I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter.
The whole point of insurance is that a middle-class family can afford to pay $12,000 or $18,000 in premiums per year, but they can't easily afford a $1M black swan medical event. So the insurance company spreads the risk out over a large pool. The system breaks down, of course, if the pool is too small. A company with 10 employees probably can't absorb a $1M expense either. But AOL has 5,600 employees and it had $1.05B in net income in 2012. They can afford it to cover expenses, even if they decide to self-insure.
Of course, another solution is to make the risk pool as big as humanly possible and to get employers out of the insurance business completely, so that no startup needs to worry about medical expenses. The AMA is a messy political compromise to do exactly that. But Tim Armstrong is also upset about the AMA. So I'm not quite sure what his ideal outcome is here.
"I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable."
"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan." -- Armstrong
Whether or not it's absolutely unacceptable to him is debatable, but it is clearly acceptable to use the cost of preserving the lives of his employees' children as a scapegoat, when many other expenses (large engineering salaries, "digital prophets" [1]) could have been noted as examples of excessive expenditures. What ekidd is mad about, and I think reasonably so, is that the attitude of "oh, our employee's child almost died which was costly, so let's cut some benefits" as an acceptable mindset to Armstrong is very troubling. In so doing, he is passing on the price of expensive healthcare costs from AOL to his employees, in the form of a slashed 401k. Now that seems to be pretty close to ekidd's paraphrase -- Armstrong does consider it unacceptable for AOL to pay for his employee's child's healthcare, because he wants to pass on that cost to his employees vis-a-vis 401k cuts.
Now at least in my view, I'd hope my employer would place employees' wellbeing first, and consider cutting benefits as a last possible option, but maybe you have a different view.
Setting aside the fact that the post above is obviously not quote from Armstrong, we can't say for certainty what he said because all we have is a reported quote in the press with the sources cited as an unnamed AOL employee's transcript of the call.
The alleged quote from the transcript is:
>“Two things that happened in 2012,” he said, according to a transcript provided by an AOL employee. “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”
If you believe the quote is accurate, Armstrong is clearly singling out these two babies as contributing to the reason why the 401k plan was changed.
But we lack all of the surrounding context, and the quote above wasn't even continuous. It does, however, fit the mold of televised arguments he gave on the subject. Obamacare and rising health care costs were cited and a decision to not completely absorb those and pass some of the increase to employees in the form of other benefit reductions was the argument he made in a few different places.
A poor comment to make considering the whole point of insurance and how it works, as well as the size of AOL's insurance risk pool IMHO, but then, I don't know if he even made that comment or qualified it with something like "But this is exactly the kind of worthy benefit and cost we believe should be prioritized above certain other existing benefits."
Given his response, it gives me the impression that he made a comment to this effect, and that it was a poor one to make, but that's just an impression. And it's even harder to say where his heart is on the matter. At the very least he has mentioned in interviews that they actively prioritized their benefits package in light of costs, and clearly healthcare was a higher priority than the 401k benefits that were cut. So for the poster to conclude that Armstrong deems covering the costs of these sick babies "unacceptable", I don't see it. The opposite, if anything. Whether or not he used the sick babies to rhetorically deflect from the fact that AOL is choosing not to absorb all of the rising costs and is passing them on to employees...well that is another story in my mind.
I wrote in haste while the mother's article was fresh in my mind and I was still assimilating Armstrong's latter statements, and it colored my reaction. I went back to rewrite exactly that part 10 minutes later and I was locked out by noprocrast. Consider my post retracted (and feel free to moderate as you wish, up to and including deleting my account).
I still have deep problems with his statement, and I haven't figured out how to articulate them better yet. But for now, my apologies to Tim Armstrong—whatever he said does not justify my hasty and unacceptably uncharitable reading.
What is your interpretation Paul? What did he say? Do you think Tim did anything wrong or do you advice that Tim sticks to his guns on this one & shouldn't have caved in with that second memo?
He shouldn't have mentioned specific cases. If he felt the company had to cut elsewhere to compensate for high medical costs, he should have left it at that level of detail. But I don't see how you get from what he actually said to
I'm utterly appalled at Tim Armstrong's attitudes towards
the lives of his employee's children. Apparently it's possible
to pay a programmer $100K/year, but spending ten times that to
save the life of one of his employee's children is absolutely
unacceptable.
Frankly, posting and upvoting that sort of comment is the behavior of a lynch mob.
I think saying "I'm utterly appalled" on an online chat board is a lot different from joining a mob to kill someone. Let's not make any Tom Perkins-esque comparisons here [1].
And people should certainly be allowed to react when those in positions of power say appalling things. Whether he thinks that is absolutely unacceptable is doubtful, but he clearly thinks that the $7.1M in healthcare spending is something that should have to come out of the workers' 401k. The OP wasn't quoting Armstrong, but what Armstrong actually said/did clearly mirrors OP's paraphrasing -- that health spending shouldn't be the duty of AOL, because it should be passed on to the employees through the form of a 401k cut.
Using the term "lynch mob" metaphorically is a long established usage. But in case you weren't just pretending to misunderstand me, I didn't mean that HN users are literally planning to kill Tim Armstrong. I meant the forces that drive lynch mobs are driving people here.
Oh don't get me wrong, I'm well aware you weren't claiming that people are planning to kill Armstrong. I'm just saying you're making ridiculous claims over a fairly tame paraphrase. Even from the well established metaphorical usage standpoint, this is nothing like a lynch mob. It's one guy expressing his frustrations. And he should be able to do that without you saying that the people supporting/upvoting him are like a lynch mob. Why do you think that everyone else responding to your post drawing those comparisons also thought the use of the term "lynch mob" was out of place?
It should be fairly clear from the responses to your post that the characterization of this reaction as a "lynch mob" does not meet the established standard of usage of this term.
Getting universally criticized for a statement is not a qualification for assuming "lynch mob" victim status.
> I meant the forces that drive lynch mobs are driving people here.
This particular statement can be interpreted in so many different ways that it remains meaningless as it stands.
...but he clearly thinks that the $7.1M in healthcare spending is something that should have to come out of the workers' 401k.
Which is utterly reasonable. AOL has allocated $X for employee compensation. The law mandates health care go up by $7.1M, so something else must be cut by $7.1M.
This is certainly bad for workers who prefer the 401k benefits to whatever Obamacare benefits are costing $7.1M (and it seems like this is many workers). But that's a problem with the ACA - blaming TA for that is silly.
I'm acutely aware that I'm effectively posting on your territory, but the term "lynch mob" seems to be almost comically inappropriate as a description of what actually occurred.
> Frankly, posting and upvoting that sort of comment is the behavior of a lynch mob.
Have you been reading the comments on the many political articles that now cross the front page of this site? The quoted comment is fairly tame stuff compared to some of the opinions expressed in those threads.
While the upvoted comment is a bit histrionic, I think it reflects the fact that Tim Armstrong could bring up specific medical cases as being contributing factors is a little frightening to most people.
We don't like to think about the reality that life or death situations we have no control over are being weighed on a balance sheet by people who's primary goal is making profits for shareholders.
I think Armstrong might be discomfited by the well deserved online education in social etiquette and the priority of life (of poorer people) over money. He sorely needs it and he will be the better for it, though a complete cure for him seems impossible.
> Did he say that?
Did I call you an ignorant money peddler, who thinks he is very smart because he can micro analyze statements and completely ignore the context in which the statement was made, as per his convenience?
No, he was cutting benefits in general and used healthcare expenses as a rationale for it.
This may be a good thing for the company's bottom line, but the optics are horrible. Even if the policy was sound (and I'm not sure it is), the delivery ruined it. It will be hard to say how he can be an effective leader at this point.
I don't see how you were disagreeing with me? He was making the 401k plan marginally worse, not cutting benefits in general. I wasn't saying anything about his ability to lead going forward, just that if their medical policy is going to continue to be willing to pay for these unusual events in the future that he probably doesn't view them as unacceptable.
He is cutting benefits overall, not completely, but it is still a cut. AOL decided to keep medical benefits high at the expense of retirement benefits. This is probably the right call, but the way that it was presented just made the entire thing look awful.
Regardless of what benefits were cut, citing specific instances of medical care as a cause for the cuts is such a horrendous mistake that it will be difficult for him to effectively lead. That was my addition. When your employees turn against you, and you have made such a blunder publicly so as to make potential employees not want to join AOL, it will be hard to lead. And the worst part is, it's not necessarily the cut itself that is the issue, but how it was presented and rationalized. Had he just said that healthcare costs are increasing, so to avoid cutting health benefits we are reducing (marginally) your retirement benefits, he might have been okay.
I mean, look at the way this sounds: Why is my 401k contribution lower this year? Because your coworkers had babies.
That may not be what he said, but that's where the story went.
He announced the company would be giving less money to employees, and blamed it on some babies, when he's earning, by himself, much more than the two incidents cost, and supposedly presided over a successful quarter.
Seems, if nothing else, a poor way of handling things. Even if you're a "tight-fisted homo-economomicus shareholder" the end result is bad, because in the end his gaffe and the subsequent publicity meant that he reversed the cuts, so the company won't get to keep that money.
I'm not against high pay for executives or that kind of thing, so I'm fine with him making oodles of money if he's doing a good job. Part of doing a good job in that position, though, is not sticking one's foot in one's mouth.
Also: I think there are certainly times when people just try and twist words to score political points, whatever the actual facts. This case doesn't strike me as one of those, really.
He announced the company would be giving less money to employees, and blamed it on some babies...
He announced the company would be giving the same money to employees but the distribution would change: more healthcare (as mandated by Obamacare), less 401k.
In my case, I read the mother's article first, and then Tim Armstrong's original remarks and followup statements. This substantially colored my reading, and not for the better.
If I brought political biases to my reading, they had more to do with a pre-modern conception of loyalty: true authority is built on loyalty towards those who are led. And I looked at this from the perspective of a parent, and from that perspective, the lives of children often weigh heavier than things like self-survival.
AOL absolutely did not desert these parents, and that's where my post was is undeniably in the wrong—and where I wanted to revise it shortly after posting, before I got caught by noprocrast.
