Cost Inflation and Control

The provisional solution I entertain on this blog to the conflict of libertarianism and social work is replacing the current welfare state with a private charity market. I intend to make no positive case for the private charity solution in this post, but it is important to keep it in mind as an alternative to the status quo.

Leaving aside (for the moment) the moral argument over whether people are entitled to charity or should only receive it through the voluntary kindness of others, we must examine the economic issues inherent with a centrally planned welfare state. The premier economic issue is, unsurprisingly, cost. Since the cost is not determined by the dynamic forces of supply and demand, it must be set by politicians who make appropriations for bureaucrats to administer. There is a limited amount of money and naturally what is spent on one program is not spent on another. Thus, the need to control costs is paramount. That is what this post is about.

Speaking from my experiences as a mental health case manager, the government programs that my organization (and all of those like it) rely on for almost all of their funding are Medicaid and Medicare. I was originally surprised that many of my clients had Medicare, but unbeknownst to me, a person qualifies for that program after receiving two years of SSI. Billings to these programs provides the budget for my entire organization. (It does not have a development department and neither did my last company.)

Our billing is based on the DSM, the bible of psychology. However, government insurance does not cover every diagnosis in the DSM. In fact, only five diagnoses are reimbursable for adults in case management--Major Depressive Disorder, Bipolar Disorder, Schizoaffective Disorder, Schizophrenia, and Psychotic Disorder NOS. Anyone who does not fall into those five diagnoses cannot receive mental health case management services paid for by the government. This includes people with Personality Disorders (an estimated 10.6% of the population, and I would venture an even higher percentage of people with low-income), Anxiety Disorders(an estimated 18% of the population and I would again venture a greater percentage in the population I serve), and those with the myriad other diagnoses present in the DSM. Even our women's trauma team cannot bill for services under Post-Traumatic Stress Disorder. So, diagnoses are made to fit billing rather than the person.

Within that chunk of the mental health population we can actually work with, the government applies the fee-for-service model of reimbursement (as does private insurance). A case manager can only bill for interventions designed to address functional deficits related to a client's particular diagnosis. That this conceptualization flies in the face of strengths-based social work is important, but secondary to the discussion here. Part of the difficulty I face in billing for my services is that some things I do are either not directly related to functional deficits or address practical rather than clinical problems. It's not enough to say "this needed to happen, so I did it" in your billing.

Say I bring Ralph, who is diagnosed with paranoid schizophrenia, to the social security office. I go over the goals of our visit on the car ride there (billable). I talk with him about his vocational goals, manage his mood, and engage him in conversation for the first hour we wait (billable). If in the second hour of our wait time, he were to become tired of my yammering and clam up, I can no longer bill for sitting with him. Even though if I were to get up and leave, he would never complete this appointment and might lose his income, I can no longer bill for supporting him while we wait.

In addition, one cannot bill for teaming with another service provider, coordinating care, or talking on the phone with a client. At this point, hours of work I do every day is not billable for my company and I am not reimbursed for my time. After I work with the client directly, I write up a service ticket for how long the intervention was and provide the billing code for "individual case management." I also bill for group services for the three groups I co-lead at my company.

Speaking broadly across the country services in case management are either provided by state or local governments, or more commonly, by non-profit or low-profit companies. (I work for a non-profit.) These companies are built on a relatively straightforward mathematical model. A minimum amount of billable hours is required of each case manager daily(mine is 5.5 hours) so that in the aggregate their combined billings will cover the costs of operating the company--perhaps leaving some room for reserves (depending on the quality of the company). My company genuinely needs me to meet that quota each month because it cannot support my salary without those funds. Most companies will work with a person struggling with their productivity for a period, but will let them go if they are unable to fulfill their requirements.

If this system were to operate without oversight (like the home health aide industry does), there would be rampant fraud. Simply input the correct things into the system, and out will pop money! Audits are performed yearly (I believe) by our local Department of Mental Health. I assume this is a state function in real states (I live in DC). DMH reviews a sampling of our clinical notes. Whatever percentage of that sample does not pass the inspection, Medicaid and Medicare recoup the costs. For example, if 5% of our notes are audited and we have a 40% failure rate, 2% of our total revenue is taken back by the government. The standards by which notes are graded are not published, but there are rough guidelines that my agency is attempting to implement that lead me to believe that there is some knowledge of expectations. So, my agency is graded on an unpublished rubric (or the whims of auditors, perhaps) with some guidelines that are discernible beforehand. This has left us in a pretty stable financial situation compared to other organizations.

Unfortunately for my company, this auditing regime will not be in place for much longer. Because of the constantly worsening fiscal situation in the government, auditors need to recoup more and more of the money they have paid out without explicitly cutting anything and all under the guise of preventing waste and abuse. Within the next few years, the failure rate of billable notes will not only be applied to the sample of notes in the audit, but the agency's total billings. Using the same numbers as my previous example, 40% of our billings would be taken away by the government and we would likely be bankrupt within the month. The regime our billing model was built on will be fundamentally changed, and our organization must change with it.

