Author Archive
ObamaCare’s ‘Sweetheart Deal’ for PhRMA
The New Republic’s Jonathan Cohn reports that back in March, IMS Health projected slightly negative revenue growth for the pharmaceutical industry but recently changed that projection to 3.5-percent annual growth from 2008 through 2013.
“What changed?” Cohn asks. “A major factor, according to IMS, was the emerging details of health care reform . . . Put it all together, and you have more demand for name-brand drugs . . . enough to boost revenue significantly.” And:
“If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”
How could this be happening? Oh yeah:
That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee . . .
The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.
To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.
Which is what I predicted, both here and here.
Cohn concludes, “the drug industry has enormous leverage in Congress.” But Cohn still supports the president’s health care takeover. Or is it PhRMA’s health care takeover?
Filed under: General; Health, Welfare & Entitlements
Abortion Funding and Health Care
President Obama’s approach to health care reform — forcing taxpayers to subsidize health insurance for tens of millions of Americans — cannot not change the status quo on abortion.
Either those taxpayer dollars will fund abortions, or the restrictions necessary to prevent taxpayer funding will curtail access to private abortion coverage. There is no middle ground.
Thus both sides’ fears are justified. Both sides of the abortion debate are learning why government should not subsidize health care. Tip of the hat to President Obama for creating this teachable moment.
Meanwhile, Catholics should be outraged at the United States Conference of Catholic Bishops (to which my grandfather served as counsel). Yes, the USCCB helped prevent taxpayer funding of abortions in the House bill. But at the same time, those naughty bishops have abandoned the Church’s doctrine of subsidiarity by endorsing the rest of the Democrats’ plan to centralize power in Washington.
As it happens, Caesar is the main source of funding for Catholic hospitals. That may explain why the bishops are so eager to render unto, ahem, Him.
Cross-posted at Politico’s Health Care Arena.
Filed under: Government and Politics; Health, Welfare & Entitlements
The Pelosi Bill’s High Water Mark
Democrats are having difficulty corralling 218 votes for the Pelosi bill because Americans do not want government to be as big and as powerful as the House leadership does. Pro-life Democrats do not want a government so big that it can force taxpayers to fund abortions. Pro-choice Democrats do not want a government so big that it uses subsidies to restrict access to abortion coverage. Other Democrats don’t want a government so big that it turns the United States into a welfare magnet.
The American people don’t want the Democrats’ approach to health care generally. The more time the public has to digest ObamaCare, the more they dislike it:
And the Pelosi bill is the most expensive and extreme version of ObamaCare. Opposition will climb higher when the public learns the bill costs some $1.5 trillion more than Democrats claim.
Even a majority vote would not necessarily indicate majority support for the Pelosi bill. Rep. Jim Cooper (TN) and other Democrats are voting aye only because they want to keep the process moving – i.e., because this isn’t the vote that counts.
Win or lose, tonight’s vote will be the high water mark for the Pelosi bill.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: General; Health, Welfare & Entitlements
Disguised Health Care Costs: The $1.5 Trillion Fraud
If House Democrats hold a vote on their health-care overhaul this weekend, they might as well vote to abolish the Congressional Budget Office too.
It would be no more audacious (and much more honest) than the way they have gamed the CBO’s rules to hide $1.5 trillion of the cost of their legislation — which has to be the biggest fiscal obfuscation in the history of American politics.
C/P Politico
Are Savvier Democrats Playing Rope-a-Dope?
Let’s simplify things and say there are essentially two parts to the health care bills moving through Congress: an individual mandate that would effectively nationalize health care, and a government-run program that would explicitly nationalize it slowly, over time.
One explanation for Majority Leader Harry Reid (D-NV) including the government-run program — supporters call it a “public option”; I prefer Fannie Med — in the Senate bill is that Fannie Med’s popularity is on the rise. Another explanation is that Reid had to include it to remain majority leader and get left-wing Nevadans to work for his re-election.
But a third explanation, not inconsistent with the others, is that the savvier Democrats know that all they need to nationalize health care is an individual mandate. So they’ll let Fannie Med take a beating, and then pass the more sweeping individual mandate when opponents are too exhausted and distracted by their “victory” over Fannie Med to notice.
(Cross-posted at Politico’s Health Care Arena.)
Samuelson: the Fannie Med Mirage
In yesterday’s Washington Post, economics columnist Bob Samuelson had a fantastic piece on the Democrats’ plan to create yet another government-run health insurance program for yet another population of Americans. Here’s the money quote:
The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more “choice” and “competition”) to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn’t?
