Tuesday, June 30, 2009

California Slashes Health Benefits to Save Money

(Sacramento, California) Effective July 1st, the state-run health care insurance system (Medi-Cal/Denti-Cal) will eliminate adult dental care benefits, podiatry benefits and optometry benefits in an effort to save money.

Apparently, health care decision-makers blew right past any thoughts of rationing the benefits and opted to make them simply disappear completely.

The California Primary Care Association pitched a complaint but a Superior Court judge ruled against them.

In any event, one might logically expect a similar approach to cost-saving when a national health care scheme is adopted.
Welcome to Canada!

By Mark Steyn

Somewhere in America Alone, I cite an example of the logical reductio of socialized health care: "the ten-month wait for the maternity ward". I've been adding to the file ever since. Here's the latest entry, from Hamilton, Ontario: "Hamilton's neonatal intensive care unit (NICU) was full when Ava Isabella Stinson was born 14 weeks premature at St. Joseph's Hospital Thursday at 12:24 p.m. A province-wide search for an open NICU bed came up empty, leaving no choice but to send the two-pound, four-ounce preemie to Buffalo that evening."

Well, it would be unreasonable to expect Hamilton, a city of half-a-million people just down the road from Canada's largest city (Greater Toronto Area, five-and-a-half million) in the most densely populated part of Canada's most populous province (Ontario, 13 million people) to be able to offer the same level of neonatal care as Buffalo, a post-industrial ruin in steep population decline for half-a-century.

But wait! The fun and games are only just beginning. When a decrepit and incompetent Canadian health bureaucracy meets a boneheaded and inhuman American border "security" bureaucracy, you'll be getting a birth experience you'll treasure forever: "Her parents, Natalie Paquette and Richard Stinson, couldn't follow their baby because as of June 1, a passport is required to cross the border into the United States. They're having to approve medical procedures over the phone and are terrified something will happen to their baby before they get there".

Once Buffalo enjoys the benefits of Hamilton-level health care, I wonder where Ontario will be shipping the preemies to. Costa Rica?


British doctors want right to pray for patients without fear of reprisal

Doctors are calling for the legal right to be allowed to pray alongside their patients. The British Medical Association is to debate whether the threat of disciplinary action should be lifted from NHS staff who try to meet patients' spiritual or religious needs. There has been concern among doctors and nurses that even offering to talk about such matters could be grounds for suspension.

Guidance issued by the Department of Health in a document called Religion Or Belief: A Practice Guide For The NHS has fuelled anxieties. It says such requests could be seen as harassment or intimidation and could lead to staff being disciplined.

Cancer specialist Dr Bernadette Birtwhistle, of the Christian Medical Fellowship, said the debate on Wednesday at the BMA's annual meeting in Liverpool would clarify how doctors and other staff could provide spiritual care for patients. She said: 'It's getting to where many of us feel we cannot talk to patients about their spiritual or religious needs or ask them about praying. 'Christianity is being seen as something that is unhelpful. 'Freedom of speech is being curtailed too much, and I don't think it is always in the benefit of patients.'

The move follows the case last year of nurse Caroline Petrie, from Westonsuper-Mare last year, who was suspended after a patient complained that she had offered to pray for her. North Somerset NHS Trust agreed she could return to work and pray for patients as long as she asked them first if they had any spiritual needs.

The Department of Health guidance states that members of some religions are expected to convert other people. It adds: 'To avoid misunderstandings and complaints, it should be made clear to everyone from the first day of training or employment that such behaviour could be construed as harassment under the disciplinary and grievance procedures.'

Dr Hamish Meldrum, chairman of the BMA Council, said the importance of the issue for a minority of people 'could not be underestimated'. He said no healthcare professional should be able to impose their beliefs but it was 'perfectly acceptable' for patients with a terminal illness to be asked if they wanted to see a chaplain. Dr Vivienne Nathanson, director of professional activities at the BMA, said: 'It's hugely important that it's allowed, but it's not an opportunity to impose your views on patients.'

The BMA will debate the matter, making it clear that offering to pray for a patient should not be grounds for suspension. The Department of Health said the document was a guide to encourage awareness for staff and patients.


States consider opting out of federal healthcare

Lawmakers in six states are considering legislation to "protect" citizens from a federal health care plan by creating statewide initiatives to vote on whether to opt out of the national program -- even before Congress has created the program

Congress has yet to come up with a clear prescription for the nation's health care system. But some state legislators are already urging voters not to take the medicine. Under Arizona's Health Care Freedom Act, which was passed by the state legislature this week, a voting initiative will be placed on the 2010 ballot that, if passed, will allow the state to opt out of any federal health care plan. Five other states -- Indiana, Minnesota, New Mexico, North Dakota and Wyoming -- are considering similar initiatives for their 2010 ballots.

"Our health care freedoms are very much at risk by health care reforms proposed in Washington, D.C.," said Arizona state Rep. Nancy Barto, the Republican legislator who sponsored the measure. "We needed to act as a state to protect our citizens and ensure that they will always be able to buy their own health care and not be forced into a plan they don't want."

But an opponent of the bill, state Rep. Phil Lopes, says the measure has less to do with individual freedom and more to do with the protecting the status quo. "The proponents of this are saying the system we have now works and we don't want any kind of reform," the Democratic legislator said. "This flies in the face of what the public tells us they want."

Not so, says Christine Herrera, director of the Health and Human Services Task Force for the American Legislative Exchange Council (ALEC). The group's 1,800 state legislator members have endorsed a resolution opposing a Medicare-modeled federal health plan and a national health insurance exchange, two concepts that are gaining ground in Washington. "Our state legislatures are looking at what's going on in Washington as trampling state's rights," Herrera says.

Some state legislators say they worry that a government-mandated program will effectively eliminate their traditional role in regulating health insurers -- an important power base. Others raise constitutional concerns. "The real goal of national health insurance exchange isn't competition -- it's a federal power grab that flies in the face of the Tenth Amendment," says Wisconsin state Rep. Leah Vukmir, a Republican.

The Tenth Amendment ensures that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." It's the same constitutional roadblock Franklin D. Roosevelt ran into during the Great Depression when he tried to ram through the first round of recovery programs under the New Deal. In a series of rulings, the U.S. Supreme Court found the National Recovery Act, the Agricultural Adjustment Act and several other recovery programs unconstitutional.

But constitutional scholars say it's unlikely history will repeat itself with health care reform efforts. "It's hard to imagine Congress passing anything that would be plausibly challengeable under the Tenth Amendment, but it's certainly theoretically possible," said Paul Bender, professor of constitutional law at Arizona State University. He said Congress has broad powers to regulate interstate commerce, which would include something as big as health care.

But Bender also said he sees a striking similarity between the current makeup of the Supreme Court and the "Nine Old Men" who stymied FDR's sweeping reform efforts in the 1930s. "Both sets of jurists seem to share a belief that the balance of power has shifted too far in favor of Congress at the expense of the states," Bender said.

Some state lawmakers who oppose President Obama's efforts to implement a national health care plan say the inevitable result will be socialized medicine. "The public plan and national health insurance exchange will squeeze out private insurance and put us on the road to single-payer health care," warns Georgia state Sen. Judson Hill, a Republican. "Having the public plan now will mean socialized medicine later," he said.

Hill and other state legislators expressed concerns that millions of people will drop their private coverage if there is political pressure to keep a public plan's premiums low and benefits high. And if private insurers leave the market, they say, consumers will essentially be left with no choice of plans and no control over how their health care dollars are spent.

"Pure speculation," says Lopes. "In 1964 this was the same argument insurance companies made with President Lyndon Johnson when he proposed Medicare. Medicare did not do away with private insurance companies. They did very well."

"Protecting the rights of individuals to be in control of their health and health care must be a fundamental component of health care reform," says Dr. Erick Novack, chairman of Arizonans for Health Care Freedom, which promoted the state's ballot measure. "We are confident that the people of Arizona will vote to ensure their own rights."

With a constitutional challenge to health care reform problematic at best, that vote may turn out to be largely symbolic. But for now, that doesn't seem to be stopping other states from following Arizona's lead.


Monday, June 29, 2009

A Duty to Die?

Coming to you sooner than you may think. Don't get old in Obama's America. Withdrawing at least some care from the elderly is going to be very tempting once costs balloon they way they will

About twenty-five years ago, then-Colorado Governor Richard D. Lamm stirred up a bee's nest of controversy with his assertion that elderly, terminally ill patients have “got a duty to die and get out of the way.” While the Governor has since waffled on whether he actually meant the words he actually said, plenty of others have not on this issue. A good example of this, and perhaps a good gauge of where the debate in this country is headed as we come closer to the reality of a one-payer system for health care is the claim by British Baroness Warnock that dementia patients “should consider ending their lives because they are a burden on the NHS [National Health Service] and their families.”