A few points on note failure make this situation even more dire. The longest notes are also those most likely to fail an audit (think about my example with Ralph). So, the notes from which the agency derives the most money are also those it will likely lose in the future. To compensate for this, we are encouraged to divide up our service tickets into chunks of time, each becoming a note unto itself. Adding further to the time of writing notes, an comprehensive agency guideline has been produced to increase overall note quality. While this is actually useful in many different ways, one of its consequences is that case managers spend more uncompensated time of their workday completing notes instead of working with clients to make that productivity quota.

But what does note auditing actually measure? No auditor actually checks to see whether people are with their clients for the exact amount of time. Nor do they check whether the interventions mentioned in the note match with what actually happened. Heaven forbid if audits were intended to judge quality of services. Auditing is subject to test-effects. Learn the right way to arrange some thoughts and you can meet your productivity quota--regardless of what actually happened in real life.

This is fraud. It's one of the worst things I have encountered in my almost two years as a case manager. Most case managers know it as either "rounding up" for hours in service or as "making shit up." The better of our peers will round up to the next increment for billing, as DMH thinks everything between 8-22 minutes only counts for 15 minutes of service. The worst of them will work 5 hours a day and submit 12-hour work days that any auditor would balk at (you know, if they looked at patterns in individual case manager's notes). Just how prevalent fraud is in case management is an interesting question. I'm nervous to just talk about it here. I'm pretty sure most of my peers would rather admit drug use in a survey than fraud. It's an incredibly difficult thing to quantify. An unscientific and extremely limited guess from intuition alone would put that number at around 20% of all case management billings in my city.

Why do practitioners commit fraud? Oddly, it's not for profit. Whereas a doctor who charges for unnecessary services or pads his billing is usually looking to line his pocket, case managers are not directly reimbursed for their services. Most are salaried employees whose billings are taken by the organization as a whole. Individuals generally do it because there is simply not enough time to do all of that work. And though the hours in the day and the pay has not changed over the past few years, the requirements for billable hours has increased secondary to cost control measures from the government. As the government compensates and recoups more costs, the organizations will find ways to adapt to the new environment and inflate their costs to survive. Like the struggle of hacker vs. security professional, the dance of cost inflation and cost control will continue on in perpetuity until our social spending hurls itself over a precipice.

It is the structure of the system itself that is unsustainable. In addition to the problem of fraud, organizations rely on Medicaid and Medicare for funding, which pay the lowest rates for mental health workers (and set the floor for private insurance reimbursements). Yearly reductions in these rates are commonplace and are expected at case management agencies. Those expectations, in turn, are manipulated by the government who will often make the fiscal situation seem more dire than it actually is (20% cuts!!) so that the actual reduction (only 10%) will seem less bad (and the result of hard work by people fighting for those who help people in need!!!) Playing with expectations in this way has many effects on individual case managers:

• organizations may raise productivity requirements on case managers, further incentivizing fraud
• case managers will be less likely to provide services to clients that they cannot bill for
• they will think of clients in terms of the DSM and deficit-based model

But this policy also affects the organization as a whole. How can organization plan ahead one year, if its leaders do not know how much money they will be receiving this year? How can they open new centers, bring on-line new programs, or invest their money in (for example) recovery-based housing if its gross revenues will be reduced by as much as 20% from last year?

The answer is that they must keep more money in reserve (and away from clients) than they would have otherwise done if those figures were stable or knowable and there were less regime uncertainty. Government control of mental health funds means less investment in innovative programs or continued investment in current ones. Money that would have been spent helping clients must instead be hoarded as a bullwark against the interventions of government. Maintaining an organization under these circumstances is incredibly difficult, let alone growing or starting one. This leads to less innovation and competition among mental health agencies.

Ultimately, we have a sclerotic industry based on unsustainable math whose last consideration is for the client being served.

A note on licensure

"The institution of long apprenticeships can give no security that insufficient workmanship shall not frequently be exposed to public sale." -Adam Smith

I'm preparing to take my LGSW examination. It's about two years later than I should have taken it. (Note to all current MSW students: TAKE IT WHILE YOU'RE IN GRAD SCHOOL. THE SCORES STILL COUNT.) When I was hired at my current job, my interviewer was the Director of Clinical Services. He enjoys posing questions to people to unnerve them and get under their skin. He called me lazy for never having gotten my LGSW, even though I had been eligible for it for over a year. And to a certain degree, he was right. I am generally a lazy person and if I have no pressing reason to get the license, then I won't do it. My current job incentivizes me to get the LGSW by paying me $3,000 more yearly for having it. So, I am sitting for it next month.

When he posed that question to me in the interview, I basically said that I had no incentive to get it and that I had tried originally, but employers and others were neglectful about getting recommendations back to me (true story). Although true, I neglected to mention the main reason (aside from laziness) that I did not get my license straight out of school. I am politically and morally opposed to the current licensing regime in social work. (A cynic may call that a rationalization.)

For those who don't know, a brief primer on social work licensure in DC. A social worker who completes a bachelor's level course in social work may pay $230, sit for an exam, and if successful, receive that level of licensure. That level is largely useless, however. A social worker who has their MSW may apply for an LGSW, pay $230 to the DC board and $230 to take the exam, collect recommendations, and if successful, receive that level of licensure. They must then collect two years worth of supervision from a licensed professional (which may or may not be paid for or provided by an employer), pay another $460, pay for continuing education courses, and if he or she successfully completes the test, they are awarded an independent level of licensure. At this level, a person can practice without supervision and will likely open their own practice or take a higher-paying position.

