Archives: July, 2006

Want Electronic Medical Records? Fix the Incentives

Suppose you are traveling, and needed to visit a doctor, who says he’d like to do an MRI. You had one done just two weeks ago at home, but your personal doc would have to snail mail the image to the new doc. The new doc needs to have a look inside you, but another MRI would be expensive.

Now think: in what kind of health care system are you more likely to get electronic medical records, where doctors can send MRI results to each other instantly:

  • A health care system where you are on the hook for the cost of the second, unnecessary MRI, or
  • A system where someone else (Medicare, your employer, etc.) is going to pay for it?

Thanks to government subsidies and the federal tax code, Americans are less sensitive to the price of medical care than even Canadians, whose government is supposed to pay for everything. As a result, most providers still keep patients’ medical records on paper, essentially because the government lets them get away with it. Some providers have started using electronic medical records, but those systems are in their infancy and are unable to talk to each other. That means lots of wasteful spending, plus treatment delays and medical errors.

When Katrina hit Louisiana, thousands (millions?) of medical records were destroyed. But when the World Trade Center went down in a fiery blaze, there was no hue and cry about the loss of financial records, because those were secured, electronically, in various sites. Why the asymmetry? My guess is that the financial services industry has customers who demand value, including responsiveness and security, because they bear the cost. Health care providers that do have price-sensitive customers, such as services like MinuteClinic and TelaDoc, do offer electronic medical records. But most of the health care industry does not have price-sensitive customers, and we have Congress to thank for that.

So when House Republicans plan to vote this week on legislation that would spend your tax dollars to encourage the creation of electronic medical records, it seems like a classic case of one fouled-up government intervention begetting another. Congress has spent the last 60 years doing little in health policy but insulating patients from the costs of paper medical records. But don’t worry, because now they’re going to throw $40 million of the taxpayers’ money at health information technologies (HIT) that create interoperable medical records.

In a further demonstration that Congress is wasting its time (isn’t there a war on?), this week Microsoft announced plans to start producing interoperable electronic medical records. Maybe the fact that the private sector is trying to muster to the task – in spite of Congress’ past meddling – will persuade Congress not to compound its past mistakes. Perhaps Congress will instead look at ways to restore the incentives that encourage providers to offer such cost-saving innovations. One can always hope.

Chicago City Council to Low-wage Workers and Poor People: Eat Dirt!

The Chicago City Council has proved beyond doubt its aggressive hostility to the welfare of low-wage workers and low-income consumers by its approval of an ordinance that would forbid Chicagoans from legally entering into agreements to work for less than $10 an hour and $3 in benefits—even if they want to—with retailers with $1 billion in annual sales and stores of at least 90,000 square feet.

By prohibiting job-seekers from accepting terms of employment to their and potential employers’ mutual benefit, the City Council has effectively requested that major employers like Wal-Mart and Target open fewer new stores in Chicago, and make available fewer (and possibly no) new jobs. Additionally, the Council has asked Chicago’s low-income consumers, who would benefit most from more discount retail outlets, to forgo significant increases in their quality of life.

As NYU economist Jason Furman wrote in Slate by way of crushing Barbara Ehrenreich in a debate about the effect of Wal-Mart on America’s working class:

A range of studies has found that Wal-Mart’s prices are 8 percent to 39 percent below the prices of its competitors. The single most careful economic study, co-authored by the well-respected MIT economist Jerry Hausman, found that grocery sales by Wal-Mart and other big-box stores made consumers better off to the tune of 25 percent of food consumption. That doesn’t mean much for those of us in the top fifth of the income distribution—we spend only about 3.5 percent of our income on food at home and, at least in my case, most of that shopping is done at high-priced supermarkets like Whole Foods. But that’s a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income—unless the family lives in New York City or one of the other places that have successfully kept Wal-Mart and its ilk away.

Why does the Chicago City Council insist on harming workers by denying them their moral right to enter into work agreements on terms they find acceptable? Why does the Chicago City Council want to keep things from getting better for its city’s poor?

Is Opposition to the Bush Doctrine “Isolationism”?

The online version of the New York Times runs the following headline for its story covering its poll on Americans’ attitudes on foreign policy:

Americans Showing Isolationist Streak, Poll Finds

The substance of the poll shows several things: Americans want out of Iraq, they don’t want to deploy US servicemen to try to make peace in Lebanon, and they don’t think that it’s our responsibility to go around the world attempting to force peace on warring nations.

Is that really “isolationism”? I covered the topic of “isolationism” earlier this year when a Pew poll interpreted Americans’ desire to “mind our own business internationally” as a sign of isolationism. (Should we not mind our own business internationally???)

I’ll say one thing: If the media keeps portraying the choice as between the Bush doctrine or “isolationism,” then isolationism is going to end up with a lot more adherents than any of us thought.

