Topic: Cato Publications

Tell Me That’s Not Your Final Answer

The congressionally chartered “Citizens’ Health Care Working Group” today released its final recommendations on how to reform America’s health care sector. (I commented on their interim recommendations here and here.)

As with many GOP-led health care reform efforts, this one began with leftist premises about the role of government. Recommendation #1 is that the federal government should “Establish Public Policy that All Americans Have Affordable Health Care.” Recommendation #2 is that the feds should “Guarantee Financial Protection Against Very High Health Care Costs.” (The group inadvertently neglected to cite any passage from the U.S. Constitution that actually grants Congress the power to do such things.)

Given those premises, there was little doubt that the group would recommend left-wing reforms. For example, the group claims to have developed both a “market–based model” and a “social insurance model” for achieving universal coverage. Yet the former is a mirror image of the statist Massachusetts health plan. What kind of “market-based model” increases taxes and government spending while forcing individuals to purchase government-defined insurance policies? Good grief.

I would give my right eye for a health care reform panel that would make this its charter:

To make health care of ever-increasing quality available to an ever-increasing number of people.

To me, that doesn’t just seem simple and non-controversial, it seems to be what everyone involved in health policy wants.

Moreover, a mission like that would force the panel to consider not just the goodness of its intentions, its knowledge of today’s health care sector, or its ability to do math, but also the incentives that its recommendations would create, and their long-term impact.

Let’s hope some enterprising panel-creator is reading this.

Harpers Denounce Border Plan, ID Systems

A prominent Harper spoke out this week against the plan to require passports or passport-‘lite’ ID cards for crossing the U.S.-Canada border. That’s Canadian Prime Minister Stephen Harper. 

He is no relation to the Cato Institute’s director of information policy studies, Jim Harper, who spoke out about the Western Hemisphere Travel Initiative’s PASS card system two weeks ago

The Western Hemisphere Travel Initiative (WHTI) sounds like a wonderful thing. It’s hard to be against travel. But WHTI is actually about shrinking commerce and travel among the friendly countries in our region.

In the Intelligence Reform and Terrorism Prevention Act of 2004, Congress pushed the Department of Homeland Security to create an “automated biometric entry and exit data system” for people crossing the borders. A prominent proposal is the PASS card, which stands for People Access Security Service. It is envisioned as a card containing an RFID chip that is to be given to passport holders. The chip would alert the DHS when a person arrives at a border crossing. 

“Pre-positioning” data by sending an electronic signal from 30 or more feet sounds like it would make border crossings go faster. But moving identification data is not what takes time at border crossings — it’s checking to see if the person and the identity information match up. 

An RFID-chipped PASS card would mean that lots more information about American citizens’ movements would be collected. It’s a system not just verifying that travelers are citizens or legal aliens — it’s a system for collecting information about our comings and goings, yet another dimension of our lives revealed to the government to do with as it will.

Congress seems held in thrall by national ID systems. Last week, the House passed a bill to require showing identification cards for voting. And, of course, we already have the REAL ID Act, which by May 2008 will have states issuing drivers’ licenses and ID cards to national standards (sharing driver information nationwide, too) — if states comply. Harper of the Cato Institute testified to a New Mexico legislative committee about that issue last week. The National Conference of State Legislatures reports that compliance with the REAL ID Act will cost $11 billion dollars nationwide.

Identification seems to offer an easy technological quick-fix for ailments like illegal immigration and terrorism. But what most of these schemes would do is further regiment and control law-abiding people while merely inconveninencing criminals, terrorists, and any other threat with a modicum of sophistication and motivation.

My book Identity Crisis has more on this and all other facets of identification.

Medicare Politics Will Sink Quality Efforts

As David Hyman explains in Medicare Meets Mephistopheles (book forum today), Medicare’s already-high tax burden is set to explode when the baby boomers begin to retire in 2011. Yet for all that money, the quality of care that Medicare delivers is downright mediocre.

Some members of Congress, led by Senate Finance Committee chairman Chuck Grassley (R-IA), are using the threat of a cut in Medicare payments to force physicians to accept tying those payments to government-defined quality measures.

Physicians, led by the American Medical Association, are essentially responding, Ditch the planned pay cut – then we’ll talk.”

Who’s right? Whose approach will get seniors and taxpayers the most value for their Medicare dollars? No one really knows, and thus all the political wrangling.

But one thing can be known: the approach that Congress chooses will be determined by raw political power – not by what provides the greatest value. For example, if the physicians get their way, every bit of quality improvement will cost taxpayers more money, because the AMA won’t even support pay cuts for lousy doctors.

As I explain in a recent paper, that is exactly why we don’t want Congress itself in the business of measuring and rewarding health care quality. That task is better left to a competitive market process. Congress should confine “pay-for-performance” to private Medicare plans, and encourage greater enrollment in private plans by giving seniors risk-adjusted vouchers rather than a defined benefit.

