You Say You Want Comparative-Effectiveness Research?
Over at CongressDaily, Julie Rovner has a great piece on the difficulties involved in generating and using comparative-effectiveness research (read: evidence that can improve the quality and reduce the cost of medical care). Rovner cites a recent New England Journal of Medicine article about the obstacles to conducting CER, and a recent article from Health Affairs that finds consumers tend to trust their doctor’s judgment more than evidence-based treatment guidelines.
In a paper titled, “A Better Way to Generate and Use Comparative-Effectiveness Research,” I explain how a string of government interventions — from state licensing of medical professionals and health insurance, to the tax preference for job-based health insurance, to Medicare and Medicaid — have reduced both patients’ demand for evidence about which medical interventions work best, as well as the market’s ability to supply that evidence. In that paper, I predict that efforts like the CER funding in the “stimulus” bill and ObamaCare’s “Patient-Centered Outcomes Research Institute” will fail, just as all such government efforts have failed in the past.
If you want to generate evidence about which medical interventions work best, and have people use that evidence, then you need to liberalize the U.S. health care sector.
Yglesias, Defending Klein’s Slander of Lieberman
Blogger Matthew Yglesias has a response to my post on Ezra Klein’s slander that Sen. Joe Lieberman (I-CT) is okay with the mass murder (or the mass negligent homicide) of hundreds of thousands of uninsured Americans.
Yglesias claims that only one of the three studies I cited speaks to what he claims is the central point: the Institute of Medicine’s estimate of how many Americans die each year because they lack health insurance. Yglesias is incorrect. The central point/threshold question is whether giving the uninsured health insurance will save lives. All three studies speak to that point, and all three all cast doubt on the intuitively appealing idea that giving uninsured people health insurance ipso facto saves lives.
To rebut the one study that Yglesias believes to be on point (Kronick), he offers two others. Yet all studies are not created equal. Kronick, Finkelstein/McKnight, and Levy/Meltzer represent the most reliable work that has been done on the relationship between health insurance and health. If I am wrong about that, I hope that one of those authors or another expert in the field will correct me.
But if I am right, it means that Yglesias and Klein are slandering Joe Lieberman and millions of others based on their (Yglesias’ and Klein’s) limited and distorted understanding of the world. (And even if I’m wrong, the Washington Post‘s Charles Lane explains why Klein’s slander is still wrong.)
Then again, considering that Yglesias also has another post suggesting that Lieberman and House Minority Whip Eric Cantor (R-Va.) are “dumb” Jews free-riding on the intelligence of other Jews, I’m not sure that the Church of Universal Coverage is open to persuasion right now.
Wednesday Links
- Chris Preble on Afghanistan: It’s time to leave. “We don’t need 100,000 soldiers in Afghanistan chasing down 100 al-Qaeda fighters.”
- Malou Innocent on Obama’s West Point speech.
- A few possible outcomes of U.S. military engagement in the Middle East.
- More updates on ClimateGate.
- An overview of all the hidden taxes in the health care overhaul.
- Podcast: “Obama’s Afghanistan Contradiction“
Will America Keep “Bending the Productivity Curve”?
Most international comparisons conclude that America’s health care sector under-performs those of other advanced nations. Aside from other serious flaws, those studies typically ignore each nation’s contribution to medical innovation — the discovery of new knowledge and practices that improve health in all nations. Today, the Cato Institute releases a new study — the most comprehensive study of its kind — that helps fill that void.
In “Bending the Productivity Curve: Why America Leads the World in Medical Innovation,” economist Glen Whitman and physician Raymond Raad conclude that the United States far and away outperforms other nations on medical innovation, but that the legislation moving through Congress threatens America’s ability to innovate. From the executive summary:
To date…none of the most influential international comparisons have examined the contributions of various countries to the many advances that have improved the productivity of medicine over time…
In three of the four general categories of innovation examined in this paper — basic science, diagnostics, and therapeutics — the United States has contributed more than any other country…In the last category, business models, we lack the data to say whether the United States has been more or less innovative than other nations; innovation in this area appears weak across nations.
In general, Americans tend to receive more new treatments and pay more for them — a fact that is usually regarded as a fault of the American system. That interpretation, if not entirely wrong, is at least incomplete. Rapid adoption and extensive use of new treatments and technologies create an incentive to develop those techniques in the first place. When the United States subsidizes medical innovation, the whole world benefits. That is a virtue of the American system that is not reflected in comparative life expectancy and mortality statistics.
Policymakers should consider the impact of reform proposals on innovation. For example, proposals that increase spending on diagnostics and therapeutics could encourage such innovation. Expanding price controls, government health care programs, and health insurance regulation, on the other hand, could hinder America’s ability to innovate.
Raad will discuss the study this Friday at noon at a policy forum at the Cato Institute.
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.
Hurting the Sick Is Not Good Politics
I was glad to see James Pinkerton engage my criticism of Louisiana Gov. Bobby Jindal’s (R) endorsement of federal price controls for health insurance. I was even more pleased to see that Pinkerton has his own blog devoted to developing a Serious Medicine Strategy.
If I understand Pinkerton, his argument is essentially: it’s all well and good for some unelectable wonk in the “citadel of libertarian thinking” to “uphold ivory-tower free-market purity” by opposing price controls. But Republicans need “art-of-the-possible solutions” to win elections, and 90 percent of the public support those price controls. “Everyone has a right to his or her principled position,” Pinkerton writes, “but the majority has rights, too.”
Two problems.
