Topic: Cato Publications

Health Wonk Review #21

Is there a happier day of the bi-week than HWR Day? Not for us health wonks. Here is this round of health policy blogging, complete with first-time hosting jitters.

R-E-S-P-E-C-T

Over at RDoctor.com, Aleksandr Kavokin interviews Kim McAllister, an ER/critical care nurse and host of Emergiblog, about the nursing profession and operating a web site devoted to that profession.

What Price, Scooters?

Bob Vineyard of InsureBlog wrestles with the inanities of administered pricing in Medicare. The most recent round of silliness? How much Medicare should pay for power wheelchairs and scooters. Seems that Medicare outlays for those geezer-pleasers jumped 28-fold in eight years. Medicare’s bureaucracy just reduced the amount it pays for the things, having gotten the impression that maybe they were paying too much. Gosh, do you think?

What Price, Biologics?

Sure, we want inexpensive biotech drugs. But some (read: biotech innovators) claim that biogenerics are impossible. David Williams of Health Business Blog has “a better idea than biogenerics.” Rather than allow biogenerics, Williams suggests slapping price controls on biotech drugs after an initial period of market exclusivity.

What Price, Medicare Private Plans?

In related news, the Century Foundation’s Leif Wellington Haase discusses the consequences of having Medicare pay private health plans based on the average senior’s expenses when plans have the ability to disproportionately enroll seniors with below-average expenses. It doesn’t take a genius to figure out that taxpayers end up paying more.

Haase concludes that Medicare should just give seniors the cash and let markets sort it out. No wait – that’s my conclusion.

Haase concludes that overpayments to Part D and Medicare Advantage plans should temper the enthusiasm of those who think that markets forces are doing wonders for Medicare. (Hey, that’s my conclusion too.) Haase also suggests that those overpayments “ought to be used for more benefits or for deficit reduction, not for drug company and insurer profits.”

Sine Qua Non of Controlling Health Spending

Speaking of things skewed, Ezra Klein rightly reminds us that we ain’t gonna make much of a dent in health expenditures until we restrain consumption among the 5 percent of patients who account for half of the spending. Klein deserves two cheers (hip! hip!) for noting that the rules surrounding health savings accounts (HSAs) are too restrictive to bring cost-consciousness to all such expenditures.

The host dangles that third cheer in front of Klein to see if he can be cajoled into acknowledging that, if widely adopted, HSAs could bring price sensitivity to more than 60 percent of medical expenditures by the non-elderly. Over at EconLog, Bryan Caplan offers another reason why Klein may be too pessimistic about the ability of HSAs to reduce above-the-deductible spending.

Save a Life, Buy an Organ

Every year, over 6,000 Americans die while waiting for an organ transplant because Congress prohibits payments to organ providers, thereby creating an artificial shortage. (Who says we don’t ration health care?) The always educational Healthcare Economist notes that support for payments to organ providers is bubbling up in some interesting places. You’ll never guess which country eliminated their waiting lists with a considerably more liberal organ procurement system than ours.

Is Health a Human Right?

The American Public Health Association made human rights the theme of its convention this year, and the Health Affairs blog is all over it. Parmeeth Atwal provides the background and interviews American Public Health Association president Georges Benjamin. Commenters include George Annas, Larry Gostin, and Sophie Gruskin.

Build Your Human Capital

Rita Schwab offers the following advice to those looking to excel in health care: attend some of the gazillion conferences put on by the industry every year. How to choose among them? Schwab has some ideas.

Cut to Cure? Or Ride It out?

Over at Workers’ Comp Insider, Jon Coppelman blogs a new study showing that patients who do not undergo surgery for a herniated disc eventually do just as well as those who do undergo surgery. The tradeoff is that they have to live with the pain a while longer.

But if the injury occurred on the job, workers’ comp provides an interesting twist: because comp pays as long as the injured worker is unable to work, that creates an incentive to forgo surgery and collect 2/3 of one’s salary while not working. Coppelman thinks insurers and employers would do well to steer clear of those costs – i.e., don’t start discouraging surgery.

How to Stand up to Your Rheumatologist

Add India’s to the list of health care sectors that aren’t following best-practice guidelines. Or so says Dr. Qaedjohar Dhariwal, an orthopedist writing at orthINDIA. Dr. Qaed lists “ten things any decent rheumatologist should be implementing in his practice” and advises that if your doc doesn’t make it past Thing Number One, “ditch him.”

