Tuesday, April 13, 2010

It passed, but we still can't figure it out

I don't for a minute think that our fearless lawmakers are going to let themselves be even momentarily inconvenienced by the mere letter of the legislation they produced all by their little selves, but isn't this a chuckle?
In a new report, the Congressional Research Service says the law may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.

For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available. 

The congresscritters do have a somewhat credible out, though. Congressional researchers suggest that the law was drafted so unclearly that it "raises questions regarding interpretation and implementation that cannot be definitively resolved by the Congressional Research Service."

Hmmm ... Wasn't passing the law supposed to be key to clarifying its contents? Or so said, David Axelrod, anyway.

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Tuesday, March 16, 2010

Could 'reform' drive doctors out of medicine?

The New England Journal of Medicine cites interesting poll numbers on the reaction of physicians to proposed federal legislation that would greatly expand the government's role in medicine. At a time when the Bureau of Labor Statistics is predicting 22 percent growth in demand for physicians by 2018, "24.7% of physicians stated that they would 'retire early' if a public option is implemented, and an additional 21.0% of respondents stated that they would quit practicing medicine, even though they are nowhere near retirement.   This brings the amount of physicians who would leave medicine to a total of 45.7%"

In the case of passage of the current health care "reform" bill without a so-called public option, the number of physicians planning to flee medicine drops -- to "only" one-third.

The NEJM (which is not known as a free-market mouthpiece) notes that not all docs who express a desire to leave medicine after the passage of unwelcome legislation are likely to follow-up on their threats, but "even if a much smaller percentage such as ten, 15, or 20 percent are pushed out of practice over several years at a time when the field needs to expand by over 20 percent, this would be severely detrimental to the quality of the health care system." Demoralization of the remainder could also cause problems in terms of numbers of patients seen and the quality of medicine provided.

Why are docs unhappy? Says Medicus, the company behind the survey:
Over 50% of physicians who responded predict that a health reform would cause the quality of medical care to deteriorate in America.  When asked how health reform could affect the quality of medical care, 40.7% stated it would "decline or worsen somewhat," while another 14.4% stated that the quality of medical care would "decline or worsen dramatically".  If a public option is implemented as part of health reform, 64.1% of physicians predict that the quality of medical care in general will decline.
"Many physicians feel that they cannot continue to practice if patient loads increase while pay decreases. The overwhelming prediction from physicians is that health reform, if implemented inappropriately, could create a detrimental combination of circumstances, and result in an environment in which it is not possible for most physicians to continue practicing medicine," states Kevin Perpetua, Managing Partner for The Medicus Firm's Atlanta division.  "With an average debt of $140,000, and many graduates approaching a quarter of a million dollars in school loans, being a doctor is becoming less and less feasible.  Health reform, and increasing government control of medicine may be the final straw that causes the physician workforce to break down."
Instead of the proposed legislation, the NEJM says the surveyed physicians have alternative ideas: "Tort reform appeared repeatedly, as did patient responsibility and ownership in their health care and costs. Additionally, many physicians emphasized a need for addressing specific issues with separate legislation, as opposed to one sweeping, comprehensive bill."

The survey of a random sample of 1,195 physicians was conducted by The Medicus Firm, which specializes in physician recruitment.


Tuesday, November 10, 2009

An actual economist examines Obamacare and says it makes no sense

According to Martin Feldstein, professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research:

A key feature of the House and Senate health bills would prevent insurance companies from denying coverage to anyone with preexisting conditions. The new coverage would start immediately, and the premium could not reflect the individual's health condition.

This well-intentioned feature would provide a strong incentive for someone who is healthy to drop his or her health insurance, saving the substantial premium costs. After all, if serious illness hit this person or a family member, he could immediately obtain coverage. As healthy individuals decline coverage in this way, insurance companies would come to have a sicker population. The higher cost of insuring that group would force insurers to raise their premiums. (Separate accident policies might develop to deal with the risk of high-cost care after accidents when there is insufficient time to buy insurance.)

The higher premium level would cause others who are currently insured to drop coverage, pushing premiums even higher. The result would be a spiral of rising premiums and shrinking numbers of insured.
There are penalties in the bill to prevent just that -- individuals who don't buy government-approved insurance and employers who don't offer government-approved insurance have to cough up a stiff tariff to The Man. But the penalty is a fraction of the cost of paying for insurance.
The average cost of an insurance policy with family coverage in 2009 is $13,375. A married couple with a median family income of $75,000 who choose not to insure would be subject to a fine of 2.5 percent of that $75,000, or $1,875. So the family would save a net $11,500 by not insuring.


Of course, this will result in yet another crisis, which the government will have to fix by ...


The health benefits of a stay in the slammer

Whether you support or oppose the health-care bill that passed in the House of Representatives over the weekend and now faces an uncertain fate in the Senate, there's no doubt that it will do at least one thing: if passed into law, the unprecedented expansion of the role and power of government will create yet more opportunities for conflict between Americans and law-enforcement officers, with fines, prison and worse at stake for those unlucky enough to be caught on the wrong side of yet another supposed government effort to make the world a better place.

In an August 2008 post, I wrote:
[T]he authorities try, and try and try to make people knuckle under to laws that they find offensive and intrusive. And as people refuse to comply, the authorities raise the stakes, adopting tactics that most of us recognize as violations of civil liberties...
The point that I made is that, when politicians push their authority beyond the boundaries of policies that enjoy near-universal support of the population and into contentious areas that involve imposing the will of the current crop of political officials on a sizeable and unwilling segment of the population, resistance is likely to be substantial. To overcome that resistance, the government adopts forceful tactics and harsh penalties -- and off we go on an escalating conflict between the enforcers and the opposition.