How does one get to the point of saying that some members of society have an actual duty to die? What moral reasoning lies in back of such a stance? While it is possible to produce a full-blown Marxist-Socialist argument in support of such a position—for example that these people cannot actively support and indeed may actually hinder Marxist Revolutionary progress, hence they have a duty to get out of the way—in Western Society, arguments underpinning a “duty to die” have usually arisen instead from the moral theory of Utilitarianism. Not itself a Socialist Ethic, it more often than not comes down with the same moral prescriptions as Socialism because like it, Utilitarianism emphasizes the supposed general good of society over the interests of the individual.

Invented in the nineteenth century by philosopher Jeremy Bentham as a means to provide moral support for reforms to the British legal system, Utilitarianism has become one of the dominant systems of secular ethics. Its deceptive simplicity has lured many into its camp for, under this view, we as human beings have only one all-encompassing moral duty: to act so as to promote the greatest good (as far as the consequences of our actions are concerned) for the greatest number of people (be it those immediately affected by what we do or society as a whole).

Its founder Bentham originally understood as ‘good’ that which increases the overall balance of happiness in society or at least lessens unhappiness. Optimistically, Bentham initially thought that we could work out our moral duty with near mathematical precision by comparing the consequences of two possible courses of action in terms of their production of overall societal happiness. Unrealistically, he thought we could talk about it in measurable units. This turned out to be a non-starter because we cannot know whether we have two or ten of something until we know what counts as having one of that thing. And how can we say with any precision what is to count as one unit of happiness?

Enter the Cost-Benefit Analysis. While we may not be able to specify with any precision what counts as a unit of happiness, we do know what counts as one dollar. Because of the impracticality of talking about moral right and wrong in terms of the promotion of human happiness, a number of modern utilitarians have tied together their theory with the business practice of developing a cost-benefit analysis. Here the morally right course of action then becomes what on balance produces the greatest benefits for the costs involved. This marriage of an essentially value-neutral accounting practice with utilitarian moral theory produces a deadly combination. For now, in the realm of health care spending, it is not just financially prudent—a matter of good business sense—to make decisions in terms of what produces the most benefits for the costs involved, it is our moral duty to do so!

The costs of treating elderly patients whose prognosis is poor and who have much less to give back to society than those much younger, even if their course of treatment is successful, result in insufficient benefits to justify them for the utilitarian. In a health care system governed by the free market, individuals may nonetheless choose to incur these costs of treatment because they are spending their own money either directly or for insurance premiums to their private insurer. But in a single-payer system, the costs of health care for individuals are the costs of it to society. If in it officials deciding on the allocation of care see it as their moral obligation to do so in a way that produces the most benefits for society for the costs involved, then elderly patients whose treatment will likely produce far fewer benefits will invariably lose out and be denied care. But moralists like Baroness Warnock argue that they should accept this consequence as their moral duty to society as it reduces society’s costs and the emotional burden on their families. It is, she argues, their moral duty to die!

At this point, some readers may want to ask, “But isn’t human life itself an unqualified good, to be preserved no matter what the costs? Does not this patient have an inalienable right to life that alone would justify his or her treatment?” What would a utilitarian say of an appeal to this right? For utilitarians, rights are derivative on duties, any rights we have are derived from duties others have toward us and these duties are determined by what produces the greatest good for the greatest number of persons. If it does so to provide members of society with universal health care, as some utilitarians would claim, then society has a duty to do so. As a result, individuals have a right to expect this provision from society. Utilitarianism can thus support this supposed positive right to universal health care. Conversely, however, we have no rights that are not derived from our sole obligation to promote society’s greater good and, what is more important, can have no rights that would conflict with this obligation. So, if providing care to an elderly, terminally ill patient conflicts with this obligation then that patient has no right to expect such care. Thus, utilitarianism is destructive of rights like the right to life —as will be government-administered universal health care.


Beware New York Times Polls, “46 Million Uninsured” and Other ObamaCare Hoaxes

If Barack Obama’s health care overhaul is such a good idea, why must its proponents resort to deception when advocating it?

When something can stand on its own merits, there is obviously no need to prevaricate. And the fact that efforts to socialize America’s health care sector cannot stand on their own logical merits betrays the dangerous nature of Obama’s scheme. The latest example came this past week, when ObamaCare proponents trumpeted a New York Times/CBS News opinion poll purportedly showing that large majorities of Americans support government-run health care.

The June 12-16, 2009 poll indicated broad, substantive support for Obama’s plan, as 72% of its respondents favored a government health care provider to compete with private insurers. Suspiciously, the poll also reported that by a 57% to 39% margin, respondents are “willing to pay higher taxes for insurance for all.”

Revealing its predictable ideological bias, CBS News’ website could hardly contain its enthusiasm: “A clear majority of Americans – 72 percent – support a government-sponsored healthcare plan to compete with private insurers, a new CBS News/New York Times poll finds. Most also think the government would do a better job than private industry at keeping down costs, and believe that the government should guarantee healthcare for all Americans. The new poll shows the idea of a government-sponsored plan, or ‘public option’ to be fairly non-controversial.”

It turns out, however, that the poll was stacked with a disproportionate number of Obama supporters. Of the poll’s 895 respondents, some 48 percent stated that they voted for Obama this past November, whereas only 25 percent reported they voted for Senator John McCain. That disproportionate two-to-one margin contrasts with the actual November 2008 election results, in which Obama’s margin was 53% to 46%. If the CBS News/New York Times poll had been representative, Obama would have defeated McCain by a 66% to 34% margin last November. As polling expert Kellyanne Conway noted, “was the vote 66 to 34? You tell me.”

Of course, this is merely the most recent instance of distortion in the current healthcare debate. Perhaps the most pernicious deception advanced by those who allege a health care “crisis” and advocate a socialized system is that 46 million Americans are uninsured. But a closer examination reveals the dubiousness of that claim.

First and foremost, approximately 21 percent of that number, or 10 million, are not American citizens. Is it the responsibility of American taxpayers to subsidize health insurance for ten million non-citizens? Of course not.

Second, it’s estimated that as many as 14 million of the 46 million are already eligible for existing government insurance programs, such as Medicaid and S-CHIP, but for whatever reason have failed to -- or have chosen not to -- enroll.

Third, approximately 19 million of the uninsured are people between the age of 18 and 34, according to the National Center for Policy Analysis. As they note in their study, “most of them are healthy, and know that they can pay incidental expenses out-of-pocket. Using hard-earned dollars to pay for healthcare they don’t expect to need is a low priority for them.” Consequently, they have little incentive to insure themselves, and instead refrain from buying coverage unless and until they suddenly need emergency care.

Fourth, 9 million of the oft-cited 46 million live in households with incomes above $75,000 per year, and another 9 million in households earning above $50,000. While nobody would contend that these income levels qualify as “wealthy,” both levels far exceed the federal poverty level.

Together, these realities expose the deceptive nature of the “46 million” statistic routinely cited by advocates of government-run health care. Moreover, scientific polling regularly shows that between 70% and 80% of Americans are actually satisfied with their level of healthcare. In fact, a recent USA Today/ABC News/Kaiser Family Foundation survey reveals that 89% of respondents were pleased with their plan.

Accordingly, improvements to the nation’s health care system must focus on free-market principles and empowering individuals and families, not stifling government takeovers. Through medical tort reform, for example, we can limit the litigation costs and frivolous “jackpot justice” awards that drive up medical costs. We can also allow citizens to purchase insurance policies across state lines, which would drive down insurance costs and provide individuals and families the freedom to choose health care coverage that best suits their needs from a national marketplace.

In any case, beware the fraudulent numbers cited by those who advocate a wholesale government takeover of the American health care system. The fact that they must resort to deception is the surest sign that they’re prescribing the wrong medicine.


Sunday, June 28, 2009

Health care reform: Questions for the president

Health care reform is on life support," says Rep. Jim Cooper of Tennessee. And he's a Democrat. President Obama has spent months building momentum for health care reform. But when the Congressional Budget Office put the price tag near $2 trillion, it stopped reform dead in its tracks.

What Senate Finance Committee chairman Max Baucus, D-Mont., once called "nearly inevitable" now seems much less so — and that's before supporters have confronted the really tough questions. Before this debate is over, Obama should answer a few questions about his plans for reform, including:

Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is "no evidence" that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn't you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn't pursuing universal coverage by definition an ideological crusade?

A draft congressional report said that comparative-effectiveness research would "yield significant payoffs" because some treatments "will no longer be prescribed." Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?

You recently said the United States spends "almost 50 percent more per person than the next most costly nation. And yet ... the quality of our care is often lower, and we aren't any healthier." Achieving universal coverage could require us to spend an additional $2 trillion over the next 10 years. If America already spends too much on health care, why are you asking Americans to spend even more?

You have said, "Making health care affordable for all Americans will cost somewhere on the order of $1 trillion." Precise dollar figures aside, isn't that a contradiction in terms?

Last year, you told a competitiveness summit that rising health care costs are "a major anchor on the ability of American business to compete." In May, you wrote, "Getting spiraling health care costs under control is essential to ... making our businesses more competitive." The head of your Council of Economic Advisors says such claims are "schlocky." Who is right: you or your top economist?

You recently told an audience, "No matter how we reform health care, we will keep this promise to the American people. ... If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what." The Associated Press subsequently reported, "White House officials suggest the president's rhetoric shouldn't be taken literally." You then clarified, "What I'm saying is the government is not going to make you change plans under health reform." Would your reforms encourage employers to drop their health plans?

