The Independent Institute


Telehealth Opportunity versus Telehealth “Parity”

33806243 - chinese doctor video chatting with african patientA great opportunity to reduce costs and improve quality in U.S. health care is telehealth, which uses information technology to eliminate distance between a patient and a medical provider. A subset of telehealth is telemedicine, which allows physicians to consult patients over the phone, by text, or by video.

Take a couple of obvious examples: Telepsychiatry, whereby a patient undergoing talk therapy has a session with his psychiatrist over the phone instead of having to go to the doctor’s office; or e-prescribing, whereby a patient can describe symptoms over the phone or send a photo (of, for example, a rash) and the doctor can prescribe immediately (if appropriate).

Most people tend to categorize these as “no-brainers,” and if we paid for our own care directly, these and many other examples would have long since taken off. However, because payment for medical care is dominated by health insurers and government, they have been stifled. Third-party payers fear being forced to pay fraudulent claims.

Caltrans Wins Golden Fleece Award for Its $10 Billion Highway Robbery


The California Department of Transportation (Caltrans) has won the Independent Institute’s second California Golden Fleece Award, given out quarterly to state or local agencies or government projects that swindle taxpayers or break the public trust.

With primary responsibility for highway maintenance projects in California, the irresponsible Caltrans has wasted billions of taxpayer dollars and even lied to lawmakers to cover its tracks.

dreamstime_m_11034060Caltrans’s history of wasting taxpayer money, while at the same time demanding more funding, justifies drastically scaling back the agency and transferring all highway and bridge maintenance to private contractors who submit winning competitive bids. This change should accompany broader reforms to modernize California’s highways, such as privatizing the public highways and bridges, which would stimulate new investment; adopting systems that adequately fund road repairs while also reducing traffic congestion and pollution; and preparing for the long-term switch to electric vehicles.

California has a unique opportunity to lead the nation in road transportation innovation, but unless bold steps are taken to scale back Caltrans, progress will be fleeting at best.

Single-Payer Setback: Canadian Doctors without Contract for Two Years and Counting

43007046 - young surgery team in the operating room .Physicians in Canada’s largest province, Ontario, have rejected a contract negotiated between the Ontario Medical Association and the provincial health ministry. The more than two-year-old dispute shows no sign of ending.

Every Canadian is covered by a provincial government health plan. Doctors therefore have only one plan with which they must contract. Individual doctors, however, cannot decide how much to charge their patients. Instead, they depend on a centrally bargained contract that determines fees for every procedure and practice, from the skyscrapers of downtown Toronto to the windswept hamlets on the frozen shores of Hudson Bay.

No wonder it takes more than two years to negotiate a contract. According to the Globe and Mail, the doctors’ demands were threatening to bust an already heavy-laden budget:

The hardline stand of Ontario’s doctors raises questions across the country about how to balance the labour rights of a well-organized profession with spiralling health costs that threaten to swamp provincial budgets as populations age and guaranteed federal health transfers grow at a slower rate.

At least Ontario’s doctors did not go on strike, as young doctors in Britain did recently. It is hard for Americans to imagine the entire profession of medicine walking off the job like U.S letter carriers did in 1970. However, labor strife among physicians appears to be common in countries where the government monopolizes payment for medical care.

What the Prague Spring Teaches Us Today about Liberty

Photo provided by author

Prague Castle, once the seat of monarchs, is now the home to one of Europe’s most successful liberal democracies.

Prague, Czech Republic is well recognized for its historical architecture and role as the cradle of civilization in Western Europe, but it’s role in reinventing itself as a peaceful, market-oriented democracy in the wake of Communism’s fall deserves to be a centerpiece of contemporary discussions about freedom and how easily it can be lost. For those born after 1990, intolerant, repressive and illiberal governments seem to be distant, abstract, isolated cases—Cuba, North Korea, Venezuela—but modern-day Prague is a living testimony that the freedoms U.S. citizens may take for granted today can be dashed by the heavy hand of the state. A recent trip to Prague as part of a workshop in classical liberal political economy with the Cevro Institute brought these realities home.

