Saturday, 22 April 2017

6 Reasons Why Healthcare is so Expensive in the USA

- In many states if you want to open a hospital you are obliged to go before an official board and demonstrate that the community needs this hospital and that you are willing and able to fund it all by yourself. The people on the board are going to be the big hospital administrators from already existing institutions which the new hospital who want the competition like a hole in the head.

- Nineteen states are even limited to having only a single medical school! There are only 123 in the US despite thousands of perfectly capable students being turned away every day.

- Not everything a doctor does requires 7 years of training but the law requires everyone to have at least 7 years of training to do it. (In some cases a practitioner will have to do 4 years of undergrad, 4 years of medical school, then 3 years residency by the end of which many are so burned out and seriously debt laden before they even begin their career.) The natural prescription is to allow doctors surgeries, clinics and hospitals to train and certify their own assistants to take responsibilities off the hands of highly specialised staff so that fully fledged professional can focus their time and attention on what they alone are capable of doing. Healthcare costs would plummet.

- In December 2011, the Administrator for the Centres for Medicare & Medicaid Services, Dr. Donald Berwick asserted (as he was leaving his job) that 20-30% of health care spending in the US is going to waste. He listed the five major causes as over-treatment, failure to coordinate care, the administrative complexity of the system, burdensome rules, and outright fraud.

- One study found that per capita prescription drug spending in the United States exceeds that in all other countries, $858 compared with an average of $400 for 19 other industrialized nations, and the most important factor allowing manufacturers to set high drug prices was market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents.

- A Harvard Business Review analysis published in 2013 revealed that while the U.S. healthcare workforce grew by 75 percent between 1990 and 2012 a whopping 95% of the new employees were administrative staff rather than doctors or nurses meaning 9 administrative workers for every doctor. The Annals of Internal Medicine last year, observed 57 physicians found that 29 percent of total work time was spent talking with patients or other staff members and another 49 percent was spent on electronic record keeping and desk work.


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Tuesday, 4 April 2017

The River: Public Policy or Private Responsibility?

What is common to many is least taken care of, for all men have
greater regard for what is their own than what they possess in
common with others. 
—Aristotle
The idea of aspects of the natural world being "privately owned" strikes as rather crass to most people and perhaps with some good reason as it brings to mind a vision of heartless mercenaries sacrificing nature to the pursuit of profit. Industrialists, we are led to believe, can only possibly view nature as a means to and end rather than an end in itself, and in doing so reduce it to a disposable commodity.

However, this prevailing assessment does not take into the equation the fact that true ownership is attended by responsibilities to which an owner must be held accountable. Where rights entail responsibilities (as they have in the past under common law), and these responsibilities are enforced, the claim to a property will serve naturally as an incentive to conserve that property. In effect owners will become custodians.*

* (The words "ownership" and "property" have perhaps simply taken on negative connotations synonymous with exploitation for various historical reasons, and so it is essential in order to dialogue on these topics that we make explicit the fact that our definition of ownership is one that not only entails property rights but property responsibilities.)

Most people presume that government must fulfill the role of protecting the natural world, but this arrangement throws up some rather dubious incentives. When governments write policy documents about rivers, lets say, they tend to be for the purpose of  delineating who is allowed to exploit the river, on what terms, and in what measure. Special favours can always be handed out to cronies or campaign contributors; to “stimulate local business”; or for any other political ends that might attract short term support for office-holders regardless of the long term consequences. The rights to log a forest can be sold off to the highest bidder and the tax payer can be left with the burden of restoring it to health.


Where the river (or forest) has particular ownership (rather than general ownership) it is fully in the interests of the owner (or owners) to keep it permanently in pristine condition for at least three reasons. (Owners also need not necessarily be private companies or individuals, but also charities, trusts, worker or consumer cooperatives, NGOs, or any form of organisation - that notwithstanding,  even if held by a private corporations these same incentives will apply.)


The first is in order to retain (or even increase) the resale value of the river. The better condition the river is kept in the higher its value will become; and even if the proprietor has no plans of ever selling the river they still have no interest in losing whatever outlay they have sunk into acquiring it in the first place. As such, a particular owner has the maximum incentive to protect against the river being polluted and to take whatever action is necessary to prevent it from being polluted. As a rightful owner they have the legal and moral right to take action against anyone who pollutes the river because the polluter has damaged the value of their property.  As it is not under general ownership where everyone has as much right to abuse it as anyone else does, the proprietor's interests are aligned with the interests of the natural world, thus he is risen to the level of a custodian. 