You found $600 billion worth of inefficiencies that you want to cut from Medicare and Medicaid. If government health programs generate that much waste, why do you want to create another?

You and your advisors argue that Medicare creates misaligned financial incentives that discourage preventive care, comparative-effectiveness research, electronic medical records, and efforts to reduce medical errors. Medicare's payment system is the product of the political process. What gives you faith that the political process can devise less-perverse financial incentives this time?

You claim a new government program would create "a better range of choices, make the health care market more competitive, and keep insurance companies honest." Since when is having the government enter a market the remedy for insufficient competition? Should the government have launched its own software company to compete with Microsoft? Are there better ways to create more choices and more competition?

When government entered the markets for workers compensation insurance, crop and flood insurance, and disaster insurance, it often completely crowded out private options. Do you expect a new government health insurance program would do the same?

You have said there are "legitimate concerns" that the government might give its new health plan an unfair advantage through taxpayer subsidies or by "printing money." How do you propose to prevent this Congress and future Congresses from creating any unfair advantages?

President Obama needs to address questions these directly. The health of millions depends on his answers.


Whistleblower helpline for NHS doctors as concerns for patient safety grow

Hospital doctors wanting to raise fears about patient safety are to be given an anonymous “whistleblower” helpline because of growing evidence of staff reluctance to speak out for fear of recriminations. The dedicated phoneline has been set up as part of new guidelines issued by the British Medical Association, and seen by The Times, designed to help to formalise the process of “whistleblowing” in the NHS.

Doctors will be presented with two motions at the BMA annual conference next week calling for action to address staff concerns about reporting malpractice. One motion, proposed by the BMA’s agenda committee, warns that the NHS risks another patient safety scandal like that of Mid-Staffordshire where 400 deaths were linked to poor care, such is the scale of the problem. It calls for trusts and regulators to pool all complaints from clinicians to identify worrying trends. A second motion, proposed by junior doctors, calls on the General Medical Council to recognise formally that the harassment of whistleblowers is a serious breach of medical regulations. It also requests guidance on whistle-blowing.

Tom Dolphin, a junior doctor specialising in anaesthesia based in East London, said he had felt compelled to act after hearing of the experiences of colleagues who had to work without some patient-monitoring equipment. “One colleague needed equipment that wasn’t there, and was told there wasn’t any. There can be a culture of ‘that’s the way it's always been and no one’s come to harm yet anyway’. Others tried to raise concerns, got nowhere and had pretty much given up.”

The BMA guidelines, released today, follow research suggesting hospital doctors are frequently frustrated in their attempts to raise concerns about standards of care, despite recommendations by the Department of Health for the development of whistleblowing policies six years ago. A survey of 565 doctors working in hospitals in England and Wales found that three quarters had had concerns about issues relating to patient safety, malpractice or bullying in the NHS, the majority linked to standards of patient care.

Many said that their experiences of reporting issues had been negative — either because they were ignored or because their complaint was shared more widely than they were comfortable with. One in six doctors who reported concerns said that their trusts had indicated that their employment could be negatively affected.

The BMA advises hospital doctors to err on the side of raising any concerns about malpractice or systemic failures, and to do it as soon as they can, rather than allowing the situation to reach a point where patient safety is threatened. It points out that employees who are victimised after raising their concerns can go to an employment tribunal, and that employers can be heavily fined. “If told not to raise or pursue any concern, even by a person in authority such as a manager, you should not agree to remain silent,” it states, adding that “raising concerns is not just a matter of personal conscience — in some circumstances it is a professional obligation”.

Last month Jonathan Fielden, the chairman of the BMA consultants committee, called for sweeping changes to reporting problems in the NHS. He said that “a culture of inactivity and despair is preventing issues from coming to light, and putting patient care at risk”.

Margaret Haywood, a nurse, is appealing to the High Court against a decision by the Nursing and Midwifery Council to strike her off the register for secretly filming at a Brighton hospital. Footage showed examples of neglect, including an elderly patient sitting in clothes he had soiled the night before.

Earlier this month the National Patient Safety Agency (NPSA) called for greater reporting of safety issues in hospitals in a report on paediatric healthcare. It said that 10,000 alerts over medication given to children were being issued annually in the NHS, including errors in the calculation of drug doses and health workers forgetting to give patients their medicine. The NPSA report concludes that over the period of a year 33 children and 39 newborn babies died with “indicators of avoidable factors”.


Saturday, June 27, 2009

Dr. Obama’s Swamp Root Snake Oil

Amazing negligence and incompetence at the VA again

Tough break for Barack Obama. Just when he is merrily rolling along peddling his socialized stealthcare as it were the most potent elixir since Violet Blossom’s Swamp Root snake oil, along comes NY Times with a decidedly sordid tale about government medicine gone awry. And since ABC (Always Barack Channel) wasn’t about to interrupt its infomercial to reveal the full facts of the matter, let’s take a quick look behind the Barakathon.

Those who can’t wait to turn their lives and limbs over to Big Government’s pseudo-sawbones need first to pay a visit to the government-run Veterans Administration hospital in Philadelphia, PA. But, first, a word of warning: if you’re a guy, leave the family jewels at home. Because, if you think the Liberty Bell is irreparably damaged … well, you ain’t seen nothin’ yet.

One of the most popular (if I can use that word) procedures for treating prostate cancer is the implantation of dozens of radioactive seeds to attack and destroy the cancerous cells. True, it’s drastic. But, it sure beats a long-drawn, painful death. Unless, of course, they plant the radioactive cells in the wrong organ. Which is exactly what Dr. Gary D. Kao did at the VA Medical Center in Philadelphia, citadel of socialized medicine. Obama should be proud. In fact, he should have covered it in his ABC infomercial – perhaps while waving his arms and shouting, “But, wait, there’s more!”

You see, Dr. Kao implanted the 40 radioactive seeds not in the patient’s ailing prostate, but in his perfectly healthy bladder. So much for Tenet One of the Hippocratic Oath – “First, do no harm.”

But, wait, there’s more! Of course, the ever vigilant federal bureaucrats in charge of VA stealthcare (coming soon to a hospital near you) knew that this probably wasn’t a good idea. So they investigated—and promptly allowed the doctor to doctor his report to match the number of seeds in the prostate.

This, naturally, did little for the patient. So, like any conscientious government employee, Dr. Kao decided to cover his tracks by doing over what he hadn’t done right—whereupon he planted the seeds in the patient’s rectum. Which, apparently for the good doctor was “close enough for government work”—since this time, he didn’t even bother filing a report.

But, wait, there’s even more! With the eager acquiescence of his government overlords, Dr. Kao was on a roll. Two years later, Dr. Kao rewrote another surgical plan after once again putting half the seeds in the wrong organ. And, once again, the socialized stealthcare regulators did not object. Perhaps the reason they did not object is that they had long since become past masters at doing well what bureaucrats do best—absolutely nothing. As the NY Times story reveals:
“Had the government responded more aggressively, it might have uncovered a rogue cancer unit at the hospital, one that operated with virtually no outside scrutiny and botched 92 of 116 cancer treatments over a span of more than six years -- and then kept quiet about it, according to interviews with investigators, government officials and public records. “The team continued implants for a year even though the equipment that measured whether patients received the proper radiation dose was broken. The radiation safety committee at the Veterans Affairs hospital knew of this problem but took no action, records show.”

I have a distinct feeling that any guy reading this piece is by now already squirming around in his chair, praying diligently that the Avodart, Cipro, Doryx, or Floxin works well if his prostate ever needs it. Because, clearly, Obama’s socialized stealthcare won’t. And for the women: let’s just say that if you have even the remotest idea of remaining sexually active with your hubby in your Golden Years, pray equally hard that Dr. Obama gets his license lifted.

Here’s the bottom line: socialized medicine doesn’t work. Whenever and wherever it rears its malignant head, it is poorly conceived, pathetically organized, and callously administered. If the VA is the microcosm (or the MVA, Amtrak, or the U.S. Congress, for that matter), imagine the horror of the macrocosm.

It was said that Violet Blossom was the Queen of Pitch Doctors.” Barack Obama may be the “King of Pitch Presidents.” But if the American people end up catching what he’s pitching, the result may be the most deadly medical crisis since the flu epidemic of 1918. And all the ABC snake oil in the world isn’t going to cure that devastating blight.


New models for real health care reform

Paying for health care has been a problem since ancient times. In the Middle Ages, guilds collected funds to provide care for infirm members. In 1789, imitating the British, the U.S. Congress funded the Marine Hospital Service by taxing American seamen 20 cents a month.

