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Posts Tagged ‘health care’

A new public inquiry into abuses at the Mid Staffordshire National Health Service Trust’s hospital has found a years-long pattern of fatal mistakes and abuses. The report makes for damning reading. From the BBC report:

Years of abuse and neglect at the hospital led to the unnecessary deaths of hundreds of patients.

But inquiry chairman, Robert Francis QC, said the failings went right to the top of the health service.

While it is well-known the trust management ignored patients’ complaints, local GPs and MPs also failed to speak up for them, the inquiry said.

The local primary care trust and regional health authority were too quick to trust the hospital’s management and national regulators were not challenging enough.

Meanwhile, the Royal College of Nursing was highlighted for not doing enough to support its members who were trying to raise concerns.

The Department of Health was also criticised for being too “remote” and embarking on “counterproductive” reorganisations.

The report said the failings created a culture where the patient was not put first.

Specifically, the report cites 1200 “unnecessary deaths” due to poor care, without a single manager having been held responsible. But the United Kingdom keeps health care costs down!

Twitter hashtag “#welovethenhs” is again trending.

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That’s the subtitle of a new working paper from Peterson, Pandya, and Leblang. Here’s the abstract:

Skills are often occupation-specific, a fact missing from existing research on the political economy of immigration. Although analyses of survey data suggest broad support for skilled migration occupational licensing regulations persist as formidable barriers to skilled migrants’ labor market entry. Regulations ostensibly serve the public interest by certifying competence but are simultaneously rent-preserving entry barriers. We analyze both the sources of US states’ licensure requirements for international medical graduates (IMGs), and the effect of these regulations on migrant physicians’ choice of US state in which to work over the period 1973-2010. Analysis of original data shows that states with self-financing state medical licensing boards, which can more easily be captured by incumbent physicians, have more stringent IMG licensure requirements. Additionally, we find that states that require IMGs to complete longer periods of supervised training receive fewer migrants. Our empirical results are robust to controls for states’ physician labor market. This research identifies an overlooked dimension of international economic integration: implicit barriers to the cross-national mobility of human capital, and the public policy implications of such barriers.

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Mike Munger, Duke political scientist and sometime Libertarian Party of North Carolina gubernatorial candidate, explains his support for single-payer health insurance:

I would prefer personal responsibility, and a competitive market in health care. Modeled after the very successful, constantly cheaper, constantly better quality, service in Lasik surgery and other “elective” surgeries. If someone, anyone, would even consider going in that direction, that would be fine.

Insurance would be for major problems, big surgeries, accidents. You might have an annual deductible of $5k or more. Doctors would advertise prices (yes, PRICES) of standard surgeries.

Does any of that sound familiar? I didn’t think so. Instead, we have something really bad. Single payer would be better than what we have. Single payer is also better than ACA, by the way, which is why I am not happy about the decision yesterday.

What we have is this…

Click through for the rest. I’m not persuaded by the claim that single-payer is better than what we have now, but I think it might be better than what the PPACA sets up. The fact is that in unregulated states (no community rating or guaranteed issue, elimination riders permitted, low mandated benefits), health insurance is pretty cheap for healthy people, and states are increasingly experimenting with allowing nurse practitioners and dental hygienists to practice independently, making less than half of their respective top-level professional equivalents and presumably passing along the savings to us. The problem is that in unregulated states, unhealthy people can’t get coverage. At all. There are tools that insurance companies can use to make coverage reasonably achievable even for the unhealthy, like elimination riders, but there is strong social pressure against their use. As a result, insurance companies would rather deny coverage to a high risk than offer coverage with exclusions. It looks bad to people to do the second. It makes no sense, but it’s a good case study of how social pressure can influence markets just as much as law and policy. And yes, mandated ER care is a problem, but uncompensated ER care is something around $50 billion a year – not a huge enough number to be driving cost inflation. Finally, the employer health insurance deduction probably means that the employed are over-insured, but the fact is that people want low-deductible, expensive, gold-plated health insurance. Some of the rise in health care costs is being driven by the market. People are willing to pay high prices even for a very small marginal benefit in treatment technology. Single-payer would probably drive down costs, at the expense of a small amount of quality – but people put tremendous value on that small amount of quality, and thus the welfare losses would stand to be huge.

