An 85 Percent Increase in Health Care Fraud Prosecutions? Be Still My Beating Heart…
USA Today reports that the Obama administration’s efforts may yield an 85 percent rise in federal fraud prosecutions. Yawn.
Fraud expert Malcolm Sparrow:
By taking the fraud and abuse problem seriously this administration might be able to save 10 percent or even 20 percent from Medicare and Medicaid budgets. But to do that, one would have to spend 1 percent or maybe 2 percent (as opposed to the prevailing 0.1 percent) in order to check that the other 98 percent or 99 percent of the funds were well spent. But please realize what a massive departure that would be from the status quo. This would mean increasing the budgets for control operations by a factor of 10 or 20. Not by 10 percent or 20 percent, but by a factor of 10 or 20. [emphasis added]
That’s not going to happen, as I explain here and in this video:
Health Care Entitlements Are the Real Debt Bomb
I’m a few days behind on this, but over at The Corner Yuval Levin has written an important post about how health care entitlements are the real cause of the debt crisis facing the federal government. Using Congressional Budget Office projections, Levin creates this magnificent chart, which I plan to steal over and over again:
If Republicans want to conquer the federal debt, they need to embrace health policy like they embrace tax cuts.
Rwanda and the Psychic Benefits of Universal Coverage
Last week, The New York Times published an article subtitled, “In Desperately Poor Rwanda, Most Have Health Insurance.” The main theme was the contrast between Rwanda’s compulsory health insurance system and the as-yet-non-compulsory U.S. health insurance market:
Rwanda has had national health insurance for 11 years now; 92 percent of the nation is covered, and the premiums are $2 a year.
Sunny Ntayomba, an editorial writer for The New Times, a newspaper based in the capital, Kigali, is aware of the paradox: his nation, one of the world’s poorest, insures more of its citizens than the world’s richest does.
He met an American college student passing through last year, and found it “absurd, ridiculous, that I have health insurance and she didn’t,” he said, adding: “And if she got sick, her parents might go bankrupt. The saddest thing was the way she shrugged her shoulders and just hoped not to fall sick.”
I don’t see anything absurd here, but I do see something remarkable. Rwanda is so poor, its per capita income is about 1 percent that of the United States ($370 vs. $39,000). Its health care sector is an international charity case: “total health expenditures in Rwanda come to about $307 million a year, and about 53 percent of that comes from foreign donors, the 
largest of which is the United States.” That’s roughly $32 per person per year, which doesn’t buy much. Dialysis is “generally unavailable.” As are many treatments for cancer, strokes, and heart attacks, making those ailments “death sentences” more often than in advanced nations. Life expectancy at birth is 58 years, compared to 78 years in the United States. Rwandan children are 15 times more likely to die before their first birthday (7 vs. 107 deaths per 1,000 live births) and 25 times more likely to die before turning five (8 vs. 196 deaths per 1,000 live births) than U.S.-born children. (If you want to meet some Rwandan kids struggling to make it to age 5, read my friend’s blog, Life of a Thousand Hills.) And yet, the saddest thing is a healthy-but-uninsured American college student.
If You Like the VA, You’ll Love ObamaCare
The Obama administration sold — well, it pitched ObamaCare to the public with this promise: “It’s time we put the health of American families back in the hands of consumers – not the insurance industry.”
The Veterans Health Administration shows how incompetent the federal government is when it comes to making medicine a patient-centered enterprise. After decades of mistreating veterans, the VHA achieved some successes in the past decade or so, such as adopting electronic medical records and improving on some measures of quality. Yet serious deficiencies remain. Today’s Los Angeles Times reports that the VA’s disability system is a nightmare for soldiers and sailors disabled in combat:
John Lamie survived six roadside bombings in Iraq, only to have the Department of Veterans Affairs refuse to accept three months’ worth of medical tests he underwent for jaw and shoulder wounds — tests performed by VA-approved doctors at VA facilities…
Many veterans wounded in Iraq and Afghanistan are being buffeted by a VA disability system clogged by delays, lost paperwork, redundant exams, denials of claims and inconsistent diagnoses. Some describe an absurd situation in which they are required to prove that their conditions are serious enough for higher payments, yet are forced to wait months for decisions.
