patients are older and thus covered under Medicare, the government run payment system for older patients. To get a new technology like this covered by Medicare today would take longer than the expected life span of every CHF patient alive today. Meanwhile, the meter keeps running on the costs of unnecessary hospitalizations of CHF patients. If our government wants to help, how about developing an expedited review system to ensure quick reimbursement of new technologies that can take costs out of the system. And, to my friends in government (if I have any), “expedited” means “get it done in 3-6 months,” not “form an interagency task force that will convene quarterly over the next fiscal year and make a recommendation to the CMS for consideration.”

We need to shift US healthcare away from the model of paying to treat sick patients toward keeping patients healthy and out of the most expensive parts of the healthcare system. Technology can play a big role there, but technology will never see the light of day until the payment schema are matched to the way the technology is used. Sadly, Obamacare is all about sticking it to the providers of novel technology (see: Medical Device tax). That’s all about politics – villifying corporate America is one of the chief Obamian campaign themes. Unfortunately, he missed a big opportunity to work with these companies to figure out ways to develop and pay for technologies that will save costs and help patients.

I’ll get to that, but first I want to pause for a moment and talk about economic theory…..and pancakes. Bear with me. There’s an economic theory I’ve been doing some reading on called “the theory of second best.” I don’t recommend trying to read the original economists’ papers on it because, like anything ever written by an economist, they’re largely unintelligible to us mere mortals. But, I’m hoping a quick trip to the kitchen may shed some light. And, if so, help us understand what’s going on in healthcare and, in fact, many other instances of government intervention into markets.

Suppose you woke up one fine Saturday morning with a hankering for a nice big breakfast. So, you announced to your family you were going to make a big pancake breakfast for them. Everyone got all excited as you started pulling out the ingredients and greasing up the frying pan. But, then, dammit, you realized you were out of baking powder and eggs. My ultra layman’s read of the theory of second best suggests that, having realized the lack of eggs and baking powder, your second best option is not pancakes without eggs and baking powder. Your second best option is a bowl of oatmeal.

But, you go ahead and make the baking powder and egg-free pancakes because there was regulation that restricted oatmeal consumption on weekends (perhaps due to over-farming of the required oats). And, when the pancakes come off the griddle – shocker – they taste like shit and have the consistency of a cardboard box. The pancake breakfast was a bust, but when you wake up the next morning you find that the government, in the name of fairness, has now mandated that all pancakes be made without eggs or baking powder. But, your government is also benevolent so, in order to address the shortcomings of bad-tasting cardboard pancakes, they add a regulation that all pancake eaters have to use 4 times the usual amount of syrup. It turns out that does help a bit because the syrup is sweet and does cover up some of the bad taste and it does help you forget they are the consistency of a corrugated box. In fact, once there’s a mandate in favor of egg and baking powder free pancakes, the syrup regulation kinda makes sense, even if it doesn’t address the root cause of the problem.

This works OK for a while because of all the yummy syrup, but over time you develop diabetes and gain weight because of all the extra syrup you have to put on your bad tasting, cardboard pancakes. Might this be a wake up call to stop making pancakes without baking powder and eggs and stop covering it up with extra syrup? Well, not if you’re the federal government. Your government will recognize the problem, but now mandate that you eat your crappy cardboard pancakes with extra syrup, but take an insulin injection with them, and perhaps mandate that McDonald’s can’t sell hamburgers because too many people are gaining weight from bad pancakes with extra syrup. And, on it goes with new regulations piled on top of each other, each trying to fix the unintended consequences of the one before it.

Oooookay, I think I’ve just about exhausted this analogy. Clearly, the problem isn’t that people put too much syrup on their pancakes or that they need insulin to tolerate all that syrup. The problem is that when you ran out of eggs and baking powder, you made a bad second choice. You should have had oatmeal. And, more important, once the bad second choice was made, the government kept piling on “fixes” that turned a small problem into a much bigger one, without ever going back to fix the original problem.

So it is with healthcare. We’ll come back to this theory later (though I gotta admit, I’m really hungry now).

