Bernie Sanders, technologist, recently used The Twitter to make what he considers to be a valid argument in the “Is there anything we can’t make free?” campaign, which is probably a warm-up for yet another nauseating series of lectures while he again runs his mouth for something.  Like a public office.

Bernie extols us to “take a look” at Finland, which I can’t easily do without socialized medicine providing me with telescopic peepers with which I will look across at least one really big ocean to peer, mindfully, at the Land of Fin.

Finland.  Happiest place on earth, according to the UN.  This is the same UN that ignored a really unhappy place called Rwanda a few years ago, and I think some hundreds of thousands of people died, but we’re not here to talk about the utility of the UN, are we?  We’re here to learn what Bernie Sanders thinks we should all do.

Bernie asks, understandably, because he doesn’t really understand math or even actually want to, why can’t the US be more like Finland?

Well, hey, let’s look at the data:


Population: 5.50 million (2016)

GDP: $251.48 billion USD (2018)

Area: 130,559 sq miles (338,145 km²)

United States of Finland, er, America:

Population: 323.13 million (2016)

GDP: $20.20 trillion USD (2017)

Area: 3.80 million sq miles (9.83 million km²)

So, in comparison:

Population:  The US has 64.6 times more people than Finland does.  New York City alone has more people than all of Finland, even if you threw in a couple of extra million theoretical Finns.

GDP:  The US economy is 79.5 times larger than Finland’s.   In terms of GDP, the US is 2nd.  Finland is 63rd.  Maybe comparing two incomparable countries isn’t a great idea, as a starting point to ask a question on Twitter.  It’s like comparing, oh, I don’t know, Karl Marx to Alexis de Tocqueville, and wondering why these two would be unlikely to get along.

Area:  From a logistics standpoint, this is relevant – the US is much larger than Finland (sorry, Finland, but size matters), and so trying to draw comparisons to how things work when they’re so different as to be incomparable means you’re Bernie Sanders, the Logical Fallacy Master.

Net migration:  What’s not mentioned by Bernie, in his Ode to Finnish Joy, is that, despite Finland’s happiness meter pinging off the charts,

The finest in Finnish fjords. For free. Theoretically.

about a quadrillion more people emigrate to the United States each year, I guess because it’s awful and they like to be unhappy in the United States.  In fact, from 2007 to 2012, the US had a net migration of just over 5 million people.  Finland’s population is 5.4 million.  In other words, the United States assimilates a Finland, every 5 years.

Except, of course, that we don’t – Finland is almost 100% native Finlanders.  The United States is not.  The United States is a melting pot of different ethnicities, with millions of people from all over the world moving here.  If Finland is so fantastic, why aren’t millions moving to Finland?  Why doesn’t Sanders criticize Finland for its lack of diversity?

Lastly, why is Finland so happy when it’s got an 8.8% unemployment rate?  One that was over 10% just a year ago?  One of the reasons might be that Finland decided to give all its citizens money, in support of the idea of a basic income:

The basic income program in Finland, which was praised as cutting edge when it was announced, pays $690 to 2,000 Finns each month, with no conditions.

Well, that’s toast:

Finland’s social security institution, Kela, selected participants at random from people ages 25 to 58 who were unemployed. Initially, the program was supposed to be expanded this year to include workers as well as non-workers, but instead the monthly payouts to these individuals will end in 2019.

Why would Finland think a basic income would be a great idea?

The basic income experiment was proposed as a solution to the unemployment rate in Finland, which reached a 17-year high of 10% in 2015. The payouts were designed to support citizens while encouraging them to find work, since the country’s other welfare benefits don’t apply to people once they are employed.

But in December, the Finnish parliament passed a bill that requires jobseekers to work 18 hours minimum for three months, making unemployment benefits contingent on finding some work.

“Right now, the government is making changes that are taking the system further away from a basic income,” Kela researcher Miska Simanainen told the Swedish daily Svenska Dagbladet.

While 70% of Finns supported the idea of basic income, surveys show that number drops to 35% when respondents are told that already-

Pull my finger, fellow Socialists!

high income taxes would have to increase in order to cover the cost of the program.

Oh.  Well.  Looks like money can’t buy happiness.

Bernie’s idea of a utopian United States, a United States that emulates a country that’s rapidly moving away from the same kinds of ideas Bernie espouses in Congress, seems to be a logical fallacy that even the dimmest bulb on the planet might perceive.

But when you’re living in Socialism Fairyland ™, where each Senator gets what he wants, according to his needs (and Bernie needs 3 houses), then reality doesn’t matter.  All that matters is that he can sell these ideas, for votes, and support from people who really don’t understand how wrong Sanders has been, on everything, his entire life.


…And Medicare For All

Bernie Sanders, “independent” Senator who’s not from Vermont but owns two houses there, has recently found the time in

What a Senator looks like when you explain the phrase “unfunded liabilities” to him.

his busy schedule to suggest yet another unworkable, ill-conceived, and destructive way to increase federal power and reduce the choices people can make.  Whoops.  I meant “Give everyone something for free, again, without figuring out how in the hell to pay for it”.

Bernie even conveniently slaps a group of meaningless statements on the splash page of his shiny, new, taxpayer-funded website, where such complex ideas as payer mix and 4,000 pages of the tax code are easily, casually batted aside in favor of putting words up on the internet and hoping they mean something when he tries to run for President again in 2020.

Which really means he hopes they’ll buy him some votes.  But I repeat myself.

Bernie’s solution to a multi-trillion dollar health care problem is…more cowbell!  In the form of more (not less) Medicare!

But wait.  I thought Medicare had unfunded liabilities in the trillions of dollars ($28-35 trillion, but what’s ten or twenty trillion amongst friends?).  Why would a sitting (mostly sitting, but frequently kvetching) US Senator want to run up the credit card on US taxpayers, and worse, run it up on taxpayers who aren’t even born yet?

Let’s let some of Bernie’s ideas speak for themselves – these ideas should guide our thinking, and convince us that he’s got the best idea ever, right?  Here’s one:

You mean Obamacare didn’t do this already? Fail.

We must ensure all Americans can access the health care they need regardless of their income.

It’s great to have someone who can afford 3 houses keep the little people of America in mind while he’s posting insipid graphics on a taxpayer-funded website.  But, to address his statement:  Everyone already has access to health care.

I’ll repeat it:  Everyone already has access to health care.

What they don’t have is a government-issued insurance card, which does not guarantee access to health care, or hire or train one more doctor, nurse, or anesthesiologist.

So the issuance of a new “Medicare For Everyone!” insurance card won’t increase access for anyone.  Anywhere.  In fact, given the reality that many providers won’t take Medicare patients, because this version of single-payer does not reimburse providers at cost, it will likely mean even fewer people will have access to health care, which really means access to a provider.

By “our”, does Bernie mean he’s going to be treating patients? One assumes he won’t be checking party affiliations when choosing which patients to see.

We must get our runaway health care spending under control by eliminating waste and focusing on our patients.

Health care spending is “running away” for a host of reasons, very, very little of which has to do with waste.  The rate of private insurance price increases has everything to do with the cost-shift from Medicare (and Medicaid) to private insurers, which results in even less access to care.  From the link:

Once again, each round of Medicare cost shifting to non-Medicare patients routinely shows up in higher insurance premium costs for younger workers and their families, who are already paying the bulk of Medicare bills through their taxes. The level of Medicare cost shifting and the impact on private health insurance will vary from year to year, but these additional costs are in the tens of billions of dollars annually.