First, Pinkerton suggests that libertarians oppose price controls for reasons that only matter to libertarians, and therefore may be safely ignored. Problem is, price controls hurt people. Were Pinkerton to explore the merits of Jindal’s proposal, he would soon conclude that imposing price controls on health insurance taxes the healthy, reduces everyone’s health insurance choices, and creates even greater incentives for insurers to shortchange the sick. (Turns out that what Larry Summers said about price controls applies to health insurance, too.) As John Cochrane explains, those price controls also block innovative products that would provide more financial security and better medical care to the sick.
But Pinkerton’s advice for Republicans is, essentially: “Do what’s popular now, even if it hurts people and voters end up blaming Republicans for it later.” How is that a good strategy?
Second is this idea that “the majority has rights.” Majorities don’t have rights. Individuals have rights. For example, you have the right to negotiate the terms of your health insurance contract with the individuals at this or that insurance company. Majorities may attain power, but that’s the opposite of rights. (See the Bill of Rights.)
Finally, a couple of important odds and ends. Pinkerton suggests it is “un-libertarian” to be “pro-life,” or to “support the police, the military, and other upholders of public order,” or to “support government restrictions on…euthanasia.” Writing from the “citadel of libertarian thinking,” I can assure him he is wrong. Might I suggest Pinkerton read the relevant chapters from The Encyclopedia of Libertarianism? (The health care chapter is a page-turner!) Also, I did not “denounce Jindal” any more than Pinkerton denounced me. I criticized his ideas, and I respect the man.
(Cross-posted at Politico‘s Health Care Arena.)
Nobody Considers Health Insurance Mandates a Tax? Really??
As my colleague Jeffrey Miron noted earlier today, when grilled by George Stephanopolous on whether the so-called “individual mandate” is a tax increase, Obama replied, “Nobody considers that a tax increase….You can’t just make up that language and decide that that’s called a tax increase…My critics say everything is a tax increase.”
Where do Obama’s critics get these wacky ideas? From a bunch of nobodies, that’s who!
Princeton economist Uwe Reinhardt, quoted by Larry Summers (1987):
[Just because] the fiscal flows triggered by mandate would not flow directly through the public budgets does not detract from the measure’s status of a bona fide tax.
Economist Larry Summers, Obama’s National Economic Council chair (1989):
Economists have generally devoted little attention to mandated benefits regarding them as simply disguised tax and expenditure measures… Essentially, mandated benefits are like public programs financed by benefit taxes… [If] the mandated benefit is worthless to employees, it is just like a tax from the point of view of both employers and employees…There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers.
Columbia University economist Sherry Glied, Obama’s appointee to HHS Assistant Secretary for Planning and Evaluation, in the New England Journal of Medicine (2008):
The mandate is in many respects analogous to a tax. It requires people to make payments for something whether they want it or not. One important concern is that the government will provide insufficient funds for the subsidies intended to accompany the mandate. In that case, the mandate will act as a very regressive tax, penalizing uninsured people who genuinely cannot afford to buy coverage.
Congressional Budget Office (2009):
Under some proposals, firms would be required to make payments to the federal government if they chose not to offer health insurance to their employees, and individuals who did not comply with the requirement to obtain insurance would have to pay a penalty. Such payments would be equivalent to a tax or a fine, and the government’s receipts should be recorded in the budget as federal revenues.
Here’s a question: if an individual mandate is not a tax, why exempt anybody? If an employer mandate isn’t a tax, why exempt small businesses?
Filed under: Cato Publications; General; Health Care; Tax and Budget Policy
Setting the Record Straight on Health Care Reform
President Obama took to the airwaves Wednesday in an effort to promote his plan for a national government-run health care system. He answered questions on rising costs, taxing benefits, and many other issues during an ABC News special on health care reform called “Questions for the President: Prescription for America.”
After live-blogging the ABC special, Cato scholars Michael D. Tanner and Michael F. Cannon dissect the president’s health care plan point by point.
Ed Crane Describes a Libertarian Approach to Health Care Reform
Last week, Cato hosted an all-day conference on health care reform, which included expert opinions from across the political spectrum. Cato Founder and President Ed Crane started the event with a talk about a libertarian approach to reforming health care, which would reduce federal involvement, increase competition, decouple health care from employment and increase the amount of doctors available.
You can find all of Cato’s reasearch on health care reform at Healthcare.Cato.org.
Obama’s Health Care Speech
In his speech to the American Medical Association today, President Obama repeatedly denied that he supports “socialized medicine” or “government-run” health care.
But what is important is not the terminology, but under the proposal supported by the president, government would control more and more of our health care decisions. Government would compel Americans to purchase health insurance, controlling its content, how much we pay, and the relationships between insurers, doctors, and patients. Government bureaucrats would determine whether Americans receive certain medical services.
There may be no better salesman than Barack Obama, but his product is deeply flawed. The so-called “Public Option,” or government-run plan, that President Obama supports would slowly but inexorably lead to the destruction of the private insurance market and the imposition of a government-controlled single-payer system.
But the problems with Obamacare go well beyond the Public Option, which the AMA opposes. The mandates on businesses and individuals, taxpayer subsidies, insurance regulation, and government interference in private medical decisions pose serious threats to American businesses, taxpayers, and most importantly patients.
That’s bad medicine, no matter what you call it.
When Democracy Fails, Let Bureaucracy Manage Your Health Care!
Sen. Jay Rockefeller (D-WV) admits that Congress is not competent to set medical prices and payment systems for America’s seniors:
It’s not pretty; it’s not quality; it’s not American medicine the way it should be.
His solution: give that power to an unaccountable government board.
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.
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