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This proposal in the UK to tax “fatties” highlights once again how once government gets deeply involved in funding health care, the pressures to control people’s lifestyles become significant. This is the same argument we hear from supporters of sky-high cigarette taxes, smoking bans, seat-belt and helmet laws, ad nauseam. “We all pay for it.” If only we didn’t.

More on the public health scam.

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I am quite pleased to announce that Elizabeth Price Foley will be joining Pileus as one of our Authors.  Elizabeth is sure to be a great addition to our lineup, especially given that she has an expertise in health care and constitutional law.  Here is her impressive bio:     

Elizabeth Price Foley is Professor of Law at Florida International University College of Law. Her research centers on the intersection of health care and constitutional law. She is the author of Liberty for All:  Reclaiming Individual Privacy in a New Era of Public Morality (Yale 2006), The Law of Life and Death (Harvard 2011), and is currently working on a book about the tea party for Cambridge University Press. 

Professor Foley clerked for the Honorable Carolyn Dineen King of the U.S. Court of Appeals for the Fifth Circuit and spent several years on Capitol Hill as a health policy advisor, serving as Senior Legislative Aide to U.S. Congressman (now U.S. Senator) Ron Wyden (D-OR), Legislative Aide for the D.C. office of the Health Insurance Plan of Greater New York, and a Legislative Aide for U.S. Congressman Michael Andrews (D-TX). She served as a member of the Committee on Embryonic Stem Cell Guidelines of the Institute of Medicine, National Academy of Sciences, and as a Fulbright Scholar at the College of Law of the National University of Ireland, Galway.

Foley is a converted ex-progressive who now unabashedly embraces classical liberalism. She lives in Key Largo, Florida with her husband, daughter, two cats, and a dog named Thomas Jefferson.

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An interesting and scary fact from David Brooks’ interesting column on the future of ObamaCare:

More seriously, cost projections are way off. For example, New Hampshire’s plan has only about 80 members, but the state has already burned through nearly double the $650,000 that the federal government allotted to help run the program. If other projections are off by this much, the results will be disastrous.

I’d love to hear from our reader who is a New Hampshire State Rep about what he thinks is going on in his state and what this might portend for ObamaCare.

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Breaking news from Virginia federal district court. Consider this an open thread on the topic. I will try to update with reaction from around the web.

UPDATE:

Here’s a link to the decision (PDF). SCOTUSblog has a summary.

Orin Kerr says Judge Hudson’s decision contains a significant, possibly fatal error.

 

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While my fellow Pilei debate the role that moderate Republicans can play in a future return to fiscal sobriety, libertarian law prof Randy Barnett considers whether, with respect to the PPACA, it even matters. What are the chances that the Supreme Court strikes down the individual mandate, including potentially the entire bill, which lacks a severability clause? Barnett argues that the individual mandate contradicts existing Supreme Court thinking on the “necessary and proper” clause, and that the mandate represents a legally unprecedented “commandeering of the people” by the federal government. If the health care bill remains unpopular by the time the case reaches the Supreme Court, he muses, there may well be five votes to strike it down.

HT: Hit & Run.

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The health care reforms were designed to expand coverage and “bend the cost curve.” Did no one suspect that insurers would muster a proactive response to changes in policy?

In Connecticut: “Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons.” This same story is playing out across the country.

The reforms prevent insurance companies from denying individual policies for children with preexisting conditions. In Colorado:

at least six major companies — including Anthem, Aetna, Cigna, and Humana — have said they will stop writing new policies for individual children” in Colorado. The companies “blamed health reform mandates taking effect Thursday requiring companies that write such policies as of that date to also cover sick children up to age 19,” the paper said.