It seems trite and a little simplistic to call this structure a racket. But the results of this licensing system, which are largely similar across state lines thanks to the efforts of the ASWB, disenfranchise younger social workers, make it difficult to social workers to move, and artificially limit the supply of helpers.

When a social worker like myself graduates from their MSW program, they will start a job search that is fundamentally altered by the licensing regime. Though this is somewhat different in Virginia (their licensing scheme is more liberal), my options in DC were limited essentially to case management and ACT team work. Part of the problem was the lack of career assistance at my MSW program. The majority of the problem, however, was that most positions wanted the independent level of licensure. A position at St. Elizabeth's was impossible, even though I was strongly recommended, because they only hired at the LICSW level. Actually, all hospital positions were out for the same reason. No independently licensed professionals were offering to supervise LGSWs as part of a group practice. My only option was case management.

Employers, evidently, did not want to invest the time and money to train employees. Or they wanted to be able to brag that their staff all had terminal licensure in their degree area. Or it was pressure from public sector or private sector unions that required licensure (most of these jobs were union jobs). I really don't know. Perhaps it was a combination of all of those. In practice, the licensing scheme severely limits the opportunities for a young social worker to begin work at a large facility or build a career within one organization.

The oddest part about it was that I was trained for these jobs in both of my field placements. I performed these same tasks (assessment, discharge planning, etc.) and was supervised by these exact staff members, but when I graduate and seek out the employment I was trained for, I am told that I do not have the requisite experience. And there is no way for me to get that experience at a different company. In fact, I have to go into an entirely different area, case management, to get the licensure requirements before I can work there.

Independent social workers (those with the highest level of licensure) are also those who set the rules for new social workers, create the tests, staff the licensing boards, and provide continuing education courses. They provide individual and group supervision for profit. They offer test preparation courses. They benefit from an artificially small pool of applicants for new jobs. They do not have to abide by the new standards they set for graduating social workers.

These professionals are granted a total monopoly over social work practice. Under the current regime, it is illegal for me to bill for my own services. I must be supervised by an independently licensed professional. I cannot hang out a shingle as a mental health counselor and bill for services. If my organization did not provide supervision, I would have to pay an independently licensed clinician to accumulate hours for my license.

In sum, it is a system designed to benefit those workers already in system at the expense of those who are just starting. Licensure’s distorting effects cause the salaries of independent social workers to increase while salaries for LGSWs and unlicensed practitioners remain stagnant or decline. Its original justification, protecting those receiving help from unscrupulous or inexperienced help is nowhere evident.

This is a system designed by those profiting to extract money and limit competition. As states move closer and closer to more strenuous licensing requirements (New York and California being prime examples), this phenomenon will only get worse. The supply of social workers with the proper level of licensure will decrease. There will be less competition and the industry will become more sclerotic than it already is. And if a social worker becomes fed up with the licensing system in their state, they will find that they have to undergo the payment and process again in the next state. Social workers must balance the benefits of monopoly power and rent-seeking in the profession with the financial and mental costs of fulfilling ever more cumbersome requirements. Again, nowhere does the consumer benefit.

What effects has licensing been shown to have on the consumer? Well, to start, there is no evidence that licensing regimes actually benefit the consumer by providing better service, as quality of service is almost never evaluated on an organizational let alone professional level. Perhaps a study that evaluated the quality of service (however defined) between states with more stringent and more lenient licensing schemes. Until such a study is performed, however, there is no evidence for licensing’s purported main effect—improving the quality of service.

The proven effects of licensing on the consumer are as follows. It increases the costs of receiving services, as the market has been perniciously altered to reduce supply. Licensure also creates a marketplace that is less open to competition. Both of these financial costs, for those with low-income, are borne by the taxpayer in the form of Medicare payments and government salaries. Even if a person with low-income were to approach mental health in the same way a middle-class or upper-class person does, by engaging in fee-for-service treatment, they will never be able to pay the inflated price. Inflated prices are countered by government cost controls, and service organizations and government become locked in a duel over money—distracting mightily from the actual mission of social work, client service. The psychological costs of these distortions are borne by the consumers themselves.

There is an argument to be made, at least in comparison to other licensed professions, that social work should have some sort of licensing apparatus. Unlike, for instance, hair stylists and interior designers (where licensure exists in absurdity), we actually work with vulnerable people, and the in case of clinical social workers, do so with the goal of manipulating a person’s life. However, if the goal is to limit the exposure to disreputable and undertrained social workers, I fail to see how a licensing scheme catches those individuals most likely to commit ethical violations or provide poor service.

Proponents of occupational licensure in general (not specific to social work) often cite other plausible reasons for the licensing schemes. For instance, there is an incentive for practitioners to invest in human capital and advanced training if low-quality substitutes are excluded from the market. Little empirical evidence exists to support this hypothesis. While continuing education is necessary for licensure in social work, better social workers will already seek out specialized, in-depth education for personal fulfillment, career advancement, and financial reasons. And in my (apparently less-than-humble) opinion, less-skilled social workers, the ones these policies are designed to address, will find the easiest way to complete the requirement, rather than fulfill the mission of education.

