Thursday, July 2, 2009

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.

posted by John R. Graham
5:32 pm
0 comment

Thursday, July 2, 2009

Maryland Medicaid Expansion Exceeds Cost Estimates

Who would have thought?

By Marc Kilmer

Categories: Maryland, Medicaid

Looks like Maryland's expanded Medicaid program is a little more popular than expected:

More than 44,000 additional state residents have enrolled as of this week, exceeding estimates that another 26,000 would enroll after income limits were relaxed. Officials say the economic downturn is the reason....
Tricia Roddy, director of Medicaid planning for the state health department, says the expansion is now expected to cost about another $144 million a year, $50 million more than originally estimated.

And who predicted as much back in 2007? Oh, that's right, I did:

Looking at the past 15 years of Medicaid spending, the General Assembly has yet to predict accurately how much money to allocate to pay for the next fiscal year's Medicaid spending. Given the fact that since 1999 the amounts budgeted for Medicaid spending have always been lower than actual expenses, it is likely that the new expansion in the program will cost more than lawmakers predict.
And if the economy slows down, it is likely to cost a lot more. The program's history shows that when the economy cools, Medicaid spending and enrollment increase. During the recession earlier this decade, spending increased from 10 percent to 14. At the same time, the recession weakened Maryland's general fund revenues, so that Medicaid was requiring an increasing amount of decreasing revenue....
Given the historic spending patterns of this program, expanding it in today's economic and fiscal climate makes little sense. Even with the recent tax increases, it is unclear if the state will have enough revenue to satisfy current spending trends. And it is likely that economic growth will not be very robust in the next few years, while Medicaid's growth will be substantial. New Medicaid spending will put even more strain on the state's taxpayers.

Anyone who looked at Medicaid spending over the past decade would have had a hard time coming to a different conclusion. Unfortunately, our state legislators did just that and expanded Medicaid during a special session that was called to close a budget deficit. The irresponsibility boggles the mind.

posted by Marc Kilmer
2:16 pm
0 comment

Thursday, July 2, 2009

Stossel Shrugged

CER may limit unapproved choices? "So what," yawns libertarian muckraker. Under Obamacare, innovation is history anyway

By Mark Todd Engler

The Reason Foundation's Shikha Dalmia had an article yesterday at Forbes that listed some of the lies President Obama has been laying on the masses, suggesting perhaps our Dear Leader's tongue might be dipped not in "unvarnished truth," but something less refreshingly aromatic.

The fib-finder on Dalmia's BS detector has fixated on Obama's assertions (or former assertions) that under his radical health care reboot:

No one will be compelled to buy coverage
No new taxes will be imposed on employer benefits
Government can control rising health care costs better than the private sector
A public plan won't be a Trojan horse for a single-payer monopoly
Patients don't have to fear rationing

It's on the last point that ABC's John Stossel gets all ambivalent, particularly with regards to Dalmia's worries that "Obama's stimulus bill...commits over $1 billion to conduct comparative effectiveness research," from which "a board will then 'direct financing' toward approved, standardized treatments," following which "doctors will find it much harder to prescribe newer or non-standard treatments not yet deemed effective by health care bureaucrats."

Responds Stossel:

I say, so what?
If the State is going to spend our money on other people's health care, doesn't the state have the right -- in fact, the obligation -- to limit choices? Everyone wants unlimited care. Care keeps getting more expensive. Pay for it yourself, then fine. But when you ask us to pay, and with Medicare ruinously unsustainable because of its trillion dollar deficits, I'd like government to set more limits. CER may become a politicized boondoggle, but the State ought to have some scientific justification for saying yes and no.
The danger is not CER itself, but a monster one-size-fits-all government health care plan. That will retard innovation because whatever treatment the political appointees decide to pay for it today will become the standard for years to come.

posted by Mark Todd Engler
12:58 pm
1 comment

Thursday, July 2, 2009

A Two-Tiered System

By Merrill Matthews, Jr.