On August 21st, 1968, 250,000 communist troops supported by nearly 2,000 tanks from five Warsaw Pact nations invaded Czechoslovakia to put an end to eight months of “bourgeois” reforms that granted greater freedom of expression, freedom to the press, and wider democracy to Czechoslovakian citizens, ending what is now called the “Prague Spring.” Seventy-two Czechs and Slovaks were killed, more than 700 wounded, and 300,000 people fled the country as as the Soviet Union re-instituted the hegemony of the State and one-party rule.

Site in Prague where two students burned themselves alive to protest communist crackdown on basic freedoms

Site in Prague where two students burned themselves alive to protest a renewed crackdown on basic freedoms

The Czechs and Slovaks weren’t ready to just cave in, however. Instead, they pioneered nonviolent resistance to raise awareness of Communism’s repression and agitate for further reform. Two students burned themselves alive to protest the renewed crackdown on personal freedoms. Protests rippled through the leadership of the Soviet satellite states, and a demonstration against the invasion even cropped up in Moscow. The military intervention was supposed to subdue the dissident nation in weeks, but actually took eight months. Many credit the Prague Spring with sowing the seeds for the break up of the Soviet Union and the “Velvet Revolution,” the peaceful, nonviolent separation of the Czech Republic and Slovakia, and their transitions to modern democracy and market economies.

Obamacare Authorities Actually Think Health Costs Fell

41586635 - obamacare red grunge vintage stamp isolated on white backgroundThe Centers for Medicare & Medicaid Services (CMS) has just made the remarkable claim that medical costs paid by health insurers operating in Obamacare’s exchanges declined in 2015 from 2014:

Per-enrollee costs in the ACA individual market were essentially unchanged between 2014 and 2015. Specifically, after making comparability adjustments described below, per-member-per month (PMPM) paid claims in the ACA individual market fell by 0.1 percent from 2014 to 2015. For comparison, per-enrollee costs in the broader health insurance market grew by at least 3 percent.

The agency’s report, however, compares apples to oranges. When discussing the change in costs in the exchange, it estimates medical claims. But when discussing changes in employer-sponsored health insurance, it estimates premiums (which increased 3 percent). The average Obamacare premium increased 5.2 percent in 2015, more than employer-sponsored coverage. (See my note below.)

Dealing with Mistakes: Government Action versus Private Action

36928961 - supreme court of united states columns row in washington dcGovernment can hardly ever do just one thing. Its action has repercussions, and these repercussions have repercussions, and so forth. Even when the government’s initial action may seem compassionate or productive, it is highly unlike that the repercussions will prove likewise.

Of course, private action also has repercussions, some of which may be unpleasant or harmful. But in the private sphere, the likelihood is much greater that people will respond to the negative feedback of information about adverse repercussions by finding diverse ways to rectify mistakes that have been made, whereas in the government sphere any bad action will either generate no negative-feedback incentive for rectification of mistakes or will, instead, only set in motion a Madisonian-Misesian dynamic in which one cruel or destructive action becomes the initial link in a long chain of reactive interventions, each as adverse as the proceeding ones, if not worse.

Scholars and analysts have put a great deal of effort into the design of economic systems or arrangements that will give rise to optimal outcomes. Usually, however, the model is premised on the assumption that decision makers make choices that reliably yield the result they seek. Such an assumption, in general, does not describe the real world, where the intrinsic uncertainty associated with physical, technological, social, and economic variables, among other things, guarantees that mistakes will occur. So, the crucial question is not simply how to choose the best course of action, but also how best to respond to errors when they occur.

U.S. State Department Endorses Uber

Rio de Janeiro, April 1, 2016: Hundreds of taxis paralyzed traffic in a massive protest against a court decision authorizing the operation of Uber.

Rio de Janeiro, April 1, 2016: Hundreds of taxis paralyzed traffic in a massive protest against a court decision authorizing the operation of Uber.

An interesting detail emerged in the coverage of the armed robbery of U.S. swimming star Ryan Lochte and three of his teammates in Rio over the weekend:

The USOC [U.S. Olympic Committee] advised athletes not to use taxis, but to take USOC vehicles, media buses or Uber ... Uber is approved by the State Department, one person familiar with the matter said, in part because of its location-tracking ability.

