Rhoads: Less Government, Not More

Jared Rhoads, director of the Lucidicus Project, has written another excellent OpEd on the problems with Massachusetts' health care. Some critics of the Massachusetts system are using that failure to call for yet more government control of health care. Rhoads notes that the exact opposite is true.

Here is his piece in its entirety, reposted with his permission:

Less government, not more
By Jared M. Rhoads

Recently, a national organization of physicians released a report strongly criticizing the health reform effort in Massachusetts that imposes a mandate on residents to purchase health insurance.[1] Citing several studies and data sources, the group showed that the reform has added wasteful new layers of bureaucracy and has failed to control costs. The Massachusetts program, they said, is faltering badly and thus should not be held up as a national model for reform.

Not exactly a ringing endorsement of government intervention in health insurance, right?

Think again. The report was published by Physicians for a National Health Plan (PNHP), a group that exists specifically to advocate for a universal, comprehensive single-payer government system of healthcare in the United States. Since 1987, PNHP has sought a government-financed system that would eliminate private insurers altogether. The group is increasingly visible in the health policy world; with more than 15,000 members nationwide, it has rallied on the steps of the capitol, published papers in journals, and has lobbied Congress.

For PNHP, the reason that the Massachusetts reforms do not work is not because the reforms interfere with the health insurance market, but because they do not interfere enough. The state reform has failed, they argue, because it leaves too much of the private system in tact. Until residents are stripped of the ability to purchase coverage from private insurers, state agencies like Commonwealth Care cannot generate sufficient "administrative savings" -- the magical ingredient in the group's Medicare-for-all vision that will allegedly lower the cost of healthcare and make additional entitlements possible.

In effect, PNHP denounces the Massachusetts reform in order to throw its support behind a much bigger goal: the United States National Health Care Act (H.R. 676). This act, which has already been introduced and referred to committee for review, would provide universal coverage under a single payer (the government) and promise all individuals the "best quality standard of care" for everything ranging from primary care and prevention to prescription drugs, mental health services, dental services, chiropractic services, podiatric care, and more. According to the bill, this would all be made available for "free" -- no co-payments, deductibles, or coinsurance required.[2]

In short, the approach that PNHP, the California Nurses Association, Healthcare for All, the American Medical Students Association, and dozens of other groups employ is: if one big dose of government doesn't work, try a bigger dose.

Combined with the recent statements by President Obama that healthcare reform "cannot wait ... and will not wait another year," it is becoming clear just how dangerous a time it is for those who value individual rights. Government payment for medical services -- regardless of whether state or federal -- is neither a moral nor practical solution to the problems we face in healthcare. But is anyone in the mainstream media arguing that point? Activists have no right to require the young to sacrifice the old, the healthy to sick, or the productive to the poor. But is anyone in Congress about to defend those convictions?

Contrary to what big-government activists maintain, market forces do work in healthcare. Insurance works -- when policies are based on coverage that consumers actually want and when premiums are tied to actual risk profiles. New technologies lead to lower costs -- when reimbursement rates reflect real prices. And uninsured individuals are not a menace to others -- when providers are not forced to provide charity care and when states do not pick up the tab. Real markets feature competitors who are free to compete and consumers who are free to be discriminating in what they buy.[3]

Massachusetts has not had anything resembling a free market in healthcare for decades. But the answer is not to drift even closer to disaster and institute a bigger mess at the federal level. The answer is to unshackle consumers, providers, and insurers and free the markets once and for all.

_____

1 "Massachusetts’ Plan: A Failed Model for Health Care Reform" Physicians for a National Health Plan, February 18 2009

2 The United States National Health Care Act, H.R. 676 [http://www.pnhp.org/docs/nhi_bill_final1.pdf] Accessed February 27 2009

3 This is a careful improvement on a point made in Herzlinger, R. "Creating a Real Healthcare Market", Boston Globe, February 18 2009, a piece that unfortunately cedes ground to the antitrust camp.

Thank you, Jared!

More Problems In Massachusetts

The March 16, 2009 New York Times article "Massachusetts Faces Costs of Big Health Care Plan" discusses the new controls that Massachusetts state government will impose on doctors, hospitals, and insurers in order to salvage their failing "universal health care system".

Costs are continuing to skyrocket out of control despite a round of new taxes. Hence, the article notes:

The very stakeholders who were coaxed into the tent -- doctors, hospitals, insurers and consumer groups -- would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said.

"Constraining" how doctors practice basically means the government overriding a doctor's judgment as to how to treat his patients. It interposes the bureaucrat into the doctor-patient relationship in order to save costs.

The end of this road will be government rationing, just as in the UK where the government explicitly says that it won't pay for treatments if it costs too much.

Advocates of universal health care often criticize free market medicine on the grounds that we "can't put a price on human life". But it is the government-controlled medical systems that actually do put a price on life. In such systems, patients can only hope that their government doesn't consider their own lives too expensive to save.

The answer to skyrocketing costs is not a government takeover of health care, but rather the free market. As we've seen with cellphones and computers, the free market drives down costs and improves quality.

Similarly, the sectors of medicine such as LASIK eye surgery which are the most free (i.e., least controlled by the government) show the same pattern of falling costs and rising quality over time. This can and should be the norm in all of medicine.

(For more on the problems with Massachusetts' system of universal health care, see the DC Examiner piece "Universal coverage? First, look at the disaster in Massachusetts" and my Objective Standard piece, "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America".)

Pisaturo on ObamaCare

In the March 11, 2009 edition of Capitalism Magazine, Ron Pisaturo argues that "Obama's Socialist 'Reforms' for American Healthcare are Impractical and Immoral".

Here's an excerpt:

...But the impracticality of socialized medicine goes far deeper than inefficiency. Socialized medicine -- which already dominates American medicine through Medicare, Medicaid, and persecution of the drug and insurance industries -- is impractical because it rests on the immoral premise that healthcare is a right, that healthcare must be provided equally for all.

Consider the contrasting case of the computer industry, which is much freer than the healthcare industry. When the newest, most souped-up, most software-laden computer with the most comprehensive service contract first comes out, it might cost $20,000 or more. Only wealthy Americans choose to buy, or can afford to buy, such an expensive model. Most Americans settle for a model and service contract that costs maybe $1,000 or less. But a couple of years later, after manufacturers have improved their manufacturing ability and brought their costs down, they can sell the old souped-up model for $1,000; and then the average man can enjoy what only the wealthiest could afford a couple of years earlier. Meanwhile, the wealthy can now buy an even more amazing new computer for $20,000.

This has been the pattern of all technological progress in all industries throughout the Industrial Revolution. A poor immigrant today making less than minimum wage off the books can afford to pay for a life-saving antibiotic that the richest of the rich could not obtain a few generations ago.

But suppose the government declares that owning a computer is a right, and so every American has the right to a quality computer, the best computer available. Then progress becomes an enemy of the state. Every new, $20,000 computer has to be provided to everyone. And so, instead of the average computer cost per person being around $1,000, the average cost is $20,000.

The government's only recourse is to outlaw progress.

Moreover, some people who had no computer before are now entitled to one. And they need more service, because they keep spilling booze on it. And those who had two computers must do with only one, with less service. And soon the computer models become more stripped down, because that's the only way to pay for an equal computer for all.

And so it has been going in America's socialized healthcare industry for the past two generations...

Read the whole thing.

As usual, the combination of moral and economic arguments is more powerful than either alone.

IBD on the Health Care Trojan Horse

The March 10, 2009 Investors' Business Daily warns against the "Trojan Horse" of Obama's health care reform plan. Here's an excerpt:

...Obama's plan is a blueprint for socialization in stages. It starts with a basically good idea -- setting up a truly national market (which we don't have now) for private insurance -- and stacks the odds against the insurers by putting a tax-subsidized plan in the mix.

The private plans would have to be at least as generous as the public plan; this was stated explicitly by the Obama campaign. However, they would be denied its subsidy, so it would be impossible for them to match its benefits and still make money.

It would be like herding sheep into the fold and letting the wolf in. Or you can think of the public plan as a Trojan horse. Once allowed inside the gates of the health insurance market and given an unfair advantage, it will eventually out-compete its private rivals and gain monopoly power.

Plus if history is any guide, the collapse of the private insurers due to unfair competition from the government will be labelled a "failure of capitalism", and used to justify a complete government takeover of health insurance.

We've already seen this specious reasoning applied to the mortgage crisis, as George Mason University professor Peter Boettke noted:

If you bound the arms and legs of gold-medal swimmer Michael Phelps, weighed him down with chains, threw him in a pool and he sank, you wouldn't call it a "failure of swimming". So, when markets have been weighted down by inept and excessive regulation, why call this a "failure of capitalism"?

Fortunately, publications like IBD are calling attention to this problem before it happens. Let's hope enough Americans are listening.

(Update: Fixed bad link to IBD piece.)