After World War II, the government imposed price controls and prohibited employers from increasing wages. Faced with an inability to entice new employees or retain current ones with higher wages, employers turned to “fringe benefits,” which was a backdoor way of paying people more while not running afoul of government-imposed wage freezes. What resulted, we now know, is a healthcare system where most of us get our insurance through our employer. This was a bad second choice and has created the first of the two huge flaws that nobody is talking about. Namely, there is no connection whatsoever to market pricing because the payor* and the consumer of healthcare are two totally different people.

Think about how you allocate your personal resources among other expenditures in your life (cars, dinners out, clothes for you and your kids, vacations, etc.). You make very informed decisions and trade-offs, particularly for expenditures that are above a certain level. For example, if you need to buy a new car, you’ll research it for a few days on the Internet, know precisely the dealer’s cost down to the floor mats, and you’ll pay a price accordingly. You will also research the quality of each car relative to others and probably ask a few friends about the various dealers and their level of after-sales service. Likewise, before you go to a new restaurant, you’ll read a few on-line reviews, consult Zagat’s, ask a few friends, and read the menu on-line to see how much the entrees cost. In other words, you’ll make a market-based decision, fully armed with all relevant data. As a result, the automotive and restaurant (and most other) markets function very efficiently and pricing is rationale.

Now, suppose you twist your knee playing racquetball and you go see the orthopedic surgeon.  He tells you that he’s pretty sure it’s just a sprain and you’ll be fine with rest, but if you want, you can confirm that with an MRI. Do you say, “Doc, how much is the MRI going to cost?” No, why would you? If you opt to get it done, your insurance will pay. Cost is literally no factor in the decision. You’re a tad worried that you might have actually torn a ligament so, even though the orthopedist has told you he thinks that’s unlikely, you decide to get the MRI. The doc then hands you the name of one MRI center (that is probably run by his golfing buddy). It’s near your house and your doc recommended it so you go there. You don’t even consider looking into other MRI centers. You don’t call around and ask them how much they charge for an MRI of the knee. Studies have shown the remarkable extent to which people will inconvenience themselves to save even a little bit of money (e.g., driving across town to buy a bottle of chardonnay for $14 instead of the $15 charged by the liquor store across the street). Yet, in the MRI example, you spend no time trying to optimize price for a very expensive item. And, you certainly don’t negotiate (or necessarily even know) the price. Why? Because you don’t give a shit. You’re not paying for it. I’m not even sure the information is available to the consumers of healthcare because heretofore they have had no motivation to demand it. That is a seriously inefficient market.

The second, and related, issue with healthcare relates to the evolution of what we call “health insurance” and how we use it. Insurance, in its purest form, involves the pooling of higher and lower risk groups so that nobody ends up paying for something they simply cannot afford. I do not carry car insurance to cover a $500 fender bender. I can afford that. I carry car insurance because if, God forbid, I got in a serious accident and got sued for $1 million, I can’t afford to pay that and, thus, need to insure against it.

By contrast, what we call “health insurance” has really become “health payment.” It blows my mind that when I take my kid to the doctor with an ear infection, a visit that probably costs $100 or so, my “insurance” company pays for all but $15 of it (my “co-pay”). Except, of course, the insurance company doesn’t pay for it. My employer pays for it through ever higher premiums. I don’t care about the cost of the visit or the premium because I’m not paying for either (though employers are starting to shift costs back to employees, which, believe it or not, will ultimately be a good thing).

Insurance only makes sense for expenses we can’t otherwise afford and thus we need to pool the risk. If, again God forbid, someone in my family gets a serious chronic disease that costs $50,000/year, I need insurance for that. I don’t need it for every $100 visit to the doctor. Yet, that’s exactly how we use it today. Go back to the racquetball injury and forget about the MRI. Did you really need to go to the orthopedic surgeon in the first place? Would your leg have fallen off if you had just waited a few weeks to see if it stopped hurting and maintained its stability? I’m not being glib nor suggesting that serious medical issues should be ignored. However, if you had to cough up $200 (plus maybe another $500 for the x-ray) to have your orthopedist tell you it’s just a sprain, you may have waited a few days to see if the pain subsided a bit, no? But, when someone else pays for it, what the hell, go have it looked at. When our kids were little, we had friends who took their kids to the doctor for every cough and cold even though, last time I checked the medical literature, the common cold was still curable only with chicken soup and about a week’s time. But, since it didn’t cost them anything, off they went to the doctor. The automotive insurance analogy would be that you put in an insurance claim to the Geico Gecko for every oil change. It’s crazy!

