Looming Doctor Shortage Demands Innovative Solutions

By Jeffrey A. Singer

The Association of American Medical Colleges projects a severe physician shortage by the year 2032, particularly in the primary care fields, as the population of patients as well as doctors continues to age, according to a report today by CNBC.com. AAMC projects the national primary care shortage will range from roughly 47,000 to 122,000.

The news report focused on Arizona, one of the fastest growing states in the union, which has a shortage of primary caregivers in every county. Arizona ranks 44thout of the 50 states in total active primary care providers (PCPs), at 77.9 per 100,000 population (the national average is 91.7 per 100,000) according to a recent report from the University of Arizona.

To deal with the problem efforts are underway in the state to expand residency training programs in order to produce more physicians. But that takes time and money. What is likely to have a more immediate beneficial effect is the state’s recent reform of its occupational licensing laws. Arizona this year became the first state to recognize occupational licenses in good standing granted by other states. This spares new migrants to the state who hold licenses in other states the hardship of repeating costly and time-consuming licensing procedures. As the CNBC report states:

Another way Arizona is hoping to help ease the shortage is by changing licensing laws. Republican Gov. Doug Ducey recently signed a Universal Licensing Recognition law that makes it easier for people licensed in other states to move to Arizona and gain similar accreditation. The measure is the first of its kind in the nation and impacts licensed occupations that range from barbers to physicians. Overall, 30% of occupations require a state-issued license.

This was indeed a good move on the part of the Arizona legislature and Governor and should be replicated in other states. But reforming scope of practice laws so that nurse practitioners, PAs, pharmacists, and other ancillary health care providers can provide services that are now the exclusive domain of people holding doctorate degrees will do even more to improve choice and access to patients in Arizona and across the country. One way to accomplish that would be to move to a system of private certification based upon proven proficiency and skill in a given area. In a recent paper from the Goldwater Institute, one of the co-authors, Murray Feldstein, MD, explains how this would work for health care practitioners:

A certified nurse practitioner, who has a bachelor’s in nursing, an RN license, and a master’s or doctorate in nursing, can do a vasectomy in Washington State. But in most states, that same individual must either fight a scope-of-practice battle in the legislature or go to medical school in order to perform a vasectomy. I am a board-certified urologist who has performed thousands of vasectomies. I am confident I could train an experienced, competent physician’s assistant or nurse practitioner to do the procedure within a few weeks and feel comfortable letting them do it independently.

It would also help for states to reform laws regarding the practice of telemedicine. Most states require telemedicine practitioners to obtain licenses in each state where they make their services available. Ironically, those states don’t prohibit their residents from traveling to the states where those practices are domiciled to receive treatment. Economist and Cato adjunct scholar Shirley Svorny investigated this issue in a Cato Policy Analysis, and suggested solutions. An easy reform would be to redefine the location of the patient-practitioner interaction from that of the patient to that of the practitioner, or for states to allow the practice of telemedicine by health care practitioners licensed by the state in which they are domiciled. 

The CNBC report featured comments by AAMC executive vice president Dr. Atul Grover, regarding the shortage. Dr. Grover called for more federal funding of training programs and for medical schools to expand their enrollments. It is unfortunate these other reform proposals were not mentioned. 

Topics:
Government and Politics, Health Care, Regulatory Studies

How to “Salvage Community” after Military Base Closure

By Christopher A. Preble

It has been nearly 14 years since the Pentagon trimmed its excess base capacity through a Base Realignment and Closure (BRAC) round. Despite repeated requests by various Secretaries of Defense, Congress has blocked the military services from reallocating resources away from unnecessary overhead and toward more urgent priorities.

Much of Congress’s reluctance comes from the perception that base closures are devastating for nearby town and municipalities. In the immediate term, job losses follow whenever a base closes, and the cost of transferring and redeveloping property can be daunting. In most instances, however, elected officials, civic leaders, and interested businesses and non-profits join forces to convert former defense facilities into something else. The best cases deliver benefits throughout the community, including renters and homeowners, students, recreational users – and, of course, businesses and their employees.

