Battle in New Jersey

The May 29, 2008 Wall Street Journal describes two proposals for health care reform in New Jersey coming from opposite philosophical approaches.

The first is a proposed change in the right direction:

Jay Webber, a Republican Assemblyman in Trenton, will introduce legislation to let Garden State residents buy low-cost health insurance from any registered policy in any of the 50 states.

Mr. Webber's proposal is a state version of Arizona Congressman John Shadegg's federal legislation to let individuals buy insurance across state lines, and John McCain has also endorsed the idea. But New Jersey would be a perfect test case, because its multiple mandates have made insurance too expensive for hundreds of thousands of families.

The average national cost for a family health plan is $5,799, according to America's Health Insurance Plans, but in New Jersey that same plan costs $10,398 on average. The state's politicians have driven up these costs by forcing insurers to provide gold-plated coverage – even for such voluntary medical services as in vitro fertilization.

The second is a change in the wrong direction:

Democrats in Trenton are rallying behind a plan to require that every uninsured individual in New Jersey purchase health insurance from a new state-administered program. So a state that is already so broke that its politicians are contemplating mortgaging its highways might now add a $1.7 billion health subsidy.

The Webber proposal offers lower costs and more choices for consumers, while the Democratic plan mandates public coverage and no choice, while putting a new burden on taxpayers.

As the WSJ concludes, "This is the kind of debate the country should have this election year.""

Thank You's

Thank you John Caldara for linking to our "FAQ on Free Market Health Insurance"!

And to Patient Power!

And to Health Wonk Review!

And to Healthcare Economist!

And to InsureBlog!

And to Roland Deschain!

And to Lear Jet SWAT Team!

And to Michael Williams!

And to Rand Simberg!

Religion, Corporations, and Universal Health Care

Activists are now using corporate shareholder votes to push an agenda favoring "universal" health care. According to the May 27, 2008 New York Times, these activists are attempting to get corporate boards to make explicit statements of principle supporting "universal health care" as a goal for all society (as opposed to asking that it be an employee benefit for that specific company). The activists include a mixture of religious and labor groups:

Employers frequently complain about the cost of health benefits for employees and retirees. The shareholder proposal would not require companies to provide health benefits for employees, but asks top corporate executives to view the issue in a broader context, as a question of social policy.

"We are doing what we can as shareholders," said the Rev. Michael H. Crosby, a 68-year-old Capuchin priest who has had discussions with nine companies on behalf of 20 Roman Catholic orders this year. "We come out of a religious tradition, but we are not engaged in a messianic enterprise. We are one voice among many seeking equitable access to health care for all."

Despite the fact that many have argued that these sorts of statements have no place in shareholder debates, the Securities and Exchange Commission has ruled that these resolutions must be included on the ballot.

The New Big Dig

The May 21, 2008 Wall Street Journal likens the Massachusetts health plan to the "Big Dig" -- i.e., the Boston highway construction project notorious for its inefficiency and cost overruns. Here are some excerpts:

Well, the returns are rolling in, and the critics look prescient. First, the plan isn't "universal" at all: About 350,000 more people are now insured in Massachusetts since the reform passed. Federal estimates put the prior number of uninsured at more than 657,000, so there was a reduction. But it was not secured through the market reforms that Governor Romney promised. Instead, Massachusetts also created a new state entitlement that is already trembling on the verge of bankruptcy inside of a year.

...The "new Big Dig" moniker refers to the legendary cost overruns when Boston rebuilt its traffic system. Now state legislators are pushing new schemes to offset RomneyCare's runaway expenses, including reductions in state payments to doctors and hospitals, enlarged business penalties, an increase in the state tobacco tax, and more restrictions on drug companies and insurers.

...In this respect paradoxically, we can be thankful that Massachusetts ignored the cost problems that doomed other recent liberal health insurance overhauls in California, Pennsylvania, Wisconsin and Illinois. The Bay State is showing everyone how not to reform health care.

Individual mandates violate an individual's right to contract with insurers and providers according to their mutual benefit. When the state presumes to override an individual's judgment as to what's best for his self-interest, it's no surprise that it results in bad economic outcomes and poor provision of medical services.

The Republican Health-Care Surrender

Dick Armey has a good OpEd in the May 15, 2008 Wall Street Journal explaining how the Republicans are caving in to the Democrats in asking for more government control of medicine.

In particular, he criticizes Senator Grassley's support of individual mandates:

...[T]he ranking Republican on the Senate committee with primary jurisdiction over health policy has endorsed a health-care plan with an individual mandate to purchase health insurance.

This endorsement comes in spite of clear evidence that individual mandates, besides violating an individual's right to choose, actually drive up health-care costs. In Massachusetts, which recently adopted a mandate of its own, skyrocketing cost overruns are currently projected at around $2 billion. The average price of a premium in the Bay State is nearly double what was predicted. And developing minimum benefit requirements – as mandates must do – merely creates a giant giveaway to health-care lobbyists, all while limiting the health-care choices of those covered. In practice, mandates force individuals to purchase coverage they may not need and drive up costs.

The plan Mr. Grassley advocates, S. 334 (legislation originally proposed by Oregon Democratic Sen. Ron Wyden), would create even greater chaos and upheaval in America's health-care system than Mrs. Clinton's current proposal. It would force the majority of Americans who are already covered to give up their current, employer-provided plans.

Disclaimer: FIRM is non-partisan, and does not support any specific political parties or candidates.

(Via Patient Power.)

British Physician Sees The Light

British ophthalmologist (eye specialist) Sarah Anderson used to be a big supporter of their National Health System:

...I have spent my working life in the NHS. And for all its perceived failings, I have been proud of its fundamental role in our society - to provide equality of care for all.

But when her own father got cancer, she saw a different side to the system:

...[W]hen I've read about people being refused particular drugs simply because of where they lived, I've always believed there must be another reason - even if it wasn't immediately obvious at the time.

I never for a moment thought that a life could be decided by something as arbitrary as one's address.

Yet that is what has happened to my father. And it is only now, sitting on the side of the patient, that I have seen the injustice inherent in our system and the devastation it can cause.

Basically, the NHS denying him the chemotherapy agent he needs. And if the family attempts to purchase the drug with their own money, then he will lose complete access to the government system. The full story can be found here: "How the NHS is letting my father die".