The government would certainly be pushing into new territory with a bill that mandates that people buy government-approved health coverage or else pay a substantial penalty. Fifteen years ago, when such policies were first proposed by the Clinton administration, the Congressional Budget Office cautioned (PDF):
A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.
Such an imposition can't help but be controversial and, indeed, fifteen years later it's still stirring up opposition and may not survive a vote in the Senate. Controversial as it is, it's bound to face resistance -- which its authors anticipated. Penalties for noncompliance have been rolled into the tax code, which means, according to the nonpartisan House Joint Committee on Taxation (PDF), if "the taxpayer has chosen not to comply with the individual mandate and not to pay the additional tax," he or she could face "a fine of up to $250,000 and/or imprisonment of up to five years."

That stiff fine and prison sentence is a worst-case scenario -- in case of a felony conviction for noncompliance. But it's what the House of Representatives has voted to add to the government's armory for use against Americans who don't want to be swept up in the government's latest effort to, allegedly, make the country a healthier place.

This is the dirty secret of health care "reform" as enacted by the government. The fact of the matter is that the only reason to ask the government to get involved in any issue is to draw upon its unique powers to use force against people who say "no." Every government reform comes backed by tough men and women carrying guns, handcuffs and the keys to prison cells.

Yes, the health care bill only latches on to penalties that already exist for noncompliance with previously established programs. But that's just further evidence that every government "reform," no matter how well-intended, increases the likelihood that any one of us will end up in conflict with the government, with brutal consequences at stake.


Tuesday, October 13, 2009

The joys of government health care

The Mackinac Center peeks north of the border to see just how single-payer health care is working out, and gets an earful from the folks who have to deal with the Canadian government's idea of good medicine.


Thursday, October 8, 2009

Does Medicaid offer a glimpse into the future of American medicine?

Last week, my wife, a pediatrician, gave a patient a prescription for compounded Tamiflu -- that is, the preparation of a children's dose of the anti-viral drug by breaking down adult-dose capsules and turning them into a liquid suspension. The Swine flu scare has made children's Tamiflu scarce, so compounding is often the only way of getting the drug for kids. Before handing the patient the prescription, my wife's office checked with the insurer to make sure it would pay for compounded Tamiflu. Reassured that the drug was covered, the patient went to get the drug compounded at the only pharmacy in the area that will do the job (Wal-Mart, if you're interested).

Of course, when the pharmacy went to put the prescription through, the insurer refused to pay. Twice.

Oh, no, not another health insurance company horror story! Well, yes it is -- but with a twist. You see, the insurer was AHCCCS -- Arizona's implementation of Medicaid -- a government program that may provide us all with a peek at the future of American medicine.

The problem was cleared up quickly enough once my wife heard about it. She set her staff to work calling the AHCCCS offices and demanding approval of the prescription. The government employees were all apologies and soon authorized compensation for the patient, who had already paid out of pocket.

But that's the way it always is. My wife and her staff play a frequent game of "guess what AHCCCS will pay for today" that has turned them into constant phone pals with bureaucrats down in Phoenix. The AHCCCS people are almost always polite and usually concede the point.

But this happens over and over again.

Tamiflu wasn't approved for use at all just a few weeks ago, even after the CDC recommended the drug for treating Swine flu. Sure enough, my wife (and other doctors, I'm sure) got on the horn and AHCCCS added Tamiflu to the formulary -- the list of drugs for which it would pay.

Yes, she does this from time to time with the private insurers too -- they're no saints, and occasional arm-twisting is required. But not with such regularity as with AHCCCS, and not to the extent that it seems a system is at work.

If there is a system, it's not a system for refusing care and treatment. It's a system for making it a little more difficult to get things paid for -- unless somebody with savvy runs interference. But most physicians' offices don't provide this kind of value-added advocacy service. It's expensive to have staffers on the phone arguing with Medicaid bureaucrats, none of whom can be fingered as a specific villain in any given case. And without savvy advocates, medications and treatments don't get approved. Not incidentally, I'm sure, such how-did-that-happen refusals to pay for even pre-approved care, spread out across the entire system, must represent a fairly substantial cost saving.

This shouldn't come as a surprise. Medicaid is, after all, a political health-care system, rather than a commercial one. It doesn't just charge for services and raise rates as needed; it's given a certain budget to work with, and somehow it has to jam all the demands upon its resources within the limits of that budget. That's not easy.

In countries where politically run health-care systems are the norm, the cost-control measures are more overt. The Los Angeles Times recently published an article about the budget strains to which the government-run health-care system is subject in British Columbia, and the accommodations it has made in response.
Provincial officials recently announced a $360-million shortfall in the $15.7-billion healthcare budget for the fiscal year that ends in March.

The shortage will mean fewer surgeries and longer waits.

The Vancouver Island Health Authority has said it would reduce the number of nonemergency MRIs by 20%; nonemergency patients now are being booked for scans in March.

Vancouver Coastal Health, which serves a quarter of the province's population, said it would eliminate 450 elective surgeries, about 30% of the schedule, during the four weeks of the 2010 Winter Olympics.

And in the rapidly growing suburbs east of Vancouver, the Fraser Health Authority plans to close its spending gap by, among other things, holding the number of MRIs to last year's total, ending $550,000 in service programs for senior citizens and reducing elective surgeries by about 14%.
How do you control costs in a politically run health-care system? You announce "this much care and no more." Ironically, that leaves one woman described in the article crossing the border and paying out-of-pocket for hip surgery in the U.S. to escape a year-and-a-half long waiting list, and has spurred the establishment of technically illegal private surgery centers in the province at a time when many Americans are touting the advantages of government-run systems like Canadian Medicare.

