On not thinking very hard about anything in particular…

The last post was when? April?

Actually, it is bad because we do have the parliamentary general election coming up; there has just been (well, a couple months back) a by-election resulting from the departure of Pansy Wong; there has been the reasons for her “retirement” as the local MP; there has been the consequential vacancy and by-election for the Council; and there has been a total non-event called “The Budget”. It is not as if “nothing” was happening!

The by-election? Well that went by default almost. There was no contest in truth; Nat begat Nat in the form of one Jami-Lee Ross. He has been a local Councillor since he was allowed to stand, and he is a reasonably non-obnoxious person. Is he likely to go anywhere politically? I can’t say that he has neither nga raho nor personality, but neither does he stand out as a future powerbroker. The size of his win was expected, simply on the grounds of the nature of the Botany electorate. The selection process prior to the by-election was very carefully managed so that the final selection (for the Party) was between Ross and a television gardening personality (who has fortunately been selected for the Blubberman’s electorate over on the Shore). That he is a politician is as much an accident of history as much as his qualification for the post. He has no specialty that he brings to the job other than having been Manukau’s youngest-ever Councillor.

More significant – in terms of the Nat’s selection process – was the fact that the final three or four did not include any Chinese, Korean, or South African. A fact that is remarkable only in terms of the nature of the local population.

Did I vote for him? Probli, seeing that I can not remember who I did vote for.

Where is all of this going?

Well, it really starts with a questionnaire that came through the mail, originating from JLR’s mailing list (that started two Council elections back when I was unwise enough to send him some suggestions for what he could do as Councillor). On second thoughts it may have been Pansy’s mailing list because I was unwise enough to communicate some thoughts on the nature of the real world to her as well. Nothing spectacularly original about the survey – no more than the standard Nat thing with “Botany” printed in the spaces where government forms traditionally have options available. SWMBO got a bit het because it was addressed to me personally, but then it was me that stuck my nose in the nats nest to begin with. I was very magnanimous and consulted her for responses to all of the questions ( :D ) and we negotiated our way through those. The questions I ”enjoyed” the most were to select which of the Nat’s actions on “law and order” I thought were “good things to have done”. The one’s I ticked were (from memory) “Initiatives on P” and “Increased police numbers” – that one even I can remember originated with the Labour lot rather than the Nats, but there is little harm in lily-gilding. The rest – things like penalising boy-racers, restricting gang access to public buildings, increased sentences…- all got the word “Joke” written alongside because that is what they are.

In fact, after two and a half years – almost exactly – that is just how this current government appears. Led by a Jonkey who established the highlight of his first term as PM playing the stand-up comic on David Letterman; abetted by a farmer acting the part of a Finance Minister whose financial management is just like farming - you plant it in the ground and spread as much fertilizer on it as you can afford and being a dairy farmer he has lots of the right kind free; a Police Minister who takes enormous risks in legislating for the destruction of boy-racer cars and preventing gang patches being worn in public buildings; a Justice Minister who is looking to prepare a White Paper that will propose the abolition of the Civil Division of the Justice system on the grounds that no one can afford to use it and because the Small Claims Tribunal is far more effective but who at the same time is totally against any admission that lowering the drinking age to 18 was a horrendous mistake; so the list goes on…

Our present parliament (I initially wrote “government”) is a joke. They are completely devoid of idea. There is already a very strong ordure of the past; the old ideologies of “selling state assets to reduce the deficit” have already been pronounced as the foundation of the Nat election campaign – by none other than the Jonkey and FarmerBill together. This from a government that is overseeing the borrowing of $500 plus million a week, to cover deficit funding requirements of less than $400 million and that latter number includes debt refinancing. The failed dogma of governments past are being heard; of Bolger, Shipley, even Muldoon’s ghost is clattering his chains in the basement of the Beehive. Even sadder, there is not much of a difference between them and The Rest. They are all of a muchness other than the colour of the flag they wave. The far right is being now run by an ex-Nat Leader who failed. The far left has become the plaything of a radical Maori who will be the next Peter Dunny (less the coif, of course!) if he can persuade the whanau to support him rather than the elder put up as his hopeful opponent in the by-election next week. The Jonkey and the Gofferguy play their own Tweedle-Deear and Tweedle-Dumb parts, alternating almost by the hour. The Grass gets Greener by the day, specially now that Tandos has gone. And Dear Old Uncle Jimmy; what would we be doing without him? Auntie Tari steams impressively into future irrelevance while Pita always looks as though any kapahaka group, anywhere, would provide far greater pleasure.