(Via Health Care BS.)

Scandlen Defends HSAs

Greg Scandlen of Consumers for Health Care Choices set the record straight on Health Savings Accounts (HSA's) in his recent May 14, 2008 testimony to the Health Subcommittee of the Ways and Means Committee of the US House of Representatives. Given that this is the very committee trying to destroy HSA's for honest Americans, his remarks are especially timely. Here's an excerpt from his testimony:

...Most of what you have been told in the testimony to date is either mistaken, based on suppositions or surveys of uninformed people, or simply irrelevant to CDHC (Consumer Driven Health Care). For example –

* You were told that lower-income people cannot afford the out-of-pocket responsibility that comes with an HSA. You were not told how those same people could afford the higher premiums that are required to avoid that cost. In fact, money that is paid to an insurance company for first-dollar coverage is money that is lost forever. Lowering the premium and using that saving to pay directly for services gives the low-income consumer a chance to save money that would otherwise be lost.

* You were told that the tax break associated with HSAs is unprecedented and a boon to the "wealthy." In fact, the tax treatment of HSAs is precisely the same tax treatment afforded to employer-sponsored health insurance. Premiums are untaxed and benefits are untaxed. It is true that the "wealthy" get a larger tax benefits than the unwealthy, but that is the case for employer-sponsored comprehensive coverage as well as for HSAs. Further, the opportunity to save, say, $2,000 a year that would otherwise go to an insurance company is of far greater benefit to the low-income worker who earns $20,000 a year than to the wealthy executive who makes $200,000, regardless of the tax treatment.

* You were told that "the sick" do not benefit from HSAs because of the higher out-of-pocket responsibility. In fact, both the healthy and the sick have less out-of-pocket exposure with an HSA, a point that was well documented in a recent Health Affairs article. In fact, HSAs limit a patient's out-of-pocket exposure, something that is not true for the Medicare program, for instance.

* You were told that most health care spending takes place above the deductible associated with an HSA, so they will not have "a significant effect on overall spending." This is probably true, but irrelevant. HSAs are having a profound effect on lower-cost routine spending and that is significant by itself. Other strategies are needed for high-cost services with or without an HSA.

* You were told that many people with a high-deductible health plan do not open up an HSA. That, too, is true but irrelevant. The HSA itself is attractive for those people who are able to get a tax benefit from passing their direct payments through the account. Other people, especially those who pay no income taxes, may find it more suitable to simply pay cash at the time of services or to keep their funds in some other, non-HSA, account. Further, there is likely to be a lag time between the point of enrollment and opening up that account. This is not a problem.

* You were told that some people who have to pay directly for care or for prescription drugs may fail to do so to save the money. That also may sometimes be true. But there is never any guarantee that people will always fill their prescriptions and take their medications regardless of the financing scheme. In fact, we know that many health conditions are caused or aggravated by patient behavior under all health insurance systems. But, to the extent that people with CDHC are more knowledgeable and more invested in their own care, their compliance will be better than it is for other benefit programs. And that is precisely what we are seeing in the market.

Given that HSA's are becoming increasingly popular (with over 6 million Americans currently enrolled, an increase of 35% from last year), it's important that lawmakers understand the tremendous benefits they offer for Americans seeking the best value for the health care dollar.

Medicaid Money Laundering

The May 19, 2008 Wall Street Journal reports on some unethical behaviour on the part of Medicaid recipients. However, the bad actors in this case are state governments. Here's the dirty little secret:

The swindle works like this: A state overpays state-run health-care providers, such as county hospitals or nursing homes, for Medicaid benefits far in excess of its typical rates. Then the federal government reimburses the state for "half" of the inflated bills. Once the state bags the extra matching funds, the hospital is required to rebate the extra money it received at the scam's outset. Cash thus makes a round trip from states to providers and back to the states – all to dupe Washington.

...The right word for this is fraud. A corporation caught in this kind of self-dealing – faking payments to extract billions, then laundering the money – would be indicted. In fact, a new industry of contingency-fee consultants has sprung up to help states find and exploit the "ambiguities" in Medicaid's regulatory wasteland. All the feds can do is notice loopholes when they get too expensive and close them, whereupon the cycle starts over.

This is not the primary reason to oppose Medicaid. But it does show the corrosive and corrupting effect that government money has in health care, especially when there are perverse incentives caused by the federal government paying matching funds for state expenditures. The only way to ultimately stop this sort of blatant fraud is to get the government out of health care.

(Via State House Call.)

Tort Reform and Texas

The May 17, 2008 Wall Street Journal reported that tort reform in Texas has brought in a huge influx of physicians, especially in "rural or underserved parts of the state". Here are a few quotes:

Over the past three years, some 7,000 M.D.s have flooded into Texas, many from Tennessee.

Why? Two words: Tort reform.

In 2003 and in 2005, Texas enacted a series of reforms to the state's civil justice system. They are stunning in their success. Texas Medical Liability Trust, one of the largest malpractice insurance companies in the state, has slashed its premiums by 35%, saving doctors some $217 million over four years. There is also a competitive malpractice insurance industry in Texas, with over 30 companies competing for business. This is driving rates down.

The result is an influx of doctors so great that recently the State Board of Medical Examiners couldn't process all the new medical-license applications quickly enough. The board faced a backlog of 3,000 applications. To handle the extra workload, the legislature rushed through an emergency appropriation last year.

Now many of the newly arriving doctors are heading to rural or underserved parts of the state. Four new anesthesiologists have headed to Beaumont, for example. Meanwhile, San Antonio has experienced a 52% growth in the number of new doctors.

If you don't penalize doctors for doing their job, then they'll actually do it!

(Via Amit Ghate.)

EMTALA Effect on Physician Consults

Physician-blogger "911DOC" illustrates the difference that the EMTALA law has had on physician-to-physician consults.

EMTALA stands for "Emergency Medical Treatment and Active Labor Act", and it is a federal law that mandates that in most circumstances hospitals treat patients that come into emergency rooms regardless of ability to pay. Additional information and specifics can be found at:

<http://www.emtala.com/faq.htm>

Rather than quoting 911DOC's piece verbatim, I encourage you to read the whole thing.

(Via KevinMD.)

Medicare For All?