“You fight for your country, then come home and have to fight against your own country for the benefits you were promised,” said [Clay] Hunt, 28, who served in Iraq and Afghanistan as a Marine Corps sniper.
It took Hunt, who lives in Brentwood, 10 months to receive VA disability payments for his injuries after the agency misplaced his paperwork…
Some veterans wait up to six months to get their initial VA medical appointment. The typical veteran of the Iraq or Afghanistan wars waits 110 days for a disability claim to be processed, with a few waiting up to a year. For all veterans, the average wait is 161 days…
Lamie, 25, an Army combat engineer who risked his life uncovering and defusing roadside bombs in Iraq, declared bankruptcy in April. He is unable to work because of his combat injuries, he said, and VA delays have left him short of cash to support his wife and four children. He gets $311 a month in food stamps.”I did everything the VA asked of me, but they block you at every turn,” Lamie said from his home in Georgia. “They play with people’s lives…They drag their feet, hoping you’ll give up. A lot of people do. Not me.”…
When he volunteered for the Marine Corps, Hunt recalled, a selling point was lifelong medical care if he were wounded.“But then the time comes to get those benefits, it turns into a lifelong battle with the VA to get what you were promised,” he said…
The experience has left [Lamie] drained and disillusioned. He said he couldn’t even look at his old Army uniform anymore.
“I can’t stand the sight of it after what I’ve gone through with the VA,” he said. “I’m not proud anymore.”
ObamaCare will produce similar horrors, and for the same reason: all economic systems serve the people who control the money. Under ObamaCare and the VA, patients don’t control the money. The government does.
Returning that money to consumers would put patients first, whether they’re veterans or other civilians. But such reforms won’t mean a thing until we repeal ObamaCare.
Weekend Links — Health Care Edition
- Republicans and Democrats are both missing the point of true health care reform: “Health care reform cannot just be about giving more stuff to more people. It should be about actually ‘reforming’ the system. That means scrapping the current bills, and crafting the type of reform that makes consumers responsible for their health care decisions.”
- Alan Reynolds: If people looking for individual health insurance policies were allowed to shop in any state, the number of uninsured could drop by 11.1 million … or more.
- And the winner for the worst idea for health care reform goes to…
- Something you might want to brush up on: The Reconciliation Rulebook.
- In case you missed it, Cato health policy experts live-blogged part of Thursday’s health care summit.
Obamacare Will Be a Budget Buster
Does anyone think that a huge new entitlement program will lead to lower budget deficits? Sounds implausible, yet proponents of government-run healthcare claim this is the case according to the official estimates from the Congressional Budget Office and Joint Committee on Taxation.
To use a technical phrase, this is hogwash. This new 6-1/2 minute video, narrated by yours truly, gives 12 reasons why Obamacare will lead to higher deficits – including real-world evidence showing how Medicare and Medicaid are much more costly than originally projected.
By the way, this video doesn’t even touch on the mandate issue, which Michael Cannon explains is not being counted in order to make the cost of government-run healthcare less shocking.
Cato Health Care Expert Michael Cannon to Debate Rep. DeLauro (D-CT) Online at 2pm EST Today
Cato director of health policy studies Michael F. Cannon will participate in a live online chat today at the New Haven Register. The event starts at 2pm EST and will last for an hour.
We encourage you to submit questions once the event has started. Rep. Rosa DeLauro (D-CT) will participate in the chat alongside Cannon.
The DNC’s Pure Uninformed Demagoguery
The other day, Sarah Palin cited my work in an oped for the Wall Street Journal. So when the Democratic National Committee savaged her for it, ABCNews.com asked me for comment. Here’s an excerpt from George Stephanopoulos’ blog:
“Instead of poll-driven ‘solutions,’ let’s talk about real health-care reform: market-oriented, patient-centered, and result-driven,” wrote Palin. “As the Cato Institute’s Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each years in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines.”