In sum, today Medicare imposes financial obligations on most taxpayers in three ways: (1) through their payroll taxes, (2) through their general revenue subsidies of Part B and Part D, and (3) through higher premium costs in their own private coverage to offset Medicare payment policies. For upper-income Americans, the new Medicare tax of 3.8 percent on their “unearned” income, such as stocks and bonds, is earmarked for funding the provisions of the PPACA, not Medicare.

Oh, and that Mayo Clinic picture, above, that Bernie uses on his website?  Here’s some revealing Medicare text directly from the Mayo Clinic:

Although Mayo Clinic doesn’t participate with Medicare Part B, Medicare will help pay for services provided by Mayo Clinic. Claims will be filed to Medicare Part B and supplemental or secondary insurance companies on your behalf. Medicare Part B and supplemental or secondary insurance payments may be sent directly to you. Patients will be responsible for reimbursing Mayo Clinic for any payments they receive and any balances not covered by their insurance.

In other words, Medicare doesn’t cover everything the patient is charged.  It’s not a free medical cost deflector shield.

But let’s have just one more bite at Bernie’s Medicare apple:

Do we need a system that covers people who only own 1 house?

We need a system that works not just for millionaires and billionaires, but for all of us.

Providing “Medicaid for All” would not change a millionaire or billionaire’s ability to pay for their own insurance, or handle out of pocket expenses.  Assuming, again, by this statement, that the system only works for rich people is hilarious on its face, if you’ve ever worked at a hospital.  Or been rational in your thinking.

And since Bernie seems to forget economic reality as part of his morning wake-up routine (after eating his taxpayer-funded breakfast), let’s remember that the richest people in the United States pay the vast majority of income taxes collected.  In fact, the top 10% of earners pay 70% of all income taxes collected.  And half the country pays no net income taxes, at all.  77.5 million households don’t pay any income tax.  Inevitably, Bernie will want to tap the incomes of the people he seems to hate the most, regardless of how much of a burden they already carry.

So what does Bernie really want?  More power, centralized, in the government, to be controlled by him and the rest of the

Free “Wellness”, America. Step inside. Carefully.

clownshow that thinks it’s qualified to make decisions on your behalf.  When the country drowns in debt and unfunded liabilities, and a recently failed presidential candidate thinks we should double down on that destructive debt strategy, then we clearly have put the wrong clowns in positions of power.

We need new clowns.




The Mask Drops: Sanders Unchained

Brooklyn’s own Bernie Sanders (Vermont Senator but really a flatlander with 3 houses, which really, really makes him a flatlander)

Not pictured here: The new chains Bernie wants to put on all of us.

has let slip the dogs of….single-payer?  Not that this is any surprise, but Bernie has stated that he will be introducing a single-payer bill, which he describes as “Medicare for All”.

What an enormous favor Bernie’s doing for Americans!  Why didn’t anyone think of this before?  A truly brilliant analysis and solution provided by a US Senator who didn’t receive his first paycheck until he was 40 years old!

What sort of delights will US citizens receive when Bernie puts us all on Medicare?  Let’s take a look:

Medicare Part A will go bankrupt in 13 years.

Medicare’s Hospital Insurance (HI) or “Part A” Trust Fund ran a cash flow deficit of $8.1 billion in 2014. Expenditures from the Part A trust fund exceeded annual income every year between 2008 and 2014. The Medicare Trustees estimate that the Part A trust fund will generate surpluses between 2015 and 2023 due to recently enacted legislation and an assumed continuation of the economic recovery. Specifically, the Medicare Part A trust fund income is expected to exceed expenditures by about $2 billion in 2015. This surplus continues for the next 8 years – through 2023. Deficits are projected to return in 2024 and will continue until the Part A trust fund is officially bankrupt in 2030, at which time the Medicare program will no longer be able to pay full benefits for seniors.

Medicare Part B will consume a quarter of all federal income taxes by 2089:

The Supplementary Medical Insurance (SMI) or “Part B” trust fund pays for physician care, outpatient services, and prescription drugs. According to Medicare’s actuaries, SMI spending is growing at a rapid rate. The Trustees report evaluates the long term implications of escalating SMI cost growth by comparing it to total Federal income taxes (personal and corporate) during the same fiscal year. The Trustees now predict that, if future federal taxes maintain their historical average level (relative to the national economy), then SMI general revenue financing in 2089 will represent 26 percent of total Federal income taxes.

The Independent Payment Advisory Board – an unelected board that sets target levels for spending on Medicare – will set “savings

Bernie brainstorming.

targets” annually, which means cuts to reimbursements to hospitals and providers.

The health care law created a 15-member Independent Payment Advisory Board (IPAB) charged with making recommendations to cut Medicare spending if and when the program’s spending exceeds specified economic growth targets. Since 2013, the CMS Chief Actuary has been required to calculate both the projected and target growth rates. If the Chief Actuary determines that the projected Medicare per capita growth rate exceeds the per capita target growth rate in a given implementation year, then the Chief Actuary must set a savings target for that year. For determination year 2013 through 2015, target growth rates have not been exceeded.

The Trustees now predict that Medicare’s per capita growth rate will exceed the per capita target growth rate in 2017 – five years earlier than projected in last year’s report. Legislation (S. 141, the “Protecting Seniors Access to Medicare Act”) has been introduced in the Senate that would repeal this unelected, unaccountable IPAB board. The House of Representatives approved a companion measure, H.R. 1190, on June 23, 2015.

Unfunded obligations in the tens of trillions of dollars:

Medicare Part A is financed by a 2.9 percent payroll tax that is split between employers and employees. The health care law (starting in 2013) mandated an additional 0.9 percent payroll tax on wages over $200,000 for single filers and $250,000 for married filers. There is no upper limit on earnings subject to the tax. Income deposited into the Part A trust fund is credited using interest-bearing government securities. Expenditures for medical services and administrative costs are recorded against the fund. Securities represent obligations the government has issued to itself. The Medicare Trustees estimate the Medicare Part A total unfunded obligation over 75 years is $3.2 trillion. Using the Centers for Medicare and Medicaid Services (CMS) Actuary’s alternative projection, which looks at Medicare’s financial footing using more realistic assumptions, the Part A unfunded obligation over 75 years climbs to $7.9 trillion.

Unlike the Medicare Part A trust fund which has a dedicated revenue stream (the HI payroll tax), Medicare Part B and Medicare Part D (prescription drug benefit) are funded by beneficiary premiums and general revenue. As a result, the Medicare Trustees estimate that the amount of taxes collected over the next 75 years that will be spent to pay for Medicare Part B and Part D services equals $24.8 trillion.

Assuming current law remains unchanged, the Trustees project Medicare’s 75 year total spending in excess of dedicated revenues is $27.9 trillion. Again, using the CMS Actuary’s more realistic alternative scenario, that figure soars to $36.8 trillion.

All of this is just the start for “Medicare for All”.  Because Medicare reimburses providers below the cost of providing that service, and there would be no more private insurance to push the costs onto (via increased rates in the private market), the inevitable result of underpaying for services is a reduction in services provided – or, as users of Great Britain’s NHS are enjoying right now – the rationing of health care.

Since Sanders currently enjoys a tasty exemption from the Obamacare mandate, through a subsidy provided to Congress and their staffs, I would also expect the Senator, once full ensconced in the warm, loving embrace of Medicare For All to ditch his subsidy and wallow in the results of his legislation, like the people he’s planning to foist it upon.

