New School Politics

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An article in today’s NY Times chronicles a dental clinic operating in rural Alaska, without any certified dentists and without the sanction of the dental unions.

The dental clinic in this village on the edge of the Bering Sea looks like any other, with four chairs, a well-scrubbed floor and a waiting area filled with magazines.

But to the Alaska Dental Society and the American Dental Association, the clinic is a place where the rules of dentistry are flouted daily. The dental groups object not because of any evidence that the clinic provides substandard care, but because it is run by Aurora Johnson, who is not a dentist. After two years of training in a program unique to Alaska, Ms. Johnson performs basic dental work like drilling and filling cavities.

Some dentists who specialize in public health, noting that 100 million Americans cannot afford adequate dental care, say such training programs should be offered nationwide. But professional dental groups disagree, saying that only dentists, with four years of postcollegiate education, should do work like Ms. Johnson’s. And while such arrangements are common outside the United States, only one American dental school, in Anchorage, offers such a program.

The number of dentists in the United States has been roughly flat since 1990 and is forecast to decline over the next decade. A study last year from the Centers for Disease Control showed that Americans’ dental health was worsening for the first time since statistics began to be kept …

…[T]he A.D.A. continues to oppose allowing therapists to operate anywhere in the lower 49 states. Currently, therapists are allowed to practice only in Alaska, and only on Alaska Natives.

Unions are historically ruthless and effective in pursuit of their political interests, even when they consist of dentists. Its no surprise, of course, that dentists want a closed industry especially when non PHDed dental workers earn a third to a half as much.
The obvious effect of regulations that mandate certain standards for dental servants is to limit the supply of labor in a sector where training and education is already expensive and time consuming. The consequences are manifest in the number of dentists remaining stagnant for almost two decades as well as the fact that “100 million Americans” can’t afford coverage (100 million seems to be an absurdly high amount, but upon further research it does appear that around 150 million don’t have insurance at all, so the number may be realistic).
The case-study may also tell us something about the problems in the healthcare industry, where the American Medical Association uses its weight to limit the supply of medical workers–as well as the amount that certain non-PHDed workers are allowed to do.
A review of the book Profession and Monopoly gives examples:

“…in the United States the number, curriculum, and size of medical schools are restricted by state licensing boards controlled by representatives of state medical societies associated with the AMA. The book is also critical of the ethical rules adopted by the AMA which restrict advertisement and other types of competition between professionals, it points out that advertising and bargaining can result in expulsion from the AMA and legal revocation of licenses. The book also states that before 1912 the AMA included uniform fees for specific medical procedures in its official code of ethics. The AMA’s influence on hospital regulation was also criticized in the book.”

While I assume that some regulations may have arisen in recent years, most have been in place for years and do not explain the overall climb in healthcare prices of late. However their rollback would still be a positive step toward making healthcare a more a affordable and more competitive industry, allowing low-priced medical practices, such as the dental practice in Alaska, to do business.

What I propose is neither dangerous nor radical really–all it is is an opportunity for the price system to operate. When prices rise, demand falls, which is impetus for supply to surge and bring prices back toward equilibrium. But because supply of health service is relatively inelastic (especially because of how expensive and capital intensive it is in both the human-educational sense, and the physical-technological sense), and various policies disable lower priced service to compete, a price floor is essentially created.

Popularity: 7% [?]

As January comes to a close, the Obama campaign has easily surpassed a fundraising goal set earlier today. In a mass e-mail from the Obama campaign earlier today, the campaign stated that they were looking for more donors to boost their current 242,000 individual donor count above 250,000. Tonight, their website shows that they surpassed that milestone and had approximately 253,198 supporters [as of this writing] during the month of January. Obama’s e-mail touts the wide variety of donors, and mentions the fact that Obama has received donations from more than 500,000 individual donators [a figure he surpassed in the hours before the Iowa caucuses]. Obama, ever the politician, attributes this “unprecedented base of individual donors” to his rejection of special interest money.

We rejected donations from Washington lobbyists and special interest PACs and relied on ordinary people to take ownership of this campaign — and the result was more donors than any presidential primary campaign has had in history.