One of the most prescient questions from the audience attending ABC's primetime health care reform interview with President Barack Obama was the first one, from Dr. Orrin Devinsky. He asked if, under Obama's reformed system, the president's family needed care that wasn't available in the government system, would he take his family outside the system to get the care they wanted or needed.

Unfortunately, the president never answered that question. And no wonder: Powerful people, and especially members of Congress, will create an exception for themselves.

Canada tried to create a no-opt-out system, but there's an open door along its southern border. And those Canadians frustrated with the waiting lines and lack of access can opt out of the Canadian system by coming to the U.S. for care. Just listen to Shona's story.

Does anyone seriously think that Speaker of the House Nancy Pelosi or Senate Majority Leader Harry Reid, upon learning that the government-run system couldn't see their spouse or family member for several weeks, would stand for that? Does anyone seriously think that the people crafting this legislation - - Rep. Pete Stark, Rep. Henry Waxman, Sen. Edward Kennedy, Sen. Max Baucus -- will ever be told no by their reformed health care system? Especially when they control the funding.

They will know who to call to get good care in a timely manner, whether it's covered under the reformed system or not.

So President Obama was wise in ducking that question. Neither he nor any of the Democrats in Congress have any intention of joining the government-run public option, and will likely oppose any proposals that would force them to do so.

We need to thank Dr. Devinsky for his insightful question. It wasn't the president's answer but the lack of an answer that told the story.

posted by Merrill Matthews
9:23 am
0 comment

Thursday, July 2, 2009

"GovernmentCareKilled My Uncle"

By Grace-Marie Turner

Categories: Single-Payer Follies

Diane Furchtgott-Roth's first-hand experience with the National Health Service teaches us that a single-payer system would radically change the standards of American medicine -- for the worse.

Socialized medicine killed Furchtgott-Roth's uncle, she writes. He was allergic to penicillin but the doctor gave him a shot of it -- soon after he had told Furchtgott-Roth's aunt that he was on the road to recovery.

Or, consider Furchtgott-Roth's grandmother, who had the misfortune of having a stroke on a Friday.

Furchtgott-Roth asked when the doctor would see her and was told that the doctor would come on Tuesday. When asked if she could pay for someone to see her grandmother over the weekend, the answer was that no one was there to be paid.

The elderly are most likely to lose from rationed care, writes Furchtgott-Roth. Her father, a highway planner in England, was instructed to consider deaths of retired people in road accidents as "benefits," because their "consumption" was likely to exceed their "production."

With the examples of Britain's NHS, it's astounding that anyone would recommend a single-payer government plan for the United States, concludes Furchtgott-Roth.

posted by Grace-Marie Turner
9:11 am
0 comment

Thursday, July 2, 2009

Pennsylvania Health Care Bill on the Move

By Nathan Benefield

Categories: Pennsylvania

On nearly a straight-party-line vote, the Pennsylvania House has passed legislation (HB 1) that would significantly enhance the benefits provided to enrollees in the Pennsylvania adultBasic health insurance program for low-income individuals. Those benefits would include coverage for prescription drugs, chronic disease management, preventive and wellness care, and behavioral health care. The Pittsburgh Post Gazette has a story on the legislation.

The bill would also double the number of people able to access adultBasic from 45,000 to 90,000. AdultBasic is designed for people who earn too much money to qualify for Medicaid but can't afford private insurance. An individual is eligible for adultBasic if he or she earns $21,600 or less; a family of four can earn $44,000 or less. The Governor's administration says the cost of House Bill 1, which would be an estimated $130 million for the state, would generate far more federal Medicaid dollars. Republicans are skeptical that the cost can be covered, especially when PA faces a budget shortfall of over $3 billion. The expansion would be funded through use of the Health Care Provider Retention Account surplus (a one time revenue source) and potentially a tax on Blue Cross/Blue Shield insurance plans.

