Doctors Protecting Their Turf

Healthcare reform is unlikely to reduce the cost of healthcare for one simple reason. Universal coverage will increase the demand for heathcare services while the supply will remain constrained. We already have a shortage of healthcare professionals and at least part of the reason for that is the top down cost controls imposed by Medicare. In many states, it is difficult for Medicare patients to find doctors willing to take them. In MA where they have enacted a universal coverage mandate, the waiting times for doctors is rising rapidly as the demand outstrips the supply.

One way to increase the supply of healthcare services is to allow nurse practitioners to provide basic medical care. A number of retailers such as Walgreens and Walmart are already doing this. These clinics provide basic medical care and refer patients to doctors for more complicated procedures.

Of course, doctors aren't happy about this since it reduces the demand for their services:

Despite better protections from malpractice lawsuits and lower malpractice premiums, Texas has a doctor shortage. Nevertheless, the Texas Medical Association took every step to ensure physicians will have a tight rein on the activities of well-trained nurses.

The barrier against nurses will continue to keep low-fee retail health clinics, such as those operated by Walgreen and CVS drug store chains, from expanding in Texas. The state law requiring doctor supervision adds too much cost to the clinics.

Texas has only about 85 of the 1,200 retail health clinics in the nation. San Antonio does not have a single one. The clinics are popular wherever they exist because nurse practitioners can treat common ailments and minor injuries with little waiting time and fees that average about $60, much less than emergency rooms. The clinics operate evenings and weekends and accept insurance plans.

The clinics would represent real health care reform, especially in Texas. Most of the state, 179 counties out of 254, is classified as medically underserved. Among them are 45 metropolitan counties, including Bexar.

Rules such as those that require a doctor to supervise a nurse practitioner are enacted under the banner of consumer protection, but what they really are is a way to limit competition in the market place. The AMA (and the state versions of same), like any professional organization, is primarily interested in protecting its members.

June Freeman Available

The June issue of The Freeman is available on line. I'll post articles later.

Supply and Demand Cannot be Conned

Who wrote this?

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit....

The law of supply and demand is not to be conned. As the supply of money ... increases relative to the supply of tangible assets in the economy, prices must eventually rise.

You are excused if you didn't guess Alan Greenspan. I cribbed that from this essay by the indispensable Sheldon Richman.

It seems that Alan Greespan was fully aware of what he was doing during his tenure as Fed Chairman. He predicted the credit expansion and then ensured that it would happen. Thanks, Al.

A commodity standard is the only monetary system that can't be bent to the will of politicians. And of course, they will oppose it at every turn, so the only way we'll get it is after the dollar is completely destroyed. And that may not be as long as we might hope. See here and here

Sheldon Richman: Government IS the Problem with Healthcare

Sheldon Richman, the wonderful editor of The Freeman, exposes the real cause of healthcare inflation (via FEE):

It is not the free market that has failed. It is government.

Therefore, the second approach to cost-cutting is in order: Eliminate all the ways that government causes medical price inflation. These range from supply-side interventions—including occupational licensing, certificates of need, the FDA, and patents—to demand-side interventions—including tax favoritism toward employer-based insurance, Medicare, and Medicaid. Third-party payment that makes medical services appear free or nearly so encourages overconsumption and raises costs indirectly for everyone, with particular hardship to those not participating in the programs.

To set things right, consumer prices and true costs must be aligned through the market process. People would then become cost-conscious buyers of services and would most likely reserve insurance for truly insurable catastrophic events. Of course, some who need medical attention wouldn’t be able to afford it. That would be less frequent in a real free market, but when it occurred, the answer would be voluntary charity rather than clumsy bureaucratic intervention.

Government always tries to blame its failures on the free market. Government intervention in the healthcare system goes all the way back to WWII, when the third party payment system emerged as a way to avoid government imposed compensation caps. The more government has gotten involved in healthcare, the faster the price has risen. The obvious answer is to reduce the role of government in healthcare (and the insurance companies who only got involved through government intervention in the market), but when was the last time government offered to reduce its role in anything?

The Climate Industrial Complex

Bjorn Lomborg had an OpEd in the WSJ yesterday with that title. The OpEd illustrates that the companies lobbying for cap and trade will benefit from the system. Well, duh. The companies that receive their permits for free, and there will be a lot of them after the lobbying is done, will receive a windfall just as they did when Europe enacted their cap and trade system.

Ronald Bailey at Reason also wrote about this last month and he's posted on it again today at their blog, Hit and Run:

A 2007 Congressional Budget Office (CBO) study reported the results of a hypothetical 23 percent cut in carbon dioxide emissions (the Waxman-Markey bill proposes a 20 percent cut by 2020). The CBO found that "giving away allowances could yield windfall profits for the producers that received them by effectively transferring income from consumers to firms' owners and shareholders." And how big would the windfall be? "If all of the allowances were distributed for free to producers in the oil, natural gas, and coal sectors, stock values would double for oil and gas producers and increase more than sevenfold for coal producers, compared with projected values in the absence of a cap," concluded the CBO report.

In 2007 Congressional testimony, then-CBO Director Peter Orszag explained, "The government could either raise $100 by selling allowances and then give that amount in cash to particular businesses and individuals, or it could simply give $100 worth of allowances to those businesses and individuals, who could immediately and easily transform the allowances into cash through the secondary market." More recently, in his March testimony before the House Budget Committee, Orszag, who is now President Obama's budget director declared, "If you didn't auction the permits it would represent the largest corporate welfare program that has ever been enacted in the history of the United States. All of the evidence suggests that what would occur is that corporate profits would increase by approximately the value of the permits."

Being a believer in public choice theory, none of this surprises me. What does surprise me is that the allegedly intelligent people in the environmental movement didn't figure out that this would be the result of their push for more regulation. Haven't they ever heard of regulatory capture?

And why do so called liberals, who believe they know what's best for poor people (and everybody else too, the busybody motherfuckers), support policies which hurt the poor the most. First, they supported turning corn into ethanol so they could feel better about filling up their SUV. Sure it raised food prices, a large part of a poor person's budget, but hey, at least they lowered their carbon footprint. Or at least they thought they did. And now they support cap and trade which will raise energy costs, another large part of a poor person's budget. If I didn't know better, I'd think the liberals had a grudge against the poor.

90-6

That's the Senate vote tally on keeping Guantanamo open. James Taranto of the WSJ Best of the Web blog discovers Republican obstructionism in the vote:

During the dark days of the Bush administration, the United States of America held hundreds of innocent terrorists without charge in a maximum-security detention facility in a communist country. Barack Obama was elected on a promise to end this injustice, and just days after taking office, he issued an executive order promising to keep that promise. It was a victory for American values, but it is now being snatched away by Republican obstructionists.

Read the whole thing; it's hilarious.

On a more serious note, what are we to do about Guantanamo? I don't like the idea of holding people indefinitely without some kind of due process, but what exactly can we do with these people? It seems like every one we release ends up fighting against us again and I don't think they deserve the full US court treatment.

The best answer I can come up with is to get the hell out of Afghanistan and release them back there. No other country has ever been able to pacify the region and I think our chances are just as slim.

Fork in the Road

My daughter, an art student at San Francisco Art Institute, recently snapped this picture in Oakland, CA.




She asks: If you find a fork in the road, do you take it or take its picture?