The Hardest-Working Man in Health-Care-Blog Business

Matthew Holt, writing at Spot-on, thinks about what the Democrats might do if they had a Republican-like desire to reward their base, and how they’d need to create the political coalition to force through universal health care. Holt writes that a politically viable plan would have to (1) cover all the uninsured, (2) maintain the incomes and autonomy of doctors and hospitals, and somehow at the same time (3) convince employers and taxpayers that they won’t end up paying more. (Quoth Ned Flanders…)

As if that weren’t heavy lifting enough, over at The Health Care Blog Holt interviews Lonny Reisman, CEO of Active Health Management, a company that manages care using claims and lab data from insurers.

I’m not Going to Pay a Lot for This Procedure

Shahid Shah (a.k.a. The Healthcare IT Guy) gives a forum to Chini Krishnan, founder and CEO of Vimo.com, which hopes “to be the Lending Tree of healthcare and offer comparison shopping for surgical procedures, insurance, doctors, health savings accounts, and hospitals.” Krishnan expects that HSAs and other forms of consumer-directed health plans (CDHPs) will encourage the development of tools that help consumers make smarter decisions – and argues that CDHPs would have failed pre-Al Gore (read: before we had the internet).

One Spoonful at a Time

The title of this brief blurb comes from a New York Times Magazine article praised by Jon Schnaars at the Anxiety, Addiction and Depression Treatments blog. Schnaars provides links to that article and others on the struggle faced by families who are fighting anorexia.

Choose Your Enemies Wisely

Fard Johnmar, of Envisioning 2.0, takes a look at the recent flap between the American Heart Association and Pfizer over the release of data relating to Pfizer’s “good cholesterol” medication torcetrapib. Johnmar shows how this incident highlights the tension between numerous competing interests: medical societies vs. drug makers, medical societies vs. “outside” investors, medical societies vs. the SEC, small vs. large drug makers…

Duking It out in Denver

Speaking of industry bigwigs not getting along, Louise of the Colorado Health Insurance Insider laments the way that patients are getting jerked around in the spat between HCA and United HealthCare in Denver. Louise rightly questions whether those CEOs are really earning their seven- and eight-figure salaries – but did she call the U.S. health care sector a free market?

Shameless Self-Promotion

Finally, your humble host would be remiss were he not to plug the Cato Institute’s recent offerings on Indiana Gov. Mitch Daniels’ new health plan, a Health Affairs review of the Cato book Healthy Competition, and the ethics of the Born-Alive Infant Protection Act.

Next!

Health Wonk Review #22 is scheduled for December 14 and is to be hosted by Rita Schwab of MSSPNexus Blog. Get your entries in by Wednesday, December 13, at 9am EST.

Hoosier Tax-and-Spender

Editor’s note: This post was written on October 30, following a briefing by Indiana officials on Gov. Daniels’ proposed health care reforms.  It was posted briefly, then pulled when those officials asked ex post that the details be kept confidential until announced by the governor.  That happened today.

Indiana Republican Mitch Daniels received a grade of ‘D’ in Cato’s most recent governors report card, which grades the 50 governors on their record of cutting taxes and spending.  I’ve just returned from a briefing on a new health care proposal that Gov. Daniels has put together, and it doesn’t seem that he wants to improve his grade.

The Daniels proposal would:

  1. Increase cigarette taxes by 25 cents per pack,
  2. Use those funds to “pull down” additional federal Medicaid dollars (federal matching funds allow Indiana to almost triple their money), and then
  3. Offer new government subsidies to every able-bodied adult under 200 percent of poverty. 

In addition, it would have the state fund a health savings account (HSA) for each enrollee, and if an enrollee receives the recommended preventive care and does not touch their HSA funds (preventive care is 100 percent covered), at the end of the year an enrollee could withdraw $600 from their HSA to spend, say, on a color TV.  If he instead leaves that taxpayer subsidy in his HSA, he gets to roll it over and let it grow.  I’ve argued in a number of places that HSAs are not the solution to Medicaid, in part because they would resurrect within that program the same dependence problems that we tried so hard to kill in AFDC. 

Gov. Daniels is not proposing an entitlement, and participants would have to pay for a portion of their premium.  But those and other provisions (e.g., the income cutoff, the mandated benefits package, etc.) would be subject to revision on their way through the state house and by subsequent governors and legislators.  Pretty soon, it would be an entitlement, the participants’ contribution would be smaller, the HSA cash subsidies would be greater, the income cutoff would be increased, and the benefits package expanded.  How can I be so sure?  Because Indiana can do all these things and the feds will pick up two-thirds of the tab.  And heck, if this is a Republican proposal, where is the opposition going to come from? 

