Hospitals Are Cutting Charity Care and Using Emergency Rooms More

18862233_SHospitals, inveterate lobbyists for Obamacare, have responded rationally to its incentives: They have increased use of their emergency departments, and cut charity care.

On Tuesday, NPR had a feature on hospitals’ using online services to allow frequent flyers to book appointments with emergency departments:

Three times in one week, 34-year-old Michael Granillo returned to the emergency room of the Northridge Hospital Medical Center in Southern California, seeking relief from intense back pain. Each time, Granillo waited a little while and then left the ER without ever being seen by a doctor.

“I was in so much pain, I wanted to be taken care of ‘now,’ ” says Granillo. “I didn’t want to sit and wait.”

But on a recent Wednesday morning, he woke up feeling even worse. This time, Granillo’s wife, Sonya, tried something different. Using a new service offered by the hospital, she was able to make an ER appointment online, using her mobile phone.

Isn’t that exactly the sort of thing that Obamacare was supposed to stop? All those newly insured patients are supposed to get timely primary care, nipping their health problems in the bud at low-cost points of care. Back in July, I wrote about this worrying development, and concluded that we might all end up getting our health care in the ED. Well, it looks like that is the hospitals’ goal:

Recently, Dignity stepped up its marketing—with billboards, print advertisements and online and radio spots. One online ad features a woman sitting in a hospital waiting room, and then cuts to her on a living room couch with a dog, as the words on the screen read, “Wait for the ER from home.”

Who is not welcome? The uninsured, that’s who:

Stephen Maxwell had struggled for years with a bad back, but what he felt in December was something new.

In January, Truman Medical Center, the hospital he has relied on for care, rolled back its financial assistance program. Truman used to provide free or discounted care for uninsured people making up to 400 percent of the federal poverty level—$46,680 for an individual. Now, only those making less than 200 percent qualify for the help. The change was intended to motivate people to sign up for health insurance plans through the Affordable Care Act. (Kansas City Star)

Another Obamacare success story! Hospitals are where we spend most of our health dollars. And their incentives under Obamacare are worse than they ever were. The next health reform must ensure that hospitals are freed from the spell of perverse incentives.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

The Worst (Still) Get on Top

admin-ajax.phpHow often when discussing politics, listening to the news, or hearing about the latest government debacle do you hear something like, “If only John Doe was in office” or “If we could just get the right people in there, things would be better?” How often are issues like corruption, waste, and other perverse outcomes viewed as a preventable and lamentable byproduct of “the wrong people?”

But is this necessarily the case? Would things really be so different if different people were in power?

Nobel laureate F.A. Hayek addressed this very question in one of his most famous works, The Road to Serfdom. One chapter of the book is titled, “Why the Worst Get on Top.” In it, Hayek responds to the immensely popular idea that the ills of socialism could be avoided. Although most people found “extreme” forms of socialism (Nazism, fascism, etc.) to be repugnant, it was thought that the particularly nefarious parts of these systems could be avoided. An “American socialism” would certainly look very different than the Soviet regime. Hayek challenged this notion. He argued that the very nature of the system would ensure that the worst came to power. Those who would become political leaders would be those individuals who sought power and were willing to use violence and other coercive methods to achieve their goals.

Hayek offered three reasons why the leaders of a system tending toward totalitarianism would consist of the worst, not the best, individuals. First, he argued that in order to obtain a “high degree of uniformity in outlook,” we have to look to a group of people with low moral standards. Second, in order to obtain and maintain power, leaders in the system must gain the support of the gullible and “those whose passions and emotions are easily aroused.” Third, in order to bring together supporters, leaders will unite people behind a “common enemy.”

Hayek goes on to say that the survival of a totalitarian system depends on the willingness to supplant the needs of the collective over the needs of the individual. He states,

The principle that the end justifies the means...becomes necessarily the supreme rule. There is literally nothing which consistent collective must not be prepared to do if it serves ‘the good of the whole.’....Once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarianism which horrify us follow out of necessity.


The worst the word “liberty”....‘Collective freedom’ is not the freedom of the members of society, but the unlimited freedom of the planner to do with society that which he pleases.

Hayek’s points are still relevant today. Though few would argue for Soviet-style central planning, there are many who advocate centralized planning in the form of foreign intervention and domestic programs. They place their trust in the bureaucratic apparatus of government to achieve some larger goal. As Hayek points out, the actions of these leaders is often justified to the public via emotional appeals and some idea of the “collective good.” The result is detrimental to liberty.

Take for example a recent interview with retired General Stanley McChrystal. In it, he argues that American youth should be expected to do “a year of service.” Further, he suggests that jobs and educational benefits should be tied to such activities. Why? Because self-sacrifice will “bind” young people to one another and “the nation.” Individuals should sacrifice their liberties in the name of the “greater good” as envisioned by the political and military elite.

Without a doubt, the world is experiencing some scary things. Ukraine is imploding. There is an Ebola outbreak in Africa. Syria is engaged in civil war. Iraq is in turmoil. There is a chance the violence could resume in Israel. But it’s important to remember that it’s not a matter of who is in political office, who runs the military operations in Iraq, Afghanistan, and Syria, or who heads the humanitarian mission in Liberia and the rest of Africa. The issue is more fundamental. Those who will seek out those positions are the ones who gain the most from being there. As Hayek pointed out, those are likely the last people we would want.

Though we may not be able to outright alter the institutions that influence political actors, perhaps there is something individuals can do. As citizens, we take responsibility for ourselves. Individuals must champion personal liberties. Each of us has the choice to think critically and to value the rights of the individual over some notion of the “greater good.” It may be small, but it’s a first step in ensuring we protect our freedoms from the “worst on top.”

Coercive Foreign Policies and the Boomerang Effect

tir_19_2_210More than a century ago, Mark Twain noted that if a “Great Republic” goes about “trampling on the helpless abroad,” then that government stands a good chance of turning against its own citizens. But why does a nation’s repression of other countries raise the risk of repression at home?

The short answer, according to Independent Review co-editor Christopher J. Coyne and Independent Institute Research Fellow Abigail R. Hall, is that coercive foreign intervention sets in motion various politico-economic mechanisms that cause it to act like a boomerang, knocking down freedoms in the “throwing” country.

Coyne and Hall put forth their thesis of the “boomerang effect” in their lead article in the Fall 2014 issue of The Independent Review. How does it work? When a government tries to impose social controls on foreign populations, the authors explain, typically it does so using means that expand the scope of government domestically. Those means include new skills and equipment to monitor and quell resistance, greater centralization of government power, and the inculcation of a willingness to impose more coercion on ordinary citizens. When mixed together, these ingredients act as a potent corrosive that erodes rights and liberties at home.

Coyne and Hall also offer two illuminating case studies of the boomerang effect. The first involves government surveillance of ordinary Americans. Its origins, they show, go back to the U.S. occupation of the Philippine Islands after the Spanish-American War, when Army Captain Ralph Van Deman helped create a data collection system to monitor Filipino insurgents and others. After his return stateside, Van Deman lobbied high-ranking officials to create a similar program that later spied on U.S. citizens who opposed America’s entry into World War I—a precursor to the NSA’s high-tech surveillance programs.

Coyne and Hall’s second illustration examines the militarization of domestic policing. The paramilitary SWAT teams now common in police departments across the United States, they show, were first created by Los Angeles police chiefs eager to adapt what they learned from special military units during the Vietnam War and World War II.

The lesson? Mark Twain could have summarized his point with one karmic aphorism: What goes around comes around.

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Perfecting Tyranny: Foreign Intervention as Experimentation in State Control, by Christopher J. Coyne and Abigail R. Hall (The Independent Review, Fall 2014)

Perfecting Tyranny, by Abigail Hall (The Beacon, 9/17/14)

AUDIO: Abigail Hall on the Scott Horton Show (9/19/14)

SPECIAL OFFER for The Independent Review: If you’re not already a subscriber, sign up now and receive a FREE book!

[A version of this post first appeared in the September 23, 2014, issue of The Lighthouse. For a free subscription to this weekly newsletter from the Independent Institute, enter your email address here.]

Public Schools and Government Schools

5222340299_3778446_f520_xlargeEarlier this year, I was saddened by the passing of Stanley Marshall, founder of the James Madison Institute, an organization that promotes individual freedom in Florida. Stan was president of Florida State University from 1969-1976, and went into private business before founding the James Madison Institute in 1987. I have worked with the Institute since it was founded and was privileged to be able to call Stan a friend. Stan had lots of friends, including those with whom he had political disagreements. He was an impressive individual who lived 91 good years, so while I was sad to see him go, his life deserves celebration.

Among the many insightful observations I heard from Stan was the distinction he made between public schools and government schools. Government schools should not be called public schools, he said, because they are not open to the public. In order to attend one, you must live in a particular district, so government schools exclude most of the public from being able to attend.

