Livinglies’s Weblog

Healthcare Madness: Stem Cell Furor

You must remember the simple American health care formula: if insurance covers it, it gets done. Insurance only covers it if the overall revenue and profit picture for big Pharma and insurance is maintained or enhanced.

The big LIE in the United States that we have all subscribed to until recently is that single payer systems would vastly increase our costs and decrease the quality and availability of health care producing long waits for appointments and treatments. 

The TRUTH is that of all the countries in the world, the United States pays more per citizen for health care and many, if not most, of its population is ineligible to receive it. Long waits for appointments and treatments under most HMOs exceed any waiting period in England, France and Canada. Check it out. 

In short, we are already paying for socialized medicine but we are not getting it — just like the education we pay for that is not delivered to our children and requires us to seek private school alternatives. 

And under Medicare Part D, the public has been frightened into taking a plan that drains more money from them than before — AND they can’t shop around for better prices. Worse yet, most people after going to the doctor under Medicare get billed for the part that Medicare didn’t pay. One can only wonder why AARP endorsed Part D. 

AND that secondary insurance they pay for every month somehow never seems to cover the shortfall, which is MORE expense (private tax) to the citizen providing a benefit that is 90% oriented to the sellers of insurance, the providers of drugs, and medical service providers. There again we are paying for socialized medicine, and not getting it. It is capitalist medicine disguised as socialized medicine. How about the real thing, since we are already paying for it?

The problem with ANY proposal that keeps the insurance companies in the mix is that while it makes it look like we are not going to a political extreme” (socialized medicine), we are going to pay for it anyway, and guarantee that prices will remain high, costs of providing healthy care will remain out of reach and will burden taxpayers with far more than they are paying right now. 

We are already paying double what we should be paying. All of the difference is going into the pockets of large corporations controlling our government policies. It is not politically feasible for any candidate to come right out and say we should convert to a National Healthcare System because too many people have blindly accepted the disinformation disseminated by drug companies, insurance companies and medical associations. So until we educate ourselves we are stuck with this ridiculous system.

EDITOR’S COMMENT: STEM CELL IS A HOT TOPIC. I knew that when I wrote the piece.

The comment from “watchdogonscience” contains inaccurate facts resulting from disinformation from the pharmaceutical companies and from lobbyists working for medical service providers. Cell treatment isn’t the end of disease or dying, but it is the largest advance in medical care we have achieved in human history. 

Only some of the bone marrow transplant has worked and none of it has worked for lung disorders. It also is quite troublesome on the issue of rejection when the marrow comes from another human being. It is not yet “quite successful” because of a variety of absurd and sometimes dangerous side effects (cancer etc). 

Embryonic stem cell research, still in its infancy is far more promising under the latest advances. It avoids the pitfalls and pain and risks of bone marrow extraction, and allows true differentiation into specific organs which in many countries has resulted in the regeneration of organ function and sometimes the organ itself. 

The comment about the drug companies wanting stem cell therapy is wrong. Drug companies want any therapy that requires purchases from them on a regular basis at prices controlled by the seller in protocols that are written by the sellers themselves and which medical providers blindly follow. 

This is why almost every recent medication requires a constant regimen for life rather than a defined course of treatment over a specified period of time. The oath to “first do no harm” is completely ignored by the drug companies because it doesn’t apply to them. And doctors, afraid of liability, must stay with “conventional protocols, which as it turns out were written by the drug companies. It is a perverse cycle. Thus they want gene therapy but not stem cells. 

Stem cell therapy and other forms of cell therapy from animals threatens drug revenue far more than any regulation or other external event. By getting Bush to veto stem cells in this country the drug companies shot themselves in the foot. The protocol is now developed in the UK, China, Venezuela, Costa Rica, Mexico and several other countries. 

The price structure has been developed without any input from the major drug companies. Hence a person receiving a successful stem cell treatment and eliminating, for example, diabetes from their current health condition is likely to avoid more than $200,000 in health care costs mostly including medications from pharmaceutical companies. The cost of stem cell therapy varies from $15,000 to about $45,000 and the cells themselves cost only around $7,000. 

It is not hard to see why the pharmaceutical companies are putting out disinformation about stem cells and stoking the religious fires to maintain opposition. 

Stem cell therapy, far from “making the pharmaceutical companies richer” threatens their legislative and market dominance. And insurance companies and government health care programs, faced with decreasing health care costs, will be under pressure to reduce premiums. Thus revenues of insurance companies are threatened as well. And fewer visits to doctors’ offices, urgent care and hospitals does the same.  

You must remember the simple American health care formula: if insurance covers it, it gets done. Insurance only covers it if the overall revenue and profit picture for big Pharma and insurance is maintained or enhanced. 