As U.S. governments grew, they continued passing laws to regulate the kind of health coverage people could purchase. By 1960, most people with coverage got it through their employer. Plans provided by hospital monopolies controlled the coverage market. The true cost of health care was hidden from covered individuals. Vast spending increases were the result. The introduction of Medicare and Medicaid in 1965 made the situation worse. Finkelstein found that Medicare increased real hospital expenditure by 23 percent between 1965 and 1970. Extrapolating from the Medicare estimates suggests that the spread of health coverage may “explain at least 40 percent of the rise in real per capita health spending” between 1950 and 1990.[1]

Only in the last two decades have economists reconsidered the effect that government regulations have had on the form health coverage takes, its cost, and how it encourages people to use health care. Government coverage programs obscure the real cost of health care and increase health spending by shifting the out-of-pocket cost of health care spending from the savings of individuals to the paychecks of working Americans.

Unlike government coverage or coverage purchased through employers, private coverage purchased directly by individuals encourages people to choose between health coverage and all other goods. It controls health spending by pricing individual risk, encourages substantial variation in plan design to accommodate differences in individual risk tolerance, and provides incentives for cost minimization.

All private health coverage arrangements must solve two problems. The first is to collect enough money to deliver enough health care to satisfy people who can stop paying if dissatisfied. The second is to control moral hazard, the tendency to use more care when other people are paying for it.

Early History of Health Insurance

By 1910, an estimated one third of all adult males in the United States belonged to fraternal societies. Like modern HMOs, some societies provided prepaid health plans that controlled the supply of medicine to member patients by refusing to provide care considered beyond the organizations’ means. They hired “lodge doctors” who worked for the plan and were less likely to side with patients in recommending more care than the plan wanted to deliver. The societies used a variety of tools to control moral hazard. These tools included home-visiting committees, waiting periods for benefits, and curfews on members receiving benefits. People not covered by the fraternal societies could choose from plans operated by trade and industrial unions, various governments, commercial insurers, and company-sponsored mutual benefit societies.

The Birth of the Blues

The Depression produced a dramatic change in health coverage. One year after the stock market crash of 1929 “average hospital receipts per person fell from $236.12 to $59.26, and average hospital deficits rose from 15.2 to 20.6 percent of disbursements.”[2] To boost revenues, hospitals created community-wide hospital benefit plans. The American Hospital Association created Blue Cross to promote hospital benefit plans that conformed to guidelines that reduced interhospital price competition.

The hospital benefit plans offered guaranteed services in exchange for an annual premium. The Blue Cross monopolies were extraordinarily successful, particularly after the hospitals persuaded state officials to exempt them from insurance company capital requirements and taxes. By 1950, Blue Cross sold almost half of all hospital insurance. As economist John Goodman notes, Blue Cross and Blue Shield (the equivalent organization for physician services) so dominated the market that “they made it difficult for a commercial insurance company to adopt reimbursement procedures that differed fundamentally from those of Blue Cross and Blue Shield. If a commercial company attempted radical deviation, the medical community could threaten a boycott.”[3] At the beginning of the 1990s, Goodman estimated that “net revenues (premiums minus benefit payments) on group policies [were] usually less than 5 percent of total premiums, [therefore] a 2 to 3 percent premium tax is equal to about 50 to 60 percent of net revenues.”[4]

Medicare and Medicaid expanded the Blue Cross coverage model to government coverage programs. It paid minimal attention to controlling moral hazard. It encouraged patients to use any hospital they saw fit. It reimbursed hospitals on a cost-plus basis. It emphasized one price for everyone in a given community, and it had little cost sharing and no waiting requirements. A structure that made sense when hospitals could do relatively little for patients ended up creating unprecedented increases in medical expenditures as medical technology improved.

The fraction of the U.S. population with health coverage stabilized in the 1980s. Since then, the percentage of Americans with health coverage has fluctuated in a narrow range between 84 and 87 percent. The favorable tax treatment bestowed on employer-based coverage after World War II encouraged most people to purchase coverage through their employers. In 2007, roughly 59 percent of Americans had employer-based coverage. Government plans, state-subsidized high-risk insurance pools for the uninsurable, Medicaid, Medicare, SCHIP, the Veterans Administration, and other forms of military health care, covered 28 percent of Americans. Just 9 nine percent of Americans with health care coverage purchased their own coverage directly from insurers.[5]

After nearly 50 years in which employer-based coverage modeled after Blue Cross dominated, researchers in health policy often implicitly assumed that Blue Cross, Medicare, and Medicaid defined the form that health coverage should take. As costs exploded, researchers focused on cost control, ways to charge the same premium for all regardless of health risk, and ways to control costs in a system that bypassed patients with direct payment to providers. The tight controls on health care demand used by the guild systems and the fraternal societies were variously reborn in the managed care, evidence-based medicine, pay-for-performance, and “comparative-effectiveness” movements. Like the fraternal societies, some state governments forced insurers to issue policies to everyone at the same price, and focused on controlling the practitioners that people in state plans could see, denying certain kinds of care altogether, and rationing care by waiting.

The Market for Individual Insurance

Recent research has shown that such tight controls can do harm by reducing overall coverage and making medical care difficult to access. Economists have also realized that health policy has paid so little attention to direct-purchase health coverage that policy makers know very little about it. As late as 2002, Pauly and Nichols published an article entitled “The Nongroup Health Insurance Market: Short on Facts, Long on Opinions and Policy Disputes.”[6] They wrote that “there is considerable disagreement among policymakers and policy analysts about how the nongroup insurance market works now” and that “factual disagreements about this market are true impediments to policy consensus.” In 2006, Marquis et al. noted that while a variety of proposals have been offered to overcome perceived weaknesses in the direct-purchase market, “until now, this market has been the subject of relatively little study. As a result, there is much disagreement about the importance of the advantages cited for this market, the extent of the barriers to participation, and the likely effects of policy proposals.”[7]

Direct-purchase coverage is owned by an individual. Premiums are based on the costs that an insurer expects a particular individual will generate in the future. People with low health risk, where risk is shorthand for expected future expenditure, pay less in premiums. Because premiums in the direct-purchase market are paid with after-tax dollars, individuals know exactly what their coverage costs. Because paying for health care with insurance coverage is more expensive than paying cash, people who buy direct-purchase coverage are more likely to insure against large costs, relying on out-of-pocket cash to cover routine expenses.

Because employer-related coverage is tax advantaged, employer plans generally follow the more expensive route of insuring even low-cost routine care. Employees “pay” the bulk of their employer-provided group health premium in the form of lower wages. Their artificially low out-of-pocket costs insulate them from the true cost of health care. This increases the demand for health care. According to Manning et al., data from the RAND Health Insurance Experiment show that the higher out-of-pocket payment characteristic of direct-purchase plans “reduces expenditures 31 percent relative to zero out-of-pocket price.”[8]

In 2008, the Kaiser Foundation Survey of Employer Coverage estimated that the average cost of employer-based group coverage was $4,704 for a single person and $12,680 for a family. On average, the out-of-pocket “premiums” that employers charged employees equaled about 16 percent of the total premium for single coverage, roughly $60 a month, and 27 percent of the total premium for family coverage, roughly $280 a month.[9] According to the AHIP 2006-2007 individual market survey, average annual premiums for roughly 2.3 million direct-purchase individual policies sold to single adults, were $1,359 for people aged 18-24 and $5,090 for people aged 60-64.[10]

Direct-purchase markets pool risk extensively, charging high risk people far lower premiums than their health status might indicate. Most direct-purchase policies are renewable without additional underwriting. This means that as long as he pays the premium, an insured person can keep his policy no matter how sick he gets. Contrary to popular claims, state laws generally prohibit raising a sick individual’s premiums unless an insurer also raises the premiums of everyone else in his rating class.

Pauly and Herring report that direct-purchase insureds who had medical expenses about 4 times that of other people enjoyed premiums that were only 1.6 times as high. People who buy a policy and become ill have a strong incentive to continue paying. This may explain why age and sex were generally better predictors of direct-purchase premiums than chronic conditions.[11] Marquis et al. concur, reporting that the individual direct-purchase market is “an important source of long-term coverage for many who purchase it” and that “there is substantial pooling” that “increases over time because people who become sick can continue coverage without new underwriting.”[12]

Adverse Selection Due to Community Rating

In states that are so wedded to the Blue Cross model that they have community rating laws requiring that premiums be the same for everyone in a given geographic region, premiums are higher for everyone. In a study of 26.8-million commercially insured people, Willey et al. found that just 0.8 percent of the population was severely ill. That group had average annual expenses of $29,273. Those with less-serious chronic disease spent $8,225 a year. Half of the population had expenses below $989 a year.[13]

Charging everyone the same price does lower the premium for high-risk people. This increases the probability that they will buy coverage. However, as more high-risk people enroll, premiums must increase for everyone in order to cover the plan’s higher costs. Some low-risk people respond by refusing to pay the artificially high prices for coverage caused by the one-price-for-all requirement. Insurance economists call this phenomenon “adverse selection.” Although economists usually use the term “adverse selection” to refer to the result of the individuals having more information than the insurance company, this is adverse selection due to regulation.

There are more low-risk people harmed by one-price requirements than high-risk people who benefit from them. Pauly and Herring find that regulations on insurance premiums raise the average premium considerably, by 12 to 15 percent, and that the number of people who drop coverage exceeds the number of higher-risk people who sign up. In all, “the overall proportion of eligible people in the individual market with insurance [falls] by 6.0-7.4 percent.” They note that policies that reduce administrative costs and create high-risk pools are likely to cover more people than government control of premiums. Avoiding price controls on premiums also “avoid[s] regulation-induced incentives to insurers to avoid money-losing high risks.” In short, allowing competitive markets to set the price for coverage will end up covering more people.

