The Military’s “Heroes” and the Scourge of Nationalism

civilian_military_180x270At the airport, one observes an “interesting” composition of human behavior. A recent trip was no exception. Walking into the airport to checkin and check my bag, there was a clearly upset woman at one of the ticket kiosks. She barked at the woman behind the counter (who was assisting someone else) to come help her. When someone appeared, she started berating the airline representative. Then came the line,


Whenever the representative told her something she apparently didn’t like, it was her default response, “I’m military. I’m military.”

This woman clearly felt her membership in the government organization known as the United States Military meant she had the right to something more than the plumber, lawyer, or photographer who walked into the airport a few minutes later.


Did a Health Insurer Pay over Ten Times the Self-Pay Price for Outpatient Surgery?

priceless_180x270A story from Arizona is a cloud with a silver lining:

Teresa Anderson was pleasantly surprised how quick and hassle-free her eyelid-lift surgery was at Havasu Regional Medical Center’s outpatient-surgery facility in April 2014.

Weeks later, the bills arrived at her Lake Havasu City home. Her surgeon, anesthesiologist and X-ray provider submitted bills and were paid nearly $2,250.

Only one remained: Havasu Regional’s bill. When it finally arrived last May, what she saw shocked her. An explanation of benefits from her insurer, Blue Cross Blue Shield of Minnesota, showed she and Blue Cross had been billed $38,526 by Havasu Regional for prep work, surgery and recovery lasting less than three hours.

Anderson, who worked for a health-insurance company before her retirement, believes hospital charges like hers explain why the economics of health care are askew. And she isn’t alone. Consumer advocates say such experiences point to the need for more transparency in the pricing of medical procedures.

Before the surgery, Anderson had asked her surgeon’s staff to estimate all costs associated with the surgery. She was considering paying on her own if her insurer denied coverage. The surgeon’s staff quoted a price of $3,500 for the surgery, anesthesia and facility fee if she paid on her own without insurance.

The hospital’s insane bill is really a pretty run-of-the-mill story these days. I am actually not sure that the reporter or the patient have it quite right: The hospital charge is not usually what a health insurer pays. On the other hand, the charge is not usually more than ten times what the real price is.

However, that is not the point of the story I wish to emphasize: The silver lining is that the patient had actually been able to figure out what the cash price would be if she paid directly herself. It has previously been hard for cash-paying patients to avoid being gouged by hospitals unless they are Canadian medical tourists. Whether this story is idiosyncratic or symptomatic of a trend, I cannot say. I hope it is the latter.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book: A Better Choice: Healthcare Solutions for America, by John C. Goodman.

Patent Trolls Still Alive and Kicking

patent_trolls_180x270Over at Techdirt, there is a good story up on how a patent troll attacked a startup and the litigation costs so distressed the startup that it was forced to sell out to another patent troll.

Peter Braxton created Jump Rope Inc., and developed an app that allows users to pay a fee to skip a line. For example, rather than wait hours in line for a seat at a trendy restaurant, the app allows you to get in quicker.

Enter the patent troll Smart Options, which has a patent on a “method and system for reserving future purchases of goods or services.” In other words, a patent on electronic options buying. This is a great example of the junk patents that the United States Patent and Trademark Office (USPTO) puts a rubber stamp on and approves.

Braxton wins the fight in court, but in the face of the costs for an appeal and renewed threats by Smart Options to sue again on another patent, he sells out to another patent troll that was able to capitalize on Braxton’s distress.


Welcome, High School Freshman! Pee in This Cup!

High school is rough for a lot of kids. As the captain of my high school’s academic team (we took tests competitively and competed weekly with other students in academic competitions—yes, this is real thing), you can imagine I wasn’t on the ballot for “Ms. Popular.” Others undoubtedly experience worse. Between parents, puberty, and prom, it’s a wonder we don’t leave our high school years with PTSD in addition to our diplomas.

During a recent visit to my parents, I heard a news report regarding a local high school’s new drug policy. Trinity High School, located in Louisville, Kentucky, is to begin mandatory drug and alcohol testing during the 2015 school year. The school cited how early kids are experimenting with drugs as a major factor in their decision. Approximately 75 percent of the students will be tested in the 2015-2016 school year. Further down the road, all students will be tested randomly throughout the year.

In a press release on the policy, the school stated it wanted to empower students to resist drugs. When confronted with a situation in which drugs and alcohol are present, Trinity students can now say, “I can’t, my school tests.”

My first reaction to this story was one of sheer bafflement. Imagine walking around your high school as a 16-year-old sophomore. You’re headed to class when some guidance counselor, principal, or other staff member hands you a plastic cup. Nothing goes with a statistics test like calculating the probability a random school administrator will ask you to pee in a cup.


Health Jobs Grow Twice as Fast in April as Other Jobs

Of the 223,000 jobs added in April, 45,000 were in health services, according to the latest Employment Situation Summary from the Bureau of Labor Statistics. Health services employment rose by 0.30 percent monthly, while other nonfarm, civilian employment grew only 0.14 percent. This continues the trend seen in March. As shown in Table 1, jobs in ambulatory settings accounted for well over half of health jobs.

