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Bernie Sanders Is Wrong About American Health Care

The U.S. system remains the best equipped to handle challenges like the coronavirus.

By Steven MalangaCity Journal

When he was President Barack Obama’s chief of staff, Rahm Emanuel famously advised never to let a crisis go to waste. Advocates of universal, government-controlled health care in the United States are pursuing that strategy as the nation confronts the prospect of a coronavirus epidemic. Last week, seizing on a story about the $1,400 bill that a Miami man received for a hospital visit to get tested for coronavirus, they charged that the American system of private insurance isn’t up to fighting the spread of the virus. Critics contend that episodes like the one involving the Miami man, who has a high-deductible policy that some call a “junk” plan, will discourage people from seeking testing and treatment, thereby enabling spread of the contagion. The solution, according to Bernie Sanders? A national health-care system—the only system, he and his supporters believe, capable of handling a crisis like the coronavirus.

The problem with this claim, as with much of what advocates contend about nationalized health systems, is that it ignores how such systems really operate. Because health care under these plans is inexpensive or even “free,” people overuse it, driving up costs and forcing governments to limit access. That’s why long wait times and denials of service are typically more characteristic of national health systems than the American one. Indeed, last week, Japanese citizens bitterly criticized their government because its national health service, which citizens must enroll in if they don’t have employer-provided insurance, had limited coronavirus testing to just 5,700 people. Some critics accused the government of Prime Minister Shinzo Abe of suppressing testing to minimize the seriousness of the virus’s spread. Others saw it as a cost-saving move.

Government-controlled health-care systems are especially vulnerable to epidemics because, to control costs, they must strip as much overcapacity as they can out of their operations. During the 2017–2018 flu season in Britain, for example, the National Health System was overwhelmed. Patients regularly spent 12 hours in hospital emergency wards awaiting treatment, corridors were jammed with beds, and doctors postponed all but the most urgent surgeries, the New York Times reported. British doctors complained of “battlefield medicine” and “third world conditions.” That spring, in order to save money, the NHS stopped paying for a broad range of remedies for common ailments, including those treating constipation, cold sores, conjunctivitis, infant colic, and backache. About a year later, the country reported widespread shortages of some 80 common medications, such as the anti-inflammatory Naproxen. One reason: the service had driven down the price of drugs so far that manufacturers found “the U.K. a less attractive market.” At the same time, the NHS is notable for restricting access to expensive drugs that treat much more serious conditions. Before relenting to criticism, for example, the NHS spent four years refusing to give cystic fibrosis patients—including an estimated 5,000 children—access to Orkambi, a drug developed by U.S. manufacturer Vertex International.

What critics deride as America’s “patchwork” health-care approach is in fact a system that attempts to offer choices, rather than a one-size-fits-all national service. The Miami man’s “junk” plan is one of those choices—a low-cost, high-deductible plan, in which the patient agrees to pay for many ordinary procedures in exchange for cheaper premiums. These plans were in place in states like California before Obamacare; they were aimed at consumers, such as young adults, who were looking for protection against catastrophic costs but balking at the price of more comprehensive insurance. Obamacare placed restrictions on these plans, looking instead to force people into insurance exchanges. Two years ago, President Trump signed an executive order expanding access to these insurance policies. While critics have charged that some of the plans, like AARP’s limited insurance for seniors, fail to inform customers adequately about the restrictions on coverage, some consumers have expressed satisfaction at the services offered and the savings they accrued.

The real issue in the Miami case was where the man went for service. The costs he incurred were not even from a coronavirus test, but from other fees associated with visiting a hospital emergency room for examination. Indeed, after an exam showed that he had the flu, the man was not tested for coronavirus, even though the Centers for Disease Control is providing the tests without charge because it has designated coronavirus a public-health emergency.

The CDC has been justly criticized for ramping up its testing regime too slowly. But, as experts predict an inevitable increase in cases in the U.S., the agency is now working to make the tests widely available. As testing expands, so should the network of facilities that provide the tests, extending well beyond expensive hospital emergency rooms. Some health-care providers have even suggested setting up the equivalent of “drive-through” facilities, where people can be tested quickly and inexpensively, as South Korea has done. Similarly, when an effective vaccine becomes available, Washington can subsidize production to get the population immunized quickly.

All these efforts, and others like them, to address the coronavirus can be accomplished without revamping American health care. In fact, it is a system like ours that makes such efforts possible. Contrary to Sanders’s claims, the American health-care system, flaws and all, is better equipped than any other to handle a challenge like the coronavirus.  


The First Postmodern Pandemic

Column: The only predictable fallout of coronavirus? Partisanship.

By Matthew ContinettiThe Washington Free Beacon

The pundits are having difficulty settling on a historical analogy for the COVID-19 coronavirus. Will the spread of the disease be President Trump’s Katrina or his financial crisis? Will it be similar to the H1N1 avian flu pandemic in 2009 or will it be politicized like the Ebola outbreak in 2014?

Comparisons are tough. After all, the situation is unprecedented. The political consequences of COVID-19 are difficult to predict because of the interplay between a public health emergency and a fractured public narrative. Coronavirus is the first postmodern pandemic.

It has the makings of a phenomenon not seen in a century. The Spanish Flu of 1918 infected an estimated one-third of the global population. It had a case fatality rate greater than 2.5 percent—slightly higher than the rate for coronavirus observed in China so far. More than 600,000 people died in the United States of “La Grippe.” No one wants to see these numbers repeated.

Perhaps they won’t be. The malpractice of the Chinese Communists may be responsible for the high fatality rate there. The rate outside its borders, according to the World Health Organization, is lower. And America inhabits a different public health universe than a century ago. Flu vaccines and therapeutics did not exist. Hospitals, the sciences of virology and epidemiology, and medical technology were primitive. Authorities relied on quarantines and appeals for good hygiene. Results were mixed. And disappointing.

This is different from the Spanish Flu. Science, medicine, and public health have improved immeasurably. But that is not the only difference. COVID-19 is novel. No one saw it before last December. No one is sure where it came from. And it has spread quickly. Despite record advances in gene sequencing and drug testing, it will be more than a year before a vaccine can be mass produced.

The global economy is far more integrated than in the past. And a worldwide broadcast, digital, and social media exist that would have been fanciful to President Wilson. This system distributes misinformation, incentivizes hysteria and partisanship, and expects immaculate performance from the government while ignoring, dismissing, and excusing its own failures. Dealing with “community spread” is hard enough. Try doing it while watching Don Lemon.