And this is the bunch from which we - the electorate - have to choose our government in about 5 months’ time. From the TV Gardening Guru to Tweedle-Dumb (the political equivalents of Vale and Valea) to the QuizMaster himself who misses not a chance to tick off a vagrant MP who dares enter the House without his permission to wear “inappropriate attire”.

What are the chances that there will be some sensible debate – like how to rescue those who have borrowed far beyond their means and do not qualify for the tax cut lifeline. With all the heat and bebotherment about PIGs and international financial crises NZ seems to stand unique. As far as I can determine, the “National Deficit” (other than the one described above) is something like 20% government borrowing and 80% borrowing for those myriad personal essentials like house, investment property, new second-hand Japanese people mover, and mobile phone. Steenkamp (of RBNZ) tells us -

Gross foreign debt to GDP peaked at over 130 percent in 2008... Banks are responsible for more than 60 percent of total gross foreign debt, which is equivalent to around 80 percent of GDP. General Government debt is a comparatively small portion of external debt. Since bottoming at the end
of 2006 at 8.9 percent of GDP, gross public debt increased to about 13 percent by the first quarter of 2010. On a net basis, public external debt stands at 6.7 percent of GDP and overseas bank debt is 64 percent of GDP.

That being the case, I (for one) can not help but get the very strong and uncomfortable feeling that the past three years of ennui and minimal activity has in fact been a season of planting. The hoped-for fruits are the public fears that the Nats will use in their election campaign; the need to sell public assets to reduce debt; the size of the public deficit and the need to curtail services; our total capitulation to US trade demands because of our future economic dependence on a FTA with them; the “need” to change employment laws yet again has already been announced. The list can go a lot further than that.

The most interesting thing for me, by far, is the plebiscite that will be held on the present electoral system. The original legislation was put in place with a sunset review clause and it may well be that we have run three years past that review. Regulars here will know that I am a strong and fervent supporter of MMP with the only reservation being that the number of list members could be reduced from 100 to 50. Yes, I know and understand that might complicate the mathematics just a little for the bureaucrats; they are after all accustomed to counting and addition rather than multiplication and division.

Education 101...

Karl Du Fresne raised the topic of “education vouchers” in the course of presenting his views on the current state of wage negotiations between teachers and the state. That started an interesting (for me at least) debate with another of his readers and it is in the spirit of that debate that I wish to present my thinking on these matters educational.

The first point that I need to make is (and I am as guilty of this as the next) is that by taking any of the elements of education in isolation the debate immediately becomes very simplistic and ignores the inter-relationship between the various factors – and factions.

Second, I also need to clarify my “position” on the subject. Both my parents were teachers, in rural service, in the 1950’s through 70’s. My secondary education was at Taipa DHS and Kaitaia College. I am a “retired” accountant with (obviously) tertiary qualifications. So given that background I do tend to focus on the difficulties of education in rural and low socio-economic communities. I have two (now adult) children, one of whom is university qualified and the other not. (As a matter of interest, the latter earns more than the former). I am also fortunate to have two very good friends, now retired, who taught and were Department Heads at one of Auckland’s larger “low –decile” colleges. A good part of the more recent “experience” is based upon their experience as well as my own as a parent guiding my two children through their secondary and tertiary education.