Another argument in favor of licensure is that it signals to clients that the services will be of a certain guaranteed quality. I find it laughable that my clients would ask me or my colleagues if we were licensed. It’s simply not in their thought process. Anyone who has looked down at the work of another social worker will also laugh at the ensuring quality part of that argument. Perhaps instead of quality treatment, it ensures ethical treatment. I find that argument at least plausible.

Regardless, there are far less costly ways to ensure ethics and protect against fraud and abuse than the stratified licensure scheme currently in place. One such way is through certification. Certification is a process by which a government entity administers and examination and certifies professionals at a given level of knowledge and skill. (Licensure requires that a self-sustaining non-profit entity—composed of professionals in that field— administers licensure tests and requirements, not the government.) Consumers are then free to choose a certified practitioner or uncertified. It is not illegal for a person to practice without certification. This, in turn, drives consumer costs down and increases competition and overall quality.

This topic brings me to a point more in line with the regular fare of this blog--how the unintended consequences of laws impact the vulnerable and the poor. Although I am often out of my depths with genuine economics, friends who I describe my point of view to will often ask me what economic policies should be changed to help the poor. My first answer is the minimum wage (another post for another time). The second is occupational licensing laws. According to the President's economic team, occupational licensing laws account for about .5%-1% of total unemployment. Who are those laws most likely to affect? Those who cannot afford the cost of attaining a license. For them, getting a license for hairdressing makes no sense. It's something they do in their spare time to make a little extra money (tax-free!). If they attempted to pool their resources and start, for instance, an African hair-braiding salon, they would need to deal not only with myriad regulatory codes for such an enterprise (a blog post to itself) but pay for training and licensure by the government. This is for something that they are already doing. Moving these workers from the shadow economy into the legitimate economy should be a goal for economic planners. Instead, their designs force these transactions underground and drive up the unemployment rate.

Public Health: The Paternalistic Conflation of Correlation with Causation

The above title could also be applied to any social science (e.g. Psychology--the art of conflating correlation with causation). But when people who help others through government, they rely on inferences drawn from this fallacy. I was watching this video of Senator Jim DeMint talking with reason.tv regarding welfare spending. Both reason hosts caught DeMint in a contradiction. He states that the federal government should address the problems that lead to high school dropouts, including drug use, unwed mothering of children, and other socially conservative targets. In the previous breath, however, he wants to get the government out of education. As impressive as that cognitive dissonance is, what struck me (and should strike you, if you have the 30 minutes to watch the piece) is the way in which policymakers talk about social issues.

I suppose that one nice thing about an endless series of correlates is that policymakers at least understand that social issues are interconnected. That's a nice social work value put into action. But people are not made of correlates, they are made of determinants. The notion that the social problem of high school dropouts should be addressed with legislation (something congressmen of both parties lauded in the President's soon-to-be-forgotten State of the Union address) is often not justified on its own merits but on what dropping out is correlated with.

Of course it is better to graduate high school, but action is only justified when correlates such as illegal drug use, crime, unwed motherhood, lack of insurance, poverty, etc. are paraded as though they are directly caused by the decision to no longer attend high school. Dropouts do not justify intervention to remedy whatever antecedents are found by a biased policymaker. There is a strong case to make that dropouts are, at most, a local issue to be dealt with by schools, parents, and local governments.

Two examples from the above arguments:

1)

-dropouts often come from homes with single parents

-the government must institute policies to promote marriage

-this will reduce overall dropout rates

2)

-dropping out of school is bad and is also associated with poverty, drug use, and mental illness (for instance, not necessarily true)

-therefore, the government must institute policies from #1 to reduce dropouts

-this will reduce poverty, drug use, and mental illness

But correlation is how social policy is made. Take a policymaker's biases, combine them with those of various interest groups and think tanks, and you will find statistics to make any social problem seem like the pivot point for all the world's social ills. It's as if social problems were viewed through a kaleidoscope. In a kaleidoscope, you know all of the images you see are deeply related to one another. However, any sense of where one belongs in relation to another is indecipherable. The myth of perfect knowledge tricks us into thinking that if only we could put our finger down on one part of the scrambled image, it would begin to form a rational picture.

Surely, anyone would see that my example with dropouts is specious (though Sentaor DeMint might disagree). A policy program that was implemented by smart, non-ideological people with the public interest at heart would be able to actually craft an intervention that would address the antecedents of dropping out. A few reasons why that is foolish:

1) No one is motivated by altruism. People are usually rational and self-interested, whether they sit in government or private enterprise. If the correct course for a policymaker is to do nothing, his incentives are to do the opposite. He is beholden to the interests of his superiors, including their vested interest in their own careers (risk-aversion), and moreso to his constituents, or in the case of regulators, the industry being regulated. In addition, he is beholden to the organized labor interests of that industry. He is influenced by how media will cover this regulation, the political effects of his decision, and its place within the guttoral moral reasoning of society. He is not of a singular mind or noble, but a deeply conflicted man beholden to various stakeholders.