For the avoidance of any doubt, I am not advocating for a system where people with chest pains sit home and wait to see if they’re having a heart attack. Serious or potentially serious medical disorders need immediate attention. But, lots of money gets wasted on unnecessary consumption of medical care simply because we’ve created a payment system where even the smallest amount of risk, risk that should be borne by the consumer, is borne by the insurance company.

What’s my point? Seriously, readers, I hate when you do this to me. It always seems to happen somewhere after about 1,500 words. I can see you sitting at your computer screens or straining to read my drivel on your iPhone and you’re anxiously tapping your foot, saying, “get to the friggin’ point, Robertson!” Do you have any idea the pressure that puts on me?

So, here’s the point. In healthcare, we have a market that has basically no price discovery because payors and consumers of the product are two totally different people, leaving the buyer/decision maker completely insensitive to price or consumption levels. And, at the same time we’ve created that woefully inefficient market mechanism, we’ve evolved an “insurance” system that is not really insurance at all and encourages unnecessary consumption (at these inefficient pricing levels). Frankly, as I re-read my own words, I’m not even convinced it’s two problems. It may just be a restatement of the same problem twice.

I warned at the outset that this screed would be more the statement of a problem than the offering of solutions. But, I think the first step in solving any problem is to make sure you have the problem statement correct. To do it any other way risks the problems introduced by the theory of second best. In healthcare, we headed down a “second best” type solution many years ago and we’ve compounded the problem over and over. This is what government does best. It heaps bad regulation on bad regulation without ever addressing the root cause. I’m really not pointing the finger just at President Obama. His healthcare law is just the latest bad idea to address the wrong problem. And, yes, it is very unfortunate that he did it in a way that is so threatening to the basic economic freedoms upon which our country was founded. I’m hopeful that (Diana Ross and) the Supremes will make that right with their decision on the individual mandate in June. But, I’ve seen almost nothing from the Republicans that offer solutions to the market-based problems I’ve raised here.

*For reasons I’ve never understood, when you’re talking about healthcare, “payor” is spelled with an “o” instead of the correct spelling of the word, which is “payer.”

OK, great, you’re back. My question is why do people put the Christian symbol of the fish with “Darwin” in the body of the fish with little feet?

Incredibly Offensive

This is THE SINGLE MOST OFFENSIVE SYMBOL that I ever see on a regular basis in alleged polite society. It is every bit as offensive to Christians as a swastika would be to a Jew. To people who have this awful little thing on their bumper, I ask you, “would you put a swastika on your car?” Seriously, would you? If you’re willing to offend Christians, why stop there? Why not put a symbol of Calvin the cartoon character peeing on the Koran. It is a fundamental affront to one of our most sacred symbols.

A very sacred symbol

I think I understand what the person is trying to say. They’re saying they believe in Darwinian evolution, not fundamentalism. That’s fine. Everyone is entitled to their opinion, whether driven by religion, science, or a combination of the two. That’s not even at issue. What’s not fine is defacing sacred religious symbols that are very dear to 80% of the US population. In fact, that is insensitive and reprehensible.

To quote my sis:

“Right, because making fun of other people’s beliefs has done so much — throughout history — to promote peace and understanding.”

Without plastic grocery bags, what will I use??

This picture has nothing to do with this blog, but I found it while searching for a picture of poop in a bag and I simply had to include it!

But, before I could get around to putting this all down into bits and bytes (originally, I wrote “…putting this all down on paper…..”, but that sounds so 20^th Century), I did a little math, something my readers know I love to do.  And, eureka, I came to a very different conclusion. I decided to calculate what this new tax might cost me on an annual basis. Here’s a very quick back of the envelope:

• 10 bags of groceries, once a week for a year = 520 bags
• 3 carry out meals per week (yeah, we don’t cook so much), 2 bags per meal = 312 bags
• Other shopping (total guesswork) = 100 bags
• Other (even more guesswork, but I’m trying to be conservative) = 100 bags

GRAND TOTAL: 1,032 bags per year @ 5 cents per bag

==> Drum roll, please………$51.60 in bag taxes per year

Since these were all estimates, let’s just round off to 1,000 bags and $50 a year, if I opt to take a bag from the vendor each time vs. bringing my own reusable bag. This is where the light bulb went off and I decided to write a thank you note to the County Council instead of a scathing letter. Before this tax was levied I got my bags for free, which was nice, but it left me with the daily challenge of finding ways to annoy the environmentalists. Now, every time I go to a store I can spend 5 cents and annoy an environmentalist. That’s $50 a year to annoy the tree huggers. I would have paid $500. Thanks County Council. I owe you.

