Topic: Health Care & Welfare

We Have Work To Do

At EconLog, I point to a survey of economists by Robert Whaples.  It seems as though there is a professional consensus on the libertarian side of the issues of free trade, school vouchers, and marijuana legalization.  They also support raising the retirement age for Social Security, which is my favorite libertarian approach on that issue.

However, on health care, Whaples reports that a plurality–almost 50 percent–support universal health insurance.

This got me thinking about what the consensus belief among economists ought to be about health care.  I think it ought to be that government should stop leading people to think that prepaid health plans are health insurance.

In any case, I think more members of the American Economic Association need to read Crisis of Abundance.

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.


Over at, 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, 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.


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.

New Mexico: Land of Dependence

Found on a New Mexico state web site…

My father-in-law runs the Santa Fe chapter of Habitat for Humanity, a voluntary charity that measures success in terms of how many people it helps to achieve financial independence.  Odd that the state government appears to take pride in doing the opposite. 

The Free Lunch Project may have found its new home.  Crescit eundo, indeed.

What Is Health Insurance?

Over at the Health Affairs Blog, Mark Smith, president of the California HealthCare Foundation, offers the following assessment of that which we call “health insurance”:

When you ask people why they want health insurance, they will give you one of four answers… . (1) “What if I’m hit by a bus?”; (2) “I need to be covered for my preventive services”; (3) “I can’t afford to go to the doctor, or to get my medicine”; and (4) “I’ve got a chronic disease, for which I can’t afford to pay over time.” …

Please note: Only the first of those is insurance, in the sense in which anyone would understand that term — that is to say, protection of financial assets against the rare, unpredictable, catastrophic event …

Some component of what we call health insurance is that “what if I’m hit by a bus” concept. But the difficulty, we think, in trying to find a method of coverage which is acceptable to the various constituencies who are involved in health insurance … is that this thing we call health insurance is actually four different market items put together in one financial instrument which is increasingly unaffordable… .

To the extent that insurers and providers both see the problem of the uninsured as a revenue problem — which is to say, there are all these people out there who aren’t part of our system, and we need to find a way to buy them into our system at more or less our system’s price, at more or less our system’s configuration, and more or less maintain the incomes of everybody in our system — that is a very different question from how can we make the underlying asset more affordable… .

My point, therefore, is not [we] shouldn’t continue with the quest for expanded insurance coverage but that in so doing, we try to understand what it is we mean by insurance in the first place, and the extent to which combining these functions in one financial package creates a package which is simultaneously attractive for some people and unattractive for others. And in a voluntary market you create this mismatch, because for instance, how many people would pay money to protect their assets if they don’t have assets to protect? Most of the uninsured are low income; most low-income people don’t have huge amounts of assets to protect. They know that the hospital won’t come after them in quite the same way as the department store will, even for the same bill, and so asking them to pay money every week or every month, to protect assets that they don’t have, in case of an experience which will probably not occur to them, strikes us as not a very likely way to expand coverage among that population.

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.


Last week the British Nuffield Council on Bioethics published a report including step-by-step recommendations regarding the proper care of premature infants.  The Council recommended that infants born earlier than 22 weeks of gestation not be resuscitated and that infants between 22 and 23 weeks of gestation only receive intensive care if their parents request such care and the infant’s doctors agree.

There has been a flurry of commentaries in U.S. papers and blogs about the Nuffield Council’s recommendations, but not a single one that I have seen mentions the fact that in the U.S., it would be illegal to follow the Council’s recommendations.   In 2002 President Bush signed into law the federal Born-Alive Infant Protection Act and in 2005 DHHS Secretary Mike Leavitt stated “[w]e aggressively enforce federal laws that protect born-alive infants.  We issued clear guidance that withholding medical care from an infant born alive may constitute a violation of the federal Emergency Medical Treatment and Labor Act and the Medicare Conditions of Participation.”

It is nevertheless worth considering what the Nuffield Council has said to help put the Born-Alive Infant protection Act into perspective.   The Council’s report makes it clear that there is no realistic chance that a baby born under 22 weeks of gestation will survive and that infants born between 22 and 23 weeks have only a 1% chance of survival.  Furthermore, those few that do survive at 22-23 weeks are highly likely to suffer from severe handicaps.  (None of this information is limited to Britain.  U.S. statistics confirm these conclusions).  The Born-Alive Infant Protection Act requires health care professionals to try to save such babies. They must tape them down, stick them with needles and tubes, and resuscitate them – essentially, they are required to torture such babies until they die.  As a mother of four children and a Christian, I would want to hold and rock my little infant as it dies.  I wouldn’t want its precious few hours of life to be filled with pain and fear and never a mother’s warm embrace or soft voice.  It is a very cruel world indeed if the drafters of the Born-Alive Infant Protection Act knew they were going to require health care professionals to torture dying infants and deny parents the only realistic succor they have to offer – the physical affection that would tell such infants that, while their stay on earth is short, they are nevertheless loved.