Third, I am going to try very hard to not appear to advocate for any particular group. So, if I point to salary as one of the major hurdles in obtaining suitably qualified teachers I am stating that as a “fact” rather than to support teachers in their current negotiations. As it happens this is a consequence rather than problem – it is the result of the comparative riches available to NZers in other countries; be they teachers, doctors or accountants. No amount of control or payment is going to resolve exodus resulting from the far greater buying power of Australia, US, Canada, Japan, China and the European countries where NZ teachers and graduates generally are held in very high regard.

Karl du Fresne, after a seven paragraph opening rant on the history of government versus labour unions finally got to the nitty with this opening –

All of which brings us to the two teachers’ unions, the NZEI and the PPTA, both of which just happen to be locked in disputes with the government right now: the NZEI over national standards and the PPTA over salary and conditions claims.

There is something depressingly familiar about all this. As the power of the old blue-collar unions has faded, so the militancy of the teacher unions has increased. It has become almost a cliché to describe them as the boilermakers and freezing workers of the new millennium. In fact I see from my files that as long ago as 1995, I wrote an editorial about the PPTA headlined Militants of the nineties.

In that Evening Post editorial I wrote: “As employees of the system, teachers have every right to be consulted on changes. They are entitled within reason to oppose moves which they believe are not in the best interests of pupils, and when all else fails they have the same legal right as any other group of employees to take industrial action. But they misuse their strength – and test the country’s patience – when they consistently use their organisational muscle to frustrate, defy and stonewall the legitimate policies of an elected government.”

I also wrote that teachers had misled themselves into believing that they were the sole guardians and arbiters of all that was correct in education. “They have deluded themselves into thinking, in effect, that they have proprietorial rights over the education system when in fact they are merely its servants.”

After further, and comparatively unproductive, ranting along those lines he gets to this -

And if previous government-union showdowns are any guide, a resounding defeat for the PPTA would leave the union weakened and demoralised, clearing the decks for a slew of potentially beneficial education reforms that have previously been put in the too-hard basket for fear of teacher resistance.

A few that come to mind are education vouchers, which would enable parents to “buy” their children’s education at the school of their choice; performance-based pay, which would reward and incentivise good teachers and strip away the protection enjoyed by non-performers; bulk funding, which would shift power from the central bureaucracy to school boards; and an end to the perverse Labour-imposed system of zoning, which locks the poor into mediocre schools and creates exclusive zones of privilege (as reflected in stratospheric real estate prices) around sought-after ones.

None of these proposals are radical. They seem that way only because the teacher unions have opposed them so vehemently, knowing that the national union structure – the source of their power and control – would probably start to unravel if they were adopted.

For some quite puzzling reason he then spends the last two paras negating the whole of his prior argument -

Good, hard-working teachers deserve far more honour and recognition than they get under the present structure, which supports and protects poor performers under the guise of “collegiality”.

Is it an anti-union rant, then? No. I believe strongly in unions and have held office in one myself. What I object to is the abuse of union power. The teacher unions exert far more control over the education system than is healthy or democratic. They do it only because they have been able to bully successive governments into letting them. But the time has come for the education of our children (and grandchildren, in my case) to be liberated from their grasp.

The first sentence under that last c&p is in many respects the crux. The first sentiment I agree with 100%. That is the truth.

What follows, once again, is the consequence of over-simplification –

…which supports and protects poor performers under the guise of “collegiality”.

The pity is that it is also one of the first fundamentals in the debate.

I want to close this first part by taking a wider view of education. It is not, as Karl states, that teacher unions have taken control of the education system, or that they might even want to do this. It is not, as I have seen recently opined in the press, that teachers are engaged in a covert action to instil socialism into the sub-conscious of their students.

There is another factor which has to be explored and overcome. It centres on the relationship between the education system and the community. It is the fundamental behind the what, by whom, and why of education. It has nothing whatsoever to do with labour union power, who runs the education system, the involvement of government, or whether education vouchers will solve the perceived difficulties of “education”.