Much of this seems quite predictable. One wonders what other changes the next few years will witness as the provisions of the reforms are enacted.

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Senator Ron Wyden (D-Ore.) had an interesting bipartisan health care bill with the now-ousted Bob Bennett of Utah that, unfortunately, never got anywhere. But apparently he sneaked into the bill that did pass a provision that will allow states to set up their own universal insurance systems. While conservative states are backing a legal challenge to Obamacare, Wyden proposes that Oregon go through the bill’s provisions to establish its own, more flexible program:

Oregonians have demonstrated again and again that a one size fits all approach from Washington is not the best approach for the Northwest, and they have come up with innovative solutions that the Federal government has never had the flexibility or will to implement. For these reasons, I wrote Section 1332 specifically with Oregon in mind.

Section 1332 is scheduled to go into effect in 2017. I intend to introduce legislation shortly to accelerate that date to 2014. Moreover, if the bipartisan legislative leadership and the executive branch were in support, I would like to explore the possibility of Oregon moving forward with a Federal waiver even earlier.

How refreshing to see a Democrat speaking in federalist, localist terms. Of course, it is an election year, and the details of what Wyden is proposing for Oregon are yet to be seen.

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Barnett is one of the most interesting voices on the law out there.  I wonder what my fellow blogger Marcus Cole thinks about his work….

Here is a discussion with Barnett about Obamacare from the Wall Street Journal.   It includes an interesting discussion of the mandate as a “commandeering of the people”:

“What is the individual mandate?” Mr. Barnett says. “I’ll tell you what the individual mandate, in reality, is. It is a commandeering of the people. . . . Now, is there a rule of law preventing that? No. Why isn’t there a rule of law preventing that? Because it’s never been done before. What’s bothering people about the mandate? This fact. It’s intuitive to them. People don’t even know how to explain it, but there’s something different about this, because it’s a commandeering of the people as a whole. . . . We commandeer people to serve in the military, to serve on juries, and to file a return and pay their taxes. That’s all we commandeer the people to do. This is a new kind of commandeering, and it’s offensive to a lot of people.”

One point that needs to be partially corrected, however, is that the U.S. doesn’t quite commandeer people to serve in the military anymore.  We have an All-Volunteer Force (AVF) within a Selective Service framework.  Of course, the government mandates that males 18 and over register in keeping with the requirements of Selective Service and reserves the power to reintroduce conscription – something repugnant in a free society.  I think conscription ought to be forbidden since forced military service is a form of slavery.  Moreover, a healthy republic with a virtuous citizenry fighting a war in the national interest should not require conscription.

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In his recent column, Michael Medved raises the interesting question of whether America’s increasing rotundity implies, given the ethic that our political leaders should “look like us,” that more of them should be obese. Indeed, Medved suggests the amusing implication that in that case some 30 senators would have to be obese, and most of the rest would have to be visibly overweight.

But Medved also broaches the touchier issue of whether obesity is a mere harmless preference, and thus properly within any individual’s range of free choice, or whether it is an effect of immoral choices, and thus properly the object of moral condemnation. Some will argue that as state governments and the federal government assume responsibility for more of their citizens’ health care, bad health care choices on the part of citizens therefore become the business of the government; being obese would then be an imposition on the state as well as an imposition on one’s fellow citizens. Hence being eating cheeseburgers would be both unpatriotic and possibly criminal.

The easy and obvious way to deal with that problem is for the state to stop assuming responsibility for its citizens’ health care, to let people assume responsibility for it themselves and thus themselves bear the costs and enjoy the benefits of their choices as the case may be. But that ship has sailed. So I understand that that is coming–the “food police” are most certainly on their way, just as the “green police” are.