During the last three months of 2007, Obama raised approximately $23.5 million. In January alone, however, the candidate has raised in excess of $32 million. This is a record for candidates still faced with a primary challenge. For all those who thought Hillary was sure to win the nomination following her victory in New Hampshire, Obama’s fundraising successes should give them second thoughts. Obama may not have the richest supporters, but he has among the widest networks of individual donors, and it’s the number of people, not the size of their donations, that counts when the Democrats will be picking a presidential candidate. MSNBC is reporting that the Republican candidates didn’t even come close to the massive figure released by the Obama campaign, and the Clinton camp has yet to release their figures for January.

Scores of Obama Supporters Have Rallied Around Their Candidate

Obama’s “Yes We Can” slogan seems to be convincing America that he’s electable as well, as he’s been victorious in several early primaries. With Edwards out of the race, it will be interesting to see where his supporters end up. Both candidates are vying for his endorsement, and many unions and organizations that once backed Edwards have now switched their affiliation to Obama. Whether or not Edwards will endorse either Democrat before Super Tuesday remains to be seen.Tonight’s Democratic debate, called a “love movie” by the Agence France-Presse, saw the start of cordial relationships between the two candidates. This is a marked difference between the finger pointing and negative comments circulating between John McCain and Mitt Romney, who still have other candidates to worry about. Both Democrats made it clear that they’d like to see the Republicans out of the White House in 2009. While their platforms differ only slightly, the CNN-sponsored debate focused on three main areas, healthcare, Iraq, and illegal immigration. CNN’s catalog of quotes from the debate provides a window into the platforms of each candidate, while their Election Center provides further information for undecided voters.

Cordial Relations Marked Tonight’s Democratic Debate

Most pundits, including CNN’s Bruce Schneider, are calling the debate a draw. Schneider said that Democrats are “happy with their choice this year, but they don’t want to have to make it.” Fortunately for the undecided, the coming weeks will shed more light on the records and positions of both candidates. Unfortunately, however, many will have to make their decisions in short order for the primaries on February 5th. Join us for live, broadcasted video coverage of Super Tuesday next week on February 5th for more about the candidates and the status of the race.

Popularity: 47% [?]

From one of my favorite thinkers, Yaron Brook:

Today, what we have is not a system grounded in American individualism, but a collectivist system that aims to relieve the individual of the “burden” of paying for his own health care by coercively imposing its costs on his neighbors. For every dollar’s worth of hospital care a patient consumes, that patient pays only about 3 cents out-of-pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14%.

The result of shifting the responsibility for health care costs away from the individuals who accrue them was an explosion in spending.

I get the impression that American healthcare is generally seen as a market system by the electorate and the only alternative as more government control. Of course, factually this is untrue as the government is responsible from between 45 and 50% of healthcare spending in the US, making it the single largest ensurer of Americans. On top of this, an endless array of regulations make the American system not only tapped by government, but dominated by it.

Additionally, of the insurance that is (essentially) private, third parties (i.e. employers) pay for six times as much as individuals. And the obvious reason for that the way the tax structure is convoluted to subsidize employee based insurance by not taxing it as income. According to Paul Krugman and Robin Wells, “the value of the tax subsidy for employer-based insurance is estimated at around $150 billion a year.”

I surmise the basic fallacy behind this system is the desire for a free lunch–voters want heathcare, especially if they can get it at someone else’s expense.

But the wasteful incentives this way of thinking creates not only is inefficient, but eventually passes even higher costs on to consumers. Remember that when people bear less cost for a maneuver, they have no encouragement to try and control its costs. The consequence is that spending goes nuts.

For the sake of achieving greater frugality and more efficiently rewarding good and bad providers, it would be wise to give the individual a greater place in healthcare. This would not happen by government mandate or subsidy, but rather an equalizing of the playing field between individual and employer healthcare, as well as a downsizing of government’s roll in the industry.

For that reason, the medical reforms of Ron Paul, John McCain, and Rudy Giuliani tend to be superior to that of other candidates.

Popularity: 54% [?]

