Friday, August 28, 2009

Articles on Health Care "Reform"

There are a series of good articles on health care posted at Capitalsim Magazine.

Here are several by economist Thomas Sowell:

Obama Cronies vs. American Citizens: Whose Medical Decisions: Part I

Obamacare's Phony Arguments: Whose Medical Decisions? Part II

Obama's "Bait and Switch": Whose Medial Decisions?: Part III

The Obama Vision:" Whose Medical Decisions?: Part IV

John Lewis demonstrates why health insurance and medical care have become so expensive by relating the process through describing what would happen if we made auto insurance a right.

Suppose Car Insurance Was Considered to be a "Right"

And finally, posted on the von Mises Institute website, Dr Maria Martins explains why medical care and health insurance can NOT be a right.

"Involuntary Medical Servitude"

Congressman Rogers on Health Care

Several good points are made, some of them are as follows:

1. Even accepting the inaccurate figure of 47 million/15% of the US population as uninsured, the remaining 85% of the country does have health insurance--which means that the vast majority of people have been able to take care of their health insurance needs without government.
2. The false dichotomy of "It's this plan, or do nothing."
3. The inferiority of medical treatment results under socialized health insurance.
4. The explosive growth of government mandates over what should be the private decisions of individuals--the kinds of cars, windows and light-bulbs we can buy, and now even the details of our medical care.

HT TIA Daily

Wednesday, August 26, 2009

Jefferson on Liberty

"I would rather be exposed to the inconveniences attending too much liberty
than to those attending too small a degree of it."

-- Thomas Jefferson (1743-1826) Source: Letter, 23 December 1791

HT Liberty quotes

Tuesday, August 25, 2009

"Safety" gone too far

When I read this latest post at 3 Ring Binder, it made me shudder and then feel terribly discouraged. But, sometimes, now matter how horrible it is, it is a mistake to look the other way.

Bleeding to Death: The Price of Doing Business.

In a startlingly accurate description of the reason for business failure, today’s Boston Globe reports on the demise of Biopure, a Massachusetts biotech company working on a substitute for human blood. The article reports that the company “could never clear regulatory hurdles that would have turned the substitute into a mainstream medical product.”

Hemopure showed many benefits compared with real blood: a three-year shelf life, the ability to be used by patients of any blood type, and freedom from diseases and pathogens that could be transmitted by human blood.

The path to Food and Drug Administration approval, however, was rocky. Although the Navy was interested in using the experimental product to treat military personnel wounded in battle, the FDA consistently rejected efforts by Biopure and the Navy to test it in clinical trials, citing safety worries and other concerns. [emphasis mine]
I’m glad the FDA was on the case because without their power to stop experimentation with the substitute, we may have been unsafe or had some other concerns.

Now we can all just sit here and safely bleed to death without concern.

Thursday, August 20, 2009

Quick Note: Source for health care spending data

In a comment, I was asked:

"Health care expenditures in this country are already half public . . ."

I have heard this before, but can't find a source. Can you suggest one?
This is an important issue. So many statistics are thrown around in political debates, and rarely are the sources referenced. My sources for the above statement have been multiple, but today I tracked down where the figures originated from.

One source is a report from Dept. of Health and Human Services, the "Long-Term Growth of Medical Expenditures — Public and Private" The first pie chart visually compares public and private funding from 1960 and 2003. (Purple is public, blue is private)

Another data source is the Center for Medicare and Medicaid Services, a division of the Dept. of Health and Human Services. See: National Health Expenditures>>Historical. Scroll down to Downloads, and then retrieve the "NHE summary including share of GPD, CY 1960-2007." If you open this spreadsheet, you will find the following data for 2007:

National health exp.

Private $ 1,205.50 billion -- 53.8%

Public $1,035.70 billion -- 46.2%

Total: $ 2,241.20 billion

In order to be more accurate, I should change my statement to read "Health care expenditures in this country are nearly half public . .." But this does not change the underlying principle that since 1960 there has been an explosive growth in government's share of health care funding. This growth has been accompanied by a similar increase in government regulation and control of the shrinking private sector--which adds even more to the cost of providing care.


Congressman--Watch your Language

Listening in on a local Telephone Townhall Meeting last night, I was struck by the repeated and blatant misuse of words----employing the language of the free market when referring to actions and programs that have little to do with, or are the exact opposite of, the implied meaning. Here's just a few of them: competition, insurance, capitalism.

It's like Iran calling itself a republic in the hopes that we fail to notice the brutal tyranny perpetrated by the government upon its people.

Here's a brief, closer look at these terms.


