45,000 Deaths per Year Linked to Lack of Health Insurance? It’s Their Fault for Being Lazy!

Or this is at least how I interpret Kiplinger‘s coverage of the health care debate. But let’s start from the beginning: A study by Harvard Medical School researchers has found that nearly 45,000 deaths every year can be linked to the lack of medical insurance and the inability of those lacking coverage to access good health care [link to Reuters story].

The final figure of almost 45,000 people has been obtained after analyzing data from 9,000 patients tracked by the U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics. As all statistical results, it will be subject to some margin of error, but its implications can hardly be overstated:

  • Lack of medical insurance is responsible for more deaths than drunk driving and homicide combined.

  • According to the study, the uninsured have a 40% higher risk of death than the insured.

  • The finding adds to the factors that led to the US being ranked 37th in a recent World Health Organization health-care ranking, slightly better than Cuba and below all other industrialized countries.

And this takes me back to a disturbing paragraph I read in Kiplinger’s October 2009 editorial, where Janet Bodnar writes:

I received an e-mail from an interest group helpfully providing me with a list of horror stories from people who couldn’t get affordable health coverage. I forwarded the message to contributing editor Kim Lankford, our expert on health insurance -who proceeded to suggest solutions to all their problems. […] [She wrote back:] “I wonder how hard these people tried to find better deals”.

This, I have to admit, is a work of genius. With one single sentence, Ms. Lankford brushes aside the so-called horror stories of 45,000 people every year, including those of the freelance cameraman with a burst appendix; the 51-year-old mother with undiagnosed heart disease; and the 26-year-old with unusual fatigue who died lacking health insurance -these three cases were covered this morning on CNN’s front page [link to CNN’s “Dying from lack of health insurance”].


Let me state my position on this debate clearly: I don’t condone the use of scare tactics by any of the two sides. And I’m not acquainted enough with the latest version of Obama’s proposal for reform to say that it’s the perfect solution. I’m sure it isn’t. But I don’t have any doubt that our system is broken, and I’m glad that the possibility of reforming is at least being talked about.

To suggest that the people who don’t have health insurance and end up dying for it just aren’t trying hard enough to find bargain-priced plans in our “quite healthy market” -Kiplinger again- is outrageous. And guess what? In countries like the U.K. or France, which spend a much lower fraction of their GDP in health insurance than we do, how hard you look for affordable coverage isn’t even an issue, since every citizen has the complete coverage that only the richest in this country can afford.

So this is my message to Kiplinger: while you -hopefully- reflect on the wisdom of minimizing the health-care drama into a simple “people should try harder to find better deals”, I’m canceling my subscription. Please be a little more sensitive next time.


  • What’s your opinion on this issue? Is it true that all uninsured people could find affordable, quality care if they tried?


How Economists Failed Us, Failed the Queen of England, and Keep Fooling Themselves

I read in astonishment an article on the July 26th UK’s Observer about a letter a group of economists sent to the Queen of England to answer a question she had asked during a visit to the London School of Economics.

It turns out that during this visit, while being no doubt showered with economists’ parlance and shown numerous graphs explaining -of course after the fact- the causes of the credit crisis, she asked the most sensible question yet to be put to an economist since the near-collapse of the entire financial world as we know it: Why didn’t you predict this was coming?

The letter, signed by a rank of experts from the Bank of England, academia, the London City, regulatory agencies, and businesses, makes a heroic effort to not point fingers, fails to put blame on anybody in particular, and can best be summarized as a less-than-satisfying “we’re sorry, but will try to do better next time”.

One of the economists’ excuses for this “failure of the collective imagination”, as they put it, is that some of them did foresee the crisis, they just failed to predict “the exact form that it would take, the timing of its onset and [its] ferocity”. It seems to me that this isn’t of much help. I can predict right now that in the next 10 years there’s going to be an economic crisis. I just can’t tell you where in the world it’s going to happen, what’s going to cause it, and how serious it will be. Surely you don’t need to go through Economics Graduate School to come up with this!

The other justifications -there were local warnings but we failed to identify the systemic risks, risk management was left to individual banks but they didn’t see the bigger picture, we believed that “financial wizards” had come up with new ways of managing risks, authorities didn’t want to burst the “feel-good” bubble, we trusted we’d be able to avert a recession once the bubbles bursted- sound equally lame and insufficient and, most of all, make you question the role of regulatory agencies.

The letter reminded me of two books I read recently, George Soros’ The Crash of 2008 and What it Means and Nassim Taleb’s The Black Swan: The Impact of the Highly Improbable, which, although very different from each other, share their view on the role and limitations of modern economics.

