Federal Regulation of Health Care Soared Under Republican Rule

According to my analysis.

Cadillac Health Plans; And Taxation Thereof

Count me in as one who anticipates that a January "conference" (of whatever formality) mashing up the House and Senate health bills will be a lot tougher than the Beltway pros believe. A growing number of people, whom the President should take for granted, have been finding things in the bills that displease them greatly.

And I don't just mean the HuffingtonPost/DailyKos/MoveOn.org crowd. There's even a sense at the New York Times that the President's faction has failed to grab history by the tail. Witness this column by Bob Herbert, who protests the tax on so-called "Cadillac health plans," those which cost more than $23,000 for family coverage or $8,500 for single coverage. Because these dollar amounts will not adjust with inflation, Mr. Herbert notes that an increasing number of people will be subject to the tax as the years roll by.

Of course, Mr. Herbert is carrying water for organized labor, which is a staunch opponent of the "Cadillac tax." One of Big Labor's major successes has been to negotiate juicy health benefits, especially for retirees. (This is especially true in the public sector, as described in a new book by Steve Greenhut.)

Conservatives haven't really weighed in on the "Cadillac" tax. Good: Let the unions fight their own battle. It is a tax hike, which any conservative should oppose. However, if it were re-cast in a different bill, it could be used to fund a universal tax credit or voucher, which would reduce Medicaid and SCHIP dependency. Indeed, lest we forget, this is the path Senator McCain took in his presidential campaign, and which I discussed favorably at the time.

A California Cash Cow or New York Pork With Your Cornhusker Kickback?

The latest Capital Ideas, in which I address the plaintiff wails of Governor Schwarzenegger and Governor Paterson, who demand even more federal bailouts of their Medicaid programs.

Senator Bill Nelson's "Florida Flim Flam'

Which he asserts protects Florida seniors, will likely lead to increase in Medicare fraud.

Who's Behind State Sovereignty Resolutions Re. Health Reform?

According to the New York Times, it's corporate lobbyists. I'm an insider, and I can tell you that ain't the case.

Tales from the Antipodes: When the Government Runs the Hospitals

I discuss a study by a physician at Sydney Hospital, and compare it to previous research in Canada.

Federal Regulatory Burden on Health Care Increased By Over Half in Ten Years - John R. Graham - Critical Condition on National Review Online

Federal Regulatory Burden on Health Care Increased By Over Half in Ten Years - John R. Graham - Critical Condition on National Review Online (a shorter version of my Health Policy Prescription.)

Federal Regulatory Burden on Health Care

Has increased by over half within the last ten years: This month's Health Policy Prescription.

Op-ed on Medicare Advantage

The Detroit News has published my op-ed on Medicare Advantage or Medicare Monopoly?

Electronic Health Records: Ontario's Experience

You'd think that a government-monopoly, single-payer, health system wouldn't have too much difficulty developing and installing electronic health records (EHRs). Well, you'd be wrong. Witness the experience in Ontario.

Reduced Medicare Benefits Will Increase Cost of Private Insurance - John R. Graham - Critical Condition on National Review Online

Reduced Medicare Benefits Will Increase Cost of Private Insurance - John R. Graham - Critical Condition on National Review Online: another blog entry about my latest study.

Advantage of Medicare Advantage

The Advantage of Medicare Advantage, a blog entry at the John Goodman Health Blog, which discusses my new analysis.

Medicare Advantage or Medicare Monopoly?

The "reform"'s attack on seniors' benefits, by rolling back the Medicare Advantage program, will increase, not decrease, medical costs. Millions of seniors will lose access to timely medical care, and the "hidden tax" on the privately insured will go up, according to my latest study.

The Loneliest Voice in the Wilderness: The Council of Economic Advisers - John R. Graham - Critical Condition on National Review Online

The Loneliest Voice in the Wilderness: The Council of Economic Advisers - John R. Graham - Critical Condition on National Review Online

Federal Medicaid "Reform" Will Devastate State Budgets

My lastest Capital Ideas.

Vacation & Offline Until 12/14/09

Well, they won't have Graham to kick around anymore. To demonstrate my confidence that the U.S. Senate will get bogged down on health care for at least a couple of weeks, I'll be on vacation and off-line until December 14.

Another Victim of Medicaid (And Employer Benefits)

Nicholas D. Kristof's New York Times' column describes a tragic story - and comes to the wrong conclusion: My take over at State House Call.

New York's Insurance Regs Hurt the Sick

As I discuss over at State House Call.

Uninsurance and Child Mortality

Uninsurance and Child Mortality, in which I debunk an article promoted by the mainstream media.

Cutting Medicare Benefits Won't Protect Taxpayers

Cutting Medicare Benefits Will Not Protect Taxpayers - John R. Graham - Critical Condition on National Review Online, in which I discuss the government's attack on Medicare Advantage plans.

Taxing Eye Lifts, Tummy Tucks, Breast Enlargements, etc.

The "Botax" to fund the government's health-care take-over is ridiculous: Taxing Eye Lifts, Tummy Tucks, Breast Enlargements, etc.

Will Cutting Medicare Protect Taxpayers?

Much of the "savings" that the majority trumpet as making the health take-over deficit-reducing come from cutting Medicare benefits. Unfortunately, this will not protect taxpayers, as I discuss in this month's Health Policy Prescription.

More on the Grinding Pace of the Health-Care Take-Over - John R. Graham - Critical Condition on National Review Online

Let's party like it's 1935: More on the Grinding Pace of the Health-Care Take-Over - John R. Graham - Critical Condition on National Review Online

Screening for Cancer

Screening for Cancer, in which I address the media backlash against those who marvel at the coincidence of a government panel recommending fewer mammograms in this time of health reform (at the John Goodman Health Blog).

An NRO Symposium on National Review Online

An NRO Symposium on National Review Online, in which I and others address Saturday's Senate vote to begin debating the bill about which there can be no debate: There is not one scintilla of good health policy in it.

Why Oregon Health Insurance Premiums Are Soaring

I suggest a couple of reasons.

Ohio to Destroy Access to Individual Health Insurance

What I learned on my trip to Columbus, OH.

"Free-Market" Competition in Health Care

Over at The Health Care Blog, I made a too-long comment to a post my Mr. Joe Flowers about competition in health care.

Florida Addicted to Federal Medicaid Funds

They've only had the increased federal match since February, and you't think the state would slip into the Atlantic ocean without it, according to Florida's Medicaid profiteers (i.e. state legislators). More here.

Collective Neurosis in Maine

Maine's experiment in Big Government health care has failed, so advocates call for Gargantuan government health care! My take at State House Call.

On the Grinding Pace of the Health-Care Take-Over: A Historical Perspective - John R. Graham - Critical Condition on National Review Online

On the Grinding Pace of the Health-Care Take-Over: A Historical Perspective - John R. Graham - Critical Condition on National Review Online

On the 'Sacredness' of Government Health Care - John R. Graham - Critical Condition on National Review Online

On the 'Sacredness' of Government Health Care - John R. Graham - Critical Condition on National Review Online

The AMA Is More a Monopoly in Crisis Than a Professional Association - John R. Graham - Critical Condition on National Review Online

The AMA Is More a Monopoly in Crisis Than a Professional Association - John R. Graham - Critical Condition on National Review Online

The "Public Option" Is Nothing Like Medicaid Managed Care

Despite Professor Romer's claims: The latest Capital Ideas.

Obama Has Already Driven Up Health-Insurance Premiums

Yours truly at John Goodman Health Blog.

An Incredibly Out of Control Health Bill - John R. Graham - Critical Condition on National Review Online

An Incredibly Out of Control Health Bill - John R. Graham - Critical Condition on National Review Online

New York's Monopolist Medical Price Fixer

NY Attorney-General Andrew Cuomo has chartered a state-sanctioned monopolist to fix prices of medical services: Read more at StateHouseCall.

Prof. Martin Feldstein's Health Plan

I participate in the dialogue at the John Goodman Health Blog.

Medicare's Bankruptcy: You Can Run, But You Can't Hide - John R. Graham - Critical Condition on National Review Online

Medicare's Bankruptcy: You Can Run, But You Can't Hide - John R. Graham - Critical Condition on National Review Online

Group, Not Individual, Health Insurance Is Failing - John R. Graham - Critical Condition on National Review Online

Group, Not Individual, Health Insurance Is Failing - John R. Graham - Critical Condition on National Review Online

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New Rule: Back Up Your Health-Insurance Horror Story - John R. Graham - Critical Condition on National Review Online

New Rule: Back Up Your Health-Insurance Horror Story - John R. Graham - Critical Condition on National Review Online

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Three Things Not to Confuse About Health "Insurance"

Why do people think reforming health care is so much harder than it really is? They confuse three very different ideas and call the whole jumble "health insurance." My latest column from Freedom Politics.