Some "single-payer" advocates say that universal health care could be run along the lines of "Medicare For All". Except for the fact that if we had Medicare for everyone, then physicians would be out of business, as internist Dr. David Dale recently testified to the US Congress:

The practice of medicine is a calling and as such, my colleagues and I have endured more unfair revenue cuts than most businesses would have endured. Yet, a medical practice is also a small business, and there are limits to how much we can endure. We are now at the point where further cuts are not survivable. Just like any small business, our revenue has to exceed costs in order to survive. Despite everything that I have been able to do to cut costs, the margin of profit is now thin, and the proposed greater than 10 percent cut will put us out of business. The only option will be to downsize the practice and stop seeing all Medicare patients. I would hate this, but it will be the only option I have if Congress does not reverse the proposed cuts.

Others would-be reformers want to expand Medicaid to achieve "universal coverage". However, the April 5, 2008 New York Times reported the following from Massachusetts family practitioner Dr. Katherine Atkinson:

Dr. Atkinson, 45, said she paid herself a salary of $110,000 last year. Her insurance reimbursements often do not cover her costs, she said.

"I calculated that every time I have a Medicaid patient, it's like handing them a $20 bill when they leave," she said. "I never went into medicine to get rich, but I never expected to feel as disrespected as I feel. Where is the incentive for a practice like ours?"

These unsustainable economic distortions are predictable consequences of government interference in the free markets for health insurance and health care.

FAQ on Free Market Health Insurance

I've received multiple e-mails in response to my recent letter to the editor in the May 11, 2008 New York Times advocating a free market in health insurance. I appreciate the fact that the correspondents all took the time to read my letter, see my affiliation with Freedom and Individual Rights in Medicine (FIRM), search for the FIRM website, find my e-mail address, and then write me with their comments and questions.

The various correspondents posed a number of good questions about the nature of a free market in health insurance, as well as some more fundamental issues on individual rights and the proper role of government in health care. I've had several stimulating rounds of e-mail discussion with folks from around the country. And even though we didn't always agree on some important issues, all of the e-mails I received were polite and articulate, and I appreciated the many thoughtful remarks from all of the writers.

One correspondent recommended that I post my responses online so that other interested parties would have a place to read a more fully developed and explicit explanation of the ideas related to a free market in health insurance. I thought that was an excellent suggestion. Hence, I've paraphrased and collated an essentialized set of questions (and my subsequent responses) in the form of this brief FAQ.

===========

Q1) In a free market for health insurance, should insurers be able to exclude someone based on a pre-existing condition?

Q2) Why should whether I live or die depend on whether an insurance company finds it too costly to pay for my care? Should my fate be determined by whether a corporation finds it profitable?

Q3) How would a free market guarantee that all Americans will have necessary health coverage?

Q4) What if someone has a bad disease through no fault of his own, can't afford the treatment, and no insurance company will cover him? Who will pay for his care?

Q5) Isn't the purpose of a government to promote the common welfare of all citizens?

Q6) Your position is very harsh and Darwinian. If you were dying of cancer and could not afford treatment, would you really say to yourself, "Oh well, this is my random bad luck, no one has an obligation to treat me and so I must die"?

Q7) Isn't it my social obligation to subsidize the health care of those who can't afford it?

Q8) I agree that health care is not a "right", but isn't it moral for the US government to raise taxes to improve the overall welfare of the nation? Universal health care (ideally administered through a free-market mechanism to the greatest extent possible) would be a good use of that power.

= = = = = = = = = =

Q1) In a free market for health insurance, should insurers be able to exclude someone based on a pre-existing condition?

A1) Yes. In a free market, insurers (like any other businesses or individuals) are entitled to set whatever terms they wish for the products they wish to sell. Similarly, customers can choose to accept those terms, decline them, or negotiate with them for some other mutually agreed-upon alternative.

It's also important to note that our current system is far from a free market -- at best it's semi-free. Insurance companies are under numerous government constraints about what sorts of services they must/must not offer, who they can/cannot exclude, what sorts of prices they can charge, when they must accept customers, etc. For instance, some states require that a healthy 22-year old man must pay the same premium as a 60-year old man with multiple chronic health problems. Some states require that insurance companies that offer small group policies must accept every group that applies and must accept every member of the group regardless of lifestyle choice or health condition. Constraints such as these make it difficult for customers to purchase insurance in the first place. These constraints are the cause of our current problems and it is those constraints that I wish to see repealed. (For more details, please refer to "Moral Health Care Vs. 'Universal Health Care'" by Lin Zinser and myself.)

Q2) Why should whether I live or die depend on whether an insurance company finds it too costly to pay for my care? Should my fate be determined by whether a corporation finds it profitable?

A2) One should reverse that question. Should an insurance company be obliged to run at a loss? For example, there are many people who wish to force insurers to cover expensive treatments that are of minimal (if any) proven efficacy, such as bone marrow transplant in patients with late-stage breast cancer. If or when such laws are passed, insurance companies don't survive for long or else they pull out of local markets where such laws are in force, thus depriving all the other residents of that locality the possibility of purchasing insurance from that company. If an insurance company cannot be profitable, then they can't provide coverage for anyone.

More fundamentally, should an insurance company be obliged to pay for your care purely because you need it, regardless of the cost to them? The fact that you have a need does not create an automatic obligation on others to fulfill that need.

Q3) How would a free market guarantee that all Americans will have necessary health coverage?

A3) There's a premise in your question that I must disagree with - namely that it's the government's responsibility to guarantee health coverage for all Americans. It is not, any more than it's the proper role of the government to guarantee that every American has a job or a car. Health care is a need, but that's not the same thing as a right.

A right is a freedom of action that an individual possesses, such as the right to free speech. Rights impose no obligations on other people, other than the negative obligation to leave you alone. Rights are not automatic claims on the goods and services produced by others -- that is just state-sanctioned theft.

To further concretize the difference between a need and a right, consider an innocent child with a rare disease who will die unless he gets a bone marrow transplant from a matching donor. The only potential donor with the proper tissue match is someone who doesn't want to donate, for whatever reason (maybe he's scared of needles, maybe he's a Jehovah's Witness, maybe he's just an ornery old cuss). We'll also stipulate that the potential donor understands exactly what is at stake for the child, and that he correctly understands that donating bone marrow is a very safe procedure that would involve a few minutes of tolerable physical pain and a couple of hours of his time, but otherwise wouldn't impair his life afterwards. The fact that the child will die without that bone marrow does not mean that the child's family (or anyone else) has the right to strap that potential donor down and forcibly take a marrow sample from him against his will. The child's need does not constitute a right to that other man's bone marrow.