So, I was excited when TSA selected me for their Preferred Traveler Program. To enroll in this program you undergo a one-time, deep-dive background check, but then you get streamlined through security at the airport. To my amazement, I passed the background check (many thanks to all my high school friends who lied for me). Now, when I depart from an airport that has implemented the PTP, it should be much easier (let me count how many have been able to get up and running in the year since I enrolled – let’s see, OK, carry the one, and the total is…..one). The good news for me is the one airport is Miami International. Since my primary office is in Miami and I live in Maryland, I fly there a lot. Being in the PTP means you go through a separate screening line, your shoes stay on, your laptop stays in your bag, your belt stays on, junk stays in your pockets, liquids stay in your bag, your coat stays on, etc. You just put your bag through the X-Ray and walk through the metal detector. Total elapsed time from when your boarding pass and ID are checked to completion of security screening: approximately 30 seconds. Nice!

Sounds great, right? Probably even a shining example of how our government has become smarter and more efficient. Perhaps even vindication for Obama and all the liberals who want to turn over the entire economy to the government to run.

Time out – there’s more to the story. First of all, in order to get my boarding pass and ID checked, I have to stand in the same line as everyone else. As a percent of total waiting time at any airport, the time from back of line to ID check is about 70-80% and actually going through X-Ray is about 20-30%, at most. So, right off the bat, this potentially time-saving program is mostly a waste. Every time I leave MIA, I stand in line for 15 minutes waiting to have my ID checked while 6 TSA agents stand idle in the PTP screening line. When I finally get there, they always joke about how lonely they are. Your tax dollars hard at work.

TSA Hard at Work

But, wait, it got even more absurd today. After the 15 minute wait to get my ID checked, the TSA agent who checked my ID and scanned my boarding pass pointed to the longer regular line, not the PTP line that had been 100% empty since I arrived. I said, “Hang on, I’m in the Preferred Traveler Program. I get to go over there.” He said, “No you don’t. When the computer scans your boarding pass, it decides when you get to go to that line. Today it didn’t send you there. It’s about 80% of the time.”

Oooookay. That makes sense. Create a program to enhance efficiency, but then decide that 20% of the time you’ll be inefficient, just for the hell of it. I groused a bit, but since I wanted to get home, I stopped just short of telling him how idiotic that is.

What’s the moral of this story? Moral? Moral? Crap – is there a moral? Oh, yeah, there is. And it’s not that I have a tough life and have to wait in regular lines with the huddled masses, though I welcome your pity for that injustice if you’re inclined to give it. No, the moral is that our Federal Gummint is still incapable of doing anything efficiently. I understand that I probably won’t get your pity for having to wait a little longer in line. But, let’s rewind the clock and think about my tale of woe in a different context.

Suppose instead of TSA, I substitute OHS (Obama Health System). Suppose instead of a special line to get me through security faster, this is an OHS program for diabetics to get their insulin more efficiently because tight glycemic control is the number one predictor of downstream co-morbidities (cardiovascular disease, blindness, amputation, etc.) in diabetics. Further suppose that under the OHS Preferred Diabetics Program (PDP), diabetics get their insulin more quickly and efficiently. Except 20% of the time they show up at the pharmacy and present their PDP card, the pharmacist says, “Oh, sorry, this program only allows you to get your insulin 80% of the time. Today it says you can’t get it.” Seriously, how is that any more far-fetched than my experience at MIA today?

You could come up with countless similar examples and none of them make a smile creep across your face, as I know it did when you read that Robertson had to wait in a longer line. The point is – large organizations don’t run things very efficiently. Our Federal Government is the largest organization in the land. They’ve never run anything efficiently or, as my experience at the airport today illustrates, even sensibly. When government inefficiency and stupidity means me having to wait in a longer line at the airport, it’s kinda funny (for you, not me). When it’s your or your loved one’s healthcare, it’s not. I’ve written in the past about how Obamacare will hurt the little guy a lot more than the wealthy. But, let’s be clear – it will hurt us all.