Secondly, a well-kept resource is renewable - it can turn a profit indefinitely. A badly-kept resource cannot. If a river is ill-kept the return on the investment for acquiring that resource will soon dry up (no pun intended.) As such an owner who does not know how to take care of the river will stand to gain more from passing it on to someone who does than from keeping it. A superior custodian will be able to pay more to acquire the river since they know how to put it to good use indefinitely.  The best experts in keeping a river running cleanly stand to gain the most from owning them and therefore will be able to pay more to acquire them than those who lack that expertise. In this way those who are the best custodians of resources will end up with them in their care on average over time. (The same would go for forests, fisheries, or grazing lands; where altruism is not enough to motivate environmental concern, rational self-interest will usually do the trick.)

Thirdly, if the river is not properly kept and becomes polluted, this is inevitably going to have negative effects on neighbouring lands, industries and settlements as the pollution is carried by the river onto other people’s property. At this point, as the last line of defence against irresponsible misuse and management of the river is the threat of litigation against the owner for his negligent and harmful management of his property. Where others have suffered harm, loss of health, or damage to their own property, a particular owner should be forced to pay damages and reparations to restore them to their original condition. They can lose their personal property and have to forfeit ownership of the river if they are found guilty of causing damages. When the government causes environmental catastrophes, as they often have, they can only be tried in their own courts, and even so the property of decision-makers is never at stake - even if found guilty of wrong-doing, the public purse will eventually foot the bill. As officials in public institutions tend to have a diffusion of responsibility it is hard to hold particular culprits to account for their actions, rarely will a department be shut down or replaced where abuses occur as they are presumed essential even having "made mistakes". Often state officials have sovereign immunity, occasionally one or two resignations will be tendered as a  token gesture, but the machinery of the institution remains as well as the lack of moral hazard which set it up to fail.

Saturday, 1 April 2017

Misanthropic Myths about 3rd World Poverty debunked!

One of the most persistent myths about 3rd World Poverty is that if underdeveloped nations are allowed economic advancement and become wealthy it will be some kind of unmitigated environmental disaster. Is that so?

Wealthy countries can afford to clean up their water supplies after fouling them and treat their sewage properly. They can replant their forests, put recycling infrastructure into place, and farm sustainably. Countries without wealth can’t do that. In places like Bangladesh people must scramble to make a living with no long-term consideration to their surrounding environment, and they have no means of repairing it afterwards. Starving Brazilians have little choice but to cut down the rainforest when they can hardly afford not to. A lack of a just legal system, economic freedom and property rights1 prevent some of the world’s poorest countries from diversifying their economies, leaving them to rely on the exploitation of natural resources to generate income. As these nations develop they attain the means to establish other sources of revenue that don’t simply involve digging things up and selling them.

As economic growth first sets in environmental degradation can worsen for a time but soon environmental health indicators (such as water and air pollution) tend to reduce.2 Environmental pollutants, such as sulfur dioxide, nitrogen oxide, lead, DDT, chlorofluorocarbons, sewage, and other chemicals previously released directly into the air or water are found in far lower levels.3 Once per capita income reaches about $4000 in a nation, people begin to demand a clean-up of their local streams and air. Among countries with a per capita GDP of at least $4,600, net deforestation has ceased to exist.4 Europe’s forests have grown by a third over the last 100 years.5

According to Hans Rosling, sustainable global development advocate, the richest billion people in the world are responsible for 50% of the world’s consumption of resources, the 2nd billion for the next 25%, and the third billion for the next 12.5%.6 This means that the 2 billion poorest people in the world could easily be raised to the standard of living of the 3rd or even 4th poorest with very little environmental impact at all.

Western Nations can help by establishing free trade with the world’s poorest countries and importing their produce in order to help their economies develop faster. Cheaper produce would also mean better living standards for people on low incomes at home. The protectionists argue that this would harm domestic farmers (who are already in receipt of considerable state benefits and government subsidies – some of which have been an environmental disaster7) but these farmers would not be starving should they have to migrate into other occupations – people in the third world are! They themselves could benefit from cheaper produce, and are we really expected to put the interests of a small group ahead of everyone else in the country and abroad?