Q4) What if someone has a bad disease through no fault of his own, can't afford the treatment, and no insurance company will cover him? Who will pay for his care?

A4) The short answer is, "Anyone who wishes to do so."

If someone incurs an unfortunate random hardship (even though it is no fault of his own), it does not create an automatic obligation for anyone else to pay for it. Depending on the exact circumstances, I might be willing to voluntarily donate my own time/money to help him out. For example, in my capacity as a physician, I have personally waived my own professional fee more times than I can count out of voluntary charity for patients whom I've thought were worthy recipients. The same is true for nearly every other physician I know. And in general, Americans have been extraordinarily benevolent about voluntarily donating their time and money for innocent victims of natural disasters, disease, and man-made harms (such as 9-11 or the Oklahoma City bombings).

So if someone developed a bad disease that would cost him $100k, and either didn't get insurance or couldn't get insurance, then he essentially has to rely on the voluntary charity of others. His need (genuine as it may be), does not create a right to someone else's property or time.

This isn't limited to health care. The same would be true if an unfortunate homeowner didn't or couldn't purchase flood insurance, then his house was completely destroyed by a freak 100-year flood. His hardship does not constitute any sort of automatic claim on others' assets. Again, I (and many others) might be willing to be offer voluntary charity to help him out. But if no one is voluntarily willing to help him out, then he loses his house.

Furthermore, the very fact that such examples tug at the sympathies of normal decent Americans also means that those Americans will be forthcoming with voluntary charity. And I fully support giving to charities that are consistent with my values and priorities.

Q5) Isn't the purpose of a government to promote the common welfare of all citizens?

A5) No, the purpose of government is to protect individual rights - specifically to protect individuals from the predations of others who would use force to deprive men of their rights to life, liberty, and the pursuit of happiness. This includes protecting honest men from external enemies who would wage war on us as well as internal criminals who would use force to steal, murder, commit rape, etc. Hence the purpose of a government is to create and enforce conditions where men and women can freely and voluntarily exchange ideas, goods, and services to their mutual benefit according to their best rational judgment, without fear that someone else will try to forcibly rob them of those benefits. Man's essential nature requires that he uses his reasoning mind to create the values necessary for sustaining his life. Hence, protecting his right to the free use of his mind (and the right to voluntarily trade with others for the products of their thought and effort free from compulsion) is the basic function of a government.

When a government ceases to be the protector of individual rights and instead becomes one of the chief violators, then it undermines the very reason for its existence. It's akin to a government claiming that "we need to protect the freedoms of Americans from enemies abroad", and then imposing a military draft on young Americans to fight in a war (and violating those draftees' freedom and rights in the process).

Q6) Your position is very harsh and Darwinian. If you were dying of cancer and could not afford treatment, would you really say to yourself, "Oh well, this is my random bad luck, no one has an obligation to treat me and so I must die"?

A6) Yes. My life is my own responsibility. Others may choose to voluntarily help me if am in need, but they should not be legally obligated to do so (i.e., they should not be forced by the government to help me against their will or punished by the government for failing to help me.)

If I needed $100,000 for a life-saving cancer treatment but couldn't afford it, I would of course do everything legal and moral to try to live. I might borrow money from friends and family, I might ask for charitable contributions, I might sign up for clinical trials of experimental drugs, etc. But I wouldn't hack into my neighbor's bank account and steal that money from his kids' college fund. Or steal $100 each from a thousand of my neighbors. Or ask the government to take it from my neighbors by force.

Similarly, if my next-door neighbor was the only possible matching bone marrow donor to cure my rare disease but he didn't want to donate a sample to save my life, I wouldn't strap him down and take it from him by force. If I had a brain tumor that required a delicate operation in order for me to live, and the only neurosurgeon with the necessary skill was unwilling to do the procedure, I wouldn't force him to perform the surgery at gunpoint (or have the government force him).

That's not being Darwinian -- that's just being moral. Of course, I would prefer to live rather than die of a terrible disease. But I wouldn't want to live if it costs me my integrity and my self-respect. A man can't "save" his life at the price of sacrificing his morality, since morality is the very means that a man survives as a man.

Q7) Isn't it my social obligation to subsidize the health care of those who can't afford it?

A7) No, you have no positive binding obligation to help others although of course you have the voluntary choice. Nor is this limited to health care -- it's an application of a more general principle. If I saw a child drowning in the ocean, in all likelihood I would try to save him if I thought I had a reasonable chance of success. And nearly everyone I know would feel similarly. But if a different passerby chose not to make the attempt for whatever reason, then that's his choice to make and one which I have to respect. He has the right to decide whether he wishes to try or not. Conversely, the drowning child cannot demand that a random passerby must help him as a matter of right -- only out of voluntary charity. If it turned out that a passerby was a strong swimmer but refused to help because he was a total jerk, then I might hold him up to public moral censure -- maybe he'd lose his friends, his job, and the respect of his peers. But the government should not send him to jail for failing to take a positive action that could have saved the child's life (assuming that he wasn't the cause of the child's drowning in the first place).

Just as a passerby should not (and currently does not) have a legally binding positive obligation to help a drowning child even if he were capable of doing so at no cost to himself, he should not be obligated by law to pay for my cancer treatment. There's a crucially important difference between him having the negative obligations not to steal from me or not to deprive me of freedom of speech (i.e., to respect my rights), and any purported positive obligations to pay for my health care or save me from an accident. Again, my right to free speech implies only the negative obligation on his part not to violate it -- it does not require a positive action on his part. On the other hand, any alleged entitlement rights such as a "right" to health care is essentially a demand by me for some forced positive action from others.

Q8) I agree that health care is not a "right", but isn't it moral for the US government to raise taxes to improve the overall welfare of the nation? Universal health care (ideally administered through a free-market mechanism to the greatest extent possible) would be a good use of that power.

A8) If we agree that there is no "right" to health care, then by what right does a government force one citizen to pay for the care of another citizen? That's what any system of "universal care" essentially amounts to. What you consider a moral use of government power is something I consider deeply immoral. And the experience of other nations shows that any attempted system of universal care ends up destroying the free market that makes quality health care possible.

At a practical level, if I needed major medical care and couldn't afford it, I'd much rather rely on a pure free market plus voluntary charity from my fellow Americans, than a British-style system of government "universal care".

Although critics of the free market regularly claim that it would lead to "people dying in the streets", this would not actually happen unless Americans were far more impoverished and callous than they are today. The free market is our best protection from that scenario. And if Americans ever became that impoverished and callous, then no system of government-run universal care would be sustainable or even possible.

On the other hand, the nationalized health systems routinely deny care to people who have theoretical "universal coverage". Those patients do end up dying because of the allegedly "compassionate" government system.

Islam and Health Insurance

Health care debates sure are different in other countries! Here is an excerpt from the April 6, 2008 India Times:

Health Insurance illegal: Islamic body

NEW DELHI: Comparing the benefits of health insurance policy to gambling, key Islamic organisations have termed the policies as "illegal" and directed Muslims to keep away from them.

At a seminar to deliberate whether insuring health was permissible under Islamic law Shariat, the Islamic Fiqh Academy (India) decided that availing such policies was illegal.

Representatives from around 300 Madrasas, including Darul Uloom Deoband, Jamiat Islami participated in the three-day meet, where they reached a conclusion that seeking insurance cover was only another form of gambling.

Health insurance schemes have turned a noble service into a business activity, hence under Islam it is not permitted, they said...

(Via Howard Roerig.)

The wreck of the good ship, EMTALA

Physician-blogger Edwin Leap has some pertinent observations about the EMTALA law and the so-called unintended consequences. Here are a few excerpts:

EMTALA, the Emergency Medical Treatment and Active Labor Act, was passed in 1986. For those who aren't familiar with yet another acronym, EMTALA is a federal law that was enacted to keep poor, uninsured patients from being 'dumped' on indigent-care hospitals, or any other facility, for financial reasons. Although it was a good idea, it soon grew fangs, tentacles, claws, rose up to several hundred stories in height and developed a surly attitude and bad breath. It is, in fact, one of the largest unfunded mandates the US legislative branch has ever gifted on its subjects.

For those of us who practice emergency medicine, and by now any medicine in a hospital that accepts Medicare payments, no one can be turned away for financial reasons. ...[S]urgeons, neurologists, cardiologists, otolaryngologists and just about every other 'ist' is burdened with the same issue. The people they see in the ER, admit to the floor, or take to surgery or the cardiac cath lab will frequently be unable to pay anything, but then still be able to sue for millions of dollars. It's hard for specialists to run practices when large numbers of patients pay nothing for their care. I understand their issues here. I don't blame them a bit for being angry.

...Across America, small and medium sized emergency departments and hospitals are closing. Trauma centers and teaching hospitals are struggling and overwhelmed. And specialists are simply leaving hospital care in order to avoid being on call, and the attendant EMTALA responsibilities that call entails. They’re working in surgery/outpatient centers. They’re leaving the setting where they are compelled to give care away, and where they are constantly overwhelmed by more and more demand, less and less payment.

...But here's the final irony. EMTALA has created the very conditions it sought to avoid. Now, with specialists unavailable, hospitals full, transfers always difficult and no lack of genuinely sick and dying patients, there’s often 1) no one to care for them and 2) no place to put or send them. EMTALA, the federal mandate to save the poor from sickness has begun to crumble at its foundations, and leave untold numbers of patients, poor and paying, without care.

...You might make the argument that nationalized health-care can fix this with money, but as we see in so many problems, money doesn't do much. Money in the school system still leaves us with staggering drop-out rates and high-school illiteracy. Money, in the hands of an irresistible, un-yielding, entitlement crazy, grandiosity-leaning government system will probably result in an even greater disaster than EMTALA.

My suggestion? Get the government out of it all. If you do, the poor will likely get better care, since we'll be able to screen out and turn away those who abuse their privilege. And doctors, that pesky, generally unimportant part of the medical equation, will actually return to hospitals and be available; out of a sense of duty, professionalism, entrepreneurial spirit and genuine compassion without federal compulsion.

His points are all good ones. They are all consequences of the fact that forcing doctors to provide free care is just a form of theft and/or slavery.

Hsieh LTE in New York Times

The May 11, 2008 New York Times printed my LTE in response to their earlier article from May 4, 2008, "Even the Insured Feel the Strain of Health Costs". My letter is the fourth one down on this page, and they include a mention of FIRM:

To the Editor:

The skyrocketing costs of health insurance are the result of onerous government regulations, such as mandatory benefits.

Many states require insurance plans to include benefits like chiropractor care or in vitro fertilization. Such mandatory benefits raise insurance costs by about 20 percent to 50 percent, according to the Council for Affordable Health Insurance.

More fundamentally, mandated benefits violate an individual’s right to contract freely with insurers and providers according to his rational judgment for his best interest. Instead, a bureaucrat decides how the individual must spend his own money.

Eliminating these mandates would make health insurance available to millions of Americans who desperately want it but cannot now afford it.

The proper solution to the health insurance crisis is not more government, but a free market.

Paul Hsieh
Sedalia, Colo., May 4, 2008

The writer, a doctor, is co-founder, Freedom and Individual Rights in Medicine.

More Canadian Rationing

According to the May 5, 2008 Globe and Mail, Canadian women and newborn babies are suffering due to rationing of neonatal care:

More than 100 Canadian women with high-risk pregnancies have been sent to United States hospitals over the past year – in what a doctors' group attributes to the lack of a national birthing plan. The problem has peaked, with British Columbia and Ontario each sending a record number of women to U.S. neonatal intensive care units (NICUs).

..."Neonatologists are very stretched right now," Dr. Lalonde [Andre Lalonde, executive vice-president of the Society of Obstetricians and Gynaecologists of Canada] said in a telephone interview from Ottawa. "We're so stretched, it's kind of dangerous."

..."We're transferring babies across the province, in all directions, to try to find an extra bed for the next potential birth or for any baby already born," Dr. Chessex [Philippe Chessex, division head of neonatology for B.C. Women's Hospital & Health Centre] said in a telephone interview from Vancouver. "We now have babies who have been transferred up to six times after leaving here before reaching home."