A just-published book, Salvaging Community: How American Cities Rebuild Closed Military Bases (Cornell University Press, 2019), explores why some communities have been more successful than others. We hosted one of the authors, Michael Touchton, for a discussion here at Cato last week. Touchton, Assistant Professor of Political Science at the University of Miami, along with his co-author, Boise State University’s Amanda J. Ashley, explore a range of different measures of a given community’s financial health, before, during and after a nearby base closes, and assess the factors that contribute to either expeditious conversion – or frustrating and costly delays. Several organizations, including the Association of Defense Communities and DoD’s Office of Economic Adjustment, exist to help with such transitions. Nevertheless, communities are often unprepared. Touchton and Ashley’s work could bridge that gap.

 

 

It begins with a unique and proprietary data set with information on 122 bases closed under BRAC. That alone was a signature achievement, requiring the authors to draw information from a wide range of sources including “public records from the DoD, the Census Bureau, other federal agencies, community redevelopment master plans, publicly available documentation of redevelopment outcomes on city, state, and local government website, and extensive e-mail and phone inquiries to supplement public records.” The metrics compiled include observed outcomes (dependent variables) such as job creation, revenue generation, municipal bond rating, and “equitable conversion benefits” – an indexed assessment of the various uses of former military land. Factors deemed relevant to success or failure include the diversity of funding sources, the number of public, private, and nonprofit partners, surrounding economic conditions at the time of closure, and the costs of environmental remediation. 

But, Touchton and Ashley explain, “the quantitative data reveal only general relationships surrounding redevelopment rather than the causal mechanisms driving redevelopment performance.” Accordingly, Salvaging Community also includes an in-depth review of three California cases – the Naval Training Center in San Diego, now Liberty Station; the former Fort Ord in Monterey County; and Naval Air Station Alameda, a short distance across the bay from San Francisco’s financial district. I have visited all three of these sites, and previously written about San Diego, here at the Cato blog, and Fort Ord at this year’s International Studies Association meeting (PDF), but I learned additional details in this fine book.

Touchton and Ashley identify effective governance as a major factor in successful redevelopment. The different entities that take ownership of the land must be incorporated within a decision-making structure that mitigates jurisdictional infighting. Local non-profits and private businesses should also be involved in both the planning and execution of base conversion. Taking the process step by step, and ensuring maximum buy-in among all stakeholders, can ensure a steady stream of revenue to fund environmental remediation, removal of structures unsuitable for preservation and reuse, and construction of new infrastructure.

Base closures are never going to be easy or without consequence. Communities near shuttered bases do experience job losses, and a decline in tax revenue, but, on the whole, a typical community will see a return to pre-closure employment and revenue levels within 5-10 years. And the resulting redevelopment nearly always benefits many within the community – not merely those working for or with the U.S. military and the federal government.

Explains the Heritage Foundation’s Frederico Bartels, “A new round of BRAC would allow the [defense] department to free time, money, and manpower in installations for other uses.” But that is unlikely so long as fear of the short-term economic repercussions of these closures, and an inability to see the opportunities when former military bases are opened up to new civilian uses, persists. Those looking for new information that might break the political log-jam in Congress should definitely check out Touchton and Ashley’s Salvaging Community.

Thanks to research associate James Knupp for help organizing the event and with this blog post.

Topics:
Foreign Policy and National Security

Man Engages In Sarcasm On Social Media. Career Survives.

By Walter Olson

Leif Olson (who is no relation) is a well-known Texas lawyer who just landed a nice job at the U.S. Department of Labor. He’s a good friend of several people at Cato, and a Facebook friend of mine, although we’ve met in person at most briefly. We agree on many legal issues and likely disagree on some others.