For education to succeed, we (our society) all need to be very clear on all of the following.

• The definition of “education”.


• The objectives education is required to attain.


• The distribution of education as a public good.

Back in the good old days – Neolithic or thereabouts – education was very simple. You either learned how to get and provide food and shelter or you perished. Simple and elegant.

More recently, education as we think of it was limited to the privileged few; nobility and religieuse. Outside of these groups education would have perhaps come from craft apprenticeship or direct learning; most often provided by parents and wider family.

The modern world has removed all barriers to education; there are no longer the class and craft divisions; there is an almost infinite increase in the complexity and depth of the knowledge required to “survive”.

The removal of those barriers has created challenges which are still not resolved; they are not unique to NZ; they are the foundation of this debate; they are the “who gets what, why, and how much” of education in this modern world.

On the state of health - 1

There was an interesting comment over at TF's place stating (and I can't for the moment think of a reasonable response to it) that the Federal government "has no place in providing health services". As should be well known to readers here, that is certainly not the case in NZ. Mind you, the commenter did continue to say that it was a State responsibility, and that perhaps is the reason why I am at a bit of a loss about it.

There is one very direct parallel between NZ and the US though, and it centres on the role of the private system and medical insurance providers.

To that end there was a very interesting and somewhat blood-chilling little article in SST this week...

RISING HEALTHCARE costs have reached crisis point, pushing families to give up their health insurance and fall back onto the straining state system, says Ian McPherson, chief executive of Southern Cross Medical Care Society.

The not-for-profit insurer saw claims rise by $61 million in the year to June and McPherson said factors behind the claims blowout included the amount private surgeons earned and costly new medical technologies with little or no proven clinical benefit.

For the time being, my salary package includes medical insurance through Southern Cross at a cost of something like $35 per week. That looks like increasing by a bit in the near future.

"How much will people be able to continue to pay and not object?" McPherson asked.

"We have seen a significant downgrading from policies that are far more general to policies covering the extreme emergencies. It is difficult for people to downgrade any more. There is a significant number sitting on the bottom rung and about to jump off into the public system again."

Exactly.

Rising costs for Southern Cross could also feed the already rapid rise in the state's healthcare bill. Consultant Paul Winton, author of a report in August – Health, New Zealand's untreated addiction – said current trends suggested healthcare costs could grow from 20% of core government spending to 40% in 15 years.

McPherson said Southern Cross had begun engaging with GPs on the premium-affordability crisis, and the subtext is clear – the insurer wants to see GPs direct patients away from the more expensive private surgeons.

"We are not going to tell GPs who to refer their patients to," McPherson said, but "we would like GPs to be mindful about the cost rather than referring out of habit. Giving them an incentive to help manage our budgets is something we are exploring with them now."

Southern Cross has been developing a network of affiliated providers, but McPherson said as yet it would be a step too far to require their use in the same way a car insurer would require a claimant to go to an approved panelbeater.

Now there is little wrong with the Southern Cross response to the problem so far as I am concerned.

The truth of the matter is though that McPherson's prognosis in the opening paras is only too true. Even given the present premium levels there is little chance that I will be able to afford the present cover into my retirement. There is no question that I will become increasingly reliant upon the public health service. Not that I have any problem with that, as it has certainly been "good value" for me.

McPherson said there were instances where it appeared that profit motive and not clinical outcomes were driving that price upwards.

He cited the example of robot-assisted prostatectomy surgery which costs $30,000 compared to the $15,000-$20,000 of conventional surgery, without evidence of faster recovery or better clinical outcomes.

Southern Cross's reaction in this case was to pay only a "contribution" to the cost of the robot-assisted surgery.

Why were surgeons using it? "Because it is fun. Because it is interesting. Because you can get a margin on your investment."

Hmmm, sounds a bit like "boys toys" no?

Let's set the parameters here.

First, medicine is about curing diseases, mending injuries, and providing palliative care for the dying.