But the larger question remains:  If Sanders thinks Medicare For All is the solution to the nation’s health care problems, what, out of

Bernie looks great in a hat here.

the above, makes him think he’s doing anything other than setting us on a path that a) reduces access to care, and b) increases the rate at which the federal budget implodes?

And this is his best idea of a fix?  Then I’d hate to see the ideas he discarded as being unworkable.  His latest is another example of what happens when politicians are put in charge of our lives, and their only accountability to the impacts they make on us is whether or not they can sell 50% of the voting populace on the idea that they’re giving them something they need, for free, paid for by someone else.




Vexit: The Vermont Exit From The Progressive Union

Great Britain, in re-claiming its sovereignty by famously voting to exit the EU, has set a new standard in terms of trying on new political ideas, and finding them wanting.  The difference for Britain and its people, in this case, is that they could disconnect from the EU experiment if they didn’t like it.  As just one maddening example shows, it turns out that the EU defining how olive oil should be served on restaurant tables might not be in anyone’s best interests, except for an EU bureaucracy that seemed to function only to create additional costs for businesses with no

Sorry, that bottle of oil is completely unsafe and might explode.

Sorry, that bottle of oil is completely unsafe and might explode.

discernible benefit to the public good, or to the business itself.

Why would anyone want to put up with this insanity?  As Great Britain demonstrated, if a free people choose to exercise their own power, they will decide not to put up with said insanity.

Vermont’s example shows, however, that it takes more than talk to change a few decades of EU-esque progressivism’s slow but determined encroachment into the decision-making space of every citizen.  The encroachment never happens in one swift stroke.  Incrementalism is the key, and as more layers of bureaucratic power and spending are added, annually, the new norm is established.  The next year’s barnacles are built on the prior year’s established barnacles.

A few of these barnacled examples from Vermont:

Act 250:  What was started as a way to manage growth in Vermont, and to apply a common set of guiding principles and rules has devolved, utterly, into a chokehold on economic growth.  A dilapidated example of which is evident to anyone getting on Interstate 189 off Shelburne Road, in Burlington, where they can see the Vermont’s largest accidentally-funded skatepark, which started construction in 1988, and only last year was the final hurdle cleared in allowing construction to continue.

1988 to 2015.  27 years to build a road.  A 2.9-mile road, one whose planning began in 1965.  Even with a recent green light given by the

You can just *feel* the economic vitality oozing from its unused surface.

You can just *feel* the economic vitality oozing from the unused surface.

Vermont Supreme Court (which tossed out a final appeal to block further construction), the City of Burlington is only targeting construction to begin in 2018.

So call it a 30 year delay in building 3 miles of road to route interstate traffic off the highway, into the city.  10 years per mile, of delay.

And Peter Shumlin has said Vermont is “open for business”?

Speaking of the business-friendly environment Vermonters have come to know and love under the Progressive agenda, one of the icons of small businesses in Vermont, Bove’s, was fined in 2008 for labeling their products in a fashion that the Progressive agenda does not approve of, including (gasp!) the fact that not every component in the sauce is made in Vermont.

The Attorney General’s office says that the Bove’s company sold several types of jarred pasta sauces and other products under the “Bove’s of Vermont” label. But the tomatoes were from California and some of the sauce was made in New York. State law prohibits companies from using the word “Vermont” to market products made outside of the state.

Granted, there is a concern about something being labeled inaccurately, but where is the line drawn?  Does the glass for the jars need to be made in Vermont, too?  The manufacturing tools used at the manufacturing facility – are those made in Vermont?  The jar lids?  The labels?  The oregano?  Modern manufacturing is a worldwide supply chain equation, and the state has no knowledge of, nor expertise in, any one single product, much less everything made in Vermont.

As an example, the state regulates wood.  Well, thank God that that issue has been figured out.  I was concerned that Christmas trees would be mislabeled, and angry Christmas shoppers would riot when this duplicity was discovered.

Vermont's lingering wood question, finally resolved through governmental excellence.

Vermont’s lingering wood question, finally resolved through governmental excellence.


EB-5:  Long a darling of the Shumlin administration, the EB-5 program was designed to attract foreign investment in Vermont capital projects, of which there is something of a shortage.  Like water in a desert, Vermont needed a federal program to let dollars rain down on its citizens, because without Progressive leadership to fix Vermonters’ problems for them, where would they be?

Well, they wouldn’t be investigated by the SEC for fraud, for one thing.  But hey, what’s a few hundred million in loans floated around in what seems to be a Ponzi-like effort to leverage investor dollars in every place but the capital project itself?  As others have noted, when campaign contributions come from people benefiting from public dollars, even a thin veneer of deniability shatters upon closer inspection:

Wait. You did *what* with the money?

Wait. You did *what* with the money?

The current circumstances at Q Burke and Jay Peak are a blow for the entire state of Vermont. Economic development in communities which have been historically neglected is absolutely essential to the financial vitality of our state. The fact that the EB-5 funding scandal is the product of, in this case, a handful of angel funders who have little connection to Vermont speaks loudly to the desperation of public officials who wanted to believe that the primary developers of these projects, Ariel Quiros and Bill Stenger, were white knights. They weren’t.

Many will point to the fact that the alleged fraud in this case was eventually uncovered and point to the hard-working forensic accounting specialists who largely go unheralded as evidence that our system of oversight worked. To the extent that these alleged white collar crooks dipped into the public till and enriched themselves at the expense of all Vermonters that is in fact true. But, we should have never, EVER gotten to this point.

Campaign contributions showered the state Democratic party and its leaders, most notably Gov. Peter Shumlin and Sen. Patrick Leahy. Quiros and Stenger did not make those contributions out of the goodness of their hearts. They expected something in return for those campaign monies. While unseemly, under our system that kind of relationship between elected officials and supporters looking to gain or sustain influence is not illegal.

Single-Payer:  Another Progressive fantasy, “Single-Payer”, which mostly involves getting other people to pick up even more costs in addition to what they’re already covering due to the cost shift and Medicaid block grants, wound up being mightily flushed into the outhouse of Vermont’s history, along with a couple hundred million in taxpayer dollars to pay for a site the state did not need, but Peter Shumlin did in order to raise his political profile to national levels.

So Vermont spent someone else’s money, again, for nothing.  Although the fact that it failed in Vermont, and Shumlin had to admit to its failure, which probably contributed to him not running for office again, might have been worth the investment.  In a jaw-dropping turn of

Hey, who's got $2.6 billion I can borrow?

Hey, who’s got $2.6 billion I can borrow?

phrase, though, Peter keeps the Progressive dream alive, by using phrasings like “Vermont’s not ready yet”, as if there’s an as-yet untapped pile of Vermonter-hidden gold in the $2.6 billion dollar range that’s just lying around, ready to be used for single-payer.

Instead, Shumlin hid his financing “plan” until after an election.  Why?  Because that’s just good science, Vermonters!

The governor kept the development of his financing plan under wraps for several years and had come under increasing pressure to include members of the public in the process. He waited, however, until after the election to make his move. The delay may have cost him voter support as he narrowly defeated an relatively unknown Republican challenger, Scott Milne, by only 2,434 votes in November.

The reality was that the Progressive dream Peter touted was not even remotely possible, under any set of financial circumstances, yet Shumlin rode the wave of its popularity to successive elections until even he could no longer hide from facts, or hide the facts from the public.

“We obviously wish that the numbers were different. It’s a huge disappointment for me, it’s the biggest disappointment of my public service so far, but we’ll make progress by pushing forward in other ways,” Shumlin said.

