Friday, August 10, 2007

Junk Science and Global Warming?

First, let me say that I am still waiting to be convinced by either side in the global warming debate. However, there were two stories that (shockingly!) were ignored or downplayed in the MSM that cast serious doubt on the validity of much global warming science. First, NASA was forced to revise all of its data on US temperature (which goes back to 1880) due to the fact that a blogger exposed a Y2K glitch in the data; there are apparently several other possible flaws that could result in further revisions. The newly revised data are here; more context is here. You will be interested to know that as a result of this first revision, 1998 is now only the second warmest year in the last century. Of the top 10 warmest years, 4 are in the 1930s, and 3 between 1998 and today.

It is my understanding that the NASA data are about the most widely used in terms of providing a basis for the argument that the globe is in fact warming in an unusual manner. If, in fact, the 1930s were warmer than the last decade, though, then the temperatures during the last decade could not possibly be conclusive or even particularly useful evidence of global warming.

The second story that has been pretty much ignored is that British government scientists have acknowledged that they overestimated the effects of global warming in recent years, and probably through 2008 as well. BUT, they claim, it will begin in earnest in 2009. Apparently, the previous climate models "underestimate the effects of natural forces on climate change." (That's right, the models of natural forces were inaccurate because they failed to account for natural forces!). As a result of these unanticipated "natural forces" the scientists simply changed their climate model slightly instead of first checking their premises; now, supposedly, the forecast is iron-clad. (A spin-doctored version of this story is also available from Reuters- without all that messy stuff about the previous version being wrong - or even existing - of course.)

Like I said, though - I'm still on the fence about this whole business...but it becomes very difficult to accept the arguments that man-made global warming is an indisputable fact when the data behind those arguments suffer from Y2K flaws and failures to account for the effects of natural forces when trying to make a model of natural forces.

Wednesday, August 8, 2007

Phrase of the Moment Feature

Not that anyone cares but me, but I've added a little section I am calling the "Moment's Statement of Freedom." The idea is that true libertarianism can be boiled down to one short sentence - it's just that there are a nearly infinite number of ways to express that sentence. Whenever I update I'm hoping to change the statement. For the first statement, I decided to use an old familiar standby.


Of course the culture of medical malpractice suits plays a role in all of this. However, I would argue that the sizable presence of med-mal is itself a result of the increased regulation of the healthcare industry. Also, as NL pointed out, Med-Mal suits have pretty much declined slightly or leveled off in the last 10 years or so (although that is at least partly the result of “reforms” on the state level):

1. The increased regulation makes it relatively easy for a plaintiff to find a cause of action whenever they are dissatisfied with their care- there are so many regulations that a crafty plaintiff's lawyer can probably find an argument for a regulatory violation in just about any instance. The AMA's own standards and regulations also probably play a big role here.
2. The increased regulation has left the insurance companies in charge of whether a claim (whether for malpractice or additional treatment) is accepted. Since the insurance companies in turn have thousands of their own regulations, they are able to deny many claims at an early stage, creating an incentive to sue rather than just settle right away.
3. I don't know that punitive damages are usually allowed in med-mal cases. However, to the extent they are permitted, they are most often creatures of statute or at least outside the realm of traditional common law. Punitive damages destroy the economic calculus, have no connection to the actual harm caused by a defendant, and when aggregated have a significant negative effect on markets.
4. Most importantly, though (and contrary to popular opinion), increased rules and regulations create a diffusion of responsibility in medical practitioners. In other words, the more “one size fits all” rules the profession has to follow, the more the doctors will blindly obey those rules (since failure to do so means automatic liability and possibly loss of license even if no harm is done), and the less they will obey their own sense of reason (since failure to do so only results in payment by the med-mal insurance, and that is only if the patient actually suffers harm as a result; in either event, the doctor keeps his license since it is only a finding of negligence, not a violation of an arbitrary rule). This sort of phenomenon has been discussed not only by libertarians like Rand, but also by all sorts of social psychologists – from Milgram’s electroshock studies to Zimbardo’s Lucifer Effect/Stanford Prison Experiment.

That said, I'm actually opposed to most of the supposed "med-mal" reforms being attempted – for many of the reasons discussed by NL. By placing caps on damages, the government is adopting a "one size fits all" approach. Additionally, in calculating the amount of the caps, the legislature must either engage in socialist-style economic planning and forecasting (something that is either impossible or so prohibitively expensive as to negate the value of the forecast), or simply set an arbitrary figure based on political pull (which is effectively the California Rule). The result in any event is that some, maybe many, legitimate plaintiffs will not be made whole, which will marginally increase burdens in other (less efficient) areas of the healthcare system.

Additionally, legislative attempts to have med-mal cases at least initially removed from the courts to be vetted by a hearing board will also only make matters worse- you can’t fix a problem caused by too much bureaucracy by adding more bureaucracy. In this case, though, you are building higher costs into the system right off the bat; you are often staffing these review boards with other doctors (again introducing “pull” into the system similar to Rand’s “Unification Board”), you still have some form of discovery process, etc. And once the board has made their decision, a losing plaintiff is going to use whatever means they have at their disposal to appeal (more bureaucracy and expense), while a winning plaintiff simply gets the right to go to court and start all over again (meaning that those cases now cost substantially more to try than prior to the reform).

Ultimately, though, attempts at medical malpractice reform are doomed to backfire because they take us even further away from the common law and the judgments of people actually in possession of the facts in any given case. Just as importantly, they are an attempt to solve a problem of over-regulation by over-regulating even more.

As an aside, I actually liked Nolan’s example of the NYC hospital. But the reason I like it is that it was a rational decision made by the individuals who would actually be directly liable in any malpractice suit. Instead of looking to the government for a shield against liability, they chose to do something they probably would have done in a truly free market years ago – take flexible measures aimed solely at increasing factual knowledge of their own business in order to diagnose and correct internal problems. This of course results in fewer claims and increased profits. The problem is that implementing this on a national level takes away the profit incentive because then the program is being run by the government, which will then implement one-size-fits-all approaches to apparent inefficiencies.

Finally, the problem with “Loser Pays” reforms is that they not only make the loser pay for court costs (which are already paid mostly by the Plaintiff), they also make the loser pay the winner’s legal fees. This will destroy the economic calculus since: 1. Hospitals have far more expensive lawyers, whose fees could be up to 50% of the original claim, depending on the claim’s size; and 2. It artificially increases incentives for the Plaintiff to settle for far less than their actual harm since it automatically reduces the value of their claim by making payment of legal fees inevitable. This would be fine if, in fact, every losing Plaintiff were filing frivolously; the problem is that truly frivolous suits almost always get tossed out by the summary judgment phase. A case that actually goes to trial is usually going to be a closely decided case that could come down to any number of different things.

Tuesday, August 7, 2007

The Health Care "Crisis"

So now that I've fought my way through "Atlas Shrugged" and have grown to understand the extent to which I really am a libertarian (thereby making the title of this blog kind of ironic), I'm starting to see just how far socialism has infected the American experiment. Certainly the worst example of this - with one exception that I dare not name - is health care.
The ongoing debate over healthcare has gotten so infected by socialism that it has become a real-life parody of Atlas Shrugged: the more health care has been regulated, the worse it has gotten, which has resulted in more and more cries for further regulating healthcare until we finally arrive at Michael Moore's socialist utopia of a system (which I think would ultimately result in the complete destruction of medicine). Strangely, I found it very difficult to find a timeline or history of healthcare and healthcare reform in the US., but I finally came across this timeline from PBS' "Healthcare Crisis" program website:

Of course, any timeline for a program based on the concept of a "healthcare crisis" is likely to have a very pro- "reform" agenda. Nonetheless, if you ignore contradictory allegations like:

"Healthcare costs are escalating rapidly, partially due to ...expansion of hospital expenses and profits, (emphasis added)"

you will notice a clear trend emerging.

Specifically, you will notice that the chief complaints about the American heathcare system are: 1. Lack of coverage for many Americans; and more frequently 2. Steadily rising health care costs. According to the timeline, these two problems have only gotten worse as time has gone on, to the point where they are now apparently a "crisis." The timeline appears to suggest that the increase in these problems is a result of insufficient government intervention in the market. This suggestion, however, ignores the fact that the timeline also shows a corresponding increase in healthcare regulation for every increase in healthcare costs and decrease in affordable medical coverage.

For instance, the timeline states that in the 1950s "federal responsibility for the sick poor is firmly established." It then states - without drawing a connection - that during that same time period, the cost of hospital care "doubled," and insurance became unaffordable for those without jobs. Similarly, in the 1960s, the government adopted measure to expand education in the healthcare professions. The timeline then complains - again without drawing a connection - that the percentage of specialists during that decade grew by 14 points.

Prior to the 1950s, the timeline fails to identify a single fact-based problem with the US healthcare system. Indeed, the only problems identified are the allegation that "Rural health facilities are clearly inadequate" (unsupported, but if true it was most likely a result of urbanization), and that "America lags behind Europe in finding value in insuring against the costs of sickness" (a blanket assertion that assumes there is value in making health insurance a government issue). Beginning in the 1950s, the only decade in which the timeline does not raise an issue of dramatically increased costs or decreased access is the decade in which regulation of the industry decreased (ie, the 1980s). What is interesting here, though, is that the timeline would seem to suggest (inadvertently, of course) that the quality of healthcare has decreased in the United States not because of too little government intervention, but because of too much government intervention.

In essence, the more government intervenes in the healthcare market, the worse things become - not just for those able to afford the best medicine, but also for the very people supposed to benefit from the intervention. But rather than blaming the problems on the actual changes in the system, and then revoking those changes, the response has been to say that "well, we just didn't go far enough - doctors and drug companies and hospitals are still making too much money."

Another thing worth noting - a list of medical advances from shows that virtually every single important medical advance in the 20th century arose from doctors in either the United States or Great Britain - and most in the US. It does not appear that the great socialist nations like France or Communist nations were responsible for many - if any - advances in medicine during the 20th century.