2) No one is omniscient. When policymakers decide to intervene in an industry such as education, they look only at the main effects of their policy (and not very hard, either). They do not look at what the effects of their policy will be on other areas. Those costs cannot be factored into the models evaluating this policy, as they can never be known. More importantly, it is rarely ever demonstrated that the policy intervention will actually have its intended effect. We would need perfect knowledge of the entire social system to actually know whether this policy will have anywhere close to the effect we want. In our sea of correlates, we know that the variables being manipulated are related in some way, but we do cannot know the full story of how they interact. Policy is awash in reciprocal determinism.

But no one, not even those who ostensibly want to curtail the size of government, truly wrestle with these issues. So, we are left with people like Senator DeMint talking out of both sides of his mouth. Promoting policies that favor marriage so we can reduce dropouts and in turn reduce crime and drug use. Or, with those same data points, policies that discriminate against single or same-sex couples, imprison youth in sclerotic schools, and do nothing to address larger social problems. The hubris inherent in claiming to know the effects of policy is extraordinary. It dehumanizes the process and serves only to insulate the decider further from the actual main effects and especially the unintended effects she has caused.

Policy is made for cyphers, not people. Cyphers are being of potential. They have probabilities, but no cause. They are not logically related. To them, people are like electrons in the quantum realm. With public health, we risk making our world like the quantum world-- an endless mindfuck of unending correlates stuck in a theoretical vacuum of no causation.

Central Planning and Its Moral Predicates

The welfare state is the most planned portion of our economy. In spite of the myriad interventions the government into all other areas of the economy, it is in the helping professions where it exerts the greatest influence. This seems natural because a welfare system is a socialist concept. I don't use either term as a bogeyman or a perjorative, though both have lost all meaning from table-thumping imps on the Right. A welfare state is a centrally planned effort to help those in need.

Accordingly, in the welfare state, decisions are made far from those seeking services and those providing them. Total funding is drawn from general government revenue and redistributed to those in need through direct government programs or government-funded programs. Very few programs are privately funded.

At this level in the system, the choices made impact the most number people but in the least visceral manner. Our decider is insulated completely from the consequences of her decision-making. Congressmen who enact laws mandating mental health parity affect the lives of millions of people just as congressmen who cut food stamps do. It seems inconceivable that a person at this level could viscerally understand the implementation of a program they cut or fund. Decisions here are not made from user feedback as that would be impossible. How can a person at this level incorporate the qualitative lived experience from millions of people affected by their decision? Decisions are subject to the influence of bias and ideology, special interest lobbying, and above all politics and self-interest.

Decisions at this level are a special product--one that reveals what the conventional wisdom is at a given time as seen by that individual. They are infected at this point with a seed of arbitrariness. Not just error but almost capricious error. Because the results of his error can never be known. Unless there truly are alternate realities in the universe, the unrealized possibilities from her alternative decisions will never come to be, are not definitely knowable, and can never be accurately measured.

From the highest level on down the line, each person who engages in budgeting and planning piles on another helping of arbitrariness. The HUD wonk who decides how many vouchers to give each state, each program, each group of those in need. The bureaucrat who determines eligibility criteria for each program and how to determine someone's true need. All of these people base their decisions on necessarily incomplete information. Government officials review data on a monthly, quarterly, or yearly basis. A system that slow to respond is one that cannot adapt itself to the needs of its consumers in an efficient manner and mandates money to be spent inefficiently by providers.

That last part is what irks me the most because that's where I come in. I am left to coordinate in a system that is poorly planned (by design, not intention). At the level I work at, the qualitative experience of those served is most salient--second only to the individuals themselves. I seek out resources for individuals, but I am limited by the designs of those who make decisions above me.

Let's take the example of Kyle (pseudonym!), a client I work with. He stays with his mother, who lives in a two bedroom apartment in public housing. He is HIV-positive and is diagnosed with Major Depressive Disorder. He has a rather paranoid view of social interactions and systems. Kyle is also on parole for the next twenty years because he was caught distributing cocaine and was chased by the police across state lines.

In my assessment of Kyle, I see that he above all needs his own housing. Because his mother lives in public housing, he puts her at risk of becoming homeless, as she would be evicted from public housing if he were found by the police to be staying at her apartment because he is a felon. People who designed this policy were no doubt trying to weed out the criminal element that is prevalent in public housing. But he is no longer selling cocaine. He is simply homeless and relies on his trusted support network to provide him with a home.

In social work, we are taught to value the importance of a person's social safety net. Family, trusted friends are those who will provide the best environment, the most loving and understanding environment to those in need. In fact, I would wager that any social worker would be glad that he has a supportive, stable place to stay. They would in fact partner with him to buck the system and stay with his mother until other housing supports can be found.

The central planning of public housing necessitates that he must stay in a shelter or on the street because of the decisions of others. (Not that Kyle is beyond reproach.) From a top-down point of view, it makes sense that people with felony records are more likely to commit crimes and invite a "criminal element" into a community that should be sheltered from harm. That decision, however, cannot understand Kyle's life situation. In no way can it appreciate what harm he actually poses to the public housing community. So, he is left with the immoral choice of staying on the street/shelter or putting his mother at risk of losing her apartment.