What should be disappointing to Vermonters is how he spent millions of taxpayer dollars on a vehicle to national office, yet Vermont was still stuck with him.

Now it’s easy to complain, so what’s the cure for Vermont’s ills?  Is there a federal grant program that could be tapped to repair what might have become an irreparably broken Vermont, after decades of abuse?

Or, instead, can Vermonters figure this out on their own?  Here’s a few suggestions that might help the state change course:

Cut taxes:  Match other states that have similar population size, demographics, geographics, etc.  New Hampshire comes to mind here.  It turns out that their aggregate rate of state and local taxes (as of 2011) ranks them 44th (at 8%), and Vermont 9th (at 10.5%).  Here’s an idea:  If people have more of their own money to spend on goods and services, aggregate demand goes up.  The economy grows.  That’s how it’s supposed to work.

Encourage business:  The costs of business can be broken down into some simple cost drivers:  Labor, materials, and energy.  What did Vermont do for its businesses in those categories?

a.  Increased the cost and reliability of energy by shutting Vermont Yankee.  Shumlin took pains to make sure he was credited for increasing business costs for Vermonters.

b.  Increased the already-high cost of labor by mandating health insurance coverage categories for everybody, essentially, mandating a Cadillac plan.

c.  Increased the cost of gas by raising taxes on it, a cost which every business uses in one way or another, and Vermonters use to drive to work and to drive to places where they might, oh, buy wood.  This cost is passed on to the buyer at every level of a business’s operations, for everything they purchase.

Cut Taxes:  Did I mention cutting taxes?  Vermont is ranked 49th for economic outlook, which, unless I’m doing my math wrong here, means Vermont is near to reaching Progressive nirvana, by being next to the best at being worst:

Only New York is worse than Vermont when it comes to tax and regulatory policies that foster economic growth, according to a new report on economic competitiveness between states.

According to the eighth annual Rich States, Poor States, Vermont is 49th out of 50 states on economic outlook due to the state’s ratings on 15 different variables, including tax rates, labor policies and overall regulatory burden.

Oh, and cut taxes.

Finally, there’s a broader, more philosophical argument to make, one that aligns with what used to be something of a political signature for Vermont, the town meeting.  The idea of subsidiarity, essentially meaning a de-centralization of political control, kicks all the way back to de Tocqueville, but is anathema to today’s Progressivism.

Alexis de Tocqueville‘s classic study, Democracy in America, may be viewed as an examination of the operation of the principle of subsidiarity in early 19th century America. De Tocqueville noted that the French Revolution began with “a push towards decentralization… in the end, an extension of centralization.”[1] He wrote that “Decentralization has, not only an administrative value, but also a civic dimension, since it increases the opportunities for citizens to take interest in public affairs; it makes them get accustomed to using freedom. And from the accumulation of these local, active, persnickety freedoms, is born the most efficient counterweight against the claims of the central government, even if it were supported by an impersonal, collective will.”[2]

Virtually nowhere in the Progressive agenda do you find calls for a reduction in power, or control.  Every Progressive item in Vermont, and at the national level, is to either take control of decision-making from the citizens, or to reduce their Constitutionally-based rights, if it furthers

Town Meeting in Charlotte, Vermont. Not in Washington, DC.

Town Meeting in Charlotte, Vermont. Not in Washington, DC.

the Progressive agenda, and garners more votes, which equates to an even further increase in control.

The idea that others represent us politically becomes less and less realistic the further away from us they get, both physically and philosophically.  Ideally, however, the opposite should be true:

The laws you live under should be made by the people you live with.

Progressivism, in its most modern sense, is a champion of centralized control.  Great Britain has learned that lesson.  As Churchill once said, the US will be sure to do the right thing, eventually, after we’ve exhausted all the other possibilities.

Let’s hope that doesn’t take too long.

The Power of No

What happens when you have the power to deny, to say “no”?  Then you are in control.  The person denied has no control, no power, no other option.  The power to say “no” is like being an umpire in a baseball game.  You can complain all you want, yell, kick some dirt (if you’re a

When good people hear the word "No". OK, marginally good people.

When good people hear the word “No”. OK, marginally good people.

former Yankee manager), or throw second base, but 99.9% of the time, you will not get what you want.  You’ll go back to the dugout (and like it), or you’ll get ejected.

Those are your two options.  That’s it.  Neither option satisfies the complaint.

In markets, competition means choices for the buyer, of whatever product or service they’re interested in acquiring.  With competition comes incentives for the business to provide a better service at a lower price, in order to gain more market share.  Choice erases the power to say “no”, because if you don’t like what you’re offered, you can take your business elsewhere.  Now the customer has the power to say “No”.

But what if you’re the only game in town?  A monopoly?  Those are generally illegal, which is why the government spends so much time enforcing antitrust laws.  In fact, they helpfully define them:

Many consumers have never heard of antitrust laws, but enforcement of these laws saves consumers millions and even billions of dollars a year. The Federal Government enforces three major Federal antitrust laws, and most states also have their own. Essentially, these laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for products and services.

But what the DoJ does not do is enforce antitrust laws against the US government, which has the market cornered (so to speak) on cornered markets, especially for health care, in Medicare and Medicaid, and other recipients of federal…care.

In fact, for some on the receiving end of the government’s monopoly on health care for their particular demographic, not being able to shop for better coverage means you’re stuck with whatever the government gives you.

In some cases, that means much more than sub-standard care.  It means catastrophically bad care, which is why only the US government could be the entity providing “care” to veterans, and have them die on their watch.  In the very place that’s been created and funded specifically for their needs.

Who has had the responsibility and oversight for this organization, the Veterans Administration?  Politicians.  More specifically, a politician who sat as the Chair of the Veterans Affairs committee from January 3, 2013, through January 3, 2015, and still sits as a member today?

Bernie celebrating his victory over Hillary Clinton.

Bernie celebrating his victory over Hillary Clinton.  (Ahem)

Bernie Sanders.  The politician that wants to expand the size of government, in order to expand its power – its power to say “no” to the people it’s supposed to represent.  The same politician who failed to oversee his own agency’s power to deny care.

But it’s not just veterans that fall before the power of “No”.  Medicaid and Medicare, both bright, shining examples of your government working for you (sort of), has a long and distinguished history of saying “no” to applicants, to people appealing decisions, and have gotten pretty good at saying “no”.

In fact, let’s take a look at the sweet KPIs HHS is compiling on appeals.  Looks like there might be one or two people out there unhappy with the one, single choice they have for health care, in Medicare (below).  For example, through FY2015, the average processing time for appeals decided (both for or against the person appealing) was 547.1 days.

That's a hot new trend in government service.

That’s a hot new trend in government service.

Now I’m no rocket surgeon, but a year and a half or so of waiting for the lumbering apparatus of those entrusted with tax dollars to disburse them to those who need them seems like, maybe, just a bit longer than is reasonable?  Especially if death is a more probable outcome if an issue goes untreated, thanks to your friends at HHS?  Especially considering those people on Medicare are typically retirees and the elderly?

So how does HHS measure itself against these appeals to power?  What do the results of these appeals look like – what are the outcomes? From the chart below, more than half are Unfavorable or Dismissed.  The power of “no” in action.

Kind of a "read 'em and weep" chart here.

Kind of a “read ’em and weep” chart here.

