Topic: Regulatory Studies

Pregnancy as a Random Occurrence

In 2004, the American College of Obstetricians and Gynecologists tried to get California’s legislature to require consumers who purchase their own health insurance to buy coverage for … wait for it … the services of obstetricians and gynecologists.

The following comes from an analysis of the failed legislation that is available on the California Senate’s web site:

In response to the suggestion that mandated coverage for maternity care will promote adverse selection, ACOG asserts that empirical evidence shows women cannot accurately predict when they will become pregnant, and therefore would not be able to time a purchase of insurance with an expected birth.

Healthcare Economist Critiques My P4P Article

Thanks to Jason Shafrin for sharing his thoughts on my article, “Pay-for-Performance: Is Medicare a Good Candidate?

Shafrin points to a problem with my preference for (I must apologize in advance for all these modifiers and hyphens) privately administered third-party pay-for-performance financial incentives:

Cannon’s point of using competition between insurers to allow each to experiment is wise assuming that insurers want the best care for their patients. As Dr. Fogoros notes in his GUTHealtcare website, patients generally do not pay for their health insurance, employers do. And for employers “As long as we don’t hear more than the average number of complaints from our employees, the health coverage we provide is, by definition, good enough.”

True enough: insurers and employers are not always good agents for employee-patients. In the Medicare setting, however, seniors can choose a private “Medicare Advantage” plan themselves – that is, they are not assigned to a plan by an employer. So in Medicare Advantage, there may be more competitive pressure for private insurers to get P4P right.

Now Who Looks Stupid?

People who argue that patients are too dumb to make their own health care decisions rarely consider how dumb government is.  According to yesterday’s New York Times:

In a significant policy change, Bush administration officials say that Medicare will no longer pay the extra costs of treating preventable errors, injuries and infections that occur in hospitals, a move they say could save lives and millions of dollars.

That’s right.  For the past 42 years, the federal government has paid hospitals to give grandma an infection, drop her on the floor, or leave a sponge inside her – and then paid the hospital more to put her back together again.  That is, if the infection didn’t kill her.

Does anyone really believe that if each patient controlled the health care dollars that employers and the government now control, that it would take patients 42 years to stop rewarding hospitals for medical errors?  In other areas of your life, how often do you give more money to a business that screwed you over?

Solution Already in Place for Chinese Product Safety Problems

The recent spate of recalls involving products manufactured in China has elicited cries from the public for better regulatory oversight and glee from protectionists who seek to demonize all trade with China. But increased government screening or an outright import ban would be unnecessarily intrusive and prohibitively expensive. The solution that makes the most sense is already working.

There is nothing more immediately deleterious to the bottom line than the kind of bad publicity that connotes wanton disregard for the vulnerable and innocent. Think Exxon Valdez and oil-drenched, arctic sea mammals; think Kathy Lee Gifford and allegations of sweatshop labor; and now, think Mattel and sick children. Companies pay dearly even for the perception that they have transgressed.

Large quantities of poisonous products ending up in consumers’ toy chests, medicine chests, and refrigerators constitute serious transgressions, which should be punished and relegated to the very rare occurrence. For its recent woes, Mattel is being punished. The company’s stock value took a hit, its revenues are projected to decline as we head into the holiday buying season, it will incur huge costs refunding and replacing purchases of tainted toys, and it will be spending hundreds of million of dollars to improve its safety audits. Meanwhile, Chinese factories that compete for Mattel’s business have every financial incentive to clean up their own acts.

If Mattel fails to win back the confidence of American parents, it could be facing extinction. But allowing Americans to decide whether they will purchase Mattel products, or other products made in China, is preferable to Congress or the administration making that decision for them.

He Who Pays the Sociologist Calls the Tune

Sociologists from around the country have gathered for the annual American Sociological Association conference, and apparently they’re running scared. At least, according to an article appearing in Inside Higher Ed, many are running from research described best using such words as “sex” and “incestuous.” Apparently, having such words in the description of one’s research has been known to draw the ire of conservative activists, and has occasionally placed National Institutes of Health funding in jeopardy.

The problem, of course, is that as much as sociologists might love free money, NIH funding ultimately comes from taxpayers, and – surprise! – some taxpayers actually want a say in how their money is used. And, no, just because someone’s a scientist doesn’t give him the right to do whatever he wants with someone else’s hard-earned ducats. Of course, it can be very hard to examine really controversial issues if everyone gets a say in what you’re doing and how you’re doing it.

Which leads to the only logical solution to the problem: If social science work – or any controversial scientific work, for that matter – is going to be done right, it cannot be conducted through the wallets of taxpayers. Just as scientists need the consent of human subjects to conduct experiments on them, they must have the consent of their funders if they want to be left alone. Which leaves sociologists with an important decision to make: Do they want to conduct science free of political interference, or sell out for the promise of abundant government grants? Unfortunately, right now the latter seems to be the more popular choice.

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?