The TRUTH is that the United States pays more per citizen for health care and many, if not most, of the population is ineligible to receive it. Long waits for appointments and treatments under most HMOs exceed any waiting period in England, France and Canada. Check it out. In short, we are already paying for socialized medicine but we are not getting it — just like the education we pay for that is done delivered to our children and requires us to seek private school alternatives.

That’s Trillion with a “T”

• Most people agree that we can’t correct the problems that are still unfolding unless we admit the severity of the problem. The current estimates of a maximum of $450 billion damage are absolute lies designed to give reassurance to people who could and probably should cut and run. As long as we deny what is really happening, the real solutions will not emerge. The current group of proposals can be be all logged in under one word : patchwork. 
• The real solution is comprehensive political action together with regulatory reform that goes in an entirely different direction than allowing money to be controlled more by political force of individuals in power with their own private agendas.
• Here is a one page summary of the measurements of the actual damages caused by the sub-prime mortgage crisis, coupled with the effect of the sub-prime mortgage crisis on all mortgages and housing, coupled with the effect on inflation and private losses rippling out from the collapse of liquidity, credit, jobs, and social services. Some fo this information was taken from the BBC News Website.
• Mortgage Meltdown: The real measurements and statistics 

You can argue all you want on paper with equations and philosophical arguments, but a simple human fact remains true — if people do not feel any moral sense of accountability they will not act in accordance with a reasonable standard of good character. Without character the entire society, and of course the economy, goes down the crapper. The U.S. Treasury plan is not merely “more of the same” it seeks to institutionalize all that is bad and wrong with our society and our economy. Some immediate thoughts about the reports on the new plan to be unveiled on Monday by Secretary Paulson:

• There is being nothing being reported that indicates the plan seeks to help out anyone now: soften the meltdown, slow the foreclosures, stop the evictions, restore confidence in the financial markets, restore consumer confidence, restore balance sheets, increase liquidity without enlarging the money supply, reverse the slide of the dollar, or reverse the rising tide of inflation. It is all about future bubbles and busts which may or may not look like the one we have, the one before (.com bubble), or the one that is in process (foreign exchange and commodities).
• There is nothing being reported that indicates the plan seeks to increase transparency for the public so that they are well-informed and educated about “new” financial products whose design is to create confusion through complexity and profit through back-doors that undermine the American Citizen, U.S. Economy, and U.S. foreign policy.
• There is nothing being reported that indicates the plan seeks to enhance the fundamentals of our economic system, which is currently based upon profligate consumer spending, pressures to increase consumer debt, and steering citizens away from savings. It is interesting that the very same people who “ideologically” plead for less government and more personal responsibility are lining up behind a plan that institutionalizes to an even greater extent all the economic forces that prohibit or inhibit the ability to provide fro their own security and prosperity.
• There is nothing being reported that the plan is willing to even address the current disparity of wealth, the current trend toward a deepening divide between a few people who have wealth and the rest who don’t. It is interesting that the very same people who plead for a free market economy line up behind a plan that would allow precedent to stand on socializing losses and expenses for big business, thus undermining entrepreneurship and innovation (the hall mark of all prior economic progress in the United States). 
• While these people tell us that windfall profits are part of the game that will even out in the end, they give us plans that prevent leveling the playing field by covering losses with access to tax dollars, covering expenses by shifting the risk onto public programs, and covering deception by legalizing slight of hand reporting in which both the methods of business and the financial results are completely misstated (that would be “lying”) or even reversed converting actual losses to the company and damage to the society into reported profits, higher per share earnings, higher price earnings ratios, higher stock prices, and “benefits” of bringing new products and services to the downtrodden members of our society (like tricking them into signing papers to “buy” a house) enabling the lender to sell the paper at a profit without regard to the quality of the paper, thus tricking investors, undermining pensions, social services etc.)
• What is being reported is more centralization of highly complex political and economic subjects into the hands even fewer people of dubious talent, leadership, training, education or creativity —thus decreasing the pool of available talent and decreasing the discourse on economic policies all contrary to the basic constitutional premise of checks and balances, division of power, prevention of tyranny and promoting policies for the health, wealth, safety, security, and benefit of United States citizens.
• Centralization of banking and deregulation of banking has produced a boondoggle of problems that will take decades to reverse. There is no doubt that the Federal Reserve should have greater control over any process that creates “money” in the marketplace so that monetary policy will mean something. But it is the Federal reserve itself that needs re-structuring to provide for greater transparency, more checks and balances, and greater de-centralization of decision-making. The open-market committee is simply not set up to deal with today’s marketplace, today’s money, the prospect of a declining dollar and the possibility of a rising Euro in the United States. 
• Centralization of banking has led to the flow of money away from where it is deposited into places that have no relationship to the depositors. Loans are made in foreign countries from deposits made in Springfield, Illinois. The depositors are deprived of the economic benefit of having that money loaned or invested in their locale, thus improving liquidity and growth prospects for those depositors and all the citizens of their town or city. With no safety net, the slightest ripple can and does cause blight to replace what were once vibrant or at least promising communities.
• Centralization of banking has led to indexing of loans as the exclusive basis on which to grant them — replacing the old fashioned relationship of person to person. This has resulted in hyperventilating the prospects for fraudulent lending by lenders, the entire CMO/CDO market, and fraudulent borrowing by borrowers. JP Morgan was asked at a senate hearing 100 years ago what was the primary criteria, the essential quality for granting credit; his answer was that it was “character,”(not balance sheets, income statements or track record) which is exactly what is not part of the equation now with the total reliance on FICO scores, other computer algorythms etc. 
• By removing “Character” from the equation we removed accountability. You can argue all you want on paper with equations and philosophical arguments, but a simple human fact remains true — if people do not feel any moral sense of accountability they will not act in accordance with a reasonable standard of good character. Without character the entire society, and of course the economy, goes down the crapper. The U.S.Treasury plan is not merely “more of the same” it seeks to institutionalize all that is bad and wrong with our society and our economy.