Second, it is a very highly skilled and for most a stressful occupation. (I am basing that on the comments made to me by the three medical doctors in the club I belong to). People who fit those parameters in any field deserve to earn more than those of us who cruise below the radar doing little more than subsist. There is also, as any capitalist will tell you, the need and justification for recovering a return on capital invested; let's face it, I will tell you that as an accountant.

Terry Moore, president of the Private Surgical Hospitals Association, said: "We are conscious of the increases in costs which ultimately, if left unchecked will mean fewer people will be able to afford to go private themselves."

Moore said uncontestable clinical proof of new technologies could take years to emerge, but acknowledged they were stoking cost escalation along with wages and surgeons' fees.

McPherson also hit out at fees in his annual report to members last month. "We hear the argument that [surgeons] are part of a globalised workforce; we point out that if their prices increase to reflect overseas rates, fewer New Zealanders will be able to afford private surgical services."

Boscawen [right wing MP] is of similar mind, arguing that the globalised workforce is more of a westernised workforce, because the wages earned by quality doctors from India, for example, where cataract surgery is cheap, are having no effect on the fees charged by private surgeons here.

Moore countered: "Surgeons are generally independent practitioners and contractors so they pretty much set their own fees in a competitive market, but I don't think the fees have gone up much more than the medical inflation rate. They have become more efficient so they are probably earning more, but probably working harder for it and doing more procedures."

He said rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one.

All true, well I have difficulty disagreeing with most of it so it must be. No confirmation bias here!

But there are some interesting contradictions. For example, the hospitals (Moore, above) are trying to argue that "economies of scale" ideas do not apply; "rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one." I would have thought that (as my wife found out when she had cataracts removed from one eye) being able to "mass produce/production line" operations would lead to some savings. If it costs the insurer $4M to provide 1100 cataract operations then does increasing the number by 20% mean a 50% increase in cost? It does if "industry" is currently running at or above capacity.

There is a secondary impact too, coming out of the combination of developing technology (and that is everything including drugs and personal skills) together with societal expectations. The best indicator I can give for this effect I wrote on some while back (2006?? Sheesh!) is the example of herceptin - a treatment drug for a specific kind of breast cancer. That example ended up as a $3 million programme to treat roughly 20 women per year or about $150,000 each.

No one can blame those women for wanting (or deserving) the best possible treatment, and outcome. Exactly the same justification existed in the 1970's when open heart surgery was being developed by the likes of Barratt-Boyes and the other researchers in US, Europe and South Africa. Today, that surgery is routine. Auckland Hospital does two or three operations per day at a cost each of (I was told) about $75,000.

[To be continued...]

State of Health - 2

Returning to Southern Cross, the pressures of increasing demand for new treatments and higher technology solutions are having impact. It is leading to the prospect of large increases in premiums. In many cases the premiums are already too high to be affordable - note SC's own comments on people not renewing, or down-grading, current cover.

Further, these impacts are being felt in the public health system as well. The herceptin debacle was eventually funded (in the first year) out of Auntie Helen's Charity Fund (otherwise known as "The Prime Minister's Discretionary Fund") but I do not doubt that it is now an established part of Vote Health.

If we look behind the political rhetoric and wailing and gnashing of teeth there is a very fundamental problem with the provision of health services. Essentially, no one wants to die. I can't blame people for feeling that way. After all, we have the ability today to ensure the survival of some 1% of all live births who when I was born would have been "sad but inevitable consequences" of premature birth. I would be one of the last to try and suggest that we should turn our backs on that ability. We have the ability to turn around the lives and health of reprobates like the ol' probligo with what is now a relatively routine opration, complex but routine. On pure observation, there must be some 1,000 people a year whose lives are improved immeasurably if not saved as a result. Those having pacemakers fitted come into a further 1000 a year. That is just one hospital.

The problem of the cost is one that has actually been with us for a lot longer than we might want to admit. It is not limited to NZ either.

