Tuesday, September 26, 2017

Healthcare and Insurance (2)

Insurance Model
Insurance is very effective for risks with low likelihood and high impact, but it stops working if the risk changes from being low likelihood to extremely widespread. That is why insurance companies have exemptions for extreme events like war and so-called acts of God. If the city is bombed during a war, nearly every house might be burned down. In that situation, sharing the cost does not help. Paying for a thousandth of the cost of rebuilding all the houses is no cheaper than the cost of rebuilding your own house.

Pooling the risk of an event that will affect everyone similarly makes no sense. Insurance cannot deal with a widespread risk because there is no benefit in pooling the costs.

An insurance model does not work for healthcare, because the conditions necessary for pooling risk do not apply. Health claims are not rare, because almost everyone makes claims against their health insurance. If everyone is making regular claims, the insurance model is inefficient, because the bureaucratic costs of handling claims are high, and costs are not really shared. Insurance companies tend to “gold plate” treatments, because that allows them to increase their margins.

With health care, there is very little uncertainty about where the risk will strike. Most expenses will be incurred by the elderly and by people with existing health issues. The probability of a claim is skewed towards these groups.

Forced Sharing of Risk
The problem with medical insurance is that young people have a very low probability of making a claim, while those who are older or unhealthy have a higher likelihood of making a claim. If they pool the risk, younger people will end up subsidizing the old and sick. That makes no sense, so young people would usually be better off not having health insurance.

If only sick or elderly people were insured, they would not be pooling risk, because everyone would be just making claims from each other.
If everyone is likely to make a claim, that is a situation of high likelihood and medium impact. This kind of risk is hard to pool, so there is not much point in having insurance. It just adds a costly administrative layer that transfers money between people. They would just be paying administrators to manage expenses they could manage themselves.

To be effective, health insurance needs young and healthy people to subsidise the old and the infirm. People were willing to do that once, but now they have woken up and are opting out. Consequently, free-market medical insurance does not work very well.

Obamacare gets around this problem by making insurance compulsory and preventing insurance companies from refusing to insure the elderly and people with pre-existing conditions. This forces the young and healthy to subsidize the old and sick. This is fine if voters accept that this is what is happening, but they usually do not.

A single-payer system has the same effect. Everyone pays tax at the same rate (more or less) and everyone gets the health care that they need. Again, this means that the young and healthy subsidize the healthcare of the old and infirm.
Single-payer is a misnomer. There is not a single-payer, as everyone pays through their income taxes. Universal payer would be a more accurate name.

The disadvantage of a single payer is that people lose control over how much health care they will receive. Governments rarely budget enough money, so there is never sufficient health services for everyone (Of course, when services are free, the demands expand significantly). Bureaucratic processes have to be put in place to ration scarce health care resources. People who are sick often struggle to persuade bureaucratic gatekeepers that they are sick enough to need care.

The situation is made worse by technology. The range of practical surgical interventions has grown immensely. People are living longer, so everyone needs their knees and hips replaced and their shoulders reconstructed. Some need these several times during their lifetime.
New drugs for cancer and other diseases are extremely expensive. A treatment can sometimes cost several hundred thousand dollars a year, for uncertain outcomes and marginal benefits. This places enormous stress on single-payer systems, because decisions about treatment often become political.

Politicians often get involved in deciding on the value of a life, sometimes on an extra three months of life. In an insurance model, the pressure of technology falls on premiums. In a single payer system, it falls on politicians.

Monday, September 25, 2017

Healthcare and Insurance (1)

Americans are really stirred up about medical insurance and healthcare.

America began with a charity model of health care. I do not know the history of how it changed, but the charity model turned into an insurance model. All that remains of the charity model is a few hospital names pointing back to a more generous past.

Some Americans are now arguing for a single-payer system.

To understand the problems with the insurance model, we need to understand the nature of risk.

Pooling Risk
Understanding and managing risk has become a bit of science. Risk has two parts.

  1. Likelihood
  2. Impact
Likelihood tells us the probability of an event happening. Impact tells us how much harm the event will do. The two factors are combined for an assessment of risk. An event that is highly likely is not a problem if it has no impact.