AHIP/PriceWaterhouse Blowback? - John R. Graham - Critical Condition on National Review Online

AHIP/PriceWaterhouse Blowback? - John R. Graham - Critical Condition on National Review Online

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The Audacity of Greed

If you don't like insurers, then don't buy health insurance. How many HuffPo subscribers are there? I'll bet you could get a few thousand of you together to make your own non-profit, co-operative insurer. Why do you need the government involved, other than making it give you the pre-tax dollars it currently gives your employers?
Read the Article at HuffingtonPost

The Death of Employer-Based Benefits Is Nigher Than I Thought - John R. Graham - Critical Condition on National Review Online

The Death of Employer-Based Benefits Is Nigher Than I Thought - John R. Graham - Critical Condition on National Review Online

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Employer-Based Health Benefits: The Death Spiral Is Nigh - John R. Graham - Critical Condition on National Review Online

Employer-Based Health Benefits: The Death Spiral Is Nigh - John R. Graham - Critical Condition on National Review Online

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Healthy San Francisco: Forum | KQED Public Media for Northern CA

Healthy San Francisco: Forum | KQED Public Media for Northern CA

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Nurses Beware! Don't Let Your Union Win Health Care

This month's Capital Ideas.

Truth About Medical-Malpractice Costs

in this month's Health Policy Prescriptions. (Due to the press of affairs, I was very grateful that two colleagues volunteered to write this month's for me!)

Jindal's Poll-Driven Health-Reform 'Ideas' - John R. Graham - Critical Condition on National Review Online

Jindal's Poll-Driven Health-Reform 'Ideas' - John R. Graham - Critical Condition on National Review Online

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Obama's Health Insurers' Whoppers

Much of what the President proposes to make illegal is already illegal: Yours truly in the New York Daily News.

Boycott Will Ferrell? Or Enjoy This Instead

Yours truly on dueling, satirical "Public Service Announcements" at National Review Online.

Best News Yet for ObamaCare: Recessions May Be Good for Your Health!

Yours truly at National Review Online.

Friday Parting Shots

Over at National Review Online.

Rep. Eric Cantor Misses An Opportunity On Health Reform

I deconstruct his performance at a recent town hall, at National Review Online.

Baucus Believes Politicians Alone Should Control Health-Reform Talks

Attack on health insurer Humana, Inc. is incredible: Yours truly in National Review Online.

Run Health Care Like A Fire Department?

Some think access to medical care should be a public service, run by the state. However, there are important differences rendering the analogy invalid: My column at Freedom Politics.

Doctors 7X More Satisfied With Payments from Private Insurers as Medicare

Yours truly, at John Goodman Health Blog.

Sen. Wyden Back in Health-Reform Game

This is a good thing, as I argue in National Review Online.

The President's Health-Insurance Horror Stories Don't Add Up

It's been illegal for insurers to drop sick people since 1997: Yours truly at John Goodman Health Blog.

Jesse Jackson on Health Reform!

My response at National Review Online.

Will the Chickens Roost in the CO-OP? Senator Baucus' "Framework"

As Sen. Baucus, leader of the "Gang of Six" senators, prepares for his deadline to whoosh by this week, I review his Framework for reform.

The Best Health Reform You've Never Heard Of In Today's Debate

Yours truly on consumer-driven health care at RealClearPolitics.

Yet Another Reason to Make Health Insurance the Property of the People

Medicare makes a mess of kidney failure: Yours truly deconstructs a New York Times article at National Review Online.

Health Spending Crisis in Perspective

Your truly's column in the Detroit News.

Union Power and Patient Care Are Incompatible: California Evidence

I recently wrote a column describing one of the major (unstated) goals of the federal take-over of Americans' access to medical services: giving union bosses control of hospitals and other health-care providers.

The media will not figure this out, but a couple of stories the last few days suggest that this is already happening, and describe a negative relationship between union power in medical services and access to care. Read more at State House Call.

Radio interview with Australian Broadcasting Corporation

The Australian Broadcasting Corporation interviewed me after President Obama's speech. Audio and transcript here.

Make September the New August: Tips to Stop the Federal Health-Care Take-Over

Representative Joe Wilson earned a lot of criticism for calling the President a liar. The President's legislative opponents shoudn't waste their time in DC, but go back to their districts, where real discussion was happening. More at National Review Online.

Medical Malpractice Reform: Will Republicans Take The Bait?

The only new thing in the President's speech last night was his death-bed conversion to medical-malpractice reform, which one presumes is designed to draw some Republicans onside. It would be a bad idea for a couple of reasons, which I describe at National Review Online.

San Francisco's Employer Health Tax: Change We Can Do Without

San Francisco's job-killing tax on employers to fund the public-health bureaucracy has garnered some scholarly support, which I rouse myself to challenge in this month's Capital Ideas.

California Republicans Hike Taxes To Rope Kids Into Government-Controlled Health Care

President Obama's so-called "stimulus" bill is working just as intended: Even Republican state legislators are voting to hike taxes to increase government control of kids' access to medical services. Read more at StateHouseCall.

Why Does Government Want to Control Your Access to Medical Services?

Because Big Labor needs it. Where else will can they unionize? My latest at Freedom Politics.

Kidney Dialysis: The Price of State Monopoly

A USA Today article recently noted that kidney dialysis looks much the same today as four decades ago. Do you wonder why? In the U.S., kidney dialysis is the only treatment subject to a single-payer, government monopoly: Medicare. More at National Review Online.

California Health Insurance Rescissions: Doctors Dissatisfied

Will the sorry saga of rescissions in California's market for individual health insurance never end? My comments on the California Medical Association & Los Angeles County Medical Association's legal brief.

Tax Reform, Not Tax Hikes, Will Make Uninsured Patients Pay Their ER Bills

Do states need to make uninsured residents post "bonds" or fine them in order to compensate for ER care that they receive? I say "no", at National Review Online.

Co-op Confusion

Keep your dirty, stinkin' government hands off my group purchasing arrangement! Yours truly on the "health co-op" in National Review Online.

Thanks for Bringing Up Switzerland, Professor Krugman

Professor Paul Krugman fears that President Obama's wriggling on health reform suggests that the U.S. will end up with a system more like Switzerland's than Canada's or Britain's. My take is at National Review Online.

"Fishy" Rumors About New York Health Insurance

A recent interview on MSNBC reveals the depth of confusion the mainstream media has over the current regulation of health insurance. Read more at StateHouseCall.

Even If It's Not A Death Panel, It Doesn't Belong in Medicare

Maybe Sarah Palin went a little off the deep end with the "death panel" remarks, but counselling patients on end-of-life care is still none of the government's business: Yours truly at National Review Online.

The Health Crisis Ain't What it Used to Be

Pesonal consumption spending on non-health goods and services has increased 1/3 since 1995: This month's Health Policy Prescription.

Gov. Schwarzenegger's Lessons for National Health Reform

Are not good. In fact, he hasn't learned the lessons of his own misguided attempt. This month's Capital Ideas.

Obama to Run Health Care Like Post Office?

Not a good idea: Unless you think an annual bail-out of $7 billion (despite a monopoly on letter-mail) is fine. Read more here.

Obama in New Hampshire

He'll require insurers to cover what they already cover, and make it illegal to do what's been illegal since 1997. More here.

Obama Supporter Unwittingly Supports Free-Market Reform

At National Review Online.

Health Insurance Regulation: Poizner Dials Back the Rhetoric

California Insurance Commissioner admits some applicants misrepresent health status. But his reforms are still very flawed. Read more at State House Call.

They'll Hang the Last Pill-Pusher With the Entrails of the Last Insurance Executive

Yours truly on Big Pharma's deal-making with the regime, at National Review Online.

Informing the White House on Healthcare "Rumors"

If you hear anything "fishy" about the federal take-over of your access to medical services that is not approved by the Administration, be sure to report it to the White House. My latest entry at National Review Online's Critical Condition blog.

Obama vs. Pelosi on health-care take-over

A little more on how Obama and Pelosi are sending conflicting signals on the government take-over of acces to medical services at National Review Online Critical Condition blog (08/05 01:45 P.M. on the scroll)

Graham versus Pelosi on CBS San Francisco Local News

Speaker Pelosi says that "this is about money, lots of money....." No kidding! Do you think she can bear to keep her hands off it?

