Monday, February 22, 2010

Incentives, Incentives, Incentives

Our loyal readers may have noticed a recent increase in the amount of posting to the blog. The reason is simple; our wise conservative leadership has put an incentive program in place for posting. Nothing big, but now I have a real reason to post.

The heathcare industry suffers from the same ailment as the lackluster blog of last semester – no incentives to do good. In fact, the system incentivizes bad behavior. If you insurance covers something that isn’t worth the cost but may benefit you, it is in your interest to go for the extra test (or whatever) because you don’t pay the cost. To be fair, this is a problem with the mechanisms of insurance.

The troubling part is how few politicians grasp this idea of incentivizing good behavior.

Health savings accounts are tremendous cost savers. They combine catastrophic insurance with a savings account which is funded by pre-tax earnings and can only be used to healthcare. Users of these accounts suddenly care whether or not they receive the generic or expensive drug. People care about keeping their costs low. There is an incentive to not spend more money than one needs to on health (namely, you can put less money in your account next year).

Any government plan is the worst form of incentivizing possible. Say you ask for a $300,000 procedure on a government plan. With ~300 million people, that would only cost you one tenth of one cent because your cost is distributed across all taxpayers. Thankfully the public option seems to be off the table.

Private industries have a great incentive to run things efficiently (more earnings). Every person or corporation is just going to try to maximize their gain in the current system. Our high costs of healthcare, then, are not a problem with the insurers but a problem with the system they operate under.

The current system incentivizes employer based healthcare by allowing it to be purchases with pre-tax earnings. (Thankfully health savings accounts are a step in addressing this problem) This is an awful incentive because it means the unemployed become uninsured; it removes purchasing power from individuals; it removes choice of insurance from individuals, and lessens competition among plans.

There are further examples of bad incentives which need to be addressed (e.g. since hospitals can charge each insurer different prices for the same procedure, large providers have a monopoly on the industry because of the leverage they have negotiating with hospitals) but the moral of the story is we need to change the current incentives we have in place. And for a stunner of a conclusion, I have some hope that the current plans will do that (mostly because they will set up insurance exchanges and will not use a public option).

Let’s hope the republicans don’t forget about the good things in healthcare reform.

Rover Film Review: Shutter Island

Shutter Island

Directed By: Martin Scorsese (The Departed, Casino, Goodfellas)
Starring: Leonardo DiCaprio (The Departed, Blood Diamond)
Mark Ruffalo (Zodiac, Eternal Sunshine of the Spotless Mind)
Sir Ben Kingsley (Suspect Zero, Gandhi)

Rating:Rated R for disturbing violent content, language and some nudity.
Running Time: 138 minutes.

Rotten Tomatoes: 66%

Martin Scorsese returns cinema to an older time in the genre-crossing, well-acted, and superbly paced Shutter Island. Leonardo DiCaprio stars as Federal Marshal, Teddy Daniels, a man with a dark past sent to a maximum-security insane asylum to investigate the disappearance of dangerous patient. His acting has clearly reached a zenith - as he plays a strong Boston official one minute and a man besieged by his past the next.

Once on the island - a wonderfully depicted and shot hellhole - he joins forces with his new partner, Chuck (an equally good Mark Ruffalo) as they seek to uncover the truth, even as Dr. Cawley (Sir Ben Kingsley) alternatively helps and hinders their efforts. As they deal with the darkness of the human mind, the darkness of nature erupts stranding them in a hurricane on the island.

The film is not fast and yet extremely riveting. It shines a flashlight beam of light on the dark questions of insanity, crime and punishment, reality, and the problem of evil. Teddy is racing against time, against those on the island, and most importantly, himself, in seeking to uncover the truth of what is happening on Shutter Island. Scorsese does throw open the shutters for the audience as the film reaches its climax, exposing the truth, but leaving the philosophical questions to linger. As the last line of the film goes: "Is it better to live as a monster or die a good man?"

Scorsese refuses to reveal his answer, but moviegoers are left with a satisfying film which pays homage to the great films of the past. While neither too scary nor too dull, the film has one or two rough scenes and violence permeates the island (which is home of course to the criminally insane). The score lifts the audience up and carries along with the narrative setting the mood perfectly. All in all a superb film which should garner serious attention come next year's Academy Awards.