Why Won’t Medicare Pay for Medical Tourism?

medical-tourismIn a working paper published by the Mercatus Institute at George Mason University, Marc D. Joffe notes that Aetna, Blue Shield, and HealthNet offer health insurance in California that gives beneficiaries access to Mexican providers. The U.S. insurers rent a provider network from a Mexican insurer.

The costs of health care in Mexico are 60 percent to 80 percent lower than in the United States. Cash-paying Americans travel to Mexico for many medical procedures. Joffe cites estimates of around half a million Americans annually visiting Mexico for medical care (although the number travelling only to fill prescriptions is not reported).

Joffe notes that 25,000 Americans living in Mexico in 2011 were receiving Social Security deposits. Unlike half a million other Americans who travel to Mexico for treatment, these retirees and their spouses return to the United States for treatment. The reason is that Medicare does not pay for their treatment out of country.

Joffe doesn’t estimate how much money Medicare would save if it paid for their treatment in Mexico, but a back of the envelope estimate is not hard to figure out.


Obamacare’s Cost Is Down 8%, but That May Not Be Good News

But so is access to doctors and hospitals in the plans offered on the health insurance exchanges.

A Congressional Budget Office report estimates lower federal spending (see the figure). The reason: Health plans in the exchanges look more like Medicaid than like employer-based coverage. Jason Millman reports:

The CBO report points out that it previously thought Obamacare’s exchange plans would look more like employer-based coverage, but that hasn’t turned out to be the case so far—hence, the cheaper premiums. “The plans being offered through the exchanges this year appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans,” CBO wrote.


Gov. Bobby Jindal’s Health Reform Proposal: Pros and Cons

11935359_SGov. Bobby Jindal (R-LA) has joined the number of Republicans with an alternative health reform. His Freedom and Empowerment Plan doesn’t mince words on repealing Obamacare:

The American people are in favor of repealing Obamacare. But conventional wisdom in Washington holds that the law cannot be fully repealed. I couldn’t disagree more. A country that won two world wars and landed a man on the moon can surely eradicate this attack on our health care system.

Much of what is in his outline is found in other Republicans’ proposals. Jindal would demand that states “guarantee access” to people with pre-existing conditions, through a “high-risk pool, reinsurance, or some other method ensuring those with chronic conditions can obtain needed care.”

Expanding the options for “guaranteeing access” beyond high-risk pools is very promising: “Reinsurance” is what we call “change of health status insurance,” which both protects those with pre-existing conditions and gives insurers incentives to enroll them (as described in John C. Goodman’s Priceless: Curing the Healthcare Crisis, pp. 183-184).


P. J. O’Rourke on the Baby Boom Generation

18052000In a career spanning four decades and counting, P. J. O’Rourke has written twenty books on subjects as diverse as the antics of Congress (Parliament of Whores), economic development (Eat the Rich), U.S. foreign policy (Peace Kills), and civil turmoil in the world’s hotspots (Holidays in Hell).

On February 13, the humorist and Founding Member of the Independent Institute’s Board of Advisors delighted an overflow crowd at our Oakland, Calif., headquarters with witty insights drawn from his latest book, The Baby Boom: How It Got That Way . . . And It Wasn’t My Fault . . . And I’ll Never Do It Again.

What sets apart the Baby Boomers from other age groups in American history? It’s true that the 75 million born in the United States from 1946 through 1964 reflect the post-war spike in birth rates. It’s also true that they became famous for challenging parental authority and other institutions. But a diagnosis of “demographics and defiance” misses the heart of the matter.

The fundamental defining characteristic of Baby Boomers, according to O’Rourke, is their emphasis on personal identity, an often reckless passion that gave him plenty of material to poke fun at.


Let’s Start a Tax Revolt with Our iPhones

Screenshot_230Tax Day is upon us and at the federal level we’re told that Washington spends $3.5 trillion a year. The annual federal deficit stands at $514 billion. The national debt has climbed to $17.6 trillion. All of these numbers are staggering, and that’s the problem. Few people can relate to such large numbers because they obscure a more basic question: What does Washington’s spending cost me?

To answer this question, The Independent Institute created the MyGovCost Government Cost Calculator in 2010. And today the Institute has launched an accompanying mobile app for iPhones and iPads called MyGovCost, which allows people anywhere to find out how much money federal spending is costing them. It’s a personalized number based on information you supply regarding your age, annual income, and education level.