Medicaid "Reform" Will Devour Us

Last Friday, the House Energy & Commerce Committee marked up HR 3200, the government take-over of Americans' access to medical services. The Blue Dog Democrats inserted an amendment that they figure will insert some fiscal responsibility into this monstrous bill.

Boy, are they wrong. The Medicaid amendment that they passed will cause states to accelerate their already out-of-control spending on Medicaid.

Medicaid is a program for low-income households that is jointly financed by the federal and state governments. It has always contained a flawed incentive that causes states to overspend: the FMAP, which is the percentage of total Medicaid costs paid by the federal government. Because FMAP has been at least 50%, state politicians have an incentive to spend one dollar to pull down at least one dollar from the residents of the other 49 states (as laundered by the federal government).

This has caused Medicaid spending to increase even faster than the bankrupt Medicare program for seniors. President Obama made it worse in February, when he signed the so-called "stimulus" bill, which significantly increased the federal match.

The Blue Dog deal would make states finance 7% of the proposed, permanent, Medicaid expansion. They appear to believe that by forcing states to swallow some of the cost of the Medicaid expansion (which was originally 100% federal) they could dampen it somewhat.

No way! If states only have to spend $7 of their own residents' money to pull down $93 of federal money, they will go into a feeding frenzy the likes of which we've never seen in the history of Medicaid.

(In case you doubt that the FMAP already creates horrible incentives for states, you might have missed the $540 million settlement that the U.S. Department of Justice made last month with two Medicaid fraudsters who wrongly billed the program for school-based health services. The busted scammers? New York State and New York City.)

"Healthy San Francisco" is No Model for Health Reform

Mayor Newsom touts his tax-hiking public-health bureaucracy as a model for national health reform. I managed to get a contrary opinion deep into opposition territory - the opinion page of the San Francico Chronicle.

Red Pill, Blue Pill, Better Not, Get Ill: President Obama's Press Conference

I think this evening's press conference achieved nothing. He barely has the slightest understanding what he's talking about: More at National Review Online's Critical Condition (7/22 8:41 P.M. on the scroll).

Make No Mistake: Folks Don't Need An Individual Mandate

In the spirit of the age, paraphrasing president Obama, I argue for voluntary participation in health insurance, over at National Review Online's Critical Condition (7/22 7:04 P.M. on the scroll).

Taking a Breather on Health "Reform": Even the NY Times wants a Do-Over

Yours truly's latest blog entry at National Review Online's Critical Condition (7/22 10:36 A.M. on the scroll).

U.S. Index of Health Ownership, 3rd edition

North Dakota tops, New York bottom of the barrel (for the third time in a row), in the latest edition of the U.S. Index of Health Ownership, which measures 24 variables of government interference in health care.

SCHIP's Race to the Bottom

The New York Times reports that 13 states have sought to bail out out their public-health bureaucracies by raiding taxpayers in the 37 other states. They have marched to the trough to take advantage of the SCHIP expansion signed by President Obama soon after he took office. (The newspaper didn't quite put it like that.)

SCHIP (State Children's Health Insurance Program), of course, creates a "race to the bottom" of government dependency because a state has to spend its own taxpayers' money to "prime the pump" that fills the trough with federal dollars. One silver lining to the cloud of recession is that most states simply do not have access to enough of their own taxpayers' funds to execute this raid.

We can all be thankful.

SCHIP expansion is popular, because it's "for the kids" and the expansion is primarilly financed by taxes on smokers. What the NY Times neglects to note is that SCHIP crowds out private coverage by at least 56%, which will get even worse as states enrol kids from higher-income households, as I've discussed before.

Furthermore, the Wall Street Journal notes a side effect of Government's unhealthy addiction to tobacco taxes - violent crime as states "go to war" on cigarette smuggling (which would not exist without discriminatory taxation).

We are effectively in an era of neo-prohibition, where governments' demonize smokers' peaceful habit in order to seize their earnings to fund a state take-over of children's access to medical services.

Let's Can the "Public Plan" - It's a Scam

My latest op-ed in Freedom Politics

America Beware: Healthy San Francisco's Tax Hikes May Be Coming Your Way

This month's Capital Ideas.

Medicaid's Costs Rise Faster Than Private Insurance Costs (Per Beneficiary)

Jeff Anderson nails the myth that government can control health costs (again), in this month's Health Policy Prescription.

Discussing U.S. Health Reform With Canucks

Webcam interview with Fraser Institute.

Fixing the FDA: More Money & Power or More Competition?

The latter, of course: My op-ed in Drug Discovery News.

Health Plan CEO for Governor of Massachusetts?

With an announcement that will certainly have implications for the national debate on health reform, Charlie Baker, the CEO of Harvard Pilgrim HealthCare, has announced that he is a candidate for the Republican nomination for governor of Massachusetts.

Gutsy move: He's a leader in the industry (health insurance) that 4 of 10 people believe is most responsible for increasing health costs, and "enjoys" a reputation as low as tobacco and oil companies.

More importantly, he was a key player in Governor Romney's reform that mandated universal health coverage, about which he was skeptical (as described very forthrightly in his blog, and about which I recently scribbled.) The media and voters are going to expect him to have some solutions to the health crisis.

Because of the likelihood of a national coverage mandate, and Mitt Romney's continuing presence as a presidential candidate, Baker the politician's views on health reform will be at least as interesting as Baker the health-plan CEO's.

Women Better Patients Than Men

A new study by CIGNA reports that women are 1/3 more likely to check prices of medical procedures than men are: 20% of women checked prices versus only 15% of men. Remarkably, some of them seem to enjoy it.

This is an interesting finding, and one that I would never have thought to pursue. Why did CIGNA do it? My guess us that men will soon be getting messages that we should bring our wives to the doctor with us: It may motivate us to swich to generic prescriptions, when appropriate, to keep costs down.

What will the government do to screw this up? I can see a flood of nonsense from the political class that consumer-driven health care is disadvantagous to women (which is actually an old tactic), because they are "forced" to make decisions about treatment based on costs.

Medical Bankruptcy Equal in Canada & the U.S.

While the reported incidence of "medical bankruptcy" in the U.S. is grossly overstated, an equally unsubstantiated claim is that a single-payer, government-monopoly health system would eliminate medical costs as a cause of bankruptcy. (If you troll the Internet, you'll find that it seems to be an article of faith.)

Indeed, I sort of fell for it myself, when I sarcastically noted that if the government exerts absolute control over citizens' access to medical services, and forbids them spending directly for care, they cannot go bankrupt from medical costs.

But then news from Canada led me to believe that people do go bankrupt from medical costs. After all, if you are sick enough and the government will not treat you in time, a lot of costly problems will pile up.

All we needed was some good research on the relative rates of medical bankruptcy in the two countries. Well! What do you know? Brett Skinner & Mark Rovere of The Fraser Institute has rode (ridden?) to the rescue with a well researched article concluding that the rate of medical bankruptcy is about the same in Canada and the U.S.

No "medical bankruptcy" under government-monopoly health care? Don't you believe it.

Sebelius' $100 Million SCHIP Marketing Bailout

One of the most pathetic consequences of the federal government's drive to control children's access to medical services is the failure of the State Children's Health Insurance Program (SCHIP) to enrol most of the kids eligible for it. In California, 80% of families eligible for SCHIP reject it for their kids.

The obvious remedy? Bail out SCHIP's sales & marketing operation. 350 self-styled advocacy groups joined U.S. Secretary of Health & Human Services Kathleen Sebelius for a teleconference where she announced her intention to release $40 million of a budgeted $100 million for "outreach".

Release the hounds!

If she really wanted to enrol kids in SCHIP, instead of perverting civic groups through government handouts, she'd offer commissions to insurance brokers to sign up kids.

Obviously, that would be unacceptable - because insurance brokers are businesses, not community activists.

Was ACORN on the teleconference? I have no idea. I think it's time for a stronger spotlight of transparency on groups that accept taxpayers' money to promote government dependency for health care.

Is Maine Ground Zero for Health Reform?

Tarren Bragdon and colleagues at the Maine Heritage Policy Center are obviously too humble to claim credit in the struggle for health freedom in Maine and the U.S. So, let me do it for them by noting today's New York Times, which runs an article describing Maine as sort of a Ground Zero for health reform.

Maine, of course, is the home of the two Republican U.S. Senators potentially most favorable to the idea of the government controlling people's access to medical services. So, the SEIU (Service Employees International Union), which would like nothing more than to take over American health care, has poured money into the state.

Fortunately, the Maine Heritage Policy Center's Crisis to Cure tour, which the New York Times notes, emphasizes the costs of current government intervention, especially Maine's failed Dirigo plan.

