Monthly Archive for July, 2009

Quote Of The Day

“On the 47 million people without health insurance point, that too is a statistic where there is less than meets the eye. First, health insurance does not equal health care (there are not just emergency rooms but cash-based clinics, and conversely, a lot of people with insurance don’t get good health care). Second, of that 47 million, 14 million are already eligible for existing programs (Medicare, Medicaid, veterans’ benefits, SCHIP) yet have not enrolled, 9.7 million are not citizens, 9.1 million have household incomes over $75,000 and could but choose not to purchase insurance, and somewhere between 3 and 5 million are uninsured briefly(<2 months) between jobs. That leaves about 10 million Americans who are chronically without insurance. Needless to say, extending the blanket of coverage to this group should not cost $1.5 trillion and require a wholesale overhaul of all of medicine.” — Bala Ambati, once the world’s youngest doctor (H/T: Megan McArdle)

The Difference American Healthcare Makes

Gary Becker writes:

A recent excellent unpublished study by Samuel Preston and Jessica Ho of the University of Pennsylvania compare mortality rates for breast and prostate cancer. These are two of the most common and deadly forms of cancer–in the United States prostate cancer is the second leading cause of male cancer deaths, and breast cancer is the leading cause of female cancer deaths. These forms of cancer also appear to be less sensitive to known attributes of diet and other kinds of non-medical behavior than are lung cancer and many other cancers.

These authors show that the fraction of men receiving a PSA test, which is a test developed about 25 years ago to detect the presence of prostate cancer, is far higher in the US than in Sweden, France, and other countries that are usually said to have better health delivery systems. Similarly, the fraction of women receiving a mammogram, a test developed about 30 years ago to detect breast cancer, is also much higher in the US. The US also more aggressively treats both these (and other) cancers with surgery, radiation, and chemotherapy than do other countries.

Preston and Hu show that this more aggressive detection and treatment were apparently effective in producing a better bottom line since death rates from breast and prostate cancer declined during the past 20 [years] by much more in the US than in 15 comparison countries of Europe and Japan.

Who To Trust: Government Or Competition?

Harvard economist Greg Mankiw breaks down the healthcare debate to one of trust:

Perhaps a lot of the disagreement over healthcare reform, and maybe other policy issues as well, stems from the fundamental question of what kind of institutions a person trusts. Some people are naturally skeptical of profit-seeking firms; others are naturally skeptical of government.

I tend to distrust power unchecked by competition. This makes me particularly suspicious of federal policies that take a strong role in directing private decisions. I am much more willing to have state and local governments exercise power in a variety of ways than for the federal government to undertake similar actions. I can more easily move to another state or town than to another nation. (I am not good with languages.)

Most private organizations have some competitors, and this fact makes me more comfortable interacting with them. If Harvard is a bad employer, I can move to Princeton or Yale, and this knowledge keeps Harvard in line. To be sure, we need a government-run court system to enforce contracts, prevent fraud, and preserve honest competition. But it is fundamentally competition among private organizations that I trust.

This philosophical inclination most likely influences my views of the healthcare debate. The more power a centralized government authority asserts, the more worried I am that the power will be misused either purposefully or, more likely, because of some well-intentioned but mistaken social theory. I prefer reforms that set up rules of the game but end up with power over key decisions as decentralized as possible.

What puzzles me is that Paul seems so ready to trust solutions that give a large role to the federal government. (In the past, for instance, he has advocated a single payer for healthcare.) I understand that trust of centralized authority is common among liberals. But here is the part that puzzles me: Over the past eight years, Paul has tried to convince his readers that Republicans are stupid and venal. History suggests that Republicans will run the government about half the time. Does he really want to turn control of healthcare half the time over to a group that he considers stupid and venal?

These thoughts, I appreciate, are broad generalizations. They don’t immediately lead to a specific set of reform proposals. But I wanted to give Paul credit for a key insight: A central question in this and perhaps other debates is, Whom do you trust?

The full post can be found here.

Buy American Is Meaningless


Why the “Buy American” campaign is just another union power grab and should be ignored.

Limited Governments Best Friend: The CBO

Remember the Democrats claim that by empowering a new panel (the Independent Medicare Advisory Council) to recommend future spending reductions we could save several billions of dollars in healthcare costs? If this was before the creation of the CBO (1974, according to Wiki), such claims would be nearly impossible to disprove. Democrats could get away with making the claim and fiscally conservative politicians would have little to say in opposition. The whole debate would break down into a he-said she-said debate, with Republicans pointing to some economist at some University showing the proposal would barely save a few billion dollars and Democrats responding with their own economist and study arguing that it would save multiple billions. How would the average citizen distinguish who is right?