“Precipitous” Withdrawal Defined

Former National Security Adviser Zbigniew Brzezinski has never been shy about voicing his opinions. But while his comments on the current crisis in Lebanon before a small group of Washington insiders hosted by Steve Clemons and the New America Foundation has elicited some media coverage, I was most struck by his comments on Iraq.

Brzezinski was an early advocate of a relatively swift military withdrawal from Iraq. In January 2005, he laid out the choices in Iraq in stark but simple terms:

we will never achieve democracy and stability [in Iraq] without being willing to commit 500,000 troops, spend $200 billion a year, probably have a draft, and [impose higher taxes].

As a society, we are not prepared to do that….even the Soviet Union was not prepared to [take equivalent steps in Afghanistan] because there comes a point in the life of a nation when such sacrifices are not justified.

(The full transcript can be found here.)

One year later, Brzezinski made his case again, this time on the op-ed page of the Washington Post:

The real choice that needs to be faced is between:

An acceptance of the complex post-Hussein Iraqi realities through a relatively prompt military disengagement [or]

An inconclusive but prolonged military occupation lasting for years while an elusive goal is pursued.

It is doubtful, to say the least, that America’s domestic political support for such a futile effort could long be sustained by slogans about Iraq’s being “the central front in the global war on terrorism.”

In contrast, a military disengagement by the end of 2006, derived from a more realistic definition of an adequate outcome, could ensure that desisting is not tantamount to losing.

Such talk has been widely panned by the Bush administration’s defenders, who typically dismiss any talk, of any timetable – six months, one year, or ten years – as “cutting and running”.

But Brzezinski remains undeterred. During last week’s meeting he said “We [should] start talking to the Iraqis of the day of our disengagement. We say to them we want to set it jointly, but in the process, indicate to them that we will not leave precipitously.”

He then went on to say “I asked [U.S. Ambassador to Iraq Zalmay] Khalilzad what would be his definition of precipitous and he said four months.”

Four months.

Four months is tantamount to immediate. 130,000 troops cannot be extracted from any country, even under the best of conditions, in a matter of weeks. Doing so in a hostile environment requires that additional measures be taken to ensure troop safety, and this can add weeks or even months to the project. I don’t believe that U.S. troops could be safely withdrawn from Iraq over a period of less than four months, given the conditions on the ground.

However, I have long advocated (e.g. here, here, and here) that the U.S. military’s mission in Iraq be terminated in an expeditious fashion. And I’m hardly alone. Today’s New York Times reports that 56 percent of respondents in their most recent poll favor a timeline for withdrawal; and, according to the most recent Gallup/USA Today poll, 50 percent of Americans favor a troop withdrawal within the next 12 months, while only 8 percent favor sending more troops.

It may be that Khalilzad was speaking out of turn. And it is never wise to base decisions on second-hand information, even from a source as credible as Brzezinski. However, if the Bush administration defines precipitous as less than four months, then we might be onto something.

A military withdrawal from Iraq, conducted over, say, a 12-month period, would provide ample time to coordinate with Prime Minister Nouri al-Maliki’s government on the handover of security responsibilities, and already enjoys support among the American public, and, increasingly, on Capitol Hill. That would hardly be “precipitous” and it certainly is better than our current open-ended policy.

Online Gambling Roundup

I have a Cato podcast today looking at federal efforts to ban online gambling. Jacob Sullum and Walter Williams have also offered critiques of the crackdown, including the recent arrest of BetonSports.com CEO David Carruthers.

In a sort of convergence of two issues I’ve been covering lately, last month, a SWAT team conducted a heavy-handed raid of an underground poker room in Dallas. The SWAT team brought along a camera crew from the A&E reality show Dallas SWAT to record the action. This was no Sopranos-style game where everybody’s packing. It was a well-known, advertised, gray-area gathering of poker fans. The Pokerati blog has more details.

For posterity, here’s a photo of the Dallas SWAT team. This is what they brought to crack down on a group of people playing cards. The Pokerati blog says the SWAT team brought computer-generated maps that looked to be specific to poker rooms, indicating that this is likely the first of many such raids.

And it isn’t the first time. SWAT teams have also been breaking up underground games in New York City. They’ve even been used to raid charity poker games in Baltimore, Denver, and all over the state of Ohio.

In my home state of Virginia, a SWAT team shot and killed unarmed Sal Culosi last January. They had come to arrest the optometrist for the crime of betting on sports games with friends. And in 1998, a SWAT team on a gambling raid in Virginia Beach shot and killed security guard Edward C. Reid, who was in a car reading a book, and mistook the police officers for burglars (the club he was guarding had been robbed months earlier).

It’s scary how quickly “good-intentioned” paternalism can turn into frightening militarism.

Gay Marriage Ban Will Make Gays Make Babies?