David Catron adds the following personal note:

This story resonated with me because, as it happens, my eldest daughter was a premie. She was a "thirty-week baby," fifteen inches long and weighing in at a little less than three pounds.

And how did she fare in the evil "profit-driven" U.S. system? Well, there was a bed for her ...about 100 yards away. And a neonatologist was on hand to manage her care from the moment she took her first breath.

What kind of moron would want to exchange a system like that for a pig's breakfast like the Canadian system?

More Market Benefits from Wal-Mart

Consumers continue to benefit from the marketplace:

Wal-Mart expands low-price drug program

Wal-Mart Stores Inc., the world's largest retailer, announced Monday it would expand its discounted prescription drug program to offer 90-day supplies for $10 and add several women's medications at a discount. It also said it would lower the price of more than 1,000 over-the-counter drugs.

The move marks the third phase of a company program that began in 2006 to provide a 30-day supply of generic prescription drugs for $4. The Bentonville-based company said the program has saved customers more than $1 billion.

...While stressing that the expansion was designed to help customers at a time of exorbitant health-care costs and difficult economic times, [senior vice president John] Agwunobi said the program has worked in everyone's favor.

"This is the time for us now to begin building capacity," he said. "It offers (customers') employers potential savings. It offers the customers significant savings. It also offers us the ability to add capacity to our pharmacies without adding people."

Wright LTE on Government and Health Care

The May 2, 2008 Rocky Mountain News posted the following online OpEd by Chuck Wright. Here are some excerpts:

Health-care market dominated by federal government

...Government interference in the health-care marketplace is the elephant-in-the-room that supporters of single-payer health care ignore. The negative unintended consequences caused by massive government involvement in health care should be part of the discussion, but Goodman, like so many other advocates of single-payer, makes no mention of that.

Politicians should take the blame for the health-care mess that they created. Instead, they blame the market and propose that the solution is even more political control of medicine. But more political control is not the solution. Political control is the problem!

He advocates the following solutions:

...End Medicare and Medicaid. End bans on the importation of drugs from other countries. Abolish the FDA. End health-care mandates and government bureaucratic red tape.

Instead, expand Health Care Savings accounts. Make health care expenses 100% tax deductible. Allow health-care consumers to control all of their health-care dollars and decisions. Consumers will be better off and health care will be more affordable (e.g., there will be Walmarts and Costcos of heath care) when politicians are not in control of health care.

Special Interests Salivating Over Mandatory Insurance

Brian Schwartz at PatientPower reports that special interest groups are already planning on loading up Colorado's proposed mandatory insurance with obligatory "benefits" that will raise the costs -- despite the fact that this was supposed to be a lean "value" plan with minimal mandates.

This is one reason why the Massachusetts plan failed. We must not adopt this system in Colorado.

How Bad is the British National Health Service?

According to The Sun, "ILLEGAL immigrants are sneaking OUT of Britain because they are sick of our weather and hospitals."

(Via Socialized Medicine.)

Schwartz LTE On Insurance Costs

The May 6, 2008 Rocky Mountain News printed the following LTE by Brian Schwartz on insurance costs:

Insurance headed in wrong direction

Darla Stuart ("Break for the insured," Speakout, April 22) writes that since "Colorado's citizens and businesses deserve to know the real cost of the health-care insurance products they are buying," politicians should force insurance companies to provide "transparency." But we really deserve to know how politicians have inflated insurance costs in the first place.

Tax policy encourages employer-based insurance, which essentially chains us to one insurer. Shielded from competition, insurers need not compete on price very much.

State-level bureaucrats succumb to special interests by burdening small-group policies with many benefits we do not need. The Congressional Budget Office reports that such mandated benefits increase premiums by at least 6 percent, and possibly more than 10 percent. It also reports that community rating laws increase premiums by 9 percent.

What's becoming increasingly transparent is where allegedly well-intentioned controls like House Bill 1389 will lead: politician-controlled health care and insurance where bureaucrats make decisions that rightfully belong to us and our physicians.

Nurses strike in Sweden

Currently, Swedish nurses are in the third week of a strike. This means at minimum delays and inconvenience for patients. Accident and emergency departments at the major hospitals in Stockholm close for a day each, meaning delays for patients without prior appointments. The first accident department to close in Stockholm was at St Goran's hospital, Sweden's fourth largest emergency hospital according to this article.

The first members of the Association of Health Professionals (Vårdförbundet) walked off the job April 21 after their demands for higher pay were not met. This Swedish newspaper article points out that Swedish newspaper editorials have devoted much time to analyzing this strike, and states that nurses' have had a better wage growth over the last 10 to 15 years than most other public sector employees at the county-level.

These strikes are not unusual in countries with government-run medical care. According to this article, Denmark is in the middle of a health care workers' strike, and Finland nurses threatened a similar action last year. In Denmark, around 65,000 nurses, midwives and laboratory assistants remain on strike, while retirement home workers and preschool workers have ended their strike. This strike over wages has led to some 40,000 canceled operations as of its second week, and is expected to be long-lasting.

More Gorman Fact Checking

Linda Gorman continues her fine work debunking bogus claims from Families USA.

Seven Simple Rules for Health Care Reform

Richard E. Ralston, Executive Director of Americans for Free Choice in Medicine, has the following nice piece on genuine health care reform:

Seven Simple Rules for Health Care Reform
by Richard E. Ralston (April 30, 2008)

The status quo in American health care is indefensible—an expensive regulatory and bureaucratic mess. What that calls for, however, is not more layers of regulation and complicated mandates. Nor should government take over health care completely and run it as part of a political spoils system.

State government proposals have proven too expensive in California and have collapsed. In Massachusetts expenses for mandatory insurance after one year are spiraling out of control faster than budgets can be printed. New recommendations in Colorado and elsewhere are being shelved because they are also too expensive to be considered at present. The alternative is one of elegance and simplicity: adopt changes now that require no new government expense, but that remove regulatory complexity and allow freedom of choice. To achieve that end, we need to adopt a few simple rules.

The first simple rule: Make all medical services, insurance and personal savings for such expenses exempt from all federal, state and local income and payroll taxes. Those who complain about the cost of medical care and insurance must be confronted with the fact that if we cannot afford medical care, we surely cannot afford to pay taxes on the money we set aside for it.

