Skip to content

Health Care Reform Idea

March 17, 2017

The status quo for healthcare in America is uniquely bad, being different than any other healthcare system in the world, and different from any other market in America. It is by far the most regulated and subsidized market in the economy, yet still manages to unsatisfactory outcomes.

Healthcare is different from other markets in many ways, but the biggest difference is that some people need much more of it than others. The way normal capitalist markets work is that you work in exchange for money. You use that money to buy things you need, and most people can earn enough through working to satisfy their needs easily. On the margin, people work and earn more to get luxury. Even a minimum wage job in America is enough that you don’t need to worry about starving or not having a roof over your head. The average person below the poverty line has cable (or equivalent) TV, air conditioning, a washing machine, and a car.

If someone wants a luxury car or a fancy vacation, they can work more for it. One of the great things about capitalism is that the consumer experience is fairly similar for most levels of income. Everyone drinks the same Coca Cola. Everyone watches the same sports games and TV shows, even if some people have bigger TVs or better seats at the stadium. Bill Gates surfs the same internet as the homeless guy using a public library computer. People understand that if you have a good job, you can get fancier versions of things everyone has, but that’s ok.

Healthcare is not like most things. A severe health problem is like somehow out of the blue, if you can’t buy a Lamborghini, you’re going to die. It’s a risk that everyone faces, but one that virtually no one can afford to confront. Whether you work hard or not, whether you have a great job or not, there is nothing you can personally do to protect yourself from a large unexpected health problem.

In the face of large risks that an individual cannot absorb, the traditional answer is insurance. This has not shown itself to be a good model. Obamacare was a valiant attempt, but I don’t think the weight of the evidence has shown it to be a great solution. At best, it is a band-aid on a bullet wound. An insurance company wants to make money. They do this by charging more for insurance than their customer uses in healthcare. Customers know more about their own health than an insurance company and they can strategically enter and leave the insurance market.

Adverse selection makes insurance markets very difficult. Healthy people wait to buy insurance until they are sick, and sick people try to buy as much insurance as they can. The market for good insurance plans become filled up with sick/high risk people, and the insurance companies must price accordingly. Medium risk people no longer think such plans are a good option and leave the market entirely, or only buy cheap plans with high deductibles. No matter how much an insurance company charges, it cannot make a profit selling only to high risk individuals because the costs are simply too high.

Obamacare tried to fix this by having people pay penalties for not buying insurance and subsidizing poor people to buy some insurance. It worked to some degree, but it’s hard to determine how well since there is a lot of conflicting and ideologically biased information out there. I did not like the solution personally because it feels very unfair and legally unconstitutional. The burden is still placed on the individual, and if you can’t afford good insurance, you pay a penalty? On top of that, since when does the absence of economic activity constitute interstate economic activity? I don’t think the government should have the right to penalize you from refraining from economic activity, no matter what the policy advantages of such a law would be. If people don’t want to buy something, it should be their right not to do so. Even if you do force people to buy something, there is the issue of people self-sorting into risk groups and unwinding the whole market anyway. It just feels like a kludgy, ineffective, and ideologically unappealing way to solve the adverse selection problem to me.

In the past, getting a large group together to spread risk was up to employers. Sure, this works ok if you work for a large corporation that is able to manage such a system, but what if you don’t? And what if you move to another company? What if your health is so bad you lose your job? You lose your insurance too and then what’s the point of having it to begin with! Employer provided health insurance is a leaky bucket which creates a insider/outsider problem where some people have great coverage and some don’t get anything at all. To top it off, insurance bought by a company is tax deductible, but insurance bought by an individual is not. I just don’t think employer provided insurance is a good model going forward. It was a historical accident and an atavistic holdover from back when healthcare was a smaller and more efficient sector. Furthermore, any third party payment system incentivizes people to be wasteful with their healthcare money.

As much as I consider myself libertarian, I find the conclusion that healthcare payment must be managed by the government compelling. The government can create a payment system that covers everyone no matter what. The government is bad at provision (of anything really), but it is fairly good at cutting checks. I would be nervous about the government actually running hospitals or hiring doctors, etc, but I am far less so about the government covering some of the costs of healthcare.

Costs have gone up an insane amount.