In a free market, companies compete for customer's voluntary purchases by offering the best product for the best price. Prices are set according to the laws of supply and demand. Efficiency in resource use and in meeting customers needs is rewarded by profits. Inefficiency and misjudging customer priorities is disciplined through financial loss.

But the "public health insurance option" that we are told we need to provide "competition" for private insurance companies, will be funded not voluntarily, but primarily through income redistribution via taxes. Prices are to be set through regulation and legislation (the laws of men---not the laws of supply and demand.) Incredibly, we are told this public option will be more efficient because it does not have to earn a profit. But profit is the mechanism by which we discover what is efficient. When your "competitor" is also the rule-maker and the referee, and the rules are designed so that "competitor" will not be allowed to fail, the game is rigged. Calling it "competition" doesn't change that.


Insurance is a means of financially protecting oneself from costly, unexpected and unpredictable events--not from the predictable, expected and affordable. An insurance company is able to provide this service by balancing risk against the premiums it collects. There are good reasons there is no market for food insurance, and why our homeowners insurance protects against earthquakes and fires but not the routine maintenance of painting or gutter replacement. There are also good reasons you can not buy life insurance after a person dies, or car insurance to cover you for a wreck that already occurred.

But the "public option" will not allow premiums to be adjusted for risk, and "insurance policies" will be required to be sold regardless of pre-existing conditions. In a free society, people may indeed choose to assist those who can not afford important goods or services, or who are suffering from unfortunate events and circumstance, but those activities are properly referred to as welfare or charity. If the government mandates such support, it is wealth distribution--not insurance.


I repeatedly hear that the current health care system is broken, that we "cannot afford the status quo," and then hear the current system referred to as "free market" or "capitalistic." It is not. Our economy is a mixture of free market and government-controlled central planning. I realize many people are finding it harder to afford health insurance and medical care, but in a system where freedom and government control are so intimately and complexly combined, it should be open for debate which aspect of the mixed economy is the cause of rising prices and shrinking affordability.

Health care expenditures in this country are already half public and half (heavily regulated) private. Sound economic arguments exist which explain how it is the public (centrally planned) half which created the "status quo" and why increased privatization (i.e. capitalism) is the the solution.

Don't be fooled by the incorrect use of these terms. Proponents of increased government control over your private health matters are using the language of freedom and and capitalism to sneak in a system that has more in common with the central planning of socialism and fascism than it does with the individual rights protected in our Constitution.

War is Peace
Freedom is Slavery
Ignorance is Strength

Monopoly is Competition
Welfare is Insurance
Central Planning is Capitalism

It's 1984 by stealth.

(I know I promised a post on administrative costs. It's coming.)

Tuesday, August 18, 2009

Insurance vs. Welfare

In a news conference on 7/23/09, President Obama said:

"[N[o insurance company will be allowed to deny you coverage because of a pre-existing medical condition."

At first glance, this may sound like a compassionate stance. However, if enacted, it would destroy the entire health insurance industry, eliminating any private option for health care insurance--which means eliminating health insurance as such. The only remaining option would be government-funded medical care--which is equivalent to putting everyone on medical welfare. Not so compassionate after all.

For an explanation of why this is so, see "Heath Insurance Negation Plan" and "Dems Plan will Eliminate Health Insurance." For more on the nature of insurance, check out step #3 in "A Four-Step Healthcare Solution."

Up next: a closer look at "administrative costs."

(If you think these claims sound "fishy," you can no longer report them to the federal government.)


Monday, August 17, 2009

More on the Uninsured

Another article takes a closer look at the "47 million uninsured" statistic which is constantly being quoted as evidence that our health-care system needs greater government involvement. (For my first post on this topic see "Miscounting the Uninsured.")

In "The Fuzzy Math of 47 Million," Robert Romano points out that the numbers just don't add up. Although the U.S. Census Bureau’s 2006 report, “Income, Poverty, and Health Insurance Coverage in the United States,” states that 46.9 million people (16% of our population) are uninsured in the U.S., a closer look at the data within that same report demonstrates that the more accurate figure is 15.8 million uninsured (5% of our population.)

Here is the chart from Romano's article which puts the data into graph form:

You can click on the image to go to the original article for a larger view, but here is a summary of the numbers:

In 2006, 67.9% of the US population had private insurance, and 27% were covered by some type of government plan. That gives a total of 94.9% of the population as having some type of health insurance, leaving 5.1% uninsured.

The 46.9 million figure is due to double counting of some subsets and the inclusion of anyone who lost their insurance at anytime during the year--even if they subsequently regained it. As Romano explains:

Remarkably, the number of individuals without any insurance at all has remained about the same, meaning that folks who did lose insurance regain it in less than a year’s time. In both 2005 and 2006, the number of absolutely uninsured was 15 million. In the more recent 2007 report the number decreased to 13.6 million who had no health coverage at all. 285 million did have coverage out of a total of 298.6 million.

The problem of the uninsured has been grossly exaggerated by those who want to implement greater government control of health care in the U.S. This is just one of many areas where statistics are inaccurately used, and repeatedly stated until they are taken as statements of fact. In my next post, I will tackle another highly misleading claim: that Medicare has lower administration costs and thus is more efficient than private health insurance companies.

Update 8/18: Another article on this topic "Who are the uninsured?"

Update 9/12/09: From Carpe Diem:

And from Reason TV:

Saturday, August 15, 2009

Death Panel -The Grain of Truth behind the Bruha

The debate over health care, at least as reported in the news, is way out of control. Both sides are distorting facts, misusing statistics, taking things out of context, and inappropriately exaggerating. None of this helps clarify our understanding of the real situation and the issues at stake.

One of the most recent uproars has been the claim that the current bill under discussion includes forced euthanasia. I haven't read the entire bill--it's hard to take the time to read over a 1000 pages of a moving target--but what I have read about it does not support the claim that people will be murdered by order of a government "death panel."

However, like all overstatements aimed at creating fear and repugnance (see Miscounting the Uninsured for an example of this tactic by those in favor of ObamaCare), there is a grain of truth behind the exaggeration.

As Robert Trasinski writes in yesterday's TIA Daily (subscription required):

Jack Wakeland sent me an e-mail yesterday which captured how these "end-of-life" decisions—let's put it bluntly: decisions about dying—are currently, and properly, treated.

"When a patient is terminally ill, it is entirely proper and legitimate for doctors to push for frank discussions between the patient and his family about whether or not the medical profession can really do anything for him other than alleviate pain. It is entirely proper and legitimate for the patient to consider the financial burden he is imposing on his family if they are supporting him, or the financial loss to his family if he intends to bequeath to them what remains of his estate after his death. This kind of end-of-life cost/benefit analysis is a deeply personal issue. It is so intensely personal that one's own family members—including one's own wife or husband—may not legitimately involve themselves in the decision unless they're asked by the one who is to die."

Yet Obama is proposing to turn the subject over to a whole bunch of strangers, to an "independent group" "guided by doctors, scientists, ethicists."

And, that "independent group" is to be organized and directed by government mandates.

Such a plan is similar to the existing National Institute for Health and Clinical Excellence in Great Britain--also known as NICE. Charged with making decisions about which procedures and medicines the government-run National Health Service will fund, this division of the NHS evaluates medical treatments using the criteria of the Quality Adjusted Life Year (QALY.) No one is "forcefully euthanized" but certain procedures and treatments are deemed insufficiently "cost effective" --which means: not worth the expenditure for society--and thus are not funded. If that treatment is something like dialysis for chronic renal failure, or certain types of expensive cancer chemotherapy, the decision not to treat is a death sentence. (See WSJ editorial "Of NICE and Men" for a few examples.)

As described in the above quote, such decisions must be made. The question is by whom and how those decisions are made: by individuals about their own lives and resource priorities, or by a government panel using the standard of what is good for society. This is not forced euthanasia, but --and here is the "grain of truth"--if a government panel is making such life and death decisions for its citizens, is that not a type of "death panel"? Even so, such emotionally charged, misleading terms do not further reasoned debate and only serve to distract from (and worse, undermine) the underlying real and valid criticisms of government mandated and government-funded health care.

There's plenty to be concerned about without such obfuscation. Health care means life and death--and we need to treat this matter rationally with the care and seriousness it deserves.


Thursday, August 13, 2009

Free Market Food Markets

Don't miss a pair of fabulous WSJ editorials with suggestions for real, honest reform of U.S. healthcare. In the "The Whole foods Alternative to ObamaCare", John Mackey, CEO and co-founder of Whole Foods, presents excellent free-market solutions which are practical, fiscally responsible, grounded on the principles of individual rights, and compassionate. I have excerpted the highlights below, but the entire article is well worth reading.

Safeway also has an innovative free-market approach to decreasing their health care costs. In "How Safeway Is Cutting Health-Care Costs", Steven Burd, CEO of Safeway Inc., outlines his company's real life experience in controlling health care costs through a system of incentives that rewards healthy behavior, thus allowing employees to financially benefit from smart and voluntary life-style and medical choices.

