November 3, 1999

by Peter J.M. Orvetti

Medical Meddling
Columbine Continues
Give Me A Break

Medical Meddling

President Clinton has proposed new regulations intended to protect electronic medical records from being improperly viewed by employers, marketers and others, AP reported. Clinton urged Congress to take further steps to safeguard patients' most sensitive information. Clinton compared the improper use of medical information to the fictional totalitarian world of George Orwell's 1984 and said asked Congress to "help protect American families from new abuses of their privacy."

In a commentary on the regulations distributed by Bridge News last week, Solveig Singleton writes, "Consumers may find the administration's privacy prescription something of a quack remedy, superficially easing fears of intrusions into medical records, while pushing the costs of health care higher. In a nutshell, the proposed privacy policy assumes that the use of patient information for nonmedical purposes is disreputable. For purposes like marketing, information such as who bought what drugs when and where would be permitted only after companies work through a tangle of red tape. Except, of course, if the person asking to access the records is a law enforcement officer or an auditor looking for insurance or Medicare fraud. In those circumstances, privacy principles go overboard fast. The idea that patient information should be seen only by doctors has an emotional appeal. It's grounded in the history of medical ethics, too.

"But as always, there is another side to the story. Why are insurance companies and auditors looking for access to our medical records? A major reason is soaring health-care costs. Costs rise out of control not because of any market failure but because of the billions of dollars in subsidies that pour into the system from Medicare, Medicaid and other sources. Patients have no reason to shop for the best price when much of the time someone else is footing the bill. So costs soar and fraud rises. Auditors demand access--and rightfully so. Soaring costs hurt all of us.

"Free market reforms would restore our health-care system and help end the explosion in costs. Until such reforms are made, the auditors will not be sated. Clinton's medical privacy proposal is unsatisfying because it leaves medical records open to endless audits of treatment records. The last thing patients need is to see more doctors fleeing solo practice rather than continuing to wrestle with thousands of pages of baffling billing rules in which a simple mistake can mean a fraud charge."

Columbine Continues

Six months after the school shootings at Columbine High School in Littleton, Colorado, authorities ordered a Cleveland high school closed Friday after they uncovered an apparent plot by students to stage "violent acts" there, AP reports. Several South High School students admitted to planning an attack with guns and explosives similar to the Littleton assault.

Over the years, Cato Institute scholars have produced a wide range of policy analyses, commentaries and studies on some of the issues evoked by the recent wave of school violence, including the failure of government schools and proposals for strict federal gun control measures. The Cato Policy Analysis "Homeschooling: Back to the Future" addresses one alternative, while in a Cato Policy Report piece, David Boaz calls on the government to "Let the Children Go". The Cato Policy Analysis "Trust the People: The Case Against Gun Control" makes the case against poorly reasoned quick fixes. Selected Cato Readings on the Littleton School Shootings" contain these essays and more.

Give Me A Break

The Senate extended $8.5 billion in expiring tax breaks without dissent last week, AP reports. Existing research and development breaks are continued by the vote, as are provisions relating to employer-provided educational assistance, welfare-to-work credits, and tax breaks for electricity produced from wind and closed-loop biomass.

"For years, the U.S. government has been in the business of providing special benefits to individual industries and companies through tax breaks, trade policies, and spending programs," write Stephen Moore and Dean Stansel in the Cato Policy Analysis "Ending Corporate Welfare As We Know It". "There are several problems with this approach. The federal government has a poor record of picking industrial winners and losers, so the economic benefits that these programs are purported to create inevitably fail to materialize. Furthermore, corporate welfare programs create an uneven playing field; foster an incestuous relationship between business and government; are anti-consumer, anti-capitalist, and unconstitutional; and create a huge drain on the federal budget…

"Because they intermingle government dollars with corporate political clout, business subsidies have a corrupting influence on both America's system of democratic government and our system of entrepreneurial capitalism. Despite the conventional orthodoxy in Washington that the United States needs an even closer alliance between business and politics, the truth is that both government and the marketplace would work better if they kept a healthy distance from each other… We now have a situation where federal regulatory policies are increasingly geared toward punishing success, while federal corporate welfare policies increasingly reward failure. That is not the way to preserve America's industrial might." The Cato Handbook for Congress (pdf) also addresses corporate welfare.