Walmart and Medicare

Brian Schwartz alerted us to an article in the Rocky Mountain news from January 9, 2008 about the fact that Medicare costs for the prescription drug program had caused a 6.7 % increase in health spending during 2006.

In fact, Medicare's spending in 2006 increased by 18.7%, driving the entire national health care spending up 6.7%, according to CMS figures. This government agency that runs Medicare and Medicaid reported that almost all other sectors of spending had a slower rate of increase than in previous years -- doctors, hospitals, clinics, home health care, private insurance, etc. So, if the government had not added the prescription drug program, medical costs would have even risen slower and might have been even with the rest of the economy.

But who would have helped the seniors to buy their drugs?

Walmart. That's who.

In Sept. 06, Walmart started its $4 prescription program -- which it now reports has allowed consumers to save over $1 billion dollars nationally (and $13 million in Colorado) in just 18 months. That's a great record - and you don't need a Medicare or Medicaid card to get those savings. In fact, you don't need an insurance card of any kind. Now that's a way to reduce health care spending. You can find out from Walmart what drugs are included in the Walmart program, and the savings per state.

Paul Hsieh, MD previously blogged on this Walmart program. But now we have something to compare it to. It's not a direct comparison because the government bought drugs the entire year, and Walmart's savings extend over 18 months beginning in Sept. 2006. But, that's another difference between the government and Walmart. Walmart can give us figures monthly or even weekly, because they have to be able to report to their stockholders and to the government. However, the US government in January 2008 was reporting on expenses in 2006. Their reports almost always take a year or more to compile. So, next year, we can see what the government spent in 2007, and meanwhile, we can see how much Walmart saves consumers week by week.

But more importantly, let's look at what this means.

Walmart reports that 30% of these prescriptions are filled for those without any insurance -- the uninsured. And these $4 prescriptions are also a huge plus for those Medicare seniors who are in the doughnut hole, which occurs when a senior has between $2,400 and $5,421.25 in drug expenses per year. In that hole, Medicare coverage disappears. So, more people can buy the drugs prescribed by their doctors and take all of the prescribed amounts -- not taking half or skipping doses because of costs. In addition, Walmart has picked up customers. And, as a result, competitors Target, Costco and Kroger have followed with their own programs as well. So, nationally, more and more prescription drug consumers benefit.

In several states, there are government restrictions on Walmart's ability to sell $4.00 prescriptions. These states include Colorado. So, without government restrictions, Colorado consumers could save more. We'll check into this and report back.

In the meantime, imagine a Free Market!

The Grass is Not Always Greener

Cato Policy Analysis No. 613 compares "universal health care systems" around the world. Here is the executive summary, as well as the full report in PDF format and HTML format:

The Grass Is Not Always Greener:
A Look at National Health Care Systems Around the World

by Michael D. Tanner
March 18, 2008

Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government-run, national health care system.

However, a closer look shows that nearly all health care systems worldwide are wrestling with problems of rising costs and lack of access to care. There is no single international model for national health care, of course. Countries vary dramatically in the degree of central control, regulation, and cost sharing they impose, and in the role of private insurance. Still, overall trends from national health care systems around the world suggest the following:

* Health insurance does not mean universal access to health care. In practice, many countries promise universal coverage but ration care or have long waiting lists for treatment.

* Rising health care costs are not a uniquely American phenomenon. Although other countries spend considerably less than the United States on health care, both as a percentage of GDP and per capita, costs are rising almost everywhere, leading to budget deficits, tax increases, and benefit reductions.

* In countries weighted heavily toward government control, people are most likely to face waiting lists, rationing, restrictions on physician choice, and other obstacles to care.

* Countries with more effective national health care systems are successful to the degree that they incorporate market mechanisms such as competition, cost sharing, market prices, and consumer choice, and eschew centralized government control.

Although no country with a national health care system is contemplating abandoning universal coverage, the broad and growing trend is to move away from centralized government control and to introduce more market-oriented features.

The answer then to America's health care problems lies not in heading down the road to national health care but in learning from the experiences of other countries, which demonstrate the failure of centralized command and control and the benefits of increasing consumer incentives and choice.

I haven't read the report yet, but I look forward to seeing if the author draws a link between the adverse economic consequences of "universal" health care and the violation of individual rights inherent in every such system.

Where Are the Best and Brightest Medical Students Going?

The March 19, 2008 New York Times has an interesting article on the recent popularity of fields like dermatology and cosmetic surgery amongst the top graduating medical students. Here are some excerpts:

For Top Medical Students, an Attractive Field

...As thousands of medical students await word this week on residency programs, two specialties concerned with physical appearance — dermatology and plastic surgery — are among the most competitive.

...Seniors accepted in 2007 as residents in dermatology and two other appearance-related fields — plastic surgery and otolaryngology (ear, nose and throat doctors, some of whom perform facial cosmetic surgery) — had the highest median medical-board scores and the highest percentage of members in the medical honor society among 18 specialties, the report said.

The vogue for such specialties is part of a migration of a top tier of American medical students from branches of health care that manage major diseases toward specialties that improve the life of patients — and the lives of physicians, with better pay, more autonomy and more-controllable hours.

...Dermatologists say they enjoy the variety of a specialty that encompasses serious illnesses like skin cancer and psoriasis as well as conditions like uncombable hair syndrome.

But students interested in such work also often factor in personal benefits. Internists, for example, worked an average of 50 hours a week in 2006 while dermatologists worked about 40 hours, according to an annual survey by Medical Economics magazine. Dermatology also offers more independence from the bureaucracy of managed care, because patients pay up front for cosmetic procedures not covered by health insurance.

And while an internist earns an average of $191,525, a dermatologist earns an average of $390,274, according to an annual survey conducted by the Medical Group Management Association, whose membership includes more than 21,000 managers of medical practices. Dermatologists who specialize in cosmetic treatments or in skin-cancer operations can earn much more.

These medical students are acting in their rational self-interest when they choose not to deal with the bureaucratic headaches of Medicare and Medicaid associated with primary care, and instead go into fields where patients and doctors have the freedom to voluntarily contract for goods and services according to their best rational judgment. The higher pay and increased autonomy of those fields is a direct result of them being subject to the least government interference.

Hence, in the (relatively) free markets of dermatology and cosmetic surgery, we see the typical pattern of falling costs and rising quality that we take for granted in the rest of the American economy.

If we want to attract the best medical students to fields like primary care and general surgery, then we need a free market in all of medicine. Any American who thinks that he or she might need good quality health care someday in the future (which is basically everyone) should therefore support a free market and individual rights in medicine.

More Massachusetts Problems

The March 17, 2008 Boston Globe reports that the Massachusetts "universal health care" system is having a "catastrophic" effect on the Cambridge Health Alliance, which takes care of many of the poor and uninsured in the Boston area. The state plan pays for only "60 to 70 percent" of the cost of the care delivered, and "has left [the Cambridge Health Alliance] responsible for providing free care for those without insurance while reducing the hospitals' compensation for such services." The Cambridge Health Alliance is therefore being forced to fire staff and reduce patient services in order to stay solvent.

As we've seen in Canada and the UK, governments can make plenty of paper promises of "universal health care". But they can't deliver actual care. Once again, we see the following lessons:

1) "Universal" health care inevitably leads to rationing. This particular development is just one way which it can occur.

2) The rationing especially hurts those whom "universal care" was ostensibly supposed to help. This is just an instance of the broader principle that socialism and collectivism harms everyone, even the intended beneficiaries (i.e., "the people").

Massachusetts is starting to learning the lessons of those other countries the hard way.

"I am so glad I no longer work for the NHS"

Terry Hamblin, MD is a noted medical authority who pioneered research and treatment for CLL (Chronic Lymphocytic Leukemia), cancer of the white blood cells. He recently retired from Britain's National Health Service (NHS).

In his blog, Mutations of Mortality, he writes much about CLL (and the posts are technical), but he also writes about politics, religion and movies. He also corresponds by e-mail with CLL patients. In his recent post, Travails of the NHS, he cites at least 3 cases of government interference between the doctor and patient, one where a patient died because of the interference, and one where the government bureaucrats of Britains MHRA (Medicines and Health Care Products Regulatory Agency) chastised the hospital because the hospital failed to document whether the 73 year old patient was told that she should use birth control during chemotherapy. The third patient eventually got some appropriate treatment, but only after much dialogue between his doctors and the NHS. Hamblin ends the post," I am so glad I no longer work for the NHS."

This is not the kind of medical care we want in the US.

(Thanks to Burke Chester for the link.)

More Free Market Success

The relatively free market continues to save money for consumers, this time in pharmaceutical expenses:

Wal-Mart Claims $4 Generics Have Saved Consumers $1 Billion

Wal-Mart's doing a bit of chest thumping this morning, claiming that its $4 generics program has saved consumers $1 billion — $1,032,573,012.61 as of March 10, to be precise.

The company says the $4 drugs now account for 40% of all prescriptions filled at its stores, adding that nearly 30% of the cheap prescriptions are purchased without insurance.

Wal-Mart breaks down the program by state, with the top savers being Texas ($132,628,224), Florida ($72,443,467) and North Carolina ($48,241,530).

The baseline figures the company used to calculate total savings are the average Wal-Mart price of each generic drug before the program launched. The calculations don't include the prices of branded (and much more expensive) drugs, a Wal-Mart spokeswoman told the Health Blog.

The ripple effects of the program may have driven additional consumer savings, the company pointed out. Competitors including Kroger and Target followed Wal-Mart with their own $4 generics programs.

If the partially free market we have in the US can benefit patients this much, think of how much a fully free market could benefit all of us. (Via David Catron.)

The Canadian Safety Valve is the US

John LaPlante at StateHouseCall.org recounts another story of a young man's experiences with both the Canadian and American health systems:

The Best Part of Living in Canada? Being Close to the U.S.
The safety valve for long waits for medical treatment

It's been said that Canada's single-payer systems "works" to the extent that it does because the U.S. serves as a safety valve. Since most of the population lives within a short drive, it can, if need be, get around rationing queues by crossing the border.

This morning I came across an anecdote in that same vein. It's from a sports-related blog, maintained by two guys in Toronto who love to cycle and go snowboarding.

Adam, the snowboarder, suffered a knee injury while playing basketball. On March 25, 2006, he wrote about his first trip to a medical facility. The people there were friendly and knowledgeable, but further treatment would expose him to the long queues of Canadian health care. "It’s really, really tempting," he said, "to go to Buffalo, Montreal or somewhere else to get an MRI sooner, so I can get on the road to recovery sooner. Is recouping my summer worth shelling out $500 to $1000?"

Rather than wait 55 days—the projected queue in Ontario—he must have come up with the money, since on April 22—28 days later—he had an MRI done in Buffalo, New York.

Would the doctor in Canada object on the grounds that Adam was subverting socialized medicine, that quality that (aside from "not being the United States") seems to define the country? Nope. "The [Canadian] company rep I spoke to said they had very few issues with doctors protesting, because the end result was that you were making the waiting list in Ontario shorter."

Once Adam placed the call to the U.S., he could have gotten his appointment with the New York clinic in a New York minute—they offered a screening that evening.

"To say I was impressed was an understatement," he wrote. "My overall impression: so worth the money. I'm now four months ahead of where I would be using the Ontario system."

But it took him over a month for an appointment in Canada to review the results. They weren't good: a scope on his knee, and possibly more, was called for. And "this being Ontario and all, when will I get the surgery? Six to eight months from now." [Emphasis in the original.]

The schedule must have loosened up a bit. (Maybe more Canadians decided to have their surgery in the U.S., too.) Adam decided to delay on scheduling his operation, so as to make better use of the winter. When he called in November 2006 for a date, he was told he would have a ...five month wait, which was in fact the truth.

At least three lessons come from this story: Time and money are interchangeable. A "right" to health care is a right to a queue. And if you need to see a doctor in a government-financed system, take a number.

Universal Health Care Kills

Brian Schwartz's powerful OpEd "'Universal' Health Care Kills" has appeared recently in a number of newspapers, including the Colorado Daily, Hawaii Reporter, and the Salida Mountain Mail:

"Universal" Health Care Kills

What good is having medical insurance if you cannot get medical care? Peddlers of "universal health care" — from Hillary, Obama, to Colorado congressional candidate Jared Polis — don't get this.

"Universal health care" is false advertising for politically-controlled medicine, with government as the "single-payer" monopolistic insurer. But having coverage does not guarantee getting medical care.

Since patients prepay through taxes, medical care appears "free." Hence, they have strong incentive to over-consume and providers need not compete on price. To contain costs, governments restrict your access to life-saving treatment. In countries with such "universal coverage," patients die waiting for treatment.

The Canadian Medical Association Journal reports that in one year, 71 Ontario patients died while waiting for coronary bypass surgery and over one hundred more became "medically unfit for surgery." The Canadian Broadcasting Corporation reports that "109 people had a heart attack or suffered heart failure while on the waiting list. Fifty of those patients died."

This week the Globe and Mail reported that:

Inside Sylvia de Vries lurked an enormous tumour and fluid totalling 18 kilograms. But not even that massive weight gain and a diagnosis of ovarian cancer could assure her timely treatment in Canada.

She sought treatment in the United States, as do Canadians in need of intensive care and emergency cardiac care.

"Physicians across Canada are in an advanced stage of burnout due to work conditions" which "causes them to retire early... or simply leave," a former Canadian Medical Association president told the New York Times. He "attributed much of the problem to technological shortages and the powerlessness doctors feel when patients complain about long waits for treatment."

"Access to a waiting list is not access to healthcare," wrote Canadian Chief Justice McLachlin when striking down legislation banning private insurance in 2005. Last year a New York Times headline read: "As Canada's Slow-Motion Public Health System Falters, Private Medical Care Is Surging."

And England? The BBC reports that "up to 500 heart patients die each year while they wait for potentially life-saving surgery." The Times reports that a British woman "will be denied free National Health Service treatment for breast cancer if she seeks to improve her chances by paying privately for an additional drug." A Daily Telegraph headline reads: "Sufferers pull out teeth due to lack of dentists." "Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives," reports another article.

Consider politically-controlled health care in America: Medicaid and Medicare. Doctors are five times more likely to refuse seeing new Medicaid patients than privately-insured patients. Increasing reimbursement rates won't help much; more than two-thirds of doctors reported being overwhelmed by Medicaid’s billing requirements, paperwork, and delays in payment.

ABC News reports that "Medicare rules bar cancer drugs for patients," including the privately-insured. As the population ages and Medicare costs continue to increase, Medicare may further restrict patients and doctors.

"Single payer" advocates cite international comparisons of life expectancy to support their cause. But life expectancy depends on factors unrelated to healthcare, such as unintentional injury and homicide. Health economist Robert Ohsfeldt found that when accounting for these two factors, life expectancy in America is comparable to that of Canada and England.

What really matters is your chance of surviving a serious illness. The American Cancer Society reported that "U.S. patients have better survival rates than European patients for most types of cancer."

So if politically-controlled medicine isn't the solution, what is?

Not a Massachusetts-style "individual mandate," which forces everyone to buy insurance. This is essentially single-payer in disguise. Insurance regulations severely limit competition, so insurance companies are effectively government contractors for politically-defined insurance.

The Boston Globe reports that to contain costs, Massachusetts authorities will "probably cut payments to doctors and hospitals" and "reduce choices for patients." Sound familiar?

Instead, we must recognize how government policies have crippled free markets.

Because the tax code deeply discounts employer-provided insurance, you're essentially stuck with your employer's non-portable plans. Hence, insurance companies can afford to be stingy and deny you care; they know that losing you as a customer requires that you change jobs. With government as "single-payer" it's even worse: to change insurance providers you must move to a different state or country.

Our current system also encourages thoughtless over-consumption and skyrocketing costs. The tax code punishes paying for medical care out-of-pocket and rewards buying insurance. So "insurance" has become prepaid medicine, and patients over-consume like business travelers dining on their company's expense account.

Further, legislation mandating minimum benefits makes insurance unaffordable for many. Consider: Colorado law compels widowed wives to pay higher premiums for prostate screening, maternity, and marital therapy. Sponsors of Colorado House Bill 08-1327 recognize this injustice. Just as businesses incorporated in other states can operate in Colorado, Coloradans should be able to buy affordable policies from insurance companies that meet less damaging regulations of another state.

So remember, the uninsured aren't the problem, but a symptom of political meddling in our most important personal choices.

Thank you, Brian!

For more on HB 08-1327 see this post by Lin Zinser.

Hsieh LTE in Christian Science Monitor

The March 7, 2008 edition of the Christian Science Monitor printed my LTE on free markets and health care:

The government hand in healthcare raises costs

Regarding the March 3 article, "Arguments mount for national healthcare": In David Francis's recent commentary on national healthcare, Shannon Brownlee blames rising healthcare costs on a failure of the free market. In my opinion, the exact opposite is true. It is government interference in the free market that has created the current crisis. Any system of national healthcare would merely worsen the current problems.

National healthcare programs violate the rights of consumers and healthcare providers to contract freely for medical services according to their best judgment. Such programs inevitably lead to rising costs and rationing, as demonstrated repeatedly in Sweden, Canada, and the United Kingdom.

In contrast, the free market consistently lowers costs and increases availability. Those sectors of medicine that are least regulated by the government (such as LASIK and cosmetic surgery) have shown the typical pattern over time of falling prices and rising quality that we take for granted in the rest of the US economy. Because the free market respects individual rights, it is the only practical and moral solution for the problem of rising healthcare costs.

Paul Hsieh, MD
Cofounder, Freedom and Individual Rights in Medicine
Sedalia, Colo.

Two Good Articles On Health Insurance

The blogosphere had two recent high-profile articles discussing the purpose of insurance and the proper role (or lack thereof) of government mandates.

The first was from "Today's Health Insurance Ain't Insurance", from Pajamas Media blogger Charlie Martin. Here's an excerpt:

...So now it's election season 2008, and the candidates are talking about the "health care crisis." It's a funny sort of crisis in one sense, because people are managing to survive to be older and healthier than they were before the crisis. But if a politician insists it's a crisis, who are we to argue? Certainly there is an issue that some people can’t afford to pay cash for day-to-day care, and old-fashioned "major medical" is hard to find.

The solution we have been offered on both sides of the aisle is something like the "Massachusetts Plan," where everyone has to have health insurance. "Has to have," here, being enforced by the government — Senator Clinton has spoken specifically of garnisheeing wages of people who don't want to participate — with some kind of public funding for people who just can't afford it.

Here's where things start to get tricky, though. Some people — young people just out of school for example — aren't making a lot of money, but then don't really want to spend a lot of money on insurance. Normally, they wouldn't have to: other than accidents and very rare diseases, a 25-year-old shouldn't normally need anything more than minor maintenance and occasional hangover cures. The idea of the mandate, though, is that if you include these low-risk people in the whole insurance pool, the premiums they pay can be added back to the pot for older people and people with serious illnesses, which makes the insurance more "affordable" — for them.

It's exactly the same situation as if we charge a 25-year-old the same amount for a year's term life insurance as we charge his 75-year-old grandfather: it may make the insurance more affordable for Granddad, but it does so by overcharging young Elmo. Add in the "mandate," so Elmo can't opt out, and we have a universal care plan that forces Elmo to pay for services he doesn't get so that Granddad can pay less for the services he gets. But it's "voluntary" — you get to pick your insurance plan to some extent — and it’s not "tax-supported" because you are just paying the insurance company directly.

Except for the cost of administering the plan itself, and the wages they take through a garnishee if I don't "volunteer."

So in this mandated universal coverage plan, the government comes and makes me give someone money so it can be distributed to other people, and I don't have any choice about participating. Where I come from, we call that a "tax."

Whatever it is, it ain't insurance.

I thought Charlie Martin's analysis of the history and nature of insurance was on-target. (Pajamas Media is a group blog that includes free speech advocate Flemming Rose of "Danish Muslim cartoons" fame as one of their contributors.)

The second is a related short piece, "Protect them from themselves?" by Atlantic writer Megan McArdle. Responding to the claim by socialized medicine supporter Ezra Klein, "...[M]andates matter because, sometimes, folks have to be protected from their worst instincts", she asks:

...I'm persistently disturbed by the notion that most of our fellow citizens are intellectual children who need to be forced to do what is good for them even at massive cost to their liberty, and ours.

In the comments section, I replied:

Megan's final sentence cuts to the heart of the issue: "Whose life is it anyways - yours or the government's?"

When this gets applied to the health care issue, the question becomes:

Should government bureaucrats decide how and for what people can spend their own health care dollars? Or do they respect the individual's right to make that decision according to his own best judgment for his own benefit?

I come down firmly on the side of the second position.

RMN Editorial on Health Care

The May 9, 2008 Rocky Mountain News has the following interesting editorial on health care reform:

The coming debate over health care

No matter who wins the Democratic presidential nomination, that candidate will have a significantly different prescription for the nation's health-care system than Sen. John McCain, the Republican nominee. Which is a good thing, since that means the country is in for a debate involving real substance.

Both parties agree that "the health system needs major repairs," reports Kevin Sack in a recent analysis of the candidates' proposals by The New York Times. As Sack noted, the Democrats are more interested in universal coverage, while the Republicans focus on cost containment.

Those may be the points of emphasis, but McCain wants expanded access, too, while Barack Obama and Hillary Clinton claim they can rein in health-care costs. One thing we've learned from state-based experiments in universal coverage: It's not cheap. In Massachusetts, taxpayer subsidies for its two-year-old program of mandated coverage will rise from $158 million in 2007 to $600 million this year and $870 million in 2009. Lawmakers are now scrambling to impose new cost controls. On the menu: lower payments to doctors, hospitals and drug companies.

Meantime, a similar plan proposed in California died in January when the independent Legislative Analyst projected the program would cost at least $4 billion more in its first five years than proponents first suggested.

By contrast, McCain's agenda would primarily expand choices for consumers. Among other things, he would allow Americans to purchase health coverage from a licensed insurer in any state; individuals could shop nationwide for an appropriate policy and compare prices. He would also allow membership organizations (like AARP) or other non-employers to sell group policies.

Most dramatically, he would end the tax deduction that employers receive for providing health insurance; instead, individuals would receive tax credits they could use to either purchase policies or invest in Health Savings Accounts. They would no longer depend on their employers for medical coverage.

Taken in combination, these proposals would give individuals more control of their health-care options..

Until the next president takes office, states would be well-advised to steer clear of comprehensive reform. But they can act on the margins. Indeed, we're encouraged to see several consumer-friendly initiatives in this year's legislature. House Bill 1061, with bipartisan sponsors, has passed both houses and would allow advanced practice nurses (who have specialized certification, such as in clinical practice or anesthesia), to provide a broader range of care - more like physicians.

Next, House Bill 1311 would establish two new, bare-bones insurance plans for any employer that does not offer its workers medical insurance. The proposal died in committee, but the lead sponsor, Rep. Spencer Swalm, R-Centennial, told us that House Speaker Andrew Romanoff has expressed interest in reviving it.

Finally, House Bill 1327, from Rep. Cory Gardner, R-Yuma, would allow Coloradans to purchase insurance from out-of-state providers if a group of states set up a market for such policies. McCain's plan does not have to be law for this bill to take effect.

HB 1327, scheduled for a committee vote on Monday, offers another example of an incremental reform at the state level that could expand choices and contain costs. We encourage more efforts along these lines.

I'm encouraged that Colorado is finally discussing some genuine free market health care reforms.

Such free market reforms are good because they respect an individual's right to spend his own health care dollar according to his judgment, for his own benefit. In contrast, false "reforms" (such as expanding Medicaid or imposing insurance mandates), merely raise costs, decrease access, and force more people to become government dependents, as has happened in Tennessee and is happening in Massachusetts. Bureaucrats then decide how and for what people's health care dollars may be spent, not the individual patients and doctors.

The debate is finally starting to shift in the right direction.

Schwartz and Shnelvar on Medicaid

The March 8, 2008 Boulder Daily Camera "virtual editorial board" has published the following comments from Brian Schwartz and Ralph Shnelvar on Medicaid in Colorado.

From Brian Schwartz:

Who's responsible?

As documented in the Cato Institute study, "Medicaid's Unseen Costs," (available on-line) Medicaid delivers sub-par medical care and unfairly competes with private insurance companies and voluntarily charities.

Medicaid also erodes personal responsibility. Many recipients avoid higher-paying jobs and saving money because such admirable behavior disqualifies them from benefits. Hence, Medicaid keeps those it "aids" helpless, on their backs, and dependent on government.

Medicaid's defenders want government in the insurance business and assert that their reforms can fix the above problems. If so, then why not let individual taxpayers decide for themselves? For every dollar expropriated from taxpayers to fund Medicaid, private charities lose a potential donation. That's unfair to private charities and condescending to taxpayers -- as if they were too callous or stupid to recognize if Medicaid were worthwhile.

A tax credit for donations to health care charities would partially level the playing field. The threat of lost revenue would motivate Medicaid administrators to be effective, and taxpayers would have more freedom to fund charities they deem most worthy.

Brian Schwartz

From Ralph Shnelvar:

Bankruptcy looms

Medicaid is/was the fastest growing component of the state budget.

If left unchecked, it will bankrupt the state of Colorado.

The idea that, somehow, the government can magically create additional medical services out of thin air is an example of the kind of Santa Clause thinking that the government wants people to believe in.

I assert without proof (because no one believes the proof or the truth) that the economy, the delivery of health services to the indigent, and the health of the budget of the government of Colorado would be far better off it the state jettisoned Medicaid and went back to private insurance.

But, of course, actually delivering better services to everyone by privatizing the system is something that those who believe in government-as-Santa-Clause will never accept.

Ralph Shnelvar

(For the record, I strongly disagree with Ralph Shnelvar's parenthetical point -- I believe that the truth is important for most people and people can be persuaded by reason.)

Kopel on Intellectually Honest Reporting

The Saturday March 8, 2008 Rocky Mountain News published an excellent column by David Kopel, discussing Denver Post writer Katy Human's claims about health care, Ari Armstrong's public challenge for her to cite her sources, her refusal to do so, and the results when she finally responded.

On February 10, 2008, in the Denver Post article "Growth spurt for kids' health plan", Katy Human wrote:

Children with health insurance, studies have shown, are less likely than uninsured kids to end up in emergency rooms, more likely to get key vaccinations, and less likely to be absent from school.

Writer and blogger Ari Armstrong then politely asked her for her citations. She initially refused, but eventually sent citations of 5 studies that supposedly supported her point.