I don't think it is an accident that these food providers are defending free-market solutions for the provision of health care. Food, shelter and medical care are all important, essential values--but none of them are a "right." The market provides us with an abundance of food in a wide variety of quality and price, and does so without massive government subsidy, regulation and control. The same bountiful results could be obtained if we reverted to a free market in medical care and in health insurance.

The Whole Foods Alternative to ObamaCare:
Eight things we can do to improve health care without adding to the deficit.

"The problem with socialism is that eventually you run out
of other people's money."

—Margaret Thatcher

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs)...

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits...

• Repeal all state laws which prevent insurance companies from competing across state lines...

• Repeal government mandates regarding what insurance companies must cover...

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year...

• Make costs transparent so that consumers understand what health-care treatments cost...

• Enact Medicare reform...

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program...

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This "right" has never existed in America


On Competing with the Government

"UPS and Fed Ex are doing just fine...It's the Post Office that's always having problems." (@ 0:53) So why would we want a medical insurance program that parallels the Post Office?

The Post Office does not do as well as private companies, even with the extra protection it receives form the government.

From Gus Van Horn:
[T]he post office is a government-protected monopoly; 19th century laws make it illegal for anyone else to deliver letters. It's also exempt from state and federal taxes and free from most government regulations.

President Obama (1:13) "There is nothing inevitable about this somehow destroying the market place as long as...its not set up where the government [the public option?] is basically being subsidized by the taxpayers even if they are not providing a good deal, we keep having to pony out more and more money"

Medicare has essentially eliminated the market for private insurance for Seniors and is posed to bankrupt the US government.

No government-run medical system has ever existed that has NOT required more and more money.

Claiming that a public option will not destroy private options and will not require ever-increasing taxpayer support, goes against both economic theory and real-world experience.

Is President Obama ignorant or disingenuous?


Wednesday, August 12, 2009

Nothing new in politics

“In the struggle between those seeking power

there is no middle course.”

-- Cornelius Tacitus (55-117 A.D.)

The only power I seek is the power necessary to insist that others

"Convince me, or leave me alone." --Beth Haynes (1955--and still going.)

HT Liberty Quotes

Saturday, August 1, 2009

Miscounting the Uninsured

Economizing on my time, here is the letter I sent to my congressional representative regarding the current legislative proposal to reform medical insurance.

Dear Hon. Eshoo,

I understand the pressures on Congress to create legislation to reform access to health care, however I strongly believe several basic tenants upon which the current legislation is premised are gravely in error. In this email I will address only one.

"47 million Americans are without health insurance."

This frequently quoted statistic is highly misleading.

The figure based on 2007 data and extrapolated to 2009. The actual 2007 figure was 45.7 million. From this starting point, the following groups of people must be subtracted in order to arrive at an estimate of the involuntarily uninsured (those who could not afford medical insurance, even though they would like to.)

Of the 45.7 million:

A. 6.4 million are due to the Medicaid undercount.
B. 4.3 million are eligible for government-supplied free or heavily subsidized insurance, but have chosen not to apply.
C. 9.3 million are non-citizens.
D. 10.1 million have incomes more than three times the poverty level and ostensibly could afford to purchase insurance but for a variety of reasons have chosen not to.
E. 5 million are adults 18-34 years of age without children, and may have rationally chosen to pay for their medical care directly rather than through insurance.

Another error is counting as "uninsured" anyone who was with medical insurance at any point in time during the year. A CBO report from 2003, "How many People Lack Insurance and for How Long?" states that 25-50% of the "uninsured" actually lacked insurance for less than one year.

Subtracting the above groups leaves only 10.6 million uninsured. This means the problem you are attempting to address concerns 3.5% of the US population--not the 15% which 47 million implies.

We do not need to mandate universal medical insurance in order to address a small subset of Americans. You have written "The House legislation as written today will ensure that 97% of all Americans will have coverage under a healthcare plan that is affordable and offers quality, standard benefits." However, nearly 97% of Americans already have insurance or have chosen to go without. Cheaper solutions exist which are more in line with the American principles of the individual rights to life, liberty and property.

Please do not support the current legislation. It is a non-solution to a non-problem.

Thank you,

Beth Haynes, MD

Further information can be found at these sources:

"How many uninsured people need additional help from taxpayers?" Keith Hennessey

"Why on Earth...Are So Many Americans Uninsured?" Bradley Doucet

"Who are the Uninsured?"
June and Dave O'Neill

If you prefer a video, here's a talk by the O'Neills: