Archives: 10/2016

Surge in Emergency Department Use Persists in New Oregon Medicaid Study

One of the main arguments proponents of Medicaid expansion make, at least on the fiscal side, is that it would save money as people gaining Medicaid coverage would reduce their use of expensive visits to the Emergency Department (ED). An earlier study from the Oregon Health Insurance Experiment threw some cold water on that theory, as it found that getting Medicaid actually increased the number of ED visits by 40 percent. Some analysts postulated that this increase was only temporary because it was due to either pent-up demand for health care services, or because new enrollees did not have established relationships with doctors. The thinking was that after enrollees became familiar with their coverage or addressed long-gestating health problems, the reductions in ED use and the associated cost savings would materialize.

A new report analyzing a longer time horizon finds that this is not the case, and there is “no evidence that the increase in ED use due to Medicaid coverage is driven by pent-up demand that dissipates over time; the effect on ED use appears to persist over the first two years.” This is another blow to the oft-repeated claim that Medicaid expansion will lead to significant savings from reduced Emergency Department utilization, and the effect actually seems to work in the other direction.

The Oregon case is important because it is one of the few instances of random assignment in health insurance, as the state wanted to expand Medicaid but had funding constraints, so it employed a lottery to determine who would get coverage. 

In this new update, the researchers see if there are any time patterns or signs of dissipation when it comes to the impact of Medicaid percent of the population with an ED visit or the number of ED visits per person. They expand upon the earlier utilization study to analyze the two years following the 2008 lottery and break up into six-month segments to see if there are any signs of the effects dissipating.

As they explain, “there is no statistical or substantive evidence of any time pattern in the effect on ED use on either variable.” In the first six-month tranche Medicaid coverage increased the number of ED visits per person by about 65 percent relative to the control group, and the estimates for the following three periods were similar and mostly statistically indistinguishable from each other. They also find that Medicaid increases the probability of an ED visit in the first period by nine percent, and the impact in the subsequent periods does not differ significantly. 

Estimated Effect of Medicaid Coverage on Emergency Department Use over Time

Source: Finkelstein et al., New England Journal of Medicine (2016).

Seattle Millennials Should Move to Houston

The Seattle Post-Intelligencer says it has found the best Seattle homes for Millennials. Judging by the former paper’s suggestions, Seattle Millennials should move to Houston. Houston may not have Mt. Rainier, but it has beautiful lakes, a sea coast that is just about as nice as Washington’s (though not as nice as Oregon’s), and most important, it doesn’t have urban-growth boundaries which means it has much more affordable housing.

Click any photo to go to the listing for that property.

The P-I’s first suggestion is a 720-square foot, two-bedroom, one-bath home on a 5,000-square-foot lot. On the plus side, the living room has hardwood floors. On the minus side, the asking price is $259,950–and if Seattle’s housing market is anything like Portland’s, it will go for more than that. At the asking price, the cost is $361 per square foot.

As an alternative, allow me to suggest this 720-square-foot home in Houston’s University Area, not too far from downtown. It has new paint and an updated kitchen and, like the Seattle home, it is on a 5,000-square-foot lot. Unlike the Seattle home, the cost is just $86,500, just under a third of the Seattle house. That’s just $120 per square foot–and the sellers will probably accept a little less.

Sen. Mike Lee on Executive Power & Conscientious Electors

This weekend, I sat down with Senator Mike Lee (R-UT) for the Cato Daily Podcast. We discussed executive power, criminal justice reform, the Electoral College and this strange, disappointing election year. Here’s a portion of our discussion:

Caleb Brown: President Obama has said he’s concerned, and I have a bit of a hard time taking some of what he says seriously, he’s concerned about leaving a loaded gun around in the White House for the next President, which is, it’s almost comical.

Senator Mike Lee: That’s wonderful. If that is a deathbed repentance, it’s better than no repentance at all. I would like to see what he means by that. I hope he means the same thing that you or I would mean if we made that kind of a statement, which people like you and I do, say things like that all the time. Look, this President has, in fact, taken a lot of steps in the direction of consolidating power in the Executive Branch. And this has been one of the consistent refrains that you’ve heard from some members of Congress. One of the consistent themes that I’ve tried to follow, is pointing out to Republicans and Democrats alike, in both Houses of Congress, look, regardless of how you feel about this President’s policy, regardless of how you feel about this President’s political orientation, this is a bad practice. This is something that ought to scare the daylights out of any Republican or any Democrat or Libertarian or person of any other political stripe, because this is not American. This is not how we do things.

