Tag: Regulatory Capture

Better than Medicaid Expansion: Missouri Senate Approves ‘Good Samaritan’ Law

Never mind Medicaid expansion. The Missouri Senate has approved a bill that would allow doctors to give free medical care to the poor. 

You wouldn’t think the government would have to pass a law to let doctors give free health care to the poor. Yet nearly every state prohibits out-of-state physicians and other clinicians from providing free charitable care to the poor unless those clinicians obtain a new medical license from that state.

In a forthcoming paper for the Cato Institute, I explain how medical licensing laws deny care to the poor, and how reforming those laws is a better alternative than Medicaid expansion:

Remote Area Medical has had to turn away patients or scrap clinics in places California, Florida, and Georgia. “Before Georgia told us to stop,” says founder Stan Brock, “we used to go down to southern Georgia and work with the Lions Club there treating patients.” After a tornado devastated Joplin, Missouri, Remote Area Medical arrived with a mobile eyeglass lab, yet state officials prohibited the visiting optometrists from giving away free glasses.

These stories belie the claim that government licensing of medical practitioners protects patients. Instead, they block access to care for the most vulnerable patients.

States should adopt “Good Samaritan” laws, like those enacted in Tennessee, Illinois, and Connecticut. Those states allow out-of-state-licensed clinicians to deliver free charitable care in their states without obtaining a new license. To protect patients, visiting clinicians are and should be subject to the licensing malpractice laws of the state in which they are practicing.

This week, Missouri’s Senate passed such a Good Samaritan law. (It even lets licensed veterinarians come to the state to provide free charitable care to animals.) The bill also provides an inducement to out-of-state clinicians by reducing their liability exposure for malpractice. It would be better if the state were to let doctors and patients choose their own malpractice liability rules via contract. Unlike ObamaCare’s massive Medicaid expansion, this bill would expand access to care for the poor without costing states or taxpayers a dime.

Here’s a video on Remote Area Medical, the good that it does–and the good that licensing laws prevent it from doing.

Even if you’re not ready to concede that medical licensing laws are harmful and should be repealed, you would have to admit it makes no sense for the government to block licensed doctors from treating the poor for free.

ObamaCare’s False Promise of Cost Savings: ACO Edition

One of ObamaCare’s selling points was that it would supposedly reduce costs through such innovations as “accountable care organizations” or ACOs. I have explained how ACOs are an innovation with many benefits, how markets developed ACOs decades before the government’s central planners caught on, and have predicted that ObamaCare’s centrally planned ACO program would fail to deliver on the promised savings. The reason is simple, and explained by industry expert Robert Laszewski:

Here’s a flash for the policy wonks pushing ACOs. They only work if the provider gets paid less for the same patient population. Why would they be dumb enough to voluntarily accept that outcome?

Turns out, health care providers are not that dumb. They have threatened to bolt ObamaCare’s ACO program in the past, and are doing so again [$] if Medicare tries to cut their pay:

One of CMS’ highest profile health care delivery reform initiatives is on rocky ground as most of the Pioneer ACOs are threatening to drop out of the demonstration if CMS makes them start meeting quality measures instead of merely requiring that they report the measures, according to a letter [$] obtained by Inside Health Policy…The Pioneer ACOs were supposed to be the few shining examples of organizations that could handle outcomes-based pay…

CMS often touts the high level of participation in ACOs, and it would seem that CMS has too much at stake to ignore the Pioneers’ requests and let the demo implode, a health care consultant says. However, it’s difficult to believe that this is the first time that the ACOs have brought these concerns to CMS – some innovation center officials come from the very organizations in the Pioneer demo – all of which indicates that negotiations have not gone well with the agency, the sources say. CMS could make changes to the quality metrics without announcing them in the Federal Register because the Pioneer ACOs are a demonstration, but the cat is out of the bag now, the sources note.

The Pioneer ACOs account for a little more than 30 of the some 250 ACOs in Medicare, and the Pioneers are supposed to be the most advanced, integrated systems of them all.

And thus ObamaCare’s false promise of cost savings comes into sharper focus. File this one under “markets are smart, government is stupid.”

