Archive for the ‘Welfare’ Category

Lies, Damned Lies, and the Heathcare debate.

David Frum writes — or rather wrote — in the Times today (or rather a few days ago) an article which attempts the impressive feat of trying to convince a British audience of an American argument on healthcare reform.

As you can tell from the above, I have been on holiday. To Sweden (any one who thinks that I may have miraculously been persuaded of the “evils” of public healthcare will no doubt give up right here). Whilst there, I have had a peaceful, laid-back time, in which I have not even felt the urge to write a note. Well, I’ve felt the urge, but I’ve actually resisted it, which is at least something. Being away might turn out to have been a wise long-term choice. I may have missed the worst of Swine flu in Britain, but far, far more importantly, I may have missed the worst of the apoplectic style ranting about healthcare.

Indeed, the worst offenders I have come across have not been American, but rather British. Dan Hannon has been sticking his head out, and regrettably, since mouthing off against Gordon Brown, people seem to be more inclined to listen to what he says. Indeed, Hannon has evidently so taken to the American people that he wishes to save them singlehandedly from the misfortunes of a system where they would pay less in taxes for more public coverage, despite the fact that it isn’t even being offered anyway. No doubt he is proud of his life-saving interventions.

I have also discovered the existence of an even darker side to the Conservative party in the form of a blog that’s nutty as a fruitcake, but thankfully, at least, no-one seems to be listening to it, so I don’t think it’s high profile enough to be worth mentioning. The relevant people (or rather person) will know to whom it applies.

But in general, even from the enlightened holiday-place of Sweden, I have managed to notice an awful lot of rubbish being spouted about the healthcare debate. What has been pretty thin on the ground is a clever argument, what with all of the nonsense about death panels, healthcare rationing, monopolies, higher taxes, socialism, communism, pinko liberal communism, yadayadayada, etc.. Which is why I found David Frum’s article so refreshing as to be worth posting as a link, despite the fact that I still disagree with it, and I still think many of the arguments are just as misinformed. This is because it at least tries to engage meaningfully in debate about the issue, rather than rant incoherently about socialism and evil.

It’s a clever article. Frum clearly knows his audience, and tries to argue in such a way as to persuade it. For example, he uses none of the exaggerated language that most of the right in America does (and instead posts exaggerated examples of the arguments we use against the US system). Frum clearly tries to position himself on the open-minded side of the spectrum, ignoring the extremes from both sides and embracing the facts.

It’s an interesting article, but it fails. Because it doesn’t.

After a refreshing introduction, Frum starts to go wrong almost immediately.

Tens of millions of people lack insurance. Yet they do not go uncared for. Rather they use the most expensive care, emergency care, and hospitals add the cost on to the bills of paying patients.

In beginning the argument in defence of the way the American system treats the uninsured so simplistically, Frum is immediately condescending to their plight. Insurance is based around addressing long-term risks, but in making this argument Frum ignores the most obvious potential ailment, long-term illnesses.

Saying “they do not go uncared for” because the uninsured get emergency care is like saying “he did not go uncared for” once the proverbial good Samaritan fails to turn up because the victim gets a flashy funeral. The real scandal of US healthcare centres around conditions, not emergency care.

Not only are you screwed if you develop a long-term condition and cannot afford insurance, but you are often screwed full stop if you develop a long-term condition and do not have insurance, even if you had been able to afford it previously. The insurance system is wonderful at delivering the best coverage to the people who need it least. If you have a long-term condition, good luck in trying to find affordable coverage.

But apart from all this, it isn’t even factually in terms of detail. Many hospitals in the US will charge emergency care fees, even if they aren’t allowed to turf you out the door. So the costs are not always passed on to the paying patient, contrary to Mr. Frum’s claim.

On to paragraph number two…

Almost all the problems of the US health system trace back to a pair of unexpected ironies: profit-driven private insurance corporations find it much harder to say “no” than governments do, and American governments are more unsustainably generous than their European and Canadian counterparts.

