Some Healthcare Musings and Market Possibilities

Single payer healthcare is back in the news, since the introduction of a "Medicare for All" bill by Bernie Sanders. In an article for Bloomberg, "Incentives Are All Wrong for Single-Payer Healthcare", Tyler Cowen writes:

It's worth thinking through why some single-payer systems, such as those on the European continent or in Hong Kong and Taiwan, seem to work. Typically these systems were instituted while health-care costs were still fairly low, and then kept down by government fiat. The U.S. is not in that position, and it's hard to see doctors and hospitals -- powerful lobbies -- going along with significant cuts to their payments.

Essentially, most special interests in the U.S. are important parts of the "buy in" for legislative results. Tyler Cowen continues:

When it comes to access, the major problem in the U.S. is distributional: Some of the poor have insufficient access, and arguably some of the well-off have insufficient access, and arguably some of the well-off receive healthcare at too low a user price. Given Americas' love for consumption, it's probably too late to fix the latter problem.

However, there's somewhat of a paradox in the "Americas' love for consumption" argument. There are many potential treatment options across the spectrum, besides what may be suggested in the doctor's office. Many such options also happen to be less expensive. Nevertheless, alternative treatments and remedies have been systematically devalued as long as anyone can remember - not just by healthcare practitioners but in particular by major media sources. While this barrage of reasoning helped to reduce marketplace competition for professional providers and pharmaceutical remedies, it simultaneously made too many people who often couldn't pay for formal healthcare, more dependent on a system which in many respects wasn't structured to include them.

For decades I've observed the effects of "alternative healthcare product is bad/worthless/dangerous" reasoning, in spite of the fact formal healthcare has its own risks. Risks go with the territory! And while the intent of many healthcare professionals may have been to preserve the loyalty of high paying customers, they inadvertently gained the loyalty of low income customers who not only lost faith in lower cost alternative options, but also tended to prefer guaranteed access to treatments with built in higher costs.

Indeed, the government fiat which Cowen mentioned in the above quote, probably makes it simpler for other governments to include older tried and true methods alongside current medical remedies and procedures. Given the chance to visit other countries, I like to imagine that I would not encounter the negative media attitude towards informal and alternative methods, which exists here.

Healthcare in the U.S. is a more substantial problem at an equilibrium level, than elsewhere. Once governments set up processes in which they are expected to "give something back" (subsidies for those who can reciprocate) for legislation, that's difficult to change.

Regular readers know that I have high hopes for knowledge use systems which could incorporate the practical from modern medicine, alongside tried and trustworthy methods from the past. Interestingly enough the "single payer" framework suggested a suitable framing for small group approaches: Contributions from "single disease" specialists. Where once such specialization would have been impractical in small or local settings, the digital realm means new horizons for the cross fertilization of approaches and remedies, across local knowledge use systems. Not all research and development which takes place via time arbitrage, need be local in nature.

Of course, no participant need concentrate on a single disease, if they wish to continue. Rather, a single disease approach would provide means for individuals to gain solid economic footing at an early stage in their incremental learning process. Some participants could make a single disease focus their healthcare contribution for aggregate group efforts, while others may choose to expand into further healthcare studies.

In his above linked post, Tyler Cowen mentioned Medicaid expansion as an option. However, as noted by Dana Goldman at Brookings, the first "go to" of Medicare has its own problems:

People also forget that Medicare is a hidebound system. It took Congress more than 40 years to offer a prescription drug benefit, for example. Physicians are paid using an arcane system developed decades ago and that has now ballooned to more than 140,000 procedures codes, all of which is supervised (and gamed) by physicians themselves. Standard private sector cost-saving measures, like competitive bidding for routine services, are rarely used.

There is a better way - called universal catastrophic coverage - which borrows from both progressive and conservative playbooks. It would combine the federal guarantees of insurance for all with the cost controlling benefits of insurers competing for that business.

While universal catastrophic coverage sounds promising, the main problem for implementation, still goes back to the way our "rewards for all" system was developed. Likewise, today's formal healthcare specialists need to focus their efforts on what clearly pays in the marketplace. And because of the costs of their education, most specialists need our government to maintain the subsidies which are already in place.

Time arbitrage could finally allow individuals to focus on healthcare issues which don't provide the same profits. How so? Since time would compensate time, system participants would be able to pursue research and development which isn't profitable in general equilibrium conditions. Plus, healthcare participants would be able to allocate time to individuals where it is most actively sought. We don't really know what time would be sought, because time based compensation has often been allocated according to institutional needs instead of the personal needs of provider and recipient. Fortunately, by making each individual an active component of wealth creation, there are market possibilities for healthcare which have yet to be imagined.

Asset Ownership is Key for Base Velocity

In particular, stable levels of base velocity are necessary, for lower income levels to reliably participate in the economy. One might also distinguish this base velocity from low income discretionary spending, which is of a more random nature.

One way to generate stronger base velocity, is to support knowledge use as an ongoing economic learning process which begins in youth. Asset formation would take place alongside mutually held time commitments, while time arbitrage contributes to personal autonomy by allowing shared daily routines to function as incremental economic processes. In recent years, I've suggested incremental asset ownership for individuals who sometimes struggle to maintain a full plate of financial obligations. Simple and flexible building components, could encourage individuals to discover and maintain levels of ownership and participation which work best for them, at different points in their lives.

When ownership options such as these are lacking, many individuals tend to end up in solitude and dependence, who otherwise could have remained socially and economically engaged. It's a reality which creates problems in terms of both basic levels of economic velocity, and production potential. Since this lack of full economic participation has yet to be addressed, the fallout of lost access generates additional burdens for higher income levels - both in taxpayer obligations and the additional costs of social separation. In some instances, a dearth of productive economic environments, ultimately translates into indirect but real lost wage capacity, for higher income level groups.

Structural considerations such as these should be taken into account, in that they provide a broader framing for related concerns regarding future wage potential. The Hamilton Project is just one of the latest groups to convene and discuss "What can and should be done to promote the economic growth that will lead to higher earnings for more American workers?"

Without sufficient base velocity for lower income levels, there are general equilibrium effects which negatively impact both nominal and real wage potential. When supply is already restricted for non tradable sector product, wage increases do nothing to increase access to non tradable sector product. This is the supply side reality in basic amenities, which consequently impacts discretionary income for higher income levels. If supply remains restricted in basic housing assets or time based services, wage increases alone cannot contribute to marketplace formation.

Tyler Cowen noted an example of supply effects on general equilibrium in a recent post. He stressed that relatively lighter regulatory environments can create positive "unseen effects", which increases supply so as to reduce the pressure on the most expensive markets within the same general equilibrium.

What Cowen highlighted in terms of housing, has a similar general equilibrium equivalent in terms of taxpayer obligations for the negative externalities attributable to those who lack economic access. A better way to address wage issues, is through equilibrium growth potential where it is most clearly missing. Again, attempting to do so via the demand side is misleading, since government redistribution doesn't create additional supply for either housing assets or time based services formation. A more appropriate government role, would be to give a green light to new institutions which generate dynamic economic conditions for lower income levels.

Granted, higher income levels sometimes face wage constraints which impact discretionary income. But the main reason for this reality, are non tradable sector supply side limits on production requirements and economic participation. Even so, quality control requirements such as these should not prevent higher income levels from full economic participation. Whereas, when lower income levels lack economic access, they are less able to contribute either to non tradable sector activity via base velocity, or tradable sector activity via discretionary income velocity.

Kevin Erdmann continues to press for broader ownership of housing assets as well. Recently he wrote "This is your occasional reminder that the stagnation we are experiencing is housing." Nevertheless, this lack of housing for individuals and families alike, is matched by a lack of personal participation in services generation. Indeed, services capacity which is capable of creating new wealth, would likely contribute more than the 1 to 2 percent of additional GDP which Erdmann believes would be possible through better housing access.

No discussion re aggregate wage levels is realistic, so long as economic velocity remains too low to generate economic complexity for lower income levels. This loss of economic capacity affects income potential along the entire spectrum. Even though general equilibrium is too tightly defined to accommodate incremental growth, new growth is possible via defined equilibrium settings which would once again generate base velocity for lower income levels. Once lower income levels become better able to meet working and living requirements, these groups will gain new options for discretionary income. What's more, discretionary gains for lower income levels could eventually translate into positive effects for the discretionary income of higher income levels, as well.

Personal Economic Interaction Can Be Regained

Are we purposefully eliminating ourselves from direct interaction with others, both economically and socially? At MIT Technology Review, David Byrne writes:

We are beset by - and immersed in - apps and devices that are quietly reducing the amount of meaningful interaction we have with each other. 

What if tech development has an "unspoken overarching agenda", as Byrne suggested, to reduce direct forms of personal communication? In other words, what if the ongoing reduction of human activity (in the marketplace and otherwise) turns out to be a feature, instead of a bug?

While some reduction of interpersonal activity has been intentional, it helps to remember how our present economic alignments inadvertently encourage social isolation. Society remains in a position where it's still necessarily to treat compensated personal interaction as an institutional cost, rather than a personal source of wealth potential. Meanwhile, the same technology gains which previously led to both increased wages and output, now mean less human input in relation to output, in a services dominated economy.

Nevertheless, an increased degree of involvement on our part is key, if we are to maintain a dynamic presence in our own economic settings. Fortunately, one means to do so, is by generating new interpersonal economic value. Indeed, we can do so not just through mutually allocated time for daily routines, but also the less routine experiences we seek via the assistance of others. Fortunately, time value as a commodity, could make our purposeful time with others, a direct component of both wealth and economic freedom.

For our time value to gain personal and social economic relevance, we transform it from an institutional cost into a shared resource. In order to do so, we purchase the time value we hope to gain from others, through the personally invested time of our own. While this time arbitrage process becomes recorded and categorized, it also gains monetary backing. Those who take part in the process, present mutually held time preferences as a commodity value constant, so as to grow the knowledge use network.

The challenge of making one's time valuable for others, would lead to a level of competition in services generation which otherwise isn't possible, whenever time based services have to rely on external resource capacity for skills compensation. And presently, firms which might otherwise choose to preserve human interaction to the greatest degree possible, remain threatened by directly competing firms which choose to reduce the need for human interaction. By making time value capable of purchase via the time of others, more individuals would gradually gain the option of preserving personal interaction at higher levels, in both the workplace and elsewhere.

Much of this comes down to the conscious decisions we can individually and collectively make, about the value of our economic time. There are two obvious essential areas which define interpersonal time based product:  Practical product, and experiential product. When time value cannot be bargained for directly (via the time people have at their disposal), certain forms of practical product deemed particularly important, will slowly but surely undermine the ability of a given population, to engage in experiential product which includes direct human interaction. Which is vitally important, because high levels of experiential product which include human interaction, are one of the most important markers of any civilized society.

Earlier this year, Alice Rivlin at Brookings, in "Seeking a policy response to the robot takeover", concluded her article with these thoughts:

If the enthusiasts of smart machines are right, the truck drivers are just a small fraction of the workers soon to be displaced by a new wave of technological advance. Americans will be forced to face up to the daunting challenge of what we want our society to be when we no longer have to do hard boring jobs like driving a truck. We have to figure out new ways of developing and adequately rewarding the skills that only humans have, like emphathizing, nurturing, and fostering athletic skills and artistic creativity. That is the particular challenge posed by smart machines. There are no easy answers to this challenge, but focusing on the soon-to-be-displaced truck drivers is a good place to start.

An Epic Storm of Inane Hurricane Articles

Numerous articles have been written about Hurricane Harvey, in what continues to be a destructive hurricane season. Unfortunately, with some notable exceptions, too many articles took advantage of the already trying circumstance of Hurricane Harvey, to bash Houston in particular, and politics in general. It helps no one, for the media to use major storms as yet another tool to divide public opinion.