This week, in one of the most unfair hatchet jobs I’ve seen over the years as a watcher of Washington journalism, a Bloomberg Law reporter took a heavily sarcastic Facebook post Leif Olson wrote three years ago and presented it as meant in all sincerity – complete with a partial screenshot which clipped off the comments that followed hailing the post as an elaborate exercise in sarcasm, which it obviously was.

As if that weren’t bad enough, the piece was compounded with other errors and distortions. As Josh Blackman points out, author Benjamin Penn asserted that “Olson filed an amicus brief for the Cato Institute in 2015, asking the Supreme Court to strike down” President Obama’s unilateral DAPA program on immigration. While Olson served as local counsel at earlier stages of the case, he wasn’t on that Supreme Court brief.

But don’t expect this to be one of those bilious damn-Washington, down-with-the-press stories. It isn’t. Instead of the pile-on you might have expected, social media almost at once was full of voices defending Leif Olson – not only dozens of his own friends and colleagues, but a robust line-up of media critics and commentators from places like the Washington Post, Vox, Slate, New York magazine, and Tablet. Most of them almost certainly do *not* share Leif Olson’s conservative political and legal views. But they saw that he had been wronged. Wednesday afternoon, the U.S. Department of Labor saw that too.

Take hope. Truth won out over partisanship, as it should. Most of the big press names who got involved deserve honor and respect for their role. Except those at Bloomberg Law, which as of this morning, in the teeth of near-unanimous criticism, has refused to correct, retract, and apologize for its report. But that’s for the next chapter.

Topics:
General

Michigan Bans Flavored E-Cigarettes

By Jeffrey Miron and Erin Partin

Today, Michigan became the first state to announce an outright ban on the sale of flavored e-cigarettes. Governor Gretchen Whitmer (D) explained the decision by saying, “As governor, I’m going to do it unilaterally until I can get the legislature to adopt a statute and write it into law.”

This executive decision will impact nearly half a million Michiganders who use e-cigarettes. The ban prohibits the retail or online sale of flavored e-cigarettes or vaping liquid, including mint and menthol flavorings. Flavored e-cigarettes account for nearly three quarters of all e-cigarettes, so the impact will be widely felt.

The governor cites increasing youth use of flavored e-cigarettes and recent CDC reports of respiratory illnesses that may be associated with e-cigarette use in justifying the ban. However, this heavy-handed response goes far beyond what is necessary or acceptable.

Although youth use of e-cigarettes has increased in the past several years, the rate of cigarette use among young people has plummeted to near historic lows. Concerns that vaping may lead to respiratory illnesses are, as yet, unsupported by any robust research. The 215 cases of pulmonary disease under investigation by the CDC comprise less than one ten-thousandth of one percent of all e-cigarette users in the United States. Meanwhile, half a million people die each year from smoking cigarettes. Studies have shown that e-cigarette use is associated with a reduction in combustible tobacco consumption and an increase in smoking cessation efforts. A de facto ban on electronic cigarettes will drive consumers back to combustible tobacco products, ultimately leading to worse health outcomes.

Prohibition does not work. Since the early 2000s, e-cigarettes have provided smokers with alternatives to combustible tobacco and facilitated cessation efforts. Banning products that have a proven track record of harm reduction, due to unsubstantiated fears, is not the way forward. Governor Whitmer’s ban is certain to face legal challenges. One can only hope that reason will prevail.

Topics:
Government and Politics, Regulatory Studies

Why the Fed Needs a Monetary Rule to Protect Its Independence

By James A. Dorn

As the 2020 presidential election season heats up, Federal Reserve Chairman Jerome Powell is being pushed from all sides. President Trump has castigated him for overly tight monetary policy and has implied that Powell is a “bigger enemy” than Xi Jinping.  Meanwhile, William Dudley, who recently headed the Federal Reserve Bank of New York, the most important reserve bank in the system, boldly called for Powell to enter the political fray against Trump and use a tighter monetary policy to help defeat him in 2020.

