“Site-Neutral” Medicare Payments: A Good Idea from President Obama’s Budget

Medicare_200Imagine that there are two providers of the same service. Their quality and timeliness are comparable. However, one provider charges significantly more than the other. In a normally functioning market, you would expect that the more expensive provider would have to significantly change its cost structure to stay in business.

What if the more expensive provider argued that it had higher overhead, and therefore needed and deserved to be paid more? He would be laughed out of the marketplace. Yet, this is exactly what happens in Medicare. Because of different fee schedules, doctors in independent practice are paid less for the same procedure than hospital-based outpatient facilities. Unsurprisingly, this has resulted in hospitals buying up physician practices, in order to profit from this arbitrage:


Apocalypse Not: The Legacy of Julian Simon

JulianSimonThe ultimate resource is people—especially skilled, spirited, and hopeful young people endowed with liberty—who will exert their wills and imaginations for their own benefit and inevitably benefit the rest of us as well.”—Julian Simon

February 12 marks the birthday of the late economist Julian Simon (1932–1998). On this special occasion, I wish to bring attention to this thinker whose work I feel has not been fully appreciated. The implications of his controversial but time-tested ideas certainly deserve greater attention in academia and society at large.

Simon is perhaps best known for his famous wager against ecologist Paul R. Ehrlich, author of the notorious best-seller The Population Bomb.


Sorry, Your Minimum Wage Law Is a Nightmare

The minimum wage is an economic nightmare.

Let’s say it one more time, with feeling.

The minimum wage is an economic nightmare.

In the recent elections, voters throughout the U.S. took to the polls to elect their political leaders. Winners and losers were decided, the Republicans took control of the Senate, and pundits eagerly anticipate how the new political landscape will impact the U.S.

Voters also voiced their opinions on several specific issues. Alaska, Oregon, and Washington, D.C. voted to legalize recreational marijuana. Voters in four states, Alaska, Arkansas, Nebraska, and South Dakota voted to raise the minimum wage. Over the coming months, these states will raise workers’ required pay to as much as $9.75 an hour. The city of San Francisco voted to raise their minimum wage to a whopping $15 an hour.


Modern Tech Suggests Government Data on Police-Related Homicides Flawed

6129573_SThe Federal Bureau of Investigation (FBI) publishes statistics on police-involved homicides, while on duty, of civilians. Its system relies on voluntary self-reporting by the nation’s more than 18,000 local and state police agencies.

Self-reporting works well when there is an incentive to report and an incentive to report accurately. But police departments have no incentive to report this emotionally charged information with possible political ramifications. As a result, some groups have alleged that official FBI numbers undercount the true number of police-related homicides. Thanks to a group of tech entrepreneurs, there is now evidence suggesting government numbers are flawed.

A handful of independent crowd-sourced websites aggregate user-submitted local reports of police-involved homicides. Matthew Green, editor of the blog “The Lowdown: Decoding the News,” part of San Francisco’s NPR affiliate KQED, examined information on one of these crowdsourcing websites, Killed By Police (a Facebook site).


Politics Is Not Just Spy versus Spy; It’s also Slogan versus Slogan

For as long as political and ideological movements have sought to engage large followings, they have embraced slogans and catch phrases that give pithy expression to their views, aversions, and objectives. Slogans are dangerous in that they substitute rote declarations for serious thought, yet they may sometimes serve a purpose even for thoughtful people as rhetorical hammers with which one hits potential listeners in the head to get their attention. In any event, it seems that slogans and politicking are inseparable under both democratic and revolutionary conditions. So, one must pick and choose. The following are two short lists of slogans and other such utterances that repel or attract me.


Health Care Spending Is Up, Way Up

21908269_SThe economic data on health spending has been bouncing around like crazy in the age of Obamacare, so we must not read too much into one report. Nevertheless, the January 30 report on Gross Domestic Product (GDP) issued by the Bureau of Economic Analysis indicates that health spending has begun to race up again, despite moderate economic growth.

Last week’s report contains the final estimate of 3rd quarter GDP and the advance estimate of 4th quarter GDP for 2014. As noted in my comment on the December release, real GDP growth in the 3rd quarter was strong: 5.0 percent annualized, and this was confirmed in the January report. However, growth for the 4th quarter was significantly slower, just 2.6 percent annualized.


I Pledge Allegiance to Blind Nationalism

I pledge allegiance to the Flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Many of us will recognize these words as the “Pledge of Allegiance.” As a child in elementary and middle school, I remember saying the Pledge—every single day—mumbling the words, hand over my heart, facing the flag placed at the front of the classroom. As a twelve year old, there was no greater honor than being the student allowed to read the Pledge over the school intercom.