20150511 Health Workforce T1[1]

Longer-term jobs in ambulatory settings accounted for just under half of health jobs in the last year, as shown in Table 2. Obamacare seems to be juicing jobs in the health services sector, which continues to challenge repeal efforts. Hospitals, especially, are relentlessly lobbying for its survival and expansion.

20150511 Health Workforces T2[2]

The Individual Mandate

healthcare-lawAs most people know by now, the Individual Mandate is one of the key elements in the Affordable Care Act (ACA). The Supreme Court ruled in 2012 that the Individual Mandate is constitutional. Prior to that ruling, both proponents and opponents of the ACA agreed that it is essential enough that the ACA would not work without it.

Enforcement of the Individual Mandate lies with the Internal Revenue Service (IRS), which is supposed to verify compliance when taxpayers submit their income tax returns.

With all the discussion of the importance of the Individual Mandate, I was surprised–as many taxpayers must have been–to discover that the way the IRS is verifying compliance with the Individual Mandate is through a box taxpayers check on their 1040 form stating they have health insurance.


Shifting from Quantity to Quality in Patent Applications

patent_trolls_180x270VentureBeat has published a good piece on how “innovators are now moving away from creating untargeted, mass-produced innovations that aim only to secure as many patents as possible, and they’re moving toward precise innovation centered around specific product and market needs.” The American patent system has long been suffering the consequences of the issuance of junk patents that are eventually bought for pennies by patent trolls who then use these patents to shake down various companies and innovators. Fewer patents can only help our system and make it more difficult for the trolls to conduct business.

The Ex-Im Bank Redux

indexAdam Smith, the first and still best of all of the world’s economists and moral philosophers, once wrote in opposition to all systems of “preference and restraint”.

That lesson is lost on most politicians and all special pleaders who support re-authorization of the taxpayer-financed Export-Import Bank, whose funding is once again set to expire at the end of June 2015. The Ex-Im Bank is a poster child for crony capitalism. The list of the major beneficiaries of its subsidies and loan guarantees is headed by Boeing, Caterpillar and other large U.S. corporations, none of which need privileged access to the common pool resources of the federal budget to sell their products overseas. The Ex-Im Bank allows foreign airlines and mining companies, among others, to buy capital equipment from U.S. manufacturers on the cheap, thereby gaining advantages over their rivals in the global marketplace, many of which, like American and Delta airlines, are headquartered in the United States. Subsidies to exporters at the expense of ordinary American taxpayers not only distort competitive market forces, but, insofar as they help Boeing and hurt U.S. commercial airlines, also are morally indefensible.

I once told Mercatus’s Veronique de Rugy in person that if fiscally responsible commentators like us cannot kill the Ex-Im Bank, we cannot kill any other profligate federal spending program that delivers special benefits to politically well-organized lobbyists, paid for by you and me.

It is past time for all Americans to stand up against all systems of preference and restraint. Although many other for opportunities for opposing Washington’s expansionism could be put on the table, the pending re authorization of the Ex-Im Bank is a good place to start.

Save the Children. Open the Border

They call it “La Bestia” (“the beast”) or “el tren de los desconocidos” (“the train of the unknown”). Every year, an estimated 400,000 to 500,000 immigrants, as many as 1,500 per day, climb on top of trains and travel from their countries of origin—mostly Guatemala, Honduras, Nicaragua, and El Salvador—and through Mexico in an effort to reach the United States.

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Obamacare’s Risk Corridors Are Back, and Bigger and Badder than Ever!

health_costsLast year, I discussed at length Obamacare’s risk corridors, which comprised an unlimited taxpayer bailout of insurers’ profits in the Obamacare exchanges, by transferring money from insurers with extra profits to those whose profits from Obamacare are less than expected. Fortunately, Congress capped this liability last December.

The CROmnibus, which funded the government for 2015, put a guardrail around the risk corridors by legislating that any payments beyond budget neutrality would have to be appropriated. (That is, if extra profitable insurers earned $100 “too much” and losing insurers lost $200 “too much”, the winners could pay the losers $100, but the U.S. Treasury could not just make up the balance without Congress appropriating the funds.)

Well, Standard & Poor’s has just concluded that payments from extra profitable insurers will fund only 10 percent of risk corridor payments:

Standard & Poor’s Ratings Services expects the ACA risk-corridor pool to be significantly underfunded if the government enforces budget neutrality. Budget neutrality requires the pool to be funded by payments insurers make into the pool. No external funding can be allocated to it. Our study of risk-corridor receivables and payables recorded in U.S. health insurance companies’ 2014 annual financial statements found that receivables insurers booked for the ACA corridor far outweigh the payables. In fact, our study indicates that the risk corridor payables are less than 10% of the receivables insurers reported in 2014.

Taxpayers: We dodged a bullet. U.S. Senator Marco Rubio wants to take it a step further, by simply abolishing the risk corridor payments entirely. Given how quickly the Republican-majority Congress stampeded into paying for an unfunded Medicare “doc fix” just a few weeks ago, it might not be a bad idea.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book: A Better Choice: Healthcare Solutions for America, by John C. Goodman.