But the growing sense that obesity is immoral suggests the interesting phenomenon of what Steven Pinker has called “moralization.” The idea is that we have a range of moral sensibilities that can switch on and off, in a process of “moralization” and “amoralization,” so that what at one time was considered a matter of moral weight becomes considered a mere preference, and vice-versa. In his book The Blank Slate, Pinker gives several examples of behaviors that were once in America considered immoral but no longer are, including “divorce, illegitimacy, working motherhood, marijuana use, homosexuality, masturbation, sodomy, oral sex, atheism, and any practice of a non-Western culture” (p. 275). In contrast to those newly “amoralized” behaviors, we have also recently “moralized” a whole range of things that were once a matter of indifferent preference, including everything from disposable baby diapers to Barbie dolls to fur to IQ tests to spanking to . . . fast food (p. 276).

Pinker argues that whether these things affect others is not the issue; everything affects someone else somehow or other. Whether they have bad consequences is similarly irrelevant; many or most of them might. The question, rather, is whether they are best understood as moral issues, instead of matters of good or bad taste, of reasonable or unreasonable risk, of cost vs. benefit, and so on.

I think these examples show how surprisingly sensitive our moral sensibilities are to our local culture, and how changes in our peers’ assessments can so quickly and so deeply change our own assessments. This might, on the one hand, cause us to reconsider the origin of our moral sentiments. Perhaps instead of deductions from first principles or intuitions of the Divine will, many of them are the result of interactive negotiations with those around us about what we like or don’t like, giving rise, unintentionally, to a larger, emergent orders or patterns of moral sensibilities. (Maybe Adam Smith was right about that.)

In addition, however, I think this should also cause us to reconsider our rush to enact current sensibilities into laws and regulations. “Live and let live” is not just an attractively humble motto: It might also constitute a recognition that many of our own moral intuitions and sensibilities are far more subject to fashion and peer pressure than we might like to suppose, and that they may well change over time.

To return, then, to the issue of obesity, my recommendation would be to resist the urge to ‘moralize’ it. People’s dietary choices may be imprudent (for them), they may be costly (to them), and they may not be what you or I would choose. In a free society, however, we should allow people to make choices about things like that even when their choices are not what you or I would make.

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As the New York Times reported:

Esther Duflo, a development economist at M.I.T., has been awarded the John Bates Clark Medal. The award is given to “that American economist under the age of 40 who is judged to have made the most significant contribution to economic thought and knowledge.”  Professor Duflo, 37, helped found the Abdul Latif Jameel Poverty Action Lab, whose affiliates do randomized experiments in poor countries to help determine what types of aid and anti-poverty programs actually work.

Wouldn’t it be great if we could experiment by allowing different states to engage in different policies, unmolested by the Federal Government, and then see how things work out?  These wouldn’t be randomized, but they would be consistent with the Constitution’s federalist plan.  And, of course, we sometimes do.  Unfortunately, we are often stuck with “one size fits all” plans imposed by Washington that, if they fail, fail big and fail for all of us. 

A smart argument I heard during the Obamacare debate (can’t remember where) applied this experimentation point to health care.  Wouldn’t it have been nice to see how similar health care plans fared in some places before adopting it on such a grand scale?  But maybe then we’d have seen how bad things are likely to turn out with Romneycare in Massachusetts and balked at repeating something like it at the federal level.

In the future, let’s remember that federalism has a number of advantages*, and we lose something when the Federal Government sucks more and more power and authority into Washington.

* Note: It should be noted that a due respect for federalism is different than thinking that states and localities are the saviors of our liberties.  States and localities have all too often been violators of our basic individual rights (see Jim Crow and other examples of “grassroots tyranny“).

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Obamacare Romneycare at work in Massachusetts.

Update: My wife and I are laughing out loud at a couple of the comments on Suderman’s post.  An example or two given how serious Pileus has been today:

“Or The Great Barack will mount his magic unicorn and sign an executive order abolishing the laws of economics. Done, and done!”