I find it difficult to believe that profit-driven private insurance corporations find it much harder to say “no” when they are famed for putting such lucrative resources towards finding creative ways of denying costly coverage. I also find it difficult to believe in face of the numerous accounts of insurance companies denying treatment at the most needed times, due to smallprint clauses and other get-outs. I also find it difficult to believe in light of his second statement that “American governments are more unsustainably generous than their European and Canadian counterparts”.

But to throw Frum a bone here, I don’t agree with that statement anyway. When it comes to Medicare, he may have a point — I don’t know enough about it, really, to comment — but when it comes to Medicaid it is well known that the coverage is very, very basic.

I’ll add a caveat here — it is true that the American government spends more on healthcare than, for example, Britain or Canada — but this isn’t out of the spirit generosity but high costs. They don’t have a choice in this and it’s precisely because of the private insurance-based model. More on this point later.

I agree with Frum’s next paragraph, but unsurprisingly, it is a critical point of the US system in any case.


For all practical purposes, healthcare is just as much a right in the US as it is in Europe. Since 1986, federal law has required all hospitals that receive federal money (ie, just about all of them) to provide emergency care to any patient who presents himself or herself. Many states back this federal law with even stronger laws of their own.

This is largely the same stuff as two paragraphs previously. Emergency care =/= all healthcare — it’s not even close. Only the last statement is true, although I haven’t heard of a State introducing something truly radical, such as a single-payer system or a public service competing within the market. Massachusetts, which I have heard cited as one of the more progressive states in this area, has instead opted to make some form of insurance coverage compulsory.

Frum’s next paragraph is very interesting:

Government generosity drives private health costs higher and higher. Health insurance is regulated by state governments. Each government decides what local insurers must cover and how they may cover it. Fifteen of the 50 states require insurers to cover fertility treatments. Twenty-four states require coverage of eating disorders. Thirty-five states require coverage of reconstructive surgery after a mastectomy. New York state requires insurers to charge the same rate for all customers, regardless of health conditions, while 11 other states tightly restrict the ability to charge more for more sick patients.

I don’t really disagree with what he’s saying. Government “generosity” is driving private health costs high and higher because it’s all in the field of regulation, rather than provision.

This is a distinction I have been coming to more and more of late, which I believe is as fundamental as the distinction between the public and private sectors. When government regulates the private sector, it nearly always drives up costs in some way or other, because it’s an inherently clumsy control that the private sector rarely truly cooperates with because of its for-profit basis.

Whereas where government provides alternative services, it invariably removes the need for a certain amount of regulation. Where the US regulates healthcare is not, as the right mistakenly believes, due to government generosity, but due to the fact that they don’t have any choice. The government is pushed from two different powerful forces, the voice of the society, rising up against injustice, and the voice of powerful insurance lobbyists. The government mistakenly tries to reconcile these two, with the result that healthcare costs are driven higher and higher as the government tries, and fails, to placate both voices at the same time.

The result is that the insurance companies fight against the government anyway, and the public still aren’t covered well enough. Both have contempt for their political masters, who lack the guts to take any real action to improve anything. The government will have to prevent the worst injustices from happening in the system, otherwise the public will do them in, but they have to do it in the most expensive way possible, otherwise the insurance companies will do them in. It’s heads they win, tails you lose.

Again, in no other system is as much in tax spent in securing as little in healthcare. The US has the highest healthcare costs, for the least in treatment.

Frum goes on to point out how there is in fact less difference between parties in their record on healthcare than people realise, which is again fair enough, although it is worth noting what different governments attempt, and fail, as well as what they do. Again, the politics of government are different to the politics of political opposition. Governments are torn between the two forces, whether it is the Elephant or the Donkey.

Frum also tackles expensive medicare for the Elderly, which further complicates the equation. How to improve coverage without readjusting public priorities? Within the incredibly expensive private insurance system it seems an impossibility.

But again, only within such an expensive system need it be so. If the State actually provides an universal public alternative, rather than trying to play everything through the wealthy and powerful private entities, then it can secure far, far more public coverage per taxpayer dollar by slashing regulation on the private sector and allowing people to choose between public and private provision. But of course, this is what private providers fear the most: having to compete in a way that forces them to offer value for money to the consumer. Far better to have the government as their tool, as a way to increase and improve their domination of the healthcare market.