Reid’s Accomplishment
Including a Fannie Med with a “state opt-out” provision in the Senate Democrats’ health care bill accomplishes only this: it helps Majority Leader Harry Reid (D-NV) survive as majority leader by appeasing his left wing. It doesn’t make it any more (or less) likely that Fannie Med will survive.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Cato Publications; General; Government and Politics; Health, Welfare & Entitlements
State ‘Opt-Out’ Proposal: a Ruse within a Ruse
President Obama and his congressional allies want to create yet another government-run health insurance program (call it Fannie Med) to cover yet another segment of the American public (the non-elderly non-poor).
The whole idea that Fannie Med would be an “option” is a ruse.
Like the three “public options” we’ve already got – Medicare, Medicaid, and the State Children’s Health Insurance Program – Fannie Med would drag down the quality of care for publicly and privately insured patients alike. Yet despite offering an inferior product, Fannie Med would still drive private insurers out of business because it would exploit implicit and explicit government subsidies. Pretty soon, Fannie Med will be the only game in town – just ask its architect, Jacob Hacker.
Now the question before us is, “Should we allow states to opt out of Fannie Med?” It seems a good idea: if Fannie Med turns out to be a nightmare, states could avoid it.
But the state opt-out proposal is a ruse within a ruse.
Taxpayers in every state will have to subsidize Fannie Med, either implicitly or explicitly. What state official will say, “I don’t care if my constituents are subsidizing Fannie Med, I’m not going to let my constituents get their money back”? State officials are obsessed with maximizing their share of federal dollars. Voters will crucify officials who opt out. Fannie Med supporters know that. They’re counting on it.
A state opt-out provision does not make Fannie Med any more moderate. It is not a concession. It is merely the latest entreaty from the Spider to the Fly.
(Cross-posted at National Journal’s Health Care Experts blog.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
To Make Health Care Affordable, Don’t Add Regulations — Repeal Them
David Freddoso of the Washington Examiner reveals how the monopolies that states enjoy over licensing doctors, nurses, and other clinicians reduce access to care for low-income Americans:
Stan Brock just wants to help. The former co-star of “Wild Kingdom” wants to deliver free medical, dental and vision care to the poor. Whereas most politicians talk about “bending the cost curve” in health care, Brock simply wants to break it – to provide care free of charge, at the hands of unpaid volunteer doctors and dentists using donated equipment.
Brock’s group, Remote Area Medical, wants to bring its services to Washington, and soon. He wants his volunteer eye doctors to grind new glasses on the spot for those having trouble seeing.
He wants his dentists to pull rotten teeth and perform root canals in badly neglected mouths. He wants to give checkups and HIV tests to the uninsured and the underinsured. No questions asked.
The only question is whether the bureaucrats will let him do it.
That sounds like hyperbole. It’s not. Read the whole thing (it’s short) and you’ll learn how in-state clinicians shamelessly use monopolistic licensing laws to protect themselves from competition — even at the cost of denying medical care to poor people.
Yesterday, Cato released a study where I advocate breaking up the state’s licensing monopolies and making state-issued licenses portable. Such a law would completely solve Remote Area Medical’s problem.
This Cato study by economist Shirley Svorny reveals how clinician licensing laws do more harm than good.
(Cross-posted at Cato@Liberty Politico’s Health Care Arena.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
“Why Don’t We Fix the Two Public Options We Have Now instead of Creating a Third One?”
That sensible — and hopefully not rhetorical — question was posed by Democratic Senator Mary Landrieu (D-LA) on National Public Radio, according to The Hill.
Regarding recent polling that shows that a new Fannie Med (my term) commands majority support among the public, Landrieu quipped, “I think if you asked, ‘Do you want a public option, but it would force the government to go bankrupt?’, people would say no.”
Real health care reform wouldn’t bankrupt taxpayers or the government.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Yes, Mr. President, a Free Market Can Fix Health Care
At his White House forum on health reform back in March, President Barack Obama offered:
If there is a way of getting this done where we’re driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.