Being a good social worker, I have worked with Kyle to get a voucher for independent housing. This is a tenant-based voucher which can follow him to any apartment which falls in the price range set by the government. He must, of course, qualify on their terms. He must prove his need. To that end, he must show how much money he draws from social security (SSI), prove that he does not have TB, explain how dire his housing situation is, and fill out a "housing plan" which will show his goals for housing and how he and I hope to achieve them.

I will submit these forms to a non-profit company who will use the money directed from the government to help him according to his means, as deemed by government requirements, and to a certain extent, the approximation of the person who reads his application. Kyle qualifies for many voucher programs because of his various conditions. He qualifies for a voucher based on his HIV status. He qualifies for a voucher based on his homelessness and coordination with a community support worker (me).

Both the HIV and homelessness voucher programs (HASTA and Shelter + Care, respectively) have waiting lists. He may be placed on the waiting list at various points based on the judgment of whoever is evaluating his application. He may be placed on the end of the line for HASTA but may be in the middle of the line for Shelter + Care. I can't tell him when he will qualify for a voucher for this reason. Here, we have multiple programs, each with their own funding sources and programmatic assessments of outputs. He will be judged not by his overall life circumstances, but how closely he fits with the missions and goals of each program.

Oddly enough, Kyle qualified for public housing (Section 8) himself many years ago, but was unable to attend his appointment because he was in a halfway house. Because he didnot attend, he was dropped from the list and was told to reapply. Again, the analysis holds that those who designed the Section 8 program wanted to weed out those who already gained housing or whose need was not great enough that they would miss their appointment. Calls to the agency to explain the situation are met with a combination of obfuscation and intentional ignorance. He is stuck with his reapplication date, many years subsequent from his first date of application, and will wait for many more years before his number comes due.

Returning to his voucher application, both programs have a limited amount of funds every year. The funding for each program is not determined by the need of the population served, but as explained earlier, is decided based on politics. Those politics, in turn, decide what determines a person's need. Since HIV in DC is on par with some African nations in terms of severity, a central planner has determined that housing for people with HIV should be a priority. In turn, he allocates some arbitrary amount of money to cover vouchers. People administering those vouchers determine what the market rent is in a given area of the city (there are many areas, each with their own valuation), and will cover up to a certain amount in each place. Unfortunately for Kyle, the number of people who are homeless and HIV-positive has exceeded the amount of vouchers and money allotted for that year. So, he must wait until a person loses their voucher by violating their lease or voucher terms.

Or, perhaps, until next year when more money may be budgeted for this group of HIV-positive individuals. All of these decisions are made far away from both Kyle, myself, and his future landlord. However, next year, there may be a new public health menace--IV drug users, transgendered youth--who require special assistance. The HASTA program will face cuts to provide for the new program for the new population. Perhaps, the councilman who chairs the committee overseeing these funds will lose his election and the person who replaces him will be one who is more sympathetic to those with Lupus, kidney failure, or other diseases. Maybe the schools will run over-budget and require a bailout, forcing agencies across the board to cut back. Whether Kyle gets an apartment or not is determined not by his actual need, but by considerations entirely alien to his circumstances.

Kyle is also faced with a pending court case for another, more recent, charge for distribution of cocaine. An undercover officer used a go-between to purchase cocaine from him. The go-between, in turn, rolled up on him, and he was arrested. Here again, a central planner dictated that drug use and abuse was a scourge on the country. He set up criminal justice interventions to root out this problem and rid the country of drugs. He could have been amassing money for a security deposit on an apartment, but it didn't matter. He ran afoul of a central plan.

Upon his arrest, Kyle relapsed for the first time in many years and turned in his first dirty urine to CSOSA. Accordingly, he was judged to need substance abuse treatment. Unfortunately, due to the allocation of resources in our local government, all male beds in substance abuse treatment facilities were full. He stopped using immediately, but waited for months to enter into a treatment program, so he could complete the requirements set by his pretrial officer. At this point, I can only think that if he needed treatment, how is getting into a treatment center 3 months later going to help him? He's still waiting to hear back regarding his placement. Again, central planning in the criminal justice system (a topic for a more elaborate post) shows how it is unsuited and cannot be tailored to an individual's needs.

You will notice that nowhere in the central planning system can Kyle's individual strengths and weaknesses be acknowledged. He is an input into the system, not a person. The treatment he receives is based on allocations that do not approximate the true aggregate need of his cohort, let alone his personal needs. He is deprived of agency. His natural resiliency discounted. He is subject to a system whose results are predetermined. Central planning leads to immoral outcomes. And that dirty feeling you can't wash off when you get home.

The Rationing of Care and the Bubble Problem

Up until I started working at my current agency, I honestly didn't believe there was rationing in medical care. I knew there were inequalities between the care offered to the poor and the wealthy. But since I worked on an Assertive Community Treatment (ACT) team, where resources are shoveled our way and most institutional barriers (blessedly) do not exist, I never encountered rationing. Need housing? Fill out a housing voucher form and you will receive a voucher in a few weeks. Need medication? Get your psychiatrist to write a prescription for anything, even new medications, off-label treatments, and physical health medications (a common, but frowned upon practice for a specialist that will sometimes get you in trouble), and you can have it! The only real barriers to service I encountered were discrimination and the odd bureaucratic requirement. I really thought that claims of rationing were merely hyperbole spun by talking heads to demonize socialized medicine.