Now, I've said things in my life which were dumb and out-of-place. (In this thread, even.) And upon re-reading, I'm willing to extend Tim Armstrong the benefit of the doubt: he may have hit upon a spectacularly poor way to explain why employees were losing benefits, despite having the best of intentions. But his remarks could be easily and predictably de-anonymized, with obvious consequences:
On Thursday, within minutes of Armstrong’s utterance, my husband began fielding questions from colleagues: Wasn’t the CEO talking about his baby?
And not did these remarks effectively single out a specific employee, they also singled out a specific 1-year-old girl—who already has significant problems—and they linked her to the company-wide benefit reductions (at least for those coworkers who knew the parents). And this is where I got too angry to read Tim Armstrong's actual words accurately. Which I regret.
The craziest thing to me is what an utterly small drop in the bucket this is and how Tim embarrassed the entire company and their stockholders over an expense that is <1% of AOLs revenue and is less than his yearly salary. He should have been immediately fired for both insensitivity and short-sightedness to the point of incompetence.
He is quoted saying that right on the linked page. But here is the exact quote, in case you haven't perused the original submission:
"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan."
...but spending ten times that to save the life of one of his employee's children is absolutely unacceptable.
It's not unacceptable according to TA. AOL insurance (pre-Obamacare) did pay for it:
"Two things that happened in 2012. We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs..."
Oh, I think I know. You are saying that ACA increased their costs, so they had to cut benefits to their employees because the federal government demanded that the company pay more money to the insurance companies so that the insurance companies could subsidize healthcare for unemployed and underemployed people? And Armstrong said he was cutting 401k benefits because of these cost increases?
I figure I am going balls deep into an internet tickle fight, but so be it.
Its not AOL's or his responsibility. If anything you can put the cost onto society as a whole. This is the type of insurance the ACA should have been instead of the crap we got. It should have covered catastrophic care, which means million dollar babies provided they can be saved.
No company should feel guilty not keeping up benefits because one or two cases blew the bank. They are not there to fix everything. Insurance is a benefit and benefits can be exhausted or become so costly that the cost of doing business means not being in business.
So yeah, it sucks. Welcome to the world. The solution is to put catastrophic care into the hands of government and let them decide who gets the care. Let employers and everyday people shop for the best care for non catastrophic care and do it across state lines. Put them all on equal footing.
So summary.
1) Government takes care of catastrophic care. They set the limits, the decide who. If you want more you buy it on the secondary market.
2) Individuals and business buy insurance from any/all provides regardless of state. The only rule is, preexisting conditions do not disqualify you. They can however put you into rule #1
The irony is that if we were to have a single payer or other form of universal healthcare like they do in France, this little girl likely would have died. In France they use "Statistical prognostic" approach which in these sorts of cases withhold NICU services for infants with statistically low outcomes.
The irony is that France didn't even allow most withholding of heroic neonatal care until 2004+ (e.g, la loi Leonetti, etc), whereas the US regularly refused such care until 1984 and then enacted statutory allowances for refusing futile neonatal care in 1986 (Baby Doe revised). Also see the Texas Advance Directives Act of 1999 and withdrawal of futile neonatal care pursuant to it.
In fact, France still does not allow withholding of nutrition and fluids from an infant not on a ventilator, a practice that is permissible in the US when care is deemed futile.
If you want an example of a state that practices more aggressive withholding of care in the NICU, look at the Netherlands, which has a private insurance model more akin to the US. According to the Nuffield report on neonatal medicine, "In the Netherlands, a consensus had been reached by 2003 that ... Dutch perinatal centers should not normally resuscitate and treat extremely premature babies born before 25 weeks of gestation, because of poor outcomes."
According to the report, the difference between the US model and the Netherlands could be seen in that twice as many premature infants born in the US survived to the age of two, but in the US five times as many premature infants had disabling cerebral palsy.
Where does this myth come from that universal healthcare systems like the European ones deny coverage for black swan events? They don't. What procedures are covered has little to do with whether the system is single payer or not.
I have a relative who works in a NICU. A 1 in 3 chance of death is actually pretty good odds (relatively speaking) for a premature baby in intensive care, so no, socialized medicine would not have killed this child.
The assumption here being that a live birth is as likely in France as it is in the US. What we should be looking for is percentage of survival for infants born sub 25ish weeks or something like that (I don't have that data).
UPDATE: And as we see from this paper from the WHO, live birth in the US is not what it means in France, for example. In the US it's any sign of life, in France and Belgium it's living for some period of time: "it has also been common practice in several countries (e.g. Belgium, France, Spain) to register as live births only those infants who survived for a specified period beyond birth"
Those statistics aren't exactly Apples to Apples between countries. There are just too many ways countries can cheat.
For instance, some countries (like France) ignore births before x weeks whereas most countries (including the U.S.) include all births.
Beyond that, the U.S. leads the world in premature birth survival despite also leading the world in assisting people with fertility problems to become pregnant and add to the statistics that on the surface seem problematic for the U.S.
Even your own data completely undermines your point. All those other countries have very comparable preterm infant mortality rates when measured against the US. You say the girl "likely" would have died in France, but in Norway and Sweden (two of the most socialist countries in the world) the girl would have had a better chance of surviving at 25 weeks. By your own data that is supposedly proving the ineffectiveness of single payer healthcare.
Go back to Fox News where people don't actually care about facts if you want to make sensational arguments with zero evidence.
Except for the part where this is 37 weeks and not 25 weeks which is 30% of the entire duration of pregnancy. The story is from AOL is at the 5 month mark which means it could be even earlier than that.
Can't go back to watching Fox News because I don't have a TV. Nice, red herring, though.
In the UK they give services, and reasses on an ongoing basis, so different than the French. Added some info for under 37 weeks, where the US comes out on top.
So are you admitting that your original point about single payer healthcare is totally BS? Because the UK has single payer and apparently you think they do a decent job with this situation.
If you had government mandated "socialised" health care like the majority of the developed world, the actual cost to provide health care would have been nowhere near as much.
I cannot fathom that people accept "12 to 18 $K" as a reasonable amount of money for health care.
>I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter.
All he said is they changed the 401k plan because of unexpectedly high medical expenses. He didn't say or imply he wished they didn't save the baby. I can give the kid's mother a pass on two pages of disjointed emoting, but I don't understand why a disinterested observer would write something like you've written.
I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children
Do you really think it's possible to have a comprehensive understanding of "Tim Armstrong's attitudes towards the lives of his employee's children" based on this one little blurb? I mean, seriously... I can't help but think people are constructing a caricature of the man, based on a very limited understanding, and heavily influenced by their own preconceived biases and generic "Robber Barrons, evil, muwahahahaha" stereotypes.
I'm not saying that Tim Armstrong is a good person, as I don't know him. But I am very suspicious of this rush to judgment that seems to be going on here.
He chose to make it specific, rather than just saying 'employee medical insurance costs were higher than expected.' By using the specific medical problems of two families to cast management in a positive light and also to justify changing the firms pension contribution structure to be less generous, he made the decision to present these issues as a zero sum game in which the beneficiaries of medical insurance - something which is part of employee compensation to begin with - were presented as the cause of a reduction in the pension compensation of everyone else.
All of that may, or may not, be true. But none of it addresses the issue I was questioning, which is how anybody can claim to understand "Tim Armstrong's attitude towards the lives of his employee's children" based on nothing more than this one news article.
I'm saying we shouldn't be rushing to judgment, and creating this caricatured images of Armstrong (or anybody else) and basically screaming "off with his head", without sufficient information.
Again, I don't know him... never met the guy in my life. He may be a complete douchebag and a total jackass for all I know. But it would be premature to conclude any of that from this story.
You're just quibbling over semantics now. It's still just one "news incident" if you're prefer that lingo. And it's still a mistake for any of us to assume that we now know all about Tim Armstrong as a result.
You seem to think that the number of times someone makes a carefully prepared public statement needs to be greater than one to determine what they think on the subject.
I do not see how the logic follows there.
That it's reported in the news or published on his blog or written in a memoir or whatever is not the relevant fact here. The relevant fact is that it is something that he carefully planned to say and said, and that is sufficient information to have high confidence that it is what he meant to say and therefore what he thinks.
You seem to think that the number of times someone makes a carefully prepared public statement needs to be greater than one to determine what they think on the subject.
I do not see how the logic follows there.
Then there really isn't anything more to say. If you really think a person's attitude (which was the original issue under discussion in this sub-thread) can be thoroughly identified and analyzed and dissected based on one example of their speech, then so be it.
I happen to think human beings are far more complex than that, that context matters, that there are huge issues of subjective interpretation and nuance in play, and that it's a mistake for anybody to assume that they have some kind of deep insight into this guy, based just on this.
That it's reported in the news or published on his blog or written in a memoir or whatever is not the relevant fact here.
Nobody is claiming that. What I'm claiming is "insufficient data".
The relevant fact is that it is something that he carefully planned to say and said, and that is sufficient information to have high confidence that it is what he meant to say and therefore what he thinks.
The problem is going from "what he said" to "what you think he thinks". He said something very specific, and I see a lot of people making radical inferences and generalizations based off of that. What he said is what he said yes, but people aren't just talking about that, they're talking about their own interpretation of what he said, which is colored by their own biases and preconceptions... and, in this case, probably just a little bit of mob psychology.
AOL may be a self insured group where it pays all of the medical costs for its employees. The insurance company merely provides administrative services such processing claims and paying providers.
What I want to know is what was AOL doing with the money that it was supposedly buying insurance with was it not actually buying insurance but trying to self insure? and using the "insurance monney" to boost its books?
The next Question is are the employees 401k's safe and accounted for or is Aol like Maxwell?
I was LinkedIn stalked by AOL HR two days before this happened. I thought about doing the interview just to get back in the habit but ended up declining the invite and indicating Armstrong's hamfistedness was the reason why.
I'm glad this article was written. Armstrong's statements were so despicable that in this case "airing the dirty laundry" is a perfectly appropriate answer.
I'm also surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America.
A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members.
What a sad, sad man. I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices.
> And to be honest, I'm surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America. A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members.
It very well may be a suable violation. HIPAA laws prohibit the "misuse and disclosures of PHI", and PHI includes a person's payment history, not just their medical records[1]. Such a breach by a covered entity is a criminal offence that can result in jail time by the offending employee[2]. As AOL isn't a covered entity (e.g. healthcare provider, insurance company, etc), I'm not sure whether it could be applied directly to Armstrong. You can probably push a HIPAA violation to the insurance company, however, as Armstrong most likely was told of these cases as the basis for group rate spikes during their insurance contract re-negotiation.