The Benefits of Variety

Results like this underline the fact that health insurance has value only because it allows those who buy it to pay for expensive medical care without forcing them to liquidate their assets or suffer big drops in current consumption. Some people are willing to pay a lot to have an insurance company bear the risk of large medical payments. Others are willing to pay very little. Cutler, Finkelstein, and McGarry find that individuals who have a higher risk tolerance, as revealed by engaging in risky behaviors such as smoking, drinking, and employment with high mortality rates, are less likely to purchase all kinds of insurance, including life insurance, private health insurance, annuities, long-term care insurance, and Medigap coverage.[14] This suggests the variety of plans offered in the individual direct-purchase market, a variety not present in employer-based coverage or government plans, adds to individual welfare. Health coverage is not necessarily the most important thing in life, and as circumstances, finances, and risk tolerance change, people are better off if they can change their coverage to match their circumstances.

Assertions that people without coverage have no access to health care ignore the fact that people can and do access care by paying cash. Though the self-employed are less likely to have health coverage than comparable wage earners, Perry and Rosen show that they use health services at roughly the same rates as insured wage earners.[15] Glied’s findings on the spending patterns of the uninsured suggest that, in addition to cash payment, even low-income “uninsured people have some de facto insurance coverage available to them through the uncompensated care system and Medicaid conditional coverage.”[16] Overall, national estimates suggest that the uninsured pay for about half of their care and that government and private spending for uncompensated care equals roughly 3 percent of total personal health spending, about $150 for an average annual premium of $5,000. As the budgetary disasters in Massachusetts, Kentucky, and Tennessee have shown, government programs seeking to eliminate uncompensated care by requiring insurance for all typically cost more than the uncompensated care they seek to eliminate.[17]

Recent work also makes it clear that people adjust their coverage as their estimate of their individual risk changes, something that mandated coverage, controlled enrollment seasons, and government standardized policies discourage. Bundorf et al. find that higher-risk people are more likely to have coverage, even at incomes of less than 200 percent of the poverty level. Regardless of income, the probability that someone will have coverage rises 17 percent when his health risk changes from low to high.[18] This increase in coverage is remarkable in view of the fact that low-income people are especially sensitive to premium cost. In Massachusetts, a $10 increase in monthly MassHealth premiums increased the odds of leaving the MassHealth program by five percent.[19] Small increases in already low subsidized premiums have been associated with significant enrollment declines in government programs in Oregon, Vermont, Wisconsin, and Rhode Island. Gruber and Simon conclude that price-sensitive people substitute government insurance for private insurance in large numbers. For every 100 newly enrolled children in state children’s health insurance programs, they estimate, 60 had previously been privately insured.[20]

The substitution may also go the other way. George Borjas found that the 1996 law limiting Medicaid eligibility for immigrants increased the likelihood that affected households worked and, therefore, increased the probability of eligibility for employer-sponsored health insurance. Their health insurance coverage rates at least remained the same after their Medicaid eligibility was curtailed.[21] Without government coverage programs, he wrote, “the targeted immigrants themselves would have taken actions to reduce the probability that they would be left without health insurance coverage.”

Although some people genuinely cannot pay even the small premiums charged by government programs, Bundorf and Pauly show that income based “affordability” calculations are not good predictors of whether or not a person chooses to sign up for coverage. For example, while 36 percent of people in families with incomes less than 200 percent of the federal poverty level are uninsured, 44 percent have private coverage. By some measures, coverage in 2000 was affordable for over 50 percent of the uninsured.[22]


Eighty years after governments began seeking to determine the shape of U.S. health coverage, economists who study direct-purchase insurance have created a body of literature suggesting that market-oriented health care reform has far more promise than the decades-old plans that seek to impose the Blue Cross model on the entire population. In view of Medicare’s insolvency, reform plans calling for further expansions of the Blue Cross single-price guaranteed-issue model, both via Medicare/Medicaid expansions and so-called “public” policies designed by government and sold through government run connectors, are unlikely to succeed in providing more medical care for more people at current expenditure levels.

Direct-purchase of health coverage, along with guaranteed renewability, flexible premiums, and high-risk pools, is a promising approach to reducing health care costs, increasing the value received for health care expenditures, and making more healthcare available for all. Given that roughly the same percentage of people has had health coverage for the last 20 years despite numerous expansions of government coverage programs and a massive increase in illegal immigration, the direct-purchase results also suggest that expecting everyone to have coverage is not a sensible policy goal.

Another danger, one too infrequently considered in the drive to lavish government funds and attention on extending the 70-year-old Blue Cross model to basically healthy people, is that insuring everyone is an unattainable goal. No one can make an adult alcoholic or drug abuser sign up for anything. If government gets out of the way, basically healthy people should be able to make their own health financing arrangements. Furthermore, the focus on universal coverage diverts attention from the radical reforms necessary to save Medicare and Medicaid, two government programs based on the Blue Cross model that are dysfunctional, insolvent, and already failing the frail and vulnerable people who depend on them.


Friday, June 26, 2009

The real crisis is Obamacare

President Obama has never met a crisis he didn't love; particularly the ones that involve spending trillions of dollars. What fun it is to propose programs that involve borrowing or taxing Americans to death.

On June 9, the Associated Press reported, "President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration's emerging health care overhaul."

Since the stealth heathcare "reform" that Bill and Hillary Clinton tried to foist on Americans during the 1993-94 Congress, this "crisis" has been off the radar screen of Americans who have the audacity to think they should decide whether and how much health insurance they want, and to expect healthcare that is not rationed on the basis of how old they are and other factors determined by some faceless government bureaucrat.

Liberals obsess over healthcare options because, of course, they want "fairness" no matter how much it will cost Americans in general and the economy in particular.

To that end, various "progressive" (liberal) groups have gotten together and have launched an $82 million campaign to support President Obama's healthcare program. The umbrella for this massive public brainwashing is called Health Care for America Now. Why is it that everything Obama wants has to be done "now"? Oh yes, I forgot. It's a "crisis." Health Care for America is directed by Richard Kirsch and has been joined by the AFL-CIO, MoveOn.org, and Democracy for America, a group founded by former Democrat National Committee Chairman, Howard "the scream" Dean. The group is essentially a re-branded version of liberal lunatic groups.

An excellent analysis of Obamacare has been published by the Cato Institute in a May 21 Policy Analysis (No. 638) titled, appropriately, "Seven Bad Ideas for Health Care Reform." Authored by Michael Tanner, it points out some very ugly truths.

* At the time of rising unemployment, the government would raise the cost of hiring workers by requiring employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.

* Every American would be required to buy an insurance policy that meets certain government requirements.

* A government-run plan similar to Medicare would be set up in competition with private insurance.

* The government would undertake comparative-effectiveness research and cost-effectiveness research and use the results to impose practice guidelines on providers, initially in Medicare and Medicaid, but ultimately extending the rationing to private insurance plans.

* Private insurance would face a host of new regulations.

* Subsidies would be available to help middle-income people purchase insurance while expanding Medicare and Medicaid.

* Finally, the government would subsidize and manage the development of a national system of electronic medical records.

According to a June 8 Bloomberg News report, "President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul." This is yet one more lie by the Obama administration in the run-up to impose the most vile form of government control over everyone's lives imaginable.

The American Medical Association, the nation's largest physician organization, has let it be known that it will oppose creation of a government-sponsored insurance plan.

The promise of the Declaration of Independence that everyone has a right to life, liberty and the pursuit of happiness will be rendered meaningless by Obamacare if your life depends on government policies regarding healthcare.

A June 1 Business Week commentary pointed out that "there are only three ways to pay for universal coverage: Raise taxes, cut payments to medical providers, or ration care." All three are the worst possible options imaginable.

"The Congressional Budget Office estimates that covering the uninsured could add anywhere from $1 trillion to $2 trillion to the federal budget over ten years," said the BW commentary. "On top of that, government economists expect Medicare to run out of money in 2017 if current spending trends continue."

Here's a handy tip regarding estimates by government economists. Multiply them by a factor of ten! As this healthcare horror awaits its run through Congress, think of it as a massive Medicare, the government program for seniors that cost 3.2 percent of the country's Gross Domestic Product in 2008 and which will become insolvent this year! Medicare faces $34 trillion in unfunded liabilities; the cost of services for which seniors are eligible in the future. According to the Medicare Trustees, the program will require a 134 percent increase in the payroll tax paid by every working American in order to remain solvent!

And this insane Democrat-controlled Congress wants to expand on Medicare while requiring everyone to purchase healthcare insurance, even if they don't want to. Then it will compete against existing private insurance companies without having to have the funds in place as they must to meet their obligations.