The second simple rule: Allow an individual or corporate tax deduction equal to double the value of the service for all charity care by medical care providers. At one time America had a vigorous network of private charity care, which was largely destroyed by the government barging in. We need to restore that environment of private charity, which was more efficient, effective and compassionate.

The third simple rule: Pass legislation now proposed in the U.S. Congress that would give every individual or business the ability to purchase insurance in a national market, from insurance companies in any state. That would allow for ownership of health insurance that is more affordable and can follow individuals from job to job and state to state. The increased competition between insurance companies would restrain the cost of insurance.

The fourth simple rule: Allow the purchase of basic health insurance with high deductibles and low premiums that covers major illness or injury and annual exams, in conjunction with tax-free accounts for out-of-pocket expenses, such as deductibles. That, more than anything, would make insurance premiums more affordable for Americans who fear the financial consequences of health misfortune.

The fifth simple rule: Broaden the availability of optional coverage provided by Medicare Advantage, but allow for additional tax-deductible premiums to be paid by those seniors who elect such options. More choices from more options should be available to retirees—but not paid for by taxpayers. This would allow for expanded and more efficient coverage, and reintroduce an element of competition to those who seek to provide health care to seniors.

The sixth simple rule: Allow Medicare patients to utilize their Health Savings Accounts to pay for services from their Medicare physicians. This could bring thousands of doctors back into the Medicare program overnight and eliminate the ridiculous and unjust prohibition on those who want to spend their own money on their medical care.

The seventh simple rule: Limit non-economic or punitive damages in all malpractice or other litigation against medical providers or drug and medical equipment firms to a maximum of $250,000 (indexed for inflation). This would wring the bonanza for a few law firms out of the current ocean of litigation—and the high cost of "defensive medicine" now practiced by providers as protection against such legal extortion. The effect would be a reduction in the cost of medical care and insurance for everyone.

While these changes would result in more efficient, affordable and uncomplicated health care, achieving them will be no simple matter—thanks to those who oppose any improvements as an obstacle to massive new government controls. But we can stop new regulations, mandates, taxes, government spending and administrative agencies. We can uphold the rational alternative—freedom and personal choice—which can improve the quality and affordability of health care without government spending.

Gorman and Donze LTEs in the Rocky Mountain News

The May 3, 2008 Rocky Mountain News printed Linda Gorman's LTE debunking false information from Families USA:

Yet another bogus Families USA story
Linda Gorman, Director, Health Care Policy Center, Independence Institute, Golden

On April 22, Rocky Mountain News.com carried "Report ties Medicaid cuts to job losses". The story simply repeated the substance of a press release from Families USA.

In fact, the Bush administration has not proposed Medicaid budget cuts. Its FY 2009 budget proposal increases Medicaid spending by $12 billion to $13 billion over expected spending in FY 2008. This is in addition to FY 2005-2007 spending increases of about 10 percent. What the Bush administration is proposing is a slightly smaller budget increase, about 7.1 percent rather than 7.4 percent. The 2009 budget numbers are available on Page 61 at http://www.hhs.gov/budget/ 09budget/2009BudgetInBrief.pdf.

If Families USA were a real family making $50,000 a year, these budget numbers would be the equivalent of having an expected windfall of $53,700 reduced to $53,550.

Families USA is known for approaching health care with a well-defined ideological slant and for producing lousy numbers on all manner of health-care issues. One hopes that, next time, the Rocky will take the Families USA reputation for inaccuracy into account, and that it will check before it unquestioningly reproduces their press releases as news.

The May 2, 2008 Rocky Mountain News posted the following LTE by Terry Donze on the government's role in rising health insurance costs:

Legislature has made health insurance so high
Terry W. Donze, Wheat Ridge

RE: Fair Act, HB-1389, RMN, 04-24 and 25-08 Regarding Colorado’s health insurance, Representative Morgan Carroll asks, "Why are our premiums higher?" All she needs to do is get the plank out of her eye and look in the mirror.

The legislature has mandated so many items (40+ and counting) for the health insurance industry to cover, what does she expect? They have run several health insurance providers out of Colorado over the past several years, such that it is extremely difficult to find affordable individual coverage because of limited competition.

Yet more regulation as proposed by her will only add to the costs, not only in higher premiums but also in higher taxes to pay for yet more government.

If she is really interested in bringing costs down, instead of more regulation Carroll should be demanding rescission of the mandates already on the books.

For Better Health, Repeal Political Controls

Ari Armstrong, guest writer at the Independence Institute, has written the following excellent piece on affordable insurance. It also appears here on the Independence Institute website:

For Better Health, Repeal Political Controls

My wife and I pay $132 per month total for high-deductible health insurance, hundreds of dollars less than we would pay for comprehensive insurance. Our goal is to never need to make an insurance claim. We pay for all of our routine medical care -- doctor visits, eye glasses, dental work, prescriptions -- out of pocket, and we like it that way.

Our medical expenses come out of our Health Savings Account (HSA), which means that it's all pre-tax money. Unfortunately for us, various enemies of HSAs have been trying to undermine them at the national level.

By paying less for high-deductible insurance, we've been able to pay off debts faster and prepare for a family, something that has been difficult given our high tax burdens.

If Colorado wants to keep and attract young working families, the legislature ought not further muck up health insurance by loading in a bunch of new expensive mandates, Nor should the legislature require such couples to further subsidize others through higher taxes and/or insurance premiums.

If the legislature wants to make health insurance more affordable for more people, it should repeal existing political controls that have driven up insurance costs and priced some people out of the market.

However, we should realize that the broader problem with health insurance is that, because of federal tax policy, most insurance is tied to one's job. Lose your job, lose your insurance. Because of the tax benefits of "paying" people with insurance coverage, such insurance is really pre-paid medical care that discourages economic provision and consumption of health care.

Our society has largely forgotten the proper purpose of insurance when it comes to health. Most people remain healthy into middle age, when risks for various diseases start to increase. Through insurance, we voluntarily pool our resources to pay for the care of the few who get unlucky. If federal policy had not driven health insurance off track, we'd buy insurance when we're young at a low rate and keep the same policy long-term, and we'd also pay for routine and expected expenses directly, which would encourage healthy competition.