In times of devastation and tragedy, which are already difficult enough, why not write instead about the positive efforts of countless heroes and volunteers, as they come together to help one another? Or at the very least, provide useful discussions regarding infrastructure design options which are short on inappropriate blame, and long on potential solutions.

Hurricane Harvey was a most unusual storm, which remained in our coastal regions far too long. Consequently, local municipal systems were strained to the limit, and we are fortunate these systems held up as well as they did. Harvey, with its record setting levels of rain across Texas coastal regions, was a storm in which the least bad option for many of us was to shelter in place. Just as one emergency management director said, re ongoing evacuations for Hurricane Irma, "Honestly, I can't tell you where safe is." And many emergency coordinators remember all too well what took place when millions tried to leave Houston in advance of Hurricane Rita. As Wikipedia noted, regarding that ill fated evacuation:

The combination of severe gridlock and excessive heat led to between 90 and 118 deaths even before the storm arrived.

Dietrich Vollrath, an economist at the University of Houston, expressed his frustration with a onslaught of "Hurricane Harvey as X" articles which were written even before floodwaters worked their way downstream. This hurricane was a catastrophe, not some ill begotten metaphor, and Vollrath's rant is worth reading in full. From his "Harvey" post:

For those of you wondering why the whole city didn't evacuate, do you really think that the city was shocked to discover it could be hit by a massive hurricane? Sheltering in place was not some shoot-from-the-hip wild guess of a strategy. It's the best of a bunch of crappy options. If you want to have a discussion, say a month from now after the worst of this is all over, about whether there are ways to effect an evacuation, during the next Harvey-like event, great. Let's do it. In the meantime, your homework is to devise a plan to evacuate the entire state of Massachusetts subject to the following constraints. (A) you have 48 hours. (B) You can't use Rhode Island, Connecticut, or New York, and (C) everyone needs shelter for up to 10 days. Go.

Unfortunately, even some economists didn't get Vollrath's "Harvey as metaphor" memo. The most recent example I came across was Joseph Stiglitz, who used this major storm as yet another excuse to assign further blame with the Trump administration. One doesn't have to be particularly fond of the inanities of Washington, to find Hurricane Harvey an odd connection to such goings on. For those who would enjoy a good rebuttal to similar narratives, Leo Linbeck at the New Geography blog, provides an apt synthesis of various major media complaints, and addresses them one by one.

At the very least, the informal use of social media platforms has been more positive. These platforms made possible a level of decentralized rescue and relief efforts which was not feasible during Hurricane Katrina. And despite what anyone thinks about the "appropriate" nature of centralized efforts, neighbors helping neighbors becomes all the more important, when people need to shelter in place and then respond to local events as the situation changes.

Two articles in particular had the right idea, hence deserve to be highlighted. Ian Bogost, in an article for the Atlantic ("Houston's Flood is a Design Problem"), wrote:

It's not because the water comes in. It's because it is forced to leave again.

Indeed, the same system decentralization which could assist and augment knowledge use, could pair people who opt to shelter in place, with water systems which capture water in place. In "How Long Will it Take Houston's Floodwaters to Drain?", Laura Geggel offers suggestions for site specific solutions to water management. She explains how Houston is slow to drain, which in turn puts additional pressure on its systems. Again, infrastructure design is important.

If there's any takeaway from the deluge of unhelpful hurricane articles, one question in particular comes to mind: Why can't formal media outlets be more helpful and positive in outlook? A more positive approach could make everyone feel better, in the uncertain times of the present.

Working Classes: What's Really at Stake?

Much can be done to improve the lot of today's working classes, through conscious efforts on the part of society as a whole. There are many reasons, why our working classes deserve a more careful economic focus than what they normally receive.

In particular, requirements for housing, time based services and physical infrastructure are too excessive and extravagant, for the future income potential of many citizens. Importantly, however, much more is at stake, than any moral judgments about specific income levels. Should future low income realities not be proactively addressed, community sustainability will become progressively difficult. New cultural markers need to be experimented with. Any discussions about regulation, for instance, should tell specific stories. What do specific individuals wish to accomplish in specific settings? Turn every imaginable resource capacity to these ends, and make allowances for the fact each setting is unique.

Many among today's working classes, hold higher levels of motivation and aspiration to succeed, than is commonly recognized. Despite the fact that much of working class circumstance can be attributed to unconscious societal motivations, we can generate new institutions which include a conscious motivation for more positive outcomes.

Even though automation greatly reduced the need for hard physical labour in traditional manufacture, not much has changed in this regard, for low income services labour. And while the working class of traditional manufacture is in decline, the still plentiful low skill jobs of our services dominant economy, include physical labour which often make "normal" retirement age, a difficult goal to reach. This important health consideration, is by far one of the most important reasons we have, to share the work of intellectual challenge with everyone, so that excessive physical labour need not lead to extensive health problems in one's later years.

Nor can anyone realistically expect to improve the lot of working classes, through monetary redistribution from other income levels. What today's working classes need most, is a chance to participate in the kinds of work and intellectual challenges which make life worthwhile. If the productive use of knowledge use is not shared more broadly in the 21st century, societal divisions may continue to a point that the liberal aspirations of recent centuries could be lost.

We need to reorient our conscious efforts towards greater economic inclusion, instead of simply hoping everything will turn out for the best, should we do nothing. Not every individual can be expected to take low income service work, should better compensated work disappear. As Mosley Vardi (Market Watch) recently noted, "Automation will significantly change many people's lives in ways that may be painful and enduring".

Fortunately, we can build new forms of productive decentralization, which counter today's overly centralized and exclusive framework. Brink Lindsey is one who holds high hopes in this regard, for he recently wrote:

There is no iron law of history impelling us to treat the majority of our fellow citizens as superfluous afterthoughts. A more human economy, and a more inclusive prosperity, is possible.

More Thoughts on Organizational Structure

In a recent post, I gave some explanations why an equilibrium corporate structure would function best as a for profit institution. For that matter, turning time value into wealth, deserves to be closely associated with for profit activity. Also, why do we need time arbitrage as a production means which could eventually lessen the need for debt accumulation? And might it be appropriate for some activities associated with this institution, to function in a not for profit capacity?

Consider that debt has become too important in the maintenance of consumption roles, instead of capital formation. Societies become fragile, whenever debt becomes expected as a matter of course for basic economic access. However: Since traditional capital no longer provides sufficient societal revenue, human capital now needs to assume a larger role for economic functions, alongside that of traditional capital.

Given the right circumstance, debt formation - for centuries at a time - has proven capable of contributing to, and augmenting wealth. Nevertheless, debt is most capable of doing so, when it is primarily utilized to generate additional output. The danger is when too much debt formation occurs in the limited output roles of non tradable sector activity, as opposed to the traditional wealth creation of tradable sector activity.

The basic problem for debt formation, is when it crystallizes a level of societal expectation which progressively becomes more difficult for all participants to reach. Many people now need the option of utilizing the time they actually have at their disposal, to tend to the production and consumption needs which have been too inefficiently allocated by today's non tradable sectors.

Time arbitrage could make it possible to realize productive gains in human capital, without the extensive risks which are now associated with human capital investment. More of today's knowledge based work needs to be opened up to society as a whole, even though substantial portions of these efforts would not receive "full" monetary compensation.

There's good reasons why the United States was once open to all comers. Many individuals could augment and improve resource capacity, with scarce any need to resort to debt formation, to do so. What people were able to create through the time at their disposal, could readily be shared with others. Immigrants left hardened class structures behind, when they no longer had to resort to debt to build a good life. If debt is left in place as the only means to succeed, where would anyone go today, to begin anew? Why has this connection between debt expectations and hardened class structures not been emphasized more extensively?

Debt is no substitute for economic time value. If growing class divisions are to be overcome, human capital will need to be strengthened, so that it functions well not just in prosperous regions, but in many other parts of the world as well.