Even if one does receive a favorable appeal, there is one final, telling stat, the Average Processing Time.  A stat that if it was shown at a high enough leadership level internally in an organization other than one run by the USG, would result in one of the following:

  1. Firings of leadership.
  2. Money thrown at the problem to alleviate the downward trend and mediate loss of market share.
  3. Both #1 and #2.

Even if a favorable outcome is decided, the person appealing might have have outcomes other than favorable already.

As far as trends go, this is Not A Good One.

As far as trends go, this is Not A Good One.

Bernie Sanders, in order to fix what he thinks is wrong, wants the government to increase spending by 2X the current debt of the United States, or another 18 trillion in entitlements of one kind or another, but specifically in single-payer.  Given the examples above, and the power ceded to a government agency that can then tell you what you can’t have, how can Bernie argue on one hand that this is good for all Americans, while on the other, he’s removing choice from the equation?  How are people empowered when they have no choice?

Were veterans empowered while they sat on secret waiting lists for the care they deserved more than anyone else?  Or were they trapped in a

The Power of Choice - you're free to choose the one option.

The Power of Choice – you’re free to choose the one option.

system, one with no options, and left to suffer the consequences?

No.  If you can say no, that’s when you know you’re in charge.  Bernie wanted to be in charge of the biggest government apparatus in history, one with the largest and most expansive power, ever, to say “no”, and he effectively sold this idea to tens of millions of people.  The same politician who decided, on his own, that there are too many types of deodorant for sale, was telling everyone exactly what he thought of their power to choose.

Which begs the question:  Why let anyone make choices for you?





Health Care In Vermont: The Overruns Strike Back

Several years ago, when Peter Shumlin and a crowd of adoring sycophants raised their tiny, shrill voices in a chorus of acclaim for single-payer in Vermont, a few people were raising their hands and asking questions about how to pay for it, regardless of the merits of a single-payer system itself.  Those people who had the temerity to ask impertinent questions were routinely shouted down, and found themselves in

Not only are we shoving you off a cliff, we're going to incur a couple of hundred million bucks in costs for nothing! Ha ha ha! Ahem.

Not only are we shoving you off a cliff, we’re going to incur a couple of hundred million bucks in costs for nothing! Ha ha ha! Ahem.

league with those awful people who wanted to shove Grandma off a cliff.

As the reality of the single-payer implementation materialized, even Shumlin had to finally concede that there was, indeed, no way to pay for it.  He delayed his plan to finance single-payer, and only released the plan after his last election, which he won by only a few thousand votes, over a last-minute challenger who had little to no campaign funding and support behind him.  Then, well past the November election, Shumlin announced single-payer was dead in December 2014, and finally presented his financing plan as evidence of its death, almost 2 years after he was mandated to do so.

So what’s happening now with Vermont’s defective “single” payer website?  The administrative costs are ongoing, and going up, well beyond the scope of what was originally promised to not cost Vermonters anything.  From VT Digger:

The Shumlin administration has placed a partial dollar amount on state staff costs stemming from manual processes and workarounds associated with Vermont Health Connect’s messy open enrollment period earlier this year.

The amount? $800,000 per month. That’s for the costs incurred for “staff augmentation” needed to process renewals manually “this winter and spring,” according to Vermont Health Connect spokesman Sean Sheehan.

The renewal and open enrollment period was from November 2014 to March 2015, which would mean the state paid at least $4 million to work around the incomplete IT system.

“Staff augmentation” is code for “additional unanticipated payroll spending for a website that was promised to work easily for all Vermonters at no additional cost to Vermonters, because it would be paid for by federal monies.”  As it turns out, implementing your own version of an exchange website is expensive, will incur costs not anticipated in the original scope, and will impact Vermont’s overall state budget negatively when it’s already operating on razor-thin margins.

So another $4 million is paid out of pocket to process routine, standard, run-of-the-mill changes made to health care plans that used to be done entirely outside of the state’s control.  Now, in order to provide health care to Vermonters, these changes are now being ably handled by the same people who once said it wouldn’t increase the budget by a dime, and would, in fact, save money.

This is a failed project, by any project management standard.  The scope, cost and schedule have all slipped, multiple times, and there is no

What do you mean this isn't an effective way to cut hospital costs?

What do you mean this isn’t an effective way to cut hospital costs?

solid date in place for recovery, nor any kind of a finalized recovery plan.  In fact, a large-scale IT project that switches software vendors in the middle of the project is an air-horn klaxon-esque indicator that the requisite requirements work was not done up front, which is what any project manager knows is critical to success.  The state cannot escape the triple constraint any more than it can escape the reality of gravity, or, apparently, the reality of Vermont’s politics.

Vermont Health Connect’s implementation was a political vehicle for Shumlin, not a project to actually provide health care.  Even if you issued every Vermonter an insurance card, magically, insurance that was paid for out of a unicorn’s lockbox of gold coins hidden deep in a cave in Buel’s Gore, that in itself does not provide one second’s worth of health care to any Vermonter.  It is access to health care, not an insurance card, that should determine whether or not Vermonters have what Peter Shumlin has called a “right” to health care.

Vermonters have access to health care.  They had it before the state decided to spend several hundred million dollars failing to create a website.  The mix of payers was available to every Vermonter, regardless of income level – commercial insurance, Medicare, Medicaid, VHAP, etc – every Vermonter had access to one of the payers, and had access to care.

The website itself is meaningless.  It’s just an enrollment vehicle, and even in that it fails.  It also fails because it’s not integrated with Medicare, or military health plans, and can’t handle plan changes without laying out hundreds of thousands of dollars in additional spending, monthly, to process the changes manually.

Would health care costs decrease if the dollars spent to implement a website were spent on care instead?  If we spend $200 million on a website, and the state’s largest hospital’s budget is $1 billion (in net patient revenues), then Shumlin threw 1/5 of a year’s worth of budget away on an unneeded failure.

As Shumlin’s own website states, he’s “determined” to get tough things done:

As Governor, Peter is determined to get tough things done. Since his inauguration, he has been working hard to create jobs for those who need them and raise incomes for those who have jobs, control skyrocketing health care costs, expand broadband and cell service to every corner of the state, reduce recidivism, invest in quality education opportunities, and rebuild our roads and bridges. Taken together,

Nope. We're gonna need a bigger rope. Or a global budget?

Nope. We’re gonna need a bigger rope. Or a global budget?

these and other key goals represent an ambitious agenda to create a brighter economic future for Vermonters.

I guess Shumlin’s definition of “control” means something entirely different to him than it does for the rest of us.  If anything, Shumlin increased the cost of health care, by:

  1. By deciding to create a Vermont version of a health care enrollment website when the federal version was available, he’s incurring millions in additional costs in the creation, maintenance, and manual support required to keep the site operational.
  2. Increased the financial reporting and regulatory compliance burdens on all the state’s hospitals, which in part means additional staff hours required to maintain unique budget reporting to the Green Mountain Health Care Board.

Not one of the things done by the Shumlin administration has provided care to a Vermonter that needs it.  Not one thing.  And instead of getting tough things done, Shumlin is now quitting the office, and the Vermonters he was so “determined” to help.  While the Green Mountain Care Board awarded Blue Cross/Blue Shield a 5.9% increase, this was lower than the request rate increase of 8.6%, which will mean that there may or may not be monies available for reimbursement at the lower, approved rate.  Kind of like how Medicare only reimburses a certain dollar amount for any procedure, regardless of actual hospital costs.

It turns out that helping himself to a several governorships was Shumlin’s most successful achievement, considering that all of his determination has not changed the reality on the ground that hospitals, insurers, and patients have to live with, on a daily basis.