Insurance is a method of pooling risk to minimise the cost of rare events to any one person.

Insurance works well for situations where the risk has low likelihood, but high impact. For example, the likelihood of a person’s house burning down is quite low. However, the impact is enormous, if it does happen. House insurance is a method for pooling the risk and the costs.

In a city with a thousand homes, only one homeowner might experience a catastrophic fire in their house in any year. If everyone who lives in the city pays into an insurance fund, each homeowner will only have to pay one thousandth of the cost of rebuilding a home to give the insurance fund enough money to pay for the cost of replacing the one house that is burnt down. Homeowners have several good reasons for paying into an insurance fund.

  • No one knows in advance who will have a fire. It might be me.
  • The cost of a fire would be devastating for the family whose house burns.
  • The cost of the insurance is relatively cheap.
  • The probability of a house going on fire can be estimated by looking at the history of house fires.
Insurance deals effectively with risk like a house fire, because it is relatively rare. The insurance company is able to estimate the probability of fires occurring and calculate an appropriate level for premiums. Everyone benefits from sharing the costs of the fire, because they know that next time they could be the one facing a tragedy.

When the cost of a claim is extremely high, but relatively rare, and there is a significant uncertainty about when and where the risk will strike, it makes sense to spread the risk. Insurance is a method for pooling risk.

Insurance works well for house fires, because the likelihood of a house going on fire is the same for everyone. Therefore, pooling the risk makes sense provided your insurance company does not cover too many people who smoke in bed or keep a can of gasoline in their cupboard for huffing.

I will apply these principles to health insurance in my next post.

Friday, September 22, 2017

Science and Economics

Economics claims to be a science. The problem with this claim is that the scientific method depends on the ability to do repeatable experiments. For example, chemistry advances by checking if hypotheses are correct by doing experiments that are repeatable. If a hypothesis fails repeated experiments, it is deemed not to be true.

The problem for economics is that is a subject that deals with the behaviour of people and society, so it is usually not possible to set up an experiment to test whether an hypothesis or theory is correct. People do not like being experimented on. An economist cannot do experiments on an economy, because every economy is different, and changes over time, so any experiment would not be repeatable.

The best that Economics can do is establish models that approximate how the economy operates. Economists use their models to explain historical events, or to make predictions about what will happen if certain changes occur. Unfortunately, the same historical events can be explained by various models. What happens can usually be explained by several different models, so making a correct prediction or explanation does not prove a model is correct. Most predictions by economists are wrong, so faith in their models is risky.

Economists tend to rely on the weight of opinion to decide which is the correct model. They sometimes reach a consensus about which model is best, but they never reach full agreement. Consensus is good, but unfortunately, it is not the same as using the scientific method.

Models have to be a simplification of reality. This means that economics is not really a science, in the true sense of the word.

Climate change faces the same problem. Climate scientists cannot do repeatable experiments, so they have to rely on models, too. Predictions about future climate change depend on the accuracy of climate models. The outcome of the model depends on the assumptions built into the model, and there is often disagreement about these assumptions.

Environmentalists often say that people should accept the weight of scientific evidence for climate change. The problem with this is that climate models cannot be tested in the way that the scientific method requires. It is not possible to set up repeatable experiments, because there is only one world, and it is not possible to repeat climate situations to test the model.

The best that climate scientists can do is to test their preferred model to see if it can explain weather events in the past, or to make predictions and see if they happen. That puts them in the same boat as economists. Weight of opinion is not the same as scientific method. Using the word “scientific” to make the case for climate change is a bit misleading.

Evolutionary theory has the same problem. It is not possible to do an experiment to test if humans could evolve into apes, because this is not repeatable in a laboratory. Small steps in the evolutionary process can be tested in artificial conditions using the scientific method. But the overall process cannot be tested using the scientific method. For this reason, evolutionists often resort to depending on consensus of scientific opinion. However, that is not the same as scientific method.

When climate scientists and evolutionary biologists speak of the weight of scientific evidence, they are playing the same game as economists. Judging by the reliability of economic models this is not a very effective method for arriving at the truth.

Thursday, September 21, 2017

Thessalonian Politics

When Paul was in Thessalonica, some of the Jews stirred up trouble and some followers of Jesus were arrested. They made the following accusation.

They are all defying Caesar’s decrees, saying that there is another king, one called Jesus (Acts 17:7).
When they heard this, the city officials were thrown into turmoil.

Paul could have said,

Jesus is not a real king, he just wants to live deep down in your heart. He is not a threat to the Roman empire.
Paul did not say this. Instead, he fled to a different town. He did not say it, because it is not true. Jesus is a real king. His kingdom is a threat to the other kingdoms of this world. As it grows and expands, other kingdoms will shrink and slowly die. Other kings and political leaders will lose their power.

Jesus’ kingdom will be a very different kingdom. It will not look like the political kingdoms of this world. However, it will provide all the justice and protection that worldly governments promise to deliver, but never do. I describe how this will happen in Government of God.

Wednesday, September 20, 2017


New Zealand has a king and his name is Jesus. He was raised up to that position by God, so we do not need an election to choose a new king, or political leader.

We should seek and honour the king who is already on the throne. Jesus is the only king who does not disappoint.

We need the Holy Spirit of God to teach us how to love and serve the king that God has given us.

Friday, September 15, 2017


Confusion will win the election.
Confusion will reign
in New Zealand.

Thursday, September 07, 2017

God and Violence (14) God’s Silence

When Jesus was serving in the world, he would not let the demons speak. The first one he encountered called out,

What do you want with us, Jesus of Nazareth? Have you come to destroy us? I know who you are—the Holy One of God (Mark 1:24).
The demons’ words were correct. Jesus is the Holy one. He had come to destroy the power of the spiritual powers of evil. Jesus could have said, “You are dead right”, but he did not. He commanded the demon to be silent (Mark 1:25).

Jesus did not allow the powers of evil to control his revelation of his character or his plans. Jesus did not want to be associated with the word “destroy”, because it would be misunderstood, even though it was true. He wanted to associate his ministry with the word redeem, which was much more positive. He did not want to give the demons to gain glory for themselves by proclaiming the truth.

The same principle applied in the Old Testament. God does not give glory to the spiritual powers of evil. He does not want them given any glory. So he does not ascribe all the violence and evil that they are doing to them. The result is that he often gets blamed for the stuff that the powers of evil were doing. He prefers to remain silent about their actions in the world, because he does not want them getting unnecessary glory. Although he could blame them, he remained silent, even though it means that he often gets blamed for things that he has not done.

This complete series of posts can be read at God and Violence.

Wednesday, September 06, 2017

God and Violence (13) Voluntary Law

The system of government that God gave in the Laws of Moses is entirely voluntary. There is no provision for the use of force to coerce people into complying with the law. We are so used to the existence of police and military power to enforce the laws of nation that we assume that the same system of coercion existed in the Laws of Moses. The surprising truth is that they are totally missing.

God did not establish any group or agency to enforce the Laws of Moses. His laws are entirely voluntary. People will obey the law because they are committed to God’s covenant and wanted to receive the benefits that flow from it.

  • The Law of Moses does not have any agency with police powers. There is no police force to arrest people who broke the law.

  • There are no prisons in the Laws of Moses. They only mention of prison is in Numbers 33:34, where the people held a person in custody while waiting for God to show them what they should do about Sabbath breaking. This was not a general justification for imprisonment. There is no provision for using imprisonment for punishment.

  • There is not compulsory taxation in the Laws of Moses. The people were to share their tithes with the Levites and the poor, but there was no organisation to enforce and deliver the tithe. Each person would decide which poor people they would share their tithes with. If someone refused to tithe, the Priests and the Levites had to power to enforce it.

  • There is no bureaucracy of executive power in the Law of Moses.

  • God gave laws required the cancellation of debt and the return of land after seven years and at the time of the Jubilee. However, he did not establish an agency to enforce these requirements. He expected the people to freely act on these laws, because they loved God and were committed to the covenant.

  • Judges could specify financial restitution for various crimes. However, they did not have the power to enforce the payment of this restitution.

Pressure to act on God’s laws would come from the rest of the community. However, the only power that the community had was to exclude someone who failed to acknowledge the law and decisions of judges from their community. Belong to a community was a privilege. If people refused to honour the covenant that was the basis for the community, they could be excluded from the activities of the community.

More at Voluntary Justice.

Tuesday, September 05, 2017

God and Violence (12) God-breathed

God inspired the scriptures, but humans wrote them using the language and words that were familiar to them. The Holy Spirit spoke into their minds, but they wrote his thoughts in their own words. His ideas were quite radical, so he often had difficulty getting them to write them down correctly.

When the Holy Spirit was inspiring the scriptures, he was engaging in cross behaviour. He was doing an important task with people that he did not control. He could put thoughts in their minds, but he could not make them use the words he wanted. Sometimes writers used a word that was not the best one for what the Holy Spirit was wanting to say. Provided that the word conveyed the meaning, he would make do with what they put. We must seek the meaning he wanted conveyed.

Moses was responsible for recording the Laws for Society. The only law that he knew was what he had learnt from the Egyptians. Their laws were ugly, ruthless and vindictive. He had also learnt a bit about God from his mother, but his knowledge was limited. The Holy Spirit gave him a set of laws that was radically different. Getting Moses to write them down accurately was extremely difficult.

Moses probably thought that the laws he wrote down were harsher than they were. The Holy Spirit was getting him to record a set of laws that were less violent than he expected. This was cross behaviour, because the Spirit was committed to working through a human who limited his ability to communicate.

Moses sometimes used words that were not exactly right, but the Holy Spirit went along provided the word supported his meaning. We have to look behind what Moses wrote to understand the message the Holy Spirit was communicating. We have to find the ideas that the words carry for him, even if Moses did not understand them. The key question is “What was the Holy Spirit saying to us here?”

Hebrew words often have a range of meaning. Moses often intended the harsher meaning, but the Holy Spirit wanted a milder meaning. If we read the Old Testament with violence in our hearts, we will get the violent message. If we listen to the Holy Spirit as we are reading, we will discover his pure message.

Monday, September 04, 2017

God and Violence (11) Misunderstood

The violence in the Old Testament has been misunderstood due to poor translation and interpretation. Much of the violence attributed to God was actually initiated and perpetuated by the spiritual powers of evil. Part of the problem is translation. Traditional translations often choose the most violent possible translation of the worlds. There are three reasons why they do this.

  1. Justification for Israelite violence. The Israelites perpetrated violence that was not commanded by God. Violent translations of God’s commands justify that violence, incorrectly. This feeds through to support for Israeli violence in the modern world.
  2. To support empire and political power. Once Christians began colluding with the Roman empire, they needed a justification for the violence of the Roman army. They found it in harsh translations of the Old Testament. This reason is still used in support of military power and empire in the modern world.
  3. Harsh translations of the Old Testament allow people to justify seeking revenge in their personal circumstances.
We need a much better translation of the Old Testament that would help us to understand better what is happening (see Spiritual Warfare during the Exodus).

Sunday, September 03, 2017

God and Violence (10) Defence and Protection

An ideology of nonviolence cannot be justified from the scriptures. Violence is occasionally justified for defence; however, these occasions are very rare. Violence should only be used as a last resort.

God allows the use of force for defence when a person or community is being attacked. It is allowed, but not ideal. A person whose family is being attacked can use force to protect it (Ex 22:2). However, a protective miracle is a better option (Luke 4:30; Acts 5:19; 12:6-7; 14:19-20).

A community that is attacked is entitled to defend itself to defend itself, eg the Israelites defended themselves against Og of Bashan and Sihon of the Amorites (Num 21:21-35) and the Midianites (Judges 7). However, physical defence is only justified if:

  • If it is the last resort
  • The benefits outweigh the costs
Spiritual war is always more effective. God organised Balaam to prophesy in favour of the Israelites against the Moabites and Midianites. If the men of Israel had not been seduced, the power of the prophetic word would have kept Israel safe (Num 23-24). Isaiah’s prophesy released the angels to destroy the armies of Sennacherib when he was attacking Jerusalem (Isaiah 37).

Rather than jumping to physical defence, Christians should seek a spiritual victory over the power that are stirring up people to attack them. Resorting to physical defence is a sign that spiritual protection has failed.