This isn't healthcare reform. It is the destruction of the best healthcare system in the world. It is the destruction of the nation's economy. It, along with the tax on energy use, must be stopped. We are being attacked by one "crisis" after another when the only one that matters is the restoration of the full faith and credit of the U.S. dollar. If the "health" of the U.S. dollar is not restored, nothing else will matter very much.


Rhetoric vs. reality in the health care debate

Half-truths about "rationing"

Last week, the Democratic leadership in the House of Representatives unveiled their discussion draft of a sweeping bill to reform America's health care system. The bill would create health insurance exchanges and a government insurance scheme, require insurers to sell insurance no matter a purchaser's health status, set minimum benefit standards, subsidize insurance purchases to families up to 400 percent of the federal poverty level ($43,000 for an individual or $88,000 for a family of four), mandate that all Americans carry health insurance, and impose price controls on what doctors and hospitals may charge. The Democratic leadership hasn't the faintest idea what its reform proposals will cost.

The draft bill also would establish a public-private Health Benefits Advisory Committee to recommend covered benefits and an essential benefits package. This is the only section of the bill that mentions the word "rationing." It declares that "the Committee shall take into account innovation in health care and ensure that essential benefits coverage does not lead to rationing of health care." Of course, it would be helpful to know what the bill means by "rationing."

Earlier in the week, New York Times economic columnist David Leonhardt set out to explain what rationing is. First, let's acknowledge that Leonhardt does identify many dysfunctional aspects of our current health care system, including how we reimburse primary care physicians and specialists.

But in the article, Leonhardt claims that "health care rationing rhetoric overlooks reality." Leonhardt asserts that health care is already being "rationed." Since this is so, those who warn against proposed government health care rationing, according to Leonhardt, are either confused or liars. Such people, Leonhardt explains, are deploying "a clever set of buzzwords that tries to hide the fact that societies must make choices." The phrase "societies must make choices" is the first hint of how confused Leonhardt is about the concept of rationing. Rationing is all about who gets to make those choices.

Leonhardt goes on to cite what he thinks are three supposedly telling examples of rationing. "We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon," he writes. Which one of those examples doesn't fit? Figuring this out is another key to Leonhardt's misunderstanding of the debate over health care rationing.

Next up he cites the dictum of one of capitalism's great defenders, economist Milton Friedman: "There is no such thing as a free lunch." True. But Leonhardt follows up this insight by writing: "The choice isn't between rationing and not rationing. It's between rationing well and rationing badly." Does Leonhardt think that lakefront homes are rationed badly? Steaks? Or for that matter clothing, restaurant meals, shoes, cars, computers, or airline tickets?

Moving beyond lakefront homes and steaks, Leonhardt eventually gives readers three examples of current health care "rationing." The first example is that employers are forced to decide between paying higher wages or providing higher health care benefits to their employees. He notes that the tradeoff between wages and benefits is often "invisible" to employees and thus it appears to them that their compensation is not increasing much.

Of course, the way to avoid this kind of "rationing" would be to just pay the employees all their money and let them buy their own health insurance. Thus health insurance would become "rationed" just the same way that we ration cars and cellular telephones. Allowing consumer choices in health insurance and health care will also help drive down prices and increase the range of health insurance products in just the same way consumer choice operates in other areas of our economy.

The current provision of medical care to the uninsured is Leonhardt's second example of rationing. This example is closer to the mark since health care for the uninsured is already mandated and/or paid for (Medicaid and SCHIP) by federal and state governments. He notes the poor quality of care that such people receive without musing for a moment that such poor government-funded care might be a harbinger for what "universal" health care would become.

Leonhardt's third alleged example of current health care rationing is the "failure to provide certain types of care, even to people with health insurance." The fact that certain health insurance policies chosen by individuals and/or their employers don't cover certain treatments is no more "rationing" than it is when people choose not to eat a USDA prime steak or pay tuition for a private college education.

On the other hand, Leonhardt is right to say that our dysfunctional health care system misses opportunities to offer good treatments to people in need. The current system misses those opportunities, in part, because there is so little competition and thus very little incentive for health care providers to supply information to consumers. Consumers can competently choose between complicated computer technologies and evaluate automobile performance because competitors are motivated to supply consumers with relevant information. The same kind of competitive dynamic could work with the provision of health care and health insurance.

So if Leonhardt gets it so wrong, what is rationing? Leonhardt is correct when he writes, "In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources." The crucial question that Leonhardt misses is that "rationing" depends on who is allocating the scarce resources. It's not rationing if an individual decides to spend his money on a 16-ounce steak—but it is rationing if he can only purchase a USDA prime rib eye when he has a coupon issued from a government agency. In other words, true rationing occurs when individuals are forbidden from spending their money on products or services they want to buy.

Imperfect as private health insurance markets are, if a customer doesn't like the decisions made by Blue Cross Blue Shield, Kaiser Permanente, or Golden Rule insurance bureaucrats, he can look elsewhere for his health insurance coverage. But if the government health care scheme becomes a monopoly, when the bureaucrats at the new Health Benefits Advisory Committee decide that a treatment should be withheld, that treatment will be withheld. That's rationing.

"Americans should get the first chance to limit their own health spending," Rep. Jim Cooper (D-Tenn.) observed recently. "Once they learn the true cost of what they are buying, share a larger portion of the cost, and can judge the benefits—if any—of treatment options, then they will choose more wisely than the government." He's right. Congress should think about "rationing" health insurance and health care the old-fashioned way—through the market.


Thursday, June 25, 2009

ObamaCare will save money? Don’t believe a word of it

President Obama is selling government health insurance to the American people as the way to save money. That government health insurance will merely provide competition to keep private insurance companies from gouging their customers.

Indeed, Obama even claimed on Monday, in a speech before the American Medical Association, that a government insurance system is essential to holding down medical costs: “if we fail to act, federal spending on Medicaid and Medicare will grow over the coming decades . . . . and impose a vicious choice of either unprecedented tax hikes, overwhelming deficits, or drastic cuts in our federal and state budgets.”

There are a couple of problems with Obama’s argument. Government is just not known for its cost effectiveness or quality. And the way for government enterprises to survive is with massive taxpayer subsidies and charging customers prices below the firm’s actual costs, driving more efficient private firms out of business. These subsidies mean that when government enterprises “win” they do so by driving more efficient private firms out of business.

Milton Friedman was well-known for pointing to a very good rule of thumb in evaluating government enterprises: “on the average anything government does costs twice as much as if it were being done by private enterprise.” Whether it is education or the post office, the reason is very simple: When people have their own money at stake they are much more careful in how it is spent.

Despite lower costs, private schools still do a better job. Americans send their kids to private schools despite having to pay taxes for public schools, too. How bad must public schools be if parents are willing to pay private school tuitions even though price for public schools is “zero.” Academic evidence consistently shows that children in private schools learn faster than those in public ones.

A second problem with government-run firms is that they typically engage in what is called “predatory pricing.” Obviously public schools don’t charge anything for students attending them, limiting competition from private schools. Also take the post office. The U.S. Postal Service would often increase its first-class mail rate, where it had a monopoly, to raise money to subsidize its overnight delivery service where it faced stiff competition. For example, it raised first-class mail to thirty-three cents in January 1999 and simultaneously reduced the price of domestic overnight express mail from $15.00 to $13.70, even though it was already losing money at the $15.00 rate. The price, which was lowered in response to increasingly successful competition in overnight delivery from FedEx and UPS Overnight, remained below $15.00 for the next seven years. Clearly the Postal Service was not able to drive its competitors out of business with this maneuver, in part because its on-time delivery record and quality was poorer.

The Postal Service lost money on its overnight deliveries despite advantages that FedEx and UPS could only dream of. The Postal Service is exempt from paying state sales, property and income taxes. And it uses some of the most expensive real estate in the country — rent-free. The competition that Obama advocates between government and private insurance companies isn’t going to be any fairer.

The reality of the situation has begun to enter into the health care discussion. Larry Summers, Obama’s chief economic adviser, claimed in April that the government insurance would be so efficient that $700 billion would be saved each year just from stopping unnecessary surgeries –- that is almost 30 percent of all heath care costs he claimed were wasted just on unnecessary surgery. He argued that the efficiencies would be so large that government insurance program actually wouldn’t cost any money. Yet, on Monday night, even the Democratically controlled Congressional Budget Office acknowledged that the cost of the health care proposals would cost at least $1.6 trillion over 10 years, and it warned that the total could go much higher depending upon what features were added to the program. Even at that cost the program would only cover one-third of the uninsured.

The government has consistently underestimated the costs of government health care programs in the past. The biggest problem with current CBO estimates is that they assume that only “15 million individuals” will give up private insurance to get what the government offers. Others have put the number at almost 120 million — massively increasingly the cost of the program.

There is also the question of whether there will be any gain in physical health for those who are currently uninsured. Being uninsured is not the same thing as not getting health care. The uninsured received health care worth $116 billion in 2008. In addition, 2.3 percent of Americans are both uninsured and very dissatisfied with the quality of the health care that they receive.

Already the Congressional Budget Office is predicting a federal budget deficit of over $9.3 trillion. Just that new debt alone means an extra $103,000 for each of the 90 million tax filers who actually pay taxes. Depending on government to magically find ways to create efficiency will only ensure huge additional expenditures and debt. It can also jeopardize a health care system where 89 percent of Americans are happy with the health care that they receive.


