Surprise, Surprise: Bill 217 Captured by Special-Interests

As Brian Schwartz has reported, State Senator Bob Hagedorn said that "to load up mandates" into his bill 217 would be its "kiss of death." Unfortunately, while the bill deserves death, bad legislation has a way of rising from the dead to stalk citizens.

Schwartz points to a May 2 article from the Denver Business Journal by Bob Mook that reports the following:

[Representative Anne] McGihon acknowledged the House is much different than the Senate bill, but it now is supported by a wide range of advocacy groups -- some of which originally opposed it. ...[T]the bill was severely changed in the House with provisions that removed a coverage cap of $250,000 from the plans. Another House provision would direct the panel to consider plans that cover hospice and palliative care...

I'm not sure where the bill stands now. But even if the bill is stripped of its House provisions, the fact that the bill was immediately subjected to special-interest lobbying indicates where this legislation is headed, if it becomes law. Not only will the new commission it creates be subjected to continual lobbying, but, if the legislature enacts the commission's recommendations, the legislature too will be subjected to such pressure, so long as the legislation remains in force. It is the inevitable result of politician-controlled medicine.

Gorman Skewers Bogus Families USA Health Claims

Families USA is a "non-partisan" outfit that is a partisan fighting for government-controlled health care. It advocates policies that would harm families and that run contrary to the USA's heritage of liberty. The organization is built on deception and it uses bogus claims to advance its agenda.

Back in February, Linda Gorman and I pointed out that a Families USA "study" regarding the magnitude of costs shifted from the uninsured to the insured is deeply flawed. We wrote:

Those who advocate an individual mandate throw up all kinds of numbers to support the wild claims that the proposal would save everyone money. A Jan. 8 article from The Denver Post claims that "Coloradans who have insurance spend an extra $950 each year to cover the costs of those who show up at the hospital without insurance."

The article attributes the number to state Rep. Anne McGihon, who said that the figure comes from Partnership for a Healthy Colorado. Partnership for a Healthy Colorado, in turn, says it got the figure from Families USA, which published a paper in 2005. That paper's estimates were unable to accurately predict the percentage of uninsured residents in Colorado. The paper also grossly overestimated at least some costs of uncompensated care.

The Lewin Group, the modeling firm hired by the commission to collect information about Colorado, reported total Colorado expenses for the uninsured of about $1.4 billion. Of that amount... leftover uncompensated costs, the ones that are not paid by any identifiable source, total $239 million. Divide $239 million by Colorado's 2.8 million insured residents, and the result is a maximum likely cost-shift of about $85 per insured individual per year.

To "fix" the problem of $239 million in cost-shifting, the [Commission for Healthcare Reform] proposes to increase health spending in Colorado by more than $3 billion...

Then, on May 2, Gorman posted an article to John Goodman's Health Policy Blog regarding Families USA's claims about insurance and mortality:

In the series of reports, called "Dying for Coverage," Families USA purports to show how many people are killed by a lack of health insurance in each state. For example, they claim 6 people die every day in Florida because they are uninsured. Seven die every day in Texas, 8 in California, and 25 in New York.

How is Families USA able to tally up all this carnage with such pinpoint precision? As it turns out, these claims are based on a 15-year cascade of studies - each repeating the errors and misinterpreting or mischaracterizing the findings of the previous one and ultimately relying on data that is 37 years old. ...

[T]here is no point at which anyone from Families USA actually examines a medical record. There is no interview with any doctor, any patient or any family of a deceased patient. There is only algebraic mumbo jumbo in support of an unsupportable claim.

Gorman explains the problems with Families USA's claims in greater detail in the article.

Gorman's criticism follows one by Michael Tanner, who explains, "The Families USA study was not a traditional 'double blind' experiment with a control group and a treatment group." Tanner offers additional evidence discrediting the Families USA claims.

As I have reviewed, Brian Schwartz discovered that a summary of State Senator Bob Hagedorn's bill 217 cites the bogus Families USA study.

Finally, on May 3, the Rocky Mountain News published Gorman's letter regarding Families USA's claims about Medicaid. Gorman points out that an earlier article from the Rocky, "Report ties Medicaid cuts to job losses," "simply repeated the substance of a press release from Families USA." Gorman continues:

...What the Bush administration is proposing is a slightly smaller budget increase, about 7.1 percent rather than 7.4 percent. The 2009 budget numbers are available on Page 61 at http://www.hhs.gov/budget/ 09budget/2009BudgetInBrief.pdf.

If Families USA were a real family making $50,000 a year, these budget numbers would be the equivalent of having an expected windfall of $53,700 reduced to $53,550.

Families USA is known for approaching health care with a well-defined ideological slant and for producing lousy numbers on all manner of health-care issues. One hopes that, next time, the Rocky will take the Families USA reputation for inaccuracy into account, and that it will check before it unquestioningly reproduces their press releases as news.

It would also be pleasant if Colorado legislators would refrain from basing state policy on Families USA's misinformation campaigns.

For Better Health, Repeal Political Controls

The following article originally was published by the Independence Institute on April 30, 2008.

For Better Health, Repeal Political Controls

By Ari Armstrong

My wife and I pay $132 per month total for high-deductible health insurance, hundreds of dollars less than we would pay for comprehensive insurance. Our goal is to never need to make an insurance claim. We pay for all of our routine medical care -- doctor visits, eye glasses, dental work, prescriptions -- out of pocket, and we like it that way.

Our medical expenses come out of our Health Savings Account (HSA), which means that it's all pre-tax money. Unfortunately for us, various enemies of HSAs have been trying to undermine them at the national level.

By paying less for high-deductible insurance, we've been able to pay off debts faster and prepare for a family, something that has been difficult given our high tax burdens.

If Colorado wants to keep and attract young working families, the legislature ought not further muck up health insurance by loading in a bunch of new expensive mandates. Nor should the legislature require such couples to further subsidize others through higher taxes and/or insurance premiums.

If the legislature wants to make health insurance more affordable for more people, it should repeal existing political controls that have driven up insurance costs and priced some people out of the market.

However, we should realize that the broader problem with health insurance is that, because of federal tax policy, most insurance is tied to one's job. Lose your job, lose your insurance. Because of the tax benefits of "paying" people with insurance coverage, such insurance is really pre-paid medical care that discourages economic provision and consumption of health care.

Our society has largely forgotten the proper purpose of insurance when it comes to health. Most people remain healthy into middle age, when risks for various diseases start to increase. Through insurance, we voluntarily pool our resources to pay for the care of the few who get unlucky. If federal policy had not driven health insurance off track, we'd buy insurance when we're young at a low rate and keep the same policy long-term, and we'd also pay for routine and expected expenses directly, which would encourage healthy competition.

All of the commonly cited problems with medicine have been caused by decades of political intervention in medicine. For details, see "Moral Health Care vs. 'Universal Health Care'," by Lin Zinser and Paul Hsieh, MD, at WeStandFirm.org.

Yet, rather than act to repeal the controls that are the cause of the problems, many of today's politicians want to impose still more controls. If they succeed, the result will be worse health care that costs even more.

Here in Colorado, the legislature has considered everything but repealing the controls that are the cause of the problems. In 2006, then-Governor Bill Owens signed into law Senate Bill 208 to create the Blue Ribbon Commission for Healthcare Reform. That commission rejected the only free-market proposal and recommended such measures as massively expanded taxes and forcing everybody to buy insurance. The Commission's recommendations basically went nowhere.