We’ve seen this pattern before—only this time, it’s more extreme. President Trump, like many executives before him, wants the Fed to sacrifice its independence in favor of more accommodative monetary policies, while Dudley, on the other hand, is willing to sacrifice the Fed’s independence in the short run.

The real problem is that, in our purely discretionary fiat money system, there is no rule to provide long-run guidance to monetary policymakers. This allows Congress to delegate too much power to the Fed and expect too much from it in return.  In conducting monetary policy, the Fed needs to be accountable to political institutions, yet independent of political pressures to finance budget deficits or use the printing press to satisfy special interests (whether those interests take the form of a border wall or a “Green New Deal”).

Only a rule—about how to track economic stability and how and when to respond to changes in that stability—can provide that independence.[1]

Read the rest of this post »

Topics:
Finance, Banking & Monetary Policy

The Trump Administration Misses the Point Again about Burden-Sharing

By Ted Galen Carpenter

President Trump and his advisers are beating the drums again about the need for greater burden-sharing by U.S. allies. In early August, Trump demanded that South Koreans pay “substantially more” than the current $990 million a year for defraying the costs of U.S. troops defending their country from North Korea. Just days later, Richard Grenell, the U.S. Ambassador to Germany blasted that country’s reluctance to spend more on defense and its continued reliance on U.S. troops for protection. “It is offensive to assume that the U.S. taxpayers continue to pay for more than 50,000 Americans in Germany but the Germans get to spend their (budget) surplus on domestic programs,” Grenell told a German news agency

Complaints about allied “free riding” did not begin with the Trump administration. Earlier generations of frustrated U.S. policymakers voiced similar sentiments. As I discuss in a recent article in the American Conservative, though, the obsession with financial burden-sharing misses a far more fundamental issue. The tendency of U.S. allies to skimp on their own defense spending and instead free ride on the bloated U.S. military budget certainly is annoying and unhealthy for America. But the more serious problem is that Washington’s array of promiscuous defense commitments to allies and security dependents is increasingly imprudent and illogical.

Not only are such obligations a waste of tax dollars, they needlessly put American lives at risk, and given the rising danger of nuclear war in some cases, put America’s existence as a functioning society in jeopardy. American military personnel should not be mercenaries defending the interests of allies and security clients when America’s own vital interests are not at stake. Even if allies offset more of the costs, as Trump and Grenell demand, we should not want our military to be modern-day Hessians. U.S. leaders need to move beyond calls for financial burden-sharing and engage in burden shedding—eliminating security commitments that now entail more risks than benefits.

The world has changed greatly since the end of the Cold War, and Washington’s security policy should reflect those new conditions. Germany and the other members of the prosperous European Union are now fully capable of providing for Europe’s defense. Indeed, European governments ought to take responsibility not only for the continent’s security, but for addressing developments on Europe’s perimeter relevant to that security. It makes little sense for the United States to retain, much less add, obligations to defend small, strategically insignificant countries on Russia’s border. The risks of such a provocative stance clearly outweigh any potential benefits.

Likewise, the risk-benefit calculation of continuing to provide a security shield for South Korea has changed dramatically since the days of the Cold War. Not only is South Korea a much stronger country economically, one that can build whatever forces are needed for its defense, but North Korea is now capable of inflicting grave damage on U.S. forces stationed in East Asia and will soon be able to strike the U.S. homeland with nuclear warheads. Similarly, Washington’s implicit defense commitment to Taiwan has become far riskier than it was in previous decades, given China’s surging military power and Beijing’s increasing determination to compel Taiwan’s reunification with the mainland.

Greater financial burden-sharing by Washington’s allies will not improve the much more important risk-benefit calculation; it merely will make the U.S. government a better compensated provider of de facto mercenaries. American forces—and the American population as a whole—still will incur greater and greater risks. If the Trump administration is serious about an “America First” foreign policy, it must address that problem.