Then we have:

Objective studies find little difference in outcomes between America’s costly care and the much cheaper care in more statist systems.

Frum here makes the classic mistake, again disguised through placatory language: describing Universal Health Care systems as more “statist”.

Yet he provides no argument to actually back this assertion up. And what makes America’s regulation-heavy system less Statist than one that provides a public option to compete within the market? From a control perspective, certainly, Britain’s system is less Statist than America’s, as it revolves around State provision rather than State control/regulation. The “Statist” argument is a misconception that the US healthcare debate suffers from all too often.

All of these misconceptions that litter Frum’s article in defence of the American system undermine and deride his final points, that

What the US system offers to those who enjoy good coverage is much harder to measure: convenience, security, responsiveness to patients and personal attention from doctors who compete to attract customers.

Perhaps it is cynical, but I find it all too easy to think that the reason that this is “much harder to measure” is that it doesn’t really exist. A system which offers no security for those who need it most (those with constant long-term healthcare problems) is not a system which offers security in any meaningful way. A system which only offers convenience to those least in need of it is not a system which offers convenience in any good way. A system which offers responsiveness only to an elite with the most expensive coverage is no system worth defending.

And as for competitiveness, Frum fails to show how the US system makes providers in any way more competitive than a system which allows people the choice between a universal public service or private coverage, when common sense would dictate that the latter is far more competitive. He also ignores the facts: people have a choice between Doctors in the United Kingdom, and our personalised GP care is well-known, regardless of broader issues with the model. The UK health system is in fact one of only a few which allow access to a Doctor to be absolutely free at the point of delivery.

In essence, this is the problem with the debate on healthcare within the US. This is an example of one of the more nuanced arguments; yet it is wrong in nearly every detail that matters. In a debate where contributions are only more vitriolic and closed-minded, meaningful reform is only likely to be years, if not decades, away. Let us hope that this is not the case.


The Strange Case of Sir David Freud

Sir David Freud, the Government’s most prominent and controversial welfare advisor, has quit to become a front bench Tory spokesman.

This may in time highlight the dangers of giving prominence to an agenda you do not fully believe in. David Freud has far more chance of a significant impact with the Tories given an increasingly likely election defeat for the government, and the Tories are already known to support his agenda far more fully, in practice and in spirit, than Labour do. You can get a good idea of Freud’s ideas by looking at his telegraph profile:

…and his BBC one:

Some of Freud’s overall beliefs are very reasonable, and difficult to argue with. The welfare system is almost certainly over-complicated, bureaucratic, inefficient and sometimes counter-productive for people going back into work. His rejection of the malicious description of people on the dole as inherently lazy is also to be admired:

“There’s good, evil, laziness and hard work in everyone, it’s a question of motivation. I do not accept the rhetoric about lazy scroungers. Even if they’re a Jack the Lad or a Jill the Lass, there’s usually something else as well – they’re illiterate or they’ve got no social skills.”

Freud is also willing to see serious money invested into helping people back to work – something that should be more widely followed as an example, as many people who moan about the problems of the welfare system are all too often ignorant as to why it was needed to begin with, and how much it costs to solve what are very real problems.

What is worrying is actually the attitude Freud takes towards approaching the solution of these very real and complex problems, however. Having been shocked at the overall complexity of the system, it should have rung alarm bells as to how complex the overall problems it dealt with were, but Freud shows little appreciation as to how difficult it is to “solve” anything, instead describing the solution as “obvious”, which is worrying, considering that he doesn’t specify what “obvious” is.

The Telegraph then says, grandiosely:

“There can be few things more horrid than the welfare system. “It’s a mess nobody understands or can manage,” [Freud] says. He took three weeks to research and write the first draft of his report”,

…as if three weeks was a particularly long and arduous time to spend researching such a thing. But I find it incredible that as little time as three weeks is needed for researching such an issue. The welfare state is well known not only as one of the most complicated organisations in existence, but also as an organisation whose need of reform over the last half-century has only been matched by the lack of success of those trying to reform it. The failure of countless governments, advisers, experts and managers to agree on how to reform the welfare system into something more efficient and successful, provides us with a big clue as to how difficult the task awaiting any energetic and bold David Freud, and to claim that the task is anything near “obvious” or simple smacks of naivety, or even carelessness.