And those are just justifications related to violating patient privacy laws. I'm sure a lawyer could also make a pretty strong case against Armstrong personally for defamation.
IANAL, most of my knowledge of HIPAA compliance comes from Business Law classes and required trainings when I worked for a healthcare/hospital system.
However, AFAIK that would make them a covered entity. As a payor, they would have direct access to their employee's medical records. Whereas under normal circumstances, the payor/insurer only provides the employer non-PHI data such as enrollment/disenrollment info and summary data (at an aggregate level) to support pricing discussions, which is why they aren't usually a covered entity. You can find a good write-up on HIPAA requirements for self-funded insurance plans here[1].
> I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices.
I know the word "sociopath" gets thrown around a lot when we're talking about CEOs, but I really really think this guy fits the bill. And so, in all likelihood, he sadly will not feel or realize a thing even as he gets older.
My daughter had a similar birth and hospital stay, which also produced a million dollar insurance bill. It costs about $10,000/day to stay in the NICU. I was never able work out why it costs so much, except that this is a major profit center for hospitals, and they use the money to cover other, money losing, departments.
Fortunately Google is run by good people, and they were never anything other than supportive. I'm grateful for having had access to the best care for her. I do think our medical system needs some rethinking though.
It is unfortunate that Tim Armstrong made these statements and all of us who have had this experience need to relive it.
My daughter also had an extraordinary birth, and was saved by the incredibly expert care of a dedicated team of medical professionals at multiple hospitals in Seattle and Bellevue. The bill I saw was north of 250K and I paid the max of that (which was a few thousand)
It occurred while I was at a startup which i had co-founded (and currently employs over 100 people). I tend to go from startup to startup, with some contract / FTE work in between, and have swung from COBRA to COBRA to keep my health insurance consistent.
Because of ACA, this is the first year that I didn't have to "get a real job" in order to keep pursuing startups.
> I do think our medical system needs some rethinking though.
You probaby don't want to hear it, but if I were running a medical system I'd decree that gestating one-and-a-half-pound globs (from the article: "One doctor, visibly shaken, described [the fetus's skin] as 'gelatinous'") outside the womb is a waste of resources. To me, if miscarriages aren't the end of the world, neither are "babies" that die of natural causes within a few minutes of being delivered.
There's just no way spending a million dollars to raise a fetus up to the age of zero passes any kind of cost-benefit analysis. The cost of replacing the thing is much, much lower.
If the child lives to 80, she only needs to contribute an additional $12,500 worth of value to civilization per year for this to make economic sense.
Another way to look at this: the government has various estimates for the value of a human life. It averages about $7MM. The "extraordinary" expense of this child actually only requires a 14% increase in value over the average citizen to make sense.
Most importantly though, we must recognize that the actual cost is actually just the cost of risk spread across society, so instead of one person taking the brunt of this cost, we as a society take it together. As a whole, it is negligible on all of us, and it's a risk that any of us can fall into. The value of having a system that supports each other is invaluable. Way more valuable than a measly $1MM. We have strength in numbers and we all benefit when a society supports each other. If we ostracize the statistical outliers in this support system, then the support system itself (the one which we all benefit from) falls apart.
In short, more important than the economic argument (which I argue, still makes sense to spend $1MM on a baby), is the argument that the value to society from supporting each other results in a negligible cost for individuals and a near-priceless benefit to everyone within that society. It's exceptionally difficult to put a price tag on that, and it's orders of magnitude higher than $1MM.
That still doesn't maximize overall benefit. What if the money were instead spent on 10 individuals that needed 1/10 the money to save their lives? The cost benefit analysis to determine what medical issues make most sense should try to maximize the number of person-years-lived across the entire population.
The money spend where '1/10 the money' was needed to save their lives is additional money spent, not 'instead money'.
In this particular case, the 'instead money' was pure profits for a company (and some taxes for the government).
Do you really think that the 'instead money' would have been a better choice?
Money is just money and is completely replaceable. Actually, we have machines to make it: it's printable. Actually, we don't even have to physically print the money to 'print the money'... It's a number in a computer file.
Every dollar is the same as every other dollar.
Each and every life, on the other hand, is unique.
Unfortunately, I wasn't clear in my comment above like I was in other comments in this thread. I am specifically referring to a not-for-profit focused healthcare system. If the choice is between profits and the care necessary to help a life, then it boils down to the contractual obligation of the insurer given the level of coverage purchased. In a nationalized healthcare system where costs are spread across all of society and the government has more or less determined the pool of healthcare dollars available by specifying the premium spent per citizen, there most certainly is a cost benefit analysis to consider.
You're assuming that we're at capacity on spending, but we're not. Instead, we can afford to bring 11 individuals into the world. The absolute gain to society is still greater than simply bringing 10 into the world.
Maximizing number of total person years is not sufficient because a population 100x as large but living 1/5 as long would be superior to a population of the current size but living twice as long.
I'd argue in favor of maximizing population size and average lifespan. Of course this ultimately leads to the requirement that humanity moves off of this little rock of ours.
Given X amount of money paid per person as a in premium and Y number of people paying those premiums, we should have XY available to spend on healthcare. That is a hard cap on healthcare spending.
While we can afford to maintain* 11 individuals in the world. There reaches a point where over that entire population, we need to triage the medical issues in that population into the people whose issues maximize human-hours-lived given the X*Y healthcare dollars available to spend treating those issues. Maybe it's not the first person that requires treatment costing a million dollars we need to triage, but you eventually will run out of money if you don't triage because we simply don't pay unlimited premiums to meet the unlimited demand for healthcare.
The issue about overpopulation is a red herring, and in this case isn't just of function of helping people live longer. Many countries once they reach a level of prosperity stop having children at the necessary replacement rate of 2.1 children per couple once that society becomes affluent. The dropping replacement rate often correlates with societies ability to spend more money on helping their population live longer through spending on medical treatment.
> The "extraordinary" expense of this child actually only requires a 14% increase in value over the average citizen to make sense.
Ok, fair enough, we'll ignore the question of whether average really makes sense, but there's a bigger problem: there's absolutely no reason to expect this hugely premature baby to have >14% increase of value. Why? This is completely unfounded, completely unjustified. In fact, as a premature baby with massive expensive health problems, wouldn't we expect the opposite? Early childhood trauma seems like it'll matter to their future prospects: https://en.wikipedia.org/wiki/Preterm_birth#Prognosis (As makes sense. If babies could be born months premature with no negative effects, why aren't they being born that way already so they can start growing up quicker?)
It was one of three points made, the last point being the most significant. Our humanity should take priority over negligible costs.
> there's absolutely no reason to expect this hugely premature baby to have >14% increase of value
Without a standard deviation on the average, there is no way to say whether or not 14% is reasonable. Regardless, I was simply pointing out that it's a small fraction rather than orders of magnitude greater. Even if the child winds up providing 50% of the value of an average person, it can still be a net gain.
Economic reasoning is just one (minor) aspect to this situation though. There is very real value in simply helping a fellow human survive.
> as a premature baby with massive expensive health problems, wouldn't we expect the opposite?
The stats you cite are for extreme cases on the edge of viability and the odds still slightly favor normal or near-normal development.
This particular baby was born with a 66% chance of living and deserves more than a quick dismissal.
> If babies could be born months premature with no negative effects, why aren't they being born that way already so they can start growing up quicker?
That's horrible reasoning. The human body has evolved over millions of years for birth. It is the optimal gestation machine. We're working on approximating this optimal machine with artificial machines and continue to rapidly make progress. In the rare situation where the human body fails for some reason, we attempt to augment it with the best artificial machines we've got. Nobody claims that premature births are better, but a hiccup during pregnancy shouldn't mean the end of a life if we can avoid it.
Humanity progresses when a society looks out for each other. In particular, without bias. That starts at birth.
What you're proposing is barbaric and borderline infantcide.
> Without a standard deviation on the average, there is no way to say whether or not 14% is reasonable.
There is no reason to expect the expectation of preemies to be above average, never mind 14%, never mind standard deviations. And there is substantial empirical evidence which I linked you to expect it to be far below average. Rescuing a preemie, even if it were free, would be a bad idea compared to alternatives like simply trying again.
> Even if the child winds up providing 50% of the value of an average person, it can still be a net gain.
And we're right back to your original problem: you are not thinking on the margin. The alternative to spending millions on premature babies is not no babies ever. (And even if it was, there's still superior alternatives: for example, lobbying for Open Borders. Think of all the millions of immigrants who'd love to come to the USA, for free! We wouldn't even have to pay them! Why, even if they're 99% below average, it's still a gain!)
> The stats you cite are for extreme cases on the edge of viability and the odds still slightly favor normal or near-normal development.
Which is what we are discussing, is it not? Or do even slightly premature babies come with million-dollar pricetags...?
> That's horrible reasoning. The human body has evolved over millions of years for birth. It is the optimal gestation machine. We're working on approximating this optimal machine with artificial machines
I'm not seeing any disagreement here. Yes, the human body is the optimal gestation machine. That's why premature babies come with all the penalties. (And note that those citations are just the penalties sufficient to be documented with small samples; there's not much reason to expect the penalty to abruptly cut off somewhere, it's just the long-term effects shrink enough to be hidden by noise and methodological problems and researcher careers' limits.)
> That starts at birth.
An arbitrary line is not a good basis for a system of ethics and governance.
> What you're proposing is barbaric and borderline infantcide.
I'm happy to own to that. It is infanticide. Premature fetuses are not humans in the moral sense: they have no hopes, they have no dreams, they have no desires or preferences, they do not think, and they have the moral status of a puppy or kitten. Given the disabilities they come with, throwing away hundreds of thousands of dollars in heroic medical measures is a crime against society and the person the parents could have raised instead.
I agree with your parent and thus don't want you in charge of "running the medical system," either. But we don't have to have one or the other. You buy your insurance policy that covers whatever it takes to save your fetus and I'll buy my policy that doesn't (and spend the difference on improving the lives of my healthy children).
