Friday, July 31, 2009

Brook: Why Are We Moving Toward Socialized Medicine?

Yaron Brook asks the question that all Americans should be asking, "Why Are We Moving Toward Socialized Medicine?"

Here's his OpEd in full:
Why Are We Moving Toward Socialized Medicine?

By Yaron Brook

Government intervention in medicine is wrecking American health care. Nearly half of all spending on health care in America is already government spending. Yet President Obama's "reforms" will only expand that intervention.

Prior to the government's entrance into medicine, health care was regarded as a product to be traded voluntarily on a free market--no different from food, clothing, or any other important good or service. Medical providers competed to provide the best quality services at the lowest possible prices. Virtually all Americans could afford basic health care, while those few who could not were able to rely on abundant private charity.

Had this freedom been allowed to endure, Americans' rising productivity would have afforded them better and better health care, just as, today, we buy better and more varied food and clothing than people did a century ago. There would be no crisis of affordability, as there isn't for food or clothing.

But by the time Medicare and Medicaid were enacted in 1965, this view of health care as an economic product--for which each individual must assume responsibility--had given way to a view of health care as a "right," an unearned "entitlement," to be provided at others' expense.

This entitlement mentality fueled the rise of our current third-party-payer system, a blend of government programs, such as Medicare and Medicaid, together with government-controlled employer-based health insurance (itself spawned by perverse tax incentives during the wage and price controls of World War II).

The resulting system aimed to relieve the individual of the "burden" of paying for his own health care by coercively imposing its costs on his neighbors. Today, for every dollar's worth of hospital care a patient consumes, that patient pays only about 3 cents out of pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14 percent.

Shifting the responsibility for health care costs away from the individuals who accrue them led to an explosion in spending. In a system in which someone else is footing the bill, consumers, encouraged to regard health care as a "right," demand medical services without having to consider their real price. When, through the 1970s and 1980s, this artificially inflated consumer demand sent expenditures soaring out of control, the government cracked down by enacting further coercive measures: price controls on medical services, cuts to medical benefits, and a crushing burden of regulations on every aspect of the health care system.

As each new intervention further distorted the health care market, driving up costs and lowering quality, belligerent voices demanded still further interventions to preserve the "right" to health care: from regulations mandating various forms of insurance coverage to Bush’s massive prescription drug bill.

The solution to this ongoing crisis is to recognize that the very idea of a "right" to health care is a perversion. There can be no such thing as a "right" to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.

You are free to see a doctor and pay him for his services--no one may forcibly prevent you from doing so. But you do not have a "right" to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.

Real and lasting solutions to our health care problems require a rejection of the entitlement mentality in favor of a proper conception of rights. This would provide the moral basis for breaking the regulatory chains stifling the medical industry; for lifting the tax and regulatory incentives fueling our dysfunctional, employer-based insurance system; for inaugurating a gradual phase-out of all government health care programs, especially Medicare and Medicaid; and for restoring a true free market in medical care.

Such sweeping reforms would unleash the power of capitalism in the medical industry. They would provide the freedom for entrepreneurs motivated by profit to compete with each other to offer the best quality medical services at the lowest prices, driving innovation and bringing affordable medical care, once again, into the reach of all Americans.

Yaron Brook is the executive director of the Ayn Rand Center for Individual Rights in Washington, D.C. ARC is a division of the Ayn Rand Institute and promotes Objectivism, the philosophy of Ayn Rand--author of Atlas Shrugged and The Fountainhead.
If you agree with him, then you should tell your elected officials.

Wednesday, July 29, 2009

Ralston: Obamacare's Attack on Doctors

The July 17, 2009 Orange County Register published the following OpEd by Richard Ralston (executive director of Americans for Free Choice in Medicine) entitled, "Obamacare's Attack on Doctors".

Ralston makes two important points:
...The first and most obvious is that reform advocates in government want the legal power to prevent doctors from deciding "what medical or surgical treatments are needed." They think that role must be reserved for politicians and government officials. Physicians must not be allowed to prescribe a drug if the government decides it helps only some but not all patients and is thus not "comparatively effective."
Second, Ralston also highlights:
...[T]he attempt to disarm doctors morally and politically so they will do what they are told. Any attempt to protect their ability to practice medicine as they think best will just prove that they are greedy profiteers, like businessmen. Anyone who makes a living or runs a profitable business that does not need to be bailed out by the government may be condemned.