Holman Jenkins: ObamaCare Is Part of the Insanity, Not Its Cure

I’m a week late on this, but Holman Jenkins has an excellent discussion of why health care costs and pricing (not the same thing!) are insane, and why ObamaCare will only make it worse:

Duke University’s Clark Havighurst [wrote] a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a “Hobson’s choice: either coverage for ‘Cadillac’ care or no health coverage at all.”

“The market failure most responsible for economic inefficiency in the health-care sector is not consumers’ ignorance about the quality of care,” Mr. Havighurst writes, “but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences.”

You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the “pernicious” doctrine that health care is different—that consumers must shut up, do as they’re told and be prepared to write a blank check—is used to “justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry.”

Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation’s resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

Put aside whether President Obama could have pushed real reform if he wanted to. ObamaCare as it emerged from Congress fulfills the insight that any highly regulated system ends up benefiting those with influence, i.e., health-care providers and high-end customers, not those of modest means.

What are ObamaCare’s mandates on individuals and employers except an attempt to force back into the insurance market those who have been priced out by previous “reforms” so their money can be used to prop up a system of gold-plated coverage that mostly benefits those in the highest tax brackets? What are ObamaCare’s minimum coverage standards except a requirement that these customers buy more costly coverage than they would choose for themselves so their money can be used for somebody else?

I include a lengthy excerpt from Robinson’s excellent article in my chapter for the Encyclopedia of Libertarianism.

Body Scanner Blues

I’ve got a piece in today’s New York Post that points out some inconvenient truths about the body scanners now installed at airports across the country. Building on Jim Harper’s excellent post, body scanners are not being installed because of a well-reasoned risk analysis.

As Timothy Carney pointed out in the Washington Examiner, this is a sop to the companies that make the body scanners. The machines don’t work as well as advertised – a March GAO Report determined that it is not certain the technology would have found Farouk Abdulmutallab’s suspicious package, and that a cost-benefit analysis needed to be conducted before spending $340 million each year to run the labor-intensive equipment.

The same report found that cargo screening was a weak spot that ought to be addressed, but it took terrorist cargo bomb plots to get the TSA to momentarily escape the clutches of regulatory capture and tend to this threat. The British have been much more candid about the limitations of this technology as applied to low-density explosives, noting that the scanners probably wouldn’t have stopped the 2006 liquid bomb plot at Heathrow.

Of course, you can always opt out of the body scanners in favor of a groping on par with the one that motivated my colleague Penn Jillette to report his sexual assault to the police.

You could opt out entirely. TSA Director John Pistole says you won’t fly, but if you publicize your objections, the TSA may try to fine you $11,000.

Keep a stiff upper lip. I’m sure that this will all be much smoother and less invasive when TSA screeners unionize.

Why Government Should Not Give Nutrition Advice

There are plenty of reasons why politicians and government bureaucrats have no business telling you what you should eat.  The Constitution grants the federal government no authority to do so, for one thing.  Even if it did, it is simply wrong to force people to pay taxes so that other people can hand down nutritional advice or – God forbid – mandates.

A terrific article by Jane Black in The Washington Post illustrates why, furthermore, the government’s advice isn’t likely to be very good:

[H]istorically, the government has shied away from offering controversial advice. And with food, everything is controversial: A boost for one type of food in the guidelines can be viewed as a threat by providers of competing products. The result, critics say, is a nutritional education system so politically influenced that it is ineffective.

This year’s process appears to be no exception. In public comments, the meat lobby has opposed strict warnings on sodium that could cast a negative light on lunch meats. The milk lobby has expressed concerns about warnings to cut back on added sugars, lest chocolate- and strawberry-flavored milks fall from favor. Several members of the Massachusetts congressional delegation also weighed in against added-sugar restrictions in defense of the cranberry…

In 1977, a Senate select committee led by Sen. George McGovern (D-S.D.) was forced to beat a hasty retreat after it initially recommended that Americans could cut their intake of saturated fat by reducing their consumption of red meat and dairy products. Its revised guidelines suggested choosing “meat, poultry and fish that will reduce saturated-fat intake.”