But apparently one failed commission deserves another, so State Senator Bob Hagedorn is currently pushing Bill 217. If the bill passes, later this year Governor Bill Ritter will appoint "a panel of expert advisors" to come up with a bunch of new political controls for the legislature to consider in the future.

Originally, the bill encouraged the "panel of experts" to assume that all Coloradans would be forced to purchase politician-approved health insurance. The amended bill lists that only as an option.

Forcing people to buy insurance would cause two basic problems. First, you can't force somebody to buy something they can't afford, so any such plan must accompany massive tax hikes and subsidies. Second, once politicians force you to buy something, special-interest groups will constantly fight to include their pet service as part of the forced package, whether you want it or not. The result will be continual pressure to expand the scope of the forced insurance and make it ever more costly.

Much of the bill describes the creation of politician-approved "value benefit plans" for health insurance that would be subject to a variety of restrictions and substantially subsidized through taxes.

Yet consumers and providers have the right to decide through voluntary exchange what plans constitute a value to them. We don't need a new bureaucratic commission; we need liberty.

Ari Armstrong, a guest writer for the Independence Institute, blogs at FreeColorado.com.

Schwartz Starts Patient Power Blog

Hooray! Brian Schwartz has started a blog called Patient Power, "brought to you by the Independence Institute."

Within a minute of viewing Schwartz's blog, I learned something new about State Senator Bob Hagedorn's Bill 217, which raises the possibility of new controls and a mandate to force people to buy politician-approved insurance. Schwartz writes:

The Bill Summary for Colorado Senate Bill 08-217 (which I’ve written about here), which would make it a crime for Coloradans not to buy politician-approved medical insurance, includes a link to a report by a group that calls itself “Families USA”* titled Dying For Coverage, which claims that lacking health insurance causes thousands of Coloradans to die each year. ...

* You gotta love the name “Families USA.” If you disagree with their policy recommendations, you must be against families, and worse yet, the USA!

Sure enough, the very first pdf file included in the summary is the Families USA study, which, as I pointed out yesterday, is seriously flawed.

In other words, Hagedorn's bill is motivated by a fabrication.

In his opening post, Schwartz writes:

Why “Patient Power”?

Because this is what government controls have taken away from us. It's what we need to continue to benefit from life-saving medical advances and care, and be satisfied with our experience with physicians, hospitals, and insurance companies.

State and federal policies have wedged insurance companies between between you and your physician, which erodes the doctor-patient relationship. Doctors have more incentive to please insurance companies than they do to please you, the patient. Government controls have also placed your employer between you and medical insurance companies, so insurers seek to please employers, and not you. ...

Patients and doctors alike owe Schwartz thanks for defending their liberties.

Tanner: Families USA Health Study Flawed

Michael Tanner of the Cato Institute wrote an article for today's Rocky Mountain News that criticizes a recent study by Families USA. That study, Tanner summarizes, claims " that 360 Colorado residents die each year because they lack health insurance." Tanner notes that, "all things being equal, it is better to be insured than uninsured," but Families USA misstates the actual problem.

Tanner writes:

The Families USA study was not a traditional "double blind" experiment with a control group and a treatment group. Rather, it is a retrospective analysis, which compared the rates of people who died with insurance to those who died without insurance. Since the proportion of people without insurance seemed to be higher than those with insurance, they extrapolated likelihood to project excess deaths due to lack of insurance. But there are just too many outside variables to make such interpretations valid.

Even the Urban Institute's Jack Hadley, who co-authored a similar Institute of Medicine study cited by Families USA has said that "observational studies . . . cannot answer the question of whether health insurance directly affects health outcomes." And a detailed review of the academic literature by Helen Levy and David Meltzer of the University of Chicago Harris Graduate School of Public Policy Studies found little proof of a "causal relationship" between health insurance and better health.

Moreover, the reason that many people cannot afford insurance is that political controls have priced them out of the market. Yet Families USA is dedicated to promoting even more political control of medicine.

Tanner continues:

One thing we know for certain is that government-run health-care systems frequently deny critical procedures to patients who need them. For example, at any given time, 750,000 Britons are waiting for admission to National Health Service hospitals, and shortages force the NHS to cancel as many as 50,000 operations each year. And in Canada, more than 800,000 patients are currently on waiting lists for medical procedures. ... A study by Christopher J. Conover with the Center for Health Policy, Law and Management in the Terry Sanford Institute of Public Policy at Duke University found that as many as 22,000 Americans die each year from the costs associated with excess regulation.

Tanner notes that various mandated benefits in Colorado significantly increase the cost of health insurance.

It's quite a coincidence that the flawed Families USA study popped just before State Senator Bob Hagedorn starting pushing bill 217, which, originally, advocated forcing individuals to buy health insurance.

Hagedorn recently said that 217 is "the antithesis of what Massachusetts has done." Yet 217 still creates the possibility of an individual mandate, the core of the Massachusetts plan.

The Daily Sentinel reports, "Senate Bill 217 would have carriers submit plans to the state rather than have the state dictate the kinds of plans it would require carriers to offer, Hagedorn said."

What a joke. Bill 217 would in fact dictate what sort of plans carriers must submit. Moreover, once the plans are submitted, the legislature can continue to impose more controls on them.

It is interesting, though, that Hagedorn is now running away from Massachusetts, even though the Massachusetts plan is in fact the primary model for proposed plans in Colorado. Paul Hsieh has collected numerous stories describing the problems with the Massachusetts plan.

If reformers such as Hagedorn get their way, perhaps politicians in other states can pretend that their statist proposals are the "the antithesis of what Colorado has done."

Nuts and Bolts of 217 Anti-Health Bill

I've been writing about Senate Bill 217, which seeks to impose Massachusetts-style health controls in Colorado, so I thought it was a good time to pull a few quotes from the bill itself. Colorado's legislative bills can be downloaded at the state legislature's web page. Click on "All Versions," and download the confusingly labeled "Preamended" version. This version of the bill states, "This Unofficial Version Includes Committee Amendments Not Yet Adopted on Second Reading." Additional versions of the bill may appear as it moves through the legislature.

Section 1(e) states that the bill would create "a balanced partnership between private and public sectors." Translation: politicians are going to control the health-insurance market to an even greater extent than they do already.

Section 2(a)(I) creates a new commission, a "panel of expert advisors appointed by the govern," composed of actuaries and insurance insiders, which "shall prepare a request for proposals to be issued to health insurance companies." The companies will be asked to describe "Value Benefit Plans," or VBPs. Section 2(b) describes how the VBPs are supposed to work. They must include "benefits for primary and preventive care participation in wellness programs, and incentives for plan participants to engage in healthier behavior."

In other words, the VBPs will be high-cost, all-encompassing plans, not real insurance with high deductibles, like my wife and I currently purchase.

Here's a big one: subsection VIII specifies that VBPs must take all comers, regardless of health, and charge everybody of the same age and region the same rate. In other words, the plans would force some people to subsidize the health expenses of others.

And here's the penultimate requirement: XII states that the plans must "assume that all Colorado residents would be required to purchase health insurance."

But Section 3 pushes the real work onto the 2010 legislature. "[T]he governor may reject proposals..." "If the governor recommends legislation and the general assembly chooses to pursue legislation..."

To quote the infamous Jayne Cobb, I'm smelling a lot of "if" coming off of this plan.

But, "if" the 2010 legislature chooses to screw Coloradans with more political controls of medicine, then it will impose mandates and a "mechanism to enforce" mandates "through the state tax laws." The insurance plans would, of course, be subject to political approval. What the bill does not mention is that the plans would be subject to continual special-interest pressure to keep forcing up premiums.

Nor does the bill mention that the reason health insurance is too expensive for many people to afford is that politicians have for decades been undermining the insurance market with tax distortions, forced wealth transfers, and reams of mandates. SB 217 would impose more of the same.

Hillman Defends Liberty in Medicine

Mark Hillman, a former Republican state senator, has come out with an excellent critique of a new legislative proposal to impose Massachusetts-style health controls in Colorado. The measure, Senate Bill 217, would force everyone to buy politically-approved health insurance and expand health welfare. I lambasted the proposal yesterday.

In a Speakout for the Rocky Mountain News, Hillman explains:

In calling for health insurance companies to design "value benefit plans" to provide a low-cost insurance alternative, the bill says that the state "shall not specify benefits or other details" of those plans. Just two paragraphs later, however, the bill stipulates a dozen mandated benefits or other details that value benefit plans must include.

Essentially, insurers are prohibited from proposing anything that's remotely innovative. They are commanded not to "interfere with the existing small-group market" but are locked into the same rating criteria that has devastated that market for most of the last decade. ...

SB 217 does change the existing health-care market in one dramatic respect, by signaling to insurance companies that state government is ready to force its incorrigible citizens to buy health insurance, even if it's unaffordable.

The bill calls for "a requirement that all Coloradans obtain health insurance either individually or through their employer" and provides for enforcement "though the state tax laws."

Rather than allow insurers to offer new choices or allow consumers to obtain coverage across state lines where Colorado's draconian regulations aren't strangling the market, legislators prefer to penalize taxpayers for the audacity of refusing to buy insurance that costs too much.

Hillman's analysis is right on. I can only hope his former colleagues are paying attention. It's nice to see that a leader of Hillman's stature -- and a party man to boot -- takes seriously liberty in Colorado.

CO to Adopt MA Health Disaster?

Welcome to Colorful... Massachusetts?

The Massachusetts health mandates have been a disaster. As Paul Hsieh, MD, summarizes:

The state of Massachusetts has already imposed a similar plan of mandatory health insurance on its residents for over a year now, and it is failing badly. Like Senator Hagedorn's proposal, the Massachusetts plan requires all residents to purchase health insurance, with state subsidies for lower income residents.

But rather than creating a utopia of high-quality affordable health care, the result has been the exact opposite -- skyrocketing costs, worsened access, and lower quality health care.

Hsieh has compiled additional news and comments about Massachusetts.

Ah, but this time, socialized medicine will work, even though it has failed in every other state and nation that has tried it.

Naturally, Colorado's big newspapers are falling all over themselves to praise our political masters. I already mentioned the Rocky Mountain News's support for Hagedorn's scheme. And The Denver Post editorializes:

The bill by Sen. Bob Hagedorn, D-Aurora, and Reps. Ann McGihon, D-Denver and Tom Massey, R-Poncha Springs... [is] aimed at providing the foundation for universal health care coverage in 2010. It's patterned after the path blazed by Massachusetts under Gov. Mitt Romney by mandating health insurance for citizens who now lack it, just as motorists are required to have automobile liability insurance.

Failure to purchase such insurance could subject residents to a penalty on their state income tax. The state would subsidize poor people.

Even though the Rocky pretends that Hagedorn is offering an alternative to the "208" Healthcare Commission, Hagedorn's plan is essentially the same plan my dad and I criticized a year ago. (In the same article, we pointed out why mandated health insurance is not comparable to mandated auto insurance.)

But do not think that this socialistic scheme is the work of Democrats alone; as the Post points out, Hagedorn's bill includes a Republican sponsor. And, as the following voting tally indicates, Republican Shawn Mitchell helped pass the bill out of committee:



Mitchell is the same Republican who claimed just last month:

A bad market vote doesn't make it a lie for many Republicans, including this one, to claim the mantle of market supporter. We may be imperfect. It would be a lie to claim otherwise. But for willingness to embrace, defend, and advocate the functioning of free markets, Republicans are the only team in town.

But if a Republican will vote for a bill to force every Coloradan to purchase politically-approved health insurance, then no political control is out of bounds. Such Republicans support free markets in roughly the same way that Mahmoud Ahmadinejad supports Israel or cancer supports human health.

Here's the upshot to Hagedorn's scheme. It's payola time for politically-connected insurance companies. What better than for politicians to force every person in the state to buy your product? This means that young, healthy workers will get screwed twice: once with higher taxes and again through higher insurance premiums.

The entire reason that health insurance is too expensive for many to afford is that politicians have systematically undermined the insurance market through tax distortions and a host of direct controls. But, rather than repeal the controls that created the problems, these politicians are intent on imposing yet more controls.

The only good news about the proposal is that it would not take effect until 2010, giving young people who don't think it's their duty to fund everybody else's health care, and doctors who don't want to work under the thumb of idiot bureaucrats, a chance to look for work in other states.

Bailey Squishes on Health Mandates

Recently I had the opportunity to meet the charming and well-read Ron Bailey of Reason magazine. We briefly discussed his 2004 article that advocates an individual mandate for health insurance. While Bailey does some great work for Reason, he is completely wrong on the matter of health mandates. While his article is dated by magazine standards, the issue is very much alive; for example, the somewhat market-friendly Rocky Mountain News just endorsed mandates this past weekend. So, in refuting Bailey's case for mandates, I mean to discredit mandates generally (though of course my comments here are limited in scope).

Bailey makes three broad mistakes.

First, Bailey commits what I'll call the "Wonk's Fallacy." That is, he concocts the best possible policy to implement a mandate, but he ignores or peers past the real-world political process, which is dominated by ideological politicians (usually with redistributionist sentiments), high-priced lobbyists, special-interest groups, and accidents common to sausage-grinding.

The Rocky does the same thing. It editorializes:

Two aspects of SB 217 give us pause. First, it includes an individual mandate, requiring every uninsured Coloradan who is not enrolled in a government program to purchase coverage. But we can live with this so long as value benefit plans are indeed viable and available at modest costs.

That's a bit like saying one can live with socialism, so long as it is a "viable" sort of socialism.

In the real world, policies are subject to political manipulation and unintended consequences. For example, Paul Hsieh, a Colorado doctor, has compiled various stories about the problems with the Massachusetts plan, which, as a combination of mandates and expanded welfare, is in some ways similar to the plan proposed for Colorado. Moreover, as Michael Tanner pointed out during his recent trip to Colorado, mandates are in fact continually subject to special-interest group pressure to expand the scope of what's mandated.

Bailey's second major error is more fundamental. His case for mandates explicitly rests on the forcible redistribution of wealth as an allegedly unalterable political "fact." And his case implicitly grants that it is the state's responsibility to ensure that people obtain health care. Once that case is granted, the free-market position is lost. Completely socialized medicine is inevitable, until and unless somebody effectively makes a principled case for liberty in medicine. (Thankfully, Hsieh, writing with Lin Zinser, has made just such a case, but it remains to be seen whether their efforts can overcome the widespread capitulation by the sunshine friends of liberty.)

In order to keep us off the fast road to socialized medicine, Bailey has placed us on the slow road to socialized medicine.

Bailey's third main problem is that, by pushing mandates, he de-emphasizes the true cause of existing problems in modern medicine: decades of political interventions. The reason that health care is a problem today is that it has already been largely socialized. For details, see the article by Zinser and Hsieh. To make insurance more available, what politicians can and should do is remove the political controls that have made health insurance too expensive for many people to afford.

Now that I've summarized the major issues, I'll go through some of Bailey's specific points.

Bailey begins his article by quoting a poll showing that "62 percent of the respondents favored a universal, government-run medical insurance program." I don't know what the polling would show today. But such polls are irrelevant for deciding which policies are, in fact, based on individual rights and which would therefore achieve good medicine in practice. It is the job of friends of the market to move public opinion, not sell out their principles to it. Moreover, very often people's opinions are "soft," in that people can be swayed by solid arguments. Unfortunately, Bailey's approach is more likely to move public opinion even further in the direction of socialized medicine.

Bailey writes, "[T]he increasingly successful campaigns to privatize Social Security and expand school vouchers suggest a way out: mandatory private health insurance."

I have no wish to reiterate my case against so-called "privatized" Social Security here. But I will point out that, when the government forces you to buy something and therefore tightly controls what it is you can buy, the product is in a fundamental sense not "private." Similarly, if the government forced parents to pay for schools of the government's choice, those schools would not be "private." When the government forces you to buy investments, insurance, education, or whatever, those items are not "private" in the sense of existing in a free market. They are merely socialized by another means. In common libertarian parlance, such government controls are counted as fascistic rather than as communistic, with socialism remaining the broader category.

Bailey then conducts a very interesting discussion of the problems in medicine and part of the history of political controls. Bailey also notes that one reason that health care has become more expensive is that doctors can do so much more to help people:

As William B. Schwartz, a professor of medicine at the University of Southern California, notes in his 1998 book Life Without Disease: The Pursuit of Medical Utopia, "In 1950 costs of health care were remarkably low, because, for a large percentage of patients, doctors really couldn't do much. People spent relatively little on health care (only 4.4 percent of gross domestic product) and got what they paid for -- very few useful diagnostic tests or effective treatments." In 1950 there were no polio, measles, or hepatitis vaccines; no open heart surgeries or pacemakers; no organ transplants; few cancer chemotherapy agents; no MRI or CAT scans; and no drugs for ulcers, high blood pressure, or arthritis.

Bailey also explains the fundamental problem with employer-paid insurance, which is the direct result of tax distortions: "'Everybody thinks they're spending somebody's else's money,' explains Robert Helms, a health care scholar at the American Enterprise Institute."

Bailey laments, "Unfortunately, there is no prominent political or intellectual figure on the national scene offering a comprehensive free-market alternative to socialized medicine."

Well, no, political figures tend not to advocate free-market alternatives when the self-proclaimed advocates of free markets themselves endorse socialism. Yet, in Colorado, a very small coalition has been successful at making real free-market reforms a noticeable part of the public debate. Had Bailey fought for liberty rather than for socialism in 2004, today free markets would have had a better chance. Instead, today we have to waste our time fighting our "allies."

Bailey offers his main case for mandates:

Why not just tell Americans they are responsible for buying their own health insurance from now on? If people couldn't pay for medical care, either through insurance or out of pocket, they wouldn't get it. "After people begin to notice the growing pile of bodies by emergency room entrances," Tom Miller wryly suggests, "they will quickly get the message and go get medical coverage."

But that's not going to happen, says Mark Pauly, a health care economist at the University of Pennsylvania's Wharton business school. "Americans don't want to see their neighbor dying bleeding in the street," he says. ...

Since it's unlikely that Americans will allow their improvident neighbors to expire without medical care in the streets, is there a politically palatable alternative that can preserve and expand private medicine in the United States? Yes: mandatory private health insurance.

There are two main problems with Bailey's analysis. First, the options are not binary: either pay or don't pay at the time of service. A third option is to require people who get care to pay for it over time. Second, Bailey here completely ignores the legitimate role of voluntary charity, which can come from health-care providers as well as from individual donors and organizations. Notably, voluntary charity is much more likely to discriminate between the moochers and the truly needy and thus to encourage independence rather than dependence.

Bailey discusses health-savings accounts, shifting away from the employer-pay system, and "privatizing" Medicaid and Medicare, but those reforms are not and should not be tied to mandates.

Bailey closes, "The proposal for mandatory health insurance offers a way to maintain our private system, expand consumer choice, lower costs, and allow medical progress to continue." Bailey's claim is exactly wrong: the proposal for mandatory health insurance undermines liberty in medicine and paves the road to socialized medicine.

If we value our health and our freedom, what we need is liberty in medicine -- and allies wiling to advocate liberty rather than statism masquerading as privatization.

Foolish Price Controls

It's almost as if Colorado Democrats are trying to actively destroy what's left of the private health-insurance market so that they can later impose socialized medicine. Yet, even though a Democratic plan to impose price controls should be an April Fools' joke, these legislators seem to be deadly serious, with an emphasis on the term "deadly."

The AP reports: "Democrats plan to introduce a package of bills to require health insurance firms [in part] to get prior approval for rate hikes..."

This is the same legislature that has imposed various mandates on insurance benefits, thereby driving up the cost of insurance.

It's just hard for me to believe that Democrats are this ignorant of basic economics. What is driving the artificial inflation of health-insurance costs is precisely the large collection of political controls over insurance. If it weren't for those controls, health insurance would cost far less, and many more people could afford it. But the Democrats have, so far as I have heard, expressed zero interest in repealing those controls. So what will happen if politicians add price controls to the mix? The result will be a shortage: fewer people will be able to obtain health insurance.

These Democrats seem to forget that a market price is determined by both consumers and producers. And both parties have the right to participate in arrangements by voluntary choice, without political meddling.

Note to Democrats: if you'd get a clue about economics and figure out that politicians do a horrible job of running the economy, you would pick up voters like me in a heart-beat. As I've recently discussed, I've already started voting for Democrats just because I'm so disgusted with Republicans. But this crazy talk about price controls and the like reminds me that Democrats want to control my every economic decision just as Republicans want to control my every personal decision. Is there anyone in Colorado government who actually understands and cares about liberty? It would sure be nice to have the option of voting for a candidate who didn't try to to run other people's lives for them.

National Health Care Systems

The Cato Institute has released Michael Tanner's March 18 Policy Analysis titled, "The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World." The summary states:

...[N]early all health care systems worldwide are wrestling with problems of rising costs and lack of access to care. There is no single international model for national health care, of course. Countries vary dramatically in the degree of central control, regulation, and cost sharing they impose, and in the role of private insurance. Still, overall trends from national health care systems around the world suggest the following:

* Health insurance does not mean universal access to health care. In practice, many countries promise universal coverage but ration care or have long waiting lists for treatment.

* Rising health care costs are not a uniquely American phenomenon. Although other countries spend considerably less than the United States on health care, both as a percentage of GDP and per capita, costs are rising almost everywhere, leading to budget deficits, tax increases, and benefit reductions.

* In countries weighted heavily toward government control, people are most likely to face waiting lists, rationing, restrictions on physician choice, and other obstacles to care.

* Countries with more effective national health care systems are successful to the degree that they incorporate market mechanisms such as competition, cost sharing, market prices, and consumer choice, and eschew centralized government control. ...

After Tanner discusses meaningful and bogus ways to compare health care across nations, he takes a detailed look at specific countries, including France, Italy, Spain, Japan, Norway, Portugal, Greece, Netherlands, Great Britain, Switzerland, Germany, and Canada. While I have not yet read the entire report, it promises to provide crucial information for Americans trying to grapple with existing problems with U.S. health care.

Team Hsieh

Congratulations to Coloradans Paul and Diana Hsieh, who each had letters published recently in big papers.

Paul's letter to The Christian Science Monitor states:

... National healthcare programs violate the rights of consumers and healthcare providers to contract freely for medical services according to their best judgment. Such programs inevitably lead to rising costs and rationing, as demonstrated repeatedly in Sweden, Canada, and the United Kingdom.

In contrast, the free market consistently lowers costs and increases availability. Those sectors of medicine that are least regulated by the government (such as LASIK and cosmetic surgery) have shown the typical pattern over time of falling prices and rising quality that we take for granted in the rest of the US economy. Because the free market respects individual rights, it is the only practical and moral solution for the problem of rising healthcare costs.

Diana's reply to a column by Dick Armey states:

Thanks to Dick Armey... for defending intellectual property in broadcast radio as a matter of justice to the creators.

Today's producers of music artists, management and record companies offer consumers around the world a vast array of music for all tastes. Those producers deserve to be rewarded handsomely for their efforts, not cheated of royalties by legal loopholes for broadcast radio or online file sharing.

While the Hsiehs cover quite different topics in these letters, both letters uphold the principle of individual rights.

Tanner Defends Liberty in Medicine

Michael Tanner of the Cato Institute spoke at the Independence Institute March 6 about health policy. (He is shown with Lin Zinser of Freedom and Individual Rights in Medicine and Brian Schwartz.)

The bulk of Tanner's speech (around 37 minutes) is available here in mp3 format.

Tanner began by noting that the U.S. has the best health care in the world, despite its problems. While life span is not an appropriate basis for comparison because many other important factors impact it, the U.S. performs well in terms of outcomes for diseases.

While some complain that the U.S. spends "too much" for health care, Tanner noted that reducing costs is not an end in itself. "It's very cheap not to provide health care," he said. The problem is that American health care often is not subject to market pricing.

Another problem is that "too many people... are uninsured." However, Tanner added, often-cited measures of the problem are misleading. Because insurance is tied to employment, people often lose their insurance for a short time as they change jobs.

Tanner then reviewed harmful policies and proposals in Britain, Canada, and the U.S., such as the attempt by some to force employers to provide insurance for all employees. That proposal "flunks Econ 101," Tanner said, because it would reduce wages elsewhere and/or result in more unemployment.

What about forcing individuals to purchase insurance? Tanner noted the real costs of forcing emergency rooms to treat people without compensation. (Tanner did not suggest any change to that policy, though I have argued against it.) However, Tanner noted, such costs account for only around 2.5 to 4 percent of health-care spending, rendering them "somewhat manageable."

The problems of insurance mandates, on the other hand, would be severe. Such insurance would be subject to political rules; people would no longer be free to purchase the insurance they wanted. Insurance mandates are difficult to enforce, and it's impossible to force everyone to buy insurance. Mandated insurance is subject to continual pressure by interest groups to expand coverage, which expands costs and leads to limits on care.

Tanner said that the most important reforms must take place at the federal level, particularly regarding the tax code that entrenches expensive, employer-paid insurance. At the state level, the cost of insurance can be reduced by eliminating various mandates.

The key question, Tanner said, is this: "Do you decide, or does someone else decide for you?"

Update on Health Studies

In a February 10 article for The Denver Post, Katy Human wrote, "Children with health insurance, studies have shown, are less likely than uninsured kids to end up in emergency rooms, more likely to get key vaccinations and less likely to be absent from school."

My immediate thought upon reading this claim is that it doesn't indicate the causal relationship. So I asked Human about this, and she replied that the studies "control for factors such as income and education of parents." I wanted to check this and see what else the studies have to say, so I asked Human to provide me with the citations. On February 21 Human sent me a list of studies. Linda Gorman looked into the studies, and then Dave Kopel also took an interest in them. He checked into the studies originally mentioned by Human, looked at other studies as well, and wrote up his results for the March 8 Rocky Mountain News:

None of five studies Human cited after the fact support her article's statement about what "studies have shown" regarding the effects of insurance on emergency room use, vaccinations and school absences. Indeed four of the five studies she cited do not even address those topics (Cousineau, Medical Care, 2008; Skinner, BMC Health Services Research, 2007; Ward, CA: A Cancer Journal for Clinicians, 2008; Morbidity & Mortality Weekly Report, Sept. 7, 2007).

One study cited by Human was relevant, and it directly contradicted her article's claim. The study looked at the effect of providing SCHIP coverage (subsidized insurance for children whose families have too much income to qualify for Medicaid). Emergency room usage "did not change," the study found. (Szilagyi, Pediatrics, 2004).

... [Later] Human supplied two more citations to substantiate her article's claim about emergency rooms. One of the studies was irrelevant, a 2002 Centers for Disease Control and Prevention report which reported no data about frequency of emergency room use for the insured and uninsured.

Human supplied another study which did support her claim. William Johnson and Mary Rimsza investigated Yuma County, Ariz., and found that uninsured children there use emergency rooms more often. The Johnson and Rimsza article, published in Pediatrics in 2004, forthrightly acknowledged that four other studies have found that taxpayer-funded insurance for children actually increases emergency room usage, and a fifth study finds that there is no effect. Johnson and Rimsza suggested that results were different in Arizona because the state's medical welfare program links recipients to pediatricians, and having a pediatrician drastically reduces ER visits for both the insured and uninsured.

Of course, a broad correlation between lack of insurance and emergency-room visits is still possible for at least a couple of reasons. First, some people without insurance are more likely to visit the emergency room -- which by law must provide care for no compensation -- for care that is less-expensively offered at the regular doctor's office or at lower-cost clinics. Second -- and this point also applies to vaccinations and school attendance -- parents who purchase health insurance for their children may be more likely to be employed, make more money, have a higher level of education, live in safer neighborhoods and homes, encourage healtheir lifestyles for their children, and insist on regular school attendance. This is a statement only of anticipated averages; many model parents are less wealthy, and many parents pay for their children's health care out of pocket rather than through insurance.

However, the thrust of Human's article was not to reveal correlations regarding health insurance, but to advocate more tax funding for health programs. Everyone can agree that it would be good for more parents to buy health insurance for their children (though insurance as such should move in the direction of high-deductible policies with routine expenses paid out of pocket). But expanded tax subsidies create all sorts of problems with incentives, such as by encouraging some parents to drop private insurance in favor of tax-funded welfare.

It's quite a leap from "insurance for children is good" to "politicians should expand their control of medicine." Indeed, as Lin Zinser and Paul Hsieh argue, the proper way to make health-insurance more affordable is to repeal the existing political controls that have made it so expensive.

The Sin is the Tax

So-called "sin taxes" are appropriately named, because it is morally wrong to forcibly transfer wealth even if the taxes discriminate against politically-incorrect behavior. Here's the latest from the Rocky Mountain News:

...Denver Democrat [Rep. Jerry Frangas] very quietly drafted a bill introduced this week that would raise alcohol taxes 2 percent to cover all of Colorado's 180,000 uninsured children.

The tax of 11 cents, for example, on a $5.49 six-pack of Budweiser, would raise about $57 million for the state children's health care program. When paired with federal matching funds, Frangas said it would provide up to $150 million.

In other words, through the magic of federal "matching" welfare payments, Frangas can capture a portion of the national income tax by imposing a state sales tax. That way, Frangas can also force people in every other state to fund the health care of select Coloradans. Ah, the glories of federalism in the modern age.

But socialized medicine is fine, "for the children," right? On the contrary, generally parents have a moral obligation to fund their own children's health-care expenses, and they should plan their families and expenses accordingly. Of course, parents whose children suffer unexpected, catastrophic illnesses already benefit from a wide array of voluntary charity programs (often in addition to insurance payments), as is appropriate. All of us want to see innocent children taken care of, which is exactly why even today's mixed economy often provides for their needs and why a truly free market would do so even better. However, unlike force-funded welfare, voluntary charity is more likely to discourage dependency and irresponsibility on the part of the parents. Offhand, I don't have a good estimate for how much socialized medicine "for the children" displaces private insurance (and discourages parental responsibility), but the figure is large. And, obviously, socialized medicine "for the children" is merely a stepping stone to socialized medicine for everyone. As one advocate of politically-funded medicine reportedly said, "[S]ome of you may think of me as an incrementalist. I prefer to think of myself as a sneaky sequentialist."

If politicians really wanted to help, they would repeal the interventions that have artificially increased the costs of health care and insurance and reduced access to medical services especially among the poor (as Lin Zinser and Paul Hsieh explain.)

What about a tax on alcohol? I oppose sales taxes in general. But, so long as there is a sales tax, it is wrong to discriminate against some people (in this case consumers of alcoholic beverages) and select legal activities. No doubt advocates of the tax on alcohol will argue that the tax would fund a "worthy" welfare program while discouraging a vice. But it is the proper role of government to protect individual rights, not to socially engineer behavior desired by politicians. While obviously alcohol can be abused -- as can many other properly legal products -- there is nothing inherently rights-violating or irresponsible about drinking alcohol. And purchasers of alcohol ought not be uniquely forced to subsidize other people's children.

Schwartz Beats Polis's Health Argument

In a February 13 Speakout column in the Rocky Mountain News, Jared Polis, the gazillionaire running for Congress (in my district), argued:

[L]et us not delude ourselves into thinking that we have anything close to a "free market" in health care. A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for. Having made a moral decision not to allow people in our great country to die in this fashion, let us discuss how to more efficiently provide for sensible universal health care.

Polis is correct that we do not have a free market in health care, but his description of a free market is completely ridiculous. My dad and I have already addressed the argument that Polis makes, and I wrote a lengthier critique along the same lines.

Brian Schwartz challenged Polis directly. In a comment to Polis's article, Schwartz argued:

Jared Polis writes: "A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for."

This is a pathetic argument. Is Mr. Polis so heartless that he wouldn't help such a person if the law didn't compel him to do so? Or if he would, does he think that doctors are so heartless? Give me a break, Jared.

In the wake of the French Revolution, French economist Frederic Bastiat wrote that "every time we object to a thing being done by government, the socialists conclude that we object to its being done at all...It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."

Apparently nothing has changed.

And on his blog, Schwartz adds:

[I]t is not hard to imagine that our community would provide such care even if a politician’s law didn’t compel us to do so. It’s not hard to imagine, because people do it. Consider the Shriners Hospitals for Children. According to Charity Navigator, their total revenue exceeed $640 million in 2005. In Colorado, private philanthropy accounted for almost $200 million in medical care for the uninsured. ...

The above examples do not address emergency situations, but it’s difficult to imagine that people in our society would voluntarily donate money to provide medical care for the uninsured in non-emergency situations, but not in emergency situations. Jared Polis, can you shed some light on this?

According to Jared Polis, a law is required compel doctors to treat the uninsured in emergency situations. Is Polis saying that doctors are so heartless and cruel that they would not treat someone for free? Is he saying that the electorate as too callous to fund charities to pay such that doctors could treat the uninsured in emergency situations?

Apparently, the answer is “yes.” Polis writes that we have “made a moral decision not to allow people in our great country to die in this fashion.” Not quite. Moral decisions are a matter of choice, not a threat. EMTALA threatens doctors with penalties up to $50,000 for not complying.

So Jared Polis thinks that the citizens of Colorado and Colorado’s physicians must be forced to do the right thing, since they lack the moral fiber to do it themselves. And yet, Jared Polis seeks public office, to represent us, the very people he doesn’t trust to do the right thing. So if the (apparently immoral) citizens of Colorado’s 2nd District elect Mr. Polis, how can we trust him to do the right thing?

Polis is clearly out of his depth. So he should fit right in should he move to Washington, D.C.

A Very Costly Health-Care Solution

The following article originally was published by the Rocky Mountain News:

SPEAKOUT: A very costly health-care solution

By Linda Gorman and Ari Armstrong
Wednesday, January 30, 2008

As the health-care debate unfolds, we hear a lot about cost-shifting, the idea that some people are charged more for health care to make up for the fact that others do not pay. Various legislators, journalists and activists tell us that the state should adopt the Blue Ribbon Commission on Health Care Reform's recommendation to impose an individual mandate and force everyone to buy health insurance in order to end the unfairness of cost-shifting.

In fact, the commission's recommendations likely will shift more costs onto those who already have insurance. Along with the individual mandate, the commission recommends large subsidies for those whom the commission considers too poor to purchase the insurance it says they should have.

Under the commission's plan, people with health insurance would be taxed to subsidize health insurance for single people making as much as $40,000 a year, and families of four making as much as $82,600 a year. Many of these people pay for their own health care now, or have the assets to do so in an emergency.

The commission would also increase cost-shifting by forcing many more people into Medicaid.

Because Medicaid pays so little to providers, Medicaid as a whole generates far more uncompensated care and cost- shifting than the uninsured.

Those who advocate an individual mandate throw up all kinds of numbers to support the wild claims that the proposal would save everyone money. A Jan. 8 article from The Denver Post claims that "Coloradans who have insurance spend an extra $950 each year to cover the costs of those who show up at the hospital without insurance."

The article attributes the number to state Rep. Anne McGihon, who said that the figure comes from Partnership for a Healthy Colorado. Partnership for a Healthy Colorado, in turn, says it got the figure from Families USA, which published a paper in 2005. That paper's estimates were unable to accurately predict the percentage of uninsured residents in Colorado. The paper also grossly overestimated at least some costs of uncompensated care.

The Lewin Group, the modeling firm hired by the commission to collect information about Colorado, reported total Colorado expenses for the uninsured of about $1.4 billion. Of that amount, around 45 percent, or $627 million, was paid out-of-pocket by the uninsured themselves.

Private philanthropy covered $197 million. Another $341 million was paid by the Veterans Administration, workers compensation and various public programs.

The leftover uncompensated costs, the ones that are not paid by any identifiable source, total $239 million. Divide $239 million by Colorado's 2.8 million insured residents, and the result is a maximum likely cost-shift of about $85 per insured individual per year.

To "fix" the problem of $239 million in cost-shifting, the commission proposes to increase health spending in Colorado by more than $3 billion, funded with an income tax increase of $800 million to $1.8 billion, new taxes on various politically incorrect types of food and drink, and an increase in the cigarette tax.

The sensible way to solve cost-shifting is to reduce health-care costs so that people fund their own health care, not to force people to buy insurance created by special-interest groups or to expand Medicaid. Professor Christopher Conover of Duke University estimates that 10 percent of annual health costs are caused by inefficient regulation. Results from experiments in consumer-directed health-care plans suggest that freeing consumers, providers and insurers can reduce costs by up to 30 percent.

The hostility of the commission to any plans like this was summed up in two votes that took place one after another on the same day. First the commission voted to recommend that the state legislature study single-payer health reform plans. Then it voted not to recommend that the legislature study consumer-directed reforms. While single-payer plans have failed around the world, consumer-directed reforms are succeeding wherever they're given the chance.

Linda Gorman, a senior fellow with the Independence Institute, serves on the Blue Ribbon Commission for Health Care Reform. Ari Armstrong writes for FreeColorado.com.

March 8, 2008, Update: After reading Dave Kopel's article about citations, it occurred to me that I had not provided the citations for the article above, so here they are, as provided by Linda. The first eight references refer to the "experiments in consumer-directed health-care plans."

1. Willard G. Manning et al. June 1987. “Health Insurance and the Demand for medical Care: Evidence from a Randomized Experiment.” American Economic Review, 77,3, p. 251-275.
* The abstract says “A catastrophic insurance plan reduces expenditures 31 percent relative to zero out-of-pocket price.”
* In the body of the paper they predict expenditures and find that “Mean predicted expenditure in the free care plan is 46 percent higher than in the 95 percent plan…” (p. 260)
2. Agenda, FY 05-06 Joint Budget Committee Hearing, Department of Health Care Policy and Financing, State of Colorado, January 4 and 5 2005. In response to question 32 the Department wrote: Average monthly allocation per client, $3,925. Average monthly expenditure per clint:$3,131 per client. This works out to a monthly saving of 20%.
3. “Full placement feat: HSA helps Wendy’s grill health costs,” Employee Benefit News, June 1, 2006. Gale Infotrak version, record A146476601. Reports that the return on investment for HSA program is 221% due to the fact that health claims costs fell by 14% from 2004 to 2005 and are on track to be 4% less than last year.
4. Silicon Designs experiment in 2005/2006. Lower out-of-pocket costs from employees (4.9 %) Lower company cost, from about 17% of salaries paid to about 15 percent of salaries paid. John Cole. “Report on One Year of Experience with HSAs/HDHPs,” http://www.silicondesigns.com/hsa.pdf. Accessed March 8, 2008.
5. Humana, Inc. June 2005. “Health Care Consumers: Passive or Active? A Three-year Report on Humana’s Consumer Solution.” http://apps.humana.com/marketing/documents.asp?file=519272 accessed March 8, 2008. A report on a three year internal experiment with a consumer directed plan for Humana employees. Cost increases were lower than trend by roughly 15 percent over the two years.
6. Wharam et al. 2007. “Emergency Department Use and Subsequent Hospitalizations Among Members of a High-Deductible Health Plan,” JAMA, 297, 1093-1102. This article looks at ED visits and subsequent rehospitalizations among members of a health plan that switched a fraction of insureds from a traditional HMO to a high deductible plan in 2001-2005. It concludes that ED visits decreased in those switched to high deductible plan with reductions primarily in repeat visits for conditions that were not high severity and in the rate of hospitalizations. It does not conclude anything about spending clinical outcomes.
7. J. Hsu et al. 2006. “Cost-sharing for emergency care and unfavorable clinical events: findings from the safety and financial ramifications of ED copayments study,” Health Services Research, 41, 5, 1801-20. Another study of the effects of copayments on ED use that does not directly address expenditures but does find that ED visits decrease with no apparent health effects when payments range from $20 to $100.
8. John Mackey. October 2004. Whole Foods Market’s Consumer-Driven Health Plan. A speech delivered at the State Policy Network Annual Meeting. Transcript available at http://www.worldcongress.com/news/Mackey_Transcript.pdf.

Christopher J. Conover. October 4, 2004. Health Care Regulation a $169 Billion Hidden Tax, Policy Analysis No. 527, Cato Institute, Washington DC. http://www.cato.org/pubs/pas/pa527.pdf

Withhold Medicine from the Elderly and Obese?

Advocates of politically-controlled medicine in the U.S. and in Colorado typically make two major errors. First, they conflate today's mixed economy in medicine, in which decades of political controls have wreaked havoc with the provision of medical services, with the "free market." Second, they claim that a "free market" would heartlessly fail to provide medical services to people who need them.

For a little dose of reality, check out a January 28 article by the UK's Telegraph. It is socialized medicine that pits doctors against patients and that rations care:

Don't treat the old and unhealthy, say doctors
By Laura Donnelly, Health Correspondent
Last Updated: 2:09am GMT 28/01/2008

Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives.

Smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations, according to doctors, with most saying the health service cannot afford to provide free care to everyone. ...

About one in 10 hospitals already deny some surgery to obese patients and smokers, with restrictions most common in hospitals battling debt.

Managers defend the policies because of the higher risk of complications on the operating table for unfit patients. But critics believe that patients are being denied care simply to save money.

This reminds me of Colorado's former Governor Dick Lamm, who once said that the elderly have a "duty to die."

The central problem is that, when everyone is paying everyone else's medical bills, everyone wants to spend as much as possible on his or her own medical care but as little as possible on everyone else's medical care. Conflict is built into the system.

By contrast, a truly free market is characterized by voluntary cooperation among doctors, patients, insurers, and charitable organizations.

When politicians and bureaucrats control medicine, they necessarily tend to try to control the personal lives of the citizenry. The Telegraph continues:

The Government announced plans last week to offer fat people cash incentives to diet and exercise as part of a desperate strategy to steer Britain off a course that will otherwise see half the population dangerously overweight by 2050.

Obesity costs the British taxpayer £7 billion a year. Overweight people are more likely to contract diabetes, cancer and heart disease, and to require replacement joints or stomach-stapling operations.

Under politicized medicine, when medical care is "free," people have less incentive to take care of their health. And taxpayers, politicians, bureaucrats, and health-care providers have more incentive to try to micromanage the lives of everybody else. As Lin Zinser and Dr. Paul Hsieh point out, "When the government pays our health care bills, in order to save money, it inevitably demands greater control in how we lead our daily lives."

Force Versus Choice in Medical Care

Some days ago "Yaakov" left a comment regarding the article, "More political control of medicine comes with higher costs." That article contains the following paragraph:

[W]hy is it that some people can demand "free" care from hospitals in the first place? After all, people can't force businesses to give them "free" food or clothing. The reason is that the "Emergency Medical Treatment and Labor Act of 1985 [EMTALA]... requires that hospitals that accept Medicare patients diagnose and treat anyone who comes within two hundred feet of an emergency room, regardless of whether the person can pay for the treatment" (see the article by Lin Zinser and Paul Hsieh, MD, at TheObjectiveStandard.com). We should repeal that unjust law and return to a system of voluntary charity.

I decided to post Yaakov's comment with my reply. Here is the comment:

January 23, 2008 12:39:49 AM MST

Granting for a moment that all of your information is accurate, an issue remains.

If the law is changed, it will become legal for a doctor to watch somebody die in front of him and not spend any effort or money to save the dying person.

Would you go to a doctor who had let a child bleed to death because the child had no insurance? How would you feel if it was your next door neighbor's kid and your brother was the doctor? Would you want to be that doctor?

This is a country that spent $10 billion on pet medical care. We fly sick kids in from third world countries to do $500,000 operations for free. We will not put up with poor children dying outside hospitals that only admit the rich.

We may go bankrupt, but something significant in our brains is going to have to change before the changes you advocate will be enacted.

My dad and I responded to a similar charge in a follow-up article of February 4. Here I'll reiterate and expand some of those arguments.

Yaakov's basic error is to assume that every desirable outcome must and ought to be forced by political controls backed by men with guns. Thus, by this reasoning, if we want doctors to treat bleeding children, we must force doctors to treat them without compensation.