Frankly, I'm surprised that the New York Times would deign to report that there's an alternative to "reform" that gives more power to government, instead of the people. Kudos to the Maine Heritage Policy Center!

"Universal" Care=More ER Use: An Old Lesson Relearned

Tomorrow is Independence Day, when we look back to the successful Revolution of 1776. I suppose we can't quite "celebrate" July 4, because we've surrendered much of that hard-won independence back to our home-grown political class.

Speaking of our political class, if I had a dime for every time President Obama or another of our betters announced that increasing coverage through more government programs would result in better access to primary care and less ER use, I'd be able to pay my taxes many times over.
There is no evidence of such an effect, as recent analyzes of the Massachusetts "reform" that introduced "universal" coverage have discussed (here and here). In a previous analysis of hospital ER use in California, I found the same effect. Indeed, ERs were far more likely to be jammed with people who had coverage, and whose symptoms could have been better handled in a primary-care physician's office, than the uninsured.

Will our rulers, who want to impose their vision of health "reform" on us, learn from this evidence? Fat chance!

Overcome by a wave of nostalgia for lost liberties, I decided to have a quick look at evidence of the effect of "universal" health care in the scholarly literature:

Exhibit A: an article from 1973 reporting a survey of Montreal households conducted over 12 months in 1969 and 1970, just before "universal" coverage was imposed by the provincial government of Quebec in 1971. The survey did conclude that higher-income households used more medical services than lower-income households did. Furthermore, 4/5ths of ER visits were for non-urgent reasons.

Sounds like those folks needed "universal" coverage, right? Wrong.

Exhibit B: the same authors published a subsequent article in 1978, which reported that ER visits increased by 14% annually in the five years after "universal" coverage versus 7% in the five years prior. Before "universal" coverage, 33% of patients surveyed had attempted to contact a physician before going to the ER and 63% were successful. After "universal" coverage, 39% of patients had attempted to contact a physician but only 38% were successful. Most of the increase in coverage happened through the ER, not primary-care doctors.

Three decades later, Massachusetts is learning the same lesson - or not.

Gaming State-Run Health Insurance in Massachusetts

I hope you don't mind if I'm a little lazy this morning and simply point you to a post by the CEO of Harvard Pilgrim Healthcare, which addresses an issue which I do not believe we have covered in our analyzes of Massachusetts. (I was directed to it by Bob Laszewski's blog.)

Critical examination of Massachusetts' experience with a government-run health-care "market" (e.g. Connector) are prevalent in this blog. Recent analyzes from the consumer-directed reform camp, by Grace-Marie Turner & Tara Persico, as well as Michael Tanner have focused on the budget-busting increases in costs and the absence of incentives for patients to use medical services appropriately (although Mr. Tanner does allude to adverse selection, the topic of this post).

Mr. Baker of Harvard Pilgrim points out that merging the small-group and individual markets, as the Connector does, creates an incentive for individuals to game the system by only buying health insurance when they become sick. Before the "reform", Massachusetts imposed guaranteed issue and community rating on the individual market, so people were already motivated to wait until they became sick to buy health insurance. (This is a key reason why the Bay State ranks so poorly in the U.S. Index of Health Ownership.)

However, this adverse selection was minimized because state law allowed insurers to exclude pre-existing conditions for up to six months. Under the Connector, which merges the small-group and individual markets, it would have to do the same for the much larger small-group market alongside the individual market.

Follow me so far?

Insurers were unwilling to do this in the small-group market, so they had to remove the exclusion in the individual market. The tax for not obeying the mandate to have health insurance is about $900 annually, or $75 monthly), which people are content to pay if they know they can wait until they get sick and get individual coverage through the Connector with no exclusion for pre-existing conditions.

Result? Death spiral! Mr. Baker reports that Harvard Pilgrim's individual policies written since the "reform" only last five months, and the premiums are ramping up fast.
What will the state do? Well, I suspect it will do what all government's do when their policies fail: impose more government.

"Underinsured" in Germany?

Back on April 27, Senator Tom Coburn and Professor Regina Herzlinger published an op-ed (inexplicably) in the Huffington Post. Needless to day, it generated a firestorm of comments. I was just rereading it and saw this endorsement of "universal" health care, German-style, in the comments.

This woman has a €2,500 deductible and pays a monthly premium of €350, with no employer contribution. Sure, it's a plan decided by a cartel of health insurers and the government, but freedom to choose a plan other than one her employer chooses, and controlling the first €2,500 spent on ambulatory care costs looks a lot like "consumer-driven" health care. In fact, I'd bet that deductible is a lot bigger share of her real income than a similar one would be for Americans, because we earn so much more.

On the other hand, this poor woman would undoubtedly be classified as "underinsured" by the Commonwealth Fund. But let's keep that a secret: We wouldn't want her to learn that she's actually endorsing a system where patients, not government, control more of their health-care dollars.

[See M. Cannon & M. Tanner, Healthy Competition, 2nd ed. (Washington, DC: Cato Institute, p. 53) for a discussion of international comparisons of out-of-pocket spending.]

Spinning the Health-Care Polls

Perhaps humbled by its shellacking for hosting and broadcasting the Obama-infomercial on Wednesday, ABC and its collaborators at the Washington Post put a very different spin on a health-reform poll that has essentially the same results as the New York Times' one a few days ago.

While the Gray Lady promoted the notion that the American people are ga-ga for a so-called "public option" for health insurance (actually a swamp of new federal bureaucracies, if Sen. Kennedy's bill is any indication), the WaPo/ABC folks are close to pushing the panic button on the plan for a government take-over. Read entire post here.

Healthy San Francisco a Model for U.S.: Sebelius, Obama

The Sacramento Bee reports that U.S. Health & Human Services Secretary Kathleen Sebelius and President Obama have praised Mayor Gavin Newsom's Healthy San Francisco municipal bureaucracy as a model of U.S. health reform.

What part of "government failure" don't these folks understand? Healthy San Francisco is a tax-hike levied in accord with the gospel of the Church of Universal Coverage (as defined by Cato's Michael Cannon). It taxes small businesses (mostly restaurants) to fund the county's public-health bureaucracy, and declares that it is "covering" all San Franciscans.

I have written about it's tax-hiking ways before, and noted that it has failed to attract private hospitals and physicians to accept its "coverage." Healthy San Francisco claims that its members are enrolled in medical homes. I took a gander at its website, and saw that it has added a grand total of two private providers to its "network" of public-health centers and community clinics.

However, one private provider is the Sr. Mary Philippa Health Center, the charity wing of St. Mary's Medical Center (which is part of the mega-system Catholic Healthcare West). It's a fine center for poor people, no doubt, but I believe that non-profit hospitals affiliated with communities of faith have been doing this long before the Mayor of San Francisco got involved.

The second private provider is the Chinese Community Health Association, undoubtedly a similarly motivated organization.

Noticeably absent from "The Care Network" are any mainstream hospitals or physician practices.

High taxes and limited choice: Is this the future of U.S. health care?

Wall Street Journal Cites Graham in Review of Failing States

Today's Wall Street Journal noted yours truly's U.S. Index of Health Ownerhip in its lead editorial. Describing the "Albany-Trenton-Sacramento disease" of high-rolling state governments, bloated with tax revenue but in continuous budgetary crises, the editorial fingered bad health policies as a key element of the problem.

New York, New Jersey, and California are all in the tank of IHOP's measurements of individual ownership versus government control over health care. The editorial quotes IHOP's diagnosis that "New York suffers from government health programs that are out of control, a grossly overregulated private insurance market and almost completely uncompetitive provider markets."

IHOP edition 3 is due to be published later this summer. I don't want to leak the results, but if you are a betting man, I would not recommend putting any money on New York moving up the rankings.

Medicare's Administrative Costs

One of the "zombies" in the health-care debate that refuses to die is the notion that a Medicare-like "public plan" does/would have lower administrative costs than private health plans. It's kind of like saying that Government Motors (formerly General Motors) will out-compete Toyota and Honda because of lower administrative costs. Nevertheless, former Labor Secretary Robert Reich brought it up again in a Wall Street Journal op-ed. I challenge it here.

Obama's Shifting Health-Care Message

As James Capretta notes, President Obama is realizing that his message — namely, that his reform will not result in you losing your health plan or doctor, is losing credibility and he is scrambling to find a new one. The new one seems to be that “if we do nothing” you will lose your health coverage anyway, because rising costs will make it increasingly unaffordable to employers.

But this is an incredibly self-important statement: Read more at National Review Online's The Corner (6/23 06:05 P.M. on the time-scroll).

"Single Payer" Health Care: "Solidarity" or Anti-Civil Rights

Last week, I participated in a radio interview with a couple of public-health doctors. Today, I posted a short column reflecting on the experience.

Arizonans to Choose Health Freedom in 2010

As the U.S. government rushes to pull us all into a government-run health-care system, one state is preparing to say "hands off my health care." The Arizona State Senate yesterday approved HCR 2014, a proposed constitutional amendment that forbids the government from forcing any citizen to participate in a government-run health-care system. The resolution will be on the ballot in November 2010.


(I was privileged to have testified to the House Health & Human Services Committee on the resolution.)


A previous version of this amendment (Prop 101) was on the ballot in November 2008, but was very narrowly defeated, thanks largely to former governor Napolitano and her allies. With Ms. Napolitano now in DC, the opposition to health freedom will not be so effective in 2010.

Former Health & Human Services Secretary on Government Take-Over of Health Care

Secretary Michael O. Leavitt & PRI Senior Fellow Jeffrey H. Anderson on the Trojan Horse, in the Washington Times.

Government Rationing Access to Health Care

Michael Hiltzik in Los Angeles Times had a not-too-bad column discussion government deciding what health care you get, but it was still pretty pro-government. My comments on National Review Online's The Corner (6/22 07:18 P.M.).

The New York Times Misleading Health-Reform Poll

In it's madcap dash not to lose the momentum (alas, already lost) for a government take-over of health care, the New York Times blared a headline suggesting that almost three quarters of people want government-run health care. The truth is different, as I wrote in National Review Online's The Corner.

Yours Truly on the Radio

Two new audio files of recent radio interviews with yours truly: KQED-AM (San Francisco NPR affiliate) and KION-AM (Salinas, CA) on health reform.

Safeway's Health Benefits & Consumer-Driven Health Care

Two more from yours truly in National Review Online The Corner blog, discussing a letter of mine in the Wall Street Journal on Safeway CEO Steve Burd's contribution to the health-reform discussion, and shouting out Greg Scandlen for his op-ed on consumer-driven heath care in the Boston Herald (6/19 01:36 P.M. and 01:50 P.M. on the scroll).

Medical bankruptcy in Canada

Another post at National Review Online's The Corner that addresses what happens when the government denies medical care in Canada (6/18 06:04 P.M. on the scroll).

On Tyler Cowen on Medicare; and VAT

Yours truly over at National Review Online's The Corner, reluctantly criticizing Professor Tyler Cowen on Medicare and enthusiastically criticizing a Value Added Tax (VAT) to fund government health-care take-over through a "public option" (at 6/18 9:11 A.M. and 09:24 A.M. on the timestamped scroll).

A Margarita with Your Medicine? Growing Medical Tourism in Mexico

Research by Professor Steven P. Wallace of UCLA, and colleagues, concludes that almost a million Californian residents crossed the border into Mexico for treatment in 2004, of which half were Mexican immigrants – both legal and illegal.

The rest were Americans shopping for cheap prescription drugs or who needed treatment when they were in Mexico for business or vacation. Many Mexicans go home for treatment because of cost or cultural and linguistic issues. However, the striking trend is the growth in “binational plans”, which cover U.S. businesses near the Mexican border. These plans started in 2000, and now cover 150,000 workers. Certainly, most of these are Mexican immigrants, but I anticipate that more employers will seek such benefits for their American employees in California, and investors will capitalize Mexican clinics and hospitals to serve their needs.

The primary reason will be to escape California’s expensive regulatory burden on health facilities. California hospitals shift the costs of treating Medicare and Medicaid patients (for whom government reimbursement does not cover costs) to private insurers. Professor Daniel Kessler of Stanford University figures that premiums for private health insurance would be about 11 percent lower without this cost shift – a “hidden tax: that private insurers can avoid by leaving the state. California hospitals also suffer under laws that drive up their costs: for example, seismic retrofitting and nurse-patient ratios, which Mexican ones do not.

Plus they have to deal with a militant union, the California Nurses Association, whose members are free to parade in front of the Capitol by the hundreds in support of more government interference in health care. The political momentum in California, and the nation, will make our hospitals more accountable to government and less accountable to patients.

Read more in my latest Capital Ideas.

The Loneliness of the Long-Distance Canadian Cancer Patient

It's been a while since I've discussed my homeland, Canada, and I'm not usually one to traffic in horror stories of government-monopoly health care. But this story from Windsor, Ontario (right across the river from Detroit) is too appalling to pass up.

A 30-yr old man was diagnosed with stage IV melanoma: skin cancer that has migrated inside and invaded his chest and bowel. Although the skin cancer was diagnosed years ago, the stage IV was diagnosed late. Now, that may be because of the government monopoly's lack of access to specialists, but it may also be idiosyncratic. Even with the best access to health care, doctors can't catch everything.

In this case, what happened after the diagnosis is what's truly appalling. Because his home-province of Ontario does not have the capacity to treat this advanced cancer, the Ontario Health Insurance Plan (OHIP), which has absolute control over every Ontarian's insured health care, must contract with U.S. providers. Scheduled for treatment in Detroit, OHIP screwed up the paper-work and he could not go.

Once things were sorted out, OHIP no longer contracted with the hospital in Detroit (right across the river, as mentioned above), so he has to go to Buffalo, NY - four hours away.
Tragically, he hasn't been able to work, and his wife has just had a baby. The family relies on the charity of neighbors for the baby's clothes and other needs.

No "medical bankruptcy" under government-monopoly health care? Don't you believe it.

A new health reform website, Health Care Horserace, interviewed me discussing the players in the debate and what is likely to occur, for their "Paddock" feature.

Obama, AMA, & Med-Mal Reform

Before President Obama's speech to the AMA yesterday, there was some speculation that he would offer a federal "fix" of punitive damages in medical-malpractice cases in return for the doctors' endorsing a so-called "public option" for health insurance (in reality, another government program in need of perpetual taxpayer bailouts).

My first reaction was: "How naive are the doctors?" Come on! Surely they realize that "Medicare/Medicaid/SCHIP for all" would erode private coverage and subject physicians to ever declining reimbursements and more control of their profession by Uncle Sam. Like similar government programs, these drawbacks would not cause it to "fail", but lead to perpetual demands for even more money and control. A federal cap on punitive damages, on the other hand, would be a fragile thing, constantly threatened by trial lawyers.

The AMA has endorsed legislation by Rep. Gingrey, a physician from Georgia, that would impose a cap of $250,000 on punitive damages - like California's MICRA. (The AMA website reports a stale version of the bill. The bill in the current, 111th, Congress, is H.R. 1086.)

As readers know from my postings on federal pre-emption of states' product-product liability law for FDA-approved medicines, I lie pretty far on the states' rights end of the spectrum when it comes to federalism in civil liability. And I lean heavily towards the same policy for medical malpractice.

H.R. 1086 asserts the interstate commerce clause, which I simply don't see relevent to medical care. Yes, the federal government pays for a lot of medical care, through Medicare, Medicaid, etc., but that is an unrelated problem. H.R. 1086 also preserves states' rights by allowing a state law that caps punitive damages at either a higher or lower rate than the proposed $250,000 to trump the proposed federal cap. (Many states do not have punitive damange caps, as I report in the Index of Health Ownership, using research by my colleague Lawrence McQuillan.)

So, a federal cap on punitive damages, as proposed by H.R. 1086, is not the worst thing since unsliced bread, but it still lets the "camel's nose under the tent." The important benefit of leaving medical-malpractice law to the states is that states with appropriate limits on the ability of trial layers to go wild will see more appropriate medical care and immigration of doctors from states with out-of-control med-mal.

The fact is, nobody know the "perfect" level of liability for med-mal punitive damages. Observing the behavior and movement of doctors in different states, in response to different reforms, allows every state to reform its laws as needed.

Barack Obama & The Dartmouth Atlas: A Dangerous Mix

Barack Obama's delusion that he can reduce health spending and income disparities through government power is a classic socialist fallacy: My latest column at KQED's Healthy Ideas.

Mr. Kristof's Disgraceful Column

Nicolas Kristof wrote one of the most appalling columns I've very read to advocate for a government take-over of health-care. He writes about an American professional who immigrated to Vancouver (where I lived for 8 years before immigrating to the U.S.), who had a hunky-dory experience after a stroke.

Ms. Tucker is a 59-year old American lawyer living in Canada who somehow has a personal acquaintance with a well-known NY Times columnist. Originally she was given a long waiting time for diagnosis, but through personal effort, she shortened the wait.