Today’s DOD (Delusion of the Day) Award goes to Henry Waxman, the nebishy little congressman from California. Why anyone would trust a man that looks like this is beyond me, but California liberals are a strange sort, to say the least.

Seriously, would you trust this guy?

Waxman recently weighed in on the question of whether the US regulatory framework was causing medical device companies to move their efforts to other countries. He said arguments that FDA’s regulatory standards are chasing devices and device makers away from the U.S. are not well founded. “There’s no evidence to back those claims,” he said, other than “anecdotal evidence.”

Wow! And this from a guy who represents California, far and away the #1 state in the country for medical device innovation. OK, Hank, let me turn your anecdotal evidence into fact. I’m a venture capitalist and I invest in medical devices. I’m not so arrogant as to say I have seen every medical device company raising money in the last 5 years, but I am confident I’ve seen 75-80% of them and I’ve invested in a few on whose board of directors I now sit.

Let me be crystal clear. In 100% (not 95%, not 99%, not 99.9%, but 100%) of the entrepreneurial medical device companies that require FDA pre-market approval, the companies are getting approved and launching in Europe first and often exclusively. If I had a dime for every time an entrepreneur has said to me in due diligence something like, “we’re focused completely on Europe and not even worrying about the US market,” I could keep myself in Obama’s 1% forever.

The reason for this is simple – getting a novel medical device approved and on the market in Europe (note – these are countries not known for passive government) can be accomplished in a couple of years for $10-20 million vs. 7 to 10 years and $100 million in the US.

And, this has HUGE implications for the competitiveness of the US medical device industry and, more important, for patients. These life-saving devices will not be available for patients in the United States for years after they are available to European patients and, in some cases, they will never be available here. Wealthy patients will travel to Europe to get treated by these novel devices. Middle class and poor patients in the US will suffer or die. Yes, that’s right, in some cases they will die. So much for liberals being the party of the little guy.

So, while all politicians are delusional liars, not all of them kill sick patients with their delusional lies. Mr. Waxman does.

Part of the unfairness doctrine is that wealthy people like Mitt Romney pay “lower taxes” than less wealthy folks. There are so many misleading details buried in this statement it’s hard to know where to start, but let’s go for it. 

On an absolute basis, of course, Mitt Romney pays far more in taxes than the average middle class Joe – about 450 times more, in fact. For example, a married person earning $50,000 per year will pay $6,654 in federal income taxes in 2011. Mitt paid $3,000,000 (in 2010). Divide 3,000,000 by 6,654 and you get 450. Mitt paid 450 times more in taxes than the middle class Joe! 450 times!! Fair? Unfair? You decide. But, wait, there’s more. A lot more. 

While it is accurate to say that average Joe married person earning $50,000 is “in the 25% tax bracket,” it is not accurate to say such a person “is paying 25% in taxes” or even that such person is paying a higher tax rate than Mitt Romney. These are marginal tax brackets and only the last $34,500-$50,000 of income would be taxed at the 25% rate while the actual taxes paid by a married person earning $50,000 would be $6,654 or 13.3% of income (6,654/50,000). So, in fact, the average Joe is paying a LOWER overall rate than Mitt Romney’s 15%. This is Buffett’s Big Lie. I don’t know what he pays his secretary, but I’ve hired many over the years and very few of them make more than $50,000 (and if he’s paying his $1,000,000 a year she would be expected to pay higher taxes; maybe that’s part of his big lie – I don’t know). So, assuming he’s paying her about $50,000, it is inconceivable that she’s paying more absolute taxes (see above) and quite likely she’s paying a lower overall rate than the Big Liar (whose rate, like Mitt’s, is probably about 15%). It probably is true that her top marginal rate on ordinary income is higher than the Big Liar’s, but, as we saw above, that is as relevant as the fact that the Redskins won 3 Super Bowls in the late 80s and early 90s (sorry – I was struggling for a good “as relevant as….” analogy and I just felt like reminding my readers that the Skins were really good a really long time ago). 