Freud’s most prominent idea, it seems, is the outsourcing of jobseeking programmes. This would involve both the voluntary and private sector, though it would seem from Freud’s comments that he is thinking mainly of the latter – more on the voluntary sector later. Though I’m generally not a fan of employing the private sector to this end, because there’s a very real danger of the creation of lots of non-jobs which mess the system around and do nobody any good in the long-term, I recognise the fact the private sector can play a useful role in creating new jobs for the long-term unemployed, and has been used to at least some success in, for example, Denmark. However, it has to be regulated carefully, and more to the point is at its least likely to be useful in the midst of a recession, when the problem is that of the most expendable jobs being shed in the ruthless pursuit of companies cutting cost. Not, then, the most likely time for a business to think of taking risks in creating new jobs for the unemployed, even if there are significant financial incentives to do so.

The other, more deep-set, problem is simply that the private sector is not going to prove an impartial mechanism for everyone seeking work – which means that quite apart from being potentially unreliable, this solution only covers one part of the problem. No matter how much you make this a lucrative market for the private sector, there will:

a) Be certain jobs and certain employees who are in least demand, which will mean significant sections of the unemployed largely left behind by this reform.

b) More to the point, the Private Sector would by no means automatically provide the right job for someone. I am by no means advocating that people on jobseeker’s allowance should be fussy over what work they go back into, but on the other hand there are always potentially jobs which are “not right” for somebody’s situation, circumstances or even health. Unemployment benefits were introduced to give people freedom from economic oppression, and some control over their lives – in other words, a liberal policy. It would be a pity to lose this element – after all, Beveridge’s second groundbreaking report was called “Full Employment in a Free Society” for a reason.

This brings me on to a second issue – that of single parents, or “lone parents”, the most obvious candidate for potential jobs being “not right”. Now, Freud makes a point of saying that lone parents should “have to work when their children reach five”. But he appears to fail to appreciate exactly why they haven’t “had” to work until their children reach 16 or leave full-time secondary education, up till now. The reason is that there are many different types of job which can be incompatible with parenting. Even with cheap-to-free childcare – for whatever some people might like to believe, childcare simply is not a panacea for lack of parenting time, and it isn’t healthy to view it as such. It can be useful, but healthy parenting necessitates spending time with your kids, and if you have to commute two hours each way to a low-paid, 6-day, long hours job it is not likely to impact positively on one’s ability to give children enough time – and furthermore, parents should have a right to quality time with their children. That can only be a positive thing, it ought to be recognised as healthy to both parent and child. Simply put we should have recognised this fundamental point long ago.

Now, I have no wish to see parents forced into “economic house arrest” and encouraged to stay at home and watch daytime TV, as Freud puts it. People should be rewarded for being productive and doing work compatible with their children, either voluntary or paid. It’s good for us, it’s good for the economy, it’s good for society. But people should be encouraged, and given the freedom to choose work compatible with parenting, not forced into finding any generic work, because that takes away such freedom and risks striking right at the heart of Thatcher’s favourite community: the family. And that would be wrong, plain and simple.

Freud says “The point about my approach is you don’t need to make a huge fuss about categorising people – everyone should be able to work.” But this almost sounds childish in its simplicity: no-one should be “categorised”, but sometimes people have circumstances that need to be taken into account. To suggest that parents with children do not have important circumstances different to others is simply absurd. And it doesn’t stop there. The point about welfare to work is getting people into a long-term, lasting and productive job when at all possible, and never forcing someone into a job which causes damage to both themselves and their family. And this should be a fundamental principle of the welfare system.