As I told the Gov. Daniels’ loyal foot soldiers, someone needs to shove this proposal in a drawer.  There is nothing worth saving. 

Where do Republicans keep coming up with these tax-and-spend health care ideas?  The party needs a health care revival, particularly when it comes to Medicaid.

Freedom is Breaking Out all Over

Being a libertarian means you’re often the entertainment at cocktail parties.  ‘Let’s have Jim tell us why there should be no traffic lights!  It’ll be a riot!’

Now comes word that seven cities and regions in Europe are doing away with traffic lights and signs - indeed with most traffic regulations.

“The many rules strip us of the most important thing: the ability to be considerate. We’re losing our capacity for socially responsible behavior,” says Dutch traffic guru Hans Monderman, one of the project’s co-founders. “The greater the number of prescriptions, the more people’s sense of personal responsibility dwindles.”

Psychologists have long revealed the senselessness of such exaggerated regulation. About 70 percent of traffic signs are ignored by drivers. What’s more, the glut of prohibitions is tantamount to treating the driver like a child and it also foments resentment. He may stop in front of the crosswalk, but that only makes him feel justified in preventing pedestrians from crossing the street on every other occasion. Every traffic light baits him with the promise of making it over the crossing while the light is still yellow.

“Unsafe is safe”

The result is that drivers find themselves enclosed by a corset of prescriptions, so that they develop a kind of tunnel vision: They’re constantly in search of their own advantage, and their good manners go out the window.

The new traffic model’s advocates believe the only way out of this vicious circle is to give drivers more liberty and encourage them to take responsibility for themselves.

I first read about the weakness of traffic regulation in Regulation magazine and was reminded of the concept by a recent post on TechDirt which seems to have stirred some passion given the 100+ comments.

I’m entirely in favor of a deregulated, human-oriented traffic system - though I am slightly concerned about it diminishing my entertainment value at cocktail parties.

My Afternoon with Milton & Rose

I had the fortune to work for the Republican leadership of the U.S. Senate from 1999 to 2003.  I got to run around on the Senate floor, act important, give senators advice, and watch them routinely reject that advice.  It was great fun. 

The highlight of my tenure as a Senate staffer was easily the the afternoon that I shuttled Milton and Rose Friedman from their hotel to the Senate and back again. 

It was May 9, 2002, the day that Milton was honored both at the White House and at the Cato Institute’s 25th anniversary gala for his lifetime of service to the cause of human freedom.  When I learned he would be in D.C., I opportunistically arranged a meeting between him and half a dozen senators so that Milton could share his ideas about health care

Some cute memories stand out.  I had to ask my two passengers to buckle up.  When we arrived at the Senate, Milton and Rose – each standing about 5’2” tall – practically got stuck when they tried to step through the metal detector at the same time.  I tried not to laugh as an enormous Capitol policeman repeatedly patted down the diminutive, apologetic, and 90-year-old Nobel laureate to find whatever deadly weapon Milton was trying to smuggle into the Capitol. 

After Milton and the senators discussed health care, Sen. Don Nickles (R-OK) brought up the farm bill that the Senate had just passed.  He and Milton had a lengthy exchange wherein Milton denounced the bill as a throwback to Soviet-style economic planning.  On our way back to the hotel, I explained that Sen. Nickles had raised the issue to needle another senator, who sat right next to Milton at the meeting, had voted for the farm bill, and who uncomfortably stared at his hands throughout the entire exchange.  Milton was unconcerned about the senator’s discomfort, asking only, “Why did he vote for that??”

That day in 2002 was the only face time I got with Milton and Rose.  (Another highlight of my career came in 2005, when Milton wrote a blurb for a book that I co-authored.) Nevertheless, ever since he passed on Thursday, I can’t help feeling that I lost a great friend.  Just another one of his gifts, I suppose.

Rest in peace.