The schools we refer to as private schools, in contrast, are open to the public, so those schools really are public schools. As Stan saw it, non-government schools are public schools, while government schools are not.

This terminology can’t catch on, of course, because government schools have already appropriated the public school name. But the idea is worth sharing and repeating, just to disabuse people of the idea that government schools are open to the public.

The school choice movement is an attempt to allow students to choose which government school they attend, which would move government schools closer to being public schools. In this regard, note the pushback that the government education hierarchy is making against school choice. Teachers’ unions and school administrators are leading the charge to prevent government schools from actually becoming public schools.

Coming Soon to California: Teachers’ Right to Work?

indexBig changes could be in the works for the California Teachers Association (CTA), the state affiliate of the country’s largest teachers union, the National Education Association (NEA).

The CTA claims it has 325,000 members. How many of them are voluntary dues-paying members is anybody’s guess. In the past the CTA has demolished “paycheck protection” initiatives in California—most recently Proposition 32 in 2012—through its sheer spending power, paid for in large part by compulsory dues from members.

That strategy doesn’t work so well in the courtroom, though.

The Harris V. Quinn Supreme Court ruling against compulsory dues collections from Illinois health care workers this summer doesn’t bode well for the CTA. Currently, it is also embroiled in its own legal challenge from the Center for Individual Rights (CIR), which is representing 10 California teachers and the Christian Educators Association International who are fighting against “agency shop” laws that require union membership as a condition of employment.

Should CIR prevail in the Ninth Circuit Court case Friedrichs v. CTA the practice of compulsory union dues imposed on any government employee could come to a screeching halt in the near future.

Larry Sand, a retired teacher and president of the California Teachers Empowerment Network, explains in his recent City Journal article that the CTA is prepping for the likely death of “fair share” and life ever after in a paycheck-protection world:

The worst union in America is contemplating its worst nightmare—a time when state law no longer compels California’s teachers to pay it for the privilege of working at a public school. According to a 23-page PowerPoint presentation unearthed by union watchdog Mike Antonucci, California Teachers Association officials are taking seriously the idea that a raft of pending litigation could put an end to mandatory union dues in the Golden State, and they’re exhorting local union leaders to rise to the challenge. The presentation’s title is fitting: “Not if, but when: Living in a world without Fair Share.”

“Fair share” in this context refers to the union’s current legal right to collect dues from every public school teacher in the state, whether they join the union or don’t. ...

The CTA is evidently resigned to the inevitability of losing the state’s protection. The last part of the union’s PowerPoint outlines an action plan suggesting different techniques to attract new members.

“Right-to-work” fever is catching on, and Sand notes that leaders of other unions are also resigning themselves to life in a free world and consoling themselves with the fact that two of the country’s most successful membership organizations, the AARP and the NRA, don’t rely on compulsory dues.

Sand also cites recent national public opinion polls that found that 83 percent of Americans believe workers should be free to choose whether or not to join a union, and that 29 percent of union members would leave their unions if they could. He rightly concludes:

Perhaps unions are on the verge of conforming to what Alexis de Tocqueville called the characteristic institutions of American life—voluntary associations. It’s about time.

It sure is, and the implications for California students are also immense.

It remains to be seen how many teachers, given the chance, would actually choose to stay or become dues-paying CTA members. Until that’s all sorted out, certainly in the short-term the CTA’s political power in Sacramento would be a glimmer of what it has been. That power void would be a tremendous opportunity to advance parental choice in education throughout California—including ending the practice of assigned schools based on parents’ income and address.

Even more, California policymakers could be advancing one of the most promising K-12 reforms already operating in Arizona and Florida: educational savings accounts (ESAs). Under these programs, students whose parents don’t prefer a public school simply inform their state education agency, and 90 percent of what the state would have spent to educate them in public schools is deposited into that child’s ESA instead. With those funds parents can pay for private school tuition, tutoring, online courses, and other education-related expenses. What’s more, any unused funds remain in ESAs for future education expenses such as college.

Arizona teachers and other unions sued to end the ESA program there—and lost. Florida’s ESA is under a similar legal challenge now.

In an ideal world, taxpayer dollars wouldn’t flow through Sacramento or Washington, D.C., in the first place. ESAs are a step in the right direction because they put parents—not politicians and their special-interest allies—back in charge of education dollars that are supposed to be for their children’s education.

A CTA that’s brought back down to size—based on voluntary membership—will have enough troubles of its own and would have a tough time fighting parental choice, teacher tenure, and voluntary membership in the courts.