And like Arizona's AHCCCS.

Americans aren't yet ready to face the hard choices that are made by politically run health care systems. That's why we get one unexplained denial after another instead of hard limits on care as a matter of policy. But, when Americans wise up to the fact that state-run medicine has a hard-nosed attitude toward cost control, they're likely to discover that doctors like my wife can't always fix the problem.


Friday, September 11, 2009

Hard choices

I know somebody who is very vocal about the "need" for single-payer health care in this country so that people don't get stuck with medical bills and have to make hard choices. This is a person who enjoys frequent travel, a comfortable life style and a very nice home full of top-notch appliances.

Because nobody should ever have to make hard choices.


Monday, August 10, 2009

When you insert politics into medical decisions, you get ...

The clever video below from the Independence Institute takes a look at just how politics has affected Oregon's decisions regarding the conditions Medicaid will -- and won't -- cover.


Saturday, July 18, 2009

And now, a message from the Health Administration Bureau


Friday, July 17, 2009

The latest prescription for your ills

So, let's see if I have this right. In a few years, the federal government might send people to wrestle you to the ground for a forced vasectomy, run up massive costs in the process of performing the procedure, and deny you access to private insurance to get yourself unsnipped? Does that about summarize the situation?

Don't know what I'm talking about?

Well, according to David Freddoso in The Washington Examiner, it turns out that John Holdren, President Barack Obama's Director of the Office of Science and Technology Policy, co-authored (with once trendy doom-and-gloomer Paul Ehrlich) the book Ecoscience back in 1977. In the book, written when the words "population bomb" played roughly the same scary role that "global warming" does these days, he discussed, in variously approving or ethically neutral terms, policies such as forced abortions, forced contraception, forcing women to give up children for adoptions and adding "sterilants" to drinking water.
Several coercive proposals deserve discussion, mainly because some countries may ultimately have to resort to them unless current trends in birth rates are rapidly reversed by other means. Some involuntary measures could be less repressive or discriminatory, in fact, than some of the socioeconomic measures suggested.
[R]esponsible parenthood ought to be encouraged and illegitimate childbearing could be strongly discouraged. One way to carry out this disapproval might be to insist that all illegitimate babies be put up for adoption -- especially those born to minors, who generally are not capable of caring properly for a child alone...It would even be possible to require pregnant single women to marry or have abortions, perhaps as an alternative to placement for adoption, depending on the society.
Note, this was over 30 years ago, when different concerns captured the public attention. Holdren's opinions may well have changed since then. But he was an adult at the time, and was somehow capable of dismissing moral and ethical objections to coercion in the name of necessity.

The cost issue comes in courtesy of the Congressional Budget Office. Douglas Elmendorf, director of the Congressional Budget Office, told the Senate Budget Committee:
"We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. On the contrary, the legislation significantly expands the federal responsibility for health-care costs."
Specifically, according to preliminary estimates (PDF) published July 14:
On a preliminary basis, CBO and the JCT staff estimate that the proposal’s provisions affecting health insurance coverage would result in a net increase in federal deficits of $1,042 billion for fiscal years 2010 through 2019. That estimate primarily reflects $438 billion in additional federal outlays for Medicaid and $773 billion in federal subsidies that would be provided to purchase coverage through the new insurance exchanges.
Taken togather, the congressional testimony and the preliminary estimate demonstrate that massive new costs are involved in the government health scheme, and that no significant cost-control measures have been developed. That suggests we're likely to see the sort of sky-rocketing expenditures that have been associated with Medicare in the past, at a time when the federal government is already drowning in red ink.

As for not being able to use private insurance to get that uber-expensive snip-job reversed, well, according to Investors Business Daily, the health care proposal does, indeed allow people to keep private coverage they like, just as promised. But plans won't be able to sign up new customers after a cut-off date, effectively letting private coverage die by attrition.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

That means everybody would eventually have to migrate to the "public option" by necessity.

Now, Obamatons counter that the bill doesn't actually ban private insurance. A Daily Kossack says, "the bill is directed at making reforms that have nothing to do with a public health insurance plan, and plans that enroll people after it becomes law have to comply with those reforms."

That sounds to me like pretty much the IBD interpretation, with a bit of spin added. You still will be able to get privately offered insurance afterthe cut-off date, but it won't be the old plan you were happy with, but a new one tailored to government specifications -- rather than as a competitive product in a diverse marketplace -- that just happens to be offered with a private label.

As Heritage's Conn Carroll says:

[A]ll health insurance plans must confirm to a slew of new regulations, including community rating and guaranteed issue. These will all drive up the cost of health insurance. Furthermore, all these new regs would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage. Until, of course, it becomes too expensive and they just dump you into the government plan.

So remember, if you get tackled to the ground, clamp one hand over your crotch, and the other over your wallet.

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Wednesday, June 24, 2009

Public medicine looks a lot like public school

With our son approaching school age, my wife and I are considering a variety of options: charter, private, homeschooling. Just about the only option not on the list, even though we're forced to pay for it anyway, are public schools. We're not only unimpressed with the results achieved by local public schools, but we also don't like their one-size-fits-all structure. As things stand, we're concerned that, a few years from now, we'll face a similar situation with health care, forcing us to pay for coverage that we don't want in addition to care that we actually choose.

That's the big problem with government-sponsored versions of anything. No matter the quality of the ultimate product, everybody has to pay for it, even if it doesn't suit their personal needs and preferences. Just imagine if dining out was a state-provided service. Given popular preferences, at best, we'd end up with reasonably decent steak and burger joints from sea to shining sea -- and that's it. Good luck to vegetarians and fanciers of exotic ethnic foods.