Cannon, the Cato expert referenced by Palin, has not had any direct contact with the former Alaska governor or any of her advisers.
He did, however, come to her defense on the Medicare issue.
‘Vouchers would not make seniors less secure, it would make them more secure,’ Cannon told ABC News. ‘Everyone agrees that Medicare cannot go on spending as much money as it does now. The voucher idea allows individual consumers to make their own decisions about what they need and what they don’t need.’
‘Giving Medicare seniors a voucher is the most rational, the most humane way to contain Medicare spending,’ he added.
Asked about the DNC’s charge that Palin’s proposal would leave seniors with pre-existing conditions vulnerable, Cannon, the director of health policy studies at Cato, called it ‘pure uninformed demagoguery.’
Cannon says that under proposals he has developed, bigger vouchers would be given to people with pre-existing conditions as well as to people with low incomes.
Actually, I think what I said was that DNC communications director Brad Woodhouse was engaging in pure ignorant demagoguery. But whatever.
The DNC is even running an ad claiming that Republicans are trying to “cut” and “kill” Medicare, presumably with vouchers. Never mind that President Obama proposes to “cut” (i.e., slow the growth of) Medicare spending too.
If Republicans were smart — hey, where are you going? — they would be running ads that say:
President Obama wants government bureaucrats to decide whether seniors get health care. Republicans are fighting to control health care costs and preserve seniors’ ability to make their own health care decisions and choose the benefits that they value most. Support Medicare vouchers!
For more on reforming Medicare the right way, click here.
Does the GOP Recognize Socialized Medicine When They See It?
Rumor has it that Republicans in the House and Senate will soon decide whether their alternative to the Democrats’ health care reforms will include an “individual mandate” — a legal requirement that all Americans obtain health insurance.
A recent Consensus Group statement shows that the entire free-market health policy community — including scholars from the Heritage Foundation — opposes such a move.
The Cato Institute has published one study arguing against an individual mandate in itself, and two studies critical of its use in Massachusetts. Cato will soon publish additional studies showing how an individual mandate has — as predicted — led to exploding costs and government rationing efforts in Massachusetts, and arguing against its use at the federal level.
Worse, as I explain in this study, an individual mandate is in fact a large leap toward socialized medicine — regardless of the fact that health insurance would remain nominally “private.” Republicans may oppose creating a new government health insurance program. Yet if they are willing to force Americans to purchase insurance, they will effectively nationalize the health insurance industry.
Finally, as I explain in this op-ed, an individual mandate is always accompanied by taxpayer subsidies to people who may (or may not) need aid to comply. The more people who rely on government aid for their health care, the harder life will become for the party of tax cuts. Bill Clinton showed that the best way to defeat tax cuts is to paint them as a threat to YOUR health care. Just in case doing the right thing isn’t reason enough to reject this horrid idea, Republicans should know that by supporting an individual mandate, they will be slitting their own throats.
All for an idea that doesn’t even command support from a majority of the public.
Health Policy Death Match: Klein vs. Ponnuru
I count both Ramesh Ponnuru and Ezra Klein as friends. (I’m so post-partisan.) Why, oh why must they force me to choose between them??
Ponnuru had an op-ed in yesterday’s New York Times where he reaffirmed his membership in the Anti-Universal Coverage Club. Klein responded in a way that’s sure to satisfy his base, but I think he left the reality-based community wanting. Are you ready for the fisk?
Klein suggests that if “80+ percent of Americans . . . think the system needs fundamental changes or a complete rebuild,” then 80+ percent of Americans must support universal coverage. Hmmm, bit of a stretch. In fact, I can recall one poll where nearly one-third of likely Democratic primary voters rejected universal coverage.