Conversely, greed for power is a saintly virtue for those who want to instruct physicians how to run their practices.

From other quarters we hear arguments that doctors should just do what they are told and accept what the government pays them, even if it does not cover their costs, because they owe us all for their medical education. Never mind the huge debts with which most MD's graduate from medical school. Never mind the long years and long hours of medical education and internship. If they went to a public school, never mind the taxes their parents paid to support it. If the government gives you an education, these politicians say that you owe that government your life. Are we now discovering the true purpose of government-controlled education?
(Read the rest of "Obamacare's Attack on Doctors".)

If physicians lose their freedom to practice according to their own best judgment for the benefit of their patients, both patients and physicians will lose.

(For another good piece on the double-speak being thrown about by supporters of Obamacare, see Ralston's July 5, 2009 OpEd, "Paging Dr. Orwell".)

Tuesday, July 28, 2009

Health Benefits of HR-3200

There are some unintended health benefits to House Bill HR-3200, as Jimmy Fallon explains:
Jimmy, with the help of supermodel Carol Alt, wants to tell you about this exciting new total health system:

The HR-3200! It's a total health concept perfect for burning fat and building muscle! America's Affordable Health Choices Act, running at over 1,000 pages and weighing in at 13 pounds, means RESULTS for your body! For only 52 easy payments of $19,231,769,235, you can't miss out on this once-in-a-lifetime offer!

Fallon video

Monday, July 27, 2009

Five Freedoms At Risk

Shawn Tully of Fortune discusses the, "5 Freedoms You'd Lose in Health Care Reform".

His list includes the following:
1. Freedom to choose what's in your plan
2. Freedom to be rewarded for healthy living, or pay your real costs
3. Freedom to choose high-deductible coverage
4. Freedom to keep your existing plan
5. Freedom to choose your doctors
(Read the rest of "5 Freedoms You'd Lose in Health Care Reform".)

Instead of losing our freedoms under a sham "reform", Tully offers the following principles for genuine health care reform:
The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains (another market-based reform that's strictly taboo in the bills).
These would all be excellent steps in the right direction towards a free market in health care.

Sunday, July 26, 2009

Schwartz on Non-Reform

The July 25, 2009 Boulder Daily Camera carried Brian Schwartz's piece on why the current proposed health care "reform" is anything but reform:
Paying for Health Care Reform

The Democrats' proposals would "reform" nothing. Instead, they would entrench problems with the status quo, as economist Arnold Kling explains in "The Non-Debate over Non-Reform."

Consider the country's total health care spending. Patients' out-of-pocket spending accounts for only about 10 percent. Insurers and government split the remaining 90 percent almost evenly. Since physicians, like anyone else, cater to who pays them, patients are left in the lurch. But Democrats ignore this problem.

Instead, they have been in bed with drug companies, Wal-mart, and hospital groups with plans to stick it to taxpayers. For details, see "A Closer Look at Those Industry Deals" at

Who should finance so-called "reform?" Translation: who should pay for other people's medical care? Anyone who volunteers, and no one who does not. Health care is not a right. Rights are freedoms of action, not entitlements to what others produce.

If you want to pay for other people's medical care, donate to or volunteer with a charity. Don't ask politicians to compel others to fund government charities, like Medicare and Medicaid. Forcing others to donate to charity is neither virtuous nor compassionate.

Hence, if Democrats want a "public plan," they shouldn't force taxpayers to pay for it.

Citizens do not earn money to fund politicians' pet projects. Politicians should pitch their great ideas to investors or philanthropists. Using tax dollars is just robbery cloaked in conceit and elitism.

Brian T. Schwartz
(His piece is the fourth one down.)

Armstrongs on DeMint Handouts

The July 20, 2009 Grand Junction Free Press published the following OpEd on Linn and Ari Armstrong, "DeMint's health handouts violate liberty".

They analyze what's both good and bad about one of the leading Republican alternatives to the Democratic ObamaCare plan. One key point:
...So long as Republicans play the handout game, they will correctly be seen as "me-tooing" the Democrats, and they will continue to lose, step by step, inch by inch, to those who would subject the entire economy to political controls.