That means that she bumped someone else. It is well researched that access to health care in Canada is determined by socioeconomic level. Indeed, the "income gradient of health" is steeper in Canada than the U.S. The College of Family Physicians of Canada estimates (p. 7) that 15% of the population has no primary-care doctor and these are certainly lower-income people.

More on Obama's Health-Care Rally in Green Bay

Over at National Review Online's The Corner (06/12 01:25 p.m. on the scroll).

Obama in Green Bay, WI

National Review Online has been covering a lot of the action on health care, especially on The Corner blog. I wrote about the president's trip to Green Bay to launch his health-care ground offensive. (The scroll is date-stamped: I'm at 6/11/09 05:06 p.m.)

Navigating Sen. Kennedy's Gateways

Keith Hennessy appears to be the first one to break Sen. Kennedy's health-reform bill, posting a draft that was clearly still being written. Since then, I've received a good copy that's over 600 pages long via e-mail, and Mr. Hennessy has also posted an agreement by three Committee Barons in the House of Representatives, the so-called "Tri-Committee Health Reform Proposal" (or Tri-Tip, for short, I guess). The Tri-Tip largely agrees with Sen. Kennedy's bill.

Mr. Hennessy has done a fine job summarizing the bills. What's in it for states? Here's where I had to laugh.

Mr. Kennedy's bill proposes "Gateways" (which we've all seen before, as "exchanges" or "connectors"). Because the reform includes a tax (which, in a remarkable abandonment of legislative responsibility, he surrenders to the Secretary of Health & Human Services to determine), it envisions Gateways being established by states to facilitate individuals and businesses finding health insurance that suits their purposes.

However, it also creates a new species of government agent: "Navigators", which are private-sector outfits that get government hand-outs to help you "navigate" the exchange. Incredible! They haven't even't established any Gateways yet, and they're already admitting that they'll be too confusing for ordinary folks to understand!

(Don't I wish the government would give H&R Block or TurboTax a hand-out to help me "navigate" the tax code...)

Who will line up for this new boondoggle, winning a government contract to be a Navigator? Darned if I know, but if you ask me, Americans should navigate away from this health-care take-over as quickly as possible.

Provider Participation in Medicaid: All Over the Map

The other day, the media gave good coverage to a report by a Dallas consulting firm, Merritt Hawkins, which surveyed waiting times for specialists in U.S. urban areas. Reporters were shocked to see waiting times measured in weeks, but in Canada, the waiting times are months. Look at the Fraser Institute’s latest waiting time survey (2008): 36.7 weeks for orthopaedic, 16.1 weeks for gynecologic, 12.5 weeks for internist, 7.3 weeks for cardiovascular, etc. And these are not for the operations: These waiting times are from the date your primary-care doc refers you until your first consultation with the specialist.

In the Merritt Hawkins survey, waiting times average about three weeks!

What the media generally ignored was doctors' participation in state Medicaid programs: It is all over the map. Overall, 55% of surveyed doctors reported participating in Medicaid, but there is huge variation across cities, and differences between the recent results and those from five years ago.

For example, 11% of surveyed cardiologists in Boston reported accepting Medicaid patients n 2004, versus 100% in 2009. On the other hand, 80% of Philadelphia cardiologists reported Medicaid participation in 2004, but only 8% did in 2009!

This remarkable instability is hard to understand. It indicates that Medicaid is out-of-control, changing reimbursement policies erratically and dramatically. It's certainly no model for health reform.

Medicare Spending Has Increased 1/3 More Than Other Spending, Since 1970

Advocates of government-run health care claim that Medicare spending growth has been slower than private health spending. However, they come to this conclusion by conveniently ignoring out-of-pocket costs. PRI Senior Fellow Jeff Anderson presents a more thorough analysis, concluding that Medicare spending growth has significantly outpaced U.S. health expenditures other than Medicare & Medicaid, the flagship government programs, in this month's Health Policy Prescription.

Research on "Medical Bankruptcy" is Analytically Bankrupt

The media re-broadcast an article that concluded that 62% of U.S. personal bankruptcies are "medical bankruptcies". The article was so off-base, John Goldman's Health Policy Blog nominated my dissection of it as an entry in the "Worst Study of the Year Award"!

Sebelius & Insurance Monopoly

In a real howler, US Secretary of Health & Human Services Kathleen Sebelius said that a so-called "public-option" is necessary because people in some parts of the country are subject to a health-insurance "monopoly" of one carrier.

We agree with the problem. (In fact, it's worse than she thinks, because limiting us to health benefits of our employers' choice puts almost everyone who works as an employee under a "monopoly": Most have a "choice" of one plan.) But we have better solutions. Here are two:

1. Give people the same tax break if they buy their own health insurance, instead of forcing them into health insurance that their boss chooses.
   
2. Let people buy insurance that is portable across state lines.
   

By the way, if the so-called "public option" is really voluntary, will the share of my taxes that will undoubtedly bail out its cost over-runs be voluntary, too?

New Rescission Regs Will Hurt

It's been a while since the topic of "rescission" of individual health-insurance policies hit the headlines in California. Los Angeles Times reporter Lisa Girion and colleagues took credit for a previous regulatory flurry against health plans' rescissions, which peaked in February 2008.

Both health-insurance regulators (Insurance Commissioner Steve Poizner and Cindy Ehnes of the Department of Managed Health Care), as well as Los Angeles City Attorney Rocky Delgadillo, went on a tear against health insurers who had rescinded policies previously issued to individuals, whom the insurers alleged had materially misrepresented their health status when they applied for coverage.

Because the rescissions occurred after the individuals had submitted expensive claims, the over-seers figured that the insurers had engaged in the illegal practice of "post-claims underwriting". It was really much ado about very little (if not exactly nothing), as I wrote in a series of posts from October 24, 2007 through September 12, 2008. (You can hyperlink back through the series from the latest one.)

But Commissioner Poizner is in election mode - for governor this time - so he has obliged Ms. Girion and the LaLa Times with some new proposed regulations against the health insurers' practices.

The proposed regulations are a bonanza for trial lawyers, and will reduce Californians' ability to find inexpensive health insurance in the individual market. For example, in order to reduce ambiguity, the proposed regs state that: "Whenever possible, information from a PHR (Personal Health Record).....shall be relied upon in addition to, or if sufficient, instead of health history questionnaires."

Hang on: Are Personal Health Records now tools that relieve applicants from truthfully answering applications? Is "PHR" even a regulated term? In court, will a PHR, of whatever quality, over-ride an applicant's hand-written application? This is a Pandora's box.
Furthermore, if the applicant does not answer questions clearly, which are important for underwriting, the new regs oblige the insurer to "pursue alternative methods of obtaining such information, including but not limited to telephone interviews, medical records, or other sources of information."

Whoa again: Does this mean that if I caught some infection from a yak during my time in the Peace Corps in Mongolia, and fail to disclose it on my application, then the regulator will prevent the insurer from rescinding my policy because it failed to make inquiries to the Mongolian Ministry of Health?

It looks like all the burden of proof lies on the health insurer (which has no previous information about the applicant) and none lies on the individual (who has all the information). This makes responsible underwriting impossible.

Industry sources have told me that last year's regulatory rampage has already made them gun-shy about issuing individual policies in California, and they are rejecting many more applications. These proposed regulations will likely make the situation worse.

Why No Health-Tax Reform? A Conservative's Inside View

I'd say that almost no serious health-policy believes that employers alone should get the huge tax-break they do for offering health benefits as a part of compensation. And yet, it persists, despite scholars from both left and right having attacke it for years. Over at KQED's Healthy Ideas blog, I try to explain why conservative analysts have not yet convinced conservative politicians to fully embrace this reform.

Audio-Visual of Arizona Legislative Testimony

As previously reported, I spoke to the Arizona House of Representatives Health & Human Services Committee on May 26. The written testimony is posted here, and the audio-visual archive is here. I follow Christie R. Herrera at 1'36' and finish at 1'49.

Patients' Choice Act: "Exchanges"

Yesterday, I wrote critically about the "auto-enrollment" feature that the federal government would require states to institute if it passed the Patients' Choice Act, a proposal by four outstanding Congressional Republicans. I concluded that the requirement would not be effective.

Another feature of the PCA is the requirement that states establish "exchanges", from which residents could buy health insurance. Once again, I believe that the proposal would be ineffective. Worse, it reflects a fundamental misunderstanding of the risk-pooling function of health insurance. (Unfortunately, it's the same misunderstanding that most people have.)
Congressman Ryan carefully distinguishes an "exchange" from a Massachusetts-style "connector" by the fact that participation in an exchange would be voluntary, whereas a "connector" requires every one to buy health insurance. Well, fair enough, but his Q&A's also show that the "exchanges" would not work as advertised, unfortunately.