Both books’ authors agree that modern economics has gone too far in its attempt to separate itself from the rest of the social sciences. In the process of building ever more complex mathematical models based on untenable assumptions of rationality, economics has ended up unable to foresee drastic deviations from the long-term equilibrium such as the one represented by the current crisis -arguably the most important events economics should be able to predict in advance.

This points seems to be partly acknowledged in the letter when the economists say that “[the misguided views that traditional risk measures did not apply any more] were abetted by financial and economic models that were very good at predicting the short-term and small risks, but few were equipped to say what would happen when things went wrong as they have”.

The letter ends trying to give reassurance that the events of the past year have shocked economists and regulators in general into action. The signers intend to “host [a] seminar” were they’ll try to come up with a new “horizon-scanning capability” so that the Queen’s question doesn’t need to be asked again.

How much hope is there that they will manage to predict and react to the next big economic crisis in advance? In my opinion, very little. I’d have a different view if this were the first time economists have been surprised by a crisis of devastating consequences and huge reach. Unfortunately, it isn’t. I can think of at least one example in each one of the past four decades, two just from the beginning of the millennium. I bet that after every one of those they claimed they wouldn’t be caught up unawares again, and yet they eventually did -they let bubbles grow, exotic and difficult to regulate financial products spread, households over-invest in the stock market, over-spend in housing, and under-save without warning, they tried to predict new dangers using the paradigms of the past.

I hope more than anything that I’m wrong but, just in case, I’m spending time learning to take care of my finances, because I don’t trust economists -specially those in regulatory roles- to be able to do that for me.


The Ultimate Depression Survival Guide:

Protect Your Savings, Boost Your Income, and Grow Wealthy Even in the Worst of Times

On the road to $1M rating:


As you would expect from somebody who thinks we’re experiencing the “Second Great Depression” of modern times, Martin Weiss is more than a little angry with the people who got us into this mess. He starts the book with a description of the doomsday scenario that awaits us in the aftermath of the current financial crisis. And while he describes, he rants at the list of those responsible for it:

  • The US Government, who have thrown good money after bad in an effort to bail out banks, brokerage firms, insurers, mortgage brokers, automakers, and any other company who could just about argue that they are “essential” for the economy or “too big to fail”. The result? According to Weiss, sixteen times our biggest-ever federal deficit.

  • Alan Greenspan, who, by keeping interest rates artificially low in the firs half of the 2000’s, contributed to the subsequent consumption spree, housing bubble, and lowest household saving rates ever seen.

  • The Federal Reserve and the Treasury Department, who first decided to let Lehman Brothers fail, then backtracked in the face of the ensuing panic and threw themselves into bailing out the entire financial system with the Troubled Asset Relief Program (TARP).

  • The “Government-bred monopolies, corruption, fraud, and cover-ups” that stained every part of the financial system, from Freddy Mac and Fannie Mae to private mortgage lenders, rating agencies, banks, and large companies’ CEOs.

  • Consumers, who were willing participants in the massive money illusion that followed the outrageous stock-market returns on the 90’s and the housing bubble and endless supply of cheap credit of the 2000’s. We convinced ourselves that a lifestyle based on raiding our homes’ equity and maxing out our credit cards was not only reasonable, but also sustainable in the long run.

The list is longer and more detailed, but I wouldn’t have space here to go through it all. Suffice it to say that every single one of corporate America’s big shots is named in the book at some point or another.

No bad for an introduction, especially one that’s intended to convince the reader that a depression is inevitable, and that this particular book holds the secret of how to benefit from it. But the whole description of how we got into this mess doesn’t come across as particularly far-fetched. I found it often illuminating, and suspect that the reality may be even darker than Weiss suggests.

The rest of the book covers methods to protect or even increase your income during an economic downturn. I particularly liked the fact that it’s full of practical tips and helpful resources.

For example, you think your money is not secure on a commercial bank? Weiss guides you through the steps to open an account with the US Treasury Department. You think Wall Street is going to go down in the second part of the year? You find a list of more than 50 index and sector inverse ETFs, whose value increases when the value of the underlying index or sector plunges. Many books wouldn’t care to explain inverse ETFs work, let alone give compile for you a catalogue of ticker symbols. I appreciated the unusual level of detail.

So while I’m still not convinced about the imminence of a depression that “threatens to rip through our lives with the force of a hurricane”, I prefer to be cautious than sorry, and the book taught me a couple of tricks to hedge my savings against economic downturns. Even if you’re convinced that a bear market is just around the corner, there’s no harm in being prepared for the opposite, and this book is the place to learn how.


  • Do you agree with Martin Weiss that the current crisis will be followed by a long period of depression?

  • Would you bet on stock prices going down in the second half of the year by buying inverse ETFs?