DeMint's handouts also distract attention away from the fundamental problem: health insurance is too expensive because of political controls. You solve that problem by repealing the controls, not by hiding them behind another welfare scheme.
The Republicans need to offer a clear principled alternative to the Democrats, and they need to support ideas that resonate with basic American values of individualism, responsibility, justice, and self-reliance. Otherwise they'll keep losing elections -- and deservedly so.

Saturday, July 25, 2009

Hsieh OpEd: The Federal Health Care Muggers

On July 24, 2009, the PajamasMedia website published my latest health care OpEd entitled, "The Federal Health Care Muggers". Here's an excerpt:
The Federal Health Care Muggers

The Democrats' agenda of "universal health care" is in deep trouble, as more Americans (including many "Blue Dog" congressional Democrats) are growing increasingly uneasy about the costs.

...But in addition to this economic flaw, there's also a more fundamental danger to the congressional plan. This plan would violate individual rights on a massive scale by imposing new mandates on individuals, businesses, and insurers, forcing Americans to cede control over their health care to the government.
(Read the whole thing.)

Friday, July 24, 2009

Reynolds on Innovation

In the July 12, 2009 DC Examiner, Glenn Reynolds describes how nationalized health care will have a chilling effect on medical innovation. Here is an excerpt:
...But there's another cost that isn't getting enough attention. That's the degree to which a bureaucratized healthcare system will squash medical innovation just as we reach a point where dramatic progress is possible. To see how important that is, I don't have to look any farther than my own family.

...The normal critique of socialized medicine is to point out that people have to wait a long time for these kinds of treatments in places like Britain. And that's certainly a valid critique. I'm sure my mom and daughter would still be waiting for their treatments, while my father and wife would probably be dead.

The key point, though, is that these treatments didn't just come out out of the blue. They were developed by drug companies and device makers who thought they had a good market for things that would make people feel better.

But under a national healthcare plan, the "market" will consist of whatever the bureaucrats are willing to buy. That means treatment for politically stylish diseases will get some money, but otherwise the main concern will be cost-control. More treatments, to bureaucrats, mean more costs.
(Read the whole thing.)

This is a perfect example of the principle of the "seen vs. the unseen" as described by Bastiat. The effects of government regulations may save money (the seen), but at the cost of preventable suffering and deaths that we'll never hear about (the unseen).

Thursday, July 23, 2009

Watkins Rebuts Singer on Rationing

Don Watkins of the Ayn Rand Center for Individual Rights has written a great rebuttal to the recent New York Times essay by Princeton philosopher Peter Singer arguing that we must ration health care.

Here's an excerpt from Watkins' piece:
...To impose rationing, Ayn Rand explained in a letter to a friend, means "to distribute [goods and services] in a certain particular manner–by the decision of an absolute authority, with the recipients having no choice about what they receive." Rationing means that the government decides how much of some good or service you are allotted.

This bears no relation to what happens under the price system of a free market. On a free market, goods and services are not rationed. They are produced by individuals and then voluntarily exchanged for the goods and services others have produced. A craftsman builds a chair, which he sells for money, which he uses to purchase a doctor's services. A doctor trades his services for money, which he then exchanges for a lawnmower.

The difference between prices and rationing is the difference between you choosing what groceries to buy and the government telling you what food you're allowed to eat.

Commentators like Singer treat those two as equivalent because, on their view, goods and services do not belong to the individuals who produce them, but to society. They hold, in effect, that brain surgeons and MRI machines are the property of society, which has the right to distribute "its" resources as "it" sees fit. But a doctor's services or a hospital's equipment are not social resources. They are created by individuals, and those individuals have a moral right to dispose of their time, effort, and property as they see fit. Rationing deprives them of this right.
(Read the whole thing.)

Watkins makes a critically important distinction between rationing and the operations of a free market -- one that even many conservatives who claim to support free markets often fail to make.

When such conservatives wrongly accept the premise that the market is just another form of rationing -- just "rationing by price" rather than by government decree -- they merely set the stage for leftists to claim that government decrees can be a more "fair" method of allocating goods.

By drawing the proper distinction between free markets and rationing, Watkins shows that it is only the free market can create a morally just distribution of goods and services. Only the free market protects the rights of the producers who create those goods in the first place to trade with willing consumers on terms they find mutually acceptable.

Wednesday, July 22, 2009

Albertoli: Immorality of Socialized Medicine

San Francisco artist Roxanne Albertoli has written the following short essay on the moral issues underlying the health care debate. Her original version was written in response to an essay by David Grundy, criticizing the British National Health Service.

I thought it deserved a wider circulation, so she has revised it to make it a stand-alone piece and graciously given me permission to reprint it here:
Immorality of Socialized Medicine

The moral issue of government controlled health care is not discussed, as it is assumed to be self-evident that socialized medicine is desirable (albeit impractical) - i.e., it is ethically good for people to see health care as a right.

This moral perversion of rights is based on the idea that we are all our brother's keeper, and vice versa. That we are all bound economically, one to the next, for medical care. Whatever someone other than ourselves wants medically, we are honor bound to hand over to that person; and that person is honor bound to reciprocate.

No one asks why. Why are we bound economically, one to the next, for medicine, or for any reason? How are we "free" if our income, that which enables us to live, is taken from us by the government to "pay" for someone else's health care, and the same thing happens to that someone else?

Why is it "better" for the government to take my money to pay for Josephine Smith's health care, and take Josephine Smith's money to pay for my health care but it is immoral for me to pay for my own, and for Josephine to pay for her own?

Why am I considered too stupid to judge what's right for me, to pick my own doctor and to contract with him or her for a fair price, but brilliant government clerks know the answers to these conundrums of life?

Why are doctors and hospitals and drug companies considered too venal, too immoral to charge fair prices, but the government is peopled with disinterested philosopher kings who know exactly the right balance between services and prices? And yet the same doctors who are too venal and mercenary to be allowed to set their own prices are still to be trusted to perform open heart surgery or diagnose a life-threatening illness.

Why is this giant shell game called moral?

Because people accept that it is "moral" to live for anther, "moral" to sacrifice for another, "moral" to sacrifice others to themselves - but that it is "immoral" to live for oneself, and "immoral" for each of us to take the responsibility of his or her own life and live for ourselves.

It is a huge responsibility to live for oneself by one's own labor, and solely by one's judgment of reality. But it is the only way to live as a human. To exist for, through and because of others is irrational and ultimately destructive, because our means of survival is our brain. And contrary to the geniuses on Madison Avenue, everyone does succeed alone, because everyone thinks alone. There's no one in there but you and only you can judge what is best for you, despite all the alleged "brains" in the government who claim they know what's best for you. It is your mind, your wealth (if you earned it) and your life - only you, the individual, know what's best for you and where and how you want your money spent that best benefits you. Taking responsibility for oneself and spending ones' own money on oneself is the most rational and therefore the most moral action to take as regards health care.

That is why socialized medicine is immoral. No one can think for another, therefore no one can decide what's best for another. Patients, doctors, medical industry people, everyone, must be free of government coercion in the marketplace of medicine. Our individual lives depend upon it.

Roxanne Albertoli
San Francisco, California
Thank you, Roxanne, for cutting to the heart of the issue.

Tuesday, July 21, 2009

Health Rations And You

This video shows us our future under government-run health care:

Remember, it's patriotic to sacrifice your health for others!

Monday, July 20, 2009

Schwartz on Systems

The July 18, 2009 Boulder Daily Camera carried Brian Schwartz's piece on reforming the current health care system. As he correctly notes, the central problem is the very existence of a "system":
Having a health care "system" is itself the problem. It implies that politicians dictate your medical choices, at your expense, regardless of whether their "system" serves your individual needs and preferences.

Consumers are frustrated with the low-quality politicized school systems and the regularly-jammed highway systems. We are quite pleased with our iPods and laptops. But there is no government-run consumer electronics "system;" instead, there's a relatively free market. A free market would do the same for medicine.

But politicians have imposed their will upon what should be individual medical decisions, resulting in an un-free market. The tax codes punishes you for not buying insurance through your employer, so you're stuck with your employer's few options. This coddles insurance companies, who are accountable to your employers instead of you. Politicians manipulate the tax code so we buy excessive insurance coverage, which discourages both price competition and prudent medical spending.

Politicians forbid us from buying more affordable insurance available to residents of other states. They force us to buy expensive policies loaded with mandated benefits many customers don't want. They force taxpayers to fund Medicaid and Medicare, which cause medical inflation, increase insurance premiums, and will bankrupt the country.

Politicians empower the FDA to enforce a default ban on all new drugs, which stifles innovation and deprives patients of life-saving medications.

Politicians should not dictate your medical and insurance decisions, you should. Only a free market empowers patients in this way, requires makes insurers and physicians to be accountable to them.

Brian T. Schwartz,
Thank you, Brian, for emphasizing an important point that is too often under-appreciated!

Saturday, July 18, 2009

Friday, July 17, 2009

Thursday, July 16, 2009

Government Health Care Organizational Chart

Here is the organizational chart for the proposed new government universal health care plan:

(Click on the image to see it full-size. Here's a related story.)

Don't you feel better knowing that the same government that is doing such a good job running General Motors also wants to take over your health care?

Disclaimer: FIRM is a non-partisan group, and does not support either the Republican or Democratic parties.

Wednesday, July 15, 2009

Schwartz on the Public Plan

The July 4, 2009 Boulder Daily Camera published Brian Schwartz's piece for the Editorial Advisory Board, "The Public Plan Will Be the Only Plan":
"The 'public plan' will be the only plan" says health care economist Scott Harrington of the proposed government-run health plan.

Be suspicious: "public plan" supporters want it to be the only plan.

President Obama uses rhetoric of "choice" and "competition" to push the "public plan." But his ideal is single-payer health care, where there is -- by definition -- a government monopoly that prohibits both choice and competition. If "public plan" supporters honestly wanted choice and competition, why do they oppose policies that would make Medicaid and Medicare compete? For example, vouchers that Medicaid and Medicare recipients can use to buy commercial insurance. Or better yet, allow taxpayers to opt out of funding these programs by getting tax credits for donations to comparable charities.

A "public plan" would not even compete fairly with insurance companies. It would have access to tax dollars, and many other advantages. As professor Harrington concludes, "equal competition between a government health-insurance plan and private plans would be impossible.

"If a government health "program were to be stripped of any special advantages it would cease to be a government program. It would be just another private insurer," writes Michael Cannon of the Cato Institute.

If politicians truly want more competitive insurance markets, they should remove the tax code's bias for employer-provided insurance, which shields insurers from competing directly for patients' business. But politicians covet votes most. Since the biased tax code empowers unions, Democrats are not likely to touch it without giving unions special treatment.

Brian T. Schwartz
(It's the fourth one down, also mirrored here.)

Thanks, Brian, for your tireless efforts!

Of NICE and Men

The July 7, 2009 Wall Street Journal describes the British NICE health care rationing board.

In essence, their system saves money by depriving their citizens of life.

Will this be the future of American health care?

Tuesday, July 14, 2009

Schroeder Critiques Grand Junction Model

Dr. James Schroeder has written a great OpEd for the July 10, 2009 Grand Junction Free Press criticizing the "Grand Junction Model" for health care which is now being touted as the method to achieve government health care reform.

Here's an excerpt from his piece, "Die sooner, save money":
...First, a large study done at Dartmouth University looking at variations in Medicare spending was released in April 2008. More recently Dr. Atul Gawande, an Ivy League surgeon, wondered in the June 1 issue of The New Yorker magazine why McAllen, Texas, had one of the nation's highest levels of Medicare spending. Grand Junction's name came up in that article as one of the lowest spending regions.

Now, President Obama's team is using the Dartmouth study to leverage advancement of the Democrat party's health care proposal.

...All the data showed is that some hospitals spent more than others. As such, this study could serve as a starting point for further research, not as a measure of how to model health care delivery for the nation as a whole. Now let me rephrase this in case you weren't paying attention. The death rate in this particular study was 100 percent. Yes, you read that right, every single patient analyzed in this study died! The only logical conclusion to be made is that Grand Junction is efficient at getting people to the point of death.

Hang on to your wallet, because the Dartmouth Atlas will now be touted as showing that some regions (Grand Junction being the shining example) are “more efficient” at delivering health care while saving money! This in turn will serve as the anvil upon which health care spending throughout the country will be hammered into line by a federally controlled health care system. In fact, the Dartmouth study reveals absolutely nothing about efficiency. Determining "efficiency" will require looking at end points other than death, and will include individual interpretations of value, quality and lifestyle. But those things are much more difficult to measure, so we are about to be treated to an example of using data wrongly to support a wrong-headed argument.

...The current administration advocates a system that will take those difficult value judgments out of your hands and put them in the hands of a nice, caring, compassionate bureaucrat. If one could practice medicine by a cookbook approach, we would not need more family physicians, we would need fewer, because a simple computer program could do the job. But it just is not that simple.
(Read the whole thing.)

Government-run health care can always save money by denying care and taking decision-making out of the hands of doctors and patients and shifting it onto the bureaucrats.

It's "efficient", but deadly.

Is that what Americans want?

(I do have a couple of minor disagreements with Dr. Schroeder's analysis, which are also nicely covered by Ari Armstrong. But overall, I agree with his major points.)

Monday, July 13, 2009

Massachusetts Vs. Georgia - In Lego!

The President and Congress want to impose a Massachusetts-style plan on the entire country.

This short video compares costs and waiting times in Georgia and Massachusetts, with assistance of some Lego patients:

If you want more expensive care and longer waits, support the Massachusetts plan!

Thursday, July 9, 2009

Schwartz on MassHealth

Brian Schwartz points out that the government-run MassHealth program in Massachusetts denies payment for treatments far more than the commercial insurance companies.

Those who think that a government-run "single payer" system will provide more care than the semi-free market system we have now will be in for a rude awakening.

Tuesday, July 7, 2009

Save Justin's Health Insurance

The Independence Institute points out more problems with Massachusetts-style mandates to provide "universal coverage" in this video, "Save Justin's Health Insurance":

(Via Free Colorado.)

Monday, July 6, 2009

Canadian Cost Controls

As health costs continue to rise, Canadian government authorities impose yet further controls which amount to rationing.

William Watson describes the latest insanity in the June 24, 2009 Financial Post:
...To keep expenses down, Quebec's Ministry of Health imposes surtaxes on physicians who make more than about $200,000 a year -- gross of expenses. What with swine flu and all, it's been a busy year for pediatricians. Some of those running the Tiny Tots Clinic apparently have already bumped up against their maximum income. As a result, they're now going to be paid at 25¢ on the dollar for all the services they provide between now and the end of the year.

Think of it as a kind of Tax Freedom Day in reverse. Tax Freedom Day is when you've earned enough in the year to pay all your taxes and can then start working for yourself. But if you're a Quebec doctor, it works the other way around: As early as June, depending how hard you worked the first part of the year, you may start working almost entirely for the government.

Trouble is, 25¢ on the dollar doesn't pay the clinic's overhead. So the clinic has been restricting its hours while the doctors petition the Minister of Health for permission to be re-classified so they can keep working with full remuneration for the services they’re providing.

What a bizarre country we live in. A doctor wants to treat a child. That child's parent wants the child treated. But if the doctor is to be paid for providing treatment, they have to await permission from the Minister of Health.
Read the whole thing.

If the government pays for health care, it will demand a say in how the money is spent. These sorts of problems are the inevitable result...

(Via RM.)

Saturday, July 4, 2009

Wal-Mart and the Employer Mandate

The advocates of "universal health care" got a big boost recently when Wal-Mart went on record as supporting an employer mandate requiring companies to provide health insurance for their workers.

But Michael Cannon explains why they did this. Basically, it's to use the power of the government to hurt their smaller competitors:
...[I]t all became clear when the lobbyist explained the reason for Wal-Mart's position: "Target's health-benefits costs are lower."

I have no idea what Target's or Wal-Mart's health-benefits costs are. Let's say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000. An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart. But it would cripple one of Wal-Mart's chief competitors.
This is just another example of the sort of unholy alliance that some big businesses and government regulators make in order to put a squeeze on smaller competitors.

This is very similar to the explanation that Tim Carney at the DC Examiner offered for Mattel's support behind onerous new regulations on lead content in toys:
Washington toy story shows why regulation helps the big guys

... [M]anufacturers who mass produce toys or children's furniture will face some added costs from the bill, but these are costs they can bear—especially because the costs will be industry wide thus passed onto consumers.

Indeed, many of the bigger manufacturers have already implemented testing procedures to comply with the federal requirements. Their smaller competitors, however, will suffer under the burden.

A stay-at-home mom who sews children's dolls on the side or a small woodworker who sells a few child-sized chairs each year will find these regulations much more burdensome if not impossible.
The big businesses offer their support for regulations in exchange for having some say ("a seat at the table") in crafting their specific provisions. The politicians get to claim that they have a "consensus" from all the "stakeholders".

In other words, the businesses provide political cover for the politicians in exchange for the politicians providing economic protection for the businesses.

Only this time, the victims won't just be customers purchasing children's toys. Instead, it will be every American who needs health care -- which is pretty much all of us...

(Via David Catron and Brian Schwartz.)

Friday, July 3, 2009

More on the Administrative Savings Myth

The AAPS debunks the widely-repeated myth that, "A public plan could save enough on administrative costs to provide coverage to all".

Some excerpts:
...The basis for the assertion is the claim that Medicare spends only 2% to 3% of its outlays on administration, compared with private plans’ alleged costs of 20% to 25%.

In fact, data from the Congressional Budget Office (CBO) shows that insurance companies spend at least 50% less on administration that government does on its health programs. (The Congressional Budget Office Reports: Comparing health care admin cost: who's less costly?)
Furthermore, there are various accounting differences that one must remember when comparing relative administrative costs of Medicare vs. private insurance plans that make Medicare seem artificially cheaper than it really is:
* Private insurance plans must pay government taxes and assessments up to 5% of premiums. When these are factored out, the real net cost of private administration is less than 10%.
* CMS excludes the cost of its own employees who enroll recipients, perform outreach and education, handle customer service, and do auditing and other functions. Private plans include these in overhead.
* Private plans have on average a higher number of claims to process for a given amount of expenditure.
* Insurance companies have to collect premiums. The IRS does that for Medicare.
* Private companies do underwriting; their premiums have to cover their costs. Medicare deficits have to be covered by taxpayers.
* The cost of servicing the public debt is not included in Medicare costs—and Part B is 75% subsidized by general revenues, not beneficiary premiums.
Journalists and politicians need to be aware of these hidden costs, rather then repeating myths promoted by those with a specific policy agenda.

Thursday, July 2, 2009

Harsanyi on Lying With Statistics

The June 26, 2009 Denver Post carried this column by David Harsanyi on the statistical falsehoods being used to allegedly justify "universal health care". Here is an excerpt:
How to lie with statistics — again

Did you know that around 300 million Americans went without food, water and shelter at some point last year?

I am a survivor.

...One of the most persistent examples of modern-day statisticulation is the sufficiently true claim that 46 million (it becomes 50 million when senators really get keyed up) Americans are without health insurance.

...It is true that the 46 million figure is based on unreliable Census Bureau data. But even the less unreliable Congressional Budget Office puts the number at around 31 million. And even that number, former CBO Director Douglas Holtz-Eakin claims, is an "incomplete and potentially misleading picture of the uninsured population."

For one reason, the uninsured figure counts every American (and illegal immigrant) who has been uninsured for any time frame during a year, even if they happen to be between jobs or changing insurance plans or on family visit to Guatemala.

...Then, another portion of uninsured Americans already qualify for an existing government health insurance program — and government already controls 46 percent of spending on health care — for which they have not signed up.

The CBO estimates that as many as 15 percent of the chronically uninsured are already eligible for help. The Urban Institute (hardly advocates of free-market fundamentalism) found that 25 percent of the uninsured qualify for some program.

...Turns out that 8.4 million uninsured Americans are making $50,000 to $74,999 and 9.1 million more are making more than $75,000. Health insurance is just incompatible with their lifestyles, I guess.

There are obviously inconveniences — children and mortgages, for instance — that can quickly make $50,000 seem like a pittance. Then again, 27 percent of all adults in their 20s (many, I presume, without offspring) choose not to have health insurance. Many of them surely have the means to purchase insurance, but after meticulously considering the tradeoffs (imbibing or insuring?) say no thanks.
Read the whole thing.

Harsanyi correctly notes that this is not a primary argument to oppose nationalized health care. But it's still important to debunk bad statistics, especially when they are so frequently used to justify bad policy proposals.

Wednesday, July 1, 2009

The Forbidding Arithmetic of Healthcare Reform

Even Massachusetts governor Deval Patrick say that perhaps the US should not adopt the Massachusetts plan on a national level, according to this June 29, 2009 article in the Boston Globe, "The forbidding arithmetic of healthcare reform".

The arguments they make are primary economic (albeit important ones). For additional perspective, please see my TOS article on the topic, "Mandatory Health Insurance: Wrong For Massachusetts, Wrong For America".