First, let's note one of the reasons for the exchange: The Q&A states that "a single patient venturing into the individual market does not have the benefit of spreading risk (and costs) in a broader risk pool." This is almost completely untrue, as demonstrated by Professor Mark Pauly and colleagues (which I discussed in a recent briefing paper, especially pp. 30-31). And it would be even less true if the government reformed the tax code so that we could buy guaranteed renewable, health-status insurance, that lasted our whole lives (as described by Professor Cochrane.)

Second, the PCA promotes states' instituting "voluntary" exchanges, but health plans within the exchange will guarantee issue policies. I.e., people who are already sick will enter the exchanges to buy insurance and those who are healthy will avoid the exchanges. Obviously, this will result in death spirals within the exchanges.

The PCA anticipates that insurers within the exchanges will re-insure each other, as occurs in Switzerland and the Netherlands. However, participation in those countries is mandatory. There's no point re-insuring risk in the exchanges if only sick people buy policies via the exchanges!

The Patients' Choice Act is a serious, good-faith effort to reform health care with minimum government, but it needs a serious make-over.

Patients' Choice Act & "Auto-Enrollment"

On May 20, the insightful policy analysts Joe Antos and Grace-Marie Turner editorialized in favor of the "Patients' Choice Act" in the Wall Street Journal, where they labelled it the "GOP's health-care alternative."

Produced by U.S. Senator Coburn (R-OK), Senator Burr (R-NC), Congressman Ryan (R-WI), and Congressman Nunes (R-CA), the PCA immediately drew some heavy criticism by freedom-loving policy analysts Michael Cannon and Michael Tanner (a.k.a. "the two Mikes") over at the Cato blog.

The PCA would compels states to institute a number of policies. The first one that I found questionable is "auto-enrollment". This means that when you get a job, or a driver's license, or show up at the ER, you are "auto-enrolled" in a health plan. The Congressional authors cite the experience of auto-enrollment in 401(k) plans as an example of how it overcomes eligible beneficiaries' inertia in the face of complex choices.

Well, maybe so, but health insurance is quite different. First, suppose I move to Florida to start a new job and get a new driver's license when I arrive there. I am just about dumb enough to "auto-enroll" in both the default plan that my new employer offers me and the default plan offered by the DMV.

Also, if the hospital ER also offers auto-enrollment (which I suppose would happen if I went to Florida without a job and did not get a driver's license), that procedure misses the whole point of health insurance. It's kind of like the auto-body shop auto-enrollling you in car insurance when you show up after an accident! What kind of a self-destructive car-insurer would sign on to such a program?!?!

The other big difference between health insurance and a 401(k) is that if I stop contributing to my 401(k), the balance just sits at Fidelity (or Vanguard or Merrill Lynch,or wherever) until I roll it over. If I stop paying health-insurance premiums, I obviously auto-disenroll from the plan, defeating the whole purpose. Because nobody seriously proposes that a tax credit alone will fully fund a health policy, but that working people will pay some of their wages in premium, this will result in significant drop out.

Which brings us back where we begun: uninsured people. We either believe in individual choice, which will result in a certain number of uninsured under any scenario, or we believe in mandatory health insurance.

There really is no middle way.

U.S. Health Care Dysfunction & U.K. Parliamentary Expense Scandal

Today's Wall Street Journal had good editorial on taxing health care, pointing out that the President and Congress are struggling to figure out how to raise enough taxes to pay for President Obama's health-care take-over. The most likely target is the exclusion of employer-based benefits from taxation, which moves Democrats closer to John McCain's position in last year's election. However, the goal of McCain's reform was to give health-care dollars to American families instead of their employers. Obama's goal is to seize health-care dollars for the government.

The WSJ also ran an op-ed on "Parliament and the Laffer Curve" explaining that the exclusion of "expenses" - very broadly defined - from British legislators' taxable compensation has led to taxpayers paying for cleaning moats and repairing duck ponds in politicians' country estates. The op-ed diagnosed the erupting scandal in terms equally applicable to American health care: "Members of Parliament face a 100% tax rate on their unclaimed allowances."

The current tax treatment of employer-provided health insurance causes Americans to over-insure. And (unless they have a Health Savings Account) the type of insurance they have is use-it-or-lose-it. Failure to consume health services of even marginal value means forgoing those benefits forever.

A few days ago, I reported on my successful visit to the Arizona House of Representatives' Health & Human Services Committee. Here's the published version of my spoken testimony.

Freddie Mac or Fannie Doc? Choices uncer ObamaCare

My op-ed in the Los Angeles Daily News.

Expanded Coverage = Less Access to Care

I've always said that the closer the state gets to "guaranteeing" "universal" coverage, actual access to care decreases. This has been the case in Massachusetts, since the 2006 reform that mandated health insurance for all.


A recent white paper by the New England Healthcare Institute suggests that access to primary care in Massachusetts is actually worse than in other states, where health insurance is voluntary. Remaking Primary Care: From Crisis to Opportunity, reports data from the Massachusetts Medical Society. The share of primary-care practices accepting new patients dropped significantly from 2006 to 2008: 90% to 78% in pediatrics, 69% to 52% in internal medicine, and 75% to 65% in family medicine (p. 13, figure 3).


However, the same page cites a national survey with data from 2003-2004, that 94% of primary-care practices were accepting new patients. However, only 74% were accepting new Medicare patients, and only 64% were accepting new Medicaid patients (footnote 20).


The message is pretty clear: more government coverage equals less access to care.

Yes, I Do Have A Nerve: And Hit Them, Too.

My blog essays over at KQED National Public Radio's Healthy Ideas online forum are starting to grate on the others, who advocate more government control over health care. My latest posting takes it all in stride.

Health Freedom Returns in Arizona

Last November, Arizona's Proposition 101 was narrowly defeated at the ballot box. Prop 101 would have prevented the government from enrolling people in a government or private health plan against their choice, or otherwise preventing them from spending their own money on their own health care.

But good ideas never die: the principle behind Prop 101 is now championed by State Rep. Nancy Barto, who invited me to testify to the Arizona House of Representatives Health & Human Services Committee yesterday on HCR 2014, which contains substantively the same language as Prop 101.

Like Prop 101, HCR 2014 is a proposed constitutional amendment. However, Prop 101 required an expensive drive for citizens' signatures to get on the ballot. If HCR 2014 passes the legislature, it will go on the ballot without the need for signatures (likely in November 2010), and the campaign will have more money to educate the public.

So, although Prop 101 failed at the ballot box last November, it obviously had enough of an impact to convince the majority in the legislature that it was worth championing. Indeed, after the hearing (in which the comittee passed the bill in a 6-3 vote), we had a press conference in which the Speaker of the House, Kirk Adams, announced his commitment to pass the resolution through the whole House.

The new resolution has more precise language than Prop 101, and the likelihood of the federal government monopolizing access to health care is much greater now than last November. These might be enough to influence the majority of voting Arizonans to protect their health services from government take-over when they see the amendment on the ballot.

As well, I'm obliged to compliment Rep. Barto on her command of the issues. Many health-policy analysts have seen Republican politicians flounder when challenged on issues of the uninsured, international comparisons of health outcomes, and the "fairness" of allowing individuals to navigate their own choices in health care. Rep. Barto was well prepared, citing reports by analysts such as Mike Tanner of the Cato Institute, and alluding to research by the NCPA's John Goodman, and other health-policy scholars.

On key issue that came up was the fate of a successful state constitutional amendment protecting health freedom, if the federal government were to take over health care. Some witnesses suggested that the U.S. Constitution's supremacy clause would invalidate the relevent clause in Arizona's state constitution.

Well, I'd prefer that the U.S. Constition's 10th amendment win that fight, but I'm not going to predict the outcome of a state's judicial challenge to an (as yet undefined) federal "universal" health plan. For those interested in preparing for such a fight, I'd recommend Levy & Mellor's The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government nd Eroded Freedom, especially chapter 1.

Health-Care Union Cartel Rises Up

Yesterday's announcement by the Service Employees International Union that it had inked a deal with the California Nurses Association/National Nurses Organizing Committee to collude in support of the Orwellian "Employee Free Choice Act" (which will take away workers' right to a secret ballot for union certification) goes far beyond that abominable piece of legislation.

As I wrote a while back, the primary beneficiaries of government-monopoly health care are public-sector unions. Behind every effort to increase government control of health care, you'll find a union boss. This was embarrassingly disclosed by Gov. Schwarzenegger, fed up that the SEIU was bullying the White House into withholding California's Medicaid bailout (as punishment for the governor's reducing home-health-care workers' wages to plug the deficit).