Yaakov's assumption that good outcomes require political force is clearly false. Indeed, political force interferes with good outcomes. For example, the fact that Soviet economic planners forced people to produce an efficient industrial society did not, in fact, achieve an efficient industrial society. It created mass poverty and starvation.

The fact that various nations impose socialized medicine does not prevent people there from dying from lack of care. Under socialized medicine, it is, in effect, sometimes "legal for a doctor to watch somebody die in front of him and not spend any effort or money to save the dying person." Under socialized medicine, the practice is not only permitted, it is inevitable. For details, see the section, "Attempted Solutions," in the article by Zinser and Hsieh.

But let's examine the central errors of Yaakov's position in more detail. If Yaakov actually believes his claims, then he should also advocate the following policies:

* If someone comes to Yaakov's house and claims to need a bed for the night (or the week, or the month), then Yaakov must be forced to provide the comer with a bed without compensation. If Yaakov refuses, he'll be subjected to severe financial penalties. It should make absolutely no difference whether Yaakov has an extra bed, whether Yaakov has other plans for his beds, whether the comer can afford to rent a bed elsewhere, or whether Yaakov thinks that the comer deserves a free bed.

* If someone comes to Yaakov's house and claims to need food, clothing, or any other essential item, Yaakov should also be forced to provide those things, without limit, and without compensation.

* Let us assume that Yaakov owns a business. If someone comes to Yaakov claiming to need a job in order to be able to afford the basic necessities of life, then Yaakov must be forced to provide the person with a job, regardless of whether Yaakov can afford the salary, and regardless of whether the person is willing and able to perform any useful work.

* If someone approaches Yaakov and claims to need his car for an essential purpose -- such as a trip to the hospital -- then Yaakov must be forced to lend his car to the person, without compensation, regardless of whether the person could get transportation elsewhere.

If doctors should be forced to provide service to any comer, regardless of circumstances, then grocers should also be forced to give out free food to anyone who claims to need it, clothing stores should be forced to give away free clothing, and so on.

Imagine the sort of society in which we would live if Yaakov's policy were consistently imposed. It would be a society in which people competed, not to produce and prosper, but to make themselves as needy as possible. Why get an education, why work, why treat others fairly, if you can just take whatever you want by force?

Recently I quoted a passage from Atlas Shrugged that perfectly sums up the sort of society that Yaakov implicitly advocates:

It didn't take us long to see how it all worked out. Any man who tried to play straight, had to refuse himself everything. He lost his taste for any pleasure... He felt ashamed of every mouthful of food he swallowed, wondering whose weary nights of overtime had paid for it, knowing that his food was not his by right, miserably wishing to be cheated rather than to cheat... [H]e couldn't marry or bring children into the world, when he could plan nothing, promise nothing, count on nothing. But the shiftless and the irresponsible had a field day of it. They bred babies... they got more sickness than any doctor could disprove, they ruined their clothing, their furniture, their homes -- what the hell, "the family" was paying for it! They found more ways of getting in "need" than the rest of us could ever imagine -- they developed a special skill for it, which was the only ability they showed. (pages 619-20)

Forcing people to provide assistance to others, whatever the details, is grossly immoral and a violation of individual rights. The ultimate conclusion is Marx's dictum, "From each according to his ability, to each according to his need," with "need" determined by whoever seizes power.

The alternative is liberty. Each individual has the right to decide how to live his own life and use his own resources. In a system of individual rights, individuals often choose, by their own volition and good will toward others, to help others in need. However, such individuals also tend to make sure that their charitable donations are spent well to help those who deserve it without encouraging dependency.

Yaakov offers the sympathetic case of a child bleeding to death. Of all the people I've met, including Christians, Muslims, atheists, Republicans, Democrats, and so on, not a single one of them (save criminals) would hesitate to take every conceivable step to save a child in such circumstances. I also know a number of doctors, and they deserve far better than Yaakov's unjust insinuation that they will not help those innocently in desperate need unless they are forced to do so. Typically doctors are among the first ones to rush to the scene of an emergency.

Even in our semi-free market, all sorts of charitable organizations exist specifically to help children. For instance, my dad is a Shriner:

Shriners Hospitals for Children relies on the generosity of donors to help us continue our mission of providing specialized pediatric care at no charge, conducting innovative research and providing world-class teaching programs for physicians and other health care professionals.

In a truly free market, I suspect that most hospitals and clinics would offer charitable services. Because marginal costs often are much lower than average costs (due to the high costs of facilities and machinery), many health providers would also offer sliding scales for payment options.

But don't parents bear any responsibility for raising their children? If parents were, in normal circumstances (as opposed to cases of rare, expensive problems), required to pay their health bills, perhaps parents would think twice about having children that they cannot afford to support. Perhaps parents would take better care of their children, reducing the chances of needing a trip to the emergency room. Perhaps in non-emergency situations parents would seek out less-expensive care options, such as regular doctors' offices. Perhaps more parents would purchase health insurance. Perhaps more parents would realize that they have to save money for health expenses, just as they have to save money for the rent and groceries. Perhaps more parents would take out short-term loans to pay off health expenses. Why should doctors (but not any other professional class) be forced to pay for parental irresponsibility?

But let us consider even less sympathetic cases as well. What about the people who could pay for their health care but choose to freeload? To take another example, one cycle proceeds as follows: an impoverished alcoholic, in rough shape because of a lifetime of bad choices and irresponsible behavior, drinks himself into unconsciousness, so somebody calls an ambulance, which takes the drunk to a hospital, which then must spend many thousands of dollars drying the guy out and fixing his self-induced medical ailments. Repeat this process every few weeks. Does Yaakov really believe that hospitals should be forced to treat, without compensation and without limit, chronic alcoholics, drug addicts, and gangsters who live by violence?

If we could attain a free society, that would imply a healthier culture in which such problems would be reduced. However, assuming the persistence of such problems, I do not doubt that a variety of charitable programs would be available even for such hard cases (as they are today). However, if I were running such a program, I would also impose very strict conditions for assistance. Alcoholics and drug addicts would have to clean up their lives, and criminals would have to work and live under controlled conditions. Charity in such cases should focus on rehabilitation and should avoid enabling self-destructive lifestyles.

Not only do existing rules encourage irresponsibility, they also harm the responsible. Not surprisingly, it is the unjust, immoral policy that Yaakov advocates that is responsible for depriving some people of health care. As Zinser and Hsieh point out:

[A]s a result of EMTALA, hospitals are closing emergency rooms. According to the American College of Emergency Physicians, from 1993 to 2003, while the U.S. population grew by 12 percent, emergency room visits grew by 27 percent -- from 90 million to 114 million visits. In that same period, however, 425 emergency rooms closed (14 percent of the ERs that existed in 1993), along with 703 hospitals and nearly 200,000 beds. More close every year.

By mandating that doctors and hospitals treat patients at a financial loss, EMTALA violates the rights of doctors and hospitals to set the terms of their business. Consequently, doctors who are unwilling to lose money or who are tired of treating dishonest patients withdraw from emergency rooms. This leads to more overcrowding, longer waiting times, and, in some cases, the closing of ERs. As the remaining ERs become still more overcrowded and understaffed, the quality of emergency room services necessarily declines, harming honest patients who have genuine emergencies.

As Zinser and Hsieh argue, the problems with modern medicine are caused by the imposition of political force. Today, many immoral political policies impose force, violating the rights of doctors, patients, and insurers. A just system, and a system that offers the best medical care, is one in which the rights of doctors, patients, and other parties are consistently protected.