We were better off when the media focused on impeachment. Now that it is interested in coronavirus, a familiar pattern will set in. Data will be publicized without the slightest sense of proportion. The most outrageous scenarios will receive the most attention. Speculation will be paraded as fact. And every conceivable negative outcome, from infections to deaths to plunging stock values, from reasonable and warranted travel bans to unanticipated diplomatic and economic fallout, will be related back to the president in an effort to damage his reelection.

Financial journalists who see bears around every corner now point to coronavirus as the irrepressible agent of recession. A columnist for the New York Times says, “Let’s Call It Trumpvirus.” CNN slams the president’s coronavirus task force for its “lack of diversity.” The Washington Post transcribes Democratic Party talking points when it suggests Vice President Mike Pence is incapable of overseeing the government’s efforts because he opposes needle-sharing programs. Among the reasons Trump is said to have weakened public health? He defunded Planned Parenthood.

The Democrats criticize Trump for budget cuts that never happened. Chuck Schumer plots a campaign to bash the president for a paltry supplemental request, only to have Trump say Congress can appropriate whatever it wants. Elizabeth Warren introduces a bill to “transfer all funding for @realDonaldTrump’s racist border wall” to coronavirus defense. Has she seen her doctor lately?

This isn’t a serious response. It’s a tantrum. There are plenty of additional things the Trump administration could do to prepare for an outbreak. My American Enterprise Institute colleague, former FDA commissioner Scott Gottlieb, M.D., has several recommendations, including allowing for more testing. What the media and Democrats offer instead are dispatches from Resistance Land—that magical place where the border is open, Medicare is for all, the New Deal is Green, and coronavirus isn’t the problem, Donald Trump is.

Knowledge of the physical universe has grown exponentially since 1918. So have the means by which we are able to express discontent, fear, blame, and unreason. Which is why I do have one prediction about the weeks ahead: Our politics will remain nasty, polarized, overheated, and dispiriting. Even as Mother Nature reminds us who’s really in charge.


Dear Majority Leader McConnell:

Many Americans share concern for the cost of medicine, particularly our country’s seniorcitizens. And President Trump has rightly called out “foreign freeloaders” whose government monopoly health systems drastically underpay for (American-developed) pharmaceuticals. However, most of the proposals go about addressing this matter not only in the wrong way, but in highly destructive ways.

Conservatives for Property Rights (CPR) is a coalition of organizations representing millions of Americans. CPR emphasizes the central importance of private property in all its forms — physical, personal, and intellectual. The right to private property ranks among the unalienable rights the Founders referenced in the Declaration of Independence, and patents and copyrights are the only rights for which the U.S. Constitution itself provides. As you appreciate, we should not harm our patent-centric research and development sectors by gutting their property rights.

While Speaker Nancy Pelosi’s H.R. 3 is the most radical and destructive of the “drug pricing” legislation, CPR wants to make perfectly clear that the Senate Finance Committee’s Prescription Drug Pricing Reduction Act is also very harmful and destructive. In no way is S.2543 any sort of “compromise” or “middle-ground” alternative. This bill passed committee by a majority of liberal Democratic votes; fewer than half the majority Senators voted for it. Notably, S. 2543 does zero to remedy “foreign freeloading.” CPR regards S. 2543 as unacceptable and urges all Senators to oppose this bill.

Of this measure’s provisions harmful to America’s leadership in pharmaceutical innovation (and thus harmful to American patients), perhaps most egregious is the inflationary penalty price control mechanism. This price control would impose a confiscatory excise tax on earnings when a Medicare medication in Parts B or D exceeds the inflation rate. Such an unpredictable, disruptive government price control would wreak havoc in drug R&D, injecting much uncertainty into and causing significant loss of R&D funding from the pharmaceutical innovation process.

Conservatives for Property Rights strongly opposes the Prescription Drug Pricing Reduction Actand urges Senators to reject this counterproductive legislation.

Respectfully,

James Edwards, Executive Director, Conservatives for Property Rights

Seton Motley, President, Less Government

George Landrith, President, Frontiers of Freedom

Dick Patten, President, Campaign for Liberty

Jenny Beth Martin, Honorary Chairman, Tea Party Patriots Action

Jim Martin, Founder/Chairman, 60 Plus Association

Kevin L. Kearns, President, U.S. Business & Industry Council

C. Person Noell III, President, Tradition, Family, Property, Inc.

Tom DeWeese, President, American Policy Center

Tim Andrews, Executive Director, Taxpayers Protection Alliance

Ed Martin, President, Phyllis Schlafly Eagles

Matthew Kandrach, President, Consumer Action for a Strong Economy

Saulius “Saul” Anuzis, President, 60 Plus Association


Bipartisan health care fix misses mark

By Peter RoffSanta Cruz Sentinel

America’s health care system is still a mess. The Affordable Care Act, Barack Obama’s signature legislative achievement, has sparked continued increases in premiums and deductibles while failing to bend the health care cost curve down as promised.

That’s just one of the assurances ACA supporters made about the new law it failed to keep. Obama was badly misinformed when he promised people could keep the coverage they had, if they liked it, once the ACA became law. Some suggest he knew at the time this was a lie, but he’s not saying, one way or another.

Yes, there are more people insured than ever before, but many of those people still can’t afford to use that insurance because the deductibles are so high. Plans in the individual markets are canceled from one year to the next, forcing people to re-enroll in something similar or find new insurance altogether.

That’s not the way it was supposed to be. Efforts at repeal collapsed thanks to the Senate Democrats’ procedural instance any plan to replace it be adopted with 60 votes or more. So much for what the people want.

The idea getting the most attention, the Medicare-for-All proposal first put forward by Vermont Sen. Bernie Sanders and embraced by other Democrats running for the party’s presidential nomination, is a non-starter. The non-partisan Committee for a Responsible Federal Budget estimates the Sanders’ plan “has a gross cost of $30.6 trillion and, incorporating offsets, would add $13.4 trillion to deficits over ten years under our central estimate.” The plans floated by former Vice President Joe Biden, Massachusetts Sen. Elizabeth Warren, former South Bend, Indiana Mayor Pete Buttigieg, and others also don’t come close to paying for themselves.

Obamacare was supposed to increase transparency for consumers, allowing them to make better decisions about the care they received and what it would cost. That hasn’t happened either, and though President Donald Trump is pushing for action from Congress to pass laws putting price tags on all kinds of care, nothing spectacular has happened in that area either – largely because the health insurance companies are still driving the train.