Today was a big day for presidential politics, as the long-shot candidate (and one of my closet favorites) Dennis Kucinich decided to cease his run for the Democratic nomination for the presidency. Calling it a “transition,” Kucinich insisted [in a video to Cleveland's Plain Dealer] he wanted to continue to serve in Congress and will pursue re-election. He’s been in the news recently for his plan to initiate impeachment proceedings against President Bush on January 28th, the day of his State of the Union speech. Kucinich’s speech, where he tears into Bush claiming, “We already know the State of the Union…it’s a lie,” is available on YouTube. He was rebuked by House Republicans afterwards, and Florida GOP Rep. Cliff Stearns called Kucinich’s plan a “personal attack.” Kucinich’s famed single-player health care plan, a hallmark of his campaign, may find its way into the healthcare plans of other candidates. Kucinich’s often radical views brought some humor and some radicalism to the race, and he will be missed. The mainstream media, it seems, made it more difficult for Kucinich to continue his run, excluding him from the past couple of debates.

Former Democratic Candidate Dennis Kucinich

We’re expecting announcements over the next couple of days of a couple of more resignations as the fields thin with the continuing primaries. Mike Gravel, a Democrat who has polled even lower than Kucinich, still remains in the race along with John Edwards, Hillary Clinton, and Barack Obama. The Republican field saw the loss of Fred Thompson the other day, and if Rudy Giuliani doesn’t win in Florida, he looks like he’ll be the next casualty. On Super Tuesday, February 5th, join New School Politics for live multimedia and written coverage of the primary results from twenty-four states, along with in-depth analysis from our staff of writers.

Popularity: 25% [?]

This is John Edwards’ Universal Healthcare Plan. I have added some comments about each of his solutions (they appear italicized).
• Promote Evidence-Based Medicine: Effective new treatments can take years to be widely adopted. For example, many patients do not receive beta blockers after heart attacks even though they are cheap and highly effective. Similarly, doctors sometimes prescribe name-brand drugs despite the availability of equally effective, less expensive generic drugs.

~Has it occurred that maybe, just maybe, there’s a reason for this? If I was a biotech company, and I had discovered a cure after spending millions on research, how would generic drugs created by some other organization/the government encourage me to do so, by siphoning my research to further their profits? I would have no incentive to find no cures if I can’t make money doing so. That’s why we’re losing out on anti-biotic research.

•  Disseminate Objective Information on Medical Advances: Edwards will establish a non-profit or public organization – possibly within the Institute of Medicine – to research the best methods of providing care, drawing upon data from Medicare and the Health Care Markets and medical experts from across the nation. ~This is such a bad idea, because it will have more bureaucrats involved whom have no idea what medicine is. We don’t have an infinite amount of doctors for this kind of low-paying, low-IQ, desk jockey work.

•  Help Doctors Implement New Advances: Edwards will support new technologies, such as handheld devices and electronic medical records, to give doctors the latest information at their fingertips.

~My local hospital already has these “new, latest technologies,” because it’s a privately run, not government baesd, hospital. Get with the program please.

•  Improve the Health Care Delivery System: Edwards will develop partnerships among academic medical centers, Medicare, and other federal agencies to make sure high-quality medicine is practiced everywhere. Improving quality is an important key to making universal health care affordable in the long run.

~As a to-be medical student, I ask you this: Why would I want to attend medical school for an extra 4 years, only to get paid the equivalent of, say, a DMV worker? I could just as easily use my skills, get an MBA in one year, and go to wall street, and make much more money. As such, why would our best students want to become doctors without any future realistic gain?

• Pioneer New Ways to Pay for Health Care: Our health care system is predominantly fee-for-service: providers are paid for each treatment, regardless of its necessity or quality. For example, a hospital that botches a surgery is often paid for the error and then paid again to fix it. Our system should pay doctors for results, encouraging better, more efficient care. Under Edwards’ plan, Medicare and the Health Care Markets will lead the way, paying higher rates to plans and providers that provide the very best care, lowering premiums for high-quality plans, and penalizing plans that fail to meet critical, easily quantifiable goals such as childhood immunization rates.
~Instead of having a federal bureaucracy ruin things by putting excess paperwork and waste time, why not just stop subsidizing the health insurance industry and let competition take its course? If an insurance agency is going to be stupid, the customers can get another insurer easily.

• Prevent Medical Errors: At least 100,000 patients die each year due to medical errors, according to the Institute of Medicine. Many other errors seriously injure patients and add to health care costs. Edwards will support public-private collaborations to reorganize patient care, improve internal communications, reduce errors through electronic prescribing, and establish basic quality benchmarks.