Doctors Vs. Begley

The March 9, 2009 Newsweek published an inflammatory piece by Sharon Begley entitled, "Why Doctors Hate Science".

Her basic premise is that doctors refuse to follow science, which is why we need "comparative effectiveness" research to help guide them into appropriate practice patterns.

Others have warned that this is just a smokescreen for government control of medicine (and subsequent rationing). Of course doctors don't hate science -- that's the basis of our profession. But we do hate bureaucrats telling us how to practice. As I wrote in my DC Examiner piece:

The Obama administration would control costs by creating a new Federal Coordinating Council for Comparative Effectiveness Research to determine which treatments are deemed most effective and thus eligible to be paid for by government. These decisions would be based on statistical averages that cannot take into account specific facts of individual patients.

Yet good physicians must consider precisely these specifics when treating their patients. If you are suffering from abdominal pain due to gallstones, who should decide whether medication or surgery would be more effective for you?

The doctor who has felt your abdomen, listened to your heartbeat, and knows your drug allergies? Or the bureaucrat who got his job by telling the right joke to the right person at the right Washington cocktail party?

And now physician-blogger "Orac" has chimed in with his own debunking of Begley's article entitled, "'Why doctors hate science'? More like: Why does Sharon Begley hate doctors?"

I don't necessarily agree with all of Orac's points, but he is correct to note that comparative effectiveness research is going to be used to control costs.

My contention is that it's also going to be used to control physicians. If the government says, "A is cheaper than B, therefore we'll only pay for A", what's going to happen when the doctor believes that B is better for his patient?

Kesler: Top Ten Specious Premises for ObamaCare

Bruce Kesler lists the Top Ten Specious Premises for ObamaCare. Each of these is described in greater detail in the full post:

1. Comparing US Health Care To Other Developed Countries
2. US Health Care Spending Is More Than We Can Afford
3. Reform Overhaul Will Yield Major Savings
4. Increased Evidence-Based Medicine And Health Information Technology Will Significantly Improve Care and Reduce Costs
5. Present Administrative Costs And Insurer Profits Are Too High
6. US Consumer Dissatisfaction Requires Drastic Health Care Changes
7. Health Care Costs Are So High They Are A Major Cause Of Personal Bankruptcy
8. The Number Of Uninsured Is So Large That Drastic Health Care Changes Are Necessary
9. More Preventive Care Will Better Serve Consumers And Save Costs
10. Health Care Consumers Are Being Served By Drastic Health Care Changes

Read the whole thing.

This is another good economic analysis of the issues that will be front-page issues soon.

(Via Debby.)

Schwartz OpEd: "Beware single-payer health care"

The March 8, 2009 Colorado Daily has published Brian Schwartz's latest OpEd, "Beware single-payer health care". Here's the introduction:

Independent Ideas: Beware single-payer health care
Colorado should adopt free-market reform instead

By Brian T. Schwartz, Sunday, March 8, 2009

Politicians cannot guarantee health care, but by trying they can create an unaccountable and toxic insurance monopoly.

Beware of Colorado House Bill 1273, which will be heard by the House Business Affairs and Labor Committee on March 18.

The Rocky Mountain News described the Colorado Guaranteed Health Care Act as a "Canadian-style, single-payer" bill. A recent survey finds that nearly one in four state House members advocate single-payer health care...

Update: It also appeared in the 3/9/2009 Denver Daily News.

Ronald Reagan on Universal Health Care

This classic video has been making the rounds lately:



Via 911Doc.

(Note: Again, FIRM is non-partisan. Plus I don't necessarily endorse Reagan's policies on some important issues, but this video is pretty much on the mark.)

Knope Issues A Call To Arms

Dr. Steve Knope has just issued a call to arms to physicians to stand up against bureaucrats who would control how they practice.

(Note: Knope refers to himself as a "Libertarian". FIRM is non-partisan and does not endorse the Libertarian Party or any other party. Speaking purely for myself, I'm not a Libertarian either, but I am a supporter of individual rights, free markets, and limited government.)

Get Ready For the Unintended Consequences

President Obama plans to pay (in part) for his "universal health care" plan by raising taxes on "the wealthy", defined as those making over $250,000 per year.

However, this will also create massive unintended consequences in the health care sector as well as in the economy at large.

Here's how one physician will respond if Obama's plan becomes law:

My wife and I are both pediatricians. We own our own practice together. We have one PA and 7 other employees. We each gross about $200 K a year. We have 3 young children at home, 2 of whom are not in school. We also employ an in-home nanny. My wife has been torn for years about not being at home for these children, which are our biggest investment in the future. We operate parallel S corporations as PC's, with a 50/50 ownership of the LLC that is our business. We file taxes jointly. After crunching some numbers concerning the President's tax hike proposals, I have come to the following conclusions. If the President's plan is enacted, we will do the following:

1. My wife will become a stay at home mother.

2. At least 3 of my 7 employees will be released.

3. The practice will downsize to a smaller office space, i.e. less rent.

4. The number of patients cared for on a daily basis will drop by 40%.

5. My wife will come out of the forced ER call schedule for good.

6. I will gross $249,999.00 a year, exactly.

7. The net income of our personal home will decrease by less than $10 K a year from where it would have been if we changed nothing.

And another physician points out:

Seeing that almost half of doctors are women, and most are married and many have children, it should be obvious that many will reduce their hours worked. And with all the problems that Obama Care will create, there WILL be a shortage of doctor hours to care for patients. So EVERYONE will EQUALLY WAIT IN LONG LINES FOR CARE.

In Massachusetts' universal system, some patients are waiting up to a year for a routine physical exam.

Is this a taste of the future for the rest of the United States?

(Both quoted segments via Bill Spears.)

Cochrane on Health-Status Insurance

University of Chicago finance professor John H. Cochrane has published a terrific paper on how the free market can handle one of the problems that worries patients most about health insurance -- namely, "What happens if I get sick and become uninsurable?"

His paper, "Health-Status Insurance: How Markets Can Provide Health Security", discusses how this problem can be addressed through the free market, without government regulations. From the executive summary:

Free markets can solve this problem, and provide life-long, portable health security, while enhancing consumer choice and competition. "Heath-status insurance" is the key. If you are diagnosed with a long-term, expensive condition, a health-status insurance policy will give you the resources to pay higher medical insurance premiums. Health-status insurance covers the risk of premium reclassification, just as medical insurance covers the risk of medical expenses.

With health-status insurance, you can always obtain medical insurance, no matter how sick you get, with no change in out-of-pocket costs. With health-status insurance, medical insurers would be allowed to charge sick people more than healthy people, and to compete intensely for all customers. People would have complete freedom to change jobs, move, or change medical insurers. Rigorous competition would allow us to obtain better medical care at lower cost.

Basically, it's insurance on future insurability, similar to this option being offered by United Health Care.

Cochrane's paper also discusses why various proposed government "solutions" (such as laws requiring insurers to accept all applicants and charge them the same price for coverage) merely make things worse.

When there is both a demand for a service (protection against future uninsurability) and someone willing to supply that service, the marketplace will allow both parties to work out a mutually satisfactory arrangement.

(Via PatientPower.)

PJM OpEd: "Ayn Rand and the Tea Party Protests"

The online commentary/opinion website PajamasMedia.com has just published my latest OpEd entitled, "Ayn Rand and the Tea Party Protests".

Although the piece only briefly mentions "universal health care", it discusses basic principles that are definitely applicable to the health care debate:

My overall theme is that the Tea Party protesters must couple their outrage at the government bailouts with a positive vision of a properly limited government based on Ayn Rand's ideas.

Here is an excerpt:

Ayn Rand and the Tea Party Protests
March 2, 2009 - by Paul Hsieh

Over the past week, an extraordinary wave of "Tea Party" protests has erupted across America. Citizens around the country have expressed outrage at the government's mishandling of the financial crisis. And one of the most intriguing developments has been a resurgence in interest in Ayn Rand's classic novel Atlas Shrugged.

Denver's Tea Party protest opened with a reading from Atlas Shrugged. A sign at the New York City protest read, "Ayn Rand Was Right." One banner at the Atlanta Tea Party said, "Read Atlas Shrugged Before It Happens." The Ayn Rand Institute reports that sales of Atlas Shrugged have nearly tripled compared to last year due to Americans' concerns about the economic crisis.

So why has there been such a renewed interest in Ayn Rand?...

Read the rest here.

Basu: "Who Should Pay for Autism Treatment?"

The March 1, 2009 Undercurrent has an excellent discussion of Virginia's proposed autism coverage mandate by Rituparna Basu. Here's an excerpt:

Who Should Pay for Autism Treatment?

Medical treatment for autism is exceedingly expensive. Many parents of autistic children take out a second mortgage on their homes and some even file for bankruptcy because they are unable to pay the costs of autism treatment that insurance does not cover. Many believe that this situation is not fair and that the government should step in to alleviate the hardships these parents endure.

In Virginia, proponents of House Bill 83 are trying to pass a law, similar to one already passed in eight other states, that would require insurance companies to cover the medical costs of treating children with autism.

...Insurance companies' costs will obviously increase if they are forced to pay for the treatment of autistic children. To offset this additional cost, insurance companies will do one of two things: they will either offer fewer medical services to maintain the current premiums or increase the premiums for everyone. In the former case, vital medical services will no longer be covered, and patients who rely on these services will have to pay more for them. In the latter case, all insured individuals will be charged a higher premium, which means that some people who have health insurance will no longer be able to afford it and fewer employers will be able to offer health insurance to their employees.

...People work hard to earn money in order to attain those goods and services that make their lives enjoyable and worth living. Consider what this bill means to those who do not have autistic children: instead of spending their money on that which they value, now they will be forced to spend that money on other people's autistic kids. Many families who already find health insurance difficult to afford will now be forced to decide whether they want to spend more for their health insurance or instead use this money for other important expenses, such as investing it towards a college education for their children or paying their rent or mortgage. If it is unfair for parents of autistic children to have to pay their children's medical bills, how much more unfair is it for other parents to have to pay the same bills? Demanding that people hand over their hard-earned money without regard for the consequences such an action will inflict on their lives is unjust.

Read the whole thing here.

I especially like the fact that Ms. Basu integrates the economic and moral arguments against insurance mandates. IMHO, we badly need more such health policy analysis along these lines.

More on "Never Events"

What happens when the US government is itself at fault for a so-called "never event"?

I'm sure they hold themselves up to the same stringent standards that they expect the rest of us to follow...

Doctoring the Numbers for Socialized Medicine

My recent Washington Examiner OpEd on "health care czars" was the subject of a spirited discussion thread at LittleGreenFootballs.

My wife Diana brought this comment to my attention:

Funny. In Sweden, right now, the government has all the hospitals agree to this "guarantee of service" which means when you seek non-emergency care, you must be guaranteed to see a doctor within 7 days. And if the doctor sees it is needed, he will refer you to a specialist, and you must be seen within 90 days. Then if treatment is needed, you must be treated within 90 days.

Nice, but, the hospitals can't meet that arrangement, so hospitals are quietly asking their doctors not to issue referrals -- that way they get out of the 7-90-90 agreement, and the heavy fines imposed on the hospitals if they do not fill them.

This sort of "doctoring" of the numbers is not limited to Sweden.

Last year, a controversy erupted in the UK when it turned out that ambulance drivers were told to keep critically ill patients within the ambulance, even after the vehicle had pulled up to the hospital property just outside of the doors of the emergency rooms (called "A&E" for "Accident & Emergency" in Great Britain).

The patients were forced to wait within the ambulance so that their waiting time in the vehicle wouldn't count against the hospital's waiting time, thus allowing the hospitals to technically claim that their patients were treated within government-mandated standards of arrival within the hospital:

Scandal of patients left for hours outside A&E

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.

If the US adopts government-run "universal health care", we will see American hospitals acting similarly and placing a higher priority on "doctoring their numbers" rather than their patients.

Rationing In Oregon

Oregon is the only state with formal medical rationing procedure on the books. Linda Gorman discusses its decision procedure.

She also notes:

The Oregon Health Services Commission Web site explains that the 2009 list emphasizes preventive care and chronic disease management because these services are less expensive and often more effective than treatment later in the course of a disease. However, there is no evidence that preventive care will reduce expenditures for the general population. Good evidence for the cost-effectiveness of disease management programs beyond those currently offered by physicians, individuals, insurers and patient groups also remains elusive.

What is driving the move away from procedures to save lives in immediate danger? Oregon's prioritized list is drifting toward increasing expenditures for politically popular care. This means preventive care for the healthy and treatment of diseases with active political constituencies. This drift in rationing appears to be unavoidable when political processes are given control over medical decision making.

Given that many of the supporters of "universal health care" at the national level are also plugging preventative care as an alleged source of savings, we may be on the verge of seeing this dynamic play out at the national level.

Hsieh OpEd in Washington Examiner

The February 23, 2009 Washington Examiner published my latest OpEd entitled, "America Doesn't Need a Health Care Czar". Here is the intro:

America doesn't need a 'health care czar'

By Paul Hsieh, MD, OpEd Contributor - 2/23/09

KEY DATA: Free market health reforms could reduce health insurance costs by over 50%.

TAKE HOME: President Barack Obama's plans for a "health czar" would represent an unprecedented and dangerous intrusion of government into the practice of American medicine.

Former senator Tom Daschle's withdrawal as President Barack Obama’s nominee for Secretary of Health and Human Services has left the White House administration scrambling to find a new "health czar" to implement their goal of government-run "universal health care."

But while the primary focus had been on Daschle's tax problems, Americans should also ask a more fundamental question: Why do we need a health czar in the first place?...

Read the rest here.

Atlas on American Medical Care

The February 18, 2009 Washington Times published the following OpEd by Dr. Scott Atlas. Atlas does some much needed "mythbusting" of the alleged problems with American health care. Here are a few excerpts:

Pardon The Interruption...

As politicians, economists, popular media and an ever increasing list of others convincingly proclaim cures for the ills of American health care, we Americans are subjected to a stream of opinion deriding as utterly miserable our health-care system compared to the rest of the developed world.

...In this interlude between health czar nominees, and before we legislate government as the solution and final arbiter of medical care, it may be a good time to consider a few unheralded facts about America's health-care system.

Dr. Atlas then cites (with references) the following facts:

(1) Americans have better survival rates from both common and rare cancers than Europeans

(2) Americans have significantly better survival rates from cancer than Canadians

(3) Americans have better access to treatment for chronic diseases than Canadians

(4) Americans have better access to preventive screening for major cancers than Canadians

(5) A marker for inequality of access and quality of health systems, the "health-income gradient" (i.e., that higher incomes achieve better health and lower incomes mean worse health) for adults 16 to 64 years old reveals a more severe disparity in Canada than in the United States

(6) In the United Kingdom and Canada, patients wait far longer than Americans (about twice as long, sometimes even more than a year) to see a specialist, have elective surgery like hip replacements or cataracts, or get radiation treatment for cancer

(7) Sixty percent of Western Europeans say their health systems need "urgent" reform

(8) More than 70 percent of Germans, Canadians, Australians, New Zealanders and U.K. adults (all countries in the survey except the Netherlands, with "only" 58 percent) say their health systems needs either "fundamental change" or "complete rebuilding"

(9) Although much maligned by economists and targeted by policymakers, an overwhelming majority of America's leading physicians themselves recently listed the computerized tomography (CT) scan and magnetic resonance imaging (MRI) as the most important medical innovations in improving patient care in the previous decade

(10) By any measure, the vast majority of all the innovation in health care in the world comes out of the U.S. health-care system

Read the whole thing here.

Surveys have shown that most Americans are satisified with the quality of their own health care. But because of the constant media drumbeat about the health care "crisis", too many are led to believe that everyone else is having a hard time and thus we need massive "reform" in the form of government-run "universal" care.

Articles like Dr. Atlas' will go a long ways towards countering these errors.

BTW, Dr. Atlas is both a senior fellow at the Hoover Institute with a focus on health care policy and also one of the top academic neuroradiologists in the country as a full professor of radiology at Stanford Medical Center. I used his textbook during my residency training as did many of my practice partners.

Hsieh LTE in Rocky Mountain News

The February 19, 2009 Rocky Mountain News printed my letter critical of yet another single-payer health care proposal for Colorado:

Single-payer health care has failed in every other country

Response to your story, "Dems' bill shoots for universal health care" from 2/5/2009 by Ed Sealover.

Single-payer health care has failed in every other country that has tried it. Canada controls health costs by forcing patients to wait months for MRI scans and cardiac surgeries that Americans can get in a few days.

Single-payer advocates mistakenly claim that health care is a "right".

Health care is a **need**, not a right. Rights are freedoms of action (such as the right to free speech), not automatic claims on goods and services that must be produced by another.

Instead of single-payer health care, America needs free-market reforms, such as allowing patients to purchase insurance across state lines and use health savings accounts for routine expenses. Insurers should be allowed to sell inexpensive, catastrophic-only policies to cover rare but expensive events.

Such reforms could reduce costs and make insurance available to millions who cannot currently afford it, while respecting individual rights.

"Comparative Effectiveness": The Path to Rationing

Lawrence Hunter discusses how the Obama Administration will use "comparative effectiveness ratings" (CERs) to introduce health care rationing. Here's an excerpt from his article:

The Hidden Healthcare Horror

...CER basically involves comparing different pharmaceutical drugs, medical devices, and other treatments in order to determine which is most cost-effective for fighting a particular disease. Theoretically, that sounds like a good program. But, in practice, CER will likely be used to justify rationing and restrict patient treatment options.

