Sunday, January 17, 2010

Toddler dies after NHS doctors dismiss meningitis signs

Meningitis is so dangerous that it should always be treated as likely

A TODDLER died of meningitis after doctors dismissed a temperature and rash as an ear infection and sent her home from hospital. Within hours of being turned away from A&E, 17-month-old Kyra Davies developed bruise-like rashes in her eyes and on her head that did not vanish under a glass – a classic meningitis symptom.

Her parents dialled 999 and she was rushed back to Pinderfields Hospital in Wakefield, West Yorkshire. But by the time she arrived she was covered in black bruises and her body was swelling up. She died of meningitis and septicaemia just four hours after being transferred to another hospital.

Now Kyra’s parents, Shelley Budby and Mark Davies, are suing hospital bosses and say she would still be alive if they had not sent them away with a bottle of infant paracetamol. Mr Davies said: ‘I’m so angry. I feel like I’ve been ripped in half.’

Mid Yorkshire Health Trust expressed sympathies and is investigating.


Busy British maternity units turn away hundreds of women in labour

Women in labour are being turned away from overstretched maternity units amid Britain’s continuing baby boom

Hospitals across the country closed their doors to expectant mothers on more than 350 occasions last year because they could not cope with demand, sending women to other units to give birth. Reasons for the temporary closure or suspension of services included shortages of midwives or beds, despite government pledges to improve staffing levels and choice for women giving birth. Maternity wards in at least six out of ten regions in England closed at some point in 2008-09, figures reported to the Nursing and Midwifery Council (NMC), the independent regulator, showed yesterday.

The NMC warned that staffing levels of midwives were “still playing catch-up” with the rising birthrate, now higher than it has been for more than 36 years. Increasing numbers of complicated births, because of problems such as obesity, substance abuse, domestic violence or mothers not speaking English as a first language also placed a strain on services, the watchdog said.

The Government promised in 2007 that all pregnant women in England would have a choice of where to give birth. Campaigners said that in many cases this choice could not be guaranteed and that it could be terrifying for women to be turned away at the last minute by a hospital or maternity unit.

Reports submitted to the NMC by Local Supervising Authorities, which oversee the work of all registered midwives, found that units in the North West of England closed on more than 219 occasions last year. There were also 60 closures or suspensions in the East of England, 46 suspensions or attempted suspensions in London, 15 in the South East and 13 in the East Midlands.

Jay Francis, of the National Childbirth Trust, said that the Government’s choice guarantees were “clearly not being met”. “It is terrifying for a woman to go into her chosen unit in labour and to find the doors are closed,” she said. “While temporary closures may occasionally be necessary on the grounds of safety these should be rare events. Women rely on maternity services being open for them 24 hours a day, seven days a week.”

Anne Milton, the Conservative health spokeswoman, said: “The Government have not adequately planned for the rising birthrate. The Government claims it has increased maternity funding yet it appears that more units are closing.”

The Department of Health said that funding for maternity services had almost doubled since 1997 to just under £2 billion and that it had set a goal to recruit an extra 4,000 midwives by 2012.

Case Study

When Kate Goode, 31, went into labour at 35 weeks at 10pm on July 3, 2006, her husband Jack took her to The Grange Birth Centre in Petersfield.

The couple knew that the centre was due to close the following day, but it was officially still open. Nurses advised them to go home and relax but when Mrs Goode returned five hours later, 7cm to 8cm dilated, she was turned away.

Because she was a first-time mother, they were told to drive 20 miles to St Mary’s Hospital, Portsmouth, where her son Jacob was born three hours later. The Grange reopened in 2007 but was too understaffed to be the choice when her daughter, Maisie, was born a year later.


Labor's $60 Billion Payoff

A health tax that hits everyone except the Democratic base

Democrats seem impervious to embarrassment as they buy votes for ObamaCare, but their latest move makes even Nebraska's Ben Nelson look cheap: The 87% of Americans who don't belong to a union will now foot the bill for a $60 billion giveaway to those who do.

The Senate bill was financed in part by a 40% excise tax on high-cost insurance coverage. The White House backs this "Cadillac tax" as one of the few remaining cost-control tokens. But Big Labor abhors the tax because union benefits tend to be far more generous than average, and labor leaders and House Democrats have been throwing a political tantrum for weeks.

So emerging from their backrooms, Democrats have agreed to extend a special exemption from the Cadillac tax to any health plan that is part of a collective-bargaining agreement, plus state and local workers, many of whom are unionized. Everyone else with a higher-end plan will start to be taxed in 2013, but union members will get a free pass until 2018.

Ponder that one for a moment. Two workers who are identical in every respect—wages, job, health plan—will be treated differently by the tax system, based solely on union membership.

Richard Trumka of the AFL-CIO says this and other concessions mean the excise tax will raise some $60 billion less than the original Senate version. Democrats are probably going to charge investors for this political perk, by extending the 2.9% Medicare payroll tax to capital gains for the first time ever—on top of all the other taxes. Just what the economic recovery needs.