Again, would the equilibrium corporation benefit from non profit activity to assist this process? Two elements are possible. First,"centralization" is only useful insofar as it brings together a full range of efforts for new community formation, to illustrate to others what works, and what may not work. Each group and area would have its own unique characteristics, and what is needed most are template possibilities for both social and physical infrastructure.

Another area of possibility is sponsored assistance for individuals and groups which may have either limited exposure to the workplace, or workplace experience that is no longer recent. Often, these individuals may require additional help in their efforts to learn how to generate mutual employment with others. They may understandably be reluctant at first to purchase the time value of others, via their own time value. On the other hand, individuals who come to the process who already have additional resources, are more likely to be able to start the process in ways which would not require outside monetary assistance, to build local communities which can eventually sustain their own local services needs.

Equilibrium Corporate Structure: Why "For Profit"?

This is a reasonable question, since some of the organizational patterns involved, generate access outcomes that are more commonly associated with not for profit activity. However, a substantial portion of such outcomes would also gain formal economic recognition, via new means of wealth creation. In particular, the total time value of all involved, could also contribute to general equilibrium wealth so as to gradually lessen the need for centralized redistribution.

Processes such as this, could eventually make possible a stronger trajectory for long term growth. Indeed: From the early days of this project, I suspected a different designation might be needed, which could transcend the standard definitions of profit and not for profit activity.

Basically, the for profit structure of the equilibrium corporation, can be thought of as including both tradable sector capacity and non tradable sector capacity. The tradable aspect of this institution is more traditional, in that the building and infrastructure components it generates, would also be accessible for surrounding economies.  All equilibrium corporation participants have ownership options for infrastructure and building components, whereas these same materials would be available for other potential consumers as manufactured product.

Whereas the non tradable sector (services) aspect of this organization, is intended for internal use, so as to avoid both debt formation and unnecessary divisions in long term knowledge use and personal ability (I'll try to explain this further in a later post). Time arbitrage would make it possible to accurately measure the internal provision of services generation. By decentralizing knowledge use, the productive agglomeration that is associated with capitalism, would finally gain the ability to expand beyond its currently existing limits. New communities would come to reflect a fuller range of economic
complexity and human capital potential.

While physical infrastructure and building components are somewhat typical "profit territory" for any corporation, it's the carefully managed gains of aggregate time value, which uniquely define the equilibrium corporate structure. With time value as an integral part of final product, societies would once again be able to commit to the widespread use of knowledge, as a major wealth creation factor. No discussion regarding long term growth is really complete, without the consideration of full knowledge use potential, alongside manufacturing and commodity potential.

How to envision what is at stake, in terms of economic dynamism? Imagine, for instance, the economy as a living organism, for a broader framing of perceived monopoly positions. What, exactly, is being "monopolized"? Does that monopoly present substantial access problems for final product, or is it simply a way of defining how organizational capacity for the product, takes place? If the answer is the latter, this form of monopoly does not present a Malthusian problem.

For instance, social media monopolies aren't really problematic, because they have massively expanded a marketplace for communication, at a limited cost to consumers. Therefore, efforts to break up social media monopolies could be counterproductive, since such efforts may not generate substantial differences in marketplace size or aggregate consumer access. Think of platforms for social media as relatively unobstructed arteries, in terms of marketplace size and access.

On the other hand, monopolies in non tradable institutions, continue to present problems for marketplace limitations. While tradable sector centralization often functions as efficient arteries, too much non tradable sector centralization has instead posed as arteries for circulation, when in fact it is necessary to include the work of capillaries for these local economic functions.

Again, remember where centralization can sometimes prove effective, as opposed to where centralized activities have no chance of being effective, especially for apparent monopoly activity. When we think of the economy as an organism, the point is not about a need to further divide arteries which are capable of providing full distribution. What's at stake, is restoring activity to the almost imperceptible, basically lateral flows of economic circulation which have been severely disrupted in recent decades. The equilibrium corporate structure, is one institution which would seek to restore economic dynamism to the capillaries of an economic body.