Failure to think critically about how to value life results in harmful abortion and euthanasia laws and is contributing to the high cost/benefit ratios of our healthcare system. We have quite enough people thinking only emotionally about these issues.
This is pretty obviously preferable to the situation we have in health care today in the U.S., where you're (more or less) forced to get employment and health insurance from the same company.
No it doesn't - these are not mutually exclusive choice. How are expenses for US health care and aid to foreign countries related? You could just as well budget the money for the latter against the expense for a coffee, an aircraft carrier or Armstrong's salary.
I totally agree that health care is too expensive at the moment.
There's just no way spending a million dollars to raise a fetus up to the age of zero passes any kind of cost-benefit analysis
If you look at the cost in dollars per QALY, it's not that bad. That million dollar treatment probably produces 40 QALYs, for a cost of $25,000 per QALY; Americans typically pay $50-100k per QALY.
I see the logic here, but I don't really agree with it. Obviously, if the fetus had a million dollars of its own, it would happily spend them for the purpose, and that would be a sensible investment. But it doesn't, and I don't think it's a sensible investment for any third party, even the parents.
I suggest you inform yourself about the gestation process. I used to think the same way, but when we had my daughter I was surprised how early everything happened. First, embryonic age is measured from the date of the last missed period. So even people who find out early are already several weeks along. By six weeks, before many women even realize they are pregnant, the embryo has a heartbeat. By 13 weeks, most of the basic functionality is already there. By 24 weeks, or the time the baby is a pound and and a half, the fetus isn't a glob, but a fully recognizable, if fragile, human. Much of the development after that is external: hair, subcutaneous fat, etc. I don't know what you consider a coherent thought, but at our 24 week ultrasound our baby already responded as we tried to push her into a position to check her gender. I don't think infants who are born full term are more intellectually sophisticated in some fundamental way.
Yes, this has implications for abortion. I support abortion rights, but the "its just a ball of cells" is a rationale that isn't convincing after week 6-9. And lines drawn on intellectual abilities don't justify in a principled way why it isn't okay to abort full term babies. Lines based on viability are susceptible to the progress of medical technology. The typical 24-26 week line we use is fairly arbitrary in all three regards.
You know I don't agree with the point you've tried to make but it's good to read arguments from various perspectives. Having said that, your last sentence is unnecessarily and (perhaps intentionally?) hurtful to Paul. Would you really call someone else's child "the thing" in person?
Just curious, do you have kids? I might have agreed with you before I held my preemie (only 5 weeks, nothing like the baby we are talking about) in my hand:
It's easier to make the calls before you have a kid, they are calls in theory. After you have a kid you are changed, what was an obvious call becomes much much more complex.
If you can make that call after holding your own kid, wow.
I don't have children of my own. When I was 16, my mother gave birth to twins, so I have more parenting experience than the typical childless American, including that of holding closely-related infants.
> It's easier to make the calls before you have a kid, they are calls in theory. After you have a kid you are changed
Very true, but I don't see myself reversing on this.
Not sure if this helps or not but before we had our first my wife and I sounded a little like we were on the same page as you, more black and white. For example, we were mid 30's when "we" got pregnant so there were concerns about Downs and other stuff that happens when the eggs are older. We were pretty darn sure that if there were any "major" problems such as Downs, we would abort. It seemed pretty obvious what the right call was.
After having the first one? Things changed. Downs really didn't seem that bad compared to a life. I'm still pro choice and I don't think you could pay me enough to judge someone else's decision, that's their choice and it's hard enough without my irrelevant opinion in the mix. But for me personally? The bar on where I would go with an abortion went WAY up after having a kid. Way up.
Just trying to say having a kid really changed my thinking and I suspect I'm not that unusual in that respect.
There's no comparison. I don't think it's possible to understand parenting without actually being a parent. I certainly wasn't able to understand it before, and I thought more as you do now.
I was once a childless single white male programmer. Oh, and an asshole. Didn't realize it at the time but I wised up. Give him time and cut him a little slack, he's entitled to his opinion.
He's entitled to his (ignorant) opinions, but he's not entitled to be so pointlessly rude and cruel with his method of expressing it.
If this was a dinner party, I'd quietly ask him to excuse himself, and he'd never be invited again. His choice of language was pointlessly cruel and outrageous.
I suspect he didn't view it as being rude, he viewed it as doing the right thing. He probably truly believes what he is saying, I used to think stuff sort of like that. My guess is he is somewhere between 23-32 years old, that was my stupid range :)
I guess the point is don't assume he's being an asshole, a real asshole would troll harder. I think he believes what he is saying. Yeah, it's rude but I'm not sure I'd be willing to write the guy off.
If all conversations were limited to dinner-party politeness, we'd remain trapped in a state of childlike obliviousness about the real disagreements and difficulties of the world.
(My dinner party would welcome both paul and
thaumasiotes, as people able to speak about a difficult topic calmly, with strong and contrasting perspectives based on real experience. In contrast, yscale would be asked to apologize or leave for content-free name-calling.)
I agree with your point of view, but I don't think you've phrased it productively, let alone respectfully. I know it's a touchy topic, but you'll be a better advocate if you avoid flying off the handle.
I don't necessarily agree, but I don't think your opinion should be downvoted.
Consider this: We as a society have more than enough wealth to give ICU care to every infant that needs it. Our medical system is what makes it expensive.
> We as a society have more than enough wealth to give ICU care to every infant that needs it.
I'm not particularly informed here, but this is a claim I'm willing to accept.
> Our medical system is what makes it expensive.
This isn't right. Giving intensive care to extremely premature infants is inherently expensive, in much the same way that mining is expensive because you have to move tons and tons of dirt. It's difficult, and it requires a very large quantity of dedicated resources; it will not be cheap at any point in the foreseeable future no matter what organizational changes we make. We'd need technological changes.
How many tons of dirt do you need to move to give intensive care to an infant? I spent quite a bit of time in the NICU and was never able to locate the $10,000/day expense. Medical expenses have more to do with billing codes and reimbursement rates than anything fundamental.
This information comes from consulting my mother (who is an obstetrician):
The most "direct" cost of NICU care is 24-hour supervision by a nurse. In the best (cheapest) case, this will cost the same as 12 hours of minimum wage per day, as nurses might be in a 1:1 or 1:2 ratio with patients. More realistically, the nurse will be making higher than minimum wage.
The NICU fee also covers the amortized cost of three major pieces of capital: the ventilator, which causes the baby to breathe, the incubator, which keeps it at an appropriate temperature, and the negative pressure room. A particular infant may or may not need the negative pressure room, but it exists as a (physically separate) part of the NICU, the hospital must have one, and it's hugely expensive to create.
Additionally, the baby is expected to suffer various bodily failures which will require treatment. Diagnosis and treatment of these will be charged separately; they are not covered in the NICU fee. But they do reflect that these babies would really rather die, and it's difficult and expensive to get them to live.
My mother says (paraphrased), "if you are the army, you buy all the machines yourself, you pay everyone army salaries, and you just assign them 'you'll do this job, you'll do this job', etc., I don't know what it would cost to run an NICU. There's definitely room for it to be cheaper."
From what I've read, it is the very nature of the beast (purely private, for profit health insurance) that causes the costs to be higher.
As I said in another comment, an earlier claim of "13 to 18 $K" for health insurance seems ridiculous, coming from a country where $6k gets top-level private insurance (to cover electives, get a private room vs shared, etc) on top of "free" health care) for a family.
You place more importance on $1M than on a human life? What if it was your child, would you be doing a cost/benefit analysis and turning to your wife and saying "sorry honey, it will cost more than $100,000 to save our child. might as well get her put down"?
This depends on how much I need $100K (odds are I can pull this together if I'm attached to the child), and, crucially, on the age of the child. I place essentially no value on a child at negative eighteen weeks old.
I mean, would you personally pay a million dollars to save my child? I'm no more attached to a new nonviable fetus than you are to my (imaginary) 11-year-old.
If I ran a business that turned over $1.05B, and you and I had some form of relationship be that employment or friendship, of course I would. If I had any reasonable number of resources I would prioritise saving lives over building a collection of sports cars or properties. Especially so if I ran a hospital.
Of course this perspective is easy to take from the UK where we don't have to face tough financial decisions over healthcare.
The thing is, children's medical care as a whole is not relatively expensive. Elderly care is.
This kind of event is super rare. However,it's not nearly so rare to have an older person go through tons of procedures and spend months in the hospital.
As callous as it is, this is the best solution under a not-for-profit health system. The cost-benefit analysis in such a system is not 1 million dollars in shareholder value versus 1 million dollars to save a life, but instead is 1 million dollars to save one life (just the first year to save the child. there most certainly will probably be a lot more money spent over the entire life of the person born under such conditions) versus splitting that million dollars over procedures and medicines to save several lives.
At the end of the day, you need to value all person-years-lived equally, and determine who gets treatment and for what based on what maximizes the number of person-years lived over the entire pool of people.
I have no numbers to back this up, but I would expect the greatest benefit from a fixed amount of healthcare dollars spent will be on people between the ages of 4 and 20.
Once you've figured out roughly the cost per medical issue, frequency per capita of each medical issue, and a distribution graphing that issue against the age at which most people are afflicted and number of years left in their lives given their demographic, you can probably come up with a reasonable algorithm for maximizing person-years-lived at a certain health premium per person per year (assuming all dollars go back into the system).
Then the only remaining question that is left for society and individuals to answer is what level of premium will be paid and the medical issues that will be covered at that premium.
Furthermore, I think it would be interesting if we gave people in medical situations the following choice:
"The procedures necessary to save this person's life are estimated to cost 1 million dollars. You can choose to save this person's life, or you can choose to donate $800 thousands dollars to save X number of lives by donating it to procedures that maximize the number of lives saved."
People choosing to exercise their right to spend healthcare dollars on a lifesaving procedure for one individual are the ones that should have to face that philosophical and ethical dilemma of deciding to value one life over many.
If I were running a healthcare system, I would make it policy that everyone put in such a position would have to knowingly have to make that hard decision. It's the only sane way that would put the burden of callousness on the people with the right to to those health services. Just because you have the right to those services, doesn't mean you should exercise them in a not-for-profit healthcare system.
> There's just no way spending a million dollars to raise a fetus up to the age of zero passes any kind of cost-benefit analysis. The cost of replacing the thing is much, much lower.