After you enter your information, the calculator shows you your share of federal spending, federal taxes, and the national debt. For example, a person age 35, with a college degree, earning $60,000 a year has a share of annual federal spending equal to $13,711, annual federal taxes of $10,380, and a national debt share of $64,604—all astounding amounts.

This person’s total federal tax bill through age 80 will be more than $529,000. If instead they had been able to invest this money at an annual rate of 6.1 percent (an historically attainable rate), they would have had a nest egg exceeding $2.7 million.

The MyGovCost app allows our 35 year old to ask herself or himself: Will I get $2.7 million worth of services from Washington? The wars in Iraq and Afghanistan alone will cost this person nearly $9,000 in lost retirement savings. Are these wars worth it?

People can make more informed decisions when they know individual price tags. The MyGovCost app provides price tags in many areas such as military operations, agriculture, energy, the environment, Social Security, Medicare, Medicaid, and welfare.

The free MyGovCost app is now available for the iPhone or iPad on the Apple App Store.

In the nation’s most populous state of California, more people are deciding they’re not getting their money’s worth from government. A new poll finds that 60 percent of Californians say they pay “much more” or “somewhat more” in taxes than they should. Is a new tax revolt brewing in California? Let’s hope so because it’s long overdue in California and everywhere else.

Uninsured Patients Are 36 Percent More Likely To Get Medical Appointments Than Are Medicaid Patients

medicare 230According to data compiled by the Kaiser Family Foundation, in fiscal year 2010 the average Medicaid payment per enrollee was $5,563. To be sure, there was a wide variance: For aged Medicaid enrollees the average payment was $12,958, and for disabled enrollees it was $16,240. The average for adults was $3,025, and for children it was $2,359.

Medicaid enrollees have terrible access to care, according to a number of studies discussed in John Goodman’s Priceless (chapter 15). New research published in JAMA Internal Medicine suggests that it would be better simply to give Medicaid patients this money and let them spend it directly on medical care.

Posing as patients, researchers made almost 13,000 calls to doctors’ offices in ten states, seeking appointments for a variety of ailments. Those posing as privately insured patients got appointments 85 percent of the time. Those posing as patients on Medicaid got appointments only 58 percent of the time. Researchers also posed as uninsured patients who were willing to pay in full at the time of the appointment.

The result? For appointments costing more than $75, 78 percent of the “uninsured” researchers got a medical appointment—a success rate 36 percent higher than for those posing as Medicaid patients and quite close to those posing as privately insured.

The policy implication? Taking Medicaid money away from Medicaid bureaucracies and giving it to low-income people to pay directly for health care would increase access significantly.

Why Is Obamacare a Rube Goldberg Contraption?

RubenventPaul Krugman has written another one of those columns where almost every single sentence is wrong. But he did get one thing right:

The crucial thing to understand about the Affordable Care Act is that it’s a Rube Goldberg device, a complicated way to do something inherently simple. The biggest risk to reform has always been that the scheme would founder on its complexity.

Have you ever wondered why Obamacare is burdened with so much complexity? Here’s the answer: Barack Obama. Obama? Yes, the president himself. He campaigned on the promise that he would put partisanship aside and unite the country behind sensible answers to pressing problems. Then he didn’t.

How could that possibly have worked in health care? Easy. Obama could have adopted the approach taken by his 2008 opponent, John McCain. In fact we now know that Zeke Emanuel and others on the White House staff were urging him to do just that. Also, before he became the president’s chief economic adviser, Jason Furman wrote a paper in which he endorsed a McCain-type approach to health reform. Since McCain’s approach was more progressive than Obamacare, it would have been easy to garner support on the left. And how many Republicans would have opposed the plan, after campaigning for McCain and defending his health plan during the election?


Medicaid Patients’ Access to Specialists Has Dropped Almost One-Fifth in Five Years

According to Merritt Hawkins’ 2014 survey of physician appointment times in fifteen urban markets (press release here, full report available by request from the firm), the proportion of physicians in five specialties (cardiology, dermatology, orthopedic surgery, ob/gyn, and family practice) accepting Medicaid patients dropped from 55.4 percent in 2009 to 45.7 percent — a drop of almost one-fifth.

This decline under the Obama administration contrasts with some improvement in Medicaid patients’ access during the second term of the Bush administration: Merritt Hawkins’ 2004 survey reported that 49.8 percent of physicians accepted Medicaid patients.

For the first time, Merritt Hawkins asked physicians if they were willing to take on Medicare patients: Only 76 percent said yes. In Minneapolis, only 38.2 percent of physicians were willing to take Medicare patients! (Unfortunately, the survey did not ask physicians if they took private insurance.)

As in 2009, Boston had the longest waiting times to see specialists. Overall, the waiting times were not significantly different than in 2009, with a few exceptions. Wait times in Los Angeles and Houston dropped dramatically, while increasing significantly in Denver.


What Middle East Peace Process?

4936771_SThe so-called Middle East peace process has died a thousand deaths. The last one happened early in April, when Mahmoud Abbas signed several treaties with international agencies under the Palestinian Authority’s recently gained “observer State” status against the wishes of the United States and Israel. The move followed Tel Aviv’s decision to renege on its pledge to release dozens of prisoners held since before the Oslo accords. A somber John Kerry spoke of evaluating the U.S. role in the process.

Abbas’ argument for unilaterally reasserting statehood was a pretext. The real reason is that, since Obama launched his new Middle East initiative back in July, Israel has intensified its policy of building settlements on land conquered in 1967 in order to make a Palestinian state unviable.

In an ideal world, the end of the Israeli-Palestinian conflict would hinge, not on a two-state solution, but on friendly coexistence under common rules based on property rights and individual liberties. In the real, messed-up world, the two-state solution in its prettiest form might at least do the Palestinians some justice and guarantee Israel its safety. The problem is that Benyamin Netanyahu, fully aware that the balance of power within Israeli society and politics favors his line, is working to make this impossible—to the delight of Arab radicals who want Abbas, the most reasonable Palestinian leader in a very long time, to fail.

Obama pushed for a negotiation during his first term, but it all ended in a fiasco when he and Netanyahu had a public spat in the White House. The U.S. president had made gestures to the Arab world, openly calling for a return to pre-1967 borders, which is anathema to most Israelis, and the freezing of Jewish settlements. Netanyahu appealed to the pro-Israel lobby in Washington and, as always, the issue became domestic for the United States. Obama pull backed and Abbas, under pressure from his own camp, pressed for statehood at the United Nations, obtaining an observer status that was symbolic in nature but politically effective at home and among his allies.


Exaggerating the Damage Caused by Climate Change

PropagandaHere is a link to the abstract of a peer-reviewed article in the American Journal of Agricultural Economics. (You may be able to download the full article. I could, from my university computer.)

The abstract says, “It appears that news media and some pro-environmental organizations have the tendency to accentuate or even exaggerate the damage caused by climate change. ... We find that the information manipulation... induces more countries to participate in an IEA [International Environmental Agreement], which will eventually enhance global welfare.”

The article argues that by exaggerating the harmful effects of climate change, advocates can gain more support for government climate change policies.

The article says, “Linking climate change to extreme weather may be a powerful way to motivate people.” Referring to the Intergovernmental Panel on Climate Change, it says, “The IPCC has tended to over-generalize its research results and accentuate the negative side of climate change. Following its lead, the mainstream media has gone even further.”

Later, “...it may be better for the countries to hold a pessimistic view of the climate problem, as it will induce more countries to participate in the IEA...” The paper then goes on to develop a mathematical model to demonstrate why this is the case.

The paper’s conclusion begins, “This article offers a rationale for the phenomenon of climate damage accentuation or exaggeration on the part of the international mainstream media or other pro-environmental organizations.” And then to show the bias of the authors, “Forming a binding IEA to curb climate change is a matter of urgency... When the media or pro-environmental organizations have private information on the damage caused by climate change, in equilibrium they may manipulate the information to increase pessimism regarding climate damage, even though the damage may not be that great. Consequently, more countries (with overpessimistic beliefs about climate damage) will be induced to participate in an IEA in this state, thereby leading to greater global welfare...”

The paper concludes, “This article further explores how the mass media may manipulate the information it privately has to influence behavior related to the environment ... this article introduces a novel mechanism, ‘information manipulation.’”

This article is noteworthy because it is published in a peer-reviewed academic journal. This is not right-wing political propaganda, and it is apparent from reading the article that the authors are sympathetic to the idea that more global action needs to be taken to combat what they believe are the negative effects of climate change.

The article is written by advocates of international environmental agreements who plainly state that climate scientists and the media exaggerate the negative effects of climate change, and explain why doing so helps further their goals.