Mr. Lochte and his teammates were riding in a taxi early Sunday morning when they were stopped by gunmen dressed as armed police and robbed.*

You may recall that Rio taxi drivers had held a protest against Uber that paralyzed that city’s streets in April (though paralyzing Rio’s streets generally requires little coordinated effort), arguing that Uber drivers are only able to “undercut them because they are not subject to the same costly training, insurance and safety laws taxi drivers face.” [Emphasis added]

Whether or not explicitly, even the U.S. State Department apparently recognizes that market innovation beats mandated standards.

*Update 8/19/16
The now-revealed actual facts of the case do not affect the point of this post, to wit, “Uber is approved by the State Department.”

The “Right to Shop” for Health Care

37885304 - doctor talking to his female patient at officeAnyone who has undergone a medical procedure knows it is very difficult to figure out how much an insured patient will pay out-of-pocket. It is often not clarified until months after the procedure, when a flurry of incomprehensible paperwork from insurers, doctors, labs, et cetera, has landed in the patient’s mailbox.

(Personal aside: A couple of years ago, my health insurer encouraged me to go paperless, and I signed up for electronic messages about claims. It was so confusing, I went back to paper after a few months. At least you can scrunch up a letter and throw it across the room with an anguished scream, which you don’t want to do with your computer.)

This problem has led to a bunch of state laws attempting to impose “price transparency” on medical providers. As I explained previously, they do not work, because relationships between insurers and providers inhibit transparency. Medical providers’ “customers” are insurers, which pay most of their claims, not patients. Further, the real problem with medical prices is not that they are opaque, but that they are not formed in a normal market process. Instead, they are negotiated by third-party bureaucracies.

So-called Police Misconduct

54804214_ML“Police misconduct” is a term one hears from time to time. Some people complain about it. Most, however, refer to it as simply a mistaken idea advanced by disgruntled ne’er-do-wells who refuse to accept that only a few “bad apples” among the police ever do anything wrong—and when they do it’s for altogether understandable and forgivable reasons.

The term, however, is an oxymoron. The cops are not misconducting themselves. They are conducting themselves exactly as they intend to do so, exactly as the politicians who pay their salaries expect them to do so and, sad to say, exactly as a large part of the populace wants them to do so.

How can it be otherwise? If the police abuses and crimes that some of us perceive as rampant in the USA were something out of the ordinary, something that undermined the position of the police departments and related organizations that carry out the crimes, then the politicians, chiefs of police, and other authorities would put a quick stop to the bad actions and cast the bad actors into outer darkness. But they do nothing of the sort (the exceptions are too few to matter). The nearly universal acceptance, and indeed reward, of police “misconduct” tells us everything we need to know. It’s not an anomaly, a mistake, or a black swan. It’s exactly what our political masters intend to dish out to those of us on the receiving end of it.

Language is important. We can’t think straight if we can’t call things by their correct names and if we substitute euphemisms and propaganda terms for plain, precise language. What is called police misconduct is not misconduct; it is police conduct. Which is a great misfortune for the suffering multitude whose rights to life, liberty, and property are so grievously violated by this routine police action.

A Civil Society Agenda for Campus Sexual Assault

Unsafe On Any Campus? College Sexual Assault and What We Can Do About It

Unsafe On Any Campus? College Sexual Assault and What We Can Do About It

As studies refine our understanding of college sexual assault, more and more observers recognize that sexual assault and rape are serious problems on many campuses even if the scope isn’t large enough to be called an epidemic. In an academic year, a recent analysis completed for the U.S. Bureau of Justice Statistics covering nine colleges and universities found completed rapes may vary from 2% to 8% and sexual assaults may range from 4% to as high as 20%. These percentages, however, mask a lot of potential harm: at a large campus such as Florida State University, the low end of the estimates suggest hundreds of students experience rape each year. Of course, the expectation among parents (and students) is zero. College campuses are scrambling for solutions, begging the question: Does a pro-liberty/libertarian framework for reducing sexual assault on campuses exist?

I believe the answer is “yes,” and libertarians and other freedom-oriented students and organizations should become more engaged as a result. In Unsafe On Any Campus? College Sexual Assault and What We Can Do About It, I scope out a three-level strategy for comprehensively addressing campus sexual assault. I actually narrow the scope of government and the criminal justice system while focusing solutions on voluntary individual action as the key to a broad-based solution that builds civil society and community.