Topic: Health Care & Welfare

Medicare Part D: Who Is the Main Constituency?

Watson Wyatt Worldwide has just released a survey showing – again – that Medicare Part D’s employer subsidies and the availability of the new stand-alone drug plans are bailing out employers who can no longer deliver on their promises to retirees:

Despite widespread use of the Medicare federal subsidy, a vast majority of employers are planning to curtail their retiree medical plans for current and future retirees in the next five years…

Fourteen percent of employers plan to eliminate the benefit entirely for future post-65 retirees and 6 percent plan to eliminate it for their current post-65 retirees…

The lesson from the Pension Benefits Guarantee Corporation and other corporate bailouts could not be more clear: if government lets corporations escape the costs of making promises they can’t keep, we’ll get more corporations making promises they can’t keep.

For Affordable Health Insurance, Cross the Delaware

My brother (whose name, no joke, is Eugene) just moved to New Jersey with his wife (Katryce) and the two cutest nieces you ever saw (Helaina and Deaven). 

New Jersey is known as health insurance hell, so I went to eHealthInsurance.com to see how much it would cost Euge to purchase a family policy in New Jersey’s highly regulated individual market.  Answer: a lot.  In fact, some of his options cost more than my mortgage.  Meanwhile, our college buddy in Doylestown (Mike) has over five times as many choices for covering his wife and two daughters in Pennsylvania’s individual market.  And the most expensive policy in PA is about the same price as the least expensive plan in NJ.  If Euge were just to move his family in with his old roommate, he could save thousands on health insurance.

…or, Congress could just tear down the senseless trade barriers that keep New Jerseyites from purchasing health insurance from Pennsylvania.

Get the full story here.

Is Bioethics an Oxymoron?

An emailer forwarded me a copy of an article in The New Republic by Ezekiel J. Emanuel, “a bioethicist and oncologist.” Emanuel argues against a recent DC Circuit Court ruling on a suit brought by a group called the Abigail Alliance. The ruling gives dying patients access to experimental drugs after they have passed some minimum safety tests but before they have been proven effective.

It would make it much harder to get people to enroll in research studies and get the data necessary to show whether a drug really was effective or not. Why should people enroll in a randomized, controlled study–where they could be put in the group receiving only conventional treatment–when they could just get their insurance to pay for whatever drug they thought was best?

…Expanded access would also rob the rest of us who may never need a cancer treatment. Individuals and society in general are struggling to pay the nation’s $150 billion-plus drug bill. And that is for medications proven to work. Now add the requirement that insurance companies pay for drugs we don’t know work, and you have a formula for financial disaster. Costs would skyrocket as we pay billions through our insurance premiums and Medicare taxes for worthless drugs.

I agree that it would be wrong to force insurance companies to cover unproven medications–otherwise, there would be no reason to stop individuals from choosing their preferred method of treatment–but the relevant alternative to these patients is not participating in randomized trials. The relevant alternative is death.

Dr. Emanuel describes his approach in a similar case:

Getting Virginia another experimental drug was not going to stop her breast cancer from growing and eventually killing her. I gently explained to her that investing all her energy chasing after another unproven drug was not going to help her and her family. Virginia was disappointed and refused to consider hospice, because she saw it as giving up. Holding her hand, I talked to her about spending time with her husband and daughters and making a videotape for her future grandchildren. We also discussed getting visiting nurses to come to her house. I saw her once more in my office. She was more accepting and found at least some of the activities meaningful. Because of her failing liver, less than three months later, she lapsed into a coma and died with her family present.

If I decide that I want to fight rather than go down graciously with a terminal illness, I will look for a doctor who is not a bioethicist. I found this article so chilling that it leaves me nearly speechless.

Health Care Provider Finds No Tragedy in This Commons

An article from the Minneapolis Star-Tribune on competition between physicians and nurse practitioners includes this endearing quote, which encapsulates how some providers see the U.S. health care sector:

The American Medical Association is against giving full autonomy to nurse practitioners, stating as its official policy position that a physician should be supervising nurse practitioners at all times and in all settings…

“There is an element within the physician community that gets a little antsy. … They think it’s going to take away revenue and business from them,” said Dr. Jan Towers, director of health policy for the American Academy of Nurse Practitioners. “Really, there’s more than enough for everybody.”

Cue “We’re in the Money”….

For more, be sure to check out Medicare Meets Mephistopheles, to be released by the Cato Institute in September.

“Crisis of Abundance” Makes Executives’ Reading List

The leadership of the National Chamber Foundation (the educational arm of the U.S. Chamber of Commerce) recently recommended to its board of directors a list of 10 “Books that Drive the Debate.”  Among the recommended titles was Crisis of Abundance, a Cato Institute book by adjunct scholar Arnold Kling and the only health policy book to make the list. 