Violence should always be the last resort and is rarely justified. Jesus lived a perfect life. He lived his entire life without any need to use violence, except when hammering nails and cutting his meat and vegetables.

Saturday, September 02, 2017

God and Violence (9) Last Resort

Because God uses violence to accomplish his purposes, we cannot say that he is absolutely opposed to violence. In situations where he has limited authority, this is the only way that he can get his will done. He seems to be able to use evil to restrain evil. In this way, he uses evil to achieve good. We do not have his wisdom, so he forbids from trying to do the same (Rom 12:21).

God sometimes had to allow his people to use violence to protect themselves from being defeated by the spiritual powers of evil. Killing the Midianites is an example. The women had seduced the men once before and nearly destroyed the nation, so Moses could not risk that happening again. They would be more subtle and clever and harder to resist the second time.

However, it is clear that God strongly prefers not to use violence. He would sooner convict people and change their hearts by the Holy Spirit. However, because people are free, that is not always possible. In a world where he had limited authority, because he had given authority to humans who had lost it to the spiritual powers of evil, he sometimes had to use violence to accomplish his purposes.

God only uses violence as a last resort. He is perfectly wise, so he knows when it is justified. In the same way, humans should only use violence as a last resort. We do not have the same wisdom as God, so we are at risk of using violence when it is not appropriate. In most situations, violence is not the best option.

Friday, September 01, 2017

God and Violence (8) Desperate Situation

Before judging God, we must understand how desperate the situation was during the Old Testament age. Humans had given the spiritual powers of evil a free rein and they took full advantage. Prior to the flood, they nearly destroyed the earth. The flood got rid of some of them, but the rest still had authority to be on earth.

Through Abraham and Moses, God established a people in a small area of land, but it was still touch and go. If Egypt had recovered and attacked them in the wilderness, the new strategy would have come to an end before it got started, so it was just as well the Egyptians enemies were destroyed. Likewise, if a powerful empire had invaded and destroyed the Israelites once they were in the land, all would have been lost.

Jesus death on the cross is unbelievable. A god allowing himself to be tortured, tormented and killed by beings that he created is a bizarre idea. We are now so familiar with the cross, that we take it for granted, but it was a shocking event. Gods do not allow the objects they have created to harm them. The fact that Jesus had to die shows what a serious threat the spiritual powers of evil are to life on earth. If Jesus had been killed by Herod as a baby, God’s bold strategy of coming as a baby would have failed. I do not know if he had a Plan B, but it hard to imagine what it might be, once his son was dead (Matt 21:33-45).

The gospels say that Roman soldiers nailed Jesus to the cross. Paul explains that it was the spiritual powers of evil who did it (1 Cor 1:2). That is why the world was so dark. The crucifixion was not just a nasty incident by a brutal political power. It was a tense moment in a brutal struggle that had been going on since the beginning.

The situation on earth was desperate, so desperate that the God who had created it had to die. It had been desperate from the time of Adam’s sin until Jesus was raised to heaven. God had limited authority on earth. He had to do what did, or just surrender the earth to the spiritual powers of evil as a permanent possession. God refused to do that, so he did what did, even though it was nasty at times.
Modern critics are looking for the cross-like behaviour in the Old Testament. This is the wrong way around. They should be looking at the Old Testament and seeing the desperation that made the cross necessary.

Some of the things that God had to do in the Old Testament do not reflect his character, except for his desperate love for the earth and the people that he had created. When he did what needed to be done, he acted in a way that is contrary to his character. That was a cross he had to bear to deal with the mess that humans had made. He loved us so much, he was willing to appear evil to rescue us.

The cross does not really reveal his full character either. It was a clever trick that fooled the spiritual powers of evil. They walked into it and deserved what they got, because they are tricky, but deceit is not what a good person does. The cross caused terrible suffering for God’s son. That is not what a loving father does, but in this case God was desperate.

I see his character more fully revealed in the ascension and outpouring of the Holy Spirit at Pentecost that allow him to work in the hearts of a people who love him because he loves them. That is his true nature.

Humans put God in a situation where had to act in ways that are contrary to his character. It is a bit rich for us to criticise him for not complying with our standards of behaviour.