They helped write the ACA and are now employing armies of lobbyists to make sure they don’t go under because of it. They’re pursuing new laws and regulations to insulate them from their responsibilities to their customers, to protect them from liability, and to avoid paying for services using a variety of what can best be called coverage loopholes.

The biggest of these has come to be known as “surprise billing,” an issue the president has taken to heart. No one likes to get a bill they didn’t expect, especially when they thought they were covered for the expense. Yet let an in-network doctor perform a procedure at an in-network hospital using an out-of-network anesthesiologist and send tissue out for analysis to a pathology lab at a nearby, affiliated and out-of-network hospital, and that’s precisely what happens.

In that case, as I recently experienced for myself, the insurance suddenly doesn’t count because you went out-of-network. That you didn’t know it and that you asked ahead of time that everything to be done “in-network” doesn’t matter so you must pay for the out-of-network services performed. It doesn’t seem fair, but it’s legal.

Congress, led by Tennessee Republican Lamar Alexander, has crafted a bill to change that. The problem with the Alexander approach is that it relies on price controls. The track record of price controls creating adverse consequences is long and storied.

The bipartisan Alexander bill requires insurers to pay the surprise bills when they arise based on the average price for the services provided. This is called “benchmarking” and it’s a bad idea because it empowers the government to make further intrusions into the health care marketplace and gets the country all that much closer to a Medicare-for-All style system.
“Price controls” and “government rate-setting” are a large part of what helped wreck the U.S. health care system in the first place. Insurers need to own their responsibilities to their customers and level the playing field on their own.


CONSERVATIVE LAWMAKERS RECEIVE REMINDER THAT PRICE FIXING IS A “BAD IDEA”

By David AlmasiNational Center for Public Policy Research

Raising concern “about the direction the health care policy debate is moving” – particularly among conservative lawmakers – the National Center for Public Policy Research has joined with more than 70 other conservative and free-market organizations to warn Congress about the dangers of price fixing.

In trying to remedy the issue of surprise medical bills for out-of-network emergency treatment, and insurers balking at covering all of such costs, some typically conservative politicians are favoring proposals to essentially enact price controls on these health care services. This would prohibit doctors and hospitals from setting their own rates and potentially make them operate at a loss.

Senator Rand Paul has explained that this could compromise the quality of American health care by driving people out of the medical field. “If you fix the price that ER doctors work at,” he said, “you will get a shortage.” He suggested that what has happened to the economy in Venezuela could happen in the United States as a result of such changes to the marketplace.

In a letter to conservative lawmakers on Capitol Hill, the National Center and others note:

[W]hat is troubling is how often otherwise right-of-center policymakers are resorting to one of the key pillars of the Medicare for All playbook – government imposed price controls. Whether it is called price fixing, rate setting, subsidy capping or inflation capping, government price controls have wormed their way into the healthcare reform plans of too many of our friends in Washington.

The National Center is joined on the letter by organizations including Americans for Tax Reform, the Competitive Enterprise Institute, Frontiers of Freedom, the Discovery Institute, the Institute for Policy Innovation and Eagle Forum.

The coalition letter concludes:

This was a bad idea a half century ago with gasoline line rationing, and it’s a bad idea today in health care. Something can only be affordable if it’s available to buy in the first place.

To read the entire letter and see all of its signers, click here.


Trump should scrap the flavored vaping ban

Hysteria over 'vaping-related lung illness' puts pressure on politicians, but vaping is safer than smoking

By Peter RoffThe Washington Times

ANALYSIS/OPINION:

There are those who say vaping is a public health menace, that it’s designed to appeal to young people as a gateway to tobacco with no redeeming social values whatsoever. Others who say it’s a public health miracle that’s made it possible for tens of thousands of people addicted to cigarettes to quit and live healthier lives.

It’s not clear who’s right but the evidence thus far hews toward the idea that vaping, from the standpoint of public health, is largely beneficial. There have been a few deaths among young people but, as we’re now finding out, those can be attributed to carelessness, black market formulas based in oil rather than water, and the effort to get a quick high by employing a THC-like additive. They did not result, as the proponents of regulation and abolition led us at first to believe, because all vaping technologies are medically and scientifically unsound.

Vaping is 95 percent safer than smoking, according to some estimates. Unlike inhaling cigarette smoke, vaping is not carcinogenetic and not, as some have claimed, a proven gateway to teen smoking. Yet it’s under attack as never before.

The hysteria over what’s been called “vaping-related lung illness” has generated enormous pressure on politicians from President Donald Trump on down to do something. That’s understandable but not necessarily right. The attack on the science showing that vaping generally leads to reductions in cigarette smoking and that favored vaping is very much a part of helping people quit is leading to a situation where even more people may die.

For more than a few years, the nascent vaping industry has tried to work with the government to set rules everyone can live with. They’re on board with an under-21 vaping ban, and the biggest player in the marketplace, Juul, has voluntarily agreed to withdraw its few flavored formulas from the U.S. market. No more mint, no more crème, no more cucumber, no more fruit and no more mango — even though studies have shown cigarette smokers find it easier to refrain from smoking if the vaping options available to them are flavored.


Nonpartisan Report: Medicare For All Would More Than Double Your Taxes And Bankrupt The Nation

An individual earning near the national median at $50,000 a year would pay more than $17,450 more per year in taxes to fund Democrats’ Medicare for All proposal. That’s not even half of it.

By Christopher JacobsThe Federalist

Democratic candidates for president continue to evade questions on how they will pay for their massive, $32 trillion single-payer health care scheme. But on Monday, the Committee for a Responsible Federal Budget (CRFB) released a 10-page paperproviding a preliminary analysis of possible ways to fund the left’s socialized medicine experiment.

Worth noting about the organization that published this document: It maintains a decidedly centrist platform. While perhaps not liberal in its views, it also does not embrace conservative policies. For instance, its president, Maya MacGuineas, recently wrote a blog post opposing the 2017 Tax Cuts and Jobs Act, stating that the bill’s “shortcomings outweigh the benefits,” because it will increase federal deficits and debt.

That centrist position makes CRFB’s analysis of single payer all the more devastating, because one cannot write it off as coming from a right-wing group. And its analysis is devastating, carrying it three main messages, as follows.

Everyone’s Taxes Will Go Up—a Lot

Consider some of the options to pay for single payer CRFB examines, along with how they might affect average families.