McGovern, whose constituents included many cattle ranchers, lost his seat in 1980. Since then, in case after case, the guidelines have refrained from suggesting that Americans eat less of just about anything.

Public health advocates say that kind of vacuum is precisely the problem: By avoiding blunt messages about what not to eat, the government has spoken in a way that baffles consumers.

“The only time they talk about food is if it’s an ‘eat more’ message,” said Marion Nestle, a professor of nutrition at New York University and a longtime critic of the food industry. “If it’s a question of eating less, then they talk about nutrients.”…

[A]s in the past, translating scientific data into clear and useful recommendations poses political pitfalls. The advisory committee’s emphasis on a “plant-based” diet, for example, has caused much consternation among the powerful egg and meat lobbies who say the term might be misunderstood as advocating a vegetarian diet.

This problem trips up all big-government schemes.  Right-wing and left-wing statists think they have a terrific idea: give the government power to do this or that, and Experts will use that power to improve mankind.  But then the people with a financial stake get involved, and the effort ends up serving them more than mankind.  See also health care, national defense, etc..

Uh-oh: Here Comes Edu-Goliath!

The hard-nosed, content-at-all-cost folks at the Thomas B. Fordham Foundation have been warned, and warned, and warned some more: Get the national curriculum standards you think are so incredibly important, and they will almost certainly be captured by the pedagogical progressives who have dominated education for decades – and whose notions you disdain. Well, if what’s being reported by Common Core’s Lynne Munson – and reiterated in this lamentation for Massachusetts by the Pioneer Institute’s Jim Stergios – is accurate, that is already happening. (Actually, some prominent analysts have long said that the national standards – created by the Council of Chief State School Officers and National Governors Association – are already nothing the Fordhamites should embrace.) Writes Munson:

This is strange. P21 is being subsumed into CCSSO. There’s nothing to be read about this on either CCSSO’s or P21′s websites. But according to Fritzwire the two organizations have formed a “strategic management relationship” that will commence December 1.

So what is P21 –  the group cozying up with the standards-writing CCSSO – you ask? Let the Fordham Institute tell you:

The Partnership for 21st Century Skills (P21) has some powerful supporters, including the NEA, Cisco, Intel, and Microsoft. Fourteen states have also climbed aboard its effort to refocus American K-12 education on global awareness, media literacy and the like–and to defocus it on grammar, multiplication tables and the causes of the Civil War. Its swell-sounding yet damaging notions have been plenty influential–but the unmasking and truth-telling have begun, thanks in large part to a valiant little organization named Common Core. And new research validates this and other skeptics’ criticisms. Today the contest resembles David vs. Goliath–but remember who ultimately prevailed in that one.

Uh-oh. It might be time to end the biblical references – it looks more and more like Goliath is going to win.

Regulatory Spending Actually Rose under Bush

Analysts across the ideological spectrum generally agree that the government’s regulatory bodies fail far too frequently. However, analysts seem to learn different lessons from this experience.

Washington Post business columnist Steve Pearlstein cites numerous examples of failure and concludes, “It’s time for the business community to give up its jihad against regulation.”

He says:

It hardly captures the breadth and depth of these regulatory failures to say that during the Bush administration the pendulum swung a bit too far in the direction of deregulation and lax enforcement. What it misses is just how dramatically the regulatory agencies have been shrunken in size, stripped of talent and resources, demoralized by lousy leadership, captured by the industries they were meant to oversee and undermined by political interference and relentless attacks on their competence and purpose.

It’s true that regulators often do the bidding of the industries that they regulate. But “regulatory capture” is a long recognized phenomenon that undermines the contention that the government is well-suited to be a watchdog.

Regardless, is Pearlstein right that federal regulatory agencies were “dramatically” shrunk? Not according to a new study from George Washington University and Washington University in St. Louis. The figure shows that regulatory spending actually rose an inflation-adjusted 31 percent during the Bush administration (FY2002-FY2009):

Similarly, regulatory staff jumped by 42 percent under Bush’s watch: