Topic: Regulatory Studies

A Snub for the Dying

On Tuesday, the U.S. Court of Appeals for the D.C. Circuit ruled 8-2 that terminally ill patients who have exhausted all available treatments have no constitutionally protected right to access experimental treatments not yet approved by the federal Food and Drug Administration.  A panel of the D.C. Circuit previously had ruled 2–1 in favor of the terminally ill patients who brought the case, Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach

The Abigail Alliance is named for Abigail Burroughs, who died of head and neck cancer in 2001 after failed attempts to access Erbitux (cetuximab) through the FDA’s existing channels.  (In 2006, the FDA approved Erbitux for treatment of head and neck cancer.)  The Abigail Alliance now represents similarly situated, terminally ill patients who only want one last shot at life.  Eschenbach is commissioner of the FDA.

In an op-ed [$] in today’s Wall Street Journal, my colleague Roger Pilon discusses the tortured legal reasoning that led to the perverse conclusion that terminally ill patients do not have a fundamental right to save their own lives. 

The scientific and economic argument supporting the FDA’s case is that we would get far less information about drug safety and efficacy if terminally ill patients could access unapproved drugs, because there would then be no incentive for patients to participate in the clinical trials that generate such information.  There are a number of problems with this argument, the greatest being that it reduces Abigail Burroughs to a cog in some bureaucrat’s grand machine.

On September 25 from noon to 2pm, the Cato Institute will host a forum on Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach.  Speakers will include Scott Ballenger, lead counsel for the Abigail Alliance; Ezekiel Emanuel, chair of the Department of Bioethics at the National Institutes of Health; and yours truly.  Keep watching Cato@Liberty or the Cato website for further details.

This week’s ruling brought to mind a quote from Mark Twain that appeared in the New York Times on February 28, 1901, and that Mike Tanner and I included in our book Healthy Competition:

The State stands a Gibraltar between me and anybody who insists upon prescribing for my soul what I don’t want to take… . Why shouldn’t I have equal liberty with regard to my body, which is of so much less concern? … Now what I contend is that my body is my own, at least I have always so regarded it. If I do harm through my experimenting with it, it is I who suffer, not the State.

More Tax-Funded Media Bias

This morning on Marketplace Radio, there was a clear example of the bias toward government intervention that pervades so much of the establishment media. The story was titled

U.S. finishes last in fuel economy

Online, the introduction reads, “A new report reveals that the U.S. is at the bottom of the barrel when it comes to fuel economy standards. Turns out even China tops us. ” The reporter introduces the topic of a new study on mandatory fuel economy rules in different countries and turns to the study’s author:

Drew Kodjak: At the bottom of the heap is, unfortunately, the United States.

Study co-author Drew Kodjak says Europe and Japan already have high mile per gallon rules, and they’re gonna get even better.

Kodjak: Out to 2012, Europe is projected to have a 49 MPG passenger fleet. And Japan a 47 in 2015.

Even China’s better than the American 27.5 miles a gallon.

Kodjak: So certainly a very big difference between the leaders and the laggers.

Notice the drumbeat: the United States is “last,” “at the bottom of the barrel,” “at the bottom of the heap,” a “lagger.” Stricter regulation is “better.” And all because our regulations are slightly less intrusive and burdensome than those in other countries.  I think we’re better off letting the market determine how much fuel efficiency American consumers want. But my point here is not to argue the issue, but simply to notice that Marketplace Radio, heard on tax-funded radio stations, didn’t argue the issue either. It just indicated to listeners that stricter regulation was “better,” and the United States was a “lagger … at the bottom of the heap” for having less stringent regulations.The last time I wrote about a similar one-sided, adjective-laden story on Marketplace, I referred to it as “unconscious liberal bias.” But really, how long can I keep seeing only unconscious bias? I noted in my previous item:

So where’s the bias? Let us count the ways. First, of all the studies in the world, only a few get this kind of extended publicity. It helps if they confirm the worldview of the producers. For instance, I don’t believe Marketplace covered this Swedish study (pdf) showing that the United States is wealthier than European countries (perhaps most provocatively, that Sweden is poorer than Alabama — perhaps because Europe has the kinds of laws the Heymann study advocates). Second, Heymann was allowed to appear without a critic. Third, the interviewer never asked a critical question. He never noted that the countries that Heymann was praising are poorer than the United States and in particular that many are suffering from high unemployment brought on by such expensive labor mandates. Fourth, look at the language of the questions: “lags behind,” “falling short,” “picking up the slack.”

The unstated, perhaps unconscious, premise is that countries should have mandatory paid leave and other such programs. If we don’t, we’re “falling short” and someone must “pick up the slack.” Language like that, which is very common in the media, posits government activism as the natural condition and then positions any lack of a government program as a failure or a problem.

Do Marketplace’s reporters, editors, and producers–and the reporters, editors, and producers at other media outlets–really not recognize that this sort of language biases their coverage?

Illegal Manicure in the ‘Live Free or Die’ State

In response to to my post about a (possibly) illegal hairdresser in Massachusetts, Michael Hampton of Homeland Stupidity forwards a link to a priceless local New Hampshire news report. (It’s two years old, but it’s new to me and to this blog.)

Free State Project member Mike Fisher performed an illegal manicure right in front of the “Live Free or Die” state’s Board of Barbering, Cosmetology and Esthetics. (Motto: Yew Best Drop That Thar Em’ry Board, Son.)

When the police asked Fisher if he had a license to perform that thar manicure, Fisher said no. When the police issued him a summons and asked that he stop performing that thar manicure, Fisher refused. So the cops slapped handcuffs on this dangerous outlaw and put him in a squad car. Fisher reportedly received a 30-day suspended sentence, with a vow from the judge that if Fisher receives so much as a traffic ticket, it’s off to the pokey he goes.

I wonder what the Granite State wasn’t doing with the time and resources used to arrest and prosecute Fisher.

Andy Stern’s Angle on Universal Coverage

Last night, I debated Andy Stern on the Jim Bohannon radio showStern is president of the Service Employees International Union, which represents 1.8 million nurses, health care workers, janitors, security officers, and public employees. He is definitely not a member of the Anti-Universal Coverage Club.

I was pleased to find that we agree that the employment-based health insurance system cannot last. What I found most interesting, though, were two weaknesses in the case he makes for universal coverage.

First, Stern argues that unless we have universal coverage, American firms won’t be able to compete with foreign firms. To me, that claim is economic nonsense, as I explained in our debate and in Health Care News:

Employers don’t need the government to save them from the rising cost of health benefits. Just as Dorothy always had the power to return to Kansas by clicking her heels, employers have always had the power to pare back their health benefits…

All else being equal, firms that contain their labor costs this way will beat the firms that don’t. Those companies that support ‘universal coverage’ want to increase the labor costs of their competition, whether through higher taxes or health premiums. Universal coverage won’t make America more competitive — it will cripple America’s most competitive firms to protect its least competitive firms.

And, of course, that’s the entire point…. Companies that support ‘universal coverage’ never bother to mention that covering all the uninsured would cause health spending to explode, because they don’t really care about overall health spending. All they care about is that their competitors spend as much as they do.

Nor does Stern seem to mind if health spending explodes. I think that may be because…

Second, Stern argues that we could get a better deal on prescription drugs if Medicare were allowed to negotiate with drug companies. But seeing as how he represents so many health care workers, I don’t think he’s going to be leaning on Medicare to be that tough a negotiator. During our debate, I invited him to discuss SEIU’s role in helping Medicare set the payment rates that affect his members. He didn’t take the bait.

Darn Those Stubborn Market Failures

Queues in Massachusetts! A fascinating article [$] in today’s Wall Street Journal reveals that Massachusetts residents wait an average of seven weeks for an appointment with a primary-care physician. The queues apparantly have nothing to do with the new Massachusetts health plan – aside from illustrating that a paper guarantee of “health coverage” does not necessarily translate into health care:

“Health reform won’t mean anything for the state’s poor if they can’t get a doctor’s appointment,” says Elmer Freeman, director of the Center for Community Health, Education, Research and Service in Boston…

“Health-care coverage without access is meaningless,” Gov. Deval Patrick said in March…

“I thought insurance was supposed to be some kind of great thing, but it hasn’t changed” anything, [newly insured hairdresser Tamar Lewis] says.

No, the big question that article raises is, why is the market not resolving the shortage of primary-care physicians?

One hint can be found in the first two sentences of the article:

“Tamar Lewis runs a makeshift hair salon out of her one-bedroom apartment in Roxbury, a low-income neighborhood [in Boston]. She’s 24 years old and has been cutting hair since she dropped out of high school in 2002.”