The time couldn’t be better for California students, parents, teachers, and taxpayers interested in the restoration of constitutional and sensible education policy.

Obamacare Will Devour Your Pay Raise

Mercer’s latest National Survey of Employer Sponsored Health Plans finds that the cost of employer-based benefits will jump significantly in 2015. Employee-benefits writer Stephen Miller, CEBS, reports:

Employers in the U.S. are predicting that health benefit cost per employee will rise by 3.9 percent on average in 2015, preliminary results from a new survey by Mercer reveal. Cost growth slowed to 2.1 percent in 2013, a 15-year low, but appears to be edging back up. Moreover, a higher percentage of employees signing up for coverage through the worksite could be a wildcard driving costs higher.

The projected increase for 2015 reflects actions employers plan to take to manage cost. If they make no changes to their plans for 2015, they predict that costs will rise by 5.9 percent on average. However, only 32 percent of respondents are simply renewing their existing plans without making changes.

One important change that employers are making is moving towards consumer-driven health plans (CDHPs), coupled with Health Savings Accounts or Health Reimbursement Arrangements. Currently, 6 percent of large employers offer only CDHPs. Within three years, 20 percent of employers anticipate that they will have fully replaced their traditional health insurance with CDHPs.

Some believe that Obamacare is driving this switch. To be sure, we should be grateful that CDHPs are surviving Obamacare, but they have been growing in the employer-based market for years. The real effect of Obamacare is shown in Figure 1: It is eliminating pay raises. Recall that we entered the Great Recession in December 2007, but even then we got pay raises (according to Figure 1). That is ending. All of our increased compensation will be in the form of health benefits, which will not be better, but merely Obamacare-compliant. Isn’t it time American workers took home more of their compensation as wages, instead of paying it to health insurers?


Common Core Called the “Obamacare of Education”

ObamaClassroomUS Senator Mike Lee (R-UT) makes a compelling case for abolishing Common Core in a recent letter. As Newsmax reports:

“As a U.S. Senator, I’ve seen the federal government make a mess of everything it touches,” the Utah Republican wrote in the email sent out Monday morning. “And if they’re allowed to stay, Common Core standards will be the ObamaCare of education,” he wrote. “Common Core is the D.C. takeover of our school system. It will dumb down standards and cheapen the education our children receive.”

All kids in America “deserve the best education in the world. The only way we can make that happen is to repeal Common Core across America,” Lee wrote.

“When it comes to education, the future of our country is on the line,” the senator said in the email. “The next generation of Americans doesn’t need to be force-fed big government propaganda in the classroom.

Sen. Lee is right. Common Core is not a set of rigorous standards. It’s a set of political agendas masquerading as academics “voluntarily” adopted by the states (see here, here, and here).

Competition, not Common Core, is what American schools and students need.

Today, more than 6 million schoolchildren are benefiting from education options their parents — not politicians — think are best. These options include 51 private parental choice programs in 25 states, online education providers, homeschooling, and public charter schools.

Parental choice programs educate students to high standards, without limiting education options. And, unlike accountability initiatives involving rigid federal mandates, all chosen education providers face immediate rewards for success or consequences for failure because parents are empowered to enroll or transfer their children as they see fit.

Ultimately, Common Core rests on the faulty premise that a single, centralized entity knows what’s best for all 55 million students nationwide. Raising the education bar starts with putting the real experts in charge: students’ parents.

Gaming Gainful Employment

collegegraduatesIt looks like the U.S. Department of Education is fudging the numbers...again.

The Obama administration is taking another run at imposing onerous gainful-employment regulations on private, for-profit career colleges.

Under the new proposed regulations unveiled earlier this year, for students to qualify for federal aid for-profit career colleges must prove the estimated annual loan payments of graduates do not exceed 20 percent of their discretionary earnings, or 8 percent of their total earnings, and the default rate for former students does not exceed 30 percent.

Education Secretary Arne Duncan insisted that 72 percent of career college graduates earn less than high school dropouts. That figure was soundly discredited, but it seems the department hasn’t learned its lesson about fudging the numbers. As’s Bre Payton reports:

The U.S. Department of Education doesn’t know for sure how many comments the public submitted to it nearly four months ago about the controversial “gainful employment” rule.

Experts say the “witch-hunt” like rule ought to be able to stand up to feedback from those affected by it, but while the public comment period closed May 27, the department still hasn’t “counted up an exact figure” of comments received.