ACT and community support services (CSS) are on a continuum of outpatient services that run from most intensive (ACT) to somewhat intensive (CSS) to not intensive (social services). ACT was created to combat the so-called hockey-stick problem of public health. The graph for costs for many public health problems like emergency room visits, overdoses, and drug arrests looks like a hockey stick--a visual metaphor I would explain better if Malcolm Gladwell's awesome article wasn't behind a New Yorker paywall. Most of the services are used by a small number of people who bleed the system of money and resources. Take care of those people with ACT, you will save lots of money! So far, so brilliant!

Then I changed jobs. I started working with clients who require a lower level of service and who did not qualify for the same treatment as ACT consumers did. When they were prescribed Abilify, they were told by Medicaid or Medicare that they could only get Risperdal. When they were prescribed Clonazepam, they were told that benzodiazepines were not covered at all. In fact, we will suspend the license of your psychiatrist for prescribing too many anti-anxiety pills in spite of the demonstrated need of his patients. But I digress, my clients have nowhere near the access to the medications they need that my previous clients did.

The same problem extends beyond medical care into other forms of assistance. Those housing vouchers I took for granted in my old job? Turns out there's a long waiting list for people not on ACT teams. What about market rent? Well, thanks to housing vouchers, most landlords in the worst places of town will renovate the apartment completely (to pass the inspection) and wait for a tenant with a voucher to come along rather than rent to someone at market rate. Why take less money and more risk when you can get a guaranteed government check each month?

This leads to what I call the Bubble Problem. You've probably heard of this before in the context of health insurance. People are slightly too rich to qualify for public assistance but not rich enough to effectively utilize private insurance. The same thing happens when the government artificially limits the quantity of housing or medicines. We have those for whom it is more cost-effective for government not to ration care (ACT) and those for whom it is far more cost-effective to ration care (CSS).

As with most public policy problems, there is both a progressive and a libertarian solution. The progressive solution is to include all medications in spite of the cost and to dramatically increase funding for housing voucher programs. But what happens when 20% of the total city is below the poverty line? What happens when the system becomes people waiting out their turn in line for Section 8 housing? (Section 8 is now pulling names for people who registered 10 years ago, and not for vouchers but for apartments vacated in public housing where tenants have died or violated their lease.) What happens as newer medications come out and are given to an increasing percentage of residents? Well, it means that there is no market housing for people on public assistance. They are forced into an ever-lengthening queue of similar individuals competing for scarce resources. Resources, mind you, that are allocated not based on need but on central planning initiatives. Have too many vouchers for chronic inebriates and not enough for people with HIV? Too bad. You can't use one like the other. And how did HUD decide how many chronic inebriates there were going to be this year who needed housing?

You eventually realize you can't cover everyone and do everything, especially in a system with centralized planning and imperfect information. And even if you could, the incentives in that system are the inverse of what you would want. Mutual aid and support die out as each person competes for scarce resources. Compare that with the libertarian solution where a completely private charity market (in ideal, anarcho-libertarianism) provides whatever resources are available immediately based on individual need. This system runs the not-unserious risk of underfunding and greater risk of immoral outcomes.

So, my clients live on the bubble. Too poor to compete for market rent in a market distorted by government intervention. Too stable to qualify for immediate housing. Stuck on a line that only gets longer with the barest of care to tide them over.

The Government as an Intervention

Social workers are taught with a pretty useful framework of "interventions" to solve problems. On the micro-scale, these can include clinical interventions, such as CBT therapy, or social service interventions, such as completion of a housing voucher. On the exo- level, interventions are normally thought of as programs that use private or public funds to address a larger social problem. For instance, housing voucher programs for the homeless or underhoused.

This brings me to a relatively cool article from the Washington Post Fact-Checker column today about Ron Paul's claim of the poor and elderly not being denied care before Medicaid and Medicare were enacted. While I am tempted to nitpick the article's conclusions and its exclusion of Medicaid data entirely (fuckers!), I'm more interested by the author actually critically analyzing the effectiveness of private versus public assistance to those in need. Most conversations in this realm fall victim to what Gillespie and Welch call "existence bias." Existence bias is a cognitive bias in which people who have always known something to exist find it difficult to imagine a world without it. In reforming social support programs, this is a fundamental bias.

Paul actually gets at another bias, though not a cognitive one so much as a political one. Because of conservative demagoguing of poverty issues for decades, most people assume that people who want to reform the system are only trying to pinch money from those who need it the most. Part and parcel with that is the assumption that if programs were altered or cut, there would be mass suffering followed by a social-Darwinian extinction. In actuality, there is a strong argument to be made that the policies of those who want to cut those programs would benefit the beneficiaries (and healthcare workers!!) greatly.

