Sunday, September 20, 2015

Another Health Insurance Market Failure

I remember during the conversations during Obamacare's construction, one of the more obscure issues was how insurance companies don't have clients for that long, so insurance companies do a poor job of encouraging long-term health (I couldn't find the statistic, but I believe the average person has the same company for somewhere in the area of three or four years).

This seemed to be a reasonable criticism of America's state of health affairs, and I could argue it in the abstract. After all, approaches that achieve long-term health benefits are investments that save money in healthcare coverage down the road, but if the insurance company isn't likely to reap the benefits, why should it make the investment? This is obviously a market failure, because the market could operate more efficiently, but providers (justifiably) are acting in their self-interest (in this sense, public health is arguably a tragedy of the commons our system has manufactured). However, I never had an explanation of how this works in practice.

I've now encountered my example, and it's frustrating experiencing how it works. I recently completed the final physical therapy session my insurance company will allow me to partake in, although my ankle has never fully healed. There's a decent chance that with another month of work I'll be much better off, but my policy doesn't allow for it. The hell of it is, spending some extra money now should pay off in the long-term, as the current state of my ankle leaves me in line for arthritis and other issues down the road.

No one refutes this. My physical therapist is the expert saying it will happen, on a logical level I agree with him based on my limited understanding of how joints work, and the insurance company likely understands. But I'm unlikely, statistically, to be with Blue Cross of New York in 20 years when my ankle becomes a real problem, so there's no rational reason to invest in therapy now. It will be someone else's responsibility at that point. Even if future surgery is way more costly than extra PT sessions this year, someone else will foot the bill.

I get the contra - if my insurance company allowed me unlimited visits, my physical therapist would be inclined to continue scheduling sessions even after they were no long necessary in order to make more money. Some providers would resist this temptation, some would be bad actors, and some would schedule unnecessary visits merely for the sake of erring on the side of caution. So even in a  system that pays for preventative care, there would still be concerns. Answers may be difficult to definitively determine, but our system is undeniably prejudiced against long-term economic decision-making.

Saturday, September 12, 2015

That Time The New Yorker Incensed Me Into Writing the Editor

While I find John Cassidy’s concerns on the evolving  (devolving?) value of higher education largely on point (“College Calculus,” September 7), I question what appear to be potshots aimed at Kansas State University (full disclosure: not an alumnus, but I am native to the State and support the school’s research and extension mission). Cassidy is concerned that colleges are enticing students with specialized degrees that may sound exciting and even offer short-term reward, but fail to provide lifetime value. He then holds up Kansas State’s major in Bakery Science and minor in Unmanned Aircraft Systems as examples. While understanding of drone technology holds obvious value as the robotics become more ubiquitous in society (a fact the article fails to acknowledge), Cassidy condescendingly suggests that the purpose of the Bakery Science major is to “run a bakery.” Were this the purpose of the degree, it would well buttress his argument that students are increasingly taking on student loans to obtain unnecessary degrees. Unfortunately for Cassidy, it’s not. K-State’s Grain Science program has been in operation for over fifty years, suggesting it is far from a fly-by-night scheme to bring in additional tuition dollars. The program enjoys 100 percent placement (a statistic Cassidy may find dubious), and graduates earn the highest starting salary of all College of Agriculture graduates (a more difficult fact to quibble over - K-State’s College of Agriculture is consistently ranked among the top ten in the nation, signaling a semblance of worth in the degree.).

The irony is that the bakery program appears to be imbuing students with specific skills that make them more marketable in the workplace. Graduates are trained to work for Kellog’s, Nestle, and King Arthur Flour – not the local donut shop. As genetic science continues modifying the protein composition and nutritional nuances of grains, this training will only increase in value. We now want sweet foods without the sugar content and savory foods without the cholesterol – who do you think develops these products?

This article is dog-whistling at its finest. Cassidy fears that college degrees may only be used for signaling, thereby failing to provide specific training that makes a graduate worth more. He then purposefully singles out a program that provides specific training that makes students more knowledgeable and marketable, but condescendingly suggests these students are only good for running local bakeries. There are undoubtedly examples of narrowly focused degrees with inherent risk that can be mocked. I like to think an Oxford/Columbia/NYU-educated journalist didn’t simply single out a funny-sounding degree from a seemingly Podunk institution in Kansas and decide this was the perfect example without actually doing any research into the program, because that would be really lazy. I like to think this wasn’t a play to an overly educated East Coast audience readily willing to join the mockery of a public school in Kansas, because that would also be really lazy. Unfortunately, the author appears willing to do exactly that. I’m personally familiar with better examples on the East Coast, but we must apparently consider where our readership lies – in the ivory towers of the original colonies, and not the plains of the Midwest.

What's unfortunate is, I otherwise completely agreed with the article.