A 32 percent payroll tax increase. No, that’s not a typo. Right now, employers and employees pay a combined 15.3 percent payroll tax to fund Social Security and Medicare. (While employers technically pay half of this 15.3 percent, most economists conclude the entire amount ultimately comes out of workers’ paychecks, in the form of lower wages.) This change would more than triple current payroll tax rates.

Real-Life Cost: An individual earning $50,000 in wages would pay $8,000 more per year ($50,000 times 16 percent), and so would that individual’s employer.

A 25 percent income surtax. This change would apply to all income above the standard deduction, currently $12,200 for individuals and $24,400 for families.

Real-Life Cost: An individual with $50,000 in income would pay $9,450 in higher taxes ($50,000 minus $12,200, times 25 percent).

A 42 percent Value Added Tax (VAT). This change would enact on the federal level the type of sales/consumption tax that many European countries use to support their social programs. Some proposals have called for rebates to some or all households, to reflect the fact that sales taxes raise the cost of living, particularly for poorer families. However, using some of the proceeds of the VAT to provide rebates would likely require an even higher tax rate than the 42 percent CRFB estimates in its report.

Real-Life Cost: According to CRFB, “the first-order effect of this VAT would be to increase the prices of most goods and services by 42 percent.”

Mandatory Public Premiums. This proposal would require all Americans to pay a tax in the form of a “premium” to finance single payer. As it stands now, Americans with employer-sponsored insurance pay an average of $6,015 in premiums for family coverage. (Employers pay an additional $14,561 in premium contributions; most economists argue these funds ultimately come from employees, in the form of lower wages—but workers do not explicitly pay these funds out-of-pocket.)

Real-Life Cost: According to CRFB, “premiums would need to average about $7,500 per capita or $20,000 per household” to fund single payer. Exempting individuals currently on federal health programs (e.g., Medicare and Medicaid) would prevent seniors and the poor from getting hit with these costs, but “would increase the premiums [for everyone else] by over 60 percent to more than $12,000 per individual.”

Reduce non-health federal spending by 80 percent. After re-purposing existing federal health spending (e.g., Medicare, Medicaid), paying for single payer would require reducing everything else from the federal budget—defense, transportation, education, and more—by 80 percent.

Real-Life Cost: “An 80 percent cut to Social Security would mean reducing the average new benefit from about $18,000 per year to $3,600 per year.”

The report includes other options, including an increase in federal debt to 205 percent of gross domestic product—nearly double its historic record—and a more-than-doubling of individual and corporate income tax rates. The impact of the last is obvious: Take what you paid to the IRS on April 15, or in your regular paycheck, and double it.

In theory, lawmakers could use a combination of these approaches to fund a single-payer health care system, which might blunt their impact somewhat. But the massive amounts of revenue needed gives one the sense that doing so would amount to little more than rearranging deck chairs on a sinking fiscal ship.

Taxing Only the Rich Won’t Pay for Single Payer

CRFB reinforced their prior work indicating that taxes on “the rich” could at best fund about one-third of the cost of single payer. Their proposals include $2 trillion in revenue from raising tax rates on the affluent, another $2 trillion from phasing out tax incentives for the wealthy, another $2 trillion from doubling corporate income taxes, $3 trillion from wealth taxes, and $1 trillion from taxes on financial transactions and institutions.

Several of the proposals CRFB analyzed would raise tax rates on the wealthiest households above 60 percent. At these rates, economists suggest that individuals would reduce their income and cut back on work, because they do not see the point in generating additional income if government will take 70 (or 80, or 90) cents on every additional dollar earned. While taxing “the rich” might sound publicly appealing, at a certain point it becomes a self-defeating proposition—and several proposals CRFB vetted would meet, or exceed, that point.

Socialized Medicine Will Permanently Shrink the Economy

The report notes that “most of the [funding] options we present would shrink the economy compared to the current system.” For instance, CRFB quantifies the impact of funding single payer via a payroll tax increase as “the equivalent of a $3,200 reduction in per-person income and would result in a 6.5 percent reduction in hours worked—a 9 million person reduction in full-time equivalent workers in 2030.”

By contrast, deficit financing a single-payer system would minimize its drag on jobs, but “be far more damaging to the economy.” The increase in federal debt “would shrink the size of the economy by roughly 5 percent in 2030—the equivalent of a $4,500 reduction in per person income—and far more in the following years.”

Moreover, these estimates assume a great amount of interest by foreign buyers in continuing to purchase American debt. If the U.S. Treasury cannot find buyers for its bonds, a potential debt crisis could cause the economic damage from single payer to skyrocket.

To say single payer would cause widespread economic disruption would put it mildly. Hopefully, the CRFB report, and others like it, will inspire the American people to reject the progressive left’s march towards socialism.


Best Way To Lower Seniors’ Drug Costs? Reverse Obama Rule-Changes

By George LandrithRedState

One of the problems in health care today is that it turns Oscar Wilde’s quip on its head: In the United States, everyone knows the value of health care, but nobody knows the price of anything (because most spending is covered by insurance or by federal programs such as Medicare).

Pricing information is crucial in any system, because when people know what price they’re paying for a good or service, they can make informed decisions. Also, prices tend to come down over time as people demand better service at lower prices.

However, unlike Walmart or Amazon.com, the federal government isn’t especially good at negotiating lower prices. And now, crony health care interests are fighting to eliminate one of Medicare’s few pricing successes.

The issue involves prescription medicines. Since Medicare Part D was put into place to cover prescription drugs, generic and biosimilar medicines have usually been added to the program as soon as the FDA approved them. That’s given seniors access to safe, effective drugs at a much lower cost. In 2018, for example, generic drugs saved consumers almost $300 billion, with $90 billion of that going to Medicare recipients.

Sadly, though, they could have saved much more. In 2016, the Obama administration changed Medicare policy so that many generics would be priced in the same band as name brand drugs. That’s increased prices for seniors by more than $6 billion.

A good chunk of that money flowed to Pharmacy Benefit Managers (PBMs), which negotiate to get the generic meds priced in a higher band, then pocket “rebates” (kickbacks) from the big drug companies that make name brand drugs. Consumers, meanwhile, miss out on potential savings.

Under the Trump administration, the Center for Medicare & Medicaid Services (CMS) is finally taking steps to roll back the price increases. Next year, it wants to stop Medicare Part D plans from moving generic drugs into branded drug tiers. Instead, it plans to create a new tier reserved just for generics and biosimilars.

Many lawmakers support this sensible policy. “I am pleased to find that CMS is considering an ‘alternative’ policy,” Sen. Bill Cassidy of Louisiana wrote to HHS Secretary Alex Azar. “I applaud CMS for considering these cost-effective policies and urge the Agency to make them final for CY2020.”

Cassidy is a doctor and a leader in the fight for a more conservative approach to health care. He also joined fellow Republican Senators Steve Daines and James Lankford and Democrats Sherrod Brown and Robert Menendez in sponsoring an amendment to The Prescription Drug Pricing Reduction Act of 2019 that would have “ensured lower-cost generic drugs are placed on generic tiers and higher-cost brands stay on brand tiers.” They dropped that amendment for internal reasons, because Finance Committee Chairman Charles Grassley told them he’ll make certain the language makes it into the final bill.

Many other lawmakers are also pushing for the reform. “We encourage CMS to move forward with this policy effective CY2020 to lower out-of-pocket costs for millions of Americans, ensuring that they receive the full value of generic and biosimilar competition,” a bipartisan group of House lawmakers wrote to Azar. “Price competition is vital in the Part D program and beneficiaries deserve a choice at the pharmacy counter when possible.” 

Seniors can thank these lawmakers, and should keep a sharp eye on Sen. Grassley. He has a chance to move forward in a bipartisan fashion with a plan that would save Medicare recipients money. That ought to be an easy sell in these divided times.

Conservatives are wary about expanding Medicare, of course. But we’re eager to use pricing power to improve the state of American health care. Let’s not allow PBMs to block this important step toward systemic reform.


Let Seniors Use Health Security Accounts to Buy Better Care

By Peter RoffRealClear Health

Atop the list of what America’s senior adults want are the preservation of their independence and a secure retirement. Admirably they don’t want to end up being a burden anyone, not their spouse, not their children, and not the rest of us. The way the system is rigged, however, almost guarantees they will

Medicare-for-All, which most of the Democrats running for president have endorsed, will only lead to increased dependency. It’s a typical one-size-fits-all proposal that sounds good from the stump and may look good on paper. The numbers though, just don’t work.

The way forward is to expand choice and to allow seniors to take advantage of competition in the health care marketplace to bring prices down. Some already have supplemental insurance that helps fill the financial gap between what they need and what Medicare will pay for but it’s not enough. Some people need more than one walker in order to stay in their homes.

This is where creativity is needed. The green-eye shade types who approve Medicare expenditures spend lots of time thinking about what things cost. Considering how many taxpayer dollars are involved in later-in-life health care, that’s not such a bad thing but it doesn’t always take into consideration what people need.

That forces seniors to make hard choices that can threaten their independence. They need to have more options as they would under a proposal by Dr. Ami Bera, D-Calif., and Jason Smith, R-Mo., that would let them use pre-tax dollars stored up in health savings accounts to fill the gaps between items covered under Medicare and what they are expected to pay for out of pocket.

“Having a Health Savings Account is a powerful resource that reimburses everything from doctor and dentist visits to prescription drugs, first aid supplies, and eyeglasses. Health Savings Accounts also incentivize saving for health-care expenses by providing critical tax benefits, just as we do for saving for retirement or college,” says Kevin McKechnie, the executive director of the American Bankers Association’s Health Savings Accounts Council.

Money put away in an HSA can stay there for decades. Under current law, there’s no “Use it or lose it” provision. That means younger workers can start saving for retirement health care upon entering the workforce and, through the magic of compound interest, build up a nest egg that’s there for them anytime they need it.

That means, if they’re lucky enough to remain relatively healthy and can be disciplined financially, it can be there for them in their retirement years which, it has suddenly become clear to me, come around a lot faster than it seems they will when you’re just starting out.

The tax benefits associated with HSA’s, McKechnie wrote in a recent op-ed, “have become even more important as deductibles and other health-care costs continue to skyrocket.” Struggling families, especially those that include senior adults facing the challenges associated with aging, are finding it harder and harder to plan for they can’t see coming. Expanding the range of services that can be paid for out of health savings accounts give them an additional hedge against the unexpected.

A recent Luntz Global poll found 46 percent support for the Bera-Smith plan and the idea of using HSA funds to fill the Medigap. Expanding the list of approved items upon which HSA dollars can be spent without tax penalties is low hanging fruit as far as health care reform goes. That’s probably why the idea has bipartisan support.

The challenges presented by an aging America in which people living longer and healthier must deal with diseases that can lead more quickly to economic ruin should give us all pause. New thinking is needed, not just where treatments are concerned but in how we make it possible for people to pay for it. We could as a country decide to turn the whole business over to the government but that inevitable means care will be rationed, fewer options will be available, and decisions regarding life and death matters will almost inevitably be taken out of our hands by the bureaucracy.

No one wants to live like that, and no one wants a loved one to die like that. The Bera-Smith Health Savings for Seniors Act will cover the gaps and help bring the cost of health care under control. At least 82 percent of those who answered the Luntz Global survey think it will. It’s time to give it a chance.


Competition, Not a Cartel, Can Cure What Ails Health Care

The best way to ensure better medical care for all is to reject Medicare for All.

By HUNT LAWRENCE AND DANIEL J. FLYNNThe American Spectator

Health care ranked as most important issue, save for “the ability to beat Donald Trump,” for Democratic voters in a FiveThirtyEight/Ipsos poll taken before and after last week’s presidential debate.

The debate revealed fissures among the party’s presidential aspirants on health care.

Bernie Sanders pronounced his desire that “every American has health care as a human right and not a privilege.” But under the senator’s “Medicare for All” scheme, private health insurance becomes illegal.

Would any American regard it as in keeping with the First Amendment if the government limited all 330 million of us to one church or one newspaper? The senator’s conception of rights, several opponents seemed to say, is wrong.

“While Bernie wrote the bill, I read the bill,” Amy Klobuchar quipped. She objected to Medicare for All forcing about half of Americans off their existing private insurance. “I don’t think that’s a bold idea,” the Minnesotan noted. “I think that’s a bad idea.”

Mayor Pete Buttigieg said he supported “Medicare for all who want it.” He objected to the one-size-fits-all quality of Sanders’ plan. “I trust the American people to make the right choice for them,” he told Sanders. “Why don’t you?”

Joe Biden balked at the price, estimated to eclipse what the federal government currently takes in in revenues. The former vice president pointed out, “Nobody’s yet said how much it’s going to cost the taxpayer.”

Sanders and Sen. Elizabeth Warren, who supports his plan, pushed back. Vermont’s junior senator railed against “the drug companies and the insurance companies.” Warren explained, “I’ve never met a person who likes their insurance company.”

