Commentary From the Mile High City

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Joshua Sharf

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June 18, 2009

The Wrong Direction

That Heritage Foundation chart, with the CBO's preliminary scoring of the Senate's health care bill.  (Hat Tip: Keith Hennessey)


April 8, 2009

The Denver Post on HSAs and Single-Payer

Guess which one gets a better review?

As the Colorado House of Representative took us further down the road to socialized health care earlier this week, Douglas County School are considering moving to a Health Savings Account plan for their employees. Needless to say, the Denver Post finds this objectionable:

Douglas County School District soon may join a growing number of employers pushing workers to manage their own medical spending with health savings accounts, eliminating copays for drugs and doctor visits.

The transition is frightening for many who see it as a reinvention of health insurance as they've always known it.


The plan would work nicely for about 85 percent of employees, who are predicted not to spend more than the $1,000 put into their accounts by the district.

But for the other 15 percent, the change could mean a few extra thousand dollars a year spent on health care.

By the twenty-second paragraph, we find out that the system would actually include all that preventative care that single-payer advocates talk about:

A major component of the new health plan, up for a teachers-union vote at the end of the month, is a push to get employees to eat healthier and exercise more.

The plan comes with free preventive care, meaning no charge for mammograms, well-baby checkups and vaccines. Also, the district wants to reward employees for getting healthier - holding contests akin to "The Biggest Loser" reality TV show.

In-between is a real-life, specific case of financial hardship that the plan might cause.

And then, almost at the end of the article, comes what could well be the most appealing aspect of the plan for middle-class employees:

Health savings accounts are the fastest-growing trend in health care, said Andrew Sykes, chairman of Health at Work, a Chicago company hired by Douglas County to coordinate the possible conversion. The accounts have a triple tax benefit - the money goes in pre-tax, grows without tax and can be taken out without tax penalty to spend on health care.

In fact, the money can eventually be rolled over into a regular IRA, without the health-care-spending stipulation. And the tax implications for that real-life case aren't even discussed.

Compare this with the promise-heavy description of single-payer earlier this week:

During the extended debate on the bill, Democrats argued passionately for a government-backed system covering all Coloradans to replace a current system they said is inefficient and full of holes.

"I think it is our responsibility that every single Coloradan, regardless of their wealth or position in society, get the health care they need," said Rep. Daniel Kagan, D-Cherry Hills Village. "It is our obligation."

"This system we have right now," said Rep. Claire Levy, D-Boulder, "is completely and fundamentally broken, and there's no amount of patching it up that we can do to provide universal coverage."

Democrats said a single-payer system would save money overall by streamlining the health-care machinery and taking advantage of economies of scale.

Eventually, we get to the Republican response, but the political trumps are saved for the last paragraph:

Last month, the head of the state Department of Health Care Policy and Financing told lawmakers that Ritter is against the bill, noting that Ritter's health-care commission studied a single-payer system and rejected the idea.

There are no numbers given, no estimates of what such a system will cost or what care compromises will inevitably have to be made, no examples of people who would lose treatment because it wasn't deemed cost-effective by the state, only vague Republican accusations of rationing and expense.

In the meantime, a system that the Post admits will work for 85% of employees, that is intended to control costs by having individual rather than bureaucracies make choices, that provides a serious tax shelter for the young and healthy - exactly when we want people to be putting away money for retirement, is described as scary.

Apparently, for the Denver Post, free stuff is an easier sell that freedom.

October 17, 2008

Let's Pretend

That seems to be the Democrats' favorite game this year. In Ohio, the Democratic Secretary of State has persuaded the Supreme Court to overturn a lower court requirement that registrations actually be validated by election day. While the Supreme Court - possibly correctly - argued jurisdictional issues, Secretary of State Jennifer Brunner was claiming that it wasn't necessary to validate up to 200,000 registrations with irregularities. I say, "possibly," because I'm pretty sure that a Colorado state court ruled on certain aspects of HAVA four years ago, but it's possible that the issues at stake here are different, and non-justiciable by a state court.

Secretary of State Brunner has already allowed up to 3000 questionable registrants to vote electronically early, making it impossible to retrieve their votes should there turn out to be fraud. But Let's Pretend all those votes should count.

ACORN's been very active in Ohio, registering individuals, both existent and non-, multiple times. But since it'll be hard to make sure all these voters are entitled to the franchise, Let's Pretend there's no problem here, nothing to see here, move along, move along. By dodging the problem now, the Court has set itself up for a much bigger headache later on.

Likewise, my Democratic opponent, Lois Court, on Tuesday, defended the notion of Single-Payer Mandatory Universal Health Care (abbreviated backwards, that's "CHUMPS") by claiming that "I define 'public good' to mean something that's good for the public."

Never mind that that's not what it means, either word-by-word or as a phrase. Let's Pretend that it is. Let's pretend that the only cost is the cost of delivery, not the cost of the product itself.

The problem with Let's Pretend is that sooner or later Mom, or as she's known in this case, The Real World, calls you in to get cleaned up for dinner.

The other side likes to style itself as, "Progressives." They are. They're Progressively More Expensive, Progressively More Intrusive, and Progressively More Restrictive.

It's Not What You Know...

In fact, it's not even what you make, it's who you know:

An ailing Democratic fundraiser has obtained an experimental cancer-fighting drug through the Mayo Clinic, according to his son, despite the drug maker's refusal to sanction the treatment.

Fred Baron, a prominent political donor linked to the John Edwards mistress scandal, received the drug Tysabri after a "legal basis" for its use was found, his son Andrew Baron said in an e-mail to The Associated Press. He didn't elaborate.

Baron has described Tysabri as a "last chance effort for life" in his 61-year-old father's battle with late-stage multiple myeloma. Doctors last week gave Fred Baron only days to live, his son said.

Tysabri is approved for people with multiple sclerosis or Crohn's disease, but is only in the early clinical trial stage for multiple myeloma.

Patients can seek to use drugs outside the authorized use under what the Food and Drug Administration calls single-patient investigations. But permission must ultimatelyBiogen Idec Inc., which manufactures Tysabri, didn't grant permission to treat Fred Baron with the drug, company spokeswoman Naomi Aoki said late Thursday. Biogen has maintained the regulatory risks of giving him special access to Tysabri are too great.

The company stood by its decision despite appeals from such prominent figures as former President Bill Clinton and cyclist Lance Armstrong.

Andrew Baron said the Mayo Clinic, working with the FDA, found a legal basis for using Tysabri on his father.
come from the drug manufacturer, said Judy Leon, an FDA spokeswoman.

Look, I have nothing against Fred Baron. I hope the treatment helps and I hope he lives. But this article contains an entire critique of our treatment of drugs, and another critique of the economics of health care.

A company has developed a treatment that has the potential to save a man's life. He's likely going to die, anyway. Why on earth should the company be held liable for its effects on him, if doctors say there's a chance it will help, and he's requesting the treatment? Let him sign a waiver, and maybe he will live. And maybe we'll discover something about the drug, or the disease, that will save lives down the line.

More broadly, doesn't this show that medicine is a scarce resource, not a "public good?" Medicine, in extremis, like any other product, will have to be rationed. Right now, we ration it through the ability to pay, either directly or through insurance. The result of a socialized system will be bureaucrats making the decisions about who's "deserving" of care.

What is more "fair" about rationing it though political connections?

August 19, 2008

Hospital Transparency; It's Not Just For Gowns Any More

If expanded markets in health care are going to work, then we need informed consumers. I can spend hours looking for the best tour package, comparing hotels, finding what airline will save me $10 on a seat if I walk down the ramp backwards flapping my arms. But if I had to pick which hospital to direct the ambulance to when I have my coronary bypass, I would probably have said, "Rose, Jeeves."

