Author Archive

Why We Lost the War on Poverty

Take a look at the graph below. From the end of World War II until 1964 the poverty rate in this country was cut in half. Further, 94% of the change in the poverty rate over this period can be explained by changes in per capita income alone. Economic growth is clearly the most effective antipoverty weapon ever devised by men.

The dotted line shows what would have happened had this trend continued. Economic growth would have reduced the poverty rate to a mere 1.4% of the population today ― a number so low that private charity could probably have taken care of any unmet needs.

But we didn’t continue the trend. In 1965 we launched a War on Poverty. And as the graph shows, in the years that followed the portion of Americans living in poverty barely budged. In 1965, 18% of the population lived in poverty. Today we are at 15%, or 50 million Americans. That’s after spending $15 trillion on antipoverty programs and continuing to spend $1 trillion a year.

Poverty in the United States

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Study: RomneyCare Saved Lives, But at a High Cost

The authors estimate that “for approximately every 830 adults who gained insurance [under RomneyCare], there was 1 fewer death per year.” If we assume the per-person cost of covering those 830 adults is roughly the per-person premium for employer-sponsored coverage in Massachusetts in 2010 (about $5,000), then a back-of-the-envelope calculation suggests that RomneyCare spent $4 million or more per life saved. The actual figure may be much higher if we include other costs incurred by that law. The World Health Organization considers a medical intervention to be “not cost-effective” if it costs more than three times a nation’s per-capita GDP per year of life saved. This in turn suggests that RomneyCare would have to give every person it saves an average of nearly 30 additional years of life to meet the World Health Organization’s criteria for cost-effectiveness. Given that the mortality gains were concentrated in the 35-64 group, that seems like a stretch.

As an economist might put it, this means there are likely to be policies out there that could save a lot more lives than RomneyCare does per dollar spent.

Michael Cannon.

Another Constitutional Challenge

The ACA passed the Senate on a party-line vote, and without a Democratic vote to spare, after a series of unsavory transactions that purchased the assent of several shrewdly extortionate Democrats. What will be argued on Thursday is that what was voted on — the ACA — was indisputably a revenue measure and unquestionably did not originate in the House, which later passed the ACA on another party-line vote. (George Will)

Should Doctors Decide if Your Health Care is “Worth It”?

StethoscopeThis is Aaron Carroll:

I’m truly conflicted here. Like any good “economist”, I’m worried about future health care spending. I know that fee-for-service just sucks, and that the financial incentives for practice are totally misaligned. But I remain totally skeptical about pay for performance (see this, this, this, this, this, this, and this). I don’t see much evidence that programs like that work, and I don’t believe that the things we can measure are necessarily the same as how we’d ideally define quality.

I’m also concerned with making doctors the ones responsible for deciding what’s “worth it.”


Today I am going to propose an idea that some of my libertarian friends may consider heretical.

I think your DNA and the way you biologically respond to various drugs should be in the public domain.

Your identity — or the ability to connect your medical records to you personally — should not be in the public domain. In fact we should go to great lengths to make sure that researchers who have access to your medical records cannot trace them back and identify you personally under any circumstance.

Just to imagine one way of doing that, suppose there was a large database that could only be populated by doctors treating patients. Doctors would replace patients’ names and other identifying information with numbers before entering any data. In fact, the database would only accept numbers, not names. The database would be used by researchers who could see the records, but researchers could never reverse-engineer the process and connect a number back with a name — because the name was never in the database in the first place. (I suppose this would work really well in an HMO or ACO where the doctors don’t know the patients’ names anyway — only kidding — I’m not suggesting we do that.)

Before getting to why this would be a good idea, let’s deal with the issue of individual rights. “Does a patient’s genomic makeup belong to the individual, or to the greater cause?” asks writer Barbara Shelly. She cites an interview with National Institutes of Health director Francis Collins:

“Your DNA sequence is really private information and it shouldn’t be given out to other third parties without your permission,” he said. “I think basically our position is, if the DNA sequence is going to be used for research, you should be asked about whether that’s OK and it would be nice if that was given to you in some sort of tiered opportunity to say yes.”

But is that position really the right one to take?

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Don’t Ask, Don’t Tell

This is from Beverly Gossage, president of HSA Benefits Consulting and a candidate for Insurance Commissioner in Kansas:

health-insuranceThe data on which of the enrolled was previously uninsured is readily available. I am certified to write policies on and off the exchange and can tell you the application itself asked these questions:

1) Have you been insured in the past 12 months?

2) When did your insurance terminate?

An applicant cannot progress through the application without answering. Of course, we won’t know if they lied on the application, but it would give us a reasonable percentage.

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Two-Tier Health Care

doctor-xray-2…About one-third of primary-care physicians and one-fourth of specialists have already completely closed their practices to Medicaid patients. Over 52% of physicians have already limited the access that Medicare patients have to their practices, or are planning to, according to a 2012 survey by Merritt Hawkins for the Physicians Foundation. More doctors than ever already refuse Medicaid and Medicare due to inadequate payments for care, and that trend will only accelerate as government lowers reimbursements.

…The American Academy of Private Physicians estimates that there are now about 4,400 concierge physicians, 30% more than last year. In a recent Merritt Hawkins survey, about 7% to 10% of physicians planned to transition to concierge or cash-only practices in the next one to three years… (WSJ)

Bizarre ObamaCare Incentives

Want a mammogram? No charge. But if you find a lump, you pay.

Here’s why:

A woman over 40 can have a free screening mammogram. But if she notices a breast lump and goes to her doctor to have it evaluated, she’ll pay for a diagnostic mammogram. That could cost $300. So the woman at lower risk for cancer — the one with no signs or symptoms of the disease — has an incentive to be tested, while the woman at higher risk — the one with the lump — faces a disincentive.

Source: The New York Times.

Headlines I Wish I Hadn’t Seen

The Time Price of Care


Source: Washington Post.