Finally, Freud is also right to point out the way the Incapacity Benefit has been abused – not least by governments keen to make use of an unemployment benefit that doesn’t add to the unemployment figures – but his comment about GPs “classic conflict of interest” is somewhat tactless to say the least. GPs are supposed to be a medical confident of people, and look after their patients’ needs, and to suggest that independent GPs start performing tests for disabling conditions is travelling down the dangerous road towards entirely impersonalising healthcare and removing patient rights. Far better, for once, to take an idea the government is now bringing in: after a certain amount of time on Incapacity Benefit a more detailed assessment specifying what work their patient is capable of doing is required, and then it is negotiated with your personal advisor at the job centre – a capability assessment.

Incidentally, Freud does not even appear to have all of his facts right about the IB claiming process: though your local GP is involved, an approved healthcare professional now has to be involved in assessing your claim, who produces the separate capability report: in other words, not only is this “conflict of interest” tactless, it is also misleading. GPs and patients do not have full control of the IB assessment anymore, even if they once did.

In conclusion, if the Tories win the election, David Freud might be something of a cause for concern, despite his good intentions; at least, if he does not do more in-depth research and analysis into the problems of the welfare state. Because though existing problems are often obvious, potential solutions rarely are – otherwise the welfare state when introduced would have been perfect, as it was set up to address one of the most obvious and shocking problems of human history.

[This note is archived from 17 February 2009]

S&A, liberal immigration, and not relying on 2nd hand information.

When researching the very crucial issue, about the conditions for strawberry workers employed by S&A, in the Independent; I came across this article, which bore a curious claim that made conditions for the Migrant workers more difficult than I had realised, one which I had not expected:

A camp in Marden, seven miles south of Leominster, houses 1,400 workers, most of whom are Romanians and Bulgarians who, unlike other eastern Europeans, have limited working rights in the UK and cannot change jobs.

This surprised me because I had learnt, or thought I had learnt, in an interesting panel debate about a year ago in which an anonymous gentleman from the Conservative party was chairing, that Britain had one of the most liberal European immigration systems, other member states of the EU having chosen to temporarily opt-out of free movement scheme for new Member states under the Treaty of Accession 2003 and the Treaty of Accession 2005. This was due to an exchange concerning the immigration system of Britain, in which I chose to dispute the idea that we had an unusually liberal approach. I pointed out to my friend that the bulk of liberal immigration was in fact an EU-wide policy, and that outside of it our immigration system was not known for being particularly liberal; to which I got the above response.

Intrigued at the re-opening of what I thought was a closed case (tactical victory on the part of my friend), I decided to do a little research into the subject, and break with the habit of a lifetime and by not relying solely on information generously shared by my peers.

Interestingly, the picture I have gained has been curiously different from that nobly supplied by this friend, whose authority is now in doubt.

According to the chart helpfully supplied by Wikipedia, the United Kingdom in fact not merely does opt-out of the free movement clause for some of the newly accessed member states of the EU, but in fact many of the other countries in the EU do not.

By opting out of the requirements of free movement of workers for both Bulgaria and Romania until at least 2012, Britain is outranked on the “liberal immigration policy” front by:

  • Portugal
  • Spain
  • Italy (which opts out for the same countries, but only until 2010)
  • Greece
  • Denmark
  • Finland
  • Sweden

— and this is excluding the newly accessed countries in the EU – all the countries that I have compared with entered the EU in 1994 at the latest.

Contrary to the popular belief that the French always opt-out of any mildly controversial EU requirements, they are in fact equally liberal to Britain on the free movement of workers policy, opting out only for Bulgaria and Romania until 2012. Other countries on an equal footing to Britain on this front are Belgium, The Netherlands, Luxembourg (one of the sites of the EU Parliament!) and Ireland.

Countries with less liberal immigration systems to the United Kingdom within the European Union are, actually, in the minority. These include Germany and Austria. Hang on, it’s only Germany and Austria. Oh well, so much for our leading the board on anything. If we can’t lead on liberal immigration, what can we achieve?

Light-hearted rivalry aside, I continue to urge anyone who finds the issue of conditions for workers in Brierly and Marden energising to get involved in some way, particularly as the inability to look elsewhere for work minimises the choices for workers who have found themselves with far less work then they expected. The Friendship Centre in Leominster is one of the leading bodies in scrutinising S&A Davies, and Herefordshire councillor Peter McCaull is also involved with highlighting the issues.