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.

When a Billion Here and a Billion There DON’T Add up to Real Money

Warren Buffett is giving away $44 billion of his fortune, $30 billion of it to the Gates Foundation. Much of that money will go toward education. If it is used for more fiddling about with our existing school monopoly, it will have a negligible long term impact on American education. If it is used to help empower parents with an unfettered choice of public and independent schools, it will transform the lives of millions of children.

Soon we’ll find out how well Mr. Buffett’s investing acumen translates to the education philanthropy business.

Foolishness High as an Elephant’s Eye…

Kudos to the New York Times for Sunday’s article critically examining the United States’ dubious infatuation with ethanol. A sample:

For all its allure, though, there are hidden risks to the boom. Even as struggling local communities herald the expansion of this ethanol-industrial complex and politicians promote its use as a way to decrease America’s energy dependence on foreign oil, the ethanol phenomenon is creating some unexpected jitters in crucial corners of farm country.

A few agricultural economists and food industry executives are quietly worrying that ethanol, at its current pace of development, could strain food supplies, raise costs for the livestock industry and force the use of marginal farmland in the search for ever more acres to plant corn… .

But many energy experts are also questioning the benefits of ethanol to the nation’s fuel supply. While it is a renewable, domestically produced fuel that reduces gasoline pollution, large amounts of oil or natural gas go into making ethanol from corn, leaving its net contribution to reducing the use of fossil fuels much in doubt.

The article is not without its faults; for instance, it gives an uncritical airing of the opinion that American agriculture should be used for “food first, then feed” for livestock, “and last fuel.” (If the economics are such that demand for ethanol is more intense than the demand for corn chips, then why shouldn’t U.S. corn go to ethanol? Of course, that’s an enormous “if.”) Still, the NYT article is a very welcome departure from the claptrap on ethanol offered by other media.

Some Good News from the Court for a Change

The U.S. Supreme Court this morning struck down a set of restrictions on campaign finance enacted by Vermont. Six members of the court believed Vermont’s spending limits and extremely low contribution limits violated the First Amendment.

The six justices agreed that the Vermont law was invalid. But they disagreed about quite a bit, too. Justices Breyer, Roberts and Alito focused on the shortcomings of the Vermont law. Breyer and Roberts also rejected Vermont’s demand that Buckley v. Valeo be overturned. Justices Thomas and Scalia concurred in the opinion but rightly called for overturning Buckley in order to offer better protections for political speech. Justice Kennedy rightly expressed dismay with the Court’s recent campaign finance jurisprudence. In the larger picture, he seems closer to Thomas and Scalia than the other three in the majority.

This ruling was expected, but nonetheless good news. The majority opinion shows that we now have a majority of the court who recognize some limits on the power of the state over political speech. After McConnell v. FEC, it was far from clear than the judiciary would draw any lines limiting state restrictions on speech.

Still, this is hardly a robust affirmation of the First Amendment, and it is somewhat discouraging that the new justices, Roberts and Alito, were unwilling to overturn past errors by earlier majorities on the Court.

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.

Intelligence Failures

Sunday’s Washington Post featured an in-depth story on the infamous “Curveball” – the notoriously unreliable source at the center of the Bush administration’s claim that Saddam Hussein had a functioning WMD program in early 2003. Both President Bush and then-Secretary of State Colin Powell referred to Iraq’s mobile biological laboratories in major speeches in the run-up to war, despite the fact that a number of senior CIA analysts had doubts about Curveball’s credibility. When asked to verify Curveball’s reports, German intelligence officials would not do so. One told the CIA’s Tyler Drumheller, as Drumheller tells the Post: “I think the guy is a fabricator…We could never validate his reports.”

Most of the attention on the Iraq war has focused on the administration’s WMD claims. (Alas, the story still doesn’t go away.) And it is certainly true that the American public would have been far less supportive of the Iraq war at the outset if they knew that a key component of Iraq’s WMD program was a figment of one man’s imagination.

But the broader intelligence failure did not pertain to Iraq’s supposed WMD program; rather, it had to do with the Bush administration’s misplaced confidence that a stable functioning democracy could be quickly established in Iraq. Richard Perle, one of the leading advocates for war with Iraq, and now an advocate of confrontation with Iran (see yesterday’s Post Outlook section), still thinks this was the case. As Justin Logan and I write in our Policy Analysis, “Failed States and Flawed Logic”:

Perle would admit in the summer of 2003 that the DOD civilians’ plan centered on installing Iraqi exile Ahmed Chalabi as the new leader of Iraq. In Perle’s view, had the Chalabi plan been enacted, “we’d be in much better shape today.”

But Perle’s (and the Bush administration’s) confidence in Chalabi was badly misplaced. As John Hulsman and Alexis Debat explain in the most recent issue of The National Interest:

the administration simply backed the wrong horse in supporting Chalabi…In its appreciation of the impeccably tailored and mannered Chalabi, the administration failed to question how his exile status and Western orientation, indeed the very qualities that made him a neoconservative fantasy ruler for Iraq, would impair his leadership capability.

Just as there were officials inside of government who were skeptical of the WMD claims, so too did government experts try to warn the Bush administration that the post-conflict period would be protracted and costly. As I wrote over two years ago, the failure to heed these warnings has been, and is likely to be, far more costly that the “failed intelligence” on Iraqi WMDs.