David Kopel then analyzed the studies and reported the following for the Rocky Mountain News:

None of five studies Human cited after the fact support her article's statement about what "studies have shown" regarding the effects of insurance on emergency room use, vaccinations and school absences. Indeed four of the five studies she cited do not even address those topics. ...One study cited by Human was relevant, and it directly contradicted her article's claim.

...So Human's pronouncement in her Post article - "Children with health insurance, studies have shown, are less likely than uninsured kids to end up in emergency rooms" - turns out to be not entirely accurate. A large body of research contradicts her claim, and that research is in the very studies which Human pointed to when she was challenged to support her claims.

...In the last two years, the phrase "studies have shown" has appeared in staff-written pieces 31 times in the Rocky Mountain News, and 36 times in the Post. About half the time the phrase is used in a direct quote, or in another way which tells the reader the source of the information. For example, "According to professor Roy Hinkley, studies have shown that minnows . . . "

But the other half of the time, the dailies used "studies have shown" with no source. The unattributed locution was especially common in Post editorials, and in health and nutrition coverage in both papers.

The phrase ill-serves readers who want to learn more about a subject, but who are left in the dark about where to look. The phrase can be used to falsely declare scholarly consensus about a subject. And the phrase can be a crutch for a writer who feels "sure" about a supposed fact, but who doesn't want to take the time to verify it.

Thank you, David Kopel, for a very illuminating piece!

If I didn't know better, I might almost wonder if a reporter had a particular ideological agenda and tried to slant a news story to support a political view favoring more government control of medicine, rather than trying to write the news in an objective fashion based on the actual facts.

But that would imply that there was some sort of "liberal media bias", and we all know that couldn't be the case...

Shurts on Polis' Dangerous Plan

The Friday March 7, 2008 Rocky Mountain News printed the following LTE by Russell Shurts critical of the Polis single-payer proposal:

Polis' health-care plan a dangerous one
Russell W. Shurts, Centennial

Recently, congressional candidate Jared Polis wrote, "A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for" ("Health-care plan stresses prevention," Speakout, Feb. 13).

Before you buy Polis' prescription, consider the following:

An unfree market ruled by a liberal like Polis would allow everyone and anyone to die...

* Because they were on a waiting list and lacked sufficient political pull to move themselves up the list.

* Because the government would make the decision about which possibly life-saving drug would or would not be available.

* Because there would be too few doctors left after the exodus of those unwilling to have their lives and careers programmed by bureaucrats unqualified to hand out aspirin tablets.

* Because new life-saving drugs would begin to evaporate after government denies pharmaceutical companies the profit needed to recoup the millions invested in creating the drugs.

Reality will win in the end and, Polis' assertions to the contrary, medicine will have to be paid for one way or the other. If you truly want Polis' "free" health care, be prepared to pay for it - in spades.

We've seen exactly those things happening in countries like Canada and the UK that have adopted "free" health care. Why would we ever want that for the United States?

Arizona Surgeon Speak Out Against Socialized Medicine

Ari Armstrong recently forwarded the following e-mail to me from an Arizona surgeon. I don't know anything about his organization besides what's on their website, but I thought I would pass this on as a FYI:

Medical Choice for Arizona
Freedom of Choice in Health Care Act -- A State Constitutional Initiative
March 2008

A MESSAGE TO ANYONE WHO IS, OR MAY SOMEDAY BE A MEDICAL PATIENT

Dear Friend:

My name is Jeff Singer, MD. I am a general surgeon in the greater Phoenix area, and am the Treasurer of a campaign committee called "Medical Choice for Arizona." We are circulating petitions to place on this November's ballot, "The Freedom of Choice in Health Care Act."

As I am sure you are well aware, momentum is building across the nation, by well-intentioned and not-so-well-intentioned people, for comprehensive --even radical-- reform of our health care system. Frustrated with the gridlock in Washington, many states are taking matters in to their own hands, and passing reforms aimed at achieving "universal coverage," but that ultimately will result in rationing of health care and limitations on our freedom of choice of health care options, treatments, and providers.

"The Freedom of Choice in Health Care Act" would amend the Arizona Constitution to insure that, whatever type of health care legislation ultimately emerges from our legislature, it will not be able to restrict our freedom of choice of private health care systems, plans, or options; it will not be able to prevent us from directly paying for lawful medical services; and it will not, in any way, be able to force us to participate in a plan or program if we don't want to.

What's more, our legal counsel, Clint Bolick (co-founder of the Institute for Justice, and currently Director of the Goldwater Institute's Center for Constitutional Litigation, among other things), who designed the language for our initiative, believes this might actually prevent a further FEDERAL intrusion into the healthcare system. He says that there is legal precedent for state constitutional law actually trumping federal law when the federal law trespasses into an area of police power that has been traditionally reserved to the states under the US Constitution. So passage of this amendment in AZ and other states would at least give us a fighting chance against those in DC who want to force us into a one-size-fits-all national health care plan.

Medical Choice for Arizona consists of people from across the political spectrum, all of whom want serious reform to our health care system -- all of whom want to reduce the ranks of the uninsured -- all of whom want to make sure our kids get adequate health care -- but who have differing views regarding what constitutes the best kind of reform. But there is one thing on which we all agree: WE MUST RETAIN THE RIGHT OF PEOPLE TO HAVE CONTROL OVER THEIR OWN HEALTH CARE CHOICES.

Medical Choice for Arizona is not about enacting -- or blocking -- any specific health care legislation. It is about preserving and protecting patients' choice.

WE NEED YOUR HELP TO SUCCEED!

Please visit our website at www.medicalchoiceforaz.com to learn more about "The Freedom of Choice in Health Care Act." The actual ballot language, as well as "Frequently Asked Questions," and a way to donate online can be found at the site. If you have further questions, feel free to phone us at: 623-271-9576.

But most important, please consider making a contribution to our campaign. Arizona law places NO LIMITS on the amount of money that can be contributed to non-partisan citizens initiative campaigns like ours. The donations are not tax deductible. However, Arizona law DOES ALLOW corporate contributions to be made to initiative campaigns.

Please make your check out to: "Medical Choice for Arizona," and mail it to our address at:

3655 W. Anthem Way
Suite A-109--PMB 212
Anthem, AZ 85086

Health care reform is on the front burner in all the political debates this year. No time is more important than NOW to act to protect our right to choice in health care.

Thank you for your consideration.

Sincerely,

Jeff Singer, MD
Treasurer
Our Website: www.medicalchoiceforaz.com

Canadians Keeping Sending Their Patients South

Rationing continues to worsen in Canada to the point that they can't even handle their critically ill patients. The March 1, 2008 Globe and Mail reports the following chilling facts:

More than 400 Canadians in the full throes of a heart attack or other cardiac emergency have been sent to the United States because no hospital can provide the lifesaving care they require here.

Most of the heart patients who have been sent south since 2003 typically show up in Ontario hospitals, where they are given clot-busting drugs. If those drugs fail to open their clogged arteries, the scramble to locate angioplasty in the United States begins.

"They rushed me over to Detroit, did the whole closing of the tunnel," said Eric Bialkowski, 47, of the heart attack he had on March 14, 2007, in Windsor, Ont. "It was like Disneyworld customer service."

..."We keep coming back to the same root cause," Dr. Day [Canadian Medical Association president Brian Day] said in a telephone interview from Ottawa. "The health system is not consumer-focused."

Patients first learn of the problem when they are critically ill.

So much for the myth of, "Sure, there may be some waiting for elective care in Canada, but if you have a true life-and-death emergency, then the Canadian system will be there for you..."

If America adopts such a system, where will we send our critically sick patients after we destroy the last semi-free medical system in the world?

(Via David Catron.)

No Miracle in Massachusetts

Grace-Marie Turner of the Galen Institute points out that the Massachusetts "universal" health plan may have reduced the number of uninsured citizens, but only by imposing an onerous burden on the taxpayers, due to the massive subsidies given away to the poor. Costs are still not being contained, and the stated goal of "coverage as good as members of Congress have", will cost an average family of four an astounding $23,000 per year.

Advocates of Massachusetts-style mandatory insurance like to claim that this system avoids the cost-shifting prevalent under the present system. It does no such thing -- it merely folds it into the state budget and disguises it in the form of higher taxes.

The only system that will control costs, preserve access, and improve quality is a system that allows consumers, doctors, and insurers to freely contract for medical good and services according to their own best judgment for their mutual self-interest -- namely the free market.

Gorman on Health Care Costs

The February 29, 2008 Rocky Mountain News published the following OpEd by Linda Gorman on the real source of rising health care costs:

Government, regulations drive up health costs
Linda Gorman, Independence Institute

I've got to say that the Feb. 25 editorial, "The surging tide of health-care costs," broke new ground for me in health-care policy. "The popular Medicare program... ." First time I knew that we had data letting us assess whether something that was virtually mandatory and without any substitutes, unless one is very rich, is "popular."

Then there were the factors cited by the editorial as driving health-care cost increases: "an aging population, boomer retirees, advances in drugs and medical technology." Never mind that the boomers are the aging population and so shouldn't count twice; advances in drugs generally save costs. So does a lot of new technology: MRIs are a whole lot cheaper than exploratory surgery, for example.

I guess the implication here is that to cut costs we should go back to the 1930s: put people in beds and provide lots of nurses to take pulses and temperatures without any medical devices or new drugs. Costs would go down.

The literature actually suggests a bunch of other major cost drivers — excess regulation is estimated to account for about 10 percent of U.S. national health spending each year. The spread of public insurance programs including the expansion of Medicaid/SCHIP also likely increases costs. Rising incomes are a huge factor. Wealthy people consume more health care just like they do more transportation, housing and education.

The spread of third-party payment, which has reduced consumer out-of-pocket expenses to all-time lows, is likely a big factor in the cost increase.

Finally, there's the line that "And if private Medicare plans become more popular, that too may increase costs." The embedded assumption here seems to be that private equals higher cost. This often is not the case in the real world.

Linda Gorman is director of the Health Care Center at the Independence Institute in Golden.

Schwartz Criticizes Polis and Government Coercion

The Rocky Mountain News has published Brian Schwartz's Speakout essay on their website on February 26, 2008:

Polis implies he’d represent the worst in us

An ambulance pulls up to a hospital with an uninsured person in need of emergency treatment. Would you donate to a charity that provides medical care in this situation? Would you give because it's right, or because the authorities will punish you if you don't? If you give just to avoid punishment, and live in Colorado's 2nd Congressional District, vote for Jared Polis this November — as he represents you.

Polis pretty much said so himself in a recent Rocky Mountain News Speakout. While arguing for "universal health care," where politicians meddle in choices best left between doctors and patients, Polis writes: "First, let us not delude ourselves into thinking that we have anything close to a 'free market' in health care. A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for."

At least Polis recognizes that state and federal laws interfere with a free market. Here he refers to the Emergency Medical Treatment and Active Labor Act ("EMTALA"), which forbids hospital emergency departments from denying care to anyone with an emergency medical condition. Jared Polis thinks that without such a law, such denials would happen routinely, and the uninsured would "die on the hospital doorstep."

According to Polis, a law must compel doctors to treat the uninsured in emergency situations. Is he suggesting that doctors are so heartless and cruel that they would never treat someone for free? Are voters too callous to fund charities committed to funding treatment for the uninsured in emergency situations?

This is unlikely. Consider the Shriners Hospitals for Children. Their 2005 donations exceeded $640 million. Or the Bonfils Blood Center, which has been operating in Colorado since 1943. It reports that "nearly 120,000 blood donors made life-saving donations in 2007." Last year Colorado's "208" Commission on Healthcare reform reported that private philanthropy accounted for almost $200 million in medical care for the uninsured.

Polis writes that we have "made a moral decision not to allow people in our great country to die in this fashion." Not quite. Moral decisions are a matter of choice, not a threat. EMTALA threatens doctors with penalties up to $50,000 for not complying. Hence, EMTALA is effectively a charity funded by the threat of punishment.

So Jared Polis thinks that government must force Colorado citizens and physicians to do the right thing, as we wouldn't do so in a free market. Yet, Jared Polis seeks public office, to represent us, the very people he doesn¢t trust to act morally. If Polis really represents us, then why should we trust him to be ethical? Here lies the fallacy behind the common rationale behind tax-funded charities: "We must use taxes and other penalties to force people to fund these charities because they will not do it on their own." If there aren't enough people who would sufficiently fund the charity by choice, why expect that there would be enough people to elect representatives that would pass laws compelling people to fund that charity?

In any case, government-funded charities are unfair, intolerant, and ineffective.

They are unfair because, just as governments shouldn't subsidize politically-connected businesses, they shouldn’t favor certain non-profits, either.

They show intolerance by forcing all taxpayers to fund someone else's idea of a worthy cause, which leaves them less able to support organizations they themselves judge to be worthwhile.

They are ineffective because, unlike voluntary charities, they are not accountable to their donors, and hence need not demonstrate results to continue receiving money. In fact, the opposite is true. When government charities such as government schools, Medicare, and Medicaid perform poorly, the politically popular solution is to increase their funding, and the opposition is branded as heartless.

Free-market charities are fair, tolerant and effective. Politicians should protect them. But if you prefer politicians who impose their notions of morality on others, vote for Jared Polis.

Brian Schwartz is a resident of Boulder.

Rationing Shell Game in the UK

Because of the rationing inherent in the British socialized medical system, there are long waits for care in their ER's (which they call "A&E" for "Accident & Emergency"). Patients were naturally frustrated and upset, so the government has set a target that A&E departments must treat patients within 4 hours.

Of course, a government decree can't actually conjure up medical care from thin air. Hence, many A&E departments are merely keeping incoming patients in the ambulances for several hours and refusing to let them into the doors of the hospital -- that way they don't count as having "arrived" at the hospital until much later:

Scandal of patients left for hours outside A&E
The Observer, Sunday February 17 2008

Hospitals were last night accused of keeping thousands of seriously ill patients in ambulance 'holding patterns' outside accident and emergency units to meet a government pledge that all patients are treated within four hours of admission.

Those affected by 'patient stacking' include people with broken limbs or those suffering fits or breathing problems. An Observer investigation has also found that some wait for up to five hours in ambulances because A&E units have refused to admit them until they can guarantee to treat them within the time limit. Apart from the danger posed to patients, the detaining of ambulances means vehicles and trained crew are not available to answer new 999 calls because they are being kept on hospital sites.

(Here's a related story.)

Of course, the fundamental problem is the government system of health care, with the inevitable rationing. Once people are deprived of free market medicine, this sort of shell game is all they are left with.

The Business of Health Care

Laura Mazer, a 2nd-year medical student at Emory, has written the following good article on the business of health care, including how bad government policy is destroying the ability of hospitals to provide good service. This essay is the featured article in Winter 2007 issue of the student newspaper The Undercurrent and is reposted here with their permission:

The Business of Healthcare
By Laura Mazer -- Winter 2007

The state of California has lost more than 90 emergency rooms since 1990 -- and with them, the ability to treat hundreds of thousands of patients. In New York City, eight hospitals have shut down since 2003 after facing a financial crisis. And in Atlanta, Grady Memorial Hospital is threatening to join their ranks. Grady is the only level 1 trauma center in the area, and if it closes, it will mean the loss of almost 1,000 beds, nine community health centers, and the training facilities for two medical schools.

The cause of these and other failures throughout the country is obvious. Hospitals are providing care without receiving payment. Like any other business, hospitals have a constant list of bills to pay every month, from diagnostic tests and drugs, to basic supplies and the salaries of sometimes thousands of people. And all too often, they receive no compensation in return.

What drives the nation's hospitals to operate at an obvious deficit, giving away for free a service that is neither cheap nor easy to produce? They do it in part because they are legally required to do so. In 1986, the Emergency Medical Treatment and Active Labor Act made it illegal for a hospital to refuse care in an emergency setting, regardless of ability to pay. The Act essentially transformed emergency rooms into primary care facilities for the uninsured.

In other industries, services provided for free are considered voluntary charity. They are provided only as far as they can be supported by the business's other income, and they are neither legally nor morally required. But in healthcare, any suggestion that a hospital accept only the patients it can afford to treat is greeted with moral outrage.

Hospitals respond to this combination of legal requirements and community expectations by accepting an unsustainable patient mix that inevitably ends in crushing debt. Healthcare has become a multi-billion dollar industry incapable of demonstrating the kind of economic common sense a child with a lemonade stand instinctively displays.

Bankrupt hospitals are serving as eloquent testimony that the basic principles of economics are just as viable for healthcare as for any other industry. So why is it that fiscally responsible hospitals are considered immoral, and prosecuted as illegal? What is it that makes medicine unique?

The answer can be found in the consumer advocacy groups and professional societies that advocate for socialized medicine. In 2001, a task force assembled by the American Academy of Family Physicians proposed a system of 'free' healthcare for all Americans -- to be paid for by Americans, with a payroll tax. They declared, "There are a set of basic services that most people are expected to utilize in their lifetime, and there should be no financial barrier to these."

This is the justification offered by all advocates of socialized medicine, in its various forms. Healthcare is required. It is a basic service. It is necessary for life. How can ability to pay determine access to a requirement for life? In a civilized, industrialized country, the argument goes, it is the government's duty to provide basic necessities to its citizens.

This argument relies on the assumption that healthcare is uniquely important for human survival, that while most industries provide optional goods -- items that improve life, perhaps, but are not required for it -- healthcare is not optional. To live, you must have access to life-saving or life-prolonging therapies.

It is true that healthcare is, in certain circumstances, required for life. A patient in renal failure will die without dialysis every week. A child with a bacterial infection needs antibiotics. But reformers forget that a lack of dialysis is not the only thing that can kill the kidney patient. A lack of food, clean water, shelter, or clothing in the winter will be as deadly to the child as a lack of antibiotics.

Medicine often focuses only on the physical act of living -- breathing in and out, keeping the heart beating. But human life is more than the functioning of the moving parts. Although healthcare may be the only requirement for a brain-dead accident victim on life support, it is not the only requirement for the rest of us. To live, we need food, we need shelter, we need companionship, and work, and hundreds of other material and spiritual requirements. Healthcare is a necessity -- and after a car accident, or during a flu infection, it may be the most important necessity. But it is not the only requirement for life.

When people talk about a 'right' to healthcare, they mean an entitlement to healthcare. They mean that unlike other goods and services that must be earned through individual work or trade, healthcare should be provided for free.

Medicine is not the only industry that fulfills a necessity for life, so what entitles us to the products of this particular industry, and not others? Why not food or clothes? And why not those products that provide a good life -- feather beds or paintings or tickets to the movies? Or are we entitled to those as well?

The issue goes far beyond healthcare. It is a question of what the government's role should be in providing for its citizens. Should the government collect taxes to provide citizens with whatever goods and services they deem 'necessary?' Or is it the responsibility of individual citizens to work for whichever products and services they can independently earn -- with the government existing to secure their freedom to pursue these ends?

In other industries, Americans balk at the idea of the government stepping in to provide values to its citizens. The dangers and inefficiencies of government-run industries are well understood. We would not tolerate, for example, the government nationalizing the supermarkets. If a grocer decides to provide food to the hungry, most Americans understand that he does so voluntarily, and with his own money.

What we must understand now is that there is no reason to treat healthcare any differently.

American healthcare is failing. It's only a matter of time before hospitals around the country can no longer support themselves, and we are forced to change the system. The only solution is a means of exchange that does not rely on sacrificing the rights of some individuals to obtain values for others. The only solution is a free market.

If we want to save American healthcare, we have a moral and practical obligation to seek less government intervention -- not more.

Laura Mazer is a second year medical student at Emory University. She has a BA in biology from the University of Chicago.

Free-Market Health Insurance Is Not the Enemy

Richard Ralston, executive director of Americans for Free Choice in Medicine, has written the following OpEd on free market health insurance:

Free-Market Health Insurance Is Not the Enemy
By Richard E. Ralston
February 4, 2008

Much of the current debate about health care is between those who want the government to wipe all insurance companies out of existence and those who instead want the government to force everyone to buy regulated private insurance. Both sides ignore the fundamental context for any discussion of health care in America: individual rights and personal choice.

Individuals have the right to incorporate and invest in businesses that provide an important service, like health insurance. Individuals and businesses have the right to make provisions for their medical expenses by seeking the insurance firms that best meet their needs—or not. That is the essential point to remember: governments should never be allowed to destroy such rights—as irrelevant details in the face of the application of naked government power.

Insurance companies do not pay all of every claim, but neither does Medicare. Yet History indicates that Medicare and Medicaid spending is out of control. The administrative costs (that those programs actually count) are a lower percentage of payout because that payout is rising rapidly. When the government is unconcerned with fraud and the rise in total spending, the administrative cost of burning money can be quite low.

Private health insurance is an expensive mess at the moment because we do not have anything approaching a free market in insurance. In that context, contending over claims with an insurance company can be painful. That situation will not be improved if everyone is required to buy private insurance from firms that know that they have to do so.

You cannot buy fire insurance for your home after it catches fire. You cannot buy automobile insurance to pay for your car repairs after the accident occurs. That is not due to greed and the profit motive, but to reality and common sense, and it is not a reason to abolish fire and auto insurance companies. Health insurance coverage for major illness or injuries is seldom available after they have occurred and are being treated. That is a serious problem for many people without insurance, but not a reason to outlaw private insurance.

Inexpensive insurance is impossible for individuals to find in most states—because it is forbidden by law. State regulators do not allow for basic or catastrophic insurance but pile on coverage requirements, which drives up the cost of premiums. State regulators do not allow competition from insurance companies in other states, which drives up the cost of insurance. States and the U.S. government require individuals who struggle to buy their own insurance to pay income and payroll taxes on the funds they use to buy insurance, which further drives up the cost of insurance.

Those who admire the supposed efficiency of government insurance do not count the administrative costs of paying taxes for individuals and businesses, the administrative cost of the IRS and its 100,000+ employees to collect those taxes, the cost on providers of contending with 130,000 pages of Medicare regulations, or the cost of fraud and the lack of cost control. The need to make a profit to stay in business requires insurance companies to restrain costs and weed out fraud.

It is not true, though it is often said, that most industrialized countries have eliminated private insurance. Some have, like Canada, although even there laws prohibiting private insurance have been declared unconstitutional by the Canadian Supreme Court. But most countries with a large government role in medical care have still found it necessary to use private insurance companies to administer care. Examples include Germany, the Netherlands, and Switzerland. Private insurance is still permitted in the United Kingdom, and more than 6,000,000 people there (including more than one-third of the physicians) choose to buy insurance rather than rely exclusively on the National Health Service.

Even though we are contending with the limitations of highly regulated and limited insurance, the last thing we need is to mandate that everyone buy private insurance or eliminate all choices in a single government system. What we need is a free market in private insurance.

Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine.

NY Times on British Health System

The February 21, 2008 New York Times has published an article suprisingly critical of the British socialized National Health Service (or NHS). Here are some excerpts:

Paying Patients Test British Health Care System

...One such case was Debbie Hirst's. Her breast cancer had metastasized, and the health service would not provide her with Avastin, a drug that is widely used in the United States and Europe to keep such cancers at bay. So, with her oncologist's support, she decided last year to try to pay the $120,000 cost herself, while continuing with the rest of her publicly financed treatment.

By December, she had raised $20,000 and was preparing to sell her house to raise more. But then the government, which had tacitly allowed such arrangements before, put its foot down. Mrs. Hirst heard the news from her doctor.

"He looked at me and said: 'I'm so sorry, Debbie. I've had my wrists slapped from the people upstairs, and I can no longer offer you that service,' " Mrs. Hirst said in an interview.

"I said, 'Where does that leave me?' He said, 'If you pay for Avastin, you'll have to pay for everything'" -- in other words, for all her cancer treatment, far more than she could afford.

Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.

...But in a final irony, Mrs. Hirst was told early this month that her cancer had spread and that her condition had deteriorated so much that she could have the Avastin after all -- paid for by the health service. In other words, a system that forbade her to buy the medicine earlier was now saying that she was so sick she could have it at public expense.

I blogged about this issue last month ("Better Equal Than Good"). Now that this issue has gotten the attention of the New York Times, perhaps patients like Debbie Hirst and Collette Mills will finally get some justice (and medical care) from the NHS.

Note the central moral issue: Being allowed to spend one's own honestly-earned money on something that will benefit one's own life is considered "unfair" by the British government.

When a government uses force to stop people from acting in their rational self-interest, it is no surprise that the results are misery and death.

(Via Amit Ghate, who has a good post on this topic as well.)

James Schroeder on The Value of Health Care

The February 19, 2008 Grand Junction Free Press printed the following excellent LTE by Dr. James Schroeder:

The value of health care

James K. Schroeder, MD
Grand Junction, CO, Colorado

Value is a word we don't hear often enough in the health care debate. Proponents of universal health care rarely acknowledge the value of health care as a professional service. Stop to consider the time and effort that comprise a medical education. Years of study and long hours are devoted to attaining the basic physician's toolset. Many more years are needed to hone those skills and develop the judgment to use them wisely. This process builds substantial value. When proposing expansion of governmental control, advocates of universal health care blithely discount that value and belittle the quality you desire for yourself and your family. This country already faces massive shortages of primary care physicians in many locations.

Expansion of low-paying programs such as Medicaid and CHP+ will not improve that. In Colorado, expanding Medicaid with its low reimbursements has previously been shown to decrease the number of pediatricians accepting new Medicaid patients. Universal health care advocates are fond of saying that nurse practitioners and physician's assistants will fill that gap. In other words they are admitting from the outset that consumer's access to physicians will be effectively rationed. At the same time they try to equate the "value" of that care as if the consumer is not bright enough to recognize the difference. As it stands, prices for most medical services are determined by the federal government (most insurance companies tie their reimbursement rates to the Medicare-determined value scale). The talent, training and experience of the provider are not even considered.

A better solution would be to return to a competitive market environment. Let the system operate openly so that the value of the service (as provided by any given provider) and the perception of that value (in the view of any given consumer) will determine the monetary cost of that service. Don't expect college-age students to embark on a career in medicine or seasoned physicians to remain in the field if the value of their hard work is not acknowledged.

Schwartz Rebuts Polis

Single-payer advocate and Congressional candidate Jared Polis recently wrote in the Rocky Mountain News:

A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for. Having made a moral decision not to allow people in our great country to die in this fashion, let us discuss how to more efficiently provide for sensible universal health care.

Fortunately, Brian Schwartz had a fitting response:

According to Jared Polis, a law is required compel doctors to treat the uninsured in emergency situations. Is Polis saying that doctors are so heartless and cruel that they would not treat someone for free? Is he saying that the electorate as too callous to fund charities to pay such that doctors could treat the uninsured in emergency situations?

Apparently, the answer is "yes." Polis writes that we have "made a moral decision not to allow people in our great country to die in this fashion." Not quite. Moral decisions are a matter of choice, not a threat. EMTALA threatens doctors with penalties up to $50,000 for not complying.

Nearly every physician I've known has gladly waived his or her fee for worthy recipients who haven't been able to afford the bill. I've done so on numerous occasions myself. I don't believe that giving away charity care is the essence of morality (instead regarding it as a tangential issue to the central moral issue of being good at what one does in order to further one's own life and rational values).

But if a patient is a worthwhile human being (and if I can afford the charitable contribution), then I am happy to donate my professional services as a physician. And nearly every physician I know feels similarly.

In contrast a law that forces doctors to provide uncompensated services is just state-sanction theft, and undercuts genuine voluntary charity.

Hsieh LTE in Pueblo Chieftain

The February 17, 2008 edition of the Pueblo Chieftain published one of my LTE's:

Don't mandate insurance

I want to thank The Pueblo Chieftain for its strong editorial against the ill-considered plan by the Colorado Blue Ribbon Commission for Health Care Reform ("Mantra of a crisis").

Their proposed system of mandatory health insurance already has been tried in Massachusetts and is failing. Costs there are already more than three times what was originally predicted, and the Boston Globe reports that it is expected to "cut payments to doctors and hospitals, reduce choices for patients, and possibly increase how much patients have to pay."

Nor did the program produce the promised savings. Instead, the state is asking the federal government to help with the shortfall.

These government-imposed plans violate the rights of individuals to freely choose what health insurance plans are best for them, and, as a result, lead only to rising costs and rationing. If Coloradans value their lives and their health, they will also reject this deadly proposal.

For more information on genuine free-market health care reform for Colorado, please see www.WeStandFIRM.org .

Paul Hsieh, MD
Sedalia

Lines For Swedish Care Grow Longer

The February 4, 2008 edition of Investors Business Daily notes that rationing and waiting times continue to worsen in Sweden's system of socialized medicine. Here are some excerpts:

Waiting times for care, long a problem in Sweden and too often deadly wherever they're found, are now the longest on the Continent, says European think tank Health Consumer Powerhouse.

...Long waits are a hallmark of government health care anywhere it's employed. When the perception exists that treatment is free (it is not; Swedes pay more than half their gross income in taxes to support the welfare state), system overuse is inevitable. People can think of no reason to self-ration care. They show up in emergency rooms and doctor's offices with conditions for which they wouldn't seek treatment if they paid directly at the time of service.

Swedes are accustomed to cradle-to-grave care provided by the state. But rather than deal with long waits, they're opting for private care, which got a boost from limited reform in the 1990s. In private care, patients self-regulate and put less stress on the system.

Thanks to the profit motive, private health care providers have an incentive to cut waiting times, lest they lose customers to the competition. Government providers have no such motivation.

They do have incentive, however, to ration care when demand gets too high and costs soar. But to do so exposes "universal access" and "equal access" to be inaccurate descriptions. "Restricted access" would be more fitting.

Gorman Letter on The Hill

Linda Gorman has written the following letter on the 208 Commission findings which was published in February 13, 2008 edition of The Hill, a daily newspaper devoted to federal government news:

Panel's report on healthcare is poor model for U.S. policy

By Linda Gorman, Health Care Policy Center director, Independence Institute

Judging from the contents of his op-ed "Congress could learn from Colorado’s 208 Commission" (Feb. 5), Sen. Ken Salazar (D-Colo.) has been misinformed about Colorado’s 208 Commission.

Sen. Salazar implies that commission members found common ground on the "complex and contentious issue" of healthcare reform. They did not. I coauthored one of the two minority reports...

Medicaid and Medicare are the largest generators of uncompensated care in the United States. They are fiscally unsustainable, yet the commission recommended a vast expansion of Medicaid/SCHIP. The recommendations accompanying that expansion would give state government almost complete control over the vast funds in the private markets for health insurance and medical care.

Sen. Salazar talks about partnership and collaboration. He repeats the fashionable assertion that healthcare is "broken."

He does not bother to distinguish between relatively efficient private arrangements and the mess that Medicare and Medicaid have created.

Steven S. Schroeder, former head of the Robert Wood Johnson Foundation, the group that almost bankrupted Tennessee with TennCare and created model legislation that destroyed health insurance markets in Massachusetts, New Jersey and New York, once explained how to run partnerships: "[t]he key to public/private partnerships is to induce the private sector to 'play' on terms that are acceptable to the public sector." Otherwise, "strong incentives -- financial or political -- [are] needed to 'force' cooperation on what were otherwise competing and successful institutions."

Healthcare is too important to be left to public officials interested in forcing cooperation, and a fabricated consensus supported by manufactured factoids is not a good reason to give government virtual control of private healthcare. Real reform means deregulation to reduce costs, and flexible programs enabling people to save so that they can spend their own money on healthcare of their own choice. ...

Golden, Colo.

RMN Against Single-Payer Proposal

In the February 1, 2008 Rocky Mountain News, editorial page editor Vincent Carroll spoke out against the single-payer plan advocated by Congressional candidate Jared Polis:

CARROLL: Polis' rationing plan
By Vincent Carroll, Rocky Mountain News
Friday, February 1, 2008

If you're as rich as Jared Polis, you'll enjoy the world's best health care for the rest of your life no matter what happens to the system on which the rest of us rely. You can afford to roll the dice with a "national single payer health care system," which is what the Democratic candidate for the 2nd District congressional seat has announced he favors.

After all, you'll never experience the rationing of treatment that a single-payer regime inevitably entails.

Rationing? That's for people without a dot.com fortune. The superrich like Polis will simply bypass the insurance system, paying whatever it takes - here or anywhere in the world - for the best treatment money can buy.

Polis says his single-payer plan will involve (a) universal coverage and (b) the "same or better benefits" at (c) a lower cost for "95 percent" of families. He doesn't mention (d), the role of magic spells or incantations to bring this all to pass, but he should have.

"To date, other Western countries have been more successful in covering all citizens at a lower per capita cost, but they have done so only by limiting the availability of high-technology medicine." So writes former Colorado Gov. Richard Lamm and co-author Robert Blank in their recent book, Condition Critical, A New Moral Vision for Health Care. And these guys are on Polis' side of the single-payer debate!

"Every single-payer health system has at its core some form of health-care rationing, including strict limits on expensive care, such as organ transplants, chemotherapy and bone marrow transplants, and long waiting lines for elective surgeries," Lamm and Blank honestly acknowledge.

Do you suppose Polis will ever wait in line for elective surgery or forgo a chemo visit that the government refuses to cover?

Me neither. But he doesn't mind if you do.

Two Good LTEs in Colorado Springs Gazette

The February 13, 2008 Colorado Springs Gazette has printed two good LTE's on the issue of health care reform:

'Right' to care requires someone to provide it

In Sunday's Letters section, Phil Stahl stated that health care should be a right ("Government needed to prevent abuse of system"). Health care is nothing more or less then the services and goods produced by hard-working people. I am certain Stahl did not mean to imply that these people give away their labor without compensation.

If that compensation does not come from the person receiving the goods or service, then it must come from someone else. And that can only happen through voluntary or involuntary means. If it happens through involuntary means, then the threat of force and violence must be used. Rights that we all believe in and cherish such as speech and privacy do not involve taking anything away from someone else. If something you think of as a right can only be obtained by forcibly taking it from others, then it is probably not a right.

Steve Reinschmidt
Colorado Springs

Canada's system fails to provide proper care

Phil Stahl talks of how good the Canadian health system is in his letter. I suggest he visit www.freemarketcure.com/brainsurgery.php and view the 2006 video of an Ontario male with brain cancer.

For people who do not have Internet access, I'll provide a summary: the patient was going to have a four-month wait just to get a validating MRI and upward of an eight-month wait for the surgery under the Canadian health system.

Medical authorities said he would not survive the wait, so he went to Buffalo, N.Y., got the MRI and had surgery done in less than five weeks.

Due to the medical emergency, he asked for reimbursement of the $28K surgery cost from the Canadian government and was turned down.

John R. Tucker
Colorado Springs

Thanks to the Gazette for printing both of those letters.

WSJ on Insurance Mandates

The February 8, 2008 Wall Street Journal published the following OpEd critical of insurance mandates. Here are some excerpts:

To hear some of the presidential candidates, you'd think that health-insurance companies are the driving force behind the growing cost of health insurance. The more likely culprits are our politicians and the laws they pass.

...A health-insurance "mandate" is a legislative requirement that an insurance company or health plan cover (or offer coverage for) common -- but sometimes not so common -- health- care providers, benefits and patient populations. They include:

- Providers such as chiropractors (mandated in 46 states) and podiatrists (35 states), but also massage therapists (four states) and naturopaths (four states);

- Benefits such as mammograms (50 states) and drug abuse treatment (34 states), but also morbid obesity treatment (four states) and wigs for cancer patients (10 states);

- Populations such as dependent students (30 states), but also grandchildren (four states).

Although there were only a handful of state mandates in the 1960s, CAHI's just released "Health Insurance Mandates in the States, 2008" has identified 1,961 nationwide -- up from 1,901 a year ago.

For almost every health-care product or service, there are at least two groups that want insurance to cover it: those who sell the products and services so they can get more business, and those who use the products and services to lower their out-of-pocket costs. Both of these highly motivated groups push state legislators -- and increasingly members of Congress -- to require insurance to cover the care. As a result, government interference in and control of the health-care system is steadily increasing -- and so is the cost of health insurance.

...Fortunately, a few states are recognizing that mandates make health insurance more expensive. At least 10 states now permit mandate-lite policies, which allow individuals to purchase a policy with fewer mandates and so are more tailored to their needs and financial situation. And there are now at least 30 states that require a mandate's cost to be assessed before it is implemented.

Mandates aren't the only things driving up the cost of health insurance. States that require insurers to accept any individual who applies, regardless of their health status, are imposing costly burdens on health insurance. And those costs get passed on to consumers -- if they decide to keep their coverage.

Before politicians jump on the anti-health-insurance bandwagon, they should look at the role they are playing in driving up costs. Making health insurance more affordable would be a lot easier if they would stop legislating what it has to cover.

HB 08-1327 Affordable Health Insurance Choice

Representative Cory Gardner has introduced House Bill 1327 which is a solid move toward a free market in health insurance. It also has the sponsorship of Senator Mitchell.

This bill would allow a Colorado resident to purchase or enroll in a health insurance policy lawfully sold, offered or issued in any other state, from any health insurance company licensed to do business in another state, even if the company is not licensed to do business in Colorado, and even if the policy benefits are different, i.e., more or less, than those benefits required in policies issued by Colorado licensed companies. It would subject these companies to regulation by the Insurance Commissioner only with regard to the enforcement of contractual benefits, including those for prompt payment and the procedure for denial of benefits.

Why is this bill a positive step?

Currently, Colorado residents are required to buy policies 1) with these specific mandated benefits and with policy forms approved by the Colorado Dept. of Insurance, and 2) sold by companies licensed by the State of Colorado. This means that residents are limited to only those policies with all of the benefit mandates and limited to about 35 companies in the individual and small group markets. By necessity, these policies are more limited in benefits and prices than those provided by the hundreds of insurance companies licensed in the various 50 states.

The economic argument for this bill is clear. According to the Council on Affordable Health Insurance 2008 research, Colorado currently mandates 50 benefits, including treatment for alcoholism. However, three surrounding states do not require that treatment benefit. So, if you completely abstain from alcohol, or you know you will never need that coverage, then you could purchase a policy from at least six states including Arizona, Idaho and Wyoming that do not require that benefit. It is estimated that this one benefit raises the cost of health insurance from 1 to 3%. Likewise, if you know you will never need maternity benefits, why buy them? Colorado says that all policies must offer those benefits, but 30 other states make them optional. Maternity benefits also raise the cost by 1 to 3%. Individually, each mandated benefit may not raise the cost of a policy much, but combined, they make a significant difference, costing the consumer from 20% to 50% more, according to CAHI, depending on the mandates involved.

Alternatively, astute individuals would be able to find policies offered in other states that provide benefits that may not be offered in Colorado -- which means they could get insurance for something that is not covered now, and, at the same time, save money on their medical costs. For example, if an individual wanted in Vitro Fertilization covered by insurance and if she could not find a company in Colorado wiling to offer same, she probably could purchase the policy from an insurer outside the state.

In addition to cheaper health insurance, this freedom to purchase policies outside the state could provide peace of mind and the particular benefits that individuals and their families want and in some cases, need.

This bill also offers Colorado residents the opportunity to seek the most affordable and best of the regulatory schemes offered by the 50 various states.

This is a great opportunity for Colorado to lead the nation in allowing its residents greater freedom, real choice, and more personal health insurance, and I urge you to speak up and write about it -- write letters to the editor and op-eds. Let's get people talking about this consumer oriented, free market option to decrease the cost of health insurance. There really is no downside to this bill as it is currently proposed.

The Colorado House Business Affairs and Labor Committee meets next Monday at 1:30 to discuss this bill. The members of that Committee are:
Rosemary Marshall-Chair (D) 303-866-2959 rosemary.marshall.house@state.co.us Joe Rice-ViceChair (D) 303-866-2953 joe.rice.house@state.co.us David Balmer (R) 303-866-2935 david.balmer.house@state.co.us Dorothy Butcher (D) 303-866-2968 Morgan Carroll (D) 303-866-2942 morgancarroll@webaccess.net Mark Ferrandino (D) 303-866-2911 mferrandino@yahoo.com Cheri Jahn (D) 303-866-5522 cheri.jahn.house@state.co.us Larry G. Liston (R) 303-866-2965 larry.liston.house@state.co.us Victor Mitchell (R) 303-866-2948 victor.mitchell.house@state.co.us John F. Soper (D) 303-866-2931 john.soper.house@state.co.us and Amy Stephens (R) 303-866-2924 amy.stephens.house@state.co.us

Technical Credits

In the Year-End Results, the intellectual efforts were stressed and I tried to give credit to all of those in Colorado who used their voice to publicly endorse free market medicine and health insurance.

There are three people who have given of their time, skills and effort to FIRM and I want to publicly acknowledge them. First, Jennifer Armstrong created the distinctive logo of FIRM.

Diana Hsieh created the website and gave FIRM its presence on the web.

John Powers has enhanced it and given it a new look and feel. John is now the webmaster. In addition, John has taken the Leonard Peikoff article "Health Care is Not a Right," and given it a glossy new look and feel in the form of a brochure.

Thanks and kudos to each of you.

Schwartz in Pueblo Chieftain

O February 10, 2008, the Pueblo Chieftain also published Brian Schwartz's OpEd, "Compulsory insurance is collective punishment".

Pueblo Chieftain Opposes 208 Commission

The February 6, 2008 edition of the Pueblo Chieftain included the following editorial against the proposals of the 208 Commission:

Mantra of a crisis
THE PUEBLO CHIEFTAIN

A CLASSIC way to get controversial legislation passed is to declare a "crisis."

That's why a number of politicians and activists have been crying about a "health care crisis" in recent years. After the mantra is repeated in the media long enough, some of the citizenry begin to believe it.

So it's not surprising that Colorado’s Blue Ribbon Commission for Health Care Reform reported last week it will recommend that the Legislature require all state residents to have at least a basic health insurance policy. This is the approach tried in Massachusetts and California and one which is advocated in one form or another by both Democratic presidential candidates, Hillary Clinton and Barack Obama.

Spokesmen for the Blue Ribbon group deny their approach is socialized medicine, but it's clearly a step toward that.

For one thing, their approach would provide a state subsidy on a sliding scale for lower-income Coloradans. Whenever government controls the purse strings, government dictates policy, whether for highways or health care.

The commission doesn't know how this new entitlement would be paid for, saying it was directed by the Legislature not to look at that side of the equation. However, Blue Ribbon members admit it would be expensive - billions in new expenditures, we'd guess.

While a certain percentage of people do not have health insurance, that doesn’t mean they don't get health care. All they have to do is show up at an emergency room and care will be provided.

While that's not the most efficient use of health care resources, it surely doesn't rise to the "crisis" threshold.

How about Massachusetts and California? In the Bay State, officials found out that about one-fifth of the population simply couldn't afford the mandated insurance, so those people were allowed to opt out of the program. As a result, the number of insured increased only marginally.

In California, someone was paying attention to the costs of Gov. Arnold Schwarzenegger's universal care proposal, one which was a near carbon copy of the Massachusetts scheme. California Senate President Pro Tem Don Perata raised the issue of cost to a state government already running a $14.5 billion deficit.

An independent analysis found the plan would cost much more than proponents claimed. (We haven't seen a similar analysis in Colorado yet.)

When the California Senate Health Committee took a vote on ArnoldCare, the plan died when only one senator voted to send it to the floor. Call it a mercy killing.

It's axiomatic that people want three things out of health care: availability to all, high quality, and low cost. You can have any combination of two of those, but all three are simply impossible, despite what the advocates of a single payer system claim.

One only need to look north of the 49th Parallel to our neighbors in Canada to see the truth of that.

There will be much debate in the Legislature this year over the Blue Ribbon Commission's proposed health-care fixes. While that's going on, we advise readers to keep a tight grip on their wallets.

One thing that I found noteworthy was the fact that the editorial explicitly and correctly identified the 208 Commission's plans as a step towards socialized medicine. This is the term that the advocates of government-run medicine hate the most, precisely because they know it will arouse opposition amongst the citizenry. Good for the Chieftain!