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ObamaCare Clusterfuck: The Sachs Conjecture

The Sachs Conjecture: The elite moral environment is pathological.*

Single payer advocates have framed the case against our current mal-system** of health care for profit in terms of saving money and lives. They point to the vast overhead of administrative waste, CEO salaries, duplication of effort, and so forth, under single payer, would go toward care. And, noting that an insurance system based on profit has every incentive to deny care, they point to better health outcomes in every country to have instituted single payer systems.

But the case for single payer didn't take, despite the many polls that show strong public support for a Medicare for All-like system. So, what if single payer advocates diagnosed the problem incorrectly? And what if a correct diagnosis would also accounts for their failure? It would be irresponsible not to speculate:

Under The Sachs Conjecture, the elite moral environment is pathological. Under The Sachs Corollary, the elite have purchased the political class. How would that play out in the health insurance "industry," which is, after part of the FIRE sector?

First, we shouldn't assume that the problem is administrative waste, overhead, and CEO salaries. We should assume that the problem is criminal corruption. And when you think about it, a lot of the systemic bugs (by which I mean features) that enabled criminal corruption among the banks in the foreclosure crisis are also present in health care: a rent-rich environment, opaque pricing, complex contracts, silo-ed service providers, poor IT systems that communicate badly, etc. Single payer, of course, makes all these problems at least tractable by slashing the complexity. And the complexity is not a problem, but an opportunity. Summing up: The insurance industry fights so hard against single payer not to preserve profit, but to preserve loot. That's corruption.

Second, by Sachs Corollary, the political class was purchased, and purchased for the purpose of destroying single payer. At a high level, we already know about how the Heritage Foundation wrote the plan that became RomneyCare to head off single payer, and how Obama adopted RomneyCare when crafting the ACA. We tend not to think of a policy-making process like that as corruption, although clearly, just as in the recent R-R case, the Heritage Foundation was telling the elite what they were happy to hear. Perhaps the corruption was purely intellectual, unlike Obama's, whose campaign contributions from the FIRE sector and Big Pharma should be viewed as a quid pro quo. We should also view the funding of HCAN and all the other "public option" front organizations as corruption, no matter that it was SEIU money, because proof of bad faith is there in the behavior: Censorship and banning of single payer advocates based on their policy preferences. To be fair (really), I honestly don't think we're experienced at doing corruption here -- the lower levels of the political class, at least, haven't had enough experience being citizens of a third-world kleptocracy -- and so what to an outsider is corruption could seem, to an insider, like a mix of incrementalism, pragmatism, tribalism, and the need to pay the rent. Some ultimately had enough and broke free, to their credit. But too late! And again, that's corruption.

So, if we framed the problem of the health care industry as criminal corruption, which I am not accustomed to doing, where would we look? Every so often there's a Medicare or Medicaid story where some small fish gets indicted for stealing a few hundred thousand or so, but I've always assumed those stories were there to trash government programs for health care. Readers, thoughts? Testing? Equipment? What? Is this the right direction to go?

NOTE * One might also (based on Sach's interview at the Fed's conference in Philadelphia) propose The Sachs Corollary: Pathological elites have purchased the political class.

NOTE ** "Dys-system"? "Unsystem" won't work because the health care system is a system; just a malevolent one.

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malagodi's picture
Submitted by malagodi on

It is of course corruption, but as the author alludes, we are not accustomed to seeing it as such: because it is ubiquitous, it is invisible. While it is always worthwhile to drill down to the linguistic, perceptual errors in any argument or struggle, one must ask how much energy one should put to engaging the general public at this level. Linguistically and intellectually disadvantaged as the U.S. population is as a whole, it is probably a useless endeavor. So we probably have to engage the debate in it's present context of efficacy.

And, as to the need for fashioning new hyphenations; it's too clever by half. This seems to be an attempt at novelty, not clarity. I try to remember the advice of Charles Bukowski; write for clarity, not cleverness. The dog walked down the street. There is no need for anything more than what is actually happening. It's bad enough.

letsgetitdone's picture
Submitted by letsgetitdone on

When industry lobbyists bribe politicians with fund raisers and campaign contributions then that's legalized contributions as long as the lobbyists are careful not to take a quid pro quo and the politicians see to it that the bill will be written by a Committee chaired by someone who is sleeping with a former staff member who at the time of bill writing had become a health insurance industry lobbyist. Any quid pro quos mentioned in the bedroom are covered by privacy rights. Unfortunately, for Max, if his lobbyist ever gets angry with him, then barring ensuing matrimony she will be free to come clean if a case is ever brought. Fortunately for him, of course, the chances of her getting to that place approach zero.