Help Wanted: New Medicare Administrator

Dr. Mark McClellan recently announced his intention to resign from the position of administrator of the Center for Medicare and Medicaid Services (CMS). 

Finding a replacement shouldn’t be hard.  The job description is simple.  The next Medicare administrator must run a sprawling program that buys health care for approximately 42 million Americans in every state of the union, and he must simultaneously:

  1. Spend less money on health care (to keep Congress and the Administration from calling for your head);
  2. Spend more money on health care (for example by averting the 5 percent cut in physician payments scheduled to take effect next year) to keep providers from calling from your head - and seniors from doing so once they can’t find a doctor to treat them;
  3. Using modest carrots and no sticks, dramatically improve the mediocre quality of care currently being delivered to Medicare beneficiaries - but don’t interfere with the way in which providers deliver health care, particularly if a low-quality provider has the ear of a congressman or employs lots of people in a swing district;
  4. Buy lots of pharmaceuticals for seniors - but don’t pay too much (because Congress and the Administration will have your head) or too little (or the pharmaceutical companies will stop developing innovative products);
  5. Using inadequate and outdated information, set the price that Medicare will pay for every single good and service that beneficiaries need in every county in the United States;
  6. Assure Congress that you are protecting the program from fraud and abuse, even though your own fraud control personnel have doubts about whether they have the tools to do so, and the program is routinely labeled as being at “high risk” for fraud;    
  7. Prepare Medicare for the impending tidal wave of baby boomers, who will stop paying into the system and will start expecting benefits in 2011; 
  8. Keep a straight face while you explain that Medicare will be there for future generations, even though your trustees have determined that putting just one part of the program in actuarial balance for the next 75 years will require an “immediate 121% increase in the tax rate or an immediate 51%reduction in expenditures;”
  9. Surrender your every waking hour to the thankless task of bailing out a sinking ship while being forced to cheer on the efforts of your bosses (in the Administration and Congress) to drill more and bigger holes in the bottom; and finally 
  10. Walk on water in your (non-existent) free time. 

The last item on the list is obviously a stretch, but the next administrator of CMS will face all of the other challenges. 

How did the Medicare program – born of such high hopes and good intentions – end up in this mess?  What can we do to address these problems? 

For some answers to these questions, along with a satirical perspective on the Medicare program, attend the book forum for Medicare Meets Mephistopheles at the Cato Institute on September 21, 2006.  Sign up here.

Klein on Medicare Meets Mephistopheles

No one is going to accuse the American Prospect’s Ezra Klein of being a libertarian.  (Oh, wait.  I think I did once.) 

Which makes it all the more impressive that he was able to say such kind things about the Cato Institute’s latest health policy book, Medicare Meets Mephistopheles:

[T]he book is actually quite good. I’d happily recommend it to anyone with a basic grasp on health care and a desire to learn a bit more about Medicare. Hyman is a felicitous and fun writer, and he conveys an impressive amount of history and data in as accessible and absorbable a manner as one could hope. I know how tricky it is to make health care a quick and gripping read, and I tip my hat to anyone who is capable of enriching the debate and educating readers by doing so.

Full disclosure: Klein was less enamored with Hyman’s analysis and recommendations.  (Readers can find those comments in Klein’s post over at Tapped.)  Hopefully, Klein will raise his concerns at the Medicare Meets Mephistopheles book forum this Thursday.

Against Equity and Good Conscience, Indeed

Medicare watchers know that the federal government recently – and improperly – sent checks to 230,000 seniors. The checks were supposed to reimburse certain seniors for premiums paid under the new Medicare prescription drug benefit (Part D). But seniors who were not supposed to receive any money at all instead got checks worth an average of $215 – for a total of almost $50 million in erroneous payments.

The feds tried to get seniors to return the money – that is, until the Center for Medicare Advocacy, Inc. filed suit to stop them. In fact, the Center even argued that even though seniors were not entitled to the money, they should get to keep it:

In certain circumstances a beneficiary may be entitled to a waiver of the overpaid refund. Waiver of the overpayment may be available to a beneficiary who was without fault in causing the overpayment and where repayment would be against equity and good conscience.

(Bold and italics in original.)

So not only may seniors pressure Congress to grant them windfalls that they don’t really deserve (e.g., Part D), but according to the Center for Medicare Advocacy, a senior should also get to keep even unlegislated transfers from younger Americans if the senior feels that returning the windfall “would be against equity and good conscience.”

But this is par for the course with Medicare. For more examples of Medicare madness, attend or watch online this Thursday’s book forum for Medicare Meets Mephistopheles, a new book by Cato adjunct scholar David Hyman.