Silly me.

Markets only work if parties have real information to base their decisions on. Without feeling sorry for insurance companies, it's possible to admit that part of their premium comes from asymmetrical information: applicants lie. Likewise, it's tremendously difficult to act like health care consumers because we don't have the information that we have when we're buying vacations or melons.

Now, comes a Colorado company, HealthGrades, which seeks to provide just that information to health care consumers - outcomes for hospitals, comparisons for physicians and nursing homes. This is exactly the kind of company that, if allowed to pursue its business, can help change the world.

Right now, the revenue model seems a bit...muddled. It appears to be a combination of selling reports and selling Google ads. I'm sure they've done much more market research than I have, which is none, but it seems a bit steep to ask a consumer to pay for this sort of report, when they're already putting up money up front for an HSA and its deductibles. On the face of it, it seems that the best bet would be to seel licenses to insurance companies, who could then market access to the information as part of an HSA.

And note that the only government action required is to get out of the way.

August 9, 2008

"Public Good"'s Just Other Words For Nothin' Left To Choose - III

Proponents of Single-Payer health care have attempted to recast health care from a product into a "public good." In fact, the term, "public good" has a very specific meaning in economics. While certain elements of health care may meet the definition, most - and the most interesting for public policy - do not.

In order to be a public good, an item has to 1) be non-rival, i.e., if I take some, it doesn't mean any less for you, and 2) non-excludable, i.e., effectively, you can't keep me from taking as much as I want. Air is a good example (despite the appealing military term, "oxygen thief").

Almost no medical services meet these requirements. There is no reasonable way that a hospital room, or the attention of the nurses assigned to that floor, can be either non-rival or non-excludable. Even if you pack patients in as though hospitals were tenements, there's still a limit. And I had darned well better know who's in each room, otherwise delivering care of any kind is going to be a pretty dicey proposition.

One could make a case that routine medicines such as aspirin and penicillin might, as well as most common vaccines. Even in those cases, however, one assumes need. While we can all breathe as much as we like, if all of us were to wander through hospital dispensaries gathering up handfuls of band-aids and anti-inflammatories, the stocks wouldn't last very long.

So someone saying that health care is a "public good," either doesn't understand the term - indicating a level of economic illiteracy and muddled thinking typical of so much of what passes for health care debate - or they do know, in which case their proposals have devastating implications.

August 7, 2008

"Public Good"'s Just Other Words - II

The great appeal of Single Payer is its simplicity. Like the man said:

Your friends, they don't like you very much anymore. You force them to make too many decisions. With me, only one decision: do what I say.

The more extreme versions of Single Payer would even outlaw spending in supplemental insurance, under the delusion that health care should be completely independent of income or wealth. (For instance, the AARP has a sign on Colorado Blvd. claiming that it's time for "universal coverage and financial security for everyone." As though the two were the same, and either achievable.)

Despite pretensions to morality, this is in fact a deeply immoral vision of health care. It says that it's perfectly ok to spend your money to protect yourself from a home invader, but not from cancer or heart disease or a broken leg.

The notion derives directly from the definition (and abuse) of the concept of a "public good," but that's for another post.


Power, Faith, and Fantasy

Six Days of War

An Army of Davids

Learning to Read Midrash

Size Matters

Deals From Hell

A War Like No Other


A Civil War

Supreme Command

The (Mis)Behavior of Markets

The Wisdom of Crowds

Inventing Money

When Genius Failed

Blink: The Power of Thinking Without Thinking

Back in Action : An American Soldier's Story of Courage, Faith and Fortitude

How Would You Move Mt. Fuji?

Good to Great

Built to Last

Financial Fine Print

The Day the Universe Changed


The Multiple Identities of the Middle-East

The Case for Democracy

A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam

The Italians

Zakhor: Jewish History and Jewish Memory

Beyond the Verse: Talmudic Readings and Lectures

Reading Levinas/Reading Talmud