“While he’s at it can we get him to repeal the law of gravity? It sucks when you trip and fall down and hurt yourself.”

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Rights and Duties

The test of whether one has a “right” to something is whether someone else has a duty to provide it. The two—a right and its correlative duty—are logically inseparable; like mountain and valley or ebb and flow, one exists only with the other. Hence if no one has a duty to provide you something, you have no right to it; and you can claim a right to something only if it is someone else’s duty to provide it for you.

What is not the test for having a right to something is that one really, really wants it. I would love a penthouse apartment in Manhattan, and it would make my life much more enjoyable if I had one. But I have no right to one because, if I did, that would mean someone else has a duty to provide it for me—which of course is absurd.

Yet consider health care. Many assert that people have a right to basic health care. But health care does not grow on trees: It is provided only at considerable expense on the part of other people, and that expense must be procured from somewhere. So when you claim that you have a right to health care, you are claiming you have a right to other people’s money, energy, talent, and hard work. Do you?

It is hard to imagine that we must actually answer that question, but in these days of political fairy tales, let us be clear: You do not have a right to other people’s money, energy, talent, or hard work. It might be nice of them to give it to you; it might be charitable or generous or magnanimous or otherwise praiseworthy if they gave some of it to you. But you have no right to it. Sorry.

Perhaps you’re inclined to think that the “right to life” mentioned in the Declaration of Independence entitles you to health care. That’s a mistake, if an easy and common one. What the Declaration claims you have a natural right to are things that do not require others to take positive action to provide. It lists life, liberty, and the pursuit of happiness: I can respect your “natural rights” to these by simply leaving you alone, by refraining from molesting you. That is a “negative” duty, a duty not to undertake unjust actions. This kind of duty we can indeed believe everyone has toward everyone else, because everyone can simultaneously respect everyone else’s rights to life, liberty, and the pursuit of happiness simply, as Adam Smith put it, “by sitting still and doing nothing.”

By contrast, granting people a right to health care means imposing positive duties on some for the benefit of others. That is precisely the sort of liberty-impinging exploitation that the Declaration meant to rule out. Congressional action declaring it legal does not change its essential character, just as the legality of slavery at one time in this country did not alter its essential character. Using some for the benefit of others has an intrinsic moral repugnance that is not erased by congressional action or by closing our eyes to the actual source of or the full costs of the proposed benefits.

Take one other case. A measure in the recently passed ObamaCare bill prohibits private companies from offering federally guaranteed student loans, leaving the federal government itself as the only lender. Part of the rationale for this is that people have a “right” to education that should, therefore, be guaranteed and provided by the government.

But no one has a right to a college education. This case is even easier than that of health care. Can people survive without a college education? Yes, of course, and quite famously—as several United States presidents, Nobel laureates, and billionaire entrepreneurs (like Bill Gates and Michael Dell) all amply attest. College education is a luxury, not a necessity; and if having a college degree means increased earnings for the graduate, shouldn’t it be the graduate who pays for it?

Regardless, the real test, again, is whether others have a duty to provide it. College education, like health care, is not free. If “the government” is subsidizing, guaranteeing, or underwriting your education, the true, full costs are still borne somewhere by someone.

The would-be beneficiaries of such manufactured “rights” have understandable, if misguided, reasons for asserting them. And of course politicians’ moral grandstanding is also understandable, if lamentable.

But let us not forget the longsuffering taxpayer who is bled, again and again, to support these programs. We may find, sooner than we care to suppose, that the taxpayer simply has no more to give.

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Randy Barnett at the Volokh Conspiracy has an excellent post on whether the personal health insurance mandate is constitutional in any of three senses of the term.  His last point is dead on – if we don’t take the Constitution or the Court’s past rulings seriously when thinking about what the Court will do, we are really just talking about the rule of men, not the rule of law.