Getting back to existence bias, it's wonderful to see a major paper actually engage in researching the merits of public assistance versus private funds. This is a direct benefit of Paul's campaign, and it's a conversation that's long overdue. The article eschews a discussion of Medicaid data, but does an okay job of explicating some of the arguments against Medicare for seniors. First, it admits that few seniors were turned away from doctors and that charitable giving was healthy and alive. Unfortunately, it makes an oddly blatant error in assuming that if Medicare were unavailable, seniors would not have health insurance. For most seniors--those in the middle and upper classes--if Medicare were not available, it is likely they would be able to afford health insurance and that a free market would pool risk better than a universal, government-run system. This would only leave the poor seniors, which I believe, are the only moral beneficiaries of government assistance (though I would rather private aid).

The article paints a picture of a system prior to Medicare where there was great need for assistance to seniors, but one where a system of charitable aid and gratis care did a good job of addressing that need. What the article fails to mention (and rightly, it's a small article) is that not only were those needs taken care of, but the decisions for care were made by those very close to the patient. A senior citizen, pre-Medicare, comes into a doctor's office and needs surgery but cannot pay, the doctor or the hospital itself will shoulder the cost. A mutual-aid or charity may help defray those costs. Regardless, the decisions affecting whether our senior citizen gets the operation they need is made by the doctor treating her and his direct administrators.

Let's take that same senior and fast-forward her to today. Her care is shouldered by each and every person in this country through taxation. The decisions for whether or not she gets that particular surgery (let's say it is an experimental surgery or may use a new instrument or technique) is made in Washington and not by the doctor or his administrators. Instead of being a person in care, she becomes an input into a much larger system. She must choose from a limited list of doctors and hospitals who will accept the paltry payments of Medicare, in addition to her possibly rationed care. If she requires aftercare and follow-up, those are much more likely to be rationed, as well. The cost of the surgery, her stay at the hospital, and doctor's fees are determined by Medicare--not by her doctor or the hospital. The hospital's incentive is not to control costs for her care, as in the previous example. Instead, their motivation is to extract as much government money as possible. Which is not to impugn hospital administrators as avaricious sociopaths, but merely people who respond to incentives in a tightly regulated financial market. In the end, she receives substandard and possibly rationed care in an impersonal system while the treatment and aftercare are provided at inflated prices which are passed on to the taxpayer.

All of this brings me to the title of this post: The Government as an Intervention. Central planners in the government saw a problem in the system--seniors faced high medical bills and had to rely on charity for care. It designed a system where they would receive free or close-to-free care at the expense of taxpayers. The system would control payments to doctors, implement price controls on medical procedures, and centralize planning with a bureaucracy to make decisions regarding care. As doctors, hospitals, and patients found ways around the cost-control measures implemented by the government, the bureaucracy must grow larger and exert yet greater control over these parties. As doctors specialize or bill for multiple services to get closer to free-market reimbursement rates, the government must implement countermeasures. When patients, such as my grandfather need assisted living care, they hide their assets 5 years prior to entering assisted living so Medicare will pay for the whole bill. If they don't, they will be on the hook for tens of thousands of dollars per year. (He actually didn't do this, but should have.)

What the article doesn't answer and what no one seems to ask is are seniors better off with Medicare? Is the US better off? At first blush, that question seems laughable. Of course we are! Of course seniors are better off getting care! Well, the choice isn't between whether to treat seniors or let them die. It's between covering them by socializing their risk and creating a massive bureaucracy (consuming 30% of total present-day federal spending) or covering them locally and privately through charities and free care.

You can take two approaches to looking at the results of this intervention. From a top-down perspective, you would have to look at aggregate statistics like number of people denied care, the quality of care they receive, and life expectancy (to name a few off the top of my head). This would merely prove, however, that Medicare has positive outputs. That's not really in dispute. If it only had negative outputs, I'm pretty sure we'd have changed that by now. We need to show it is better than a private system. Well, would a private system have similar or better results in access to care, quality of care, and length of life? The article does not provide statistics, and I don't have any, but it does mention that access to care was largely on par with Medicare, and we can't really acquire alternate-reality data on life expectancy without Medicare. That only leaves the quality of care. It's hard for me to gauge logically whether quality of care would suffer more under a rationed, controlled government market or under one where a person had to rely on charity. I just don't know. It seems at least plausible that a private system would lead to better outcomes in the aggregate than Medicare.

Where the private model really shines, however, is not in the aggregate, top-down view but in the lived experience of a person in the system. How is our nameless senior treated in both systems? In Medicare, she has fewer choices, less control of her care, and is charged an exorbitant rate for services (which is then absorbed by taxpayers). In private charity, she may have more options for care, but will be able to control her care and influence those who make decisions about it, and will be charged as much as she can afford. From her point of view, there is no question which system is more moral and just.

This analysis will hold true with any area of social support--Medicaid, housing, etc. When the government is the intervention, it's aggregate results are debatable, but the experience in the system is almost universally negative, impersonal, and (I argue) morally wrong. The providers of your social support network do not get to make important choices regarding your care. Our organizations are built on payment structures dictated by the government. We cannot be human because the system we are in is not designed for humans--it's designed for whatever passes for a widget in Economics courses.

Look down at the next post and that Bastiat quote. No one is saying we should let sick seniors die. We are just arguing whether government is the best method of achieving those important results.