If I return to the commenter whose thoughts started all of this off, I wish him and TF and everyone fighting the good cause against Obama the very best of luck. Why? Because the choice is very simple.

Generally, private insurance and health providers are by their very nature required to make a return on their investment if not an additional return for those whose money made the investments in the first place. The argument in favour of public provision is based (in theory) on universal cover and no profit.

Irrespective of how you add those two quite different proposals there are common impacts upon how much has to be paid for them. I have covered those already.

The truth is that there is a limit between cost, availability, technology and outcome; a "mathematical" limit as well as economic and "social".

The ultimate and universal outcome for all is death. The "social" end of the limit wants that outcome minimised as far as possible and delayed for as long as possible given that it is a certainty for all (at least at present). There is much that can be argued about the causes and nature of a person's death. I do not think that this is the place for that debate other than to suggest that its inevitability has to be recognised.

The ultimate technology would have to be (effectively) eternal life. There was comment made last night on tv that in the Middle Ages the average life span was 30 years. A man of 40 would be considered elderly. A man of 60 years almost unheard of. Needless to say, aging diseases such as cancer, alzheimers, coronary heart disease were unheard of and unrecognised. In the 1800's in Europe and America, the average lifespan might have increased to 55. In the past 15 years the average lifespan for men in NZ has increased from 71 to 82; the life expectancy of a newborn is something like 62, but once past the age of 15 it increases to 85. It is expected that the number of people reaching 100 years in 60 years time will be double that of the present day. In very large part that increase in life expectancy is the result of improving technology.

The ultimate in availability is universal. It is here that most of the heat and darkness arises. "Why should I pay..." is fundamental to both sides; with the sentence ending "...for anyone else" on one side and "...more than the true cost" on the other leading to "...more than I can afford" again on the other side of the lake. What must be decided by society, not by the medical profession or the government, is who should be able to access medical services. The "rich" will always be able to afford to buy; "rich" because that is a matter of perspective as much as it is of fact (compared to half of NZ I am a "rich" man yet as I said at the beginning paying for personal medical insurance is almost out of reach).

The decision on public health services needs to come back to the fundamentals I began with - curing diseases, mending injuries, and providing palliative care for the dying.

The debate must centre on the immediate cost of treatment against the benefit to society of the likely outcome. Is that a simple judgement? Not in my book! What is certain is that it is a necessary debate. Nor can the availability of health services be limited to those with the ability to pay. There has to be a universality in health services. The scope of that universality has to be unlimited. That means that the universal care will necessarily provide services which are below the available technology and ability.

Not an attractive thought.

The Big Bill

Yesterday was Budget Day; one of the annual highlights of the Parliamentary Year.

I had been working up all manner of epithets, mots bon, and suitably cynical ripostes for my response to The English Willie's first budget of this new centre-right government.

However, I have to confess to some pleasant surprise!!

I had anticipated much of what was in the Budget, but suspected (as any good cynic should) that the bad news being broadcast was a smoke and mirror concealment for far worse; whether a massive overspend on "anti-recession" programmes, or a slash and burn on government services a la the Mother Richardson of all Budgets from the early '90s would be equally disastrous.

No, I confess to pleasant surprise.

The English Willie has taken an amazingly pragmatic stance. No dramatic tax cuts, no borrowing money to make saving for the future.

The Big Bill is for the future - an estimated $20billion shortfall in the Cullen Fund in 10 years time, an estimated 10 years before the short term borrowings already in place are repaid in full.

But, it could have been a whole lot worse. That is for sure, a huge amount worse.

Random quote...

No, sorry, hat tip to Jack Grant over at Random Fate -

Compassion is not weakness, and concern for the unfortunate is not socialism.
- Hubert Humphrey

To which I will add -

In April 1938 [Michael Joseph] Savage outlined the government's social security proposals... he started to use the term 'applied Christianity' to describe the government's scheme...