Health Care Coverage So Nice, Shumlin Wants You To Pay For It Twice

(Just barely) Governor Peter Shumlin recently let Vermonters know that he’s aware of how health care costs are shifted from participants in commercial plans to those participants in the current version of single-payer:  Medicaid.  In other words, the private sector subsidizes a single-payer program because single-payer can’t cover its own costs.  Just casually walking past

Health care costs got you down?

Health care costs got you down?

this stark irony seems to not be impossible for a governor who promised single-payer for all because of the urgent need for all Vermonters to have insurance.  A need that seemed to evaporate just after the governor edged out, by a few thousand votes, his competitor in the last election, as the governor subsequently scrapped plans for single-payer implementation that he already knew the state could not possibly afford.

Shumlin’s plans were scrapped only after a few hundred million were flushed down the tubes on a malfunctioning website, of course.  Note that the hundreds of millions that were wasted on a website could have gone to actually funding Medicaid, instead of paying a contractor to build a site that allowed people to sign up for a plan they were already eligible for.  The governor’s new plan blows all of that away, however:  He now wants to fix Medicaid, all the way from a small office in Montpelier, and then the cost-shift is reduced, and voila!  Problem solved.

But once again, those nagging realities – things like cost, and the fact that the states, in general, have become puppets on the strings of federal dollars – come back around to remind us all (except Shumlin) that you can’t have something for nothing.

Shumlin’s new plan is to hike the payroll tax (a tax hike!  Shocking.) by .7%, to generate an expected $90MM in revenue.  The $90MM is matched by the federal government, which is the way it entices states to manage their own Medicare programs, while simultaneously being completely on the hook for them since the matching funds are the only thing keeping the states’ system alive.

Under the plan, we will ask businesses to pay a one seventh of one percent payroll tax (0.7%), which will raise $90 million a year. For the majority of Vermont businesses, this will equal less than $1,000 per year. And since state Medicaid investments are matched by the federal government, we’ll draw down an additional $100 million in federal money to help our efforts.

Shumlin's hat is on backorder.

Shumlin’s hat is on backorder.

Now, keep in mind that the federal Medicaid dollars come from somewhere, right?  I’m going to guess “taxes” here, on a lark – so taxpayers are already paying for the matching Medicare dollars that the state collects.  And so are future generations, since the federal government’s unfunded Medicaid liabilities are in the tens of trillions.

This is the “free money” argument that seems to hold so much water in Montpelier – that if it’s federal dollars, it’s “free”, and we should do whatever we can to maximize those dollars.

But Vermonters are paying the taxes to the federal government and Peter’s government, and getting hit by them on both ends.  By increasing a payroll tax, you’ve just added another cost to businesses in Vermont, decreasing profitability, which imperils jobs – all to collect matching funds to offset a cost shift that’s due to underfunded and catastrophically managed federal and state programs.

In other words, commercial rate payers (employees who buy commercial insurance through their employers) pick up all the failures of the federal and state government, and now they’re going to get kicked again.  They’re going to wind up paying more for Vermont products because the costs will be shifted to people buying the products from Vermont companies.  Prices for Vermont goods will go up, making them less competitive.  It is an anti-business solution to an already well-known government failure.

But wait -there’s always more good news:

Of that $190 million, we will dedicate a significant portion of it to shore up Medicaid payments and immediately drive down private insurance rates, resulting in a 5 percent reduction in private insurance costs to individuals and businesses. We’ll invest the rest of the funds in strengthening the overall health care system to ensure better outcomes at a lower cost, meaning businesses providing insurance will benefit financially from lower health care costs.

If the cost-shift is the problem, why aren’t all dollars going to Medicaid?  Aren’t there Vermonters in need of Medicare dollars?  What does the rest of that “investment” look like?  How would money not spent in Medicaid “strengthen” the health care system?  How would that improve outcomes and reduce costs?

It looks to me that this is more window-dressing on a chronic failing of the federal single-payer system, that the states are far too tangled up in now to say “no” to.  So we go, hat in hand to the federal government, showing that we’ve done our due diligence in controlling health care costs by raising the cost of employment so we can claim we’ve “fixed” a cost shift created by the same people now claiming we need to fix the health care system.

As a result, Peter’s closing arguments are less than…convincing:

I know businesses are skeptical of new revenue and worried that this will not return value. 

What businesses?  You mean like the state’s formerly largest business that had to cut a $1.5 billion check to take an asset off its hands?  You mean businesses that rank Vermont near dead-last in business climate surveys?  Those businesses?

I know they are worried that Montpelier will try to use this revenue source for other purposes down the road.

Well, only because the state moves dollars around between the general fund and the education fund like water flows through a tap.  The Governor’s budget shows a $300 million transfer from the General Fund to the Education Fund (p. 23 of the governor’s budget summary).  So you can see where maybe the state’s businesses have some sort of historic basis for skepticism here.

General Fund, Education Fund - whatever.

General Fund, Education Fund – whatever.

But here is why I think this makes sense. Right now, businesses pay the vast majority of private health care costs and are the ones being overcharged. If we act, businesses will be the ones that will get the greatest relief if we lower private insurance costs by shoring up Medicaid.

But this just means they’re paying it twice.  Shumlin asks Vermonters to pay more to one system to offset their costs in another.

Simply put, we’ll ask businesses to pay in a payroll tax money they would have spent in higher insurance premiums had we not acted to shore up Medicaid.

So how is this a net benefit?  At best, you raise costs on businesses to offset one insurer (Medicaid) from another (commercial).  To put it in layman’s terms, this does not move the needle – it’s simply a transfer of dollars that would have already been spent on insurance, in one form or another.  It’s just raising one tax (payroll) to offset an already-existing cost, in commercial insurance rates.

It seems like the governor’s plan is to raise taxes, one way or another, to pay for a version of single-payer.  This version of it, though, will just look a little bit more like what we have today, which is a blended coverage, and will lack the stigma of the label of single-payer.

So, no single-payer, but you're going to raise taxes anyway?

So, no single-payer, but you’re going to raise taxes anyway?

What it won’t lack, however, will be the tab, which is ultimately foisted upon the Vermonters Shumlin keeps telling us he represents.  Given the massive budget failures that have occurred and are ongoing, and that Shumlin’s plan will also raise the cost of doing business in Vermont which won’t make it easier for Vermonters to live their lives here, how, exactly, did he manage to squeak past the finish line last November?

Crouching Tiger, Hidden Costs

Paying for health care, no matter what the payer vehicle is, is simultaneously a complex and simple idea.  Costs are incurred when care is delivered, and someone has to pay for those incurred costs.  How that payment occurs, however, is the crux of the issue, and has become more of a political football than a rational discussion about costs, revenues, and the delivery of care.

Hey, even Tiger needs health care.

Hey, even Tiger needs health care.

As VPR notes, there are those in the legislature that have had and continue to suggest ways to pay for the uninsured.  In some instances, though, they seem to be putting the horse before the cart.

Gov. Peter Shumlin will unveil his single-payer financing proposal later this month. But a powerful Senate lawmaker says the Legislature might want to spend less time this year talking about how Vermont pays for health insurance, and focus instead on making sure everyone is getting it.

Few people in the Legislature will have more influence over the health care debate in than Sen. Tim Ashe. The Chittenden County Democrat not only chairs the committee that handles tax matters for the Senate, he’s also the Senate President’s most trusted advisor on health care reform matters.