Klein suggests that giving consumers the freedom to avoid unwanted state health insurance regulations would mean that Arizonans wouldn’t get coverage for colorectal cancer screening, and that there would be no mammogram coverage in Idaho. Mmm, that’s good crazy. I refer my right honorable friend to the episode where The New Republic‘s Jonathan Cohn made a similar claim about mandates for prostate and cervical cancer screening. I looked up the services covered by the plans made available to the Cohn family by the University of Michigan. It turned out that six out of the seven available plans cover both prostate and cervical cancer screening — even though Michigan requires insurers to cover neither. (I offered to wager Cohn a fancy dinner that his family has coverage for both, but I never heard back from him. Foolish, really, to let me know where he gets his insurance. Klein would never give me such an opening . . . or would he?) What Ponnuru proposes is to let Arizonans and Idahoans and everyone else choose what their health plan covers. Imagine that: people rationing medical care according to their preferences, rather than the preferences of employers, interest groups, bureaucrats, health policy wonks… Why Klein clings to such regulations despite zero evidence that they actually increase access to the targeted services is beyond me.
Klein criticizes Ponnuru for proposing to replace the current tax preference for job-based coverage with a tax credit available to everyone, much like John McCain proposed during his (latest) presidential campaign. Ponnuru cites a study estimating that tax credits would reduce the number of uninsured by 20 million. Klein counter-cites one study estimating that tax credits would have zero net effect on the number of uninsured, and a second study estimating that those who transition from job-based coverage to the “individual” or “non-group” market would pay an additional $2,000 per year for an identical policy. Klein’s criticisms sound persuasive — provided you know precious little about the topic. For one thing, the two studies Klein cites are actually the same study. Pity, really. Had Klein found a second study to support his position, perhaps it would not have been quite so flawed as the one he did find. Here’s what I wrote back in September about that study’s flaws:
Events This Week
Tuesday, March 31, 2009
POLICY FORUM – Can the Market Provide Choice and Secure Health Coverage Even for High-Cost Illnesses?
12:00 PM (Luncheon to Follow)
In a study recently published by the Cato Institute, economist John Cochrane argues that the market can solve a huge piece of the health care puzzle: providing secure, life-long health insurance and a choice of health plans to even the sickest patients. The key, Cochrane explains, is to eliminate government policies that force the healthy to subsidize the sick, such as the tax preference for employer-sponsored coverage and other attempts to impose price controls on health insurance premiums.
Featuring John H. Cochrane, Myron S. Scholes Professor of Finance, University of Chicago Booth School of Business Research Associate, National Bureau of Economic Research; Bradley Herring, Assistant Professor, Johns Hopkins Bloomberg School of Public Health; moderated by Michael F. Cannon, Director of Health Policy Studies, Cato Institute.
Please register to attend this event, or watch free online.
Friday, April 3, 2009
P
OLICY FORUM – Drug Decriminalization in Portugal
12:00 PM (Luncheon to Follow)
In 2001, Portugal began a remarkable policy experiment, decriminalizing all drugs, including cocaine and heroin.
In a new paper for the Cato Institute, attorney and author Glenn Greenwald closely examines the Portugal experiment and concludes that the doomsayers were wrong. There is now a widespread consensus in Portugal that decriminalization has been a success. The debate in Portugal has shifted rather dramatically to minor adjustments in the existing arrangement. There is no real debate about whether drugs should once again be criminalized. Join us for a discussion about Glenn Greenwald’s field research in Portugal and what lessons his findings may hold for drug policies in other countries.
Featuring Glenn Greenwald, Attorney and Best-selling Author; with comments by Peter Reuter, Department of Criminology, University of Maryland; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute.
Please register to attend this event, or watch free online.
The Easy Solution to Rising Health Care Costs
It turns out that solving the health care crisis is easy. There’s never been any reason for the lengthy, divisive, and impassioned debate. Explains the New York Times:
“Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.
Gees, it’s no problem then. Why didn’t I think of that?
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