Concerns for the environment regarding “food miles” (how far food has to travel) are also completely misplaced. It is often far more energy efficient to grow foodstuffs in countries with naturally high temperatures which would otherwise have to be artificially raised in colder climates. As Matt Ridley explains, only “4% of the lifetime emissions of food is involved in getting it from the farmer to the shops. Ten times as much carbon is emitted in refrigerating British food as in air-freighting it from abroad, and fifty times as much is emitted by the customer travelling to the shops.”8 Economist Johan Norberg also attests that while 83% of the CO2 emissions involved in American food consumption is used in the production phase, less than 11% is caused by transportation and that it's puzzlingly more environmentally friendly to grow apples in New Zealand and ship them all the way to Great Britain than to produce them locally.9

Some environmentalists believe that growing populations attaining greater living standards in developing countries is a recipe for ecological disaster, but actually birth rates fall to manageable levels only when countries become developed. The industrial revolution created population booms across the whole planet – but in every single country where a reasonable standard of living has been achieved population growth receded; there is no reason to believe that will be any different when it comes to the developing world. Education has played an increasing role and will continue to do so, while current projections predict that the world’s population will level off between 9 and 11 billion, and may even then start falling.

People who don’t have to scrape out a living can get educated, work less in agriculture, factories and more with their minds. Their occupations are not so polluting, and some of them may even be responsible for the environmental innovations of the future. Inventions such as e-mail and the USB Flash Drive have already saved more trees than all of the environmental activism throughout history combined, and a car today emits less pollution travelling at full speed then a parked car did in 1970 from leaks.10 It is clear that innovation is set to play an increasing role in the solution of our environmental issues. Intensive farming techniques have helped save countless acres of rainforest by increasing yields over less land, and soon lab-grown meat from cloned tissue may put an end to our factory farming crises by reducing the massive ecological impact of meat production through fossil fuel usage, animal methane, effluent waste, and water and land consumption. Cloned meat will also produce a positive impact on world health by eliminating the heavy use of antibiotics and preventing the fecal contamination which factory farming currently produces.

Countries where the vast majority of people are engaged in subsistence farming are a waste of millions of minds. They do not have the leisure time to enjoy art, become cultured, innovate, creative, and reach the higher potentials of human flourishing which will allow them to contribute to advances which may help everyone on the entire planet. They are too poor. Farming is of course a fine occupation too, but it should be chosen rather than forced upon people by poverty.

If we really believe in prosperity, we have to believe in it for everyone. Not just those lucky enough to be born into affluent nations. Fundamentally, it’s not economic progress but our irresponsible economic systems which are responsible for the environmental damage we have seen over the last 200 years. Governments can externalise the costs of damaging the environment and redistribute it to the taxpayer, rather than allowing producers and consumers who pollute to pay for the full cost of their choices. We can create sustainable economies by holding individuals and organisations personally responsible in proportion to how much they pollute. These very incentives would encourage people to choose sustainable development and ecofriendly habits far more of the time.



1 Where private property is established, logging companies develop the incentives to look after the sustainability and long term value of their land, and charities can even buy up tracts of land for preservation. At present that is rarely possible as those property claims would currently just be ignored by the loggers and the corrupt governments in those countries

2 Tierney, J. (2009). “The Richer-Is-Greener Curve.” New York Times.

3 Ridley, M. (2010). “The Rational Optimist.” Fourth Estate. p106

4 Waggoner, P. E. (2006) “Returning forests analyzed with the forest identity.” Proceedings of the National Academy of Sciences of the United States of America, vol. 103 no. 46.

5 Noack, R. (2014) “How Europe is greener now than 100 years ago.” Washington Post.

6 See BBC Documentary “Overpopulated” (2013) (available on youtube).

7 For example, the EEC – now the EU – tried a policy of buying everything that farmers produced and couldn’t sell which led to mountains of excess grain being produced that then had to be sold off at knock-down prices to third world countries, causing gluts in their markets which put local farmers out of business and had devastating effects on their economies. Before the policy was reverse countless miles of hedgerows well pulled up to make fields bigger uprooting the natural habitat of countless animals and insects giving way to the bleak, soulless prairies that parts of the UK have becoming. Magnificent wetlands were drained and destroyed to plant more land for crops that no one could sell 95% of the flower-rich meadows, 60% of the lowland heath, and 50% of ancient lowland woods were destroyed in little more than forty years in the UK alone.

8 Ridley, M. (2010). p41.

9 https://www.youtube.com/watch?v=_mBgUqqnsyw

10 Ridley, M. (2010). p17