Medicare Prices to Be Posted Online

Here’s some important information for the next time you visit the hospital.  After dictating prices for health care services for 20-some years, Medicare is finally going to let you see those prices. Today, the Bush administration took the first step toward posting the prices that Medicare pays providers. Today’s release includes county-by-county prices paid for 30-plus hospital procedures, including:

  • heart operations and implanting cardiac defibrillators
  • hip and knee replacements
  • kidney and urinary tract operations
  • gallbladder operations and back and neck operations
  • common non-surgical admissions

In a study released this week, I wrote that this step by the Bush administration

probably will not hurt, and it could even help. However, the administration’s efforts to force price disclosure should stop there. If patients demand price information, there will be no need to force providers to supply it: providers will publish it, or perish. But as long as patients have no interest in price information, forcing providers to supply it would be a useless exercise and a costly distraction. 


Advice for Conservatives Wrestling with Medicaid

John Hood of North Carolina’s John Locke Foundation today pens important advice to conservatives who are trying to improve Medicaid, the joint federal-state health care program (ostensibly) for the poor:

Too many conservative advocates of Medicaid reform couch their advocacy in terms such as “enrolling in private health plans will remove the stigma from patients on Medicaid” and “choice is better than cutting Medicaid reimbursements to providers, which limit recipients’ access to the best doctors.” These may be effects of a reform, but they shouldn’t be thought of as goals or even as necessarily positive.

Repeat after me: Medicaid is welfare. Medicaid is welfare. Medicaid is welfare. It is a forced redistribution of resources from those who earned them to those who did not. There may be good reasons to defend Medicaid as a concept, or to imagine some kind of more-limited program to replace it, but they must recognize that Medicaid is an arm of the welfare state. As such, no one should consider it a “right” for Medicaid recipients to have access to the very same doctors, devices, and treatments as those who pay their own way.

Full disclosure: He then goes on to quote me favorably, which may be clouding my judgment.

Saving Trees, Wasting Brain Power

For the first time, General Electric has filed its corporate tax return electronically.

GE’s return consumed 237 megabytes of computer storage space, but apparently saved a small forest from being clear-cut to print an eight-foot high, 24,000-page stack of tax forms. That’s progress I suppose, but we’re still waiting for those dim bulbs in Congress to recognize that major tax reforms are needed so that American businesses can focus on ”bringing good things to life” rather than slaving over endless government “paperwork.”   

Supreme Court, Meet Sweet Science

Debates about constitutional rights often take the form of either-or propositions. Either the Supreme Court must take an iron stand on high principle, come what may, or we are left with a world of politics-takes-all.

More often than not, that intuition is right. But sometimes, the court can take a few lessons from the sweet science of boxing. Great fighters don’t always win the fight in a toe-to-toe slug match. In hard fights, it can take a bit of fancy footwork. As I argue in this piece, that’s exactly what’s needed in a confrontation between the Supreme Court and the president over NSA surveillance.

What? High Schools Go All the Way to Grade 12?

The Department of Education released its annual “Condition of Education” report today, and as always it is filled with interesting information. There are, however, a couple of curious omissions. The report has a lengthy section discussing the international evidence on U.S. student and adult achievement, including the scores of fourth and eighth graders on the Third International Mathematics and Science Survey.

What’s missing are the scores of 12th graders. At the end of high school, American students are in last place in mathematics, and second to last place in science.

This sad reality caps a steady trend: The longer American kids spend in our public schools, the worse they do compared to their peers in other industrialized countries. At the fourth grade, we’re close to the average of developed nations, by the ninth grade we’re below that average, and by the 12th grade we’ve hit rock bottom.

The literacy scores of our young adults are also abysmal. On the recent international Adult Literacy and Lifeskills test, the only country we beat was Italy – the only country we managed to edge out in 12th grade science. Hurray.

A Quibble with Kling

Arnold Kling points out a disagreement we have over whether Americans spend too much on health care. There is no doubt that Americans spend more on health care than any other country. But why is that necessarily a bad thing? There is no “right” amount to spend on health care or anything else. The United States spends more on athletic shoes than any other country. No one speaks of the athletic shoes crisis.

Economists consider health care a “normal good,” meaning that spending rises or falls with income. As incomes rise, people demand more and better health care. America’s wealth determines its spending on healthcare. And we receive value for our money. If you’re sick, American health care is still the best in the world. For diseases such as cancer, heart disease, and AIDS, outcomes are far better in the U.S. than in other countries.

Of course much health care spending is wasted. Many of the drugs, procedures and services we purchase are relatively useless. Some may even do more harm than good.  But who is best placed to make that decision? After all, health care purchasing is based on a wide range of personal preferences, not all of which are measurable in terms of outcome. Pain tolerance, time away from work, desire to pursue certain activities, and even peace of mind may all influence my decision. Only individual consumers can really make such decisions — and there really is no wrong answer.

Where Arnold is right is in pointing out that those decisions are currently distorted by our third-party payment system. Because those purchasing health care are able to pass the bill onto third parties, the usual market disciplines don’t apply. We consume health care with even the most marginal perceived value. That is why health-care reform must focus on giving consumers a greater stake in the decision-making process.

If consumers were spending more of their own money on health care, would total spending go down? Probably. But, then again, I don’t care — and neither should the rest of us.


Five Years in Prison for Online Gambling

Next week, a law takes effect in Washington State that makes Internet gambling a Class C felony, punishable by up to five years in prison. It’s the same class of felony reserved for child pornographers, animal torturers, and people who make threats on the governor’s life.

Lawmakers and state officials say the intent of the law isn’t to go after gamblers themselves. One wonders, then, why the bill was necessary. The “bet taking” side of online gambling is already a federal crime, and has been for years. That’s why gambling sites are incorporated and located overseas.

The only conceivable reason why a bill might be needed would be to clear up the ambiguity on the “bet placing” side of the transaction. No one seems to know whether the user-end of online gambling is legal. This bill is quite clear on that – the placing of bets via the Internet is now a felony in Washington. Indeed, one official conceded to the Seattle Post-Intelligencer that vice agents have already begun breaking into the homes of people gambling online to warn them that the activity is illegal. They’ll now be able to arrest them too.

In addition to the usual paternalistic objections, the bill also raises significant privacy concerns. How will state officials know who’s gambling unless they’re closely monitoring citizens’ online habits? Will they begin snooping through ISPs?

The other option would be to track the finances of suspected gamblers. That’s even more troubling. Most gaming sites now conduct transactions with U.S. customers through offshore payment services like Neteller or FirePay (U.S.-based PayPal was threatened out of the business by federal prosecutors via the PATRIOT Act). In industry jargon, these are called “ACH” transactions. They’re more commonly known as a “virtual check.” But banks can’t trace the nature of ACH transactions. They can only trace the name of the vendor. A customer could be using Neteller or FirePay to purchase just about any good or service online. But it’s conceivable that merely using either service could be enough to set off red flags for state investigators.

Though predicated on concerns about problem gambling and children’s access to gaming sites (virtually impossible, by the way), it’s probably worth noting that the Washington law has been pushed with heavy backing from the state’s bustling bricks-and-mortar casino industry. Sort of undercuts the notion that moral aversion to gambling is motivating all of this. The politically powerful horseracing industry won an exemption from the ban too.

If there’s a bright side to the bill, it’s the public reaction to it. Comments posted on the state legislature’s website aren’t just overwhelmingly negative, they’re scathing. In fact, polls show most Americans are by and large opposed to state and federal attempts to prohibit Internet gambling.

More on the folly of Internet gambling prohibitions here and here.