The Supreme Court upheld the health care bill, as you’ve no doubt heard by now. Over at the Daily Caller, I add a few quick thoughts about how Randy Barnett’s Commerce Clause argument also applies to Congress’ taxation power, on the Court’s reluctance to check the other branches’ excesses, and how happy rent-seeking insurance companies must be right now.
Read the whole thing here.
Posted in Economics, Health Care, Publications
Tagged Health Care, health care decision, health care ruling, health insurance, insurance mandate, insurance tax, obamacare, obamacare decision, obamacare ruling, scotus, tax
This video is based on article by National Journal‘s Jonathan Rauch, which you can read here. I also recommend Rauch’s excellent book Government’s End.
HHS is about to issue over 1,000 pages of new regulations stemming from last year’s health care bill. That’s not a huge surprise, considering the bill is about 2,000 pages long.
But these regulations all come from a 6-page section covering accountable care organizations, or ACOs.
According to Politico, John Gorman, who runs a health care consulting firm, “expects a 1,000-page rule to come out on Thursday, March 31—because he doesn’t think HHS will want to deal with releasing the regulations on April Fool’s Day.”
Posted in Health Care, regulation
Tagged accountable care organizations, aco, Antitrust, gorman health group, hcr, Health Care, health care bill, health care reform, john gorman, regulation
One of the worst parts of the current health care system is its sheer complexity. Because most of the payments are made by third parties, the paperwork burden is enormous. Co-pays, deductibles, ever-shifting networks, and so on. Unfortunately, that complexity is about to get a lot worse because of this year’s health care bill. Check out this flow chart of what the health care system will look like once Obamacare is implemented:
You can also download a PDF version of the chart that allows you to zoom in more closely. It’s worth taking a few minutes to look at all the agencies and bureaucracies in greater detail.
This chart was released by Rep. Kevin Brady, a partisan Republican. But whatever your politics, you should be wary of any scheme as grandiose as Obamacare. This represents a re-ordering of one sixth of the American economy.And not only is the government tasked with making this flow chart flow smoothly. It is also tasked with fighting two land wars in Asia. With delivering the mail. With developing new energy technologies. With overhauling the nation’s entire financial system. No organization can do all those things and do them well. Doesn’t matter how talented and well-meaning the people behind it are. It is beyond the limits of anyone’s ability to plan.
As Dan Mitchell points out, real health care reform would have just two parties to most transactions: buyer and seller.
There are two other things I’d like to see. One is that health insurance should not be linked to your job. Under both the current system and Obamacare, if you lose your job, you lose your insurance at exactly the time you need it most. This can be done by treating employer-provided insurance exactly the same as individual insurance in the tax code. Employer-provided insurance is currently given special treatment.
Real reform would also fundamentally change the way we use health insurance. The purpose of insurance is to insure against unexpected risks. Your annual physical does not fit that description. Having insurers pay for routine, expected expenses is like using your auto insurance to pay for a tank of gas and a car wash. No wonder premiums are so high. Health insurance isn’t really insurance. It’s pre-paying for your health care. And it also has one whopper of a principal-agent problem that explains a large portion of why health costs are so shockingly high.
A dying patient in the UK’s NHS made the news after nurses refused to bring him a glass of water, despite his repeated begging. He died soon after of pneumonia. It really is a terrible story.
Had that poor soul lived in Arizona, he might not have had that problem. In that fine state, it is against the law to refuse someone a glass of water if you have any to spare.
As the U.S. slowly but surely hands its health care sector over to government, and NHS horror stories repeat themselves on this side of the Atlantic, this may become a more pressing issue than one would expect.
Posted in Health Care, regulation
Tagged arizona, dumb laws, Health Care, nhs, obscure laws, regulation, regulations, strange laws, uk, weird laws
As the House gets ready to pass the health care bill today, I’m reminded of one of the first lessons in economics I ever learned. Milton Friedman put it best:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.
The biggest problem with health care today is that patients only pay 12 percent of costs out of pocket. As far as each individual is concerned, it’s basically on sale for 88 percent off! No wonder we spend so much on health care.
Today’s bill consists almost entirely of spending other peoples’ money on other people. If it becomes law, that 12 percent figure will fall even further. This is no way to keep costs under control. However noble Congress’ intentions may be, its bill will not work as advertised. Human nature won’t allow it.
Posted in Economics, Health Care, Spending
Tagged basic economics, econ 101, Economics, economics 101, hcr, Health Care, health care bill, health care reform, milton friedman, obamacare, spending, spending other peoples' money
Supporters of the health care bill spend a lot of time attacking health insurance companies.
The health care bill, by the way, would legally require people to give a lot of money to those same insurance companies. A lot of money. It would be the largest corporate gift Washington has ever given out — as much as $1.5 trillion over ten years by one estimate.
Health insurers’ loudest detractors are actually their best friends, and they don’t even seem to realize it. Apparently, regulatory capture is not always a conscious process.
Posted in Health Care
Tagged Health Care, health care bill, health care reform, health insurance, health insurance companies, health insurance mandate, insurance, lobbyists, obama, pro-business, trillion
Having eliminated all crime from New York’s streets, ended homelessness, rebuilt Ground Zero, and fixed the state’s ailing public schools, New York’s state legislature has set its sights on how much salt you eat.
New York City Mayor Michael Bloomberg already has a plan to reduce NYC residents’ salt intake by 25 percent over five years. But State Assemblyman Felix Ortiz (D-Brooklyn) thinks that doesn’t go nearly far enough. It only covers New York City, for starters. The rest of the state’s salt intake would remain perilously unregulated under the Bloomberg plan.
That’s why Mr. Ortiz has introduced statewide legislation that would “make it illegal for restaurants to use salt in the preparation of food. Period.”
A $1,000 fine would accompany each violation.
Tom Colicchio, who owns a restaurant and has appeared on the television show Top Chef, is livid. He told the New York Daily News that “New York City is considered the restaurant capital of the world. If they banned salt, nobody would come here anymore… Anybody who wants to taste food with no salt, go to a hospital and taste that.”
He’s right; the salt ban does offend culinary decency. But there’s another angle that’s at least as important: personal responsibility.
If I want to pile on the salt, as Mayor Bloomberg famously does, that’s my right. But I also need to be liable for the consequences. If chronic salt over-consumption gives me high blood pressure and heart trouble, that’s my fault. I should pay the cost.
But that’s not how the current health care system works. We suffer from the 12-cent problem: on average, people only pay 12 cents for every dollar of health care they consume. Roughly 50 cents are picked up by the government, and insurers cover the rest.
That means people have less incentive to watch what they eat than under a more honest system. Why not rack up huge health care bills? Everyone else is paying for me. Health care on sale! 88 percent off!
Freedom cannot exist without responsibility. Decades of government encroachments in health care have taken away a lot of our responsibility for health care decisions. So it makes some sense that Mr. Ortiz would finish the job by taking away peoples’ freedom to eat what they want.
A better solution would be to have both freedom and responsibility, instead of neither. Ban the salt ban. Give people more control over their health care dollars. Let us be free. Let us be responsible. We’re all adults here. Treat us as such, Mr. Ortiz.
Posted in Health Care, Nanny State, Regulation of the Day
Tagged bloomberg, brooklyn, diet, felix ortiz, freedom, health, Health Care, health care reform, mayor bloomberg, michael bloomberg, Nanny State, new york, new york city, new york daily news, new york state, new york times, nudge, nyc, paternalism, personal responsibility, push, responsibility, salt, salt ban, tom colicchio, top chef
George Will has a good column today. He does a wonderful job contrasting Hayek’s philosophy of humility before complexity with the early 20th-century progressive mindset of planning and scientistic design. The framework applies surprisingly well to today’s health care debate, with President Obama playing the role of Woodrow Wilson. Very thought-provoking.
Posted in Economics, Health Care, Philosophy, Political Animals
Tagged barack obama, george will, hayek, Health Care, health care debate, health care reform, humility, obama, president obama, progressive, progressivism, uncertainty, woodrow wilson
If you’re gay, you can’t donate blood. It’s illegal. The ban was put in place in 1983, during the early days of the HIV/AIDS scare. It may have made some sense in those days, when HIV testing was less than trustworthy. But it sure doesn’t now, with modern screening technology.
Obviously, keeping HIV-positive blood out of circulation is a wise policy goal. But most gay people don’t have HIV/AIDS. Rather than screening donors for sexual preference, they should be screened for blood-borne diseases. Straight people already are. And it works quite well. Current policies are keeping healthy, willing donors out of the system.
The outdated ban could soon be coming to an end. Sen. John Kerry and 15 of his colleagues, usually more prone to passing regulations than repealing them, are urging the FDA to repeal this one. You can read their letter here.
The one disconcerting thing about the letter is that every single one of the signees is Democratic. Not one Republican joined in. That could be because Sen. Kerry and the others deliberately excluded them for political reasons. But the GOP is famously behind the curve on gay rights issues. So maybe Republicans were asked, and said no. I don’t know.
Republicans should send their own letter supporting Sen. Kerry’s position. Enlarging the pool of eligible blood donors is an unabashed good. It’s a classic gay rights issue. It’s also a health issue. Blood would be more readily available for patients who need it. Economists would add that increasing the supply of blood will lower its price – a good thing in this age of rapidly rising health care costs.
Posted in Economics, Health Care, Political Animals, Regulation of the Day
Tagged aids, blood donors, democrats, donating blood, fda, gay, gay rights, Health Care, hiv, hiv/aids, John Kerry, kerry, republicans, senate, Senator John Kerry