Of course, at worst, you'd be forced to pay for the food quality of a high school cafeteria mixed with the service you've come to love at the Department of Motor Vehicles.

That worst-case scenario came to pass in Canada, where the country's Supreme Court ruled in 2005 that the quality of medical care provided by the state system in Quebec was so terrible that the province's law against private health insurance couldn't be allowed to stand. While the ruling doesn't apply elsewhere, private -- and arguably illegal -- clinics are springing up around the country to provide care to people who'd rather pay for medicine twice than accept the government's prescription.

Private medicine is legal in the United Kingdom, where about 11.5% of Britons (up from 5% in 1980) carry private insurance in addition to the taxes they pay for the National Health Service. Government-provided dentistry is such a shambles that people have fled the system, and dentists now make more from private-pay patients than from the state system.

But if other country's medical systems have troubles, so does the American system. After all, The World Health Organization gave America's health care a miserable 37th-place ranking out of 191 countries, right?

Well ... not so much. Actually, when economist Glen Whitman looked at WHO's rankings, he concluded:

The WHO rankings depend crucially on a number of underlying assumptions—some of them logically incoherent, some characterized by substantial uncertainty, and some rooted in ideological beliefs and values that not everyone shares.

The analysts behind the WHO rankings express the hope that their framework "will lay the basis for a shift from ideological discourse on health policy to a more empirical one." Yet the WHO rankings themselves have a strong ideological component. They include factors that are arguably unrelated to actual health performance, some of which could even improve in response to worse health performance.

Basically, WHO front-loaded its ratings with criteria that guaranteed high rankings to tax-supported systems, and low rankings to systems where people pay for their own care. Said Whitman, "To use the existing WHO rankings to justify more government involvement in health care--such as via a single-payer health care system--is therefore to engage in circular reasoning because the rankings are designed in a manner that favors greater government involvement."

Plenty of people share WHO's biases -- many Canadians and Europeans are happy with what they get, and lots of Americans say they want the same thing. But plenty of people don't share WHO's biases. If you implement a state-sponsored health care system, everybody gets drafted into the one-size-fits-all scheme, without consideration for their personal preferences.

Actually, "draft" is the right word. Since state-supported schemes are supported by taxes picked from all our pockets, they're basically conscription with limited -- or expensive -- opportunities for conscientious objectors (and sayonara to voluntary alternatives). That's true of public schools, and it may soon be true of health care.

Right now, President Obama and his allies in Congress say they have no plans to displace private medicine, only to create a public plan that would compete with and "discipline" private insurers.

Right. What do you think would happen to Burger King if McDonald's not only ran its own restaurants, but also had the power to charge everybody for Big Macs whether they ate under the golden arches or not, and could regulate all fast-food joints? That's the sort of "discipline" you get from a government plan.

I expect that, in years to come, my wife and I will be looking at our options for escaping not just public education, but also public medicine. And, as it already is for Britons and Canadians, that choice will be expensive and limited by a government that doesn't put a lot of value on personal choice.


Tuesday, December 30, 2008

Here comes bureaucratic health care

Get ready for a few years of breast-pounding about greedy pharmaceutical companies, insurance companies and doctors. The campaign will culminate (we can expect) in some half-assed health care scheme cobbled together by bureaucrats that will hide its costs in taxes, discourage innovation and ultimately run up against the same laws of economics that trip up state-run medicine elsewhere.

The incoming Obama administration is in full yes-we-can mode on health care. Pity-hire ... ummm ... honorable former Senator Thomas A. Daschle wanders the country, asking anybody who will hold still for a moment what the government should do to make people happy with their doctors, prescriptions and aging bodies. Not surprisingly, lots of folks seem to be reaching for the stars, answering that they want expensive stuff for free, and lots of it.

Sob stories always lead, of course. The Washington Post reported the sad case of Dolly Sweet, who says she's not taking her cancer medicine because it costs $35,000 a year.

You know, I'm sorry to hear that Ms. Sweet was priced out of that expensive drug, but I'm at a loss for a viable alternative. Medicines cost money in terms of research, development and the approval process. Seven years ago, the Tufts Center for the Study of Drug Development pegged the cost of developing a new prescription drug at $802 million. Two years ago, the same group put the cost of a new bio-tech product at $1.2 billion. If it's a new painkiller that's going to reach a vast number of users, the cost can be spread out over millions of people. But a new cancer drug -- particularly if it's targeted at specific types of cancer -- is going to cost fewer users a lot of money.

Somebody has to pay those costs, and resources are finite for all possible candidates. Ms. Sweet says she's unable to pay. She apparently doesn't have private coverage that will pick up the tab, and Medicare (she's 77), budget-busting prescription drug coverage be damned, clearly isn't champing at the bit to foot the bill.

Well, honestly, it's a difficult situation for whoever is holding the checkbook.

But somebody always blames the people who accept the check for being greedy bastards. From the same article:
Jill King had her own theory about why her friend's cancer medicine was so expensive: Drug companies spend too much money buying meals for doctors.
And with that sort of brilliance on the loose, this is inevitable:
The group that met in the Las Vegas home of Ruby Waller concluded that a single-payer system similar to the Canadian approach might make better sense. "There's too much profit in health care," said Waller, 53, who has diabetes.
Actually, Ms. Waller might do all right under just about any health care system, assuming she doesn't suffer from complications; diabetes is pretty easy to control with inexpensive treatments which even an inept system could probably manage.