We don’t live in a kind of government where Presidents can appropriately say if Congress won’t act, I will. That’s kind of scary. Scary because of what it says about the consolidation of power in the minds of the chief executive, in the minds of the American public as far as they regard the executive, it’s also scary for the simple reason that in many respects the law allows them to do precisely that. Because we’ve got so much buildup from so many decades of broad, amorphous, quasi lawmaking, where we basically say we shall have good law in area X, and we hereby delegate to department or agency Y the power to make good law in area X. Well guess who controls department Y? The President, and those he chooses, who normally serve at the pleasure of the President. So, in many respects, Congress has enabled this. Congress has created this monster. And it’s time for Congress to tame the monster once again.

Brown: Is there any appetite to do that this year?

Lee: There is a strong appetite on the part of some members of Congress to do that. I don’t, frankly, sense a lot of appetite from the White House. In fact, aside from this statement which was made very recently and has yet to be followed up by anything substantive that I’m aware of, you don’t ever hear that from the White House. And shockingly, you don’t hear it very much from very many members of Congress. That is starting to change, and I’m going my best to change that, but most members of Congress have become strangely, bizarrely content with allowing for this delegated lawmaking trend to continue. And in fact I wrote a book called Our Lost Constitution, it just came out in paperback, and in Our Lost Constitution I explain that even though our Founding Fathers thought that each branch of government would have a strong, compelling interest to guard jealously its own power, what we see is that in the last few decades the opposite has been true for Congress. Congress has been eager to delegate more and more.

Land Use and Economic Mobility: You Could Have Read It Here First

Wednesday’s Wall Street Journal contains a great page 3 article on how stricter land use regulations are slowing the growth of housing in areas that need it most. Laura Kusisto reports on a developer’s fight to build middle-class housing in downtown San Francisco, but she notes that similar problems can be seen in wealthy communities from New York and Connecticut to San Diego and Portland, Ore. She also cites academic research on the topic:

According to research by Daniel Shoag, an associate professor of public policy at Harvard University, and Peter Ganong, a postdoctoral fellow at the National Bureau of Economic Research, a decadeslong trend in which the income gap between the poorest and richest states steadily closed has been upended by growth in land-use regulations.

Moving to a wealthier area in search of job opportunities has historically been a way to promote economic equality, allowing workers to pursue higher-paying jobs elsewhere. But those wage gains lose their appeal if they are eaten up by higher housing costs. The result: More people stay put and lose out on potential higher incomes.

For on-the-ground reporting, you need newspapers. But you could have read about that paper twice in Cato Institute publications. Regulation magazine editor Peter Van Doren wrote about it in Winter 2013-2014 in his “Working Papers” column on new research (page 78). 

And just two months ago a summary version of the paper appeared in the Research Briefs in Economic Policy series edited by Jeff Miron, director of economic studies. 

I hope state and local policymakers will take note of the findings in this paper.

Stay tuned to the Cato Institute for more ahead-of-the-curve ideas.

GOP Senate Candidates in Tight Races Reject Trump’s Anti-Immigrant Message

As Donald Trump doubled down on his anti-immigration message in last night’s debate, Republican candidates for Senate across the country are not adopting his lines. In fact, they are overwhelmingly going the other way, rejecting mass deportation and endorsing legal immigration and various forms of legalization for those immigrants illegally in the United States. Here are what the candidates in the tightest races are saying:

1. Arizona – John McCain

It comes as little surprise that Sen. McCain, a longtime proponent of immigration reform and coauthor of the Senate 2013 reform bill, should be running on an openly pro-immigrant platform. He touted his accomplishment at his Senate debate last week. “I was able to get immigration reform through the United States Senate,” he said. “That is the very big difference between having working groups and talking about it and legislative accomplishment, and I promise you that the Dreamers were part of immigration reform.”

2. Florida – Marco Rubio

Sen. Rubio also coauthored the 2013 reform bill that passed the Senate. Although he has backed away from that approach, he continued to take a pro-immigration position at his debate. “I personally know people, children included, who are in this country out of status, illegally brought here at a very young age, and I see the sadness that they’re going through. I want to fix the problem,” he said. “The second step would be to modernize our legal immigration system so that it’s not as bureaucratic, and it works better. … Republicans would support doing something very reasonable with people that are not criminals, that have been here a long time.”

3. Illinois – Mark Kirk

Sen. Kirk who voted for the 2013 reform bill defended his pro-immigrant position during his campaign. In a campaign ad in Spanish, he said, “When Donald Trump says bad things about immigrants, I have spoken out against him. I don’t support Trump. I’ve worked with Republicans and Democrats to reduce gang violence in Chicago. And I support immigration reform so families can stay together.”

4. Indiana – Todd Young

Rep. Young has previously endorsed a form of legal status for the unauthorized immigrants in the country. In his race, he appears to have backed off this position a bit, while still taking a much more pro-immigrant position than Trump. “Immigration should be attractive to Americans so long as immigrants come to our country to contribute to our economy and society. I strongly support legal immigration,” he said in response to questions from a local news outlet. “I would consider proposals which require those who have entered the U.S. illegally to apply for their visas from their home countries and not from within the US…. Congress should work to find a rational middle ground between granting an automatic path to citizenship for every illegal immigrant and a program of mass deportation.”