Havighurst on Healthy Competition

In the most recent issue of the health policy journal Health Affairs, Duke law professor Clark Havighurst reviews Healthy Competition, authored by Mike Tanner and me.  I believe the full review requires a subscription, but here are some excerpts:

“One of the book’s most interesting and original policy ideas would have Congress allow consumers to select a health plan regulated by a state other than their own…

Healthy Competition provides extensive and creative suggestionsfor expanding the role of cost-conscious consumer choice in both Medicare and Medicaid…

“Other provocative libertarian ideas laid out in the book include the authors’ argument that federal regulation of prescription drugs and medical devices may cause more deaths than it prevents. In this case, they provide persuasive responses to concerns that an unregulated market would wreak havoc on patients, observing how private researchers and other groups already certify or otherwise test and confirm the safety and efficacy of prescription drugs for various off-label uses.

“Finally, the authors strongly criticize policies that foreclose a market for transplantable organs, citing evidence that relatively low payments would increase the supply of organs, saving thousands of lives…

Healthy Competition…is a valuable challenge to the health policy community to take health policy debates to a moral plane where consumer welfare and individual freedom are given more than just lip service.”

Havighurst does have criticisms of the book, such as that it “ignores the challenging practical problems of integrating [health savings accounts] with various kinds of health insurance.” 

I found that part odd, since Healthy Competition spends some ink discussing how the rigid insurance requirement makes HSAs unworkable for many consumers.  We argue that Congress should eliminate that requirement entirely, which “would allow anyone to combine an HSA with their existing coverage, instantly making HSAs a feasible option for millions” (p. 70). 

In fact, I’ve always regarded that proposal as eminently compatible with the suggestions that Havighurst and Mark Hall have made about integrating HSAs and managed care

A Turn of the Revolving Door

According to the Hill Climbers section of today’s Roll Call,

Brian Zimmer is saying goodbye to Capitol Hill to join the American Association of Motor Vehicle Administrators.  According to a statement, AAMVA is an association that “actively promotes traffic safety and uniformity among North American jurisdictions.” Zimmer starts today as the company’s new senior vice president of identity management.
Before making the jump, Zimmer worked for the past five years as senior policy adviser and investigator for the House Judiciary Committee. There he helped investigate and conduct the committee’s oversight on issues such as fraud prevention, border security and counterterrorism, among others. 

Specifically, Brian was the Judiciary Committee’s lead staffer on the REAL ID Act, our national ID law.  He is a committed and motivated proponent of that cause.

AAMVA is well recognized (by those who care to follow these issues) as a proponent of driver regulation, national IDs, and even internationally uniform ID systems.  Since at least the late 1930’s AAMVA has been pushing regulatory control of drivers and driving.  As I note in my book, Identity Crisis, “Before September 11, 2001, AAMVA promoted a national identification card as a solution to illegal immigration.  After September 11, 2001, it promoted a national identification card as a solution to terrorism.  If national identification cards are a hammer, AAMVA sees every public policy problem as a nail.”

AAMVA collects about $1 per driver per year (roughly $13 million) for its part in administering the Commercial Drivers License Information System.  AAMVA would make much more as the administrator of databases required by the REAL ID Act.

Brian is a nice guy and, as I say, dedicated to his cause.  His new employment provides a window into AAMVA’s role in the national ID debate.

The GOP’s Failed Anti-immigration Strategy

The Wall Street Journal published a great lead editorial this morning (subscription required) on the GOP House leadership’s losing campaign strategy of using immigration as a “wedge issue.” The strategy obviously failed.

As the Journal’s editorial staff observed:

Republicans on Tuesday managed both to lose their majority in Congress and alienate a fast-growing bloc of Latino swing voters. Other than that, the House GOP strategy of trying to save itself by bucking President Bush and using immigration as a wedge issue worked pretty well.

Republicans can’t say they weren’t warned. Like trade protectionism, the immigration issue is the fool’s gold of American politics. Voters like to sound off to pollsters about immigrants, yet they pull the lever with other matters foremost in mind. Elections seldom if ever turn on immigration, and the GOP restrictionist message so adored by talk radio, cable news and the nativist blogosphere once again failed to deliver the goods.

Such GOP anti-immigration crusaders as J.D. Hayworth of Arizona and John Hostettler of Indiana were tossed out of office by wide margins. Exit polls suggest that Republicans suffered a sizeable drop in support from Hispanic voters turned off by the harsh Republican rhetoric aimed at Hispanic immigrants.  

Of course, I call it a great editorial because it and this week’s election returns confirm my own warnings to Republicans about the dangers of running as the anti-immigration party (here and here).

Although the election results were not good news on free trade and other issues, the new Congress will probably be more open to the kind of real immigration reform the Cato Institute has been advocating.