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You’re unlikely to get a patient’s prescription right if you haven’t properly diagnosed the illness you’re trying to treat. Predictions both rosy, catastrophic, and everywhere in between have issued forth from supporters and opponents of the recent health care reform bill. The truth is that economics is not a precise, predictive science, and we simply don’t know what the medium-term consequences of the bill will be. But we do know that if the bill’s treatment of the ailing U.S. health care payment system is based on a faulty diagnosis, it is likely to fail. So let’s be good empiricists and look at the evidence: What is wrong with U.S. health care payment system, and are these problems rationally related to the solutions offered by supporters of a government regulatory takeover, whether Obamacare or something more radical like single payer? Virtually everyone agrees that rising health care costs are the main problem we need to address, but why are health costs rising so much?

Any argument for government intervention must depend on showing that any health care payment system suffers from market failure. Market failure comes in essentially two varieties: public goods and market power.*

Public goods are goods that have to be provided for “everyone” if they are provided to anyone. You can’t find ways to exclude non-payers – thus, strategic customers will not pay even if they want the good, and the good isn’t provided. Everyone is worse off. Public goods include externalities, the tragedy of the commons, etc. Is health insurance a public good? Probably not. The left’s main complaint about market-provided health insurance is that those who cannot pay are excluded from it. However, during the course of the health care debate, supporters of the Democrats’ plan argued that health insurance was a public good, mainly because people who do not have insurance can obtain emergency care anyway and impose costs on others (“uncompensated care”). Therefore, everyone would be better off if everyone were forced to obtain health insurance.

To this argument there are three main responses: 1) uncompensated care represents no more than 3% of health care expenditures, so it cannot be responsible for much of the escalation of health care costs; 2) the rational solution to uncompensated care is not forcing everyone to buy insurance, but forcing everyone who can pay to pay for the care that they actually receive, for instance through wage garnishments; 3) even if #1 weren’t true, and #2 weren’t feasible, at most this argument would justify forcing people to obtain coverage for emergency care, but Obamacare essentially prohibits high-deductible, emergency-only plans! (See also here.)

What about market power? Economic theory predicts that monopolies – and maybe oligopolies too – will raise prices to the consumer and reduce the quantity of service. Health care prices have risen, but is there any more direct evidence of market power in health insurance?

We can look at profits. Monopolies should be able to reap profits well above the norm for most industries, because they enjoy monopoly power only due to the inability of other firms to enter the market. According to Henry Aaron at the liberal Brookings Institution, “Insurance company profits in the large picture have very little to do with the overall rising cost of health care.” Insurance companies’ profit margins tend to be under 5%, right about average for the American economy as a whole. In most states (those that have not regulated the industry to the brink of expiry), the health insurance market is competitive.

So why have health insurance costs risen so much? Because health care costs have risen so much. What does Obamacare do about health care costs? Almost nothing. Instead, the bill forces insurance companies to take all comers (guaranteed issue), forbids them from pricing risk (community rating), and gives the federal government review over their prices (price controls). These policies might make sense if the main problem with U.S. health care were market power in the insurance market, but it isn’t, and so they don’t.

Obamacare makes no economic sense. It should be repealed and replaced with true, consumer-powered reform that will force doctors and hospitals to reduce their prices.

*Allow me to quickly dispense with a third set of problems that really don’t count as market failure, because they don’t actually lead to socially suboptimal outcomes in competitive markets. I’m referring to moral hazard and adverse selection, which afflict finance and insurance markets in general. When a person is insured against a risk, that person is more likely to engage in behavior likely to actualize that risk (moral hazard). When insurance is offered, more risky persons are more likely to seek it out (adverse selection). But all insurance and financial markets have ways of dealing with these problems, from credit checks to claims adjustment. If you really thought these were insuperable problems requiring massive federal intervention, then you would also advocate this same intervention in, say, auto and homeowners’ insurance. But no one does.

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