The Commonwealth Foundation has commented on this proposal (and the rhetoric behind it), which is essentially an expensive proposal to serve a small percentage of the uninsured, while raising costs for those with insurance, but eschewing any real health care reform.

posted by Nathan Benefield
8:11 am
0 comment

Thursday, July 2, 2009

Against a Right to Health Care

By John LaPlante

While it seems that using government to control costs (!) is a major excuse to enact comprehensive health care reform these days, a more long-lasting rationale has been to declare that "health care is a right," and then back that up with government action.

Andrew E. Busch takes on this argument in an essay published by the Claremont Review of Books.

First up, he argues that a right to health care is not consistent with traditional, historic understandings of what a "right" is:

"health care is not a natural right as the founders or John Locke would have understood it. In their view, natural rights exist prior to the formation of government. Since there is no government in the pre-political state of nature, there cannot be a right to government-supplied health care in the state of nature."

Americans, Busch says, have rejected other appeals to establish a positive right, including a right to welfare or a right to obtain an abortion and get public funding to do so. (At least one state, Minnesota, actually has deemed a right to have taxpayers fund for one's abortion.)

The one example of a "positive" right to taxpayer support--to obtain legal defense in a criminal trial--is uniquely related to the state's power to deprive a person liberty, a situation not at all similar to medical concerns.

Busch also mentions two possible justifications for government-paid health care--utilitarianism and the "veil of ignorance" of John Rawls--and found them wanting.

If a positive right to health care existed, further, it would trump political rights. "Accepting a positive government obligation to fund social services claimed as a matter of right would lead inexorably to government without limits."

He closes with an appeal to the value of letting civil society find a solution to the problems of health care access.

posted by John LaPlante
8:10 am
0 comment

Thursday, July 2, 2009

Words to Judge Health Care Policy By

By John LaPlante

In a classic essay published eight years ago, Milton Friedman asked a question still worth pondering: Why, after a tremendous increase in technology in health care, are we still unhappy?

Since the end of World War II, the provision of medical care in the United States and other advanced countries has displayed three major features: first, rapid advances in the science of medicine; second, large increases in spending, both in terms of inflation-adjusted dollars per person and the fraction of national income spent on medical care; and third, rising dissatisfaction with the delivery of medical care, on the part of both consumers of medical care and physicians and other suppliers of medical care.

An advancement in the state of the art combined with dissatisfaction and increased spending is unique to health care, he wrote.

Friedman blamed two factors: third-party payments, and the tax-exempt nature of (certain) health care purchases. He admits that European countries do a better job of restraining growth of spending, but at the cost of government rationing.

So what's the ideal? He offers the following:

The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direct.

As it stands now, we're getting further away from that ideal.

posted by John LaPlante
6:06 am
0 comment

Wednesday, July 1, 2009

Idaho Insurance Change Making Some State Workers Unhappy

By Marc Kilmer

Categories: Government employees, Idaho

Governor Butch Otter of Idaho has decreed that instead of part-time state employees receiving the same health insurance benefits as full-time employees, part-timers will have to contribute to their premiums based on the number of hours they work. Government workers are, as may be expected, upset.

As this Idaho Statesman article points out, though, Governor Otter is simply moving the state in the same direction as the private sector and other state governments. Currently, the state offers a generous plan where an employee covering only himself pays $30 a month for a health insurance policy that has a total cost of $752. That's about 4%, which is a very good deal for state employees.

Under the governor's plan, "the state is moving to a bracketed plan, where employees working 28 to 35.9 hours a week pay 20 percent of the cost of their premiums, and employees working 20 to 27.9 hours pay 40 percent of the premium." Considering the very low premiums full-time state workers pay, perhaps the governor should consider raising their rates, too. As the article points out, private sector employees in Idaho pay around 16% of their employees' premiums. There is no reason why state employees should pay 1/4 of that.

posted by Marc Kilmer
1:40 pm
0 comment

Wednesday, July 1, 2009

Gaming Health Insurance in Massachusetts

Connector's health insurance regulations fragment insurance coverage

By John R. Graham

Categories: Individual Mandates, Insurance Regulation, 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 our 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.