In a new Cato study titled, “Yes, Mr. President, a Free Market Can Fix Health Care,” I take up the president’s challenge and explain that markets are indeed the only way to achieve those goals. I also explain how Congress can remove the impediments that currently prevent markets from doing so:
- Give Medicare enrollees a voucher (adjusted for their means and health risk) and let them purchase any health plan on the market,
- Reform the tax treatment of health care with “large” health savings accounts, which would give workers a $9.7 trillion tax cut (without increasing the deficit) and free them to purchase secure coverage that meets their needs,
- Free consumers and employers to purchase health insurance across state lines (i.e., licensed by other states), which could cover up to one third of the uninsured,
- Make state-issued clinician licenses portable, which would increase access to care and competition among health plans, and
- Block-grant Medicaid and the State Children’s Health Insurance Program, just as Congress did with welfare.
Unlike the president’s health care proposals (which, as Victor Fuchs explains, would merely shift costs), these reforms would reduce costs, expand coverage, and improve health care quality – without new taxes, government subsidies, or deficit spending.
Would a free market be nirvana? Of course not. But fewer Americans would fall through the cracks than under the status quo or the government takeover advancing through Congress.
There is a better way.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Medicare for Everyone?
According to The Hill, House Democrats are considering re-branding their new government-run health insurance program. A “public option” evidently isn’t catchy enough. Now they’re thinking, “Medicare Part E” as in, Medicare for Everyone.
By all means, model a new government program after Medicare, which:
- Drags down the quality of care for all patients, both publicly and privately insured
- Literally kills people by fueling the epidemic of deaths due to medical errors (as many as 100,000 annually)
- Is responsible for the fragmented delivery system about which the Left complains
- Has required one tax increase every four years, still has an unfunded liability approaching $90 trillion, and will therefore be the driving force behind income-tax rates essentially doubling by mid-century
- Has been expanded well beyond its original mission
- Didn’t save a single life in (at least) its first 10 years of operation
- Coerces people to choose it over private insurance
- Restricts enrollees’ freedom to spend their own money on medical care
- Is easily (and persuasively) parodied as a tool of the devil
Pleeeeease don’t throw me into that briar patch.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Universal Coverage Means ‘Willing to Let You Die Sooner’
I cannot disagree with Uwe Reinhardt’s response to my previous post at National Journal’s Health Care Experts blog. But his response bears clarification and emphasis.
Improving “population health” generally means “helping people live longer.”
To paraphrase, Reinhardt then writes:
If helping people live longer were our objective in health reform, we could do better than universal coverage. But health reform is not (solely or primarily) about helping people live longer. It is (also or primarily) about other things, like relieving the anxiety of the uninsured.
I applaud Reinhardt for acknowledging a reality that most advocates of universal coverage avoid: that universal coverage is not solely or primarily about improving health.
Will Reinhardt go further and acknowledge that, since universal coverage is largely about some other X-factor(s), that necessarily means that advocates of universal coverage are willing to let some people die sooner in order to serve that X-factor?
(Cross-posted at National Journal’s Health Care Experts blog.)
Filed under: General; Health, Welfare & Entitlements
Parsing Pelosi: House Health Takeover Would Cost around $2.25 Trillion
Just like the Senate Finance Committee’s government takeover, the House of Representatives’ government takeover hides more than half of its cost by pushing those costs off the government’s budget and onto the private sector.
So when Speaker Pelosi says the House bill would cost under $900 billion, what she actually means is that it would cost around $2.25 trillion.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Nice Insurance Company. Shame If Anything Were to Happen to It.
Just days after the health-insurance lobby released a report criticizing the Senate Finance Committee’s health care overhaul (for not expanding government enough!), Democrats and President Barack Obama lashed out at health insurers, threatening to revoke what the Government Accountability Office calls the insurers’ “very limited exemption from the federal antitrust laws.”
Democrats say they’re motivated by the need to increase competition in health insurance markets. Right.
According to Business Week:
David Hyman, a professor of law and medicine at the University of Illinois College of Law and adjunct scholar at the Cato Institute…considers it unlikely that repeal would fundamentally change the nature of the market. While it might increase competition in some markets, he says, it could actually decrease it in others, such as those where small insurers survive because they have access to larger providers’ data. Changes to the act could therefore hurt smaller companies more than larger ones, he says.
Because the act doesn’t outlaw the existence of a dominant provider but simply prohibits collusion, says Hyman, a repeal would fall short of breaking up existing market monopolies that are blamed for artificially inflating prices. The current move against [the] McCarran-Ferguson [Act], he says, “has more to do with the politics of pushing back against the insurance industry’s opposition to health reform than it does with increasing competition in health-insurance markets.”