Meanwhile, the extra five-year dispensation gives labor lobbyists plenty of time to negotiate a permanent extension for the Democratic union base, even as labor is being armed with an important new organizational tool: Eliminating the secret ballot in union elections might be unnecessary when unions have an exclusive tax privilege at their political disposal. Right-to-work states will also be punished because they are less unionized.

The payoff shows that no one is doing a better job of rebutting the White House's technocratic cost-control claims than its own party. How exactly is the excise tax going to drive down premiums when a good part of the most expensive plans is exempted? The new union deal follows a similar one with Harry Reid that exempted the 17 states in which health costs are highest, plus longshoremen, construction workers, some farmers and sundry other liberal allies.

Amid the Beltway panic over Tuesday's special Senate election in Massachusetts and deepening public revulsion about sweetheart deals like Mr. Nelson's "Cornhusker kickback," it's more than a little surprising that the White House would be so tone-deaf to even contemplate a demand that is so contrary to basic fairness. But somehow Democrats have convinced themselves that the only tourniquet that will stop the political bleeding is to pass a bill that even President Obama admitted on Thursday is deeply unpopular.

Democrats wouldn't have to pay these partisan bribes had they chosen to write a less radical bill that could attract Republican votes. But then they would have had to pass something other than this destructive and unaffordable exercise in entitlement politics.


For healthcare bill, a frantic ride in the final days

Like a roller-coaster ride on its last twisting turns, President Barack Obama's campaign to remake health care is barreling into final days of breathless suspense and headlong momentum. Democrats, led by Obama himself, are deploying this weekend to salvage an unpredictable Senate race in Massachusetts, while senior White House and congressional staffers in Washington hurry to finish work on cost and coverage options at the heart of the sweeping legislation.

A Republican victory in the race to fill the late Sen. Edward M. Kennedy's seat would deprive Democrats of the 60-vote majority needed to pass the bill in the Senate. Obama and Democratic congressional leaders would have a political window of perhaps days only to try to ram the bill through _ at considerable risk of incurring public wrath.

Democrats put on a bold public face Friday, while working behind the scenes with grim determination. Negotiators are "pretty close," Senate Majority Leader Harry Reid said at the end of a week of marathon negotiations to reconcile House- and Senate-passed versions.

A White House statement said there are "no final agreements and no overall package." But no further meetings were scheduled, and Rep. Jim Clyburn, D-S.C., the third-ranking House Democrat, said, "Something should be going to CBO very soon," indicating that aides were drafting the decisions made around the table in the White House Cabinet Room. The Congressional Budget Office is the official arbiter of the cost and extent of coverage that any legislation would provide. No details were immediately available, and congressional aides stressed the decisions made at the White House had not yet been fully shared with the Democratic rank and file.

One key obstacle appeared on its way to a resolution when Sen. Ben Nelson, D-Neb., requested the elimination of an intensely controversial, one-of-a-kind federal subsidy to cover the entire cost of a Medicaid expansion in his home state. That provision in the Senate-passed measure has drawn criticism from governors and others in both political parties from the moment it was disclosed, and even former President Bill Clinton urged that it be jettisoned. In its place, officials said Obama and lawmakers decided to increase federal money for Medicaid in all 50 states, although it was not clear if there would be enough to cover the expansion completely.

The increase in the Medicaid program is a key element in the bill's overall goal of expanding health coverage to millions who lack it. The bill also envisions creation of new insurance exchanges, federally regulated marketplaces where consumers can shop for coverage. Individuals and families at lower incomes would receive federal subsidies to defray the cost.

The legislation would curb insurance industry practices such as denial of coverage because of medical problems and charging higher premiums to people in poor health.

At the White House, spokesman Robert Gibbs was unequivocal that Obama's effort would prove successful. "As you heard the president say yesterday, we're going to get health care done," he said.

Not everyone was quite so certain, particularly given poll results from Massachusetts that showed Republican Scott Brown within reach of an upset over Democrat Martha Coakley in a three-way race. "If Scott Brown wins, it'll kill the health bill," said Rep. Barney Frank, D-Mass, reflecting that the Republican would provide opponents of the health care bill a decisive 41st vote to uphold a filibuster and block passage in the Senate. Frank predicted Coakley would ultimately prevail and thus preserve the essential 60-vote Senate majority. Obama hurriedly scheduled a weekend campaign trip to the state. Even so, Frank's remark sent shudders through the ranks of Democrats.

The president called on Congress in his inaugural address a year ago to send him legislation that would remake the health care system, including expansion of coverage, new regulations on industry and unprecedented measures to slow the rise in health care costs generally. Obama has made an unusual commitment in time and energy to the negotiations at the White House, essentially serving as a referee on key issues that the House and Senate leaders could not resolve.

Beyond that, he was willing to reopen issues where the two bills were identical. One example involved the patent protection that drugmakers would receive for their biotech drugs from generic competitors. The president wants to give generic makers quicker entry into the marketplace, and the pharmaceutical industry's top lobbyist, former Rep. W.J. Tauzin, sent an e-mail threatening to oppose the legislation if that happened. Even with an agreement on cost and coverage issues, Obama and congressional Democrats would have to resolve controversy over abortion, coverage of immigrants and other issues before sealing a final compromise.


Healthcare reform and a new producer tax

The US Senate recently passed their altered version of the House's healthcare reform bill. Among hundreds of other economically harmful proposals, the Senate bill, HR 3590, will create several onerous new taxes on the producers of health goods and services.

The Tax on Insurers

In Title IX, Section 9010 of the bill, the Senate proposes a new direct tax on health-insurance providers in dense and esoteric language. The annual amount of the new tax for any insurer is defined as the sum that when divided by $6.7 billion yields the same result as
(The firm's net premiums for all US health risks insured + 200% of third-party administration fees received by the firm)

Divided by

(Aggregate premiums received by all private insurers + 200% of all third-party administration fees received by all firms)

Simple mathematical understanding reveals that the structure of this ratio ensures that the tax will fall most heavily on those insurers whose total premiums constitute the largest share of the total market for health insurance. Politically, this tax is an attempt by Congress to award itself a certain measure of backdoor authority over the execution of antitrust law.

Economically, this tax is a draconian attack on the largest health insurers in America. While Austrian analysis advocates against attacks on firms of an arbitrary size or market share in all cases, this conclusion is especially important when considering the market for health insurance.Download PDF

Insurance companies profit by separating their clients into "risk pools" and charging monthly premiums that reflect the collective financial risks of those pools. If both the timing and the cost of consumers' future health outlays were known by insurers in advance, insurers would enjoy guaranteed profits by selling insurance to each consumer at a price just above his future health outlays.

In reality, however, health insurers must constantly collect new data on maladies and their methods of treatment, hedge against the financial risks of unknown future costs, and account for the possibility of losses due to fraud and errors in calculation, all while optimizing the timing of their cash flows.

With such monumental challenges in mind, it is clear that insurance is a market that favors large firms with diverse clienteles. The addition of new customers, rather than indicating some sort of unfair monopolization or "bloating," is a natural and necessary outcome of the provision of insurance. Increases in size will occur until a firm's management is no longer able to handle additional growth.

Large firm size benefits both clients and insurers, and should not be penalized with a new progressive tax. This tax will result in a smaller-than-efficient typical firm size and therefore smaller-than-efficient risk pools, which will create unnecessary and unwanted financial risks that must be mitigated by higher premiums.

The ratio also includes 200% of all fees received by a firm for managing another insurer's health risks, which is a harsh disincentive for those insurance firms who manage other firms' health benefits packages. By making such contracts much more expensive for the insurance firm, the tax makes any "outsourcing" of benefits management by a large employer much more expensive.

As a result, large firms that now provide employee health insurance will either deduct more for their benefits packages or attempt to manage the plan internally. Firms that outsource plan management to insurers, by the very act of doing so, demonstrate that their managers do not believe themselves competent to manage the plans.

Therefore, this tax will lead to poorer management of employer-provided health insurance plans that, by government fiat, can no longer be inexpensively outsourced. For employees, this will mean more expensive premiums and more erratic claims-payment practices, both of which undermine the benefits to employees of having insurance in the first place.

The Tax on Capital Production

Section 9009 of Title IX establishes a new tax, or as the bill calls it, an "annual fee," on all producers and importers of medical devices. This tax is calculated similarly to the tax analyzed above, the tax to each individual producer being defined as that sum which, divided by $2 billion, is equal to the producer's percentage share of the market.

The implications of this tax are similar to those of the tax on insurers; it is an attack on the utilization of economies of scale in the production of medical capital goods. However, the analysis of a tax on producers of medical devices must take into consideration another dimension, namely that of economies of scope. "Economies of scope" refers to the profitability of diversifying rather than specializing.

For example, a firm specializing in artificial hearts may enjoy economies of scope in the production of vascular-care equipment due to the firm's access to dually useful knowledge. The same firm, however, will likely face diseconomies of scope in the production of prosthetic arms, due to the need to maintain an entirely separate stock of capital goods.

Just as with firm size, a firm's optimal scope would be determined by the profit-and-loss mechanism on the market. This tax, then, will discourage expansions of firm scope along the margins.

In more concrete terms, this means that medical-goods companies will be less likely to produce medical devices that have complementary relationships with their main products, or to produce different devices that enable the treatment of similar afflictions. To the health-services consumer, this implies higher risks of device failure and fewer available treatment methods for any given malady.

This tax on the capital supply also implies that hospitals and clinics will face higher costs to replace their capital stocks, which of course are composed almost entirely of medical devices that will be made scarcer by the tax. Thus, institutions will likely continue to use their medical devices beyond the point of degradation at which they would now be deemed unsafe for medical use.


The so-called "Patient Protection and Affordable Care Act" in fact will make access to health insurance more expensive and less useful, and will also render the care provided by insurance less effective, more risky, and more expensive by taxing the production of new capital goods. The taxation approach taken by Senate Democrats is a purely foolish method of funding regulations that are themselves horrible.


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