But poor Ms. Sweet's plight would get worse, not better, up north. Two years ago, the Globe and Mail ran an editorial lamenting the Canadian single-payer system's traditional means of allocating expensive cancer treatments: making patients wait, and wait and wait ...
Canada's health system can't seem to cast off the built-in complacency that is the mark of the second-rate. Take waiting times for prostate-cancer patients. Canada's health ministers set a goal of four weeks wait for radiation treatment for cancer. But 70 per cent of hospitals surveyed don't meet that goal for prostate patients. Apparently the hospitals have decided the waits won't kill them. ...

Canadians have told their governments that the number-one problem in health care is the wait for crucial care. The Supreme Court of Canada has put governments across the land on notice that if the waits persist, medicare's constitutional foundation could be brought crashing down.
Canadians of means can't even choose to shoulder the expenses that Ms. Sweet finds excessive, since their government makes it illegal to pay privately for services covered by the public system (except in Quebec, where the Supreme Court ruled the state-run system was so bad private medicine had to be allowed). Canadian politicians are familiar with the complaints and have responded -- by coming to the U.S to pay out of pocket for their own cancer care.

The U.K. goes a step beyond Canada. Forget waiting lists -- you just can't get up-to-date treatments through the National Health Service. It's a way of controlling costs that wouldn't put Ms. Sweet any closer to her expensive cancer drugs (Britain has miserable cancer-survival rates).

At least Canadians have the U.S. Where would Americans turn if we followed Ms. Waller's advice by emulating our northern neighbors in getting the profit out of medicine?

That antipathy to profit is one of the weirder aspects of the discussion of such important services as the provision of health care. Nicholas Kristof penned a navel-gazer for the New York Times last week that actually began with the question: "Here’s a question for the holiday season: If a businessman rakes in a hefty profit while doing good works, is that charity or greed? Do we applaud or hiss?"

Umm ... what? Are we actually at the point that we'd rather that people suffer than that somebody earn a buck by making the world a better place? Who do we think will shoulder the billion or so dollar cost (plus regulatory grief and liability risk) of developing new drugs and bio-tech products if we strip away monetary rewards for making the effort? Where will the brilliant minds go if years of medical education aren't rewarded by lucrative careers?

And is it really morally preferable to keep medical providers that cater to the needy on an umbilical cord that can be severed at any time, rather than to turn them, as The HealthStore Foundation does, into for-profit franchised clinics that earn tidy incomes for their owner-operators in the third World?

To his credit, Kristof finally allowed that "by frowning on aid groups that pay high salaries, advertise extensively and even turn a profit, we end up hurting the world’s neediest."

But what about the rest of us? Aren't we all entitled to medicine and medical providers spurred to excellence by the potential for monetary reward?

Well, Mr. Daschle doesn't seem to think so. As Sally C. Pipes points out in the Wall Street Journal:

In his book, Mr. Daschle proposes a National Health Board to regulate the way health care is provided. This board would have vast powers in regulating the massive federal health-care system -- a system that includes Medicare, Medicaid, and other programs. Under Mr. Obama, it is likely that that system will be expanded and that new government insurance for the nonelderly, nonpoor will be created.

That new government insurance will likely expand and push out much of the private competition -- especially if the government responds to differences in quality of care by imposing greater mandates on private coverage so as to hide the disparity.

In the end, we'll likely get some muddled amalgam that reduces the ability to make a profit and lards the health care system with yet more mandates and regulations -- which will make matters even worse.

But we won't really ever know how much worse, because the next expensive drug that Ms. Sweet would have agonized over won't even be developed, and the top-notch medical talent that might have helped her find alternatives will have gone into another field instead.


Thursday, November 13, 2008

Socialists? No, we're not socialists -- well, except for health care

Beware of a politician who has a long, detailed, plan for how an important area of human life should be run by the government. A politician, for instance, like Sen. Max Baucus:
Baucus, the Senate Finance Committee chairman, called on Congress to create health reform legislation that would achieve “coverage for every American while also addressing the underlying problems in our health system” in a detailed, 87-page plan that was made public yesterday.

Baucus’ plan, which he said is not intended to be a legislative proposal, is very similar to the plan Obama outlined on the campaign trail, the notable exception being that Baucus would eventually mandate coverage for adults as well as children.
Baucus concedes that, "In the short term, health care reform would cost taxpayers more than the government can achieve in savings from all reforms and financing changes..." Making that concession before the plan has even been debated, let alone implemented, is a clear assurance that a real-world version of his universal health care system would be outrageously fucking expensive by an order of magnitude greater than predictions, sort of like Medicare.

Baucus's proposal is actually 89 pages long. The full text can be found here (PDF).

Question: Why does the word "reform" out of a politician's mouth always preface a scheme for putting bureaucrats in charge of our lives?

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Wednesday, November 5, 2008

My record at the polls -- not so great

With my track record at the polls, you'd think I'd just get the pretense over with, hire a dominatrix, and get my abuse the old-fashioned way: with whips and ball-gags. But no, I tried my hand at another election cycle, and look what I have to show for it.

OK, I didn't expect Bob Barr to win, but I was hoping for a vote total that could credibly be said to exceed that attributable to simple statistical error. He pulled 0.6% in Arizona and something rather less nationally. All because of the oh-so attractive candidates put forward by the major parties, I'm sure.

My congressional district (but certainly not me) is now represented by business-bashing, anti-immigrant, drug-warrior Democrat Ann Kirkpatrick. I already miss the corrupt, graft-hungry son of a bitch she replaces.

Prop. 100, which forbids new taxes on the sale or transfer of homes, was a bright spot. It passed with better than three-quarters of the vote.