Combined with what The New York Times described as the Obama administration’s “ham-handed” attempt to censor insurers who communicated with seniors about the effects of the president’s health plan — the Times editorialized: “the government’s Centers for Medicare and Medicaid Services had to stretch facts to the breaking point to make a weak case that the insurers were doing anything improper” — it’s hard to argue that this is anything but Democrats threatening to use the power of the state to punish dissidents.
When Republicans were in power, dissent was the highest form of patriotism. Now that Democrats are in power, obedience is the highest form of patriotism.
Filed under: Cato Publications; General; Government and Politics; Health, Welfare & Entitlements; Law and Civil Liberties
Baucus Finances Health Overhaul by Raiding Social Security
Andrew Biggs, FTW.
Filed under: General; Health, Welfare & Entitlements; Tax and Budget Policy
Why Does Health Care Need Reform?
Is it because health care is special? Or is it because we have treated health care as though it were special?
David Goldhill is the CEO of the Game Show Network and author of “How American Health Care Killed My Father,” in the September 2009 issue of The Atlantic.
In this Cato video, Goldhill explains why a consumer-driven health care sector would never produce the often horrific problems we see in American medicine, and why the legislation moving through Congress fails to address those problems.
See Goldhill’s complete remarks here.
Should Congress Even Try to Achieve Universal Coverage?
If the goal is to improve health, then the answer is clearly no.
Ironically, even though universal coverage is presumably about helping the sick, the Democrats’ pursuit of universal coverage demonstrates not how much, but how little they care about their neighbors’ health.
Economists Helen Levy and David Meltzer explain, in a book published by the Urban Institute, “There is no evidence at this time that money aimed at improving health would be better spent on expanding insurance coverage than on…other possibilities,” such as clinics, hypertension screening, nutrition campaigns, or even education. In the Annual Review of Public Health, they explain further:
The central question of how health insurance affects health, for whom it matters, and how much, remains largely unanswered at the level of detail needed to inform policy decisions…Understanding the magnitude of health benefits associated with insurance is not just an academic exercise…it is crucial to ensuring that the benefits of a given amount of public spending on health are maximized.
If Democrats were serious about improving health, they would first gather evidence about which of those strategies produces the most health per dollar spent. (As I recommend elsewhere, the $1.1 billion Congress allocated for comparative-effectiveness research should just about do the trick.) Democrats would then fund the most cost-effective strategies, which may or may not include broader insurance coverage.
But the fact that Democrats are pursuing universal coverage without any such evidence necessarily means that they are willing to sacrifice potentially greater health improvements to achieve…whatever else they hope universal coverage will achieve.
Universal coverage is not about improving public health. It is about subordinating health to some X-factor that supporters value even more.
Which leads to an even more intriguing question: what is that X-factor?
Financial security? (If so, would universal coverage achieve that? Or are there better strategies?) Political power? Dependence on government? Industry subsidies? The appearance of compassion?
I’d like to see that question put to the group.
(Cross-posted at National Journal’s Health Care Experts Blog.)
Filling the Airwaves with Deception and Dishonesty
In his weekly radio address, President Obama says private health insurance companies are “filling the airwaves with deceptive and dishonest ads.”
Gee, I wonder if the insurers’ deceptions and dishonesty will reach even half the number of people that President Obama’s did during his address to Congress.
(Cross-posted at National Journal’s Health)
House Democrats Choose Dishonesty
I’m not a fan of the House Democrats’ proposed takeover of the health care sector. (If there’s one thing that legislation is not, it’s “reform.”) But at least House Democrats were honest enough to include the cost of the $245 billion bump in Medicare physician payments in their legislation, unlike some committee chairmen I could mention.
Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like Senate Democrats, now plan to strip that additional Medicare spending out of health “reform” and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the “reform” legislation reduces the cost of health “reform”!
But why stop there? Heck, enact all the new spending separately, and the cost of “reform” would plummet! Enact the new Medicaid spending separately, and the cost of “reform” would fall by $438 billion! Do it with the subsidies to private health insurance companies, and the cost of “reform” would plunge by $773 billion! All that would be left of “reform” would be tax increases and Medicare payment cuts. Health “reform” would dramatically reduce federal deficits! Huzzah!
Except it wouldn’t, because at the end of the day Congress would be spending the same amount of money.
The only good news may be this. If this dishonest budget gimmick succeeds, then Congress will have “fixed” Medicare’s physician payments. Absent that “must pass” legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.
(Cross-posted at Politico’s Health Care Arena.)
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