Now, let’s look more carefully at the 15% that Mitt actually paid. The 15% is almost completely on capital gains, the source of most of his income. But, the effective total federal tax on those dollars is more like 45% because the profits of the corporation were taxed at the corporate rate of 35% (one of the highest corporate tax rates of any country in the world; even President Obama has agreed it is anti-competitive), then again at the 15% capital gains rate when Mitt filed his return. Since Mitt and other shareholders ARE the owners of the company, the profits of the company inure to their benefit only and, thus, they are the ones who are effectively paying the 35% corporate tax on profits. So, indeed, Mitt’s effective tax rate is probably about 45% (15% on top of 35% – do the math) on most of the dollars earned, much higher than the rate (even the marginal rate) paid by the average Joe or the Big Liar’s secretary. Fair or unfair? 

Now, as we start to dig deeper into the question of fairness, let’s look at who actually pays how much in taxes in the US? The top 1% pay 37% of all federal taxes (2009 numbers). Yeah, those evil one-percenters, who have been the proximate cause of demonstrations around the nation, are carrying nearly 40% of the load for the entire country. You’d actually think the Occupiers might say “thank you” instead of building squalid little villages in public parks. The top 5% pay 59%. The top 10% pay 70% of all taxes. The bottom 50% pay 2.25% of all taxes. So, in considering “fairness,” it’s probably relevant to consider the fact that while Mitt (and other wealthy folks) may pay a net tax RATE that is lower than the top marginal rate paid on ordinary income by someone in the bottom 50% of earners/taxpayers, the top 1% are paying way more than their “fair share” of taxes under any mathematical construct. And, if you include the top 20% in the analysis, they are, mathematically speaking, paying basically ALL of the taxes in the United States. The bottom half are paying essentially nothing. I find it puzzling to contemplate how that could be “unfair” to the folks paying close to nothing and overly generous to the folks paying basically everything. Seriously, I’m an open-minded guy (stop laughing) – can someone explain to me how that’s “unfair” to the folks paying basically nothing? Should they pay less than nothing? There’s a comment section below. Have at it. 

Here’s a more controversial line of thought. Mitt paid $3,000,000 in taxes in 2010. We pay taxes to run the government so that the government can provide services to us – pave our roads, protect us with a military and police force, make sure we don’t get life saving drugs because the FDA is dysfunctional (I digress). Universally, at all levels of income, Americans do not believe the tax code should be used to redistribute income. Thus, it is interesting to consider whether Mitt used more government services than the average Joe making $50,000 who paid $6,654 in federal income taxes. I’m guessing probably not. Maybe Mitt even used fewer services (for example, if he sent kids to private vs. public schools). If two people are using the exact same level of government services, is it “fair” to ask one of them to pay 450 times more for those services than someone else using exactly the same level of services? Personally, I’m OK with a progressive tax code as I actually do believe that the more fortunate folks should pay more, but I do find it odd and offensive that a guy who pays 450x more for the exact same services is vilified and accused of paying unfairly LOW taxes. That’s mondo bizarro, folks. 

Finally, suppose we were to concede that it is somehow objectively “unfair” that Mitt is paying 15% (which, in actual fact, may or may not be a lower rate than someone making less money, per the data above on Buffett’s Big Lie), then one has to  propose a solution to rectify the alleged unfairness. How would you make it more fair? Well, there are only two possibilities: (1) Raise the tax rate on capital gains so that Mitt pays a higher percent or (2) Lower the tax rate on ordinary income. Let’s take #2 first because it is easy. If President Obama wants to lower marginal tax rates anywhere in the economic spectrum, he has my support. As the numbers above on who pays what show, it will only have an impact on economic growth if he does it for all taxpayers, but any tax cut on marginal rates is a good tax cut. #1 is way more complex. 

In 2008, Charlie Gibson interviewed President Obama and asked him why he would support raising capital gains tax rates even though “revenues from the tax increased” when the rate fell. Obama replied, “I would look at raising the capital gains tax for purposes of fairness.” So, even Obama acknowledged that raising this tax would have a net negative impact on the economy and tax revenue, but he’d do it anyway for “fairness” even if that meant slower growth, higher unemployment, etc.  This notion of symbolism over substance dramatically alters the landscape in the debate over fairness and feels antithetical to the founding principles of America. It seems to me that doing something in the name of fairness that would inherently make economic life worse for the middle class is, by definition, unfair to those middle class folks. Q.E.D.