The foundation’s board is a bipartisan group of influential figures from the business, political, and policy spheres.  The NCF also plans to recommend the 10 titles to all Chamber of Commerce members.

The complete list is pasted below.  NCF chairman Bill Little told me today that Crisis of Abundance will be the first book they send out to their board members.

“Books that Drive the Debate”
NCF’s Top 10 Reading Selections

  1. Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy by Moises Naim
  2. Three Billion New Capitalists: The Great Shift of Wealth and Power to the East by Clyde Prestowitz
  3. The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy by Peter Huber and Mark Mills
  4. In Our Hands: A Plan to Replace the Welfare State by Charles Murray
  5. Our Brave New World by Charles Gave, Anatole Kaletsky, and Louis-Vincent Gave
  6. The Sarbanes-Oxley Debacle: What We’ve Learned; How to Fix It by Henry N. Butler
  7. An Army of Davids: How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths by Glenn Reynolds
  8. The Innovator’s Solution by Clayton Christensen and Michael Raynor
  9. Crisis of Abundance: Rethinking How We Pay for Health Care by Arnold Kling
  10. Education Myths What Special-Interest Groups Want You To Believe About Our Schools – And Why It Isn’t So by Jay P. Greene

(Another Cato connection: in March, the Cato Institute held a book forum for Glenn Reynolds’ An Army of Davids: How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths.)

The leadership of the NCF evidently agreed with Marginal Revolution publisher Tyler Cowen that Crisis of Abundance “is one of the most important books written on health care.”

AMA Curing Competition, Part Deux

I’ve received a couple of thoughtful e-mails from Dr. Thomas Davis (the Missouri physician, not the legendary basketball coach) concerning my earlier post criticizing the American Medical Association for wanting to rein in the emergence of retailer-based health care clinics. With Dr. Davis’s permission, I’m posting a few of his comments for readers’ consideration.

First, lest anyone want to straw man Dr. Davis as a pro-regulation, anti-market, rent-seeking weasel, he writes:

I would prefer a world where a patient can get any medication over the counter without a prescription, where doctors are not licensed, there is no insurance and patients paid cash at the time of service. Health care would be far more efficient and transparent in such a world.

He also stresses that he is not a member of the AMA and that he has some serious qualms with the organization.

Dr. Davis raises three concerns with the in-store clinics:

  1. If they are operating without direct physician supervision, the clinics lack important medical expertise, and many customers could suffer unnecessary medical expenses (not to mention pain and suffering) from undetected or misdiagnosed afflictions.
  2. If the clinics siphon off customers who are seeking annual checkups or treatments for minor problems, traditional MD practices will become financially strapped, affecting the care of patients with more complex medical problems.
  3. The in-store clinics’ business model could create perverse incentives for their employees and for tort lawyers, who may likely see the major retailers’ clinics as deep-pocketed malpractice suit targets.

Readers can make up their minds on these points. As with most thoughtful arguments, I believe there is some merit to each, but not enough to change my opinion that the clinics are a welcome addition to the health care marketplace.

Indeed, a comment Dr. Davis makes in his second e-mail supports this idea better than anything I could write:

My point is not that these clinics are “bad.” The competition in the short run is probably a good thing, and I can out-compete Wal-Mart on the delivery of high quality health care any day.

That, I take it, is a sentiment we all want to hear from health care providers.

Well That’s Another Fine Mess You’ve Gotten Us into

AARP and Families USA are screaming about rising prescription drug prices, without and within Medicare Part D. The New York Times is calling for price controls on drugs purchased under Part D.

A 2004 study by the Manhattan Institute estimated that applying the type of price controls found in Medicaid and the Veterans Health Administration to Medicare would reduce pharmaceutical R&D by nearly 40 percent and reduce Americans’ aggregate lifespans by 277 million life-years.

In other words, the logic of “negotiating drug prices” is that everyone under the age of 65 should die one year sooner so 42 million geezers (sorry, Dad) can save a few bucks on Lipitor. But is the logic of opposing price controls that workers should have to pay through the nose to pump these geezers full of drugs?

Part D puts us all in a no-win situation: either pay up and bankrupt the nation or control prices, suppress R&D, and prepare to check out early. It is a trap, set by the Left and sprung by the GOP.

That’s why – if the repeal train has left the station – the only sane option left is a radical overhaul of the entire program. With a little luck, Republicans will come to see the box in which they have put themselves and rediscover their interest in Medicare reform.