No right to health care

What virtually no one has addressed in the debates on health care is that there is no such thing as a fundamental “right to health care.” Even more to the point, health care provided by the coerced expenditure of the time and money of others is even more destructive of rights and freedom.

While medical insurance and health care are certainly desirable values, “forced charity” is a contradiction in terms. Few people would condone a private citizen (or group of citizens) walking into a neighbor’s home, placing a gun to that person’s head, and demanding money. Even if the intruders claimed they needed the money for themselves or for someone else in need, any decent individual would still condemn such robbery. The (“good”) ends do not justify the (bad) means.

Somehow, though, voting for such an immoral set of actions and outcomes is supposed to make such policies okay. But hiding behind an anonymous vote and relying on the government and its armed agents to impose one’s wishes on unwilling others is neither honorable nor moral. Legalized theft is no less theft simply because one group of people is more politically powerful than another. Might does not make right.

Only voluntary actions have moral value. In the end, no one has a right to anyone else’s life, money, or property without that person’s consent. The Thirteenth Amendment to the Constitution abolished involuntary servitude. Congress, the President, and the majority of the American public have brought it back.


Medicare for all: Wrong answer, right question

If America HAS to have a "public" insurer for all, the VA would be a better model than Medicare -- though instrument sterilization practices would need to be much improved

Jacob Hacker's enthusiasm for a 'real' public plan option is laudable. It also dramatically overstates the strengths of Medicare. I'm not entirely convinced that we need a public plan option, and am even less sure that Medicare should be the basis for a public plan option. That said, there are at least three solid arguments for a public plan option;

1.) at least one public health provider actually does a terrific job of holding down costs while delivering outstanding care (hint it's not Medicare);

2.) most markets are already dominated by one or two large private insurers, making it extremely difficult for another private insurer to effectively compete. a government plan may (emphasize MAY) offer more competition which might (emphasize MIGHT) lead to lower costs/better outcomes, and

3.) private insurers have done a lousy job of holding down costs, delivering better outcomes, and servicing their insureds. It is hard to see how a governmental plan could be any worse, and easy to envision much better results.

In my mind those arguments tip the scales in favor of a public plan option, and give the lie to opponents' arguments against said option. But Hacker overstates the case for Medicare, and in so doing weakens the case for a public plan option. Specifically, he argues that Medicare has lower administrative costs and does a better job holding down medical trend. I disagree.

As has been well-documented, government plans have unfair advantages over private plans: they don’t need to maintain reserves, earn profits to attract capital, or pay premium taxes. These result in big dollar 'savings' over private plans. It is also important to note that Medicare's cost structure is dramatically different in other ways. Here are a couple examples:

1.) Medicare has no underwriting or sales expenses or marketing costs. No commissions, either. This saves a lot of admin dollars. This differential would disappear in a health connector-type system, with the playing field leveled by dramatically reducing commercial healthplans' marketing costs and elimination of their underwriting expense.

2.) Medicare has one-time enrollment and dis-enrollment, and greatly simplified eligibility processes. This cuts their costs, but would not continue under a connector model.

As significant as the admin expense argument is, it is Hacker's contention that "Medicare has increasingly out-performed private plans in restraining the rate of increase of health spending while maintaining broad access" that is the real problem with his argument for a public plan option. The unfunded liability for future Medicare costs clearly and convincingly demonstrates that Medicare is not earning enough revenue to pay for future expense. In commercial insurance terms, they are dramatically under-reserved. Why? Premiums are not keeping pace with medical inflation, and Medicare is not controlling the primary driver of medical costs - utilization of services.

Here are a couple examples. Medicare's imaging expenses doubled between 2000 and 2007. Utilization of physician in-office services went up more than 10% in 2006. Back surgery rates for Medicare patients in Fort Myers Florida are five times higher than they are in Miami. And physician fees are scheduled to be cut 20.5% next January because total physician expenses under Medicare are way over budget. Not to mention the cost-shifting that currently has private insurers making up lost revenue from Medicare underpayments.

I could go on, but the point is clear - Medicare's supposed administrative and medical cost advantages are not real. That does NOT mean a public plan option isn't viable. In fact, there is a government plan that is kicking the collective private health plan industry's rear end. It's the Veteran's Administration, and rather than Medicare, I'd base a national plan on a dramatic expansion of the VA. Here are a few factoids...

- compared to commercial managed care plans, the VA provided diabetics with better quality care on seven out of eight metrics (NCQA report).

- In 2005, VA hospitals were the highest-rated health system, outperforming other systems including the Mayo Clinic and Johns Hopkins.

- the VA achieves higher scores than private hospitals for patient satisfaction, staffing levels, surgical volume and other significant quality measures

- for six years running, VA hospitals scored higher than private facilities on the University of Michigan's American Customer Satisfaction Index.

And costs haven't increased nearly as fast as they have in the private sector. In the ten years ending in 2005, the number of veterans receiving treatment from the VA more than doubled, from 2.5 million to 5.3 million, but the agency needed 10,000 fewer employees to deliver that care - as a result the cost per patient stayed flat. (costs for care in the private sector jumped 60% over the same period).

The VA did this by closing down unneeded facilities, developing an industry-leading electronic health record system, opening clinics, and dramatically increasing the quality of care, especially for patients with chronic conditions. Oh, and patients can access their own health records - securely - anytime on the web.

Medicare's not the answer. A public plan option based on an expanded VA would force private plans to get better - a lot better - or lose share quickly to this very efficient, and very effective, health system.


Wednesday, June 24, 2009

Is Government Health Care Constitutional?

The right to privacy conflicts with rationing and regulation

Is a government-dominated health-care system unconstitutional? A strong case can be made for that proposition, based on the same "right to privacy" that underlies such landmark Supreme Court decisions as Roe v. Wade.

The details of this year's health-care reform bill are still being hammered out. But the end result is sure to be byzantine in complexity. Washington will have immense say over how, when and through whom Americans are treated. Moreover, despite the administration's public pronouncements about painless cuts in wasteful spending, only the most credulous believe that some form of government-directed health-care rationing can be avoided as a means of controlling costs.

The Supreme Court created the right to privacy in the 1960s and used it to strike down a series of state and federal regulations of personal (mostly sexual) conduct. This line of cases began with Griswold v. Connecticut in 1965 (involving marital birth control), and includes the 1973 Roe v. Wade decision legalizing abortion.

The court's underlying rationale was not abortion-specific. Rather, the justices posited a constitutionally mandated zone of personal privacy that must remain free of government regulation, except in the most exceptional circumstances. As the court explained in Planned Parenthood v. Casey (1992), "these matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of the universe, and the mystery of human life."

It is, of course, difficult to imagine choices more "central to personal dignity and autonomy" than measures to be taken for the prevention and treatment of disease -- measures that may be essential to preserve or extend life itself. Indeed, when the overwhelming moral issues that surround the abortion question are stripped away, what is left is a medical procedure determined to be "necessary" by an expectant mother and her physician.

If the government cannot proscribe -- or even "unduly burden," to use another of the Supreme Court's analytical frameworks -- access to abortion, how can it proscribe access to other medical procedures, including transplants, corrective or restorative surgeries, chemotherapy treatments, or a myriad of other health services that individuals may need or desire?

This type of "burden" analysis will be especially problematic for a national health system because, in the health area, proper care often depends upon an individual's unique physical and even genetic history and characteristics. One size clearly does not fit all, but that is the very essence of governmental regulation -- to impose a regularity (if not uniformity) in the application of governmental power and the dispersal of its largess. Taking key decisions away from patient and physician, or otherwise limiting their available choices, will render any new system constitutionally vulnerable.

It is true, of course, that forms of rationing already exist in our current system. No one who has experienced the marked reluctance to treat aggressively lethal illnesses in the elderly can doubt that. However, what may be permissible for private actors -- including doctors and insurance companies -- is not necessarily lawful when done by the government.

Obviously, the government does not have to pay for any and all services individual citizens may desire. And simply refusing to approve a procedure or treatment under applicable reimbursement rules, as under the government-run Medicare and Medicaid, does not make the system unconstitutional. But if over time, as many critics fear, a "public option" health insurance plan turns into what amounts to a single-payer system, the constitutional issues regarding treatment and reimbursement decisions will be manifold.

The same will be true of a quasi-private system where the government claims a large role in defining acceptable health-insurance coverage and treatments. There will be all sorts of "undue burdens" on the rights of patients to receive the care they may want. Then the litigation will begin.

Anyone who imagines that Congress can simply avoid the constitutional issues -- and lawsuits -- by withdrawing federal court jurisdiction over the new health system must think again. A brief review of the Supreme Court's recent war-on-terror decisions, brought by or on behalf of detained enemy combatants, will disabuse that notion. This area of governmental authority was once nearly immune from judicial intervention. Over the past five years, however, the Supreme Court (supposedly the nonpolitical branch) has unapologetically transformed itself into a full-fledged, policy-making partner with the president and Congress.