All of the commonly cited problems with medicine have been caused by decades of political intervention in medicine. For details, see "Moral Health Care vs. 'Universal Health Care'," by Lin Zinser and Paul Hsieh, MD, at WeStandFirm.org.

Yet, rather than act to repeal the controls that are the cause of the problems, many of today's politicians want to impose still more controls. If they succeed, the result will be worse health care that costs even more.

Here in Colorado, the legislature has considered everything but repealing the controls that are the cause of the problems. In 2006, then-Governor Bill Owens signed into law Senate Bill 208 to create the Blue Ribbon Commission for Healthcare Reform. That commission rejected the only free-market proposal and recommended such measures as massively expanded taxes and forcing everybody to buy insurance. The Commission's recommendations basically went nowhere.

But apparently one failed commission deserves another, so State Senator Bob Hagedorn is currently pushing Bill 217. If the bill passes, later this year Governor Bill Ritter will appoint "a panel of expert advisors" to come up with a bunch of new political controls for the legislature to consider in the future.

Originally, the bill encouraged the "panel of experts" to assume that all Coloradans would be forced to purchase politician-approved health insurance. The amended bill lists that only as an option.

Forcing people to buy insurance would cause two basic problems. First, you can't force somebody to buy something they can't afford, so any such plan must accompany massive tax hikes and subsidies. Second, once politicians force you to buy something, special-interest groups will constantly fight to include their pet service as part of the forced package, whether you want it or not. The result will be continual pressure to expand the scope of the forced insurance and make it ever more costly.

Much of the bill describes the creation of politician-approved "value benefit plans" for health insurance that would be subject to a variety of restrictions and substantially subsidized through taxes.

Yet consumers and providers have the right to decide through voluntary exchange what plans constitute a value to them. We don't need a new bureaucratic commission; we need liberty.

Ari Armstrong, a guest writer for the Independence Institute, blogs at FreeColorado.com.

Gorman on Mandates and SB217

The April 27, 2008 Pueblo Chieftain printed the following OpEd from Linda Gorman of the Independence Institute:

Mandate repeats mistakes of other states

With Senate Bill 217, which has passed the Colorado Senate and awaits House action, state lawmakers who believe that higher taxes and more spending constitute health care reform have sunk to new depths of legislative trickery.

If SB217 passes, the basic laws that created the failing Massachusetts health care plan could take effect in Colorado in as little as 24 months. Sponsored by Sen. Bob Hagedorn, D-Aurora, and Rep. Anne McGihon, D-Denver, the bill creates a politically appointed panel to create a set of recommendations for rules governing Colorado health care. The rules prepare the way for the panel to recommend that every individual in Colorado purchase state-defined "credible" health insurance. State tax law would "enforce the requirement."

Because even legislators know they cannot force people who have no money to buy health insurance, the panel likely will move to create a subsidy program to "assist low-income individuals and families in paying the premium costs for health insurance."

Judging from the recommendations of the Colorado Blue Ribbon Commission on Health Care Reform, this is an expensive proposition.

The commission recommended that families of four making up to $84,800 be eligible for low-income subsidies that would increase state spending by an estimated $2.3 billion. In a blow to those who peddle individual mandates as a way for the insured to save money, it estimated the subsidies would save about $777 million in spending on the uninsured.

SB217 creates a Connector program, "health marts" "through which an individual eligible for the state subsidy may select" one of the state designed "Value Benefit Plans (VBP)." The health insurance offered through VBPs would be designed by a government committee.

People who would buy "Value Benefit Plans" insurance would have to pay with their premium dollars for some odd things, like "educational materials" that show people how to use the Internet to get health information.

The Hagedorn-McGihon bill envisions prohibiting these plans from helping people to save money on health insurance premiums by paying cash for routine preventive care. It seeks to mandate preventive care and an unspecified grab-bag of wellness programs. The plans also would "encourage" insurers to use a "pay-for-performance system for reimbursing health care providers" and "evidence-based medicine."

Pay-for-performance measures may not be safe for patients.

Experts at a 2001 American Society of Transplantation conference were so concerned about the effects of forced switching from brand name to generic immunosuppressive drugs that they called for patients to be taught to inform their physicians of any switch to or among generic alternatives.

Meanwhile, the pay-for-performance program at Blue Cross Blue Shield of Michigan paid physicians $100 to switch patients from brand name drugs to generics.

SB217 contemplates the Colorado panel finding "a dedicated source of revenue" to support the new programs. But it also says the new revenues may be spent on "the premium subsidy program or other new state costs," so this dedication is a smoke screen. In practice, the new revenues will fund whatever the Legislature fancies. If the governor agrees with the expert recommendations, and he will, SB217 would require that they be submitted to the Legislature on the "third legislative day" of the 2010 session. They then would pass through the Legislature like grass through a goose. People in favor of tax and spend health care reform know that the more voters know the less they like tax and spend reform. Speedy passage limits public debate.

Speedy passage reduces the possibility that people might find out that individual mandates are failing in Massachusetts, where about 20 percent of the uninsured already have been exempted because buying insurance costs them too much. They might be reminded that insurance is not health care, especially when Massachusetts controls costs by cutting payments to doctors, creating a shortage of doctors in the program and ridiculously long waits for care.

They might also be reminded that government officials routinely understate program costs. When campaigning for the Massachusetts plan, then-Gov. Mitt Romney said it would cost $125 million. After it passed in April 2006, his administration issued bonding documents estimating costs at $276 million. As of January 2008, Massachusetts Gov. Deval Patrick was requesting $869 million to cover estimated 2009 costs. (Seven times the original estimate!)

Like Gov. Romney on costs, Colorado politicians mislead the public by saying there will be no mandates this year. In February, Sen. Hagedorn reportedly told the Rocky Mountain News, "There's no mandates coming down this session, pure and simple."

Sen. Hagedorn must have changed his mind in the last two months. He undoubtedly knows his bill contains a program that will impose a health insurance mandate in 2010.

By hiding under an expert panel subject to gubernatorial approval two years from now, he gets to have his mandate and deny it, too.

Linda Gorman is director of the Health Care Policy Center for the Independence Institute, a free-market think tank in Golden. She co-authored the minority report of Colorado's 208 Commission on Health Care Reform.