That's been precisely the result of CER programs in other countries.

Britain's comparative effectiveness agency, the National Institute for Health and Clinical Excellence (NICE), recently denied approval for the osteoporosis drug Protelos. NICE officials claimed that it was too pricey to be covered by the country's public insurance system. Never mind that research shows that Protelos's cheaper alternatives aren't effective for one out of every five osteoporosis patients. Countless Britons will now suffer from preventable bone fractures.

Canada's government-run healthcare system is equally stingy about approving state-of-the-art medical treatments. One recent example: A 57-year-old man living in Alberta went in for treatment for an arthritic hip. A specialist recommended he receive a cutting-edge surgery known as "Birmingham" hip resurfacing. Public bureaucrats denied the man coverage for the procedure, claiming he was "too old" for it. Worse still, they forbade him from paying for the procedure himself on the private market.

Virtually every government-run CER program ends up closing off patient access to the best treatments in the name of "cost consciousness." When bureaucrats are put in charge of medical care, cutting down on bills is prioritized over fighting disease.

Whenever government attempts to "guarantee" a service such as health care, it must also control it. This necessarily places bureaucrats in ultimate control of health care delivery, not physicians and patients.

Where Does Your State Rank?

The Small Business & Entrepreneurship Council has come up with a handy guide to rank the 50 US states (plus the District of Columbia) based on how badly their regulation raise the cost of health insurance. Some of the measures include the number of mandates, whether the state requires "guaranteed issue", community rating, and employer mandates, whether it allows tax-free use of Health Savings Accounts.

Here's their guide:

"Health Care Policy Cost Index: Ranking the States According to Policies Affecting the Cost of Health Care"

And their conclusions:

Among the 50 states and District of Columbia, the best 15 states in terms of state health care policies are: 1) Idaho, 2) Utah, 3) Iowa, 4t) Michigan, 4t) Ohio, 6) Alaska, 7) South Carolina, 8) South Dakota, 9) Pennsylvania, 10t) Nebraska, 10t) Wyoming, 12) District of Columbia, 13) Kentucky, 14) North Dakota, and 15) Oklahoma.

Meanwhile, the worst states are: 37) Minnesota, 38) New Hampshire, 39t) North Carolina, 39t) Rhode Island, 41) Florida, 42) New York, 43) New Jersey, 44) Colorado, 45) Maryland, 46) California, 47) Vermont, 48) Connecticut, 49t) Maine, 49t) Washington, and 51) Massachusetts.

Our elected officials talk a great deal about "solving the health care crisis." Unfortunately, the origins of the crises can largely be traced back to governmental policies that raise the costs of health care, and thereby limit the availability of health care coverage. If policymakers are serious about having a positive impact on health care, then significantly limiting the number of mandates and regulations makes sense at the federal and state levels.

Obviously, I wish Colorado ranked higher than 44th. But at least we have the examples of lots of other higher-ranked states to point to in the public policy debate!

(Via State House Call.)

Esmail: "'Too Old' for Hip Surgery"

The February 9, 2009 Wall Street Journal has published an OpEd by Nadeem Esmail warning of the health care rationing we'll be facing if we continue on our current course towards nationalized health care. Here is an excerpt:

'Too Old' for Hip Surgery

President Obama and Congressional Democrats are inching the U.S. toward government-run health insurance. Last week's expansion of SCHIP -- the State Children's Health Insurance Program -- is a first step. Before proceeding further, here's a suggestion: Look at Canada's experience.

Health-care resources are not unlimited in any country, even rich ones like Canada and the U.S., and must be rationed either by price or time. When individuals bear no direct responsibility for paying for their care, as in Canada, that care is rationed by waiting.

Canadians often wait months or even years for necessary care. For some, the status quo has become so dire that they have turned to the courts for recourse. Several cases currently before provincial courts provide studies in what Americans could expect from government-run health insurance...

For more discussion of problems with Canadian health care, click here.

Knope in Wall Street Journal

The February 14, 2009 Wall Street Journal has a major article on concierge medicine, featuring Dr. Steve Knope. Here's an excerpt:

Health Matters

Dale Haralson was the kind of patient some doctors would rather avoid. In 2005, the Tucson, Ariz., lawyer had a triple-bypass operation, then contracted an infection that spread to his chest, lungs, blood and bone. He needed more surgery and was told he would need a permanent feeding tube. But few surgeons wanted to take his complex case.

A former partner recommended that he see Steven D. Knope, a local primary-care doctor who treats a small group of patients in exchange for an annual fee. Dr. Knope took over Mr. Haralson's care, and found a skilled and willing surgeon and a pulmonologist who said that, instead of a feeding tube, he just needed to use an inhaler every day.

Today, Dr. Knope handles all the routine medical care for Mr. Haralson and his wife, Betty, and tracks the couple's general health and fitness. Together, they pay him $10,000 a year, and think it's money well spent. "All you need is one crisis and a good outcome and you know it's worthwhile," says Mr. Haralson, age 71, who exercises regularly, still practices law and still eats chocolate cake.

The kind of "concierge medicine" that Dr. Knope practices is gaining popularity across the U.S., particularly among older Americans with complex medical needs...

(Read the whole thing.)

In particular, there are a few points worth highlighting.

1) Concierge doctors take care of some complex, challenging patients whose needs could not be met in the standard fast-food medical model. If a doctor taking Medicare or conventional insurance has to average 7 minutes per office visit just to pay the overhead, there's no way he can do justice to his patient's medical needs.

2) Concierge medicine is not just for the wealthy. Those services are affordable to patients of modest means, if they are willing to budget for them and place a high priority on good medical care. It's no different from the fact that some parents who really value their kids' education will make it a priority to budget carefully and send their kids to a good private school rather than subject them to the harms of a government-run public school.

3) Both parties win because concierge medicine represents a shift towards free-market principles. Patients receive the care they need at a fair price. Physicians are able to practice according to their medical conscience, while being appropriately compensated. This is just an example of the broader virtue of free markets, where buyers and sellers exchange money for services on a purely voluntary basis. In a free market, the exchange occurs only if both parties deem it to be in their benefit. The concierge physician succeeds only by offering a genuine value to his patient. Hence, they are willing and eager to do so, as the many happy patients in the article can attest to.

If you want to protect yourself from the upcoming fiasco of "universal" Obama-Care, follow Dr. Knope's advice:

Maintain your private medical care if at all possible. If you are relatively healthy, look into a high-deductible health insurance plan linked to a Health Savings Account (HSA). Start putting money away in that HSA for a rainy day. Find a "concierge physician" or doctor with whom you can establish a direct financial relationship; someone who will act as your medical advocate in a system that is broken and will only get worse. You get what you pay for and medicine today is no different.

After all, it's your life at stake.

Concierge Physicians Vs. Maryland - Update

AP News reports that, "The Maryland Insurance Administration has issued a report clarifying the distinction between so-called 'concierge' medical practices and insurance providers who are subject to state regulation."

According to the article:

...[A]s long as the annual fee for a physical exam does not exceed the market value of the services, the business model would not be considered "insurance." For practices offering bundled fees for unlimited office visits, the report says contracts must define the services and use market values to avoid being considered insurance.

This may seem like a victory for concierge physicians. But the problem is that the current prices of most medical services are set directly or indirectly by government. Government explicitly sets prices for services rendered through programs like Medicare and Medicaid. And many private insurers peg their own rates to Medicare (e.g., paying for an ultrasound test at 125% of Medicare), thus increasing the scope of government influence in setting prices in the nominally private sector.

Hence, most medical "market values" are ultimately set by government, rather than by patients and physicians negotiating in a truly free market.

To illustrate the danger this poses to concierge physicians, consider what would happen if Medicare costs kept skyrocketing and the government decided that it must lower the payments for a Medicare patient's office visit from $50 to $25?

Yet suppose that concierge physicians decide they wish to still charge $50 (because they judge that's an appropriate price point that allows them to practice quality medicine) and their patients are glad to pay that amount (because they wish to receive that quality service)?

Because of the massive influence of the government in medicine, the "market value" of an office visit would be at or near $25, even though the concierge medicine price of $50 would be the actual price in a free market.

Hence, the government could then semi-plausibly claim that concierge physicians were "gouging" their patients by charging above-market rates, making them liable to be regulated as "insurers".

This is why concierge physicians must oppose in principle any claim whatsover by the government that it should regulate their fees. Any money that a concierge physician earns is based on a voluntary agreement between doctor and patient, where both sides judge that they are making a fair and rational exchange.

If concierge physicians value their ability to practice according to their best conscience, they should continue to oppose the state of Maryland's attempt to slip in this "market value" loophole.

Concierge physicians are the "market value" and they should be proud of that fact. They shouldn't let the government steal that noble designation from them.

(Via Dr. Steve Knope.)

My PajamasMedia OpEd on Cass Sunstein

The online political commentary website PajamasMedia.com has published my OpEd on Cass Sunstein, who is President Obama's new director of the Office of Information and Regulatory Affairs. Sunstein is one of the leading advocates of the philosophy known as "libertarian paternalism".

Although it's not directly related to health care, if his ideas were implemented, they could have an enormously destructive effect on American freedoms in many spheres including health care.

Here is the opening of my piece:

Obama's Regulatory Chief Believes in Paternalistic Government
February 10, 2009 -- by Paul Hsieh

The old joke runs, "I'm from the government and I'm here to help." Most Americans are appropriately skeptical of such a claim, just as they are skeptical when told that they've won $10 million in a Nigerian lottery. But President Obama's selection of Harvard Law professor Cass Sunstein to direct the Office of Information and Regulatory Affairs threatens to turn this joke into grim reality...

Read the rest here.

McCaughey on Government Controlled Medicine

Although Tom Daschle is no longer the nominee for Secretary of Health and Human Services, his ideas live on in the boondoggle "stimulus package".

In this Bloomberg News piece, Betsy McCaughey points out how the current stimulus bill calls for a "Federal Coordinating Council for Comparative Effectiveness Research" to essentially dictate how doctors should practice medicine. The government will decide what treatments are "most effective" and should therefore be paid for. If your doctor thinks a different treatment may be more appropriate for you, then he risks losing money and/or running afoul of the authorities.

Advocates of "universal health care" like to say that it would create a "compassionate" system in which money would no longer pose a corrupting influence on medical practice. Instead, doctors would be able to practice in their patients' interests free from economic concerns.

Of course, this is not possible. Any system of "universal health care" merely shifts the economic decision-making from the affected parties (doctors and patients) to government bureaucrats who will not necessarily have the patients' best interests in mind.

Free market health care is reviled by the leftists because it supposedly "puts a price on life". But as Betsy McCaughey points out, it is the government-run systems that actually do put a price on life and will explictly deny care to patients if it costs too much.

This is already the policy in Great Britain, as The Telegraph reported in its August 13, 2008 article, "Patients 'should not expect NHS to save their life if it costs too much'".

If we're not careful, it will soon be the policy in the US.

Government Interference With Insurance Markets

The February 8, 2009 Oklahoman points out some basic lessons from Economics 101:

Risk averse: State control affects insurance market

Here's what happens when governments assume too much control of the property and casualty insurance market: Private insurers are driven out, leaving taxpayers as the insurers of last resort.

Here's what happens when governments assume too much control of the group health insurance market: Premium prices are driven up, leaving some citizens uninsured...

Regulations on health insurers have driven away insurers in other states such as South Dakota. Those insurers returned only when those bad laws were repealed.

If we adopt such laws at the national level (as many universal health care advocates wish), then private health insurance may disappear altogether, leaving Americans with no choice but to rely on a government-run single-payer insurance system. When the government becomes the only health insurer, it has citizens by the throat and can take control over their lives in ways that private insurer would never dream of.

(Via Rob Abiera.)

Coverage vs. Care in Japan

Japan's universal health care system supposedly guarantees "coverage" for all residents. However, theoretical coverage isn't the same thing as actual medical care, as this unfortunate man found out:

Injured man dies after rejection by 14 hospitals

After getting struck by a motorcycle, an elderly Japanese man with head injuries waited in an ambulance as paramedics phoned 14 hospitals, each refusing to treat him.

He died 90 minutes later at the facility that finally relented -- one of thousands of victims repeatedly turned away in recent years by understaffed and overcrowded hospitals in Japan.

Paramedics reached the accident scene within minutes after the man on a bicycle collided with a motorcycle in the western city of Itami. But 14 hospitals refused to admit the 69-year-old citing a lack of specialists, equipment and staff, according to Mitsuhisa Ikemoto, a fire department official.

The Jan. 20 incident was the latest in a string of recent cases in Japan in which patients were denied treatment, underscoring health care woes in a rapidly aging society that faces an acute shortage of doctors and a growing number of elderly patients.

Nor is the problem one that would be solved by imposing a law like the US EMTALA statutes which force hospitals to accept and stabilize emergency patients. In the US, this has creating yet more overcrowding of emergency room. EMTALA has also driven away physicians from working at these hospitals. What cardiologist or neurosurgeon wants to take ER call if he isn't compensated for any care he delivers, but can still be sued for any alleged malpractice?

Instead, Japan's problems are more systemic and "is nearing collapse". When people are told they have a "right" to care without limit, costs will also rise without limit. Soon, the only alternative will be rationing, as is already commonplace in other countries like Canada and the UK.

Will the US be next?

(Via Gus Van Horn.)

Scandlen on Massachusetts Mandates

Greg Scandlen of the Heartland Institute has posted a brief article on the problems in Massachusetts entitled, "Mandatory Health Insurance Fails in Theory and in Massachusetts".

In addition to describing the bad economic outcomes caused by that state's policy of mandatory insurance, he concludes:

Mandatory insurance violates insurers’ and consumers’ right to act in their own best interests by forcing insurers to sell and customers to purchase insurance on terms and prices dictated by government decree. This destroys the very conditions that give insurance any value at all.

This is exactly on target and I'm glad he's highlighting that critical point.

(I'm also honored that he cites FIRM and my Objective Standard article, "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America".)

Gingrich: The Market Can Fix the Healthcare Problem

In the January 27, 2009 issue of US News & World Report, former Congressman Newt Gingrich explains why we need free market health care reforms:

...Yet oddly, there is sympathy for turning over our most private, personal decisions, not to mention one sixth of our economy, to the same unresponsive, anti-entrepreneurial culture that gave us the response to Hurricane Katrina. Our two largest government-run health programs--Medicare and Medicaid--are on fiscal crash courses that make Social Security seem like a model of solvency. Steep benefit cuts or much higher taxes will be required to sustain them anywhere near their current form.

The dwindling number of doctors who accept Medicare patients resent politicians and government bureaucrats threatening their fees and meddling with their judgment. This has aided the rapid expansion of private "concierge" medicine for seniors who can afford it and for physicians who demand more than what Medicare offers. In the mid-1990s, Tennessee's Medicaid's program went further than any other state toward the 1993 Hillary Clinton model of government-run healthcare. It proved so catastrophic that only the capable leadership of Democratic Gov. Phil Bredesen--who profoundly scaled back the experiment--saved the state.

More government bureaucrats involved in your healthcare would be destructive. Other countries with similar systems face lengthy and often deadly waiting lists. That is the only way to ration unlimited demand in the face of static supply. Go to YouTube and view the short films of Stuart Browning for a flavor of the Canadian system.

He makes many good economic points. When combined with fundamental moral arguments (such as government-run health care infringes on basic human freedoms), these can be extremely effective.

(Via David Catron.)

The Trojan Horse?

Is the Obama stimulus package a Trojan Horse for nationalized health care?

Joseph Smith warns about this possibility in this article in the February 2, 2009 American Thinker.

(Via Tom Olson.)

Update: Fixed bad link.

Lessons From Hawaii

Grace-Marie Turner explains how, "Hawaii's Keiko Crash Offers Lesson for All".

Fortunately, Hawaii's "universal coverage" plan for children collapsed quickly before it could destroy private insurance in the state. But it offered a good example of the phenomenon known as "crowd out".

Will the other 49 states learn the right lesson? Or will we duplicate this error on a national scale?

Massachusetts In A Nutshell

Grace-Marie Turner of the Galen Institute reports the following observation by one Massachusetts resident about their system of "universal health care":

"Before, I was uninsured and couldn't see a doctor. Then I made the sacrifice to buy insurance, but I still can't find a doctor who will see me. So I still don't get to see a doctor, but it's just costing me more now."

Concierge Physicians Fight Back

In response to the recent attempt by the state of Maryland to regulate concierge physicians as a form of insurance, the Society for Innovative Medical Practice Design (SIMPD) -- the national organization that represents concierge doctors -- has started to fight back.

Dr. Steve Knope has the scoop.

Patients have the right to seek medical care and physicians have the right to offer it on terms they find mutually acceptable. Both sides win they this freedom of contract is respected and protected by the government. It's good to see physicians defending their rights and their patients' rights.

Rhoads: What Administrative Savings?

Jared Rhoads of the Lucidicus Project has written another OpEd, which I am reposting here with his permission. His topic is the myth of administrative savings under government-run "single payer" systems:

What Administrative Savings?
January 17, 2009 by Jared M. Rhoads

Many people seeking national healthcare reform -- particularly those on the political left -- believe that the United States should adopt a single-payer insurance system, similar to that of Canada's. Proponents say that single-payer systems achieve lower per capita healthcare expenditures because they eliminate "wasteful and unnecessary" business practices such as advertising and screening of new applicants, and that this lowers administrative costs. By empowering the government to pay all health insurance claims, they say, we could simplify paperwork, standardize billing procedures, and consolidate many other activities entailed in processing claims. In other words, if we would just leave the business of health insurance to the government, we could get the same great care we have always had, except at a much lower cost.

But do single-payer systems really achieve lower expenditures through operational efficiency, or is something else going on in this picture?

At first glance, the argument regarding administrative costs may seem plausible. After all, businesses are always trying to reduce costs by building economies of scale, so what could be more economical than having one payer for the entire nation? And statistics do show that per capital spending on healthcare is lower in many countries with single-payer systems. For example, in 2005, Americans on average spent $6,401 on healthcare, versus $3,326 for Canadians -- a difference of over three thousand dollars per person per year.

What pundits and politicians fail to disclose, however, is that the reduction in administrative costs by and large does not account for this difference. In fact, it doesn't even account for most of the difference. According to an article in the New England Journal of Medicine, administrative costs totaled an estimated $1,059 per person annually in the United States versus just $307 per person in Canada.[1] That's a difference of just $752, or about 23 percent of the difference. So where does the rest of the alleged savings come from?

In effect, Canada's relatively low per capita rate of expenditure comes not from reducing paperwork, but from using the financial grip of the government to withhold care.

Consider how the Canadian system works. Canada uses a global budget system in which government officials dictate to hospitals how much they will be allowed to spend in a given year. Looking at variables such as patient volume, supply costs, and inflation, they come up with a projection -- i.e. a wild guess -- for how much it will cost to treat all of the patients who come for care. Each hospital receives a lump-sum payment (or is put on a schedule of recurring payments), an amount of money that must last until the next round of guessing and granting.

When the money runs out, as it predictably does each time, care slows to a crawl. In order to defer or reduced costs, hospitals put patients on long waiting lists or substitute lower quality services (e.g. giving x-rays or ultrasounds in lieu of higher-resolution but more expensive MRI scans). In short, if you are a patient in Canada and need an expensive procedure, you had better hope that the facility is either early in its budget cycle and therefore still awash in money, or that it has deprived enough other patients the services that they need so there is still a ration left for you.

One of the most the perverse things about any socialized system of healthcare, including Canada's, is that the less the system does for its patients, the better its financial performance looks on paper. For instance, if a hospital withholds care from a patient long enough, the patient may give up and travel over the border to get their diagnostic test, surgery, or other procedure done elsewhere. In terms of the hospital's pocketbook (and therefore also the nation's pocketbook), this scenario goes down as an unseen and unaccounted-for personal expense, not an expenditure. Or, perhaps the patient on a six-month waiting list for hip surgery simply dies while waiting. In that scenario, there is no cost to the system at all.

Whatever the case, national expenditure figures of single-payer systems can be set as low as government officials desire, because what ultimately determines how much care patients receive is what the government is willing to fund -- not how much patients want to spend or how much their physicians recommend they spend. (And even if patients wanted to pay out of their pocket for faster or better care by their own doctor, in many cases it is illegal to do so.) Quality and access to care can always be sacrificed to create the illusion of a government-run system that is low-cost and efficient because they are much more difficult to measure and compare.

The notion of administrative efficiency as the primary source of savings is nothing but a shabby cover story to hide the rationing inherent in a single-payer system. Most people wouldn't trust (or allow) a government official to set a budget for what they spend on dry cleaning in a year, yet with a little rhetoric and some confusing statistics, they are willing to hand over control of their own healthcare. Rather than emulating our neighbors to the north and instituting a top-down, centralized system in which the government makes decisions about how much care each person should get, Americans ought to demand the freedom to pay for as many or as few services as they desire, and to keep for themselves whatever they do not spend.

_____

1 Woolhandler, Campbell, and Himmelstein. "Costs of Health Care Administration in the United States and Canada" N Engl J Med 2003;349(25):2461.

Goodman: Market Forces Work

John Goodman discusses how medical markets can actually work, citing a number of positive examples including:

Cosmetic and LASIK surgery
Laboratory testing
Pharmaceuticals
Retail health clinics
Concierge medicine
Medical tourism

The common element is that when patients control their health spending, they rationally choose to seek the greatest value for their dollar. The result is decreasing costs and increasing quality, as we expect in the free market.

For more information, see the blog post and the full paper by Devon Herrick, "Health Care Entrepreneurs: The Changing Nature of Providers".

These economic arguments work especially well when combined with the moral arguments for free market health care -- namely that patients have the right to seek health care and physicians have the right to provide it in terms that they find mutually agreeable.

Hunt: How I Got My New Hip

Allison Hunt explains what she had to do to get her new artificial hip in the Canadian medical system:



A few interesting points:

(1) Her waiting time for the initial appointment to see the orthopedic surgeon was 10 months. Then her waiting time for the surgery itself would have been another 18 months had she not taken matters into her own hands.

(2) She had no qualms about doing what she needed to do to "jump the queue". At some implicit level, most people realize that it's right to seek to improve one's health and life -- i.e., that pursuing one's self-interest is good.

(3) She also explicitly recognized that what she was doing was "cheating the system". However, she doesn't ever quite come out and say that the system was morally wrong. Instead, her final remarks sound like a form of moral rationalization for her actions. It's therefore unclear to me whether she personally thinks her actions were right and the system was wrong, or the other way around. This highlights the importance of explicit discussion of the morality (or lack thereof) of government-run health care.

(4) This sort of "queue jumping" happens all the time in Canada. Lee Kurisko, a physician who has practiced in both Canada and the US calls this the "deep dark secret" of Canadian medicine.

(Thanks to Paul Lemke for the video link.)

Daily: It's Not Wrong to Put a Price on Health

Stella Daily has written an excellent commentary responding to the recent New York Times article, "Putting A Price on Compassion".

I am reposting her piece here in its entirety, with her permission:

It's not wrong to put a price on health

In yesterday's New York Times, Pauline Chen lamented our growing comfort with the role of money in medicine. She refers to healthcare as "the gift of life," which cannot be reduced to a mere commodity that can be quantified and analyzed. And she cites the example of a man suing his estranged wife for either the return of the kidney he donated to her or $1.5 million as evidence that medicine has become too commoditized, saying that there "should have been outrage over putting a dollar value on human life." Is she right?

It's telling that Ms. Chen calls healthcare "the gift of life." Throughout the whole article, the tone is: Healthcare is getting easier to assess and quantify in monetary terms, and that's a bad thing. She would prefer "compassionate care" and "patient-centered partnerships." The implication is clear: Altruism needs to play a bigger role in medicine. Thus, healthcare is not a trade between individuals to mutual benefit, but "the gift of life."

But bringing altruism into medicine harms patients rather than helping them. If we allowed people to buy and sell organs in this country, we would see the supply of available organs increase; is it more "compassionate" to allow thousands of patients to die waiting for an organ, just to keep money out of the equation? If we go toward a freer market in medicine, rather than move in the direction of price controls and government mandates for lower payments to doctors, more bright young people will want to go to medical school; is it "compassionate" to create a shortage of doctors, or to tell someone who has spent many years in extensive postgraduate training that he doesn't deserve to make money just because people need his services?

It's true that quantifying the cost-effectiveness of healthcare has caused dissatisfaction in some ways: The insurance company decides that your doctor's time is worth a lower amount this year than last year, so he shortens the length of a visit and sends you off feeling as though you were rushed through the appointment. Your policy raises the copay for prescription drugs, so your asthma medication costs more, but delivers you no more value than it did when you were paying less. And so on and so forth.

But such examples do not prove that altruism is the solution. They only illustrate the problem with trying to pretend that healthcare has no monetary cost. When patients have to pay for their own care, they become cost-conscious: They evaluate for themselves whether it's worth it to pay more money for a doctor who has more time to spend with each patient, or whether the cost savings is worth a quick visit with less time to discuss medical issues. When a third party is introduced, the patient is insulated from the true cost of care. He starts to want the best of everything, regardless of how much it costs -- because his insurance company is covering the cost. The insurance company, on the other hand, wants to reduce costs as much as possible, even if it means that some patients are dissatisfied with their care. Thus, instead of mutual trade to mutual benefit, we get a system nobody is happy with.

Doctors, medical researchers, and pharmaceutical company executives do not work for the benefit of others. They work because of the pleasure they get from tackling the problems of human disease -- and because of the financial rewards they stand to gain. And nobody can be expected to donate an organ to a stranger out of brother-love alone. The fact that there's money in medicine is not a sad fact to be lamented -- it's the reason that we can enjoy good care.

If you liked her piece, check out her blog ReasonPharm.

More Regulation = Higher Prices

More regulation of insurance companies in Colorado is causing premiums to go up.

Here's the latest example.

(Via Brian Schwartz.)

More Trouble With Medicare "Never Events"

Dr. Kevin Pho discusses more problems and unintended consequences caused by the new Medicare "never event" rules in his January 15, 2009 OpEd in USA Today, "Medicare's Mistake". Here's an excerpt:

...Where Medicare goes wrong, however, is by extending the no-pay rules to include "reasonably preventable" complications. These currently include patient falls and hospital-acquired infections.

...When a hospitalized patient develops an infection, for instance, it can be difficult to determine whether the fault lies with the medical staff or with a predisposed condition. This is a crucial distinction because Medicare will punish the former scenario but pay in the latter.

Hospitals might be motivated to order tests, without clear medical symptoms, to show that any infection caught from within its walls was already pre-existing.

The American Medical Association shares this concern, saying that the aggressive expansion of no-pay events can "drive up costs by requiring more tests upon admission."

Furthermore, some institutions could decide not to admit or perform elective procedures on high-risk patients, particularly the elderly, out of fear of being denied payment for complications it cannot prevent.

Robert Wachter, professor of medicine at the University of California-San Francisco and an authority on hospital medicine and patient safety, cautions that the rapid expansion of the no-pay idea looks like a "cost-cutting effort clothed in the garb of patient safety" that is "nowhere near ready for prime time."

In other words, government controls to save money will end up costing more money in the long run, because doctors and hospitals will practice to suit the external incentives created by regulation rather than according to what's in the patients' genuine medical interests.

These sorts of unintended consequences will become the norm if we adopt any form of government-run universal health care.

CT Looking To Repeat MA Mistakes

The January 16, 2009 New York Times reports on Connecticut's attempt to implement "universal health care" despite the failure of a similar program in neighboring Massachusetts. This proposal has the support of the Connecticut Medical Society.

As Dr. Evan Madianos notes, they must believe that reality doesn't cross state lines.

The Value of Innovation in Health Care

Grace-Marie Turner of the Galen Institute has a new article on "The Value of Innovation in Health Care". It's well worth reading the entire piece.

One point that can never be emphasized enough is that innovation comes from the free exercise of the rational mind. The human mind requires freedom to function. That is why men need the freedom to think and the freedom to act according to their best judgment. Only force can stop the mind from functioning, which is why the initiation of force is anti-life.

When government protects individuals from the initiation of force, it protects individual rights and promotes life. In contrast, when government initiates force against honest citizens, it stifles the human mind, and thus prevents exactly the sort of life-fostering innovation that Grace-Marie Turner describes.

That is the real evil of government-run medicine. By smothering the mind, it smothers life itself.

(Disclaimer: Although Turner's piece portrays the Bush administration in a favorable light, this post should not be construed as any kind of endorsement of Bush-era policies. President Bush has been anything but a principled defender of free markets or individual rights.)

ObamaCare Could Kill You

David Catron explains why, "ObamaCare Could Kill You".

Read the whole thing. It's your life at stake.

Hsieh LTE in NCBR

From Brian Schwartz, I learned that the Northern Colorado Business Report published one of my LTEs recently as well:

Kefalas readies comprehensive health-care bill

Every country with a single-payer system saves money by rationing and waiting lists. You can save a lot of money by forcing women to wait months for their chemotherapy for their newly diagnosed breast cancer. You can save money by limiting the numbers of cardiac surgeries per year. This is commonplace in Canada. But the patients pay the ultimate price. Do we really want this in America?

Paul Hsieh, MD

Freedom and Individual Rights in Medicine (FIRM)
www.WeStandFIRM.org
Sedalia

(I'm not sure of the exact date, so I'll attribute it to 1/16/2009.)

Knope On Forbes Article

Dr. Steve Knope sent me these additional comments on the recent Forbes article on concierge medicine, "Should You Dump Your Primary Care Physician?"

I am reproducing them here with his gracious permission:

First, the title Forbes selected carries a very interesting message: "Should You Dump Your Primary Care Doctor?" It would seem that Forbes is effectively calling concierge medicine the "gold standard" by which readers should judge their own primary care doctor. If your doctor doesn't measure up -- if you don't have adequate access to and time with your doctor -- perhaps you should consider "dumping" him and paying for better care. This is a far cry from the uniformed criticism that was levied against concierge doctors in the early stages of this movement. It would appear that people are beginning to get the idea that doctors cannot provide excellent medical care without the time to do so.

Second, the comments from Joseph Heyman of the AMA are revealing in their ignorance and represent nothing more than political rhetoric:

"...[H]e says, physicians 'should provide the same quality of care to all patients regardless of the model of care in which they are practicing.'"

Really? Let's examine this statement from the chairman of the Board of Trustees of the AMA. Doctors should somehow provide the same level of care in a traditional, third-party practice (in a 7 minute visit) that a concierge doctor provides to his patients in a 30 minute visit. And just how does a physician do this, Dr. Heyman? The corollary of this statement is already recorded in the AMA position statement on concierge medicine: There is nothing intrinsically unethical about concierge medicine, they say, provided that doctors do not advertise concierge medicine as somehow better than the standard, fast-food medical model.

When is the AMA going to stop spewing this political nonsense and start telling the truth? If I didn't think spending more time with a patient was better care, I wouldn't do it. Most concierge doctors take excellent care of about 600 patients. This is plenty. Suggesting that a doctor can do the same job while taking care of 3,000 patients is nonsense. It is clearly refuted by a large body of literature, which shows that primary care doctors do not have the time to adequately address the needs of their patients, much less address their preventative care, which is now being touted by the nationalized healthcare advocates as a part of our needed "reform."

Thank you, Dr. Knope, for standing up for your right to practice in a free market on your terms, for your patients' best interests, according to your medical conscience, free from government interference.

Knope Featured on Forbes

Forbes has an article discussing concierge medicine in detail. When physicians and patients are able contract in the free market, the result is vastly improved patient care as well as physicians who love their jobs because they can practice according to their medical consciences.

Learn more at, "Should You Dump Your Primary Care Physician?"

Dr. Steve Knope is one of the featured physicians in this article.

How To Protect Yourself Against ObamaCare

Dr. Steve Knope gives some good advice on how patients can partially protect themselves from ObamaCare and the inevitable rationing. Here's an excerpt:

My advice: Maintain your private medical care if at all possible. If you are relatively healthy, look into a high-deductible health insurance plan linked to a Health Savings Account (HSA). Start putting money away in that HSA for a rainy day. Find a "concierge physician" or doctor with whom you can establish a direct financial relationship; someone who will act as your medical advocate in a system that is broken and will only get worse. You get what you pay for and medicine today is no different.

All indications are that there will be attempts to ram a national healthcare program through Congress early in the Obama administration. They will create a false sense of urgency, just as they did with the "financial bailout" of our economy. No time to study the issue; this must be done or the society will collapse! Tom Daschle has studied Hillary Clinton's failed national healthcare attempt and he does not want to make the same mistakes she made. He was just quoted in the WSJ as saying that the new Congress needs to act quickly. "We need to be on the offense. This time around, lawmakers cannot try to address every detail when it comes to legislation. Details kill." [Secretary-nominee of Health and Human Services Tom]Daschle said.

"Details kill?" "Lawmakers cannot try to address every detail?" We are just going to guarantee medical coverage for every American on the backs of the American taxpayer and we don't have time to discuss the details of how it will work or how it will be paid for? Every good lawyer I've ever retained has reminded me that the devil is in the details! It looks like we are in for a devil-of-a-new program.

Read the whole thing.

Of course the best way to protect yourself from the dangers of government-run universal health care is to stop it in the first place. So let your friends, family members, co-workers, and elected officials know that you don't want it! After all, it's your life that's at stake...

Citation in Washington Examiner

The January 11, 2009 Washington Examiner has quoted me in their editorial on the dangers of universal health care. Here is the opening:

Universal coverage? First, look at the disaster in Massachusetts
By Examiner Editorial -- 1/11/09

To much fanfare from both right and left in 2006, Massachusetts became the first state in the nation to require all residents to buy health insurance. A new state health insurance clearinghouse was created, with taxpayers subsidizing those who couldn't afford to buy coverage. Then Gov. Mitt Romney, a Republican, promised that "every uninsured citizen in Massachusetts will soon have affordable health insurance." Yet just two years later, Romney's much-heralded "solution" -- touted by many as the model for a national program -- has become an embarrassing flop.

Just a year after the universal coverage law passed, The New York Times reported, state insurers were already jacking up rates to twice the national average. According to Dr. Paul Hsieh, a physician and founding member of Freedom and Individual Rights in Medicine, 43 mandatory benefits -- including those that many people did not want or need, such as in vitro fertilization -- raised the costs of coverage for Massachusetts residents by as much as 56 percent, depending upon an individual's income status. So much for "affordable" health care...

Read the rest here.

Their OpEd quoted extensively from my article in the Fall 2008 issue of The Objective Standard, "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America".

The same issue also includes an excellent OpEd by Sally Pipes, "Obama-Daschle 'reform' will cripple American health care".

I'm deeply grateful to the Examiner for publicizing this issue and to Craig Biddle for encouraging me to write the original TOS article.

Update: The OpEd also appeared in the San Francisco Examiner.

CAHI on Mandatory Insurance

The Council for Affordable Health Insurance has just issued a short two-page paper entitled, "Should the Government Force You To Buy Health Insurance?"

It includes some useful economic data as well as some pretty damning criticisms of the Massachusetts mandatory insurance plan.

The CAHI is a little more sympathetic to the Swiss system of mandatory insurance that I would be. The Swiss system still violates individuals' right to contract, although the subsequent bad economic effects have not (yet) hit Switzerland as hard as Massachusetts.

But overall, the CAHI piece is informative and well worth reading!

Rhoads: On Preventative Medicine

Jared Rhoads, director of the Lucidus Project, has written another OpEd on the government's flawed push to promote preventative medicine. It is reposted here with his kind permission:

On preventive medicine
by Jared M. Rhoads (December 16, 2008)

With expectations for major healthcare reform on the rise, members of Congress are pushing for comprehensive measures for increasing the use and funding of preventive medicine. Senators Tom Harkin (D-Iowa) and Chris Dodd (D-Conn), for example, want to put more prevention programs in place because prevention is "smart economics in addition to good public policy."[1]

Actually, this type of prevention has nothing to do with economics, and it has no place in any proper discussion of public policy.

Practicing good prevention is a thoroughly personal responsibility. Signing up for a mammogram, having a colonoscopy, or keeping on schedule with dental exams are all part of what it means to be a rational, self-interested adult. The same is true of exercising, eating well, managing stress, and countless other measures. Sure, scientific differences of opinion exist over which of these is most important and why. But is this simple advice really so abstruse as to require government officials to instruct us how to manage our own bodies?

Whether in the domain of health, lawn care, or backgammon, the fact that such-and-such an action is "smart" is not a sufficient reason for it to be required, subsidized, paid for in full, or in any other way made the business of the government. Dodd's claim that preventive medicine is good economics and good policy makes, at best, a pseudo-logical connection. If it is proper for government to oversee and involve itself in the care of each man's health, then it is smart to economize over the long term with preventive programs today. The form of this argument holds, but where on earth did he get his premise from?

What Dodd and his colleagues fail to grasp is that government is not a plaything for do-gooders to improve society in whatever ways they believe is good -- regardless of whether such interventions make economic sense. We all know what Dodd means: an ounce of prevention is worth a pound of cure. But while that maxim is wise in the realm of personal conduct, it is irrelevant to public policy.

Why? Because the sole purpose of government is to protect individual rights. Whose rights are being violated if John Q. Smith does not get, does not want, or cannot afford, a prostate cancer screening? The answer is that nobody's rights are being violated -- not Smith's rights, not his neighbor's, and not anyone else's -- so no government-backed remedy is in order. There is, however, a violation of rights if citizens are taxed to pay for each other's services; or if certain preventive measures are made compulsory (or "highly incentivized"); or if insurance premiums are manipulated through selective tax incentives; or if further licensing requirements are introduced to mandate the teaching of preventive medicine in medical schools. Each of these is a distinct possibility given the proposals currently being discussed.

Legislators may have the power, but they do not have the right, to intervene with healthcare or any other industry. Nothing they can do can make such involvement right. Put another way, legislators do not tell us what rights we have; rights tell us what legislators can (and cannot) do.

If preventive healthcare is as economically advantageous as proponents claim, then let people form free associations with like-minded individuals and purchase -- or forgo -- healthcare services as they choose. No programs, no personal fitness czar, no "public-private partnerships", no "Universal HealthMart." Just individuals living as they see fit, and managing the natural risks and rewards of their own behavior. Now that would be smart public policy.

_____

[1] Adofo, A. Congressional Quarterly Healthbeat, December 10 2008

Parker on the Federal Health Board

Dr. Richard Parker explains why the proposed new "Federal Health Board" will be hazardous to your health:

The "Federal Health Board:" Another Scheme to Ration Healthcare

Tom Daschle, President-elect Obama's nominee for Secretary of Health and Human Services, has big plans for healthcare. Mr. Daschle has proposed a new "Federal Health Board," an agency that would have unprecedented powers over the healthcare industry. This new federal board would essentially determine by government fiat what doctors can and cannot do to treat their patients. This represents not only a vast increase in government regulations, but the virtual elimination of healthcare decisions at the point of service, and the specter of government bureaucrats making life and death decisions over physicians and patients.

Never mind what you and your physician think is the best course of treatment, the "Federal Health Board" in Washington will make all those decisions for you...

Read the rest here.

The moral is the practical.

Hsieh OpEd in Christian Science Monitor

I'm pleased to report that the January 7, 2009 edition of the Christian Science Monitor has published my latest OpEd on health care entitled, "Universal healthcare and the waistline police".

My theme is that adopting government-run universal healthcare will lead to a "nanny state on steroids" deeply antithetical to core American principles of individual freedom and responsibility.

Here is the opening:

Universal healthcare and the waistline police

Imagine a country where the government regularly checks the waistlines of citizens over age 40. Anyone deemed too fat would be required to undergo diet counseling. Those who fail to lose sufficient weight could face further "reeducation" and their communities subject to stiff fines.

Is this some nightmarish dystopia?

No, this is contemporary Japan.

The Japanese government argues that it must regulate citizens' lifestyles because it is paying their health costs. This highlights one of the greatly underappreciated dangers of "universal healthcare." Any government that attempts to guarantee healthcare must also control its costs. The inevitable next step will be to seek to control citizens' health and their behavior. Hence, Americans should beware that if we adopt universal healthcare, we also risk creating a "nanny state on steroids" antithetical to core American principles...

Read the rest here.

(I would also like to extend my deepest thanks to Diana Hsieh, Ari Armstrong, and Brian Schwartz for their many helpful suggestions when proofreading earlier drafts of this piece.)

Maryland Moves Against Concierge Medicine

The December 20, 2008 Baltimore Sun reports on a proposal by the Maryland insurance commissioner to regulate concierge physicians as a form of insurance.

Fortunately, Greg Scandlen has been raising a stink about this. And so has Marc Kilmer.

And the January 2, 2009 Baltimore Sun also printed my LTE opposing this unjust intrusion of government against the rights of patients and physicians to contract for their mutual benefit.

But as Dr. Steve Knope explains, the Maryland physicians gave up the fight too quickly.

If Maryland patients want to preserve this option for themselves, they need to speak up now.

Thomas on Charity and Rights

Retired surgeon Dr. David Thomas has posted some thoughts on charity, medical care, and rights on his blog. The following is an excerpt from his post, "Can There Be A Right to Medical Care?":

...When I was in medical school, there was no insurance. People got care. Doctors charged and received payment with a direct doctor-patient relationship that was mutually sustainable and satisfactory, medically and financially. Poor people received care through the dedication and compassion of the doctor and community.

I was taught, "Save the widow the farm." That is, when Farmer Joe comes in with a lung cancer, one might encourage him to undergo extensive, expensive surgery that would require that the farm be mortgaged. However, the results were dismal. After Joe’s death, the widow frequently was unable to pay the mortgage and lost the farm.

Instead, one could explain the situation with compassion and frankness and Farmer Joe and his wife, using the same frugality and value system by which they had otherwise lived, would accept the reality of the situation, a reality that bespoke a meager chance of benefit that was not appropriately affordable. Joe's plight would be alleviated by all palliative means medicine had to offer. This rational, realistic decision was the norm. Indulgence in futile care to the point of threatening the whole system was not a problem.

Some patients would be wealthy, and with a full understanding, decide to take the slim chance of cure, paying for their treatment out of pocket, getting the "best money could buy." Frequently, they would leave money in their will to help the hospital meet the expenses of the care given to the poor.

Patients who received charity care knew that the doctor was doing it without pay, out of compassion. That had an added healing effect on the illness and the patient had the ennobling experience of gratitude. The physician sensed fulfillment of the underlying reasons that called him to an honorable, healing profession, a reward greater than money. Thus, the patient and the physician derived a mutual benefit.

The intrusion of government as the provider for the poor came at a great price. The politician arrogated the role of being the source of care. He gave the poor a warrant for medical care through Medicaid and instilled an attitude in the patient of having a right to it. This deprived the patient of any sense of being a recipient of personal compassion and the physician of feeling appreciated. The patient was told that the medical bill had been paid by the government. The physician actually received a pittance on the bill. So the mutual benefit of patient gratitude and physician fulfillment was replaced by the patient feeling entitlement and the physician feeling exploited.

Dr. Thomas has written much more, and I may post additional excerpts in the future. Here's the link to the whole piece.

Happy New Year!

Because of the holiday, there will be no posting until January 5, 2009. Happy New Year!