Given that insurance companies issue bills to consumers, this necessarily makes them unpopular. But the majority of costs come from hospitals (33 percent) and physician and clinical services (20 percent), according to the Center for Medicare and Medicaid Services (CMS). We want to kill the messenger. Those primarily responsible for the message — $25 for two aspirin pills, $120 for a cloth sling, $57,000 for a knee replacement — somehow not only escape our wrath but also win our admiration.

Hospitals gouging patients occurs most glaringly in places where hospitals operate as a monopoly and in emergency situations. The common denominator in both circumstances involves the inability to compare and shop.

In a paper published earlier this year in the Quarterly Journal of Economics, academics at Yale, Penn, MIT, and Carnegie Mellon note hospital price increases for the privately insured when competition decreases. “Prices at monopoly hospitals are 12% higher than those in markets with four or more rivals,” their abstract reads.

Monopoly hospitals also have contracts that load more risk on insurers (e.g., they have more cases with prices set as a share of their charges). In concentrated insurer markets the opposite occurs — hospitals have lower prices and bear more financial risk. Examining the 366 mergers and acquisitions that occurred between 2007 and 2011, we find that prices increased by over 6% when the merging hospitals were geographically close (e.g., 5 miles or less apart), but not when the hospitals were geographically distant (e.g., over 25 miles apart).

In the emergency room, when circumstances necessarily kill the ability to shop, spending per patient more than doubled from 2008 to 2017, according to research compiled by Kevin Kennedy and John Hargraves for the Health Care Cost Institute.

Reducing health-care costs requires more competition, not a monopoly. Change soon comes, and not necessarily legislative change of the Medicare for All variety. Data stored in the cloud and available via an app may make medical costs and outcomes transparent, which should reduce cost. Medicare for All will retard this process since the whole health-care industry will lobby against the smartphone apps, and the consolidation of the entire industry necessarily leads to less competition.

Beyond transparency enabling health-care consumers to shop, the industry appears ripe for new players. Amazon, JPMorgan Chase, and Berkshire Hathaway, for example, entered the field last year. If they do not ultimately seek to dethrone the status quo, why did UnitedHealth’s Optum sue to stop a former employee from working at the trio’s health-care startup? A $3.6 trillion industry remains too big a cash cow for the giants of tech and finance to resist a milking.

Competition is coming. Price transparency is coming. If Medicare for All is coming, then neither is coming.


Third Dem Debate Leaves Major Health-Care Questions Unanswered

Even the ‘moderate’ proposals would sabotage private coverage, driving everyone into a government-run system. That’s probably why Democrats don’t really answer questions about their health proposals.

By Christopher JacobsThe Federalist

For more than two hours Thursday night in Houston, 10 presidential candidates responded to questions in the latest Democratic debate. On health care, however, most of those responses didn’t include actual answers.

As in the past several contests, health care led off the debate discussion, and took a familiar theme: former vice president Joe Biden attacked his more liberal opponents for proposing costly policies, and they took turns bashing insurance companies to avoid explaining the details behind their proposals. Among the topics discussed during the health care portion of the debate are the following.

How Much—and Who Pays?

Most notably, Massachusetts Sen. Elizabeth Warren again declined to admit whether individuals will lose their current insurance, or whether the middle class will pay more in taxes, under a single-payer health care system. By contrast, Vermont Sen. Bernie Sanders claimed that while all (or most) Americans will pay higher taxes to fund his single-payer system, middle class families will come out ahead due to his plan’s elimination of deductibles and co-payments.

The problems, as Biden and other Democratic critics pointed out: First, it’s virtually impossible to pay for a single-payer health care system costing $30-plus trillion without raising taxes on the middle class. Second, even though Sanders has proposed some tax increases on middle class Americans, he hasn’t proposed nearly enough to pay for the full cost of his plan.

Third, a 2016 analysis by a former Clinton administration official found that, if Sanders did use tax increases to pay for his entire plan, 71 percent of households would become worse off under his plan compared to the status quo. All of this might explain why Sanders has yet to ask the Congressional Budget Office for a score of his single-payer legislation: He knows the truth about the cost of his bill—but doesn’t want the public to find out.

Keep Your Insurance, or Your Doctor?

Believe it or not, Biden once again repeated the mantra that got his former boss Barack Obama in trouble, claiming that if people liked their current insurance, they could keep it under his plan. In reality, however, Biden’s plan would likely lead millions to lose their current coverage; one 2009 estimate concluded that a proposal similar to Biden’s would see a reduction in private coverage of 119.1 million Americans.

Minnesota Sen. Amy Klobuchar echoed Biden’s attack, saying that while Sanders wrote his single-payer bill, she had read it—and pointing out that page 8 of the legislation would ban private health coverage. (I also read Sanders’ bill—and the opening pages of my new book contain a handy reading guide to the legislation.)

For his part, Sanders and Warren claimed that while private insurance would go away under a single-payer plan, people would still have the right to retain their current doctors and medical providers. Unfortunately, however, they can no more promise that than Biden can promise people can keep their insurance. Doctors would have many reasons to drop out of a government-run health plan, or leave medicine altogether, including more work, less pay, and more burdensome government regulations.

Supporting Obamacare (Sometimes)

While attacking Sanders’ plan as costly and unrealistic, Biden also threw shade in Warren’s direction. Alluding to the fact that the Massachusetts senator has yet to come up with a health plan of her own, Biden noted that “I know that the senator says she’s for Bernie. Well, I’m for Barack.”

Biden’s big problem: He wasn’t for Obamacare—at least not for paying for it. As I have previously noted, Biden and his wife Jill specifically structured their business dealings to avoid paying nearly $500,000 in self-employment taxes—taxes that fund both Obamacare and Medicare.

Tax experts have called Biden’s avoidance scheme “pretty aggressive” and legally questionable, yet neither Democrats nor Thursday’s debate moderators seem interested in pursuing the former vice president’s clear double hypocrisy about his support for Obama’s health care law.

A March to Government-Run Care

I’ll give the last word to my former boss, who summed up the “contrasts” among Democrats on health care:

Gov. Bobby Jindal@BobbyJindal

Dem debate on health care:@berniesanders: If you like your health plan, too bad, we are going to take it away now.

“Moderate” Dem: If you like your health plan, don’t worry, we will gradually take it away.#DemDebate #DemocraticDebate2078:47 PM – Sep 12, 2019Twitter Ads info and privacy104 people are talking about this

As I have previously noted, even the “moderate” proposals would ultimately sabotage private coverage, driving everyone into a government-run system. And the many unanswered questions that Democratic candidates refuse to answer about that government-run health system provide reason enough for the American people to reject all the proposals on offer.


Health Care Systems in Other Countries: Would They Work in the United States?

Only if we developed a fondness for long waiting lines and ever more insurance mandates.

By ROGER STARKThe American Spectator

he United States has a complex health-care delivery system composed of private and government-funded insurance plans. Half of all Americans receive their health insurance from their employer or their spouse’s employer. Over 40 percent of Americans receive their health insurance from the government. The remainder are either uninsured or obtain health insurance through the private individual market. The current political debate concerns how large a role the government should play in our health-care delivery system.

The United States spends far more money per person on health care than other industrialized countries. Last year, overall medical spending in the U.S. totaled $3.5 trillion or 18 percent of the national gross domestic product.

Because other countries spend less on health care, they are often used as models for the U.S. Looking to other countries to solve our health care delivery system problems, however, may not be reasonable. Other countries are smaller than the U.S. and have more homogenous populations. What the people of one country favor may not be applicable or acceptable to people living in a different society.

According to a Forbes survey, the U.S. accounts for 38 percent of life-saving and life-extending medical innovations, compared to an average of 15 percent in other countries. The U.S. also leads the world in the research and development of pharmaceuticals.

In all other industrialized countries, the demand for health care is much greater than the money budgeted for it. The results of this supply/demand mismatch are chronic shortages followed by strict rationing of health care. The rationing can take many forms — from long waits, to denying the elderly access to certain procedures, to allowing individuals with political influence to receive priority attention from providers.

Canada has a truly single-payer, nationalized system that is totally funded by taxpayers. In 2018, wait times for specialty care averaged 20 weeks. In practice, Canada has a two-tiered system in the sense that officials allow their citizens to travel to the U.S. for privately funded health care.

Great Britain established a comprehensive government health-care system in 1948 that gives every citizen cradle-to-grave coverage. About 10 percent of the population has private insurance, and many physicians combine government entitlement work with private practice. Over the past year, 250,000 citizens have waited more than six months for planned treatments within the National Health Service, while 36,000 people have waited nine months or more.

Switzerland has a comparatively large private health-care sector, and patients are responsible for 30 percent of their own health-care costs. Consequently, a certain degree of health-care consumerism exists in Switzerland, and the country has been fairly successful in holding down costs. Unfortunately, as officials increase the number of benefit mandates required in insurance plans, health-care costs are rising.

Singapore has a multi-tiered system with different levels of care depending on the patient’s ability and willingness to pay more. This is similar to the system in the U.S. before the passage of Medicare and Medicaid: private hospitals and doctors treated paying patients and charity hospitals and residents-in-training cared for low-income patients.

Is there some combination of measures from other countries that the U.S. can use in reforming our health-care delivery system? Although the overall systems vary, the common factor for all other countries is government-mandated health insurance. Even those countries that have a component of “private” health care continue to mandate that every citizen have government-approved health insurance.

While universal health insurance coverage is a worthy goal, the critical point is using the best mechanism to allow the greatest number of Americans access to health care. Simply having health insurance in no way guarantees timely access to health care. The American experience with the Veterans Administration hospital system, a comprehensive, government-controlled, single-payer health-care program, reveals unacceptable wait times and huge inefficiencies.

The United States distinguishes itself from other countries by a broader use of free markets. Just like all other economic activities, the free market offers the best solution to provide the greatest access to health care and to control costs.

Instead of looking to other countries, health-care reform in the U.S. should allow Americans to freely make their own health-care decisions and use their own health-care dollars. This would give Americans the best chance to use their right to access health care. Eliminating third-party payers, greater use of health savings accounts, price transparency, and health insurance reform would put patients, rather than the government, in charge of their own health care.


PETA Means To Stifle Medical Innovation And Stop Medical Advances

By George LandrithRedState

We have been witnessing unprecedented innovations in medical treatments. In the coming years new drug therapies promise to provide solutions for some of the most pressing diseases — diabetes, cancer, heart disease, strokes, Alzheimer’s, retinal diseases — to name only a few. But if People for the “Ethical” Treatment of Animals (PETA) gets their way, most of the research that feeds the amazing future cures that we read about will be shut down or severely curtailed.

For the past few years PETA has undertaken a pressure campaign designed to intimidate airlines from transporting medical research animals. Even though it is illegal for the airlines to refuse to perform service, the campaign is proving successful in certain cases and a widespread adoption of this policy would likely stymie medical innovation.

PETA opposes all forms of animal testing despite the fact that the National Institutes of Health views such research as required by ethics and essential to finding cures. Scientists and researchers do as much research as possible with computer modeling and peer reviewed science, but at some point they must test the most promising medicines on living organisms. For example, pigs were used to develop both the ability to transplant a heart and the drugs that stop the body from rejecting the new heart. It was done ethically, with rigorous standards and oversight, and with anesthetics so as to eliminate pain for the animals involved. But PETA ignores all of this and labels these critical experiments the same as torture.

There are places were there is no animal testing. For example, in China, they test procedures and new products on humans who are prisoners of the state. So effectively, humans become the lab rats. That isn’t an improvement in ethics.

PETA’s real agenda is profoundly anti-human. PETA president and co-founder, Ingrid Newkirk admitted as much stating that:  “Even if animal research resulted in a cure for AIDS [or cancer or other horrible diseases], we’d be against it.”

When Hamas terrorists used flaming falcons and exploding donkeys to kill Israeli civilians, PETA under political pressure denounced Hamas — but only for harming and killing the animals — not for endangering or harming the school children in the way of these living weapons. This lack of concern for people is truly disturbing.

PETA’s supporters have filed comments with the Department of Transportation hoping to shut down any medical research with animals. One comment simply said: “Stop experimenting on animals. Experiment on your children and mothers instead.” Then with absolutely no sense of irony, this commenter also accused those who reject the idea of using children and mothers in medical research of being “a bunch of barbarians.” Let that sink in.

But PETA’s track record on animals isn’t so great either. For example, in Virginia, PETA activists were charged for criminal animal abuse.  Then there is the PETA animal shelter kill rate from 2007-2017 — a full decade — which averaged 95.3 percent. Simply stated animals that were intended for adoptions were abused and then killed in 95% of the cases by an organization supposedly promoting the ethical treatment of animals. A PETA spokesperson quipped, “there are fates worse than euthanasia.”