Ashe says he isn’t necessarily opposed to pursuing a publicly financed health care system. But he says the payroll tax on employers that would be needed to fund it will make it a difficult goal to attain, at least in the short term.  

Why isn't everyone smiling?

Why isn’t everyone smiling?

Senator Ashe well understands that the payroll tax will not only fail to raise enough money to cover the estimated $2.2 billion required to finance Governor Shumlin’s single-payer plan (and $2.2 billion is the low end of the estimate), it will also have a potentially catastrophic effect on small businesses, as they will not be able to absorb that large of a cost increase.

If you remove the idea of insurance from this requirement, and just think of it as a cost that gets added to a business with  no offsetting revenue, then those businesses that are already operating at the barest margins of profitability will slide into the red.  Businesses that can absorb this cost are largely providing insurance coverage already; those that cannot, will not, and it will either force businesses to cut costs, staff, hours, and/or force Vermonters onto the state exchange.  Which is likely the goal, anyway, to make all Vermonters, regardless of current coverage, to enroll in their state-mandated insurance coverage through the state.

Senator Ashe keeps the idea simple, which is a good place to start:

“I believe people across the political spectrum believe that every person in Vermont should have health insurance,” Ashe says. “So, I believe that at a minimum we should come out of this legislative session with a plan for how we’re going to get everybody health insurance.”

Here’s what I believe – I believe having insurance does not make one healthy.  I believe having insurance does not guarantee access to medical care.  I believe having insurance does not affect what decision a doctor makes in the emergency room and the patient is bleeding out.  I have auto insurance, but that won’t stop me from getting in an accident.

“I believe, I happen to have a radical belief, which is that we can provide insurance to every person in Vermont without raising a penny,” Ashe says.

Assuming you can increase the number of people covered under insurance without increasing the cost of said insurance does not make sense.  Would that make sense if the state said we’re going to make all Vermonters who don’t currently drive a car purchase auto insurance?  Wouldn’t they have to pay for the coverage, in some way, or have someone else pay for it through taxes?  You can’t increase the insured pool size and not expect the insurance costs to go up.

But this misses the larger point.  Having access to insurance isn’t the goal; having access to health care is the goal. An insurance card won’t stop an arterial bleed; a hospital, physician, and nursing staff will.  And as Medicare so ably demonstrates, having insurance does not mean you have access to health care.  It’s quite the opposite, as it  turns out.  The fact that the government’s existing version of single-payer (Medicare) is simply a cost-shift to commercial insurance carriers means, as always, that costs cannot be wished away under the guise of the state’s beneficence.

Ashe has two ideas to help fund this universal coverage, first:

Ashe says he would accomplish this task by taking all the money Vermont already spends on health care for the uninsured, and using it to buy insurance for them instead. He says the state would likely need to find additional dollars as well. And for that money, he says he’d look to the largest cost centers in the health care system: hospitals.

First, Vermont long had a system for insuring the uninsured, called the Vermont Health Care Assistance Program (VHAP).  It’s what a hospital would sign a patient up for if they showed up at the hospital with no insurance.  A state allocation, partially funded by taxes levied on hospitals, provided the dollars to this fund to insure those people who sought or needed care at the hospital, but had no existing insurance.  This program was already up and running, and working.  The only net benefit from taking the dollars from this and issuing insurance cards to the uninsured is to, well, make sure the uninsured have insurance cards, and to claim that the state provides universal coverage.  In other words, no net tangible improvements to anything, but the state can claim they’ve insured everybody.  Which was already occurring.

The state also collects a provider tax, which also goes, in part, to cover the uninsured – so the hospitals are already paying for the uninsured out of their revenues.

And the second idea:

Ashe says the state could take a number of approaches to curbing administrative costs at hospitals. But he says he doesn’t think it makes sense for either legislators or members of the Green Mountain Care Board – the five-person panel that regulates hospital budgets – to be micro-managing medical centers.

This is not a new idea, and not new to any organization that’s trying to reduce costs.  That said, assuming that, by whatever vehicle, hospitals will simply find administrative cost savings if mandated to by the state means that the legislature thinks the hospitals are already wasting a lot of money.  Even if the legislature states that they are not qualified to tell hospitals how to cut costs (as Ashe does above), yet somehow, miraculously, the legislature just simply knows that there are administrative savings to be had, it absolves the legislature of the responsibility for any cuts that are made, even if the legislature does not mandate which cuts be made.  It’s a fundamental contradiction:  if you state that you’re not qualified to tell someone how they should cut costs, how can you possibly know that they should be able to cut costs in the places you think should be cut, i.e., administrative costs?

Take that, administrative costs!

Take that, administrative costs!

This also assumes that a hospital, or any other organization that has a bottom line, is not already cutting costs, eliminating redundancies, etc., as part of normal operations.  It also assumes that these other functions, like making sure doctors get paid, that the heat works, that the parking garage is open, that patients are fed, that the floors are cleaned, etc., are somehow superfluous to the organization’s mission, in that they are not found in a direct patient care category.

But by then taking “cost savings” from a hospital and applying them to funding for the uninsured, along with providing insurance from the pool of dollars that’s already in place to insure the uninsured, misses the largest and most critical issue as to why insurance rates go up at such a high clip:  The government’s existing version of single-payer does not cover costs, and creates a cost-shift onto commercial payers to cover the difference.

In the 2014 Green Mountain Care Board’s approved 2014 budgets for Vermont hospitals (p. 17), the cost-shift to commercial payers is detailed, and explains why those commercial rates climb so much every year – because the Medicare and Medicaid reimbursement rates do not cover the costs of care (let alone the free care and bad debt piece of the hospital’s lost revenues):

GMCB 2014 Budget Cost Shift Summary

The amount shifted and given away has roughly doubled in 6 years, from 2008 to 2014:

Cost-shifting made easy.

Cost-shifting made easy.


These are hundreds of millions of dollars that are absorbed almost completely in rate increases for commercial insurers.  Those shifted costs of care cannot be found in future administrative reductions.  There’s no rational way to assume that a hospital is sitting on $100 million in administrative reductions, but just hasn’t quite gotten around to it yet.

That said, had the state not spent $100 million on an “exchange” that has done nothing but increase overheads and not deliver one additional second of patient care, well, that’s 25% of the annual cost shift that’s occurring right now.  The same state that’s telling Vermonters that it knows that costs can easily be reduced, while ignoring this fundamental reason for the increase in commercial insurer rates:

Look at those costs go down!

Look at those costs go down!


Vermont’s aging demographics are the primary reason why those shifts have become larger over time, and that does not look to change in the near future.  If you have more people receiving care under Medicare, then the shift can only get larger, and cutting back an IT budget line will not make up a fraction of that difference.

The real culprit in the cost-shift is not the patient, the hospital, or the state legislator – it’s the US government’s version of single-payer, which does not cover costs, and happily shifts that responsibility onto the backs of those people currently working and paying for insurance through their employers, or the self-insured.  It’s not only a cost-shift, it’s an income shift – an income re-distribution, one not voted on by elected representatives, but one made possible through decades of bureaucratic sclerosis and an abdication of responsibility by the US Congress, which continually fails to address its own mistakes, and the massive unfunded liabilities it has created.


Budget: Impossible!

Should budget-building really be this impossible?

Should budget-building really be this impossible?