Second-order emotional (and nth-order social and monetary) costs are part of a comprehensive cost-benefit analysis.
The cost of even thinking in terms of "replacing the thing" is predominantly the cost of complete societal ostracism.
It is impossible to do a cost-benefit analysis on something like that. It is worth any amount of money if the child can be saved. I'd go to the ends of the earth for my children.
Who knows what these children could end up being or doing as adults? Who knows what value they could end up bringing the world? What they might invent? What health issues they could solve? What priceless works of art they may create?
No it's not. We're dealing with the scarcity of goods and services here. Healthcare needs are unlimited and supply of the goods and services is constrained. Whatever the amount of money needed to save that child's life, you need to consider how many more children, not your own, could be saved instead had the money been spent on other people's children with life-threatening issues that are cheaper to treat.
Who knows what those other children who didn't get treatment so that this one could end up being or doing as adults? Who knows what value they could end up bringing the world? What they might invent? What health issues they could solve? What priceless works of art they may create?
What if this couple had been given the choice to forgo saving their own child's life and instead donate that $1 million to saving many children's lives in some other country that don't have the resources we have here in the US. Every time society chooses to save one life at considerable cost, it is also choosing to condemn others. What if you had to make the same choice, what would you do?
This is a human being we are talking about. A child.
I like to think of myself as someone who can usually empathize with folks who hold a different point of view, but I have never been able to understand someone who looks at a human life in terms of a "cost-benefit" analysis.
> This is a human being we are talking about. A child.
This glob we're talking about has less in common with a (prototypical) human being than does a 29-week fetus still implanted in the womb. You're taking a strong stand here in the abortion debate; is that intentional?
If we think microeconomics for a moment: healthcare for distressed infants could be a textbook example of inelastic demand. Q: How much are you willing to pay to save the life of this child? A: ALL THE MONEY! AND MORE!!
People are a little more willing to spend someone else's money on less-than-worthwhile pursuits than they are to spend their own. As long as the customers aren't bearing the cost, everything they buy will have a similarly inelastic demand. Healthcare for distressed infants is certainly not an example of inelastic demand where people have to pay for it themselves; even food for healthy infants (a much smaller, and much more cost-effective, expense) doesn't show inelastic demand.
I gave you an example. Mothers uncertain of their ability to raise an infant will abandon it to die (this is traditionally called "exposure"). It's a practice at least as old as humanity. And it conclusively demonstrates that the demand for infant care is not inelastic; these mothers aren't killing themselves trying to preserve their nonviable children. Rather, they're killing the children so that they don't die themselves in the effort to save a doomed child.
I think your example conclusively demonstrates that people in radically different economic and cultural circumstances have different attitudes towards their children. This is a completely fair conclusion, but has very little bearing when reasoning about health care for infants in modern neonatal ICUs, especially infants with rich technologist parents.
> If it was a question of saving my child's life, I'd spend every last cent I had and then go sell a kidney.
there is no distinction between being unable to raise a child, and being unable to survive the attempt. If you survive, the child will get raised. The only way to fail is by dying (or killing the child).
I don't really understand how anyone can lump a real child with whom you have years of shared experiences, who you've loved and taught and who has a personality of its own in with a lump of cells that's yet to have a coherent thought.
Did you really think my argument was that anything that is a lump of cells that has never had a coherent thought has no value?
I can understand a sense of loss in losing an infant at birth. You make plans for the child and are excited to meet the person they will become. It's a miscarriage. A similar loss is learning that your spouse can't get pregnant in the first place. It's not the same as losing a child of 3, 6, 12 or 24.
> You make plans for the child and are excited to meet the person they will become. It's a miscarriage.
You often interact with children in utero before they are born. Also, at about 4 - 5 months (it'll vary from jurisdiction to jurisdiction) a miscarriage becomes a stillbirth and requires a birth and death certificate.
And while I have not lost a child at 3/6/12/24, I have lost a child at 6 months into a pregnancy, and it was quite probably the worst experience of my life - worse than my experiences during this: http://en.wikipedia.org/wiki/2011_Christchurch_earthquake - and I was trying to dig crushed people out from underneath rubble.
Births are (these days anyway), normally a joyous event wherein a new life comes into the world. A stillbirth is the polar opposite - especially if the baby died sometime before the birth was induced.
Just correction a misconception here. The human brain "boots" on the 18th day after conception (you can set your watch to it). It is obvious on echo pictures that coherent thoughts are present on the 21st day after conception (e.g. if awake, most kids are aware that they're being pictured and attempt to find and play with the source of the sound, I think that qualifies as coherent thought).
It is quite obvious on the 23rd day that fetuses are swimming around and exploring their environment purposefully. They are at least as alive and coherent at that time.
The reason for this is that your DNA does not contain a plan for a human being. It contains a plan for a bilobite (an very old and presumed extinct form of life), and a way to transform a bilobite into a trilobite, a trilobite into something that resembles a fish, that fish into something very similar to a frog larva, and so on and so forth until you get a human. Other species have the same evolution in the womb/egg, except it diverges at some point.
The fish has a working brain (and it is unknown whether the trilobite does, it grows active neurons), generally referred to as a neural tube. That brain is working during the whole gestation period.
>It is quite obvious on the 23rd day that fetuses are swimming around and exploring their environment purposefully. They are at least as alive and coherent at that time
Um well it isn't a fetus at 23 days its an embryo...
Thanks, that's very interesting. Whether it's a fish brain or frog larva brain or something more, though, my point is that it's not yet intrinsically worth protecting as human life. Its worth is all potential. Consider: how much would would this life be worth if brain development stopped at this point? For a newborn or earlier, the answer is not much.
I am strongly "pro choice" - i would allow abortion on demand upto 21 weeks and after that with medical need. I think the way we deal with children who have very poor quality of life and very little chance of living beyond a few months after being born is really poor.
None of this is incompatible with saying that the "clump of cells" is precious and worth preserving, and that parents should have support before, during, and after pregnancy to help this child.
My father in law is a neonatologist and was given an ownership stake of the NICU he started in a midwestern hospital.
He makes around $4 mil/year.
Granted, he does sometimes stay at the hospital for two weeks at a time with only very brief visits home but at this point he also owns apartment complexes, office buildings, a gentleman's ranch with a few dozen horses and staff and on and on.
I think it is shameful, personally, that he profits so much. He works hard and he saves lives, it's true, but how much is enough?
Speaking as someone who is also familialy-related to a neonatologist and a cardiologist -- both of whom earn more than a few million per year, I'd say they deserve every last dollar of it. They had to go to school for some while, and work under very tiring schedules. Hell, their schedules are still to this day pretty sucky -- they often tell me how much they envy me for my startup I'll-do-whatever-I-want-whenever-I-want lifestyle.
I think they both earn somewhere between 2 to 5 mil/year, but they spend it extravagantly and handsomely -- that's a very good thing. They're spending it on boats, cars, houses, nannies, restaurants, vacations, etc. etc. They're keeping the money going, they're spreading it out. They save lives, get money, and then help the economy by spending this money.
Now, what IS shameful is what the salaries of these social-app CEOs are. Why is Zuck worth some 20 BILLION? He's just going to sit on it, unlike my uncles he's not going to spend the majority of it. Zuck isn't helping the economy, Uber isn't helping the economy (it's externalizing costs, privatizing profits -- if they didn't exist that'd be a good thing). What is shameful is the profiting from rent-seeking, from making a killing on capital gains, etc. etc. Getting a few million per year isn't that bad, because believe it or not, in the large scheme of things that's little money -- most importantly, it's money that one can realistically spend from year to year. Spending a billion -- that's a challenge.
Why is Zuck worth $28.8 billion? Private property rights and a tremendous success. How do you know he's just going to sit on it? You don't, which null and voids your entire premise.
Spreading money out, ie redistribution of previously existing funds through service based consumption industries, is a very mediocre example of "keeping the economy going." Production is what bolsters an economy, not consumption. The faltering US economy has been demonstrating how that works in practice for decades, while China's production-centric economy demonstrated the exact opposite (and the same principle that the US economy was originally built on: production creates wealth, consumption destroys wealth, which is easy to deduce logically).
And sitting on wealth is a tremendously benevolent thing: it removes that purchasing power from circulation, boosting the net purchasing power of every other person holding, for example, dollars. If Zuck puts his $28.8 billion in a bank account, it does two wonderful things for the economy: it becomes available to be lent out by the bank in question, to help fund businesses or similar, and it temporarily removes $28.8 billion worth of dollars from the economy, increasing what other people's dollars can buy.
You're worrying about the wrong things. The problem here is not the pay of heart surgeons and neonatologists, the problem is with insurance companies, our healthcare system, etc. etc. Focus directly on fixing those issues, large salaries for surgeons is only a red herring.
But large incomes for people like Zuck is a problem. That makes no sense to me.
I think it is shameful, personally, that he profits so much.
Profits from saving human lives. Can a price be really put on a human life? Sure you can cite economics and a number like $7MM or whatever, but would you, personally, decide against paying that amount (assuming you had the money) to save your or your loved one's life, push come to shove?
And of course, it is always about resource availability, in this case the resource being money.
He works hard and he saves lives, it's true, but how much is enough?
Demand and supply. He works at a level of specialization that is a cluster of "black swan" events. Hence also, his crazy hours and most importantly, responsibilities. Do you have experience working at a position that is a nexus of similar conditions? Have you ever felt responsible for the life of not one but multiple human beings? And have that responsibility extend over your entire career, each day, every day? Now tell me, how much money would be enough to do work like that and keep doing it well?
Note: I am specifically focusing on money, because that is the question that was raised. Let's not divert the conversation into job satisfaction or humanity and all that, in this particular discussion.
This is the crux of the problem. You can't really.
The interesting thing is that his brother is a physician with very similar training in the UK (they both went to Trinity in Dublin). Does he get $4 million a year? Not by a long shot. Is he hurting for money? No. He has a large house and equally large family, travels all over the world and in general has a wonderful life. Granted he's never bought a yacht on a whim 6 states away, neglected the insurance and have it sink in a hurricane before he ever got it out of the marina (true story) but he is not hurting. Is he any less responsible or hardworking than his brother? Were any fewer lives saved under his care?
You can't measure these things in terms of widgets and currency.