Topics:
Foreign Policy and National Security

New York Times on Opportunity Zones

By Chris Edwards

The Tax Cuts and Jobs Act of 2017 included capital gains tax cuts on investments in chosen areas called “opportunity zones.” There are about 8,700 O Zones across the country, which were selected by state governors based on rules in the federal statute.

O Zones are a bad idea and should be repealed. They actively divide the nation between winner and loser communities. They replace equal justice under law with differential treatment based on political pull. The main winners likely are landowners within the zones, not poor households.

Business investment and low capital gains taxes are good things. But tax policy should aim to create equal treatment for investments across the economy to maximize growth and fairness while minimizing corruption.

If cities want to subsidize investment in particular neighborhoods, they can do so. But O Zones create a dangerous precedent of using federal taxing power to micromanage local economies. The Republican O Zone law parallels failed Democratic efforts since the 1960s to top-down plan cities with federal spending subsidies.

Policymakers who want to fix particular neighborhoods in their hometowns should run for city hall, not the federal legislature. Even better, they should put their money where their mouths are and start businesses in poor neighborhoods themselves to create growth and opportunities.

The New York Times investigated O Zones in a lengthy article on the weekend. The article probably focused too much on the cultural aspects of wealth. It associated O Zones with high-end condos, rooftop pools, yoga studios, pet spas, shrimp tempura tacos, and sweeping views of Biscayne Bay.

Nonetheless, the main theme of the NYT piece was spot-on. O Zones were supposed to help low-income households, but they appear to be mainly benefiting developers, investors, lawyers, accountants, consultants, lobbyists, and other intermediaries. This is a common problem with government efforts at aiding poor communities. In addition to the program beneficiaries noted by the NYT, I would add landlords who owned property in O Zones when the legislation passed.

O Zones are discussed further here, here, here, here, here, here, here, and here.

Here are some highlights from the NYT article:

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.

Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

… Sean Parker, an early backer of Facebook, helped come up with the idea of pairing a capital-gains tax break with an incentive to invest in distressed neighborhoods. “When you are a founder of Facebook, and you own a lot of stock,” Mr. Parker said at a recent opportunity-zone conference, “you spend a lot of time thinking about capital gains.”

Starting in 2013, Mr. Parker bankrolled a Capitol Hill lobbying effort to pitch the idea to members of Congress. That effort was run through his Economic Innovation Group. In addition to Mr. Parker, the group’s backers included Dan Gilbert, the billionaire founder of Quicken Loans, and Ted Ullyot, the former general counsel of Facebook.

The plan won the support of Senators Cory Booker, Democrat of New Jersey, and Tim Scott, Republican of South Carolina. When Congress, at Mr. Trump’s urging, began discussing major changes to the federal tax code in 2017, Mr. Parker’s idea had a chance to become reality.

Mr. Scott, who sponsored a version of the opportunity-zone legislation that was later incorporated into the broader tax cut package, said it was “for American people stuck, sometimes trapped, in a place where it seems like the lights grow dimmer, and the future does, too.”

… But even supporters of the initiative agree that the bulk of the opportunity-zone money is going to places that do not need the help, while many poorer communities are so far empty-handed.

Some opportunity zones that were classified as low income based on census data from several years ago have since gentrified. Others that remain poor over all have large numbers of wealthy households.

… In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones. In Miami, for example, Mr. LeFrak — who donated nearly $500,000 to Mr. Trump’s campaign and inauguration and is personally close to the president — is working with a Florida partner on a 183-acre project that is set to include 12 residential towers and eight football fields’ worth of retail and commercial space.

In spring 2018, as they planned the so-called Sole Mia project, Mr. LeFrak’s executives encouraged city officials in North Miami to nominate the area around the site as an opportunity zone, according to Larry M. Spring, the city manager. They did so, and the Treasury Department made the designation official.

… Financial institutions are not even trying to make it look as if their opportunity-zone investments were intended to benefit needy communities. CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”

 

Topics:
Regulatory Studies, Tax and Budget Policy

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