Mortgage Meltdown Remedial Legislation

Barney Frank has a good idea that will work. Mortgage notes must be reduced without penalty to borrowers, and of course continue the tax exemption for short sale. 

Cooperation will be needed by FDIC, Federal Reserve, SEC, FASB, IRS, Controller of Currency and Treasury Department. 

I would add the following AFTER reducing the mortgage by a flat percentage (because it will take too long to figure out 10 million mortgages on a case by case basis):

1. Contingent reverse amortization (betting that housing prices will recover particularly in the event that this plan is put into effect). 75-25 in favor of homeowner up to recovering value of home at time of purchase. Then 75-25 in favor of Lender over purchase price until full value of mortgage is covered. Encourages homeowners to stay in their homes instead of abandoning them. Covers 8.8 million homes instead of 1 million.
2. Allow contingent equity to reported as actual capital for lenders. Allows capital requirements and reserves to be met and allows further lending, increasing market liquidity in the credit and money markets.
3. Allow contingent equity to be reported as footnote capital for investment banking. Allow financial institutions to recover write-downs and avoid additional write-downs.
4. Allow contingent equity to be capital for CDO holders, including where used as collateral.
5. Use flat relief percentage unless hardship is demonstrated. HUD has hearings. Suggested decrease in mortgage debt 20%.
6. Use Fed Funds rate plus 1% as interest rate, 30 year amortization fixed. 3 point service fee that can be paid up front or 5 points if added to note. This applies to all mortgages. Opt-out provisions can apply for those homeowners who wish to opt out. Many will do so rather than go through the hassle of adjustment, even though most of the work will be done by lender.
7. 1 year moratorium on all foreclosures on primary residential dwellings, giving time for mortgages to be converted.
8. 2 month moratorium on payments of principal and interest on primary residential dwellings. Insurance and Taxes must still be paid. Borrowers given up to an additional 6 months to bring their escrow accounts for insurance and taxes up to date.
9. After 1 year moratorium, foreclosures resume only on those homes where the mortgage note has been reset, as above, and borrower has defaulted. 
10.  After 10 years original mortgage and note reinstated, adjusted for payments as above.
11.  On second homes provide relief, by half of the above, and after 5 years original terms reinstated. 
12.  Credit cards: Remedial cap on interest at 15%
13.  Credit Cards: If interest rate is already 15% or under, reduce the rate by 25%.
14.  Cap overdraft, bank fees etc. at 60% of current industry rates. 
15.  Payday advance: cap fees, costs and interest at 10% per month. Require payroll deduction for repayment over maximum of 10 weeks.
16.  Establish aggressive regulatory environment wherein the ultimate holders of risk (CDO owners) are educated as to actual quality of the mortgage-backed securities. This would include indexes identifying subprime loans, subprime borrowers, and various levels of prime borrowers statistically, so that ratings agencies, insurers, investors, fund managers, CFO’s and Treasurers can properly evaluate the risk of the investment. 
17. This uses full information to allow market forces to dictate the credit liquidity offered to home buyers and other consumer debt. In other words, if the buyers of CDOs had been told the truth about these mortgage backed securities, and other aggregate derivative investments, neither the ratings  nor the demand for them would have been nearly as robust. 
18. The meltdown would never have occurred. instead the incentive was to put out as many mortgage loans as possible, artificially inflated prices, because the lenders, closing agents, appraisers etc., were all incentivized to appease the confusion and worriers of the borrower and get the borrower to sign papers.