To do so is mere rationalization as if the current state of affairs isan economic inevitability. It clearly is not.
All else being equal, would the brother turn down the money if he were given it? Would he turn it down merely and strictly due to the number of zeroes tacked after the first six digits? How would anyone in his position make a decision either way? All questions worth thinking about. And IMHO, intricately woven of human nature and our immediate economies. I fail to see the foundation of a moral dilemma, leave alone outrage, in all this. But then again, I plead that I am merely following my own moral compass!
>Would he turn it down merely and strictly due to the number of zeroes tacked after the first six digits?
Of course not. And I don't blame my father in law for taking the money either. Why wouldn't he?
I understand your confusion. I was not clear.
I don't think it is personally shameful for my father in law to accept the money. I think it is shameful that we, as a society, have allowed a system to function where he is offered that kind of money. You can cite 'market forces' as the reason that state of affairs exist but the truth is that the market doesn't exist in a vacuum. It is shaped by regulations, standards and bureaucracy put in place by intention or by accident by human beings. No place is that more true than healthcare.
Whether it is doctors that own a hospital or surgical center that, on paper, operate at razor thin margins while paying their principal shareholders, who happen to be employees, exorbitant amounts of money or urine testing companies charging thousands of dollars for a single drug screening while giving kickbacks to doctors in the form of leasing office space in their clinics for far more than market rates for their representatives, or medical supply companies that charge more for refilling oxygen tanks than the tanks themselves cost new and filled then we have some inefficiencies that could use the light of day below the surface.
None of these things are crippling in and of themselves. All of them together are creating a crisis that affects almost every person in the United States.
"... except that this is a major profit center for hospitals, and they use the money to cover other, money losing, departments ..."
I think you, like many people, misunderstand the reimbursement regime as it works in American hospitals currently. A patient in an ICU will typically have a DRG associated with him/her. This DRG relates to the acuity, and these in turn, impact the reimbursement level. This is because the complexity of care, as indicated by the acuity level, implies higher resource utilization. For instance, the patient-nurse ratio in a typical hospital room is somewhere right around 4:1. In ICUs this ratio is, more often, 1:1. The ICU also needs an array of techs for a patient... highly specialized techs capable of analyzing and acting on information coming off of the monitor that the tech is responsible for.
So hospitals are not saying, "Hey... we have these people here who we can get a lot of money out of!" The system, as it currently stands, is "volume based", so money comes in for ICU care regardless of what the hospital wants. One of the issues with being volume based in this fashion, is that money does NOT come in for things like data analytics, nutrition departments and occupational therapy for instance. Now here's the rub... how do you offer comprehensive ICU care without due consideration of nutrition? Without the ability and expertise to analyze the data coming off of what could very well be an extensive array of monitoring equipment?
It actually goes further than that... Most hospitals MUST have a clinical equipment department for which they are not reimbursed at all. Of course, the creation of an ICU withOUT a clinical equipment department is out of the question.
So while there do exist cross subsidies in any given hospital, it misses the mark to view the departments on the receiving end of the subsidies as "money losing". This sort of thinking has led the industry to all of the issues we see presently. A good example is the poor reimbursement of primary care... and so primary care becomes "money losing" when viewed in that manner. Instead, I think these departments would better be viewed in the fashion that they are viewed in the "value based" reimbursement regime that the industry is currently transitioning to.
Not only will care delivery facilities be in a better position to provide care to families like your own and others, but the quality of care will increase across that enterprise. Your family was given high quality care because the hospital took money from a "volume based" reimbursement system, and distributed those monies based on the judgement of what were probably some very clever "value based" administrators. I can pretty much guarantee you that they did not view Clinical Equipment, Data Analytics or Nutrition as "money losing" departments.
One of the things that has been missing in the discussion about the health care system is the education of the typical citizen about the tradeoffs and compromises that, for example, hospitals are making internally to deliver the quality of care that they do. I think if the citizenry had a more full understanding of the nuances of things like the reimbursement system, we could have a more productive debate on the issue of healthcare.
I didn't mean it as a judgement. It's just the reality that some procedures and areas of the hospital reimburse at much higher rates than others, and it's often unrelated to actual expenses. This isn't random speculation on my part -- I've spoken to hospital administrators as well as entrepreneurs working on fixing it.
Tim Armstrong has an incredible ability to say the wrong thing.
The underlying topic, however, is fascinating. I do healthcare analytics for a living so I see how often a single neonatal ICU incident can consume 30% of an entire company's healthcare budget for the year (note: if you don't really understand healthcare, e.g. what self insuring means, please don't respond with comments that the insurance company pays the bills, this is what insurance is for, etc.).
The economics of healthcare combined with the inability to have a rational discussion on how to allocate resources means that doctors / researchers will apply their research efforts where they will be rewarded. The race to keep younger and younger babies alive is fueled with ego and dollars.
No one wants to talk about scarce resources and how to allocate dollars to have the most impact. I wish conversations stemming from idiotic comments like Armstrong's ended up being productive but they always end up with non-actionable ranting around taking executive pay and giving it to sick people. Unless someone proposes a mechanism to achieve that, it's just a dream / rant.
The race to keep younger and younger babies alive is fueled with ego and dollars.
If you actually look at the global data on neonatal mortality [1], that doesn't seem to be true.
Countries like Finland, France and Cuba perform better than the United States on this metric. These countries offer completely free healthcare to babies and pregnant mothers.
Frankly, I find your assumption borderline offensive. Maybe you should take your USD-tinted healthcare analytics glasses off for a while and contemplate the possibility that human lives are worth saving.
> contemplate the possibility that human lives are worth saving.
Here fucking here.
What do we want to accomplish with the most advanced civilization history has ever seen? Advertising? A flourishing human condition? Fart apps? All? None? Anarchic meritocracy? It's all on the table.
This is one of the most profound and insightful comments on this page, and I wish I could upvote it more than once.
Did we come all this way so that we could buy a second SUV for 25 people, or do we instead want to save a human being with a life full of potential (and spare incredible grief from at least two other persons in the process)? We should do a cost benefit analysis! [0]
Thanks. I was actually thinking about that when I wrote it, but opted for full-on indignation of the moment, rather than calm and contemplative dictionary checking.
>> Maybe you should take your USD-tinted healthcare analytics glasses off for a while and contemplate the possibility that human lives are worth saving.
FYI - I've dedicated the last 10 years of my life to the cause of saving and improving as many lives as possible. Haven't had a paycheck for going on 4 years. Personal attacks like yours don't bother me but are frustrating because it's an example of the difficulty we face as a nation in our effort to improve our healthcare system. We all (myself included) get emotional over individual stories (e.g. Armstrong's comments over 2 lives) but have a much harder time seeing the invisible wreckage and thousands of people dying because of our distorted economic incentives.
> In the United States, all infants who show signs of life at birth (take a breath, move voluntarily, have a heartbeat) are considered alive.
> In Belgium and France — in fact, in most European Union countries — any baby born before 26 weeks gestation is not considered alive and therefore does not “count” against reported infant mortality rates.
The baby at issue here would have been just under 22 weeks. (France changed their standard in 2008-2009; their page defining stillbirth ( http://www.insee.fr/en/methodes/default.asp?page=definitions... ) now includes a warning that French numbers cannot be compared to other European neonatal mortality numbers, so it seems safe to assume the rest of Europe has carried on as before.)
> According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child.
The article baby weighed well over 500g. But this is quite relevant to the question of who has better neonatal mortality.
> In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates.
This baby's length is not reported, so this is of questionable relevance to this particular baby. But, again, it remains very relevant to the question of "do countries like Finland, France, and Cuba have better neonatal mortality than the US?"
> If a child in Hong Kong or Japan is born alive but dies within the first 24 hours of birth, he or she is reported as a “miscarriage” and does not affect the country’s reported infant mortality rates.
This could be a non-premature, 8-pound baby!
> Efforts to salvage these tiny babies reflect this classification. Since 2000, 42 of the world’s 52 surviving babies weighing less than 400g (0.9 lbs.) were born in the United States.
Still think "USD-tinted healthcare analytics" biases you against saving premature babies?
Full disclosure: I'm with your parent; I consider spending so much pumping life into these very premature "babies" a self-aggrandizing waste of time, effort, and money. But your comment seems to be grotesquely misinformed.
The article you quote is out of date. Many of the countries mentioned, like Germany and Austria, are self-aggrandizingly wasting time and tax money pumping life into <500g babies regardless of whether the law considers these living children or not. After all it's the doctor who makes the call, not a lawyer.
You can verify this by looking at the Tiniest Babies Registry [1], which was also mentioned in the article (those 52 surviving babies -- but the toll today is already at 155). The numbers are not so skewed towards the US as they were in 2008. In recent years, about half of these tiny babies were born in Europe, Japan or South Korea.
How exactly are outliers like this not "what insurance is for"? I'm curious (not arguing). I could understand that 'self insuring' is a different beast, but isn't the point of insurance in general (not just healthcare), to protect against outliers?
If the company didn't put aside enough money to account for unexpected cases, such as this, arn't they just being negligent (or at the very least causing their own financial problems)?
> the point of insurance in general (not just healthcare), to protect against outliers?
No, the point of insurance is to enrich the stockholders of the insurance company. This might sound like a leftist rant, but it's actually the singe most important thing to understand about the insurance business.
If a policy term doesn't contribute to the bottom line, it's changed to disfavor the policy holder. If a deductible amount eats too much into corporate profits, it's changed to disfavor the policy holder. These facts explain why some companies and individuals choose to self-insure.
If you buy an insurance policy, the policy's payments go into a corporate investment pool that benefits only the company's stockholders. If you self-insure, the funds you set aside to pay claims go into a personal investment pool that benefits you. For the life of me, I can't understand why more people don't know this.
Agreed, the point of 'any' company is to enrich the stockholders.
I was more saying the point of insurance in general to those buying the insurance is to protect against outliers.
Not debating the point that insurance companies are there to make a profit rather than to service people. Agree with what you're saying but it doesn't address what I was asking.
Edit: Also since AOL 'self insured' there wasn't an insurance company at the heart. AOL just decided to cut corners and 'put away money for a rainy day', and was shortsighted on how much to put away, to put it simply
> I was more saying the point of insurance in general to those buying the insurance is to protect against outliers.
