Opinionated @ CFE

Mike Lee, Please Read Sun Tzu

Oct
10

Sun Tzu probably had no idea that his treatise “The Art of War” would still be often cited and respected over 2500 years after his death. It’s a masterpiece of strategic thinking that applies to any conflict be it military, political, or even athletic. The United States armed forces have even gone so far as to require that the book be in each unit’s library. One of the most prescient quotes from the works is “victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” Mike Lee seems to have completely skipped this part when agitating for a government shutdown.

I get why he’s doing it. Federal programs, once enacted, are very difficult to undo no matter how unpopular they get. If you don’t believe it, remember that a “temporary” phone tax enacted for the Spanish-American War was repealed sometime during the Bush Administration. For them, this is the last stand before a program they legitimately believe to be horrible rolls forward.┬áThe House is following because elections matter. It’s no coincidence that in the two federal elections after the ACA passed, the opposition party took control of the House. They rode in on a promise to undo the ACA, and they’re determined to fulfill it. If they don’t fight hard enough for the base, they’ll get replaced.

The problem is that while a shutdown could have potentially been a Battle of Rorke’s Drift, it’s starting to look a lot more like The Alamo. Lee has to be smart enough to know that a shutdown was coming and when it would happen. Given those circumstances, you’d think he would have laid the groundwork for explaining the issues with the federal budgeting process, the unworkability of creating new entitlements beyond the reach of Congress (which now comprises a full 2/3 of federal spending), and why playing a game of chicken to see who blinks first would be the best way to force the hand of a dug-in Senate and President. Instead, absolutely no narrative or purpose to the shutdown was created and the first to market ideas are now the defining narrative. Lee can’t even properly capitalize on the ham-fisted way in which national parks are being closed down, a prime piece of low-hanging fruit.

The failure to figure out how to win before picking the fight never ends well. It has already distracted media attention away from the train wreck that is the ACA launch and numerous stories about huge premium increases, both things that would build popular support for 2014 and beyond to eliminate the ACA. About the only silver lining is that the two parties have pretty clearly defined who owns the ACA and its attendant problems. I wonder if Mike Lee will find a way to screw that up too.

Utah should decline Medicaid expansion

Jan
24

One of the hot-button issues to be discussed at the upcoming legislative session is whether or not to expand Medicaid as part of the Affordable Care Act. The Act provides 100% funding to begin with, then drops back to 90% (or possibly less) in future years. That big sack of money makes for a pretty tantalizing offer, but I don’t think it’s a good idea to take it. Here’s why.

The obvious problem is that most of the Medicaid expansion money is only available via federal borrowing. It’s pretty easy to rationalize that the money will be spent anyway, so we should get our share. It’s also easy to justify as being a relatively small amount of money compared to the current budget deficit. To be fair, I think this is probably one of the weaker arguments against the expansion, but I do think that, even as a largely symbolic gesture, it’s a good idea to put our money where our mouth is on federal spending.

A deeper problem (and, indeed, the core problem with the ACA) is that a Medicaid expansion is subsidizing an overpriced healthcare system rather than attempting to resolve the cost issues that make even routine procedures unaffordable. True, using a subsidy may alleviate the symptom for some, but there is no mechanism to try and curb costs. This is a long-term recipe for requiring more subsidies to maintain the same levels of care. This turns into a vicious downward spiral where both costs and subsidies for that cost continue to rise. The end result is that more people end up relying on Medicaid and the cycle continues.

Since the Medicaid expansion doesn’t appear to be serious about either controlling costs or providing flexibility in doing so, I see no reason why Utah should get involved with it. There are much better solutions out there, such as targeting hotspots, that can both curb Medicaid spending and provide a much higher level of care while driving down costs across the board. Let’s do something smarter than tossing a multi-billion dollar bandage on the problem.

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