~Great, so now it’ll be easier for Mr. Edwards (a lawyer) to be ambulance chasing for malpractice lawsuits. And these are coming from generally our better doctors. What happens if they leave for China or Russia?

• Promote Preventive Care: Health Care Markets will offer primary and preventive services at little or no cost. Incentives like lower premiums will reward individuals who schedule free physicals and enroll in healthy living programs. Edwards will also support community efforts to improve health, such as safe streets, walking and biking trails, safe and well-equipped parks, and physical education programs for children.

~So not only are physicals free (hurting doctors and nurses), but maybe we should just give people free everything. After all, doctors would be willing to work without pay. Right?

• Improve the Treatment of Chronic Diseases: When chronic diseases are not routinely treated, they can cause emergencies that threaten patients’ health while raising costs. Health Care Markets will encourage plans to monitor patients’ health to keep them out of the emergency room. For example, plans can pay for nutritional counseling for diabetic patients to help them make healthy choices and control their blood sugar levels.

~More incursion into peoples’ lives. You can’t eat this, you can’t eat that, you need to take your pills. Give me a break. If I want to die from MDR-TB cause I hate needles, I have the right to do so. You have the right to prevent me from getting you sick. But they can’t tell people how to live their lives. That’s Soviet.

•  Empower Patients through Transparency: Finding reliable information comparing doctors and hospitals on price and performance is harder than finding it for a new car. Edwards will create a “Consumer Reports” for health care, a universal and easy-to-use report card to help Americans evaluate hospitals’ effectiveness in treating injuries and diseases. Informed patients will make better choices and drive health care providers to offer better services for lower costs.

~ Consumer Reports for doctors are like U.S. News Reports for Colleges. They use random statistics that are easily inflatable and will obviously favor those doctors whom have more connections, regardless of their capabilities. This is plainly “No Child Left Behind” for hospitals.

•  Reduce Health Disparities: People of color are more likely to be diagnosed with cancer and less likely to receive timely and effective treatment. Children of African-American mothers are twice as likely to die within their first year. In California, low-income minority neighborhoods have one-third as many doctors, as a share of their population, than other neighborhoods do. Edwards will support medical research into disparities, reduce the pollutions and toxins that disproportionately harm communities of colors, and support translation services to address language barriers. By helping all Americans get insurance, Edwards will also address disparities in health caused by disparities in insurance. [ACS, 2003; KFF, 2003; Kormaromy et. al. 1996; KFF, 2007]

~ Maybe it’s because doctors are afraid that they’ll get sued by ambulance chasers like Mr. Edwards here. Has it occurred that religion, among other things, may be affecting what doctors can do? Has it occurred that doctors, having spent thousands of dollars and years in medical school, not to mention hell via the pre-med process, might influence where they want to work? Why do you think hedge fund managers live in suburbs?

•  Improve Productivity with Information Technology: Health care administration costs more than $1,000 per American. It may be the fastest growing part of health care costs. [Woolhandler et. al., 2003]

~Exactly! Let’s exacerbate the costs even more by adding a bureaucracy.

• Adopt Electronic Medical Records: Many insurers and hospitals still rely on cumbersome paper systems and incompatible computer systems. The outdated “paper chase” causes tragic errors when doctors don’t have access to patient information or misread handwritten charts. It creates needless administrative waste recreating and transporting medical papers, performing duplicative testing, and claiming insurance benefits. Edwards will support the implementation of health information technology while ensuring that patients’ privacy rights are protected. Savings from electronic records could be as great as $160 billion a year, according to a RAND study. [RAND, 2005]

~This is of course all going to be paid by who?

• Support Local Infrastructure: Edwards will provide the resources hospitals need to implement information systems that improve patient safety and hospital efficiency. Steps include:

~Except, at this rate, we won’t have any hospitals left. In my region, three hospitals have closed down due to expensive malpractice lawsuits, leaving the hospital I attend very busy and crowded.

• New Methods of Distribution:  Adopting automated medication dispensers that can quickly and accurately fill prescriptions, freeing pharmacists to work more with patients and reducing the risk of prescription errors.
~Who’s going to pay for this?