Yes, and the basic principle of an insurance pool is to use the pool's size to absorb the impact of an outlier event. The larger the pool, the better it is able to absorb such an event. This means a small company can be a risky place to set up a self-insurance scheme on which the employees depend.
> since AOL 'self insured' there wasn't an insurance company at the heart. AOL just decided to cut corners and 'put away money for a rainy day', and was shortsighted on how much to put away, to put it simply
Yes, and that's a surprisingly common outcome -- it's the downside of self-insurance plans -- often a company or an individual doesn't actually have the resources to deal with an outlier, or a sudden surge in claims is synchronized with a business reversal.
But it's sold to payers of premiums as protection against outliers. And if it's sold as such, but isn't really, then it's fraud. Let a hundred lawsuits bloom.
That's all true, but even gigantic insurance companies are sometimes overwhelmed by a surge in claims. Is that fraud too?
People need to understand that insurance is a kind of gambling -- a bet that claims won't wipe out the fund pool, that a random act of nature won't undermine the actuarial assumptions on which the pool is designed.
> (note: if you don't really understand healthcare, e.g. what self insuring means, please don't respond with comments that the insurance company pays the bills, this is what insurance is for, etc.).
Could you explain more about how self insuring works?
> Could you explain more about how self insuring works?
In normal insurance, the policy payments go into an investment pool that benefits the corporation's stockholders. In self-insurance, the set-aside funds go into an investment pool that benefits you (or your company).
The drawback to self-insurance are outlier claims that can more than wipe out the set-aside (as in the case under discussion). Obviously an insurance corporation has (or should have) a larger pool to deal with outliers than an individual or small company.
This is not to say that big insurance companies aren't sometimes wiped out by a sudden unexpected uptick in legitimate claims. In that case, the company may simply declare bankruptcy and the policy holders are left out in the cold -- just as though they had self-insured. But that's a rare occurrence.
The problem with a self-insurance plan re-insuring is that it undermines the very reason for the self-insurance -- it erodes the advantage of local investment of the set-asides.
But not totally, and would presumably protect against catastrophic catastrophes by spreading the meta-risk.
You could make the same argument against having home or medical insurance, that it erodes the advantage of having the totality of your take home pay. But it seems responsible to have home insurance and medical insurance, and it would seem responsible for a self-insurer to reinsure.
The problem with re-insuring is it's not one thing and its not the other. The advantage of self-insurance is diminished, and the advantage of conventional insurance is diminished also.
> it would seem responsible for a self-insurer to reinsure.
Reinsuring is sort of like being married, and not being married, at once. Many people think that sounds pretty cool -- until they try it.
Reinsurance policies can be pretty bespoke; you could for instance get a policy that only covers you in the event that a tornado hits corporate HQ (=> driving corporate revenues down and healthcare costs up at the same time), or individual payments above a certain amount, or N% of aggregate claims above a certain level. You still preserve most of the benefits of self-insuring while protecting yourself against outliers, in the same way that you come out ahead if you skip insuring the loss of your refrigerator, but do insure the loss of your house.
The biggest issue is the principal-agent problem - it costs some amount to insure against once-every-20-year claims, and by that time the CEO is likely to be retired, so why buy the coverage?
That's one of the reasons why insurance companies per se are highly regulated.
yes. every self insured company I've known re-insures. When you get to the size of Wal-Mart, perhaps you don't bother. For smaller employers, reinsurance (also called stop loss) is a major cost
> How often do self-insuranced companies run out of their set-aside?
I don't have any figures at my fingertips, but I know it's more often than insurance corporations, which are highly controlled by governmental oversight to prevent that very thing.
> When that occurs, do their employees simply go without health care?
Yes, that's exactly what happens. Sometimes instead, a company will stop offering in-house insurance and require employees to seek insurance elsewhere.
It sounds like working for a self-insured company is strictly worse for employees than working for a company that offers insurance through an insurance company, risk-wise.
Not "strictly worse", because if one cares about maximizing profits for the company and wages for the employees, the self-insurance route might be better overall. Formal insurance arrangements can be a real drain on resources. On the other hand, some companies choose to self-insure without fully appreciating the risks.
How serious are the risks to the company's other assets? Can a company limit the damage to its other assets if the money it set aside for insurance gets used up?
> Can a company limit the damage to its other assets if the money it set aside for insurance gets used up?
Yes, but at risk of civil lawsuits from the insured, who might have a different perception of their coverage. This kind of thing actually happens, often based on an implied contract between the employer and the staff that may have never been fully committed to paper.
> No one wants to talk about scarce resources and how to allocate dollars to have the most impact. I wish conversations stemming from idiotic comments like Armstrong's ended up being productive but they always end up with non-actionable ranting around taking executive pay and giving it to sick people. Unless someone proposes a mechanism to achieve that, it's just a dream / rant.
What about progressive taxation and nationalized healthcare, like most wealthy countries do?
What is the frequency of these kinds of incident per thousand live births? What I'm saying is should you not be in favour of a much larger risk pool? Is there any way self-insuring corporations can pool risk without the overheads of an actual insurance company?
UK perspective: I'm interested in the concept of 'health analytics' as our present government are sort of dancing round the edges of the NHS (knowing that any form of direct privitisation/move to insurance based benefits would result in prompt removal from office).
AOL could've chosen a 3rd party insurance company instead of self-insuring. Self-insuring was probably a decision intended to save money compared to getting an external health provider.
The CEO could conclude that these outlier events create too much unpredictability for the bottom line, and thus move the company to an external healthcare provider. Heck, they could even fire the CFO or whoever made the cost-benefit analysis if it was wrong. But blaming the employees, who didn’t create this situation? Unacceptable.
Thats the real shocking part here. AOL made a poor business decision, paid for it, and the CEO, the very person in charge of business decisions, blames medical complications from a fucking baby. It is absolutely unfathomably terrible from a quality human being perspective.
Isn't self insuring generally considered more efficient for companies of this size?
I can't find the link right now but I read somewhere that it is common for large companies that self-insure to buy reinsurance to cover themselves against large payouts like in Armstrong's mythical example. The company will typically have an insurance policy for their insurance policy.
Third party insurance doesn't necessarily save you when this happens. I worked for a company with third party insurance, and when one of my coworkers had a kidney transplant we lost money that quarter as a result of extra charges.
If your company cannot afford to pay $1M insurance claims, you shouldn't be in the business of insuring medical coverage. You should be re-insuring that risk. There are many companies that will be happy to do this for you.
The fact that apparently AOL is on the hook for medical claims by its employees indicates they've made a reasoned judgement that their risk pool is diverse enough that it's worthwhile to self-insure, or they're incompetent.
Either way, it's crazy to set yourself up as an insurer and then complain about having to pay claims. That's kind of the point.
Exactly. The expectation from the outset would have been that they'd pay out less over time but experience more volatility, given the small risk pool. Complaining about the volatility is just nonsensical.
I expect Anderson understood this but had to look for a reason to cut 401K matching in a profitable quarter, and increasing executive compensation didn't sound quite right, so... the high cost of saving babies! Whadda guy.
Yes - there is a middle ground for self insured companies called a stop-loss provision. Companies can still get lower premiums through being self insured, but are also covered against huge losses over a specified amount.
In addition to the horrible way this was handled by management, this is clearly the failure of the AOL benefits team, who exposed AOL to more risk than it was actually prepared for.
I also had a distressed baby a few years ago that spent months in the NICU of one of the best children's hospitals, had multiple surgeries, was in and out of the hospital for the first few months of his life. Ultimately an incident occurred that left him brain dead and on life support before he was 6 months old. We decided to remove life support and held him as he died in our arms. The family insurance plan offered by my ~1000 employee public tech company covered everything. I never saw a single bill and only had to pay the requisite co-pays. Always wondered how much it all costs...
Less dark: we used to measure budgets, wages &c in units of Rovers (millirovers for small items) for some years in a place I worked in because the Principal decided to buy herself an official Rover - while at the same time freezing expenditure on such fripperies as textbooks, photocopying paper &c. That one ended up on extended sick leave and then a payoff...
Spreading the risk is only half of insurance, the other half is deciding exactly what hazards are covered.
In normal first-world countries you have some form of socialized healthcare with bioethics committees that decide what should society should pay for. You can have reasoned arguments about end-of-life care and very premature babies.
But in America with the crazy system of employee-provided coverage it's the CEO that sets coverage limits, and generally speaking a company's interests are not aligned with society in general.
Tim Armstrong blaming Obamacare (its mandate for medical coverage for situations like this) for the benefit cuts also has an interesting implication:
If not for Obamacare, AOL would have provided a insurance plan that wouldn't have covered this child, and instead left her to die and her family in a permanent state of medical bankruptcy.
ETA: For the record, I think most insurance policies have covered this for awhile. But Armstrong's either very confused, or, more likely, just struggling to find a way to point fingers at anything who's not him.
That's not exactly accurate - he's blaming Obamacare for them having to provide new insurance products that have a net higher cost going forward - the incident of distressed babies happened before the ACA, which means they did have that choice, and chose to pay the costs.
Regarding what most insurance policies cover, there are actually several scenarios that would leave AOL on the hook. First, they could have a policy that has an Annual or Lifetime payment limit, which would leave the company (or individual) responsible for anything over. Alternatively, if the number of incidents was significantly higher than average for the carrier, AOL could see a significant premium increase due to the higher utilization of their plan. Or, they could actually be running a self-funded insurance program, which means they are managing the risk instead of relying on a separate insurance carrier.
Either way, there are several situations in which AOL's costs could be significantly impacted by the situation.
According to the article, the family had family insurance plan which would have existed before Obamacare, so I think this is a bit of a red herring. I think he was pointing to increased costs of Obamacare AND the distressed babies as examples.
But I agree, if you can't use your insurance when you need it, whats the point of insurance?
The point of insurance is to make money for people selling insurance. That's why those companies employ teams of people who look for ways to avoid paying insurance.
That's why those companies employ teams of people who look for ways to avoid paying insurance.
You mean the people encouraging people to use proper fire-safety techniques, "baby-proof" their homes, eat more healthful foods, exercise regularly, etc?
Of course every insurance company knows they will have to pay some claims at some point, it's a cost of doing business. So their entire purpose isn't to avoid paying claims, it's to charge enough in premiums to cover those claims while still making a profit.
left her to die and her family in a permanent state of medical bankruptcy.
I can't get my head round this, as someone born and raised in the UK, America's health care system (or lack there of) is the single thing that will stop me ever wanting to live in the US.
A national healthcare system doesn't take away any of the things you get in the US. Many employers offer private medical insurance, and one can choose to pay for individual treatments privately if one wishes. So if you're wealthy or have a good employer, you're in just as good a position as you are in the US (and if you're poor, you're better off).
The reason you can't wrap your head around it is that it's not actually true.
People love saying that about America, but it's not true and never has been.
For cases like that there is government insurance. It's called Medicaid, or Chip, or a bunch of other names, and it's available everywhere.
(And it doesn't help that the person you replied to is doubly confused and combined two unrelated things to confuse him even more. The CEO was saying that Obamacare was an added expense - it had nothing to do with the babies.)
To be absolutely clear: The CEO is the person who rhetorically conflated Obamacare and having to pay for the babies, not me. Don't try to poison the well by trying to shift his misspeaking to me.
> Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012
Assuming the above is factual (and I have no reason to doubt it), he wanted to cut the 401(k) plan for everyone because of an expense that was one twelfth the size of his own pay that same year.
Just as an aside, I think AOL had the highest stock price increase in 2012 of any comparable company. I wonder how much of compensation was due to capital gains.
We need new words to describe new patterns of social news and commentary. For aspects of this situation, I first propose 'paraphrage':
paraphrage (v): to paraphrase in a way to maximize outrage
Tim Armstrong has been widely paraphraged as saying, "we're cutting your 401(k)s because two AOLers had distressed babies last year".
Paraphraging not only brings many profitable clicks, but it removes complicating details that interfere with an audience's offensertainment.
offensertainment (n): amusement or enjoyment felt by taking offense, and expressing moral indignation, usually in solidarity with some larger group
The isolation and individual disempowerment of modern online life has driven many people to seek a compensating sense of joy, purpose, and belonging through offensertainment. Leading offensertainment providers include Gawker, the Huffington Post, and Slate, but the full participatory experience also requires forwarding, commentary, and button-pushing through services like Reddit, Facebook, Twitter – and HN.
An amazing, baring article that brought back too many memories (our first son was early and classified "distressed", though not nearly to this degree). I'm glad to see she's doing so well, and I really have to wonder why pay health insurance premiums (that claim to cover this sort of catastrophic event), if you can't cash in on that policy should you ever need to (all the while praying that you don't).
It's not like CEOs of large companies are selected for being empathetic, but in this case I'll predict that he doesn't survive the publicity surrounding his statements. Children are (and should be) important to a civilized society regardless of their present capabilities or future expectations.
1. The costs of the procedures involved are wildly inflated by the private sector healthcare system we employ.
2. Regardless of 1 the effort involved in keeping the child alive was extraordinary.
3. The effort involved was disproportionate to the benefit to society.
It's unlikely the reader will agree with 3. That's ok. But I would ask anyone who disagrees with 3 to think carefully about if there is a line where the effort to save a child's life is too great, and if that line exists, how would you determine where it is, and given that method where is that line for you?
Armstrong's quotes are quite deplorable and the backpedaling is cringe-worthy but all i could think of while reading the article is Mrs. Lovejoy from the simpsons, "Won't somebody think of the children?!"
Because somebody should think of the children. And the geriatric. And the disabled. Part of the point of having a developed society with a developed healthcare system is using it to sustain people who can't sustain themselves.
I think this article isn't important because one person happened to say something rude about somebody's daughter. It's important because it's a peek into how a lot of people are actually thinking about the world, and that's pretty scary.
No hard feelings. The article is important - especially being from one of the mothers affected by the statement, her words carry more weight than others for sure.
However, i do also think her bias in the matter let the article drift from the costs of cost-cutting in health care (losing faith in a business), and slide into fearmongering. A harsh word, yes, but she has a platform, she has our attention, and she has experience where it counts, but instead of showing what we can learn from it, she decided to pull our heart strings at every turn.
Have you considered that rather than this being a calculated attempt to affect mass opinion on something, this is in fact primarily a mother expressing her distress about what she perceives as an attack on her child?
I didn't read it as trying to make any point other than "this is awful and unfair and my daughter is innocent of wrongdoing."
I don't know that it's as calculated as it seems like you think it is.
Of course i don't think it's calculated. Does the PTA mom who demands creationist teachings in school calculate exactly how to guilt trip the administration? Of course not. Rather emotion and personal morals influences their decisions.
Same here, the emotional toll and frustration derived from the comments (again, which were completely uncalled for) overly influenced the article. There is no reason for her to not be frustrated and angry, and putting that into her writing is important. It should not, however, be the primary driving force of the article, otherwise it's just plain manipulation.
> I didn't read it as trying to make any point other than "this is awful and unfair and my daughter is innocent of wrongdoing."
My point exactly. To reiterate, she had a platform, she had us listening, and she knows what she's talking about, but she missed the opportunity to spark a real discussion of how to prevent this from happening again. Instead she only focused on relating her frustration to every other parent reading, which in my opinion, can be very manipulating. Using the anger that her daughter was a target, and the fear that even though they're innocent they were punished is manipulative. "Won't somebody please think of the children?!"
The point about "won't someone please think of the children?" is that its usually uttered when something that doesn't affect children is going on.
It's a demand that society fight a bogeyman that poses no real threat to children: Sonic the Hedgehog or communists or "gay propaganda" or saucy pop videos.
Asking that one's health insurance cover the delivery of one's baby seems a pretty legitimate demand.
I can't imagine that Tim Armstrong sits at home stewing about the high costs of distressed babies, but singling them out in this situation is deplorable.
I don't think you guys understand how this works. Armstrong earned his $12 million salary. Employees, meanwhile, receive health care as an unearned benefit bestowed on the commoners by the wealthy. If they abuse this gift (by having premature babies, cancer, etc.), they will be expected to make up for these extra costs elsewhere.
Blame the law for this: clearly those employees who abuse the system should be fired outright, preferably on a conference call with 1000 people in attendance. Sadly, due to government overreach, it is considered illegal.
Helping others is something that we did for very long long time
"The third stage, based on findings from Europe between around 500,000 and 40,000 years ago, sees humans such as Homo heidelbergensis and Neanderthals developing deep-seated commitments to the welfare of others illustrated by a long adolescence and a dependence on hunting together. There is also archaeological evidence of the routine care of the injured or infirm over extended periods. These include the remains of a child with a congenital brain abnormality who was not abandoned, but lived until five or six years old. The researchers also note that there was a Neanderthal with a withered arm, deformed feet and blindness in one eye who must have been cared for, perhaps for as long as twenty years."
The other very odd aspect of this story is blaming 7 million in new costs on Obamacare.
A large company like aol would have already provided pretty good health benefits. It is very unlikely that the ACA's provisions about mandatory coverage for procedures (such as birth control) would have cost aol anything significant.
"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general."
Is this how health insurance works? Maybe AOL is "self-insured"? I don't understand AOL having anything to do with paying directly for medical treatment. Except, by virtue of making claims and costing an insurer money, the premiums increase. It's as if the insurers, ever-faithful capitalists they are, want to sell us insurance and can't believe we have the gall to make claims against our policies, and have convinced our employers to be equally appalled.
How about AOL stop whining about paying for medical care, and stop employing "digital prophets"? Perhaps then they could afford both the insurance costs and 401(k)s.
They should have gotten secondary catastrophic insurance. I.e. only for claims over some dollar amount, which are very rare and very cheap to insure for.
AOL decides to take on the responsibilities and risks of an insurance company and then blames the employees and Obamacare when it doesn't work out? Wow. Armstrong is quite a piece of work.
Well, if you work for him, you apparently get Compensation, including salary, 401(k) matching, and a health plan that'll cover your infant's medical expenses even if they run to like a million dollars. For someone or another, that's probably the best deal they were offered.
I don't understand - doesn't insurance pay for such costs? Why is it an extra burden for a company if one of their employees needs money from the health insurance?
1. Baby born Medical cots $1 Million, INSURANCe COStS $250,00 and yet Tim decides to eliminate 401ks to balance benefits costs over something that does not increase insurance costs? You have to have a significant amount of $250,000 in an insurance pool of AOL employees before that happens..one is not the number that triggers it.
@. He also cited Obamacare. Obamacare is by design to get businesses to pay healthcare for those at-risk employees in the low income brackets so that that preventive health care spent on them decreases the huge medacaid expenses seen later by THE FEDeral Government.Lets not even mention the productivity studies that state employees are more productive when not worrying about uncovered medical expenses.
Seems tome the AOL board shold remove this CEO for gross lacking of clear thinking skills
Tim Armstrong shows us directly what the upper class actually thinks of us.
The mean-spirited worldview shouldn't be a surprise. What is a bit brazen is the "turn the poors on each other" behavior. Usually, it's not so obvious. He had hoped that the rank-and-file employees would, as a response to this phony scarcity (health benefits OR 401k, when the real problem is executive overcompensation) imposed from above, turn their frustrations and gripes at colleagues who get sick a lot (or have sick children, or sick parents) and that the environmental change would, perhaps, prune the company of a few sick people. It didn't work. Now everyone hates him. Good. I hope he dies alone, broke, and miserable. (The "broke" part probably won't happen, but one can dream.)
Whenever the upper class tries to turn the rest of us against each other (say, Mission lifers vs. Google bus riders, who are on the same side even if they don't know it) we should always recognize it for what it is, and attack the real enemy with our combined force.
The whole point of insurance is that a middle-class family can afford to pay $12,000 or $18,000 in premiums per year, but they can't easily afford a $1M black swan medical event. So the insurance company spreads the risk out over a large pool. The system breaks down, of course, if the pool is too small. A company with 10 employees probably can't absorb a $1M expense either. But AOL has 5,600 employees and it had $1.05B in net income in 2012. They can afford it to cover expenses, even if they decide to self-insure.
Of course, another solution is to make the risk pool as big as humanly possible and to get employers out of the insurance business completely, so that no startup needs to worry about medical expenses. The AMA is a messy political compromise to do exactly that. But Tim Armstrong is also upset about the AMA. So I'm not quite sure what his ideal outcome is here.