The department is instead “spending our time having conversations and crafting a rule that will best serve students,” a spokesman from the department said on background in an email to ...

The department spokesman confirmed staff received “less than 100,000 comments this go-around.”

Advocates worry the department’s opaque treatment of these comments is not only a transparency issue, but a disservice to the rule-making process.

If gainful-employment regulations go through, they’ll also inflict more hardships and less opportunities for students and taxpayers.

Jameis Winston . . . Again?

jameisIf you’re even a little bit of a sports fan, you probably know that Florida State University’s quarterback, Jameis Winston, has been suspended from the first half of the FSU-Clemson game for standing on a table in the student union and shouting out obscenities. As good as he’s been on the field, Jameis has been in the news a lot over the past year, receiving negative publicity for his off-the-field activities.

I’m on the faculty at Florida State, and when I heard the news, I questioned whether his offensive behavior really warranted that punishment. He offended some people (most of them, people who weren’t there at the time but just heard about what he did on the news), but he didn’t hurt anybody, and he apparently had no malicious intent. But, I thought, maybe because this isn’t the first time he’s done something questionable, the suspension is warranted as a warning in light of all he’s done before. (I’m not talking about a rape accusation, which is a matter for law enforcement.)

But now I’ve been told by a student who was there when the incident happened that Jameis was only one of about 15 individuals who were standing on tables and shouting the same obscene phrase. I’ve never seen this in any of the news stories about the event. I’m hearing this second-hand and taking the student’s word that Jameis was just one of more than a dozen engaging in the same acts. I wasn’t there . . . but neither were members of the news media who are now reporting the story.

If it is true that Jameis was just one of many, then I’m thinking his suspension is unfair. None of the others have even been mentioned, let alone punished. While at first it appears that there is some parallel here with the NFL sanctions for players who have behaved badly off-field, the parallel breaks down because the NFL is a private organization (albeit with monopoly powers protected by the government) whereas Florida State University is most definitely a government institution. Private organizations can make their own rules. Governments should follow rule of law.

If the student’s eye-witness account is accurate, Jameis was just trying to be one of the guys, although admittedly, one of the guys engaging in offensive and rude behavior. But he meant no harm, and rudeness is normally not a punishable offense. (Increasingly, offending people is.)

Should a government organization really be punishing people for behaving crudely in public? That, in itself, is questionable, but if it is the case that Jameis was just a part of a larger rude group with no malicious intent, and he’s the only one who was punished, that’s another issue.

If Florida State University were a private organization, I’d say that they can do what they want (even if I disagree). But as a government organization, FSU should be obligated to follow the rule of law and to treat everyone equally. After hearing a student’s account of the event (no media was present to witness it), I question whether FSU’s bad boy was treated fairly in this case.

The Giver’s Dystopia: Total Equality and No Humanity

tg-180x300Submitting to censorship is to enter the seductive world of The Giver: the world where there are no bad words and no bad deeds. But it is also the world where choice has been taken away and reality distorted. And that is the most dangerous world of all.” —Lois Lowry

Last month, I had the pleasure of reading The Giver and seeing its recent film adaptation. After hearing many of my friends rave about the book, I decided to read it myself (for some reason, I was never assigned this book during my grade school years). I was not disappointed. Despite being a children’s novel, The Giver deals with many mature themes and offers a deep, thought-provoking commentary on politics and society.

The Giver presents us with a world where war, poverty, crime, suffering, and bigotry have been completely eliminated. In this utopian Community, people strive to maintain “Sameness” where everyone and everything is equal and same. But the reader quickly perceives something is wrong with this supposedly perfect society. Memories of basic human emotions such love, hate, and empathy have been completely suppressed in the populace; and defining cultural features including art, music, literature, and even color, have also been completely erased. Both the best and the worst aspects of humanity are instead stored within the mind of the titular character, the Giver. As the Giver explains to the protagonist Jonas in the novel: “Our people made that choice, the choice to go to Sameness. Before my time, before the previous time, back and back and back. We relinquished color when we relinquished sunshine and did away with difference. We gained control of many things. But we had to let go of others.”

Despite taking liberties with the novel, the film adaptation made graceful use of black-and-white cinematography to showcase a colorless dystopian world and slowly transitioned to full color as Jonas gradually learns the truth about his society and its past. Most of all, the main theme of the inspiring individual struggling against the all-powerful State was not lost in the film. After Jonas was selected to be the new Receiver, he realized the vast social cost that had to be paid for his Community to achieve perfection and “Sameness.” READ MORE