Prop. 101, which would have blocked the government from imposing socialized medicine, failed by a heartbreakingly slim margin: 49.9% to 50.1%. That's less that 2,200 votes out of 1.7 million total.

Prop. 102, the repulsive "Arizona doesn't like queers" measure, passed with 56.5% of the vote.

Prop. 201, a scam to turn every home sale into a legal free-for-all, thankfully failed with 77% against.

And state legislators won't get a raise, since Prop. 300 went down to easy defeat.

I'm happy to say that the campaign season is now over, and I can get back to the important business of bashing politicians and government officials without worrying about electoral outcomes.

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Tuesday, November 4, 2008

How I voted, in case you care

Who did Tooch anoint with his much-coveted vote this year? Which issues won his all-important nod? Read on and find out.

President: Bob Barr. He's a moderate libertarian with a conservative bent, which means he and I disagree on some issues. But his overall platform is one that expands liberty instead of contracting it. That's a rare thing in this day and age, and makes him unique on the presidential line of the Arizona ballot. I didn't have to agonize over this at all.

By the way, I do find his conversion convincing. Nobody abandons conservatism for libertarian ideas, works with the Marijuana Policy Project and consults for the ACLU in order to gain political advantage. And we need to welcome converts -- the future of libertarianism lies in one-time authoritarians who have seen the light.

Congress: Sydney Hay. Yes, Hay is a social conservative, but she's savvy on economics and very pro-free-market (she sat on the board of the Goldwater Institute). That'd be an important quality in a House that has engaged in serial ineptitude for years when it comes to economic issues. Democrat Kirkpatrick is sounding the economic populism bell and touting her drug warrior credentials, so to Hell with her. Libertarian Thane Eichenauer is on the ballot and would be my choice if Hay's economic credentials weren't so impressive and important.

County Attorney/Sheriff: After the Dibor Roberts affair, I was very much looking forward to voting against Sheriff Steve Waugh and County Attorney Sheila Polk, who rallied behind the thuggish Sergeant Jeff Newnum and prosecuted Roberts. Unfortunately, the ballot is Soviet-style for these offices -- their names, with no alternatives. I wrote in Dibor Roberts for Sheriff and her husband Merrill for County Attorney.

Prop. 100, barring new taxes on property sales and transfers: Yes

Prop. 101, blocking state officials from imposing socialized health care: Yes

Prop. 102, barring the recognition of same-sex marriages: No, goddamnit

Prop. 201, basically abolishing contract law and turning home sales into a litigious free-for-all: No

Prop. 300, raising state legislators' salaries: No

That's not everything, of course. Some of the races I took a pass on, several offices were uncontested (or contested only by a nice old lady whose memory has been slipping for a few years), and a few propositions were make-the-best-of-a-bad-choice situations. I also voted against a jail tax.

You think you did better? Bring it on.

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Friday, October 31, 2008

Arizona's Prop. 101 is good medicine for bad politicians

Proposition 101

Be it enacted by the People of Arizona:

1. Article II, Section 36: Constitution of Arizona is proposed to be added as follows if approved by the voters and on proclamation of the Governor:


2. The Secretary of State shall submit this proposition to the voters at the next general election as provided by Article XXI, of the Constitution of Arizona.

Sometimes the best way to preserve freedom is to tie people's hands -- government people, that is. That's what Arizona's Proposition 101 would do when it comes to health care. Designed to prevent officials from dragooning state residents into a government-mandated health care system, the measure would write into the state constitution a ban on passage of any law that "restricts a person's freedom of choice of private health care systems or private plans of any type."

I'll admit here that I have a bit of a personal interest in the passage of this measure. My wife is a physician -- a pediatrician -- in Arizona who owns her own practice. She's already horrified by the extent to which the government has inserted itself into the provision of medicine. She and I both consider health care to be overregulated under existing law, and consider many of the flaws of the health care system in this country to be direct result of busybody politicians' efforts to "perfect" the provision of medicine with mandates, bans and rules of all sorts.

Prop. 101 wouldn't undue existing regulations, I'm sorry to say. But it could potentially block a worst-case scenario by preventing our ever-meddlesome political class from deciding that the skills they've put to such good use in driving Arizona into a massive budget deficit could also be applied to designing an oh-so-clever health care system that's so attractive that people have to be forced to participate under threat of law.

I'm struck by the difference in tone between the official arguments for and against Prop. 101. The "for" arguments all mention the virtues of personal freedom and the benefits to innovation and responsiveness to be found in systems that avoid the rigidity of top-down design and government control.

Dr. Anthony K. Hedley, president of the Arizona Institute for Bone & Joint Disorders, writes:

As an orthopaedic surgeon, I have devoted most of my adult life to eliminating the pain and suffering that patients immobilized by severe joint disease must endure. Many of these patients have come to me from other countries, such as Canada, where their health care systems make them wait months, and sometimes years, to get the kind of surgical intervention that Americans expect to receive in a timely manner.

Dr. Robert F. Spetzler, a neurosurgeon, adds:

Many nations--and now many of the states of OUR nation--have made attempts to deal with the problem of the uninsured. But what frightens me is that in most--if not all--of these instances, the reforms have resulted in restricting the ability of patients to choose their own doctors; or to seek a new and innovative form of therapy-or an alternative form of therapy; or to get a second or third opinion; or to purchase the type of health insurance plan that best suits their needs.

By contrast, the "against" arguments dwell on the supposed perils of changing the Constitution to prevent the government from doing stuff to us in the future that we might not want it to do, but would be good for us. Oh, and they say socialized medicine is too a great thing.

Says Dr. Jonathan B. Weisbuch and Dr. Mary Ellen Bradshaw, the chair and co-chair, respectively, of the Arizona Coalition for a State and National Health Plan:

An Amendment limiting future legislation is dangerous. No one can predict what laws may be needed to improve the health of Arizonans. ... The Proposition's goal, to prevent abuses associated with "socialized" medicine, is irrational. The only "socialized" medical programs in the US are the Veterans Health System, the Indian Health Service, and military medical services. None abuse the private sector. Socialized systems are funded by the Government. They provide services in government facilities by professionals who work for the U.S. Public Health Service. No one is abused by "socialized medicine" in America.

For the record, from speaking with doctors who have worked in all three systems, and patients who have endured treatment under all three, I can say with confidence that the VA and the military provide, at best, sub-standard care, and the Indian Health Service is a tour through third-world hell. I'd say the patients in those systems are "abused."

But if you want care under systems such as those, you should be free to choose them -- and the rest of us should be free to opt for care under competing arrangements.

As for the idea that "an amendment limiting future legislation is dangerous ..." You know, the best parts of both the federal and state constitutions do just that. I'm talking about the Bill of Rights (Declaration of Rights in Arizona), which provide a laundry list of things the government can't do. We didn't trust the government with a free hand on free speech, property rights and search and seizure protections, and there's no reason to keep politicians unrestrained when it comes to maintaining our freedom to make our own health care choices.

Proposition 101 isn't a cure-all. There isn't any such thing. But it could be an effective roadblock to further incursions by the government into one important area of personal liberty.

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Wednesday, April 30, 2008

McCain plays medicine man

John McCain's health care proposal is out and, as I predicted, it's not so much free market-oriented (as it's being touted in the press) as it is less statist than the schemes offered by his Democrat competitors, Hillary Clinton and Barack Obama.

That said, there are some good elements in the plan. For starters, he touts the value of Health Savings Accounts. Some years ago, I had an early version of the HSA (a real one that rolled over from year to year, not one of the accounts that magically ate your money every December). It really did give me a remarkable degree of control over my health expenses and an idea of what everything cost -- and it allowed me to go to providers as a cash-paying patient, with access to lower prices.

McCain also wants to shift tax breaks so that they stop incentivizing employers to offer health coverage and start incentivizing individuals to acquire coverage independent of employers. To that end he's offering credits of $2,500 for individuals and $5,000 for families. That's not enough to pay the full cost of coverage, but it's not supposed to be. It's just supposed to act as a carrot to get people to acquire coverage. McCain also wants to allow people to shop for plans across state lines, potentially buying cheaper insurance that covers just what they need from states with fewer regulations. Overall, that promises increased competition, coverage chosen for its personal fit, and also improved job mobility since people won't stay in unpleasant situations just to retain coverage.

Tort reform is also on McCain's agenda, though I'm curious as to how he's going to address what's really a state-level issue from the White House.

McCain's proposal does not address the problems inherent in a third-party-pays system of health coverage. I don't see how his ideas are going to rein-in the increasing costs that come with the all-you-can-eat model (nor do Obama and Clinton address this).

And the plan does nothing to challenge the entitlement mentality that has converted health care in the minds of too many people into a "right" that somebody else has to provide at any and all cost. As long as people insist that unknown others owe them endless fixes for their booboos, health care will remain a political football, with the advantage going to the politicians who promise the most free stuff (Who pays the bill? Who cares?).

McCain also promises what sounds like a pricey but vague state-federal fix for the problems of "higher-risk" patients who have trouble getting approved for coverage under the third-party-pays system.

And there's some inscrutable stuff in there, including an endorsement of "coordinated care."

We should pay a single bill for high-quality disease care which will make every single provider accountable and responsive to the patients' needs.

Talk about counter-intuitive. If I want a doctor's attention, I expect that I'll get it not from one pre-paid bill, but because I haven't yet signed a check to her.

My verdict: Less bad than what the Democrats offer, with some actual quasi-market-oriented improvements over the current system. The model also allows for continuing individual experimentation, unlike Clinton's plan to conscript the entire population into a government-designed system.

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Tuesday, April 29, 2008

Why do doctors stick with the health care system?

In response to yesterday's post on John McCain's sort-of, not-quite rejection of a government-designed health-care system, a reader writes to ask me:

If they are so dissatisfied with the current state of medical insurance, why aren't more doctors operating outside of the insurance industry by providing good care for a reasonable cost and completely boycotting medical insurance?

That's a good question, since the current system is a disaster and proposals put forward by the leading presidential candidates promise to enhance the worst aspects of what's already in place. To quote a Forbes column by Yaron Brook recommended to me by the same reader:

But by the time Medicare and Medicaid were enacted in 1965, this view of health care as an economic product--for which each individual must assume responsibility--had given way to a view of health care as a "right," an unearned "entitlement," to be provided at others' expense.

This entitlement mentality fueled the rise of our current third-party-payer system, a blend of government programs, such as Medicare and Medicaid, together with government-controlled employer-based health insurance (itself spawned by perverse tax incentives during the wage and price controls of World War II).

Today, what we have is not a system grounded in American individualism, but a collectivist system that aims to relieve the individual of the "burden" of paying for his own health care by coercively imposing its costs on his neighbors. For every dollar's worth of hospital care a patient consumes, that patient pays only about 3 cents out-of-pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14%.

The result of shifting the responsibility for health care costs away from the individuals who accrue them was an explosion in spending.

This is exactly right. The dominant means of paying for health care in the United States has little to do with the discipline and consumer feedback of the free market. Prices for procedures and visits are set not according to supply and demand in the local market, but according to insurance company compensation and the mysteries of medical coding. Each procedure must be coded at the highest justifiable level -- too low and you're giving services away, too high and you're flirting with fraud. The charges for each code are then set at a level above expected insurance company (including Medicare and Medicaid) compensation. To maximize compensation, medical practices charge at a level well above what the companies are actually willing to compensate. If a practice is being compensated equivalent to its charges, the assumption is that the office is charging too little.

Smart cash-paying patients who know to ask at well-run practices will often find an entirely separate and unadvertised price list that bears little resemblance to what insurance companies are charged. That is, it's a lot lower. These separate price lists for cash-paying customers have been adopted at a very few medical practices as the only price lists. Practices that use SimpleCare charge patients directly and don't deal with insurance companies or government programs at all, although patients are free to submit their bills to insurers for reimbursement.

How much lower are these cash prices? SimpleCare providers are reported to charge 30% to 50% less than competitors who work through the traditional insurance schemes. And that's with much less effort and expense in collecting payments.

All right. So the system of codes and insurers as it now exists is arcane, difficult to navigate and drives up costs. So, as my reader asks, "why aren't more doctors operating outside of the insurance industry by providing good care for a reasonable cost and completely boycotting medical insurance?"

The fact is, doctors are some of the least business savvy people I've ever met. Most will admit that, too. Medical school teaches them how to save lives, but not how to run an office. Unfamiliar with alternatives, physicians go with what they know, which is the system in place. Successful practices almost always rely on practice managers who are trained in the arcane art of extracting money from insurance companies and the government. They have conferences, newsletters and mailing lists devoted to proper coding and price-setting. Practice managers are highly skilled at running medical practices under the current system and only under the current system.

And once physicians who've opened their own practices find themselves bringing in more money than they put out in expenses, they have little incentive to start jiggering with the business model. Shifting gears would involve putting profitability on the line for the hope of reestablishing profitability under a different (if more sensible) business model -- all the while swimming upstream against the prevailing assumption, so well described by Yaron Brook, that health care is a "right" that should be free. Switching to a pay-as-you-go model requires getting patients who balk at coughing up $20 for a co-pay to pay the full (but discounted off of current prices) cost of their health care.

That's one of the maddening things about medicine. People who drive to the office in a new truck with a carton of cigarettes in the back and who just spent a couple of hundred bucks to get their dogs de-wormed will bitch about handing over $20 for a co-pay. People don't mind paying the veterinarian, but that greedy doctor ...

The prevailing entitlement attitude toward medicine is another big barrier toward changing to a more market-oriented model that would lower costs.

And, of course, since most health care consumers pay little or none of the actual cost of the services they consume, there's a strong incentive among an expensive subset of patients to demand ever-more tests, more medication, more visits and more specialized treatments that drive up costs overall for the whole system.

There are health-care providers who do use a market model, though. If you're a fan of alternative medicine, chances are that your homeopath or naturopath, right after a monologue about the evils of profit-driven mainstream medicine, will guide you to the counter where you're expected to pay, in full, for all services rendered that day.

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Monday, April 28, 2008

McCain just won my wife's vote

My wife is pretty much a single-issue voter this year. As a physician who owns her own practice and already despises the extent to which the government has intruded itself into her business, she's reserving her vote for the major-party candidate who promises the least expansion of the state sector in medicine. So, while we haven't discussed the latest development yet, I think this announcement will clinch it for her:

Sen. John McCain on Monday rejected a "big government" takeover of the health care system, saying he wants to empower families to make more medical decisions.

"I've made it very clear that what I want is for families to make decisions about their health care, not government, and that's the fundamental difference between myself and Sen. Obama and Sen. Clinton," McCain told reporters in Miami, Florida, referring to the two remaining Democratic presidential candidates, Sens. Hillary Clinton and Barack Obama.

"They want the government to make the decisions, I want the families to make decisions," he said.

But, McCain goes on to denounce "parochial interests" in medicine and said:

"We must move away from a system that is fragmented and pays for expensive procedures, toward one where a family has a medical home, providers coordinate their efforts and take advantage of technology to do so cheaply, and where the focus is on affordable quality outcomes."

That doesn't really sound to me like a candidate who wants to get the government out of the way and let the market provide medical care in a variety of ways to consumers with different needs -- free markets are, pretty much by definition, "fragmented" -- so I'm not sure what his assurances are worth.

But with Hillary Clinton and Barack Obama promising to stick the insurance companies with the cost of government-designed coverage (until they close their doors) that (under Hillary's plan) everybody is forced to sign up for, basically denying people access to low-cost, bare-bones plans, McCain sounds at least a bit less dangerous. And that's before we even get to the Democrats' vow to limit drug companies' prices and profits, pretty much eliminating the incentive to incur the $802 million cost of developing and getting approved a new drug or the $1.2 billion cost of developing and winning approval for a new biotech product.

I still think that to whatever extent McCain is more market-oriented than his donkey-party rivals, it's more by default than by conviction -- he wants to distinguish himself from the competition, and Republicans can't really go more socialist than Democrats. On his own, though, he's generally distrustful of the free market, and convinced that the government needs to intervene and throw its elbows around. His prescriptive vision for health care, revealed above, sounds to me like a military man's gut-level instinct to address a perceived problem by issuing orders from above rather than by getting out of the way and letting people work out grassroots-level solutions -- probably a multitude of solutions to address many needs and preferences.

I think, then, that McCain's instinct is to move in the same coercive direction as Clinton and Obama, with the right solution (whatever in hell that is) imposed from the top down, but less so, just because he's a Republican.

That'll probably be enough for a lot of voters (including my wonderful wife), but a slower road to a bad destination doesn't sound too enticing to me.

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