The Washington State Supreme Court has upheld that state’s ban on gay marriage based on the following brilliant bit of reasoning:

“Limiting marriage to opposite-sex couples furthers procreation, essential to the survival of the human race….”

And how, my good Justices, will it do that?

Will gays say: “Well, Hank, we can’t get married, so lets go find some dames and make babies”?

Or will the prohibition on gay and lesbian marriage work a Viagra-like spell on straight couples, causing them to reproduce with added alacrity?

Neither. Forbidding gays from getting married isn’t going to make them “just go straight all of a sudden” and start shopping at Baby Gap. Nor is it going to increase fertility among straights.

Any anyway, if the rationale for legal marriage is procreation alone, when do we start seeing the forced annulments of all those childless couples? Or the reverse of China’s one-child policy: “you must have at least one,” instead of “you can have at most one.”

If there is any silver lining to this decision, it is the 5-4 split of the justices – far closer than decisions in similar cases a generation ago. Perhaps, in another few years…

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The Campaign Finance Institute Study II

Two days ago, Brad Smith, Robert Bauer and I criticized a recent study by the Campaign Finance Institute.

The head of CFI, Michael Malbin, has now responded to our criticism. Bauer and Smith have in turn continued the debate in posts well worth your time.

Before turning to Malbin’s reply, I might note that he did not respond to a couple of my earlier points. I argued that the sample used in the CFI working paper was biased and a poor foundation for policymaking. I also suggested that the bias in the CFI sample was interesting: it concerned organizations–on both sides of the partisan and ideological divide–that were heavily involved in national politics and elections. The CFI sample is almost certainly not representive of the entire population of nonfprofits, 527s and interest groups. It might, however, be a workable sample of groups of primary interest to members of Congress, i.e. groups that bear on a member’s primary interest in being re-elected. In that respect, the CFI study might be a poor guide to policymaking but persuasive to policymakers. That should be troubling to the rest of us.

Malbin also does not mention a political point I made in my post. Why should the Democrats give up 527s which they used to spend substantial sums in 2004 in exchange for Republicans forsaking 501c groups that appear to have laid out only a small portion of the Democratic 527 expenditures? If I were a Democrat, I would read that “compromise option” as a ”bad deal.”

Malbin states that we have misunderstood the CFI study. It does not advocate a policy, it merely points out “uncomfortable facts” to foster a needed debate. Of course, you could say that Michael Malbin might know best what the study sought to do (he heads the organization that sponsored it), and we should leave it at that. I’m not interested in questioning Malbin’s integrity so the reader is welcome to that conclusion.

But Mike doesn’t have a monopoly on the correct interpretation of this text. To see why I (reasonably) believed the study was a policy proposal, we need to head on over to the IRS website (of course!).

The Campaign Finance Institute is a nonprofit organized under section 501c(3) of the Internal Revenue Code. That means CFI can educate the public but not propose legislation. Here is the relevant advice from your friendly taxman:

In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying)…Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items…An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation. Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their tax-exempt status.

So for legal purposes I went to an education meeting at the National Press Club and received educational materials prepared by CFI.

However, the CFI authors urge us to think about campaign finance matters in light of their context (that is, the political facts) rather than “legal pigeonholes.” (CFI study, p. 33) In my original post I set out the political context of the CFI study: legislation on 527s had stalled in Congress because of partisan opposition by Democrats. I could have added to the earlier post: Louise Slaughter, the ranking member on the House Rules committee, suggested in early April that Congress should broaden the 527 debate to include 501c groups which she saw as potential loopholes to current and planned campaign finance regulation. A study then appears that argues both parties use non-regulated entities to fight elections, that such spending probably corrupts representation, and that adumbrates “possible compromise” options for policymakers. (CFI study, p. 33) Given that context and this text, what is a reader to make of the CFI study? It is educational material (it fits the legal pigeonhole) that in context looks a lot like an announcement of the next item on “the reform community’s” agenda for restricting political speech.

There is also a larger legal context here that should be kept in mind. The main justification for regulating campaign finance remains preventing corruption or the appearance of corruption. However, legislative actions to prevent circumvention of laws that address corruption may also justify constitutionally restrictions on campaign finance. The CFI study argues that powerful interest groups use 527s and 501c groups along with regulated spending in elections. Its authors then ask whether those alternatives, taken as a whole, corrupt legislators on the theory mentioned in my earlier post: policymakers do not distinguish among legal categories, which is to say that disclosed spending acts like a contribution. Given that, the use of 527s and 501c groups are both corrupting and a circumvention of campaign finance law. The CFI study thus justifies extending campaign finance regulation to entities that spend money on politics but do not contribute to candidates. That is why I wrote earlier that the CFI study sought to end the distinction between politics and elections in current law and thus constituted a radical break with the past. I would be glad to know that CFI does not support ending that distinction or making that radical break. A fair reading of this study, however, suggests otherwise.