Of course, years after the policy changes had been put into effect, the truth would have come out – which is why in every single healthcare change, including the recent Massachusetts healthcare reforms, the healthcare policies have turned out to cost far more than people assumed – but by then the changes would have already been in affect for atleast a couple of years. New special interest groups would have already been created, and the government program, like any other government program, would become nearly impossible to stop.

But that was before the CBO had so much influence. Today, Democrats have to get their claims past the CBO and are having a very difficult time doing it. The latest is their claim that an Independent Medicare Advisory Council would save several billions of dollars. The CBO argues that that simply is not true, Donald Marron reports:

CBO estimates that the proposed legislation would save a paltry $2 billion over the next ten years, less than 1/500 of the 10-year cost of health reform.

This is on top of the earlier headaches the CBO has given Democrats.

Long gone are the days when Democrats could simply propose some theoretical cost saving legislation and ask the public to take it on good faith. Imagine if the CBO had existed when FDR was around? LBJ?

Although that doesn’t mean the CBO itself doesn’t have serious shortcomings, on the contrary, it too tends to underestimate the costs of policies, as it recently did in predicting the fiscal stimulus recovery (see here and here) but atleast now the Democrats proposals have to pass a higher standard than simply their word.

Keith Hennessey has more here.

Update: The Economist has more.

Quote Of The Day

“In the thirties, governments had Four Year Plans.  Today, they have Four Year from Now Plans – big policies that basically don’t kick in until the next election.  Waxman-Markey lets emissions grow normally until 2012.  When I criticized the House’s health care plan, several defenders quickly pointed out that its payroll tax doesn’t kick in until 2013.” —Bryan Caplan, on Obama’s opportunism

Obama’s Proposed Power Grab

The latest:

Today, the Obama administration delivered one of the more remarkable presidential power grabs seen in recent memory (the transmittal letter is here, and a section-by-section description of the proposal is available here).

The president has decided — just days before the deadline he himself set for passage of health care bills in both chambers of Congress — that he wants to create a new and very powerful executive branch agency, the Independent Medicare Advisory Council (IMAC), which would be accountable only to him and have the authority to re-write the Medicare program from top to bottom by executive memo. Now that’s audacious.

The council would be made up of five members, all selected by the president and confirmed by the Senate. The president could fire any one of them for cause. They would have two jobs. First, each year, the council would make recommendations to the president regarding inflation updates to Medicare’s payment rates for hospitals, doctors, and other suppliers of services. Those recommendations, if approved by the president, would automatically go into effect in thirty days unless Congress passed a resolution disapproving them — which the president would also have to sign into law. Of course, if the president approved the council’s original package of recommendations, it is unlikely he would sign a congressional disapproval resolution overturning them. So, as a practical matter, the proposal would force Congress to find a two-thirds supermajority to stop presidentially-approved IMAC recommendations from going into effect.

That would be a remarkable shift of power on its own, but the president’s proposal doesn’t stop there. Not only would the council make recommendations on payment updates, it would also have the authority to propose other “Medicare reforms” which would go into effect unless Congress could muster veto override majorities in opposition. What are “Medicare reforms”? From the write-up, it seems they could be just about anything. Changes in beneficiary cost-sharing. New rules for establishing qualified hospitals and doctors. Penalties for physicians who don’t follow government guidelines. Pretty much anything except for the payroll tax and premium structure. The only parameters are that the “reforms” must improve the quality of medical care and the efficiency of Medicare operations.

Can somebody explain to me why, again, Obama is better than Bush from a power grab perspective?

Quote Of The Day

“There are two health policies that liberals and libertarians would both prefer to the status quo.  The first is a free market plus redistribution for the poor.  The second is bare bones, high-deductible national health care, with a free market for all add-ons. The reason neither are likely to happen is mistrust.  Liberals think that if they sign on for the free market plus redistribution, the redistribution won’t actually happen.  Libertarians think that if they sign on for bare bones national health care, the cost will quickly increase.” — Bryan Caplan paraphrasing what Brink Lindsey said before a debate between Robin Hanson and Ezra Klein on healthcare reform

Quote Of The Day

“Massachusetts passed a major health care reform bill back when Mitt Romney was governor, that effectively created a universal health care system which was paired with some fairly hand-wavy promises of cost controls. The expanded coverage has worked great, but the cost controls haven’t.” — Matthew Yglesias

A Wal-Mart Job Is Better Than No Job

That is the lesson Chicago politicians need to learn:

Chicago needs new jobs. Wal-Mart wants to provide jobs to Chicago. Alderman Howard Brookins wants Wal-Mart in his 21st Ward. Yet the company and the alderman face huge resistance from the City Council to a proposal for a Wal-Mart Supercenter on the South Side, at 83rd Street and Stewart Avenue just west of the Dan Ryan.

What’s there now? A vacant lot. A vacant lot where no one is working. The construction of that store on that vacant site would put hundreds of Chicagoans to work. Once the store was opened, at least 500 people would get jobs.

What’s the holdup? For Chicago politicians, Wal-Mart jobs are the wrong kind of jobs. They’re not union jobs.

The Chicago Tribune has more.

More Vargas Testimony


Update: Expired video updated with a more complete one.

Vargas Testimony In The Sotomayor Hearings

I haven’t seen this discussed much in the blogosphere so I thought I would provide it here:

ACTING CHAIRMAN: Mr. Ricci, thank you very much for your testimony. We’ll now hear from Lieutenant Ben Vargas. Ben — Benjamin Vargas is a lieutenant in the New Haven Fire Department and was a plaintiff in the case of Ricci vs. DeStefano. He also worked part-time as a consultant for a company that sells equipment to firefighters. Mr. Vargas?

VARGAS: Thank you. Members of this committee, it is truly an honor to be invited here today. Notably, since our case was summarily dismissed by both the District Court and the Court of Appeals panel, this is the first time I am being given the opportunity to sit and testify before a body and tell my story. I thank for this — thank you to this committee for the opportunity.

Senators of both parties have noted the importance of this proceeding, because decisions of the United States Supreme Court greatly impact the everyday lives of ordinary Americans. I suppose that I and my fellow plaintiffs have shown how true that is. I never envisioned being a plaintiff in a Supreme Court case, much less one that generated so much media and public interest.

I am Hispanic and proud of their heritage and background that Judge Sotomayor and I share. And I congratulate Judge Sotomayor on her nomination.

But the focus should not have been on me being Hispanic. The focus should have been on what I did to earn a promotion to captain and how my own government and some courts responded to that. In short, they didn’t care. I think it important for you to know what I did, that I played by the rules and then endured a long process of asking the courts to enforce those rules.

I am the proud father of three young sons. For them I sought to better my life, and so I spent three months in daily study, preparing for an exam that was unquestionably job-related. My wife, a special education teacher, took time off from work to see me and our children through this process.

I knew we would see little of my sons during these months, when I studied every day at a desk in our basement, so I placed photographs of my boys in front of me. When I would get tired and wanted to stop — wanted to stop, I would look at the pictures, realize that their own future depended on mine, and I would keep going. At one point I packed up and went to a hotel for a day to avoid any distractions, and those pictures came with me.

I was shocked when I was not rewarded for this hard work and sacrifice, but I actually was penalized for it. I became not Ben Vargas, the fire lieutenant who proved themselves qualified to be captain, but a racist statistic. I had to make decisions whether to join those who wanted promotions to be based on race and ethnicity or join those who would insist on being judged solely on their qualifications and the content of their character.

Quote Of The Day

“Universal health care will lead to one of two things. Either people will lose some of the incentive to stay healthy, because everybody else has to pay for the cost, or the government will become even more of a nanny state and will start monitoring our exercise and Twinkie intake. (Remember how the government monitored daily exercise in 1984?)” — Greg Krehbiel, who has more here.

Quote Of The Day

“We now talk of trillions the way, even a few months ago, we spoke of billions. In mid-June, the Senate health committee put out its version of reform and was horrified when the Congressional Budget Office figured that it would cost a trillion dollars over 10 years (over current spending) and would still leave millions uninsured. The committee retreated to its lair and re-emerged in early July with a revised plan “scored” by the CBO as costing only $600 billion and leaving only 3 percent of the population uninsured. Six hundred billion doesn’t sound like all that much to achieve, or come close to achieving, an important and long-standing goal such as universal health care. But keep in mind that health-care reform is supposed to save money. Its premise is that the current path is unaffordable. In that sense, a “mere” $600 billion extra is total defeat.” — Michael Kinsley, writing in the Washington Post

Quote Of The Day

“Counties that supported Obama last year have reaped twice as much money per person from the administration’s $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain, a USA TODAY analysis of government disclosure and accounting records shows. That money includes aid to repair military bases, improve public housing and help students pay for college.” — USA Today, link via Chicago Boyz who has more thoughts on the issue here.

Quote Of The Day

“What is the essential informational imperfection in our labor market example? Workers have attributes—innate skills, adaptability and maturity, preferences between shirking versus expending effort—that are difficult for employers to observe. As a consequence, employers look for signals about these things. Professor Neumark offers one such signal: If you are an adult and still in a minimum wage job, chances are you have those attributes that are associated with low productivity. If you are a teenager, on the other hand, there is still a chance you are a high-productivity type. Faced with a government mandated hike in the wages paid to workers in minimum-wage jobs, the percentages dictate you go with the teenager. Which leaves in the cold the people we probably most want to help.” — David Altig, senior vice president and research director at the Atlanta Fed