There’s a good chance that Ms. Lewis is breaking the law. Massachusetts requires hairdressers – yes, hairdressers – to be licensed by the government. Asipiring hairdressers must (a) complete “a course of at least six months, which course must have included 1000 hours of professional training in a cosmetology school approved by the Board,” (b) pass an examination, and (c) pay a fee before they may become an apprentice hairdresser. After completing two years as an apprentice, the aspiring hairdresser must pass another exam and pay another fee to become a licensed hairdresser. Licensing a salon requires paying a fee, having an approved floor plan, and other restrictions that make it unlikely that Ms. Lewis’ salon is up to code. In all likelihood, the enlightened Commonwealth of Massachusetts could nail young Ms. Lewis for cutting people’s hair without a license, operating an unlicensed salon, and employing an unlicensed hairdresser (herself).

Too subtle? Another, much bigger hint can be found in an oped titled “Our Soviet Health System” [$] that the Wall Street Journal ran last month:

The limited number of endocrine specialists is a not a consequence of limited demand – everyone is aware of the epidemic of diabetes we are facing. There are also shortages of generalists and other specialists, and the reason is the absence of market signals – i.e., market-based prices – for influencing the supply of physicians in various specialties…

The essential problem is this. The pricing of medical care in this country is either directly or indirectly dictated by Medicare; and Medicare uses an administrative formula which calculates “appropriate” prices based upon imperfect estimates and fudge factors. Rather than independently calculate prices, private insurers in this country almost universally use Medicare prices as a framework to negotiate payments, generally setting payments for services as a percentage of the Medicare fee structure.

Many if not most administratively determined prices fail to take into consideration supply and demand. Unlike prices set on the market, errors are not self-correcting. That is why, despite an expanding cohort of patients with diabetes, thyroid disease and other endocrine disorders, the number of people entering this field is actually dropping. Young physicians are accurately reading inappropriate price signals.

Darn those stubborn market failures.

Finally Legal!

I can finally report that I am driving a legal automobile.

As readers will recall, this was my third trip (see here and here for previous installments in the saga). Actually, it was my third and fourth trip. When I got to the DMV this morning, happily clutching the Fairfax County tax receipt to my chest, I was told that I also needed an emissions test. It would have been nice of the bureaucrats to tell me that on my first trip, but why expect miracles.

So I had to exit the line, go back out to my car, and drive (illegally, once again) to a nearby service station. This interaction with the private sector was predicatably brief, so I was back at the DMV in less than 30 minutes. Unfortunately, Dan Griswold must have been hard at work in the interim since there was now a long line of people, none of whom appeared to be native-born Americans.

But after a 90-minute wait, I got up to the counter, and was able to get registered - but only after dealing with a libertarian quandary. While twiddling my thumbs, I noticed that I could request a vanity plate. Wouldn’t it be nice, I thought, to have a license plate reading “anti gov.” But getting a special plate also involved paying more money - funds that presumably would help finance the sloth-like bureaucracy that I despise. After wrestling with my conscience (which usually comes out on the short end), I decided that the cause of freedom would be best served by having the vanity plate.

I feel guilty about giving government more money, but I somewhat compensated by paying for my registration and vanity plate with a credit card, which means at least some small slice of the $103 gets diverted to the financial services industry. It ain’t easy being libertarian, but I somehow muddled through.

Air Traffic Control

You often need a crisis, real or imagined, to get major policy changes enacted. There are two looming challenges in our backwards and bureaucratic air traffic control system that might nudge Congress toward reform. The first is that the government system is having a hard time keeping up with the continued growth in air travel.

The second, as Government Executive magazine reports today, is that a large group of controllers are nearing retirement and the government might have a hard time finding replacements.

These challenges add to the woes of the Federal Aviation Administration, which has mismanaged the air traffic control (ATC) system for decades. The FAA has struggled to modernize ATC technology in order to improve safety and expand capacity. Its upgrade projects are often behind schedule and far over budget, according to the Government Accountability Office. (Discussed in here). 

Privatization of U.S. air traffic control is long overdue. During the past 15 years, more than a dozen countries have partly or fully privatized their ATC, and provide some good models for U.S. reforms.

Canada privatized its ATC in 1996, setting up a fully private, non-profit corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has received rave reviews for investing in new technologies and reducing air congestion, and it has one of the best safety records in the world.

The United States should be a leader in air traffic control, especially given the nation’s legacy of aviation innovation. A privatized system would allow for more flexible hiring policies, replacement of expensive human controllers with machines, and access to private capital for infrastructure upgrading. It is also likely that privatization would help improve safety and reduce air congestion by speeding the adoption of advanced technologies.