The average 1960 worker spent ten days’ worth of their yearly paycheck on health insurance; the average modern worker spends sixty days’ worth of it, a sixth of their entire earnings. Unless the prices stabilize, it doesn’t matter how you shuffle the money around, it’s going to be expensive. Making the government pay for something doesn’t make it free – it *increases* the overall cost of the good to society since you have to run everything through bureaucracy and get the money from deadweight loss inducing taxation. Running everything through an insurance company likewise dramatically increases the overall cost. The cheapest way to pay for anything is direct, two party payment (buyer and seller only).

The next priority would be to implement a wide array of supply side reforms to make the healthcare sector bigger and more competitive. Make it easier to become a doctor. Allow PAs and nurse practitioners to do more. Reform (lower liability for) malpractice lawsuits. Deregulate whenever possible. Lower barriers to opening new hospitals and other healthcare facilities. Reduce doctor’s residency periods to let them get to work sooner. Open up off-patent drug imports and competition. Reduce the costs of drug approval at the FDA. Make hospitals publish and stick to fixed prices instead of charging an insanely high, undisclosed amount after the fact. There are hundreds of reforms that could be done.

The Plan

If you spend less than 10% of your income in a year, the health care market looks completely free market. You pay cash out of pocket for all of your expenses, and get no government assistance whatsoever. The vast majority of people fall into this category. Most people don’t spend 10% of their income on healthcare, and if you don’t, you should be able to pay for it yourself. Individuals can be expected to pay for this amount out of pocket. Car insurance doesn’t and shouldn’t pay for you to fill up your gas tank. Health insurance/welfare shouldn’t pay for small routine healthcare expenditure. I’m not persuaded by the “preventative healthcare” argument, but I’d be open to arguments in that direction in the comments.

As your expenditure on healthcare increased, the government would match more and more on the margin, until it reached a maximum of paying for 95%. I think it might be good to have the individual pay for at least some of their healthcare. I wouldn’t be opposed for some 100% category for the destitute or extremely ill. As written, if you spend 40% of your income on healthcare, you’d personally be liable for 25% (10% + 7.5% + 5% + 2.5%). Above that, the government would cover most of your expenses. This would allow mostly free market to dominate and reduce costs, but for the very ill and very poor, they would be covered by a plan more generous than the status quo, and it would be universal. There would need to be some conversion ratio of wealth-income for people with a lot of wealth but no income, such as the elderly. Perhaps wealth/(years remaining until age 100) could be the effective “income” of such people. It’s a first draft, but this is the general direction I’d like to see. I realize it’s never going to happen, but an economist can dream.

Hanlon’s Razor

March 1, 2017

“Never attribute to malice what can be explained by stupidity.”

Concerning Trump, that may be true, but treating it as if it is can be dangerous because it opens you up to deliberate attacks obfuscated as incompetence. One of the main things I have been worrying about lately is how Trump is sabotaging US counter-terrorism and preblaming rivals to power. In the event of a terrorist attack, Trump will benefit greatly. He is an authoritarian, and people turn to authoritarians when they feel unsafe. A self-aware authoritarian can exploit this tendency to great effect. The classic example of this is the Reichstag Fire which Hitler used to grab more power.

Trump has been implementing controversial policies quickly in order to stir up protests. He’s playing the law of large numbers. The more protests there are, the more riots there will be and the more there will be a potential for violence. He can also hire provacatreurs to stir up trouble if trouble doesn’t arise naturally. It’s fairly easy to throw a few thugs into the mix when large protests happen more or less continually.

Muslim Ban

The most harmful narrative for increasing terrorist attacks against the U.S. is that the U.S. is at war with all Muslims. When a group feels persecuted and oppressed because of their religion, they are far more likely to turn to violence than if they are met with tolerance and freedom. Trump has repeatedly stirred up religious hatred and scapegoated Muslims for problems, which dramatically increase the chance that Americans will be killed by terrorists. By banning 7 random Muslim countries, rather than trying to do a more effective and comprehensive security policy, Trump has ensured that any terrorist who does want to attack America will easily be able to do so.

Torture/killing families of “terrorists”

Torturing innocent civilians is about the most evil thing a government can do. Trump has promised to restart and amplify that policy, meaning Al Qaeda and other terrorist groups will have their ranks swelling with new recruits. Terrorists want to paint the U.S. as the Great Satan and evil. If you wanted to increase the number of terrorists who want to attack the U.S., you’d be hard pressed to find a better way to do it than to bring back torture, especially when that torture is not directed at people who are actually committing terrorist attacks.

Intelligence agencies

The CIA, FBI, and other intelligence agencies are at the frontline of the battle to protect America. So what does Trump do? Attacks and alienates them non-stop. Refuses to go to security briefings. Appoints untrustworthy advisers with foreign loyalties, so much that the CIA now assumes that the Kremlin has ears in the White House. Trump has also been undermining our relationships with other countries that have helped us fight the War on Terror, such as the U.K. and Australia. Without allies, we will be far more blind to potential threats.

So all this could just be an incompetent president who is undermining the safety of U.S. citizens because he’s a mendacious idiot, but the thing that makes me think it might be deliberate is how he’s preblaming his political enemies. “”Just cannot believe a judge would put our country in such peril, if something happens blame him and court system.” He’s also preblamed the media, the generals, the Democrats, and a number of his other enemies. He’s already laying the groundwork for undermining democracy and assuming more control in the wake of the attack that is now far more likely.

I’m not sure what is to be done. Knowing human nature, even if we see it coming, that doesn’t mean we can stop it. Trump himself could set the bomb and his approval rating would probably go up.

Don’t Fear Wrongthink

March 1, 2017

“I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear.
I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing. Only I will remain.”
– The Litany Against Fear

The most important behavioral skill for an aspiring intellectual is teaching yourself not to fear exposing yourself to wrongthink. Don’t be afraid to read the writings of people who disagree with you. Don’t be afraid to learn subjects that seem wrong or unappealing to you. If you find yourself thinking “I don’t want to learn X” or read a certain author, look inside yourself and ask yourself if it is because you fear what you might find out, or if you fear the discomfort from reading something that you don’t agree with. It is a difficult undertaking to expose yourself to things which go against what you believe, but it’s the only way to expand your horizons.

The wrongthink might be have a kernel of truth. There are very few totally false ideologies, and even those that are contain some insight into human behavior and beliefs. Understanding how it is that someone could believe wrongthink will let you recognize those mental failings in yourself and others more quickly. Understanding the kernels of truth will allow you to integrate those kernels into your own thinking.

You can’t refute something you don’t understand. Even if your goal is purely combative, if you demonstrate ignorance of your opponent’s position, they will dismiss you as an idiot. Try your best to pass Ideological Turing Tests.

You learn to use your own arguments better and more persuasively. Knowing what others say about your position will allow you to evaluate and correct your weaknesses, even if they are purely rhetorical.

If the wrongthink is wrong, you should have faith and confidence in your own morality to be able to reject it, even when you are exposed to it. Step back, take stock of your morals and beliefs, and have the courage of your convictions not to be afraid that they will be easily swayed by being exposed to other ideas.

Assorted Links

February 10, 2017

1. On mass incarceration

2. Cost disease

3. How to build an autocracy

4. R.I.P. Hans Rosling. You will be missed.

My Favorite Dubstep/Electronica Songs

January 25, 2017

I’m not going to be fussy with all the microgenres, etc.

Overwerk – Daybreak (GoPro HERO3 Edit)
This is the song that converted me from the “dubstep is complete trash” to “wow, there might be something here”. Still sends chills down my spine.

Ronald Jenkees – Throwing Fire
There’s a longer cleaner studio take, but the “live” version has more energy and it’s great to watch him having so much fun with the song. He’s got a lot of really good stuff out there. You really can’t help but smile and dance to the music while watching this.

Pendulum – Girl in the Fire
Pendulum’s other work is more rock than electronica, but this song has such great rhythm.

Stephen Walking – Shark City
Stephen Walking’s early work is pretty bad, but he’s improved a lot in a fairly short time. I’m really looking forward to new releases. Really fun and catchy melodies. Turtle town, Top of the World 2, and Pizza Planet are also good.

We are Presidents and Favulous – Pop Art

Shirobon – Born Survivor
Chiptuny, bouncy, and fun. If you like this stuff, also try FantomenK, Tokyo Rose, Power Glove, and Sound Remedy & Nitro Fun – Turbo Penguin.

Coyote Kisses – Acid Wolfpack

Klaypex – Game fire
Heavier and a bit harsher than most of the rest. Very rhythmically based.

Noisy Freaks – Selection

Tristam – Till it’s Over
One of the few songs on here with vocals. If you like, also try Au5, Headhunterz ft. Tatu = Colors, and Biometrix – Hush.

Pegboard Nerds – Self Destruct
These guys have a lot of fast paced songs similar to this.

Feint ft. Laura Brehm – Words

Full playlist

Rhetoric and Dangerous Questions

January 13, 2017

“We live on a placid island of ignorance in the midst of black seas of infinity, and it was not meant that we should voyage far. The sciences, each straining in its own direction, have hitherto harmed us little; but some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new dark age.”
Adam Gurri

1. Question
Scientists usually begin their journeys with observations that seem strange to them, or questions they come up with following their curiosity. Rhetoric plays a substantial role in this step. What problems are important? What will other scientists be interested in? Once this question is answered, will the world improve? These questions can only be answered relative to other human beings.

– Alexander Fleming say that bacteria didn’t grow around a fungus.
– Louis Pasteur notices that milkmaids didn’t get smallpox.
– Coase noticed that although firms were a central part of the economy, Economics didn’t have a good explanation for them.
– The Great Depression happened and a whole bunch of economists said to themselves “let’s not do that again”.

2. Theory
What is the scientists’ hypothesis of how the world works? These mental models don’t spring from nothingness, but arise as the result of conversations scientists have with one another and storytelling. You’re ultimately trying to convince other scientists that your explanation is better than the previous one, which is squarely within the realm of rhetoric.

3. Test/observation
The scientist does a test and writes down what happens. The rhetorical power of science stems from the verification and replicability of this step. Science doesn’t depend on one authority. It depends on a network of independent people running the same test and replicating the results. This is why psychology had such trouble is that they had fallen away from that model and thus lost their rhetorical power.

Yes, scientific testing is rhetoric, but it is important to note how this sort of rhetoric gets its power. It’s not like the persuasiveness of rhetoric is merely determined arbitrarily or by the artfulness of oratory. Replication is powerful rhetoric because it is independent of the perspective and voice of the scientist themself. Anyone can verify a test. Post-modernists might say “well you’re just saying that because you’re a rich white male and you have false consciousness”. The retort of the scientist can be, well have a poor minority woman run the same test, and they will get the same result. It’s not just like your opinion, man.

4. Reporting results/Teaching/disseminating
Once scientists have convinced themselves that something is true and important, they must go about convincing others. This is the majority of effort spent by scientists and it’s pure rhetoric. They go to conferences, teach classes, talk to other professors, etc. Disseminating knowledge is dangerous if that knowledge is dangerous in the wrong hands. Scientists have passive defense mechanisms for this by making their writing boring and obscure to limit their audiences to other intelligent and careful scholars.

Rhetoric and Social Sciences
In my last post, I argued that talking to scientists about rhetoric makes their culture worse by undermining the ideal of truth seeking. The post-modernism that has overtaken the humanities might be more true than a more black and white view of the world, but if taken too seriously it undermines cohesion and enthusiasm for truth-seeking. If everything is mere opinion, people aren’t willing to go to the barricades for it. Science is worth fighting for. It’s worth it even if many mistakes are made, because so many profound advances have been made which allow people to live safer, longer, happier lives.

I agree with him that rhetoric is an inescapable part of what scientists do, whether they want to or not. Those who try to escape the burden of rhetoric wind up marginalized and ignored.

Gurri states that “All reasoning to a conclusion falls under rhetoric”, but I think that’s too broad. Rhetoric is usually used to denote communication with the intent to persuade. Referring to observing the world rhetoric is misleading. Calling reasoning about those observations without communication rhetoric is confusing to a modern audience, although perhaps Aristotle would have used it that way. I think that’s why Sam Wilson breaks it into two parts where Gurri only sees one.

There are countless examples of science being driven by practical problems – “we need to find a stronger/lighter material” “we need to do X Y or Z”. Knowledge is performative. How do we know we know things? Because we can do stuff with that knowledge. Social constructs can’t build airplanes – scientific knowledge can. Rhetoric doesn’t hold bridges aloft. Yes, social science is more touchy feely than physics, but at the end of the day, if a society adopts a certain institution and they become much richer, economists will be convinced it works. When monetarism stopped inflation, economists were convinced. When price controls cause shortages, people are convinced. The proof is still in the pudding, even for social science, it’s just harder to see.

Are there questions which are dangerous enough to justify putting ethical boundaries on science?
I don’t think there is a question – truthfully answered – that has a dangerous answer. There are sometimes horrible moral assumptions baked into questions, but it’s not the discovery of truth that makes the question dangerous.

“What should be done about the Jewish problem?”
The premise is how do you exterminate the Jews. The end is taken for granted. If you want to say that asking questions of the form “How do I perform some horrible crime against humanity” are dangerous, ok I concede that. But I don’t think that has anything to do with science or epistemology or limited inquiry in any meaningful way.

The Nazis would not have been stopped by someone saying “maybe we should limit inquiry into such and such”. The Mongols were perfectly capable of butchering millions of Arabs and Chinese hundreds of years earlier with nothing more than axes and bows. There’s nothing more scientific about the Holocaust than any other of the hundreds of genocides that humans have engaged in since the dawn of time.

Science does have the power to dissuade people that genocide is less necessary. We can discover new crops to feed even more people. We can cure new diseases. We can use social science to try to defuse racial and nationalistic tensions. I have faith that the more humans understand the world, the less they will feel the need to kill each other en mass. I believe that as humans become more prosperous, we will value human life more, as the trend has been in the past. As we communicate with each other more closely, we will learn to empathize. Knowledge is the savior of humanity, and limiting its discovery is the surest path to evil. As Voltaire said ‘Those who can make you believe absurdities, can make you commit atrocities.’ The worst evil of the last century was founded on absurd beliefs and an unwillingness to look for truth to correct them.

Truncated Distributions, Writing Quality, and Stories

January 7, 2017

A truncated distribution is a conditional distribution that results from restricting the domain of some other probability distribution.” That is, some data has been removed from the distribution based on some condition it meets. Much of the data we examine in the real world has been truncated to some degree, and this truncation can give rise to causeless correlations. You can remove data in a way that creates a correlation, even when there is no underlying casual relationship.

The first time I heard of this was with professional tennis players. Shorter tennis players tend to have better serves and hit the ball more accurately. At first you’d think the correlation would go the other way – tall players are stronger on average and thus hit harder, or that it would be uncorrelated. But the truncation was that short players had to become professionals to get into the distribution to begin with. Since they had shorter arm span, they better darn well have other traits that made up for that. The correlation goes away with the very best of the best, because any disadvantage kicks you out.





So, what does all this have to do with writing quality? Experienced culture is a truncated distribution. Of the culture that is created, only a small percentage is shared and passed down the ages. We mostly only see the good stuff, where good is judged by others who are in turn relying on the judgments of those around themselves.

To this I say, of course Poe is a bad writer – his stories are so good! He joins a select elite of creative geniuses whose creation transcends their terrible writing – Lovecraft, Tolkien, Asimov, Rand, and Orwell. People love them for the worlds they create, for the imagined stories they give life to. Not for their raw skill at writing.

The best written novel I ever read was The Great Gatsby, by F. Scott Fitzgerald, and I loathed every second of the experience. I frequently stopped reading in awe at the way he could describe someone walking down stairs or eating breakfast in a sublime and perfect way. But the story he told was inane to the point of agony. The characters were uninteresting and petty. His world didn’t spark the imagination, or cause any hint of further reflection of what his writing entailed. It was mere outstanding writing – nothing more. There are just as many writers in this camp, and they are celebrated greatly by the elites of the writing world. I would put Hemingway, Dickens, Joyce, and Faulkner in this category as well.

It is entirely possible for someone to be both a great writer and to create wondrous worlds and tell interesting stories, but such writers are extremely rare. Huxley and Pratchett fall into this category, perhaps a couple more. Even though being a good writer does not cause being a bad storyteller, the correlation exists nonetheless. Any time you see an unusual correlation, ask yourself if there is some truncation that could be causing it.