Here’s a poor, unsuccessful letter I sent to the editor of the Washington Post:
“Health‐care provision at center of Supreme Court debate was a Republican idea” [Mar. 27, A7] describes the health care law Mitt Romney signed while governor of Massachusetts as comprised of “free‐market ideas.” Really?
RomneyCare’s individual mandate, now mirrored in ObamaCare, uses the power of the state to compel people to health insurance. What could be more un‐free than that?
Two articles in the Washington Post sparked these two poor, unsuccessful letters to the editor. First this:
I’m no Republican, but “‘Innovation advisers’ chosen for ideas to improve health care, cut costs” [Jan. 21] gives short shrift to those who oppose the new health care law’s Center for Medicare and Medicaid Innovation when it reports, “Some Republicans have questioned the value of investing in experimentation to produce results at a time of limited resources.”
If some critic of the law actually said, “Resource limitations prevent us from investing in innovations that stretch resources further,” please do print it. I could use the laugh. But that’s not why critics oppose the Center.
The argument against the health care law’s efforts to promote innovation is that they won’t work. The Congressional Budget Office recently reported that out of dozens of supposed Medicare innovations, only one met its goal of saving taxpayers money. That pilot program ended 16 years ago. Medicare has yet to adopt it program‐wide.
This is an important debate. Readers deserve to hear both sides, not caricatures.
And then this:
Recent coverage of the new health care overhaul [“‘Innovation advisers’ chosen for ideas to improve health care, cut costs,” Jan. 21; “Center for Medicare and Medicaid Innovation aims to cut health‐care costs,” Jan. 26] let defenders make outlandish claims about government efficiency, but gave short shrift to critics.
Government is not more innovative than private health insurance. It was private health plans that developed important innovations like prepayment, bundled payments, pay‐for‐performance, and penalties for medical errors. Government adoption typically lags private insurers by decades. In the rare instance where Medicare successfully tests an innovation (read: bundled payments for heart bypass surgery), it goes nowhere. If Thomas Edison had to submit his innovations to Medicare, you would be reading this by candlelight.
We don’t need more pilot programs to tell us that Medicare blocks innovation. What we need is a little skepticism when presented with the latest Bureau of Government Efficiency.
Investment giant J.P. Morgan made a bad trade that cost its owners $2 billion. The responsible parties are losing their jobs. Yahoo’s CEO evidently misled people about his qualifications. As a result, he lost his job.
If you want to know why these are market successes, consider: Medicare and Medicaid lose at least 35 times as much per year to fraud and other improper payments, and Medicare wastes even more on medical care that does nothing to make patients healthier or happier. This happens year after year after year.
Now ask yourself: when was the last time someone got fired over those losses? And yet the politicians’ first reaction to the J.P. Morgan trade was greater oversight by the political system, which tolerates much greater losses than the market system that is currently disciplining J.P. Morgan.
Here’s hoping the Yahoo incident inspires some politician to crack down on people who embellish their resumes.
What the media blare:
What I hear:
Drip .… .… . . drip … .… .… . .
Why? As the latter article notes, “authorities have targeted fraud that’s believed to cost the government between $60 billion and $90 billion each year.” So add up those two figures, which include frauds that occurred in multiple years, and you get somewhere between 1.1 percent and 1.6 percent of the amount that Medicare and Medicaid enable criminals to steal from taxpayers in a single year.
Neither article makes it clear how paltry these anti‐fraud efforts are. But at least the former article asks:
So what is it about the government’s health care programs that make them such inviting targets for white collar criminals?
I answer that question here, and in this video:
(This blog post first appeared at Cato@Liberty following the release of the 2006 Medicare and Social Security trustees’ reports. I repost it, with updated links and “exhaustion dates” because sadly nothing else has changed.)
Sometimes, Governments Lie
Year after year, federal officials speak of the Social Security and Medicare trust funds as if they were real. Yesterday Today, the government announced that the Social Security trust fund will be exhausted in 2040 2033 and that the Medicare hospital insurance trust fund will be exhausted in 2018 2024— projections that the media dutifully reported.
But those dates are meaningless, because there are no assets for these “trust funds” to exhaust. The Bush administration wrote in its FY2007 budget proposal:
These balances are available to finance future benefit payments and other trust fund expenditures — but only in a bookkeeping sense. These funds…are not assets…that can be drawn down in the future to fund benefits…When trust fund holdings are redeemed to pay benefits, Treasury will have to finance the expenditure in the same way as any other Federal expenditure: out of current receipts, by borrowing from the public, or by reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, increase the Government’s ability to pay benefits.
This is similar to language in the Clinton administration’s FY2000 budget, which noted that the size of the trust fund “does not…have any impact on the Government’s ability to pay benefits” (emphasis added).
I offer the following proposition:
If the government knows that there are no assets in the Social Security and Medicare “trust funds,” and yet projects the interest earned on those non‐assets and the date on which those non‐assets will be exhausted, then the government is lying.
If that’s the case, then these annual trustees reports constitute an institutionalized, ritualistic lie. Also ritualistic is the media’s uncritical repetition of the lie.
In today’s Wall Street Journal, Alan Blinder writes one of the most error‐ridden and discourse‐debasing op‐eds I have ever read. About any topic. Ever.
[O]ur country was founded on the idea that the rights to life, liberty and the pursuit of happiness are inalienable. Access to affordable health care is surely essential to two of these three rights, maybe to all three.
This is absurd. Does Blinder really mean to say that until about a hundred years ago, when modern medicine really began, the lack of access to affordable health care alienated every single human being to walk the Earth from their rights to life, liberty, and the pursuit of happiness?
I wish people would think — long and hard — before they write about health care. Especially the smart ones.
Conservatives like John Graham of the Pacific Research Institute have also been touring states with the platform provided by the American Legislative Exchange Council to help kill off state‐based exchanges, a key piece of health reform that will help millions of people purchase insurance coverage — often with federal subsidies — starting in 2014.
“Our approach has to be absolute noncollaboration, civil disobedience — well, not civil disobedience but resistance … by whatever means,” said Graham.
Two years into the law’s implementation, conservative emissaries have contributed to impressive stats. Almost all red states are holding off on exchange legislation at least until the Supreme Court decides on the Affordable Care Act, and in most of those states, exchange‐building legislation has crawled to a stop.
I have to point out three problems with the story, though. First, the Cato Institute and I are libertarian, not conservative.
Second, the article identifies Cato, ALEC, and AFP as being “funded partly by the Koch brothers.” Even though these groups have no direct or indirect financial interest in this issue, and even though Cato currently receives no funding from the Kochs, and even though Cato is currently fighting a hostile takeover attempt by the Kochs, I guess that’s a fair categorization. What isn’t fair is how the article fails to disclose that Leavitt Partners has a direct financial interest in this issue: Leavitt is getting paid by states to help implement Exchanges. (See “Health Exchanges: A New Gold Mine,” Politico, June 27, 2011.) It would have been nice if the article mentioned that all the moneyed interests – including health insurance carriers and many Chambers of Commerce – are on the pro‐Exchange side. But it at least should have mentioned Leavitt’s financial interest.
Third, I’m not sure what basis there is for saying “most legal experts think” the federal government can offer tax credits and subsidies in federal Exchanges. My co‐author Jonathan Adler and I have been following that debate closely. Only a handful of scholars have even commented on the issue, and they are fairly evenly split. If I’m unaware of others who have weighed in, I’d like to hear about them.