So Much for Tort Reform

From the Chicago Tribune:

“The Illinois Supreme Court struck down the state’s medical malpractice law today, saying it violates separation of powers by allowing lawmakers to interfere with a judge’s ability to reduce verdicts.”

At least, from first blush, the majority exercised some measure of sound judicial reasoning:

Justices Lloyd Karmeier and Rita Garman dissented on certain points of the decision and expressed sympathy to providers of medical care, citing President Obama’s recent address to a joint session of Congress that the justices said “admonished” the nation’s collective failure to enact health care reform.

[snip]

Justices in the majority, however, said their decision was not made with health care reform efforts in Washington in mind, saying the “Obama administration’s health care reform efforts are not the backdrop against which we have decided the constitutionality.”

In other words, decide on the basis of your understanding of the law, not of the headlines.

Half of the Illinois Budget for Medicaid

How serious is the financial problem posed to state budgets (and hence, state taxpayers)  by adding more people to Medicaid? Here’s some perspective from Illinois:

According to a June report from the Taxpayer Action Board, if recent spending rates remain constant, “Medicaid spending will reach approximately $22 billion in 2019, which could represent roughly 50 percent of the entire state budget and would begin to crowd out other State spending priorities, such as public safety and education.

And if I read the commentary correctly, that’s without the required expansion of Medicaid. It also makes this point, which I haven’t read much of elsewhere: “Low-income children, their parents and the disabled have traditionally been first in line to receive Medicaid. These populations may suffer from adding more able-bodied adults to the system.”

Government policies should be organized such that health insurance, and more importantly, health care, is affordable and accessible. There are things we can do towards that end, but putting more people in Medicaid isn’t one of them.

State governments ration “free” cancer screenings

When you empower government to provide “free” health care (paid by others through taxes), government gets to decide when it’s appropriate for you to receive it.  Here’s yet another example from the Associated Press:

…low-income women in at least 20 states are being turned away or put on long waiting lists for free cancer screenings, according to the American Cancer Society’s Cancer Action Network. In the unofficial survey of programs for July 2008 through April 2009, the organization found that state budget strains are forcing some programs to reject people who would otherwise qualify for free mammograms and Pap smears.

…

New York used to screen women of all ages, but this year the budget crunch has forced them to focus on those considered at highest risk and exclude women under 50….

At least 14 states cut budgets for free cancer screenings this year: Colorado, Montana, Illinois, Alabama, Minnesota, Connecticut, South Carolina, Utah, Missouri, Washington, Ohio, Massachusetts, Pennsylvania and Arkansas.

How Much Does that Surgery Cost? Who Cares?

The Illinois Hospital Report Card has gone live, letting consumers compare hospitals on price and quality measures. According to an article in the Chicago Tribune, “The data include information about what these medical providers charge, how many procedures they perform, how often they deliver recommended care, and how consumers rate their care.”

In a perfectly competitive market, the price for a given product or service will be identical, or nearly so. (Look, for example, at any intersection at which there are two or more gas stations.) That health care is not a market of perfect competition is obvious when you do some looking on the report.<blockquote>The median list price for a bunionectomy (the surgical removal of a bunion) is $21,616 at The Oak Brook Surgical Centre but just $3,516 at the Hinsdale Surgical Center. Hospitals show similar ranges: The charge for an uncomplicated vaginal birth is $16,134.97 at the University of Chicago Medical Center, compared with $6,614.04 at Hinsdale Hospital.</blockquote>I suppose this is all well and good (I’d rather that it not come about through a law, but that’s another story). But Congress is determined to obscure the prices of health care services, and insulate patients from any knowledge of pricing. (See, for example, the fact that high-deductible insurance policies will be wiped out.)

If “the rich” are going to pay for my health care, why would I give a flying fig about whether hospital A costs someone (not me!) $3,000 and another $16,000 for roughly the same service? In a world in which patients are responsible for and control their health care spending, such a site makes a lot of sense. But if someone else is paying the bill …..

By the way, a companion article in the Tribune says that the state’s hospital association plans to unveil a more comprehensive site in the next few months.

Government Health Care–It’s Somewhere in the Constitution

By what authority does any unit of government, especially the federal government, tell me what kind of insurance I can buy, or (more remarkably) that I must purchase it?

Someone asked a similar question to Sen. Roland Burris (D-Ill.), and his answer was a remarkable demonstration of constitutional ignorance. Not that we should be surprised to see a member of Congress exhibit such behavior, but I digress.

According to CNSNews.com,

When asked by CNSNews.com what specific part of the Constitution authorizes Congress to mandate that individuals must purchase health insurance, Sen. Roland Burris (D-Ill.) pointed to the part of the Constitution that he says authorizes the federal government “to provide for the health, welfare and the defense of the country.” In fact, the word “health” appears nowhere in the Constitution.“Well, that’s under certainly the laws of the–protect the health, welfare of the country,” said Burris. “That’s under the Constitution. We’re not even dealing with any constitutionality here. Should we move in that direction? What does the Constitution say? To provide for the health, welfare and the defense of the country.”

The “general welfare” and interstate commerce clauses are thin justifications, but at least they, unlike health, are mentioned in the U.S. Constitution.

Illinois Senator Says “Maybe” On Opt-out Provision

U.S. Sen. Rolland Burris (D-Ill.) supports health care legislation that lets states opt out of a government-run health insurance plan (aka “public option”). Or does he?

The Chicago Tribune says that Burris might–or might not–support such an idea.

The Burris story illustrates one factor that determines where health reform goes–will single-payer advocates be happy with four-fifths of a loaf, or will they vote it down because it doesn’t give them even more?

Illinois to Enact to New Insurance Regulations

Illinois is larding another layer of regulations on health insurance companies. Currently, those companies, like any companies, are subject to laws governing fidelity to contracts. They’re also subject to laws unique to the industry.

A new law will impose new requirements. One will give policyholders the right to an external review panel. Another would force companies to disclose their finances–the amount of money paid out and the amount of money received in premiums.

The latter requirement sounds innocuous and even beneficial. But information-disclosure requirements are often the first step in a long-term attack.

A Law for Lilly–or is it Eli Lilly?

The Chicago Tribune has a feel-good story that is also a bit creepy.

Lilly Jaffe is a girl who lives in suburban Chicago. She has been treated since infancy for Type I diabetes, which requires injections to deliver insulin. Recently, however, researchers discovered that she has a rare condition that could in fact be treated by oral medication.

No more needles or insulin pump? That's the feel-good element.

As for the other part of the story, here's what the Tribune had to say:

Hoping to find more patients and gather more genetic information to study, University of Chicago doctors proposed the creation of the first state-mandated diabetes registry. They crafted legislation after joining forces with Rep. Tom Cross, R-Oswego, whose 16-year-old daughter, Reynolds, has Type 1 diabetes, though not the mutation.

The bill officially became Lilly's Law when signed by Gov. Pat Quinn last month. The law requires Illinois physicians to register all children with diabetes onset before 12 months of age with the state Department of Public Health. Its backers hope the registry, which was approved as a three-year pilot program, leads to further advances in understanding the genetic cause of diabetes.

Whenever a law has a person's name in it, watch out: Overly ambitious government may be at hand. Even more unseemly, perhaps, are laws created by a politicians in response to their family situations. 

I certainly hope more children who might benefit from this treatment find out about it. But requiring physicians to enter the names of children in a state-run registry? That's not only an intrusion of the doctor-patient relationship, but a violation of patient privacy. Now you might argue for required notifications in the case of serious communicable diseases, but last time I checked, you can't get diabetes of any kind by handshakes or sneezes.

Eli Lilly is a major player in the diabetes drug sector. I wonder if they had a role in Lilly's law.

A Health Exchange Doesn’t Need to be Expensive, Top-Down

The State of Utah recently launched a new program that lets employees of small businesses shop for a health insurance plan that best suits them and their families and purchase a policy at affordable rates. Called the Utah Health Insurance Exchange, it demonstrates why state-level policy innovation–not top-down, federal planning–is the key to improving America's health sector.

Run by just two Utah officials with almost no new taxpayer money, the Exchange provides an online portal where employees of small businesses can combine contributions from their employers with their own pre-tax dollars to purchase the policy of their choice. Because participating employers don't have to take on the administrative burden of setting up an insurance plan, this service promises to substantially cut down on the cost of offering health coverage.

The Exchange allows employers to simplify benefits management. Instead of the headache of administering their own health plan, they can offer employees a "defined contribution," or a specified amount of pre-tax dollars that is set aside for employees to apply toward premium costs. Then employees, rather than employers, compare options and select the health plan that works best for their needs and circumstances.

As more employers choose to offer health benefits on a defined contribution basis via the Exchange, more workers will be able to take their coverage with them from job to job. This will substantially improve the state's insured rate. Right now, 60% of Utah's workers are employed by a small business. In the past, these firms have had difficulty offering insurance to their employees since insurance tends to cost more for small firms than it does for larger ones. The Exchange will help these employers offer insurance and allow their employees to choose from a menu of different plans and prices.

In just the first two weeks since the Exchange was launched in August, it enrolled 136 employer groups with a total of 2,333 employees. And while officials have capped total enrollment at 150 businesses for now, they plan to open the Exchange up to many more employers as soon as possible.

There are many benefits for employees, as well. The Exchange allows employees of the same firm to have different plans; some may choose an HMO and others a Health Savings Account instead of getting stuck with whatever health care plan their employer chooses.

The Exchange is also expected to drive prices down. There are currently 72 plans offered by five private insurance companies, with individual premiums as low as $35 a month (and family premiums as low as $135). As the number of plans grows, competition should force prices down.

The Utah Exchange also helps make insurance portable. Because of the historic link between health insurance and employment, individuals often lose their coverage when they change or lose jobs. Since Exchange plans aren't linked to any particular job, participants can keep their insurance even when their employment situation changes, avoiding a break in coverage.

Because it's working so well, one might argue that the Utah Exchange should be replicated at the national level. But the Exchange has been successful because Utah lawmakers, led by House Speaker David Clark, were able to create a market-based program tailored to the unique needs of their residents.

The Exchange being contemplated in Washington is very different: It would put Congress in charge of determining what constitutes acceptable insurance coverage with limited options of costly, impersonal, one-size-fits-all programs dominated by benefit mandates and pushed by lobbyists and special interest groups, not consumers.

Right now, intrusive federal regulations threaten to stifle the kind of innovation responsible for the success of this program. Federal lawmakers should scrap the top-down reforms championed by President Obama and Democratic leaders in Congress and encourage state policymakers to create programs tailored to the specific challenges of their states–just as Utah has done.

U.S. Index of Health Ownership 2nd Edition Is Here

Pacific Research Institute has published the 2nd edition of the U.S. Index of Health Ownership, the only ranking of health care in the states that uses criteria of individual choice.

Americans lack the basic freedom to make their own health care decisions. The Index measures the degree to which individuals, be they patients, health professionals, entrepreneurs, or taxpayers, “own” the health care in their states.

The lack of health ownership is a real problem. Almost half of the country’s health care spending is in the hands of the government, instead of patients themselves. The other half is governed by regulations inflicted upon doctors, health plans and patients.

The Index uses 24 variables to quantify how state laws and regulations affect the liberty of citizens involved in state government health plans (primarily Medicaid), the private health-insurance market, and the provision of medical services. It also assesses the effect of medical tort on people’s freedom to engage health services.

Alabama, Montana, Nebraska, North Dakota, and New Hampshire finished in the top five, as the states that allow their citizens the highest degree of health ownership. Alabama leads the pack primarily because of a lightly regulated private insurance market, and good control of state government programs. Also, the state performs well on medical tort indicators. Alabama’s regulatory environment for providers favors competition, and government health programs run more effectively than in most states.

New York, Massachusetts, Rhode Island, Vermont, and North Carolina rounded out the bottom five, as the states in which the government has taken the most undue control of health care from its citizens. This is the second year that New York was in last place. The state suffers from government health-care programs that are out of control, a grossly overregulated private-insurance market, and almost completely uncompetitive provider markets.

A full listing of all 50 states and their rankings is contained in the Index.

The Index will give concerned citizens a good basis to demand reforms from their state politicians that will put American families in charge of American health care, instead of government and special interests.