I believe that one important reason for the failure of the government to monopolize health care has been the discord between the SEIU and the CNA/NNOC. This erupted during the 2007 debate over health reform in California, where the SEIU supported Schwarzenegger's scheme for compulsory enrolment in private insurance, whereas the CNA supported pure single-payer. The CNA's ally, state senator Sheila Kuehl, killed Schwarzenegger's bill in the senate.

So, if these two powerful unions have buried the hatchet, we should expect to see an even more comprehensive assault on individual choice in health care, as they combine to lobby for government take-over in every state capitol and DC.

Today's "Public Options" for Health Coverage are Already Bankrupt

My latest column for KQED's Healthy Ideas online forum on covering the uninsured.

The Few, The Proud, The California Tax-Killers

A few dozen Californians bravely strode forth and slayed Gov. Schwarzenegger's tax dragon. Five tax-hiking propositions that the governor and other Sacramento politicians tried to con us into believing would fix the budget deficit failed to get past the voters. (The solution is to shrink the state government, as Jason Clemens wrote today.)

Two of the initiatives would have broken into two piggy-banks funded by previously approved taxes for mental health and children's health, and rolled those dollars into the general fund. I'm glad that the voters rejected them, but I've previously argued that the original taxes were also harmful, although they were sure winners years ago at the ballot-box.

But fans of Big Government need not despair: President Obama has recanted his previous nullification of the Golden State's Medi-Cal (Medicaid) bailout. Perhaps he was embarassed when Gov. Schwarzenegger and his subordinates disclosed that the Service Employees International Union (SEIU) participated in his teleconference with the White House, when they discussed reducing wages to home-health workers. Certainly, the SEIU expressed extreme displeasure that the governor disclosed this information.

But the federal bailout of Medi-Cal will not suffice to feed the relentless growth of California's government-run health-care behemoth. What's next? Well I've been around long enough to be pretty confident that I can identify the next target: those pesky smokers.

In case anyone wants to prepare for that fight, here's my 2006 paper debunking the notion that hiking California's tax on smokers will solve any problems, either health or budget related.

States, U.S. Collude to Hike Rx Prices

I'd bet that Avis, Hertz and other car-rental businesses pay a lot less per car than I do. After all, they buy entire fleets and I buy only one car every few years. Imagine if I could get a law passed that made it illegal for cars to be sold to different customers for different prices. Would I be able to buy cars cheaper?

Probably not: Depending on how many cars were sold to corporate fleets versus how many to individuals, the price of cars to corporate fleets would rise. Renters would pay a higher price.
So, governments generally allow different prices to prevail in markets - but not when the government competes against private customers. For example, it is illegal for a private patient or organization to pay less than the government for prescriptions. We've known for years of evidence that this increases prices to private buyers of medicines (which I discussed in a 2003 report, pp. 10-12, 25-26).

This has not stopped states and the federal government from acting aggressively to artificially increase Rx prices for American patients. The latest is a multi-state and federal lawsuit against Wyeth Pharmaceuticals, in which 16 states and the U.S. are colluding on a lawsuit charging that private hospitals got lower prices for Protonix Oral and Protonix IV acid-reflux medicines than state Medicaid programs were able to negotiate.

The business case for these discounts was that the patients would be loyal to those medicines once discharged from the hospitals, and encourage their doctors to keep them on those meds as out-patients.

Horror of horrors! Competition between Wyeth and other drug-makers who make different therapies for acid-reflux disorder (such as a certain purple pill). And the states were little more than ineffective bystanders. Well, we just can't have that.

The result of this lawsuit will not be lower Rx prices to state Medicaid programs: Rather, it will be higher drug prices for hospitals and out-patients, and a higher likelood of fewer patients having access to a broad choice of anti-reflux therapies.

Do Small Businesses Need a Health Insurance Exchange?

Anyone in libertarian-conservative health-policy circles knows that we can tie ourselves in knots pretty quickly over the idea of a health-insurance "exchange". If the federal government amended the federal tax-code to give American families the same ability to buy health insurance that American employers currently have, we wouldn't have to worry about "exchanges".

Unfortunately, because of the federal tax-code, state reformers often throw "exchanges" (a.k.a. "connectors") in the mix: Witness Massachusetts or (most recently) Utah. Nevertheless, the option of an exchange embraces a fundamental flaw in the way most people think about health insurance: That employer-based groups pool risk better than individuals.

No: they do not. If they did, we would get all of our insurance from our employers - including life, homeowner's and auto. Our great ally James Capretta has written an excellent essay in National Review which appears to suggest pooling small businesses in large groups as an advantage of health-insurance exchanges:

"Moreover, job-based coverage doesn’t work nearly as well for workers in smaller firms. Insurers charge premiums based on the known risks of the group they are covering, and the smallest firms simply are not big enough to spread these risks broadly. Most states have rules requiring insurers to treat all small businesses as if they were part of one large group, but there’s usually some give in the rates they can charge, allowing for adjustment based on a business’s recent claims history. Consequently, it is not uncommon for a small business with one or two workers newlyiagnosed with cancer to see premiums jump 20 or 30 percent, and sometimes even more, in just one year."

I may have misunderstood the paragraph. However, a "known risk" is not, of course, a "risk" at all, and the aggregate risk of all the employees in any one firm is trivial to the block of business of the health insurer.

If this understanding of pooling risk were correct, then the small business with one or two workers newly diagnosed with cancer, whose premiums jump 20% or 30%, would have had its problems solved by the small-group reforms of the early 1990s. Many states imposed a modified community rating on small-group policies, but this neither contained premium hikes nor insured more small businesses (as I wrote about in my analysis of Gov. Schwarzenegger's failed California reforms.)

The problem with the small-group market is not instability of insured risks, but instability of employment. One or two people quitting or new ones getting hired changes the health-risk of the small business. So, small businesses and carriers write policies that last only one year, which is a ridiculous term for health insurance.

It works okay for auto or homeowner's insurance, because you are insuring against an acute event (e.g. theft or fire). However, catastrophic health events last longer than one year. If you were free to buy your own health insurance, you'd never buy a policy with a one-year term. You'd buy one with guaranteed renewability, and a mechanism to ensure the insurer did not "game" the block of business, by investing in health-status insurance as described by Professor Cochrane).

Even with the current prejudice against individuals buying their own health insurance, the individual market functions much better than the media reports. Professor Pauly has studied the data and concluded that guaranteed-renewability works quite well even in today's malformed individual-insurance market, (as I reviewed in my analysis of Senator McCain's presidential proposal).

Mr. Capretta (whom I've had the pleasure of meeting a couple of times when the zookeepers allow me out of the cage to mix with my betters) also has another important essay in the Weekly Standard, in which he recommends health-insurance exchanges. I'm not against an exchange qua exchange, but we've got to clear our heads of the notion that people can only buy health insurance effectively buy shopping in large groups, like mastodons marauding the pre-historic tundra.

Why Obama Won't Give California Its Medicaid Bailout

What's up with the President turning off the spigot to the Medi-Cal program? Sure, he's following the direction of the Service Employees International Union (SEIU), but I think there's more going on: Taking away Medi-Cal patients' power to choose their home-health aides, and giving it the the union. Read about it in this month's Capital Ideas.

Free Prescriptions for Unemployed

I am supposed to be a free-market, conservative, capitalist, health-policy analyst, but seem to have spent a lot of my recent time attacking some of the antics of private-sector interests who have given up a lot of ground on the current health-reform "debate". (That is, if we can really dignify it as a "debate.")

So, I suppose I'd better write something positive about "corporate health care" before folks start thinking I'm an MSNBC reporter in camouflage. I was impressed to see news from Pfizer that the firm will give its medicines for free to anyone unemployed during 2009 and had been using Pfizer meds for at least three months before losing his job.
Sure, the press release was a little gushy, but the program is straight-forward enough: Just fill in a one-page application (on the honor system, apparently) and you get free meds for a year. Why Pfizer issued the press release before the program is actually launched on June 1, I cannot say, but this sounds like the real deal.

So, unemployed people will get their meds for free for a year (or until they get new jobs). That's great, but there are a few things this program will not do, for which I'm sure it will draw criticism:

• It will not employ even one more government bureaucrat to administer another welfare program.
• It will not give the government more control over which medicines doctors prescribe, in the name of "cost-containment."
• It will not add one cent to the unfunded liabilities of the welfare-state programs that will burden our descendants with a massive tax load.

So, no, Pfizer's new program to expand access to medicines does not achieve all the goals of "universal" health care, but it's a start!