Turkey Attacks Anti-ISIS Forces in Syria

Obama administration officials were outraged when Russian and Syrian government planes recently attacked rebel positions in and near the city of Aleppo.  Such raids were a humanitarian atrocity, President Obama charged, when they struck civilian targets.  But Washington had little patience even for assaults directed against military targets.  Those attacks, U.S. officials contended, played into the hands of ISIS by damaging insurgent elements opposed to that extremist group and even creating incentives for moderates to make common cause with ISIS.  The regime of Bashar al-Assad and its Russian allies responded with the assertion that they were not targeting moderates, but were in fact attacking either ISIS units or other “terrorists.

Whatever the merit of Washington’s criticism in that case, it has been severely undermined by the latest action of America’s “loose-cannon” NATO ally, Turkey.  The Turkish military just launched attacks against forces of the YPG, the Kurdish People’s Protection Units, in positions north of Aleppo.  According to Turkish authorities, the raids killed some 200 Kurdish fighters.  Ankara insists that the YPG is affiliated with the outlawed Kurdistan Workers Party (PKK), a violent separatist movement in Turkey itself.  YPG leaders deny such a connection, and Washington continues to regard Kurdish forces as a crucial component of the anti-ISIS coalition.

This latest incident underscores three points.  First, Turkey is an increasingly unreliable ally that pursues its own narrow agenda regardless of Washington’s wishes.  Second, regardless of Ankara’s probable motive, which apparently was to stem growing Kurdish power in both Syria and Turkey, the attack objectively strengthened ISIS by damaging one of its most effective military adversaries.  Third, the Syrian civil war is incredibly complex.  It is not a simple melodrama featuring the evil Assad regime versus noble, freedom-seeking rebels.  The insurgents themselves are extensively fragmented, with agendas ranging from genuine Western-style democracy to Saudi-style Islamic fundamentalism.  Outside parties, especially Russia, Turkey, Iraqi Kurdistan, Iran, and Saudi Arabia, all back certain Syrian factions to advance their own geopolitical objectives. 

To its credit, the Obama administration has refrained from full-scale involvement—a “big footprint” military intervention–in Syria’s civil war.  But U.S. efforts to encourage Assad’s ouster helped create the ongoing tragedy, and even Obama’s “light footprint” strategy has entangled the United States far too deeply in a murky and ultimately unwinnable struggle.   One hopes that the next president will have the wisdom to extricate the United States from this beckoning quagmire and let the Turks, Russians, Saudis, and others deal with the headache of the Syrian civil war.  

On the Poverty of Constitutional Debate

In last night’s third and final presidential debate we were treated, finally, to a brief discussion of what should have been a central issue in these debates—the meaning of the Constitution and the role of the Supreme Court under it. Unfortunately, the discussion got off on the wrong foot right from the start when moderator Chris Wallace asked Secretary Clinton, “Where do you want to see the Court take the country?”

It’s not the role of the Court, of course, to take the country anywhere. Its role, rather, is to correctly read the law—constitutional, statutory, or regulatory—and apply it to the cases that come before it, period. Wallace quickly recovered, however, by asking how the Constitution should be interpreted—by reading the Founders words for what they say, or by reading it as a living document to be applied flexibly according to changing circumstances? That’s been the great jurisprudential question since Progressives prevailed on the New Deal Court to follow the second course, resulting in the Leviathan that surrounds us today.

Ever the Progressive, Clinton answered that “the Supreme Court needs to stand on the side of the American people, not on the side of the powerful corporations and the wealthy.” Read our basic legal document as carefully as you wish, you will find no such opposition between the people and the powerful. Clinton’s populist appeal was a prelude, of course, to her attack on the Court’s 2010 Citizens United decision, which upheld the First Amendment right of corporations and labor unions to make independent political expenditures—in that case, let’s remember, the right of a nonprofit corporation to advertise “Hillary: The Movie” in broadcasts within 30 days of the 2008 Democratic primaries. It’s personal.

For his part, Trump rambled, as usual, but when he finally got to the point, he at least called it correctly, promising that the judges he would “appoint” (the president nominates, not appoints; and Trump can hardly promise for others) “will interpret the Constitution the way the Founders wanted it interpreted.” Unfortunately, the discussion that followed—warring arguments over guns and abortion—was more politics than law, as doubtless is to be expected at this point in our constitutional history, when even extended judicial confirmation hearings reflect politics more than law, to say nothing of the Court’s Obamacare opinions, among others. We’re far removed from the Federalist Papers.