I am not alone in this experience. The Pledge is a hallmark of the American educational system. Every day across the country students state their loyalty and dedication to the flag and the U.S. government. As of 2003, the majority of states actually require the pledge to be said in schools. A few states make the pledge optional, and a few have no laws.

Pledge Map

Although the pledge contains the words, “with liberty and justice for all,” the pledge is anything but freedom preserving. For those of us who value individual liberties, the recitation of the Pledge should induce immediate feelings of duress and an uncomfortable tightening in our stomachs.

In fact, the origins of the pledge date back to 1892. The original version was written by Francis Bellamy, a Baptist minister and fervent socialist. Bellamy published the Pledge in The Youth’s Companion in September of that year. He hoped the Pledge would promote egalitarianism and undermine the “capitalistic greed” of the country. By reciting the words daily, it was hoped that the Pledge would unite school children in loyalty to the state and a collective society.

The Pledge was altered several times from Bellamy’s original words. The words “under God” were added in 1954 in an attempt to emphasize the distinctions between the U.S. and the atheistic Soviet Union.

The Pledge has been the center of controversy over the years. For the most part, those opposed to Pledge have done so on religious grounds. In 1943, the Supreme Court ruled that requiring a person to say the Pledge violates the First and Fourteenth amendments.

Issues of religion aside, the Pledge of Allegiance is disturbing.

Schools are supposed to be a place of learning, a place where students learn to think critically. Schooling is supposed to prepare students to function in society. It is supposed to make them responsible citizens.

The cultivation of devotion to the flag and the U.S. government creates anything but responsible citizens. In fact, the Pledge is a complete slap in the face to the principles it supposedly espouses. It encourages, not a love of liberty and justice, but blind obedience to an “indivisible” government.

If you’re skeptical of this, consider what happens to those who disagree with the Pledge and ask that their children be “opted out.” Not only do they see their children socially ostracized as “that kid,” but they are often viewed as “unpatriotic” or “un-American.” Heaven forbid we question authority!

It’s time to rethink the Pledge of Allegiance. As opposed to teaching our children to blindly follow a piece of cloth and the government behind it, let’s teach them to think critically, value liberty, and truly appreciate the need to protect personal freedoms.

Medical-Device Excise Tax Kills Jobs, Obamacare Kills Much More

StethMoney_150The sweet smell of success for the medical-device industry is wafting over Capitol Hill. News from Senator Orrin Hatch (R-UT) is that the Senate will take up repeal of the medical-device excise tax. This is a tax of 2.3 percent on most medical devices that was passed as part of the Affordable Care Act to fund Obamacare.

AdvaMed, a trade association representing the medical-device industry, has just published another survey of its members, which reports on the tax’s impact on jobs:

According to the survey, the tax has led to employment reductions of approximately 18,500 industry workers and will lead to forgone hiring of 20,500 additional employees over the next five years. The total impact of the tax on medical technology industry employment is approximately 39,000 jobs. Additional jobs will be lost in companies providing supplies or services to the industry. Forty-six percent of respondents said they would consider further employment reductions if the tax is not repealed. On the positive side, 71 percent of respondents said they would reinstate forgone hiring if the tax were repealed.


Breaking News: The FDA Will Not Regulate Your Kid’s Skateboard

20686970_SThe Food and Drug Administration has just issued draft guidance saying that it will not regulate products that help with “general wellness” and “promote a healthy lifestyle,” but pose low risk to peoples’ safety.

The guidance specifies “exercise equipment, audio recordings, video games, software programs and other products” (although I suppose “other products” is not really very specific). The inclusion of exercise equipment is especially alarming. Exercise equipment has been around for generations. The term includes baseball bats, snowboards, and running shoes. Why, in 2015, has it become necessary for the FDA to clarify that it will not regulate these items?


The Fall of Liberty and Human Dignity in American Sniper

American SniperGiven the buzz from conservatives touting the film American Sniper‘s homage to Christopher Kyle as a war hero, libertarians may be tempted to sit this movie out. I think they should resist that temptation. This is not a typical “war movie.” In fact, I would argue it’s not a war movie at all: it’s a character study of the corrupting influence of systemic violence on idealism, especially when that violence is socially and politically justified, and even when those ideals are noble by most conventional measures. Herein lies the lesson (and threat) to liberty, and I believe this theme is told masterfully through the story of Chris Kyle under the direction of Clint Eastwood.