•  Improve Communication:  Developing systems to promote patient-doctor communication, such as email and group consultations and support groups for individuals suffering from the same disorder.

~It’s called “alcoholics anonymous.”

• Creating computerized physician order entry to eliminate lost paperwork and illegible writing.

~Who’s going to pay for this?

o Developing computerized patient reminder systems to improve compliance with treatments, such as automatic phone calls home to remind patients to take needed medication to help keep them healthy and out of the hospital.
~Who’s going to pay for this?

o Using handheld devices to allow hospital staff to communicate results directly to physicians, instead of wasting time trying to find a doctor with urgent information.

~Who’s going to pay for this?

•  Protect Patients against Dangerous Medicines. Recent drug recalls such as Vioxx have raised concerns about drug safety. Edwards will restrict direct-to-consumer advertising for new drugs to ensure that consumers are not misled about the potential dangers of newly marketed drugs and strengthen the Food and Drug Administration’s ability to monitor new drugs after they reach the marketplace. He will also ensure that researchers evaluating medical devices and drugs are truly independent.

~Likewise, evolution is a “theory,” not a fact, and we need “independent, non-atheist devil-worshippers” to analyze this theory with evidence. Das Kommisar, anybody?

Popularity: 92% [?]

Its encouraging, once again, to see the GOP’s front runner pushing for market based reforms. In today’s Boston Globe, Mayor Giuliani wrote an op-ed outlining what he calls the “free-market US cure for healthcare”.

His plan, as outlined in his article, is four-pronged:

-”Bring fairness to the tax treatment of healthcare”

-”Expand tax-free Health Savings Accounts”

-”Encourage Medicaid reform through block grants”

-”End lawsuit abuse by unscrupulous trial lawyers”

While my healthcare plan is much more simple than the Mayor’s (get the government out of healthcare), I am once again refreshed by Mr. Giuliani’s free market policy push, especially considering the giant step to the left the Democrats have made on economic issues, led by John Edwards who already has a plan for universal, government mandated healthcare.

There is a lot to be said about the economic rationality of Giuliani’s plan. Point-by-point,

-By cutting taxes on health insurance not provided by the employer, it will mollify the significant market distortion that has been caused by the fetish that many politicians have with attaching health service with employment. In this way, by subjecting the commodity to equal treatment incentive will be driven by natural supply and demand rather than by government manipulation of the market. By distancing ourselves from a system that forces the employer to provide healthcare, to one that lets the market decide, individuals and businesses will be driven to make healthcare decisions based on the value of the care itself rather than by circumstances set by the government.  

-Lifting the government burden on health savings provides a more practical solution for individuals on healthcare. For one, it is a realistic option which accepts the fact that not everyone can, wants, or needs to be purchasing health insurance on a large scale and, additionally, enhances their ability to purchase healthcare in the future. Additionally by encouraging savings (rather than mass-consumption) we can increase the available supply of healthcare at present–thereby lowering the price–as well as accumulate wealth and thus incentive for investment and innovation in healthcare for the future.

-By decreasing the federal governments roll in Medicaid and giving the states more leverage, we will be applying the simple and effective concept of competition to government–which is almost inherently devoid of it. Federalism, which–as Giuliani correctly points out–is useful in creating political competition, can allow different sovereignties to attempt different initiatives. The value of this is (a) that different constituencies which have different needs can be tended to in different ways and (b) that different states can comparatively learn from each other’s trials, what systems work and what do not. Block grants, rather than categorical grants, allow this competition to thrive in the same way as it did under welfare reform.

-Finally, by placing caps on malpractice lawsuits we can do two things. The first would be that by decreasing the amount that doctors can be hit by lawsuits, we can reduce the costs that the industry has to undertake from such cases and thus decrease the cost of health insurance on the whole and increase the earnings available to be reinvested. Second, by reducing the potential penalties for doctors we can accentuate the incentive for doctors to innovate the type of healthcare they give thereby increasing the amount of good doctors can do while simultaneously welcoming more doctors into the profession.

Giuliani’s ideas are generally sound, and should cause excitement among free market advocates. The Mayor’s remarks on healthcare are a bright spot in a zeitgeist that is moving ever so ominously in the direction of socialized healthcare. 

Popularity: 62% [?]