In the process, the justices blew past specific congressional efforts to limit their jurisdiction and involvement like a hot rod in the desert. Questions of basic constitutionality (however the court may define them) cannot now be shielded from judicial review.

It is, of course, impossible to predict how and when the courts will ultimately rule on the new health system. Much depends on the details and the extent to which reasonable and practical private alternatives to the national plan remain. In crafting the law, however, its White House and congressional sponsors must keep privacy -- that near absolute right to personal autonomy they have so often praised and promoted -- squarely before them. The only thing that is certain today is that the courts, and not Congress, will have the last word.


NHS still going around in circles over dentistry

NHS dentists should be paid according to the number of patients on their list and penalised for shoddy operations that require repeat visits, an independent review has recommended. The proposals, which have been accepted in principle by the Government, include changes to improve access to NHS dentists and to end the “drill-and-fill” culture of operations. The review said that dentistry had become too preoccupied with treatment rather than prevention over the past 60 years.

The recommendations include rewarding dentists for registering new patients and building up relationships with existing ones, similar to those between GPs and their patients. Jimmy Steele, the lead author from Newcastle University, said that dentists’ responsibilities must be as much about ensuring that people understand oral health and diet as carrying out fillings.

A series of pilot trials will start in the autumn. Income will be determined on patient list size, quality of care and the number of courses of treatment.

The plans for patient registration have marked the return of a policy scrapped by Labour in its much-criticised dental reforms of 2006 — and which the Government said at the time would end the “drill-and-fill” culture. Figures show that around a million fewer people now have access to an NHS dentist in England than before the contract came into force three years ago. Andy Burnham, the Health Secretary, said yesterday that he recognised that dentistry was “an area of unfinished business”. He accepted that the contract had been problematic and that some decisions could have been taken differently.

Professor Steele said that dentists would have as much as 50 per cent of their income linked to the number of patients on their books. “It’s an incentive to take more patients on,” he said.

The review also recommends that dentists have greater accountability. This could mean being penalised for faulty work and having to carry out repairs at no extra charge to the NHS. At present, dentists can charge local health trusts for a procedure and then charge again even if they are the reason why a patient has had to return for further treatment. Under the new plans, the points dentists receive for carrying out an operation would not be awarded a second time if restorative work had to be carried out within three years.

Professor Steele said: “It’s a basic principle of quality and warranty. If I think the filling that I’m about to put in, or the crown I’m about to prepare for, is not going to last three years, then I shouldn’t be picking up that handpiece.”

Other plans include a new system of patient charges, replacing the current three-band system with one of between five and 12 bands. This was in response to the view of some patients that they did not always receive value for money.

Professor Steele said that patients should be called in for check-ups based on their individual need between every three and 24 months. “The six-month recall has no basis in science,” he said. “It’s just got a long history.”

The review also calls for more focus on preventative healthcare, with the aim of teaching people how to better look after their teeth. Mr Burnham said this could include looking at people’s diet. He has long been in favour of adding fluoride to the water in deprived areas.

The 2006 contract, which was supposed to allow dentists to spend more time with their patients, was criticised by dentists, while they were accused of playing the system. Yesterday’s report included examples of dentists recalling patients too often, or choosing more profitable treatments for patients when a less lucrative alternative was available.

Professor Steele added: “In the last 60 years, dental services have all been about quantity. We need to make a jump — and it’s a difficult jump — to move on to quality, to accept that less is usually actually better.”

Norman Lamb, the Liberal Democrat health spokesman, said the “near-destruction of NHS dentistry will be one of Labour’s most shameful legacies”. He added: “The Government has repeatedly botched efforts to reform dentistry services in this country. The NHS must learn from past mistakes and ensure that future reforms are rigorously piloted. It is also vital that the concerns of dentists and patients are listened to.”

Andrew Lansley, the Conservatives’ health spokesman, said that the review confirmed the comprehensive failure of the 2006 reforms. “It is bad news for the Government that their own independent reviewer has highlighted a string of problems with NHS dentistry and recommended moving to a patient registration systemas Conservatives have proposed.”

John Milne, of the British Dental Association, said: “What is important now is that the Government pilots properly the changes it makes and engages fully with the profession and patient groups as we move forward.”


FDA’s bad medicine

They are actually aiming to keep information about medical research away from doctors! Hard to believe but that's the sort of destruction you can expect when you put Leftists in charge. All decisions must be made by government bureaucrats -- even medical decisions, apparently

President Barack Obama promised to shake up the Food and Drug Administration, so it's no surprise that his new FDA leadership team has made bold moves. Deputy Commissioner Joshua Sharfstein, who led the agency until Commissioner Margaret Hamburg was approved by the Senate on May 18, announced his presence with authority. In his first two months, Sharfstein's FDA has threatened to regulate Cheerios as a drug because its label says it can help lower your cholesterol and proposed action against drug companies because Google Internet searches for their products don't show enough safety information.

Sharfstein was chosen to lead the FDA's drug enforcement efforts in part due to his connections as a former staff member for Rep. Henry Waxman (D-Cal.), chairman of the congressional committee that oversees the FDA, and one of the pharmaceutical industry's biggest critics. Since he's already shown a desire to clamp down on even minor infractions, drug makers and the medical community are holding their breath over what Sharfstein may do next. One likely move is a crack down on so-called "off label" prescribing of drugs, which has been one of Waxman's high priorities for years.

When the FDA approves new drugs or medical devices, they are approved to treat specific conditions in particular populations, which are identified on the products' labels. But once they are on the market, doctors are free to prescribe drugs and devices for any safe and effective use, including ones not indicated on the label.

Getting FDA approval to add another use to a drug's label is time consuming and very expensive, even after rigorous clinical testing shows the new use to be safe and effective. But physicians read medical journals. And if they find, for example, that a certain liver cancer drug is effective in treating kidney cancer, or that an antidepressant approved for adults also works for teenagers, these other uses tend to be adopted.

This practice of off-label prescribing is widespread, and is common in every field of medicine. By some estimates, as many as 60 percent of all prescriptions written are for off-label uses. The American Medical Association has repeatedly studied the practice and concluded that "physicians have the training and experience to determine what is the best or preferred method of treatment for their patients."

Accordingly, the AMA says off-label prescribing should often be considered "reasonable and necessary medical care, irrespective of labeling." Indeed, physicians may even be subject to malpractice liability if they do not use drugs and devices for off-label indications when doing so constitutes the medically recognized standard of care.

Still, certain members of Congress and bureaucrats in the FDA think doctors should prescribe nothing without the express consent of the federal government. The FDA, for example, proposed regulating off-label drug use in 1972, but gave this up after vigorous objection from the medical community. Beginning in the 1990s, however, FDA began restricting the ability of pharmaceutical manufacturers to give physicians peer-reviewed journal articles and other information about off-label uses of their drugs. FDA treats any drug information distributed by manufacturers, no matter what its form, as part of the product label. So as far as the agency is concerned, mailing out reprints of peer-reviewed journal articles describing an off-label use makes the drug or device "mis-branded."

Physicians try to keep abreast of new research findings, but they can't read every issue of the hundreds of medical journals published in this country. So drug makers have long distributed journal reprints in an effort to promote their products. Regulators regard the practice as grubby commercial marketing, but the distribution of scientific studies allows physicians to be better informed about new developments and enables them to make better treatment recommendations for their patients.

The practice also happens to be protected by the First Amendment. In a series of challenges to FDA's reprint restrictions, federal courts have held that the policies "restricted considerably more speech than necessary" to ensure the information was truthful and not misleading. FDA may monitor the practice to ensure the information is not biased, but forbidding the practice altogether is unconstitutional. By 2007, recognizing that the FDA could not ban the dissemination of all information about off-label drug uses, the agency published a guidance document in the waning days of the Bush Administration that explained what procedures drug firms had to follow in order to be within the boundaries of the law.

Rep. Waxman, however, chafed at even this modest step. He claimed the guidance would promote "potentially dangerous uses" of drugs and would "short-circuit the FDA review and approval process." Not only did Waxman criticize allegedly "abusive marketing practices" by the drug industry, he even attacked the integrity of medical journals themselves and the peer-review process, and he insisted that FDA bureaucrats be placed in the position of judging the quality of the scientific literature.

It's no wonder industry observers and the medical community suspect that Waxman's acolyte Joshua Sharfstein will soon turn his sights toward restricting this important and beneficial mechanism that inexpensively facilitates the dissemination of valuable information to physicians and their patients.

Opponents of off-label prescribing seem unable to balance the regulatory objective of protecting patients from unsafe drugs against the prerogative of physicians to use their best professional judgment to treat individual patients. They downplay the costs of FDA approval, exaggerate the credulity of physicians and their willingness to unquestioningly trust information distributed by drug manufacturers, and ignore the significant benefits off-label prescribing offers for patient care.

Physicians are reluctant to see FDA further restrict information about off-label uses. They know that the practice has large benefits and few costs. Its use should be extended, not curtailed by stricter regulation. Unfortunately, the FDA has a long, troubling history of succumbing to political pressure even when it harms the interests of doctors and their patients.