Peter Shumlin, governor, wanna-be Senator, and Trump-like landowner, is about to unveil his financing plan for Vermont’s version of single-payer.  That he’s unveiling it almost 2 years after the law he so proudly signed into existence required that it be presented is beside the point.  He doesn’t need to follow the law, much less the laws he himself enacted.  This is single-payer, you see, and since Dear Leader President Obama himself has made a virtual mockery of Obamacare, in terms of basically making stuff up as you go along, and re-writing/re-interpreting vast provisions of the law that would have likely guaranteed a failure of its passage had those changes seen the light of day while it was being rammed through Congress, well, let’s just say Peter’s got a role model for how to get things done.  Whether we want them done to us or not seems of little consequence to Vermont’s Budgeter-In-Chief.

As has been noted, Shumlin’s plan requires a massive increase across a broad spectrum of taxes, including both payroll and income taxes.  It’s been estimated that an additional $2.2 billion in taxes are needed to fund Vermont’s single-payer program.

If we grant the rumor to be true, that there will be an 8% payroll tax, and there will be an income tax increase, well, how much of an income tax increase would be required to cover the cost?  Leaving alone, for the moment, the future impacts of expected revenues if you jack tax rates through the roof.  There’s a good chance that those paying the highest rates will not stay in Vermont.

So:  Total income tax revenue projections for 2014 were $738 million (page 5 of the state’s budget projections), projections which have run into the cold brick wall of reality in recent months.  But even if we assume those revenue projections to hold, how much in additional revenue would be needed to hit the estimated target of $2 billion to $2.2 billion?  Given some of the other proposed taxes on the table, it would require roughly $1.7 billion in additional income taxes.

As a place to start, in 2012, Net Income taxes paid was $578 million.  The state’s breakdown by bracket is unavailable for 2013, but I’m assuming the same spread will apply in terms of how much each bracket pays as a percentage of the total net income taxes.  If we assume a 2014 total income tax revenue projection of $738 million, as the State has, that’s a 27.5% increase from 2012.  Granted, that’s a two-year span, but that’s an enormous increase for such a short period, and highlights the fact that the state’s revenue assumptions are likely to be flawed at the core.

But taking that one step further, if you add a 9% increase in income taxes for $50K and up filers (as VT Digger is saying is likely part of the financing package), that only nets you $796,696,542, an increase of $58MM.  Which is somewhat shy of the $1.7B target.  About $900 million shy.

So what tax rate would it take to cover the $1.7B?

Here’s the revenue model with a 9% increase for $50K and up filers – again, a net revenue increase of $58MM:

The 9% "Solution".

The 9% “Solution”.

So if 9% won’t get us there, what percentage will?  Oh, just something slightly more – like 147% more:

Hey, what's 147% of your income between friends?

Hey, what’s 147% of your income between friends?

Given the price tag for single-payer, it’s pretty clear that there’s not enough money in the state to pay for it, which is why Shumlin has held off talking about it until he was well clear of the last election – an election he almost lost.

All aboard!

All aboard!

Which begs the question:  Would Shumlin be governor today if he kept his promise to tell Vermonters how he planned to fund this program?  Given the financial impossibilities of the financing model, there must either be significant and permanent federal monies available that are as yet being withheld, or this single-payer ship is going to sink like a stone – and Shumlin did not see fit to tell Vermonters the realities they would face under the law he so proudly enacted.


Vermont’s FrankenHealth Online: A Belt and Suspenders Approach

Vermont’s single-payer experiment – foisted on the witting and unwitting populace like a massive

It is alive!  Well, not really.  Not if you need it.  Even though we spent $100 million on it.

It is alive! Well, not really. Not if you need it. Even though we spent $100 million on it.

Frankenstein experiment gone horribly and expensively wrong – seems to be flailing badly, just as the gubernatorial election looms right around the corner.  Like most things involved with Vermont Health Connect, the timing couldn’t be much worse, both for the users and for the politicians who have saddled Vermonters with a $100 million dollar “exchange” that doesn’t give them anything they didn’t already have access to.

But hey, it’s the right thing to do, if you’re buying votes looking out for the little guy.  As the Rutland Herald notes:

The state is asking customers not to use the Vermont Health Connect website to make changes to their policies during the upcoming open enrollment period, when it is preparing for a high volume of those requests.

So:  $100 million dollars – roughly 1/3 of the Transportation Fund for 2015 – have been chucked down the money pit and given us a system that will not be available for usage.  “Open enrollment” usually means “Open for enrollment”.

But not in Vermont.  In Vermont, you spend $100 million and you get “closed for enrollment”.  You get phone calls, pencil and paper, and manual labor.  And what does the state have to say to explain why Vermonters are being backhanded, repeatedly, by a failed implementation?  Buy

Where do I sign up for the belt and suspenders subsidy?

Where do I sign up for the belt and suspenders subsidy?


During a briefing Tuesday before the Legislative Committee on Health Reform Oversight, Lawrence Miller, chief of health care reform, told the committee his staff is preparing for as many as 60 percent of health exchange customers to make some sort of change to their policies.

“It’s a belt-and-suspenders approach,” Miller said of preparations as 22,000 households are expected to begin renewing their policies when open enrollment begins Nov. 15.

Miller’s stating the obvious here, which is have a backup plan.  But if the Vermont Health Exchange was never implemented, people could still have still signed up for their health care, either at work, through Medicare (which has been the bulk of “new” enrollees, people who already had access to health care but had not signed up for it), or VHAP (now wrapped under Green Mountain Care).  Which begs the question: Why buy an exchange?

But don’t worry, those tax dollars sure buy a lot of pencils:

The website, however, will not include a page for customers making changes while renewing their policies. Instead, Miller urged customers making changes — either to their policies or to their personal information to determine subsidy eligibility — to do so either on paper or by contacting one of the exchange’s navigators. 

Due to the state’s inherent inability to do much at all, we’re going to spend $100 million to fall back onto pencil and paper, when we didn’t need to, other than to satisfy the political ambitions of a frequently-absent governor.

Health care access was never, and continues not to be, the problem.  Solving the increasing costs of health care was not the problem, either, despite claims of un-bendable cost curves.  The reason that private insurer rates go up so much every year is primarily due to the government’s already-existing single-payer program:  Medicare.  When Medicare doesn’t reimburse at the full cost of care – which it doesn’t – then the costs are picked up by the insurers in the private sector in the form of increased rates.

The cost curve is a feature, not a bug, of single-payer.  Since many doctors refuse Medicare patients, because they like to be able to keep the lights on in their practices, the inevitable conclusion for single-payer is reduced access to health care, as more doctors decide they do not want to participate in a system that doesn’t reimburse them at cost.

Would a mechanic keep his doors open for long if what he was able to be paid by his customers didn’t cover the costs of materials, labor, and overhead?  So why is that same economic premise any different for health care?  Financial reality doesn’t change just because someone is sick; things still have costs.  They cannot be waived away by magical thinking, or by promises by under-qualified and ambitious politicians.

If you really want the insurance rate climb to slow down, increase Medicare reimbursement rates.  That would remove the rate burden off the private insurer, more doctors would participate, and there would be less need for the spending of $100 million dollars on nothing much at all.  This will mean a de facto increase in Medicare withholding, but those costs have to be borne one way or another.  But even now it looks like Medicare won’t be giving Vermont the control and dollars that it anticipated under Act 48.  There’s nothing quite like an undelivered promise about your health

So it's going really well, then?

So it’s going really well, then?

care, right before an election.

Speaking of cost curves, like the Vermont state budget going up 2x/3x the rate of economic growth, there’s another question to be asked: How many Vermonters could have been insured with that $100 million?  Instead of this being forced to ask this question:  How many pencils does $100 million dollars buy?