The ends to which this organization will go to supposedly defend the interests of animals knows no bounds. PETA led the move to change the packaging of animal crackers that used to show cartoon circus animals in carton railcar cages. Thanks to PETA, the carton animals now roam free on the African Savannah. I’m sure we can all feel better than cartoon lions and elephants now roam a cartoon grassland.

Sadly, as silly as that effort was, far more serious is the mounting public relations campaign PETA is waging to pressure airlines to refuse to transport animals (below deck in climate controlled areas of the plane) that will be used in medical research. To date, United Airlines has caved to PETA’s pressure campaign. What’s so strange is that United’s CEO, Carlos Munoz, is alive today because he had a heart transplant that was made possible because of medical animal research.

Here’s some context — airlines often allow passengers to bring comfort pets to travel by their side — dogs, cats, rabbits, pigs, peacocks, ducks, roosters, turkeys, and even kangaroos and miniature horses. This inconveniences other passengers and in some cases causes severe health problems for other passengers. On the other hand airlines are caving to PETA’s pressure campaign and refusing to transport animals used in ethical, humane & government mandated testing of new cures. These animals will not inconvenience or endanger any passengers. But this is the weird world you get when the lunatics run the asylum.

Airlines win kudos for donating flights to children in need of cancer treatment at specialized medical centers far from their home. At the same time, some airlines refuse to transport research animals and make it more difficult to develop the very cures and medicines needed to cure these sick children.

It is illegal for the airlines to discriminate against transportation of animals for research purposes. Public carriers have long been prohibited from discriminating when it comes to transportation. Non-discrimination laws for airlines do not simply prevent racial discrimination. The law also prevents an airline from transporting animals for zoos, or vacationing passengers, or as comfort animals, and then refusing to transport similar animals to be used in lawful and ethical medical research.

The law is clear — if the airline is willing to ship one woman’s dog or cat, it must also ship other similar animals being transported even if for different purposes — including medical research. Airlines have no real basis for objecting because they are paid to transport them, and these animals actually have no impact on their passengers as they would be shipped below the passenger compartment.

But because they are fearful of the bad press of PETA’s false claims of animal torture, Airlines give in. We all love pets and animals. But who wants to be slimmed by PETA as the equivalent of a war criminal for trying develop heart translate procedures and medicines or for curing cancer?

We need the Department of Transportation to enforce the law. We wouldn’t tolerate an airline discriminating against a racial or ethnic group and we shouldn’t tolerate this form of discrimination either. The lives of countless millions depend on the cures and medicines that are being developed in careful, thoughtful and ethical ways.


The Lower Health Care Costs Act Will Make A Big Problem Even Bigger

By George LandrithRedState

When the federal government sets out to solve a problem, it often begins by making the problem larger.

For example, lawmakers may want to reduce pollution. Or cut down on the use of fossil fuels. So they pass a “Clean Air Act,” or mandate the use of renewable fuels. But now they need inspectors. And lawyers to file (and respond to) lawsuits. The big problem gets bigger as it gets bogged down in bureaucracy, and a solution may seem ever further away.

As a Microsoft blogger once joked, “if the solution begins with ‘First, install…’ you’ve pretty much lost out of the gate. Solving a five-minute problem by taking a half-hour to download and install a program is a net loss.” The same can be said about Washington. If the answer is “First, pass legislation…” then your problem probably isn’t going to get solved, especially in today’s environment of divided government.

But bad things keep happening to good people. For example, anyone with insurance can be sent to a care center that’s not covered by their network and end up with a big bill. That isn’t fair. So how can policymakers bring down their health care costs?

As always, Washington’s response begins with a big bill, the “Lower Health Care Costs Act of 2019,” penned by Tennessee Republican Lamar Alexander. One goal of the bill is to set prices in cases of surprise billing, so insured patients that are taken to out-of-network facilities without their knowledge aren’t hit with huge bills. The bill plans do to so by capping provider costs at the median in-network rate.

If the LHCC gets the prices wrong -and if the history of price controls provides any indication, it will – it could lead to yet another Obamacare-esque death spiral, where premiums rise, hospitals lose money, and doctors stop seeing patients.

The legislation’s big-government, top-down solutions won’t amount to a very effective way to push back against high prices. The faster and more effective way is to encourage competition. One way to do that is by allowing market negotiations to proceed.

The STOP Surprise Medical Bills Act, introduced by Sen. Bill Cassidy, M.D. (R-La.) and Sen. Tom Carper (D-Del.), would do just that. When cases of surprise medical bills pop up, The STOP Surprise Medical Bills Act would allow all players in the healthcare industry to submit proposals to an arbiter, who would ensure that the best offer for consumers wins the day. This process will create far more informed, data-driven decisions than the LHCC’s blanket price controls ever could.

We also need more doctors, which would increase competition among physicians and help force prices down. Instead, we’re chasing doctors out of the profession. “The United States could see a shortage of up to 120,000 physicians by 2030,” warns the Association of American Medical Colleges.

Well, federal policies can make it more difficult than ever to practice medicine. For example, it can cost more to treat Medicaid patients than the federal government is willing to pay. That squeeze is an example of the wrong way to approach price cuts, yet it’s the one that Washington usually turns to. It’s at least partially responsible for the decline in the number of doctors.

Big medical bills are a big problem. Together we can solve that problem. But first, let’s prevent Washington from making it even bigger by imposing the LHCC Act.


Robbing Peter To Pay Pelosi

By George LandrithRed State

It’s bad enough when politicians rob from future generations by piling on debt to the nation’s ruinous finances.  Now the Administration and Senate Republicans are considering paying for Nancy Pelosi’s exorbitant spending demands by decimating medical innovation.

But don’t worry, kids: sure it’ll kill future life-saving medicines from ever coming to market, but when you’re done paying for this Pelosi-scale largess, I’m not sure you’ll be able to afford anything nice, anyway.

The deal reportedly under discussion in the Senate would be to meet almost all of Pelosi’s spending demands — did I mention that Republicans control the Senate and President Trump is our chief executive? — and “paying” for it in part by installing crudely designed price controls on the drug industry.

This bright idea is the brain child of Sen. Ron Wyden (D-OR), the chairman, er, ranking member, of the Senate Finance Committee. (Sorry – it’s easy to get confused about who is running things over there).

The headline at Politico tells you everything you need to know: “Senate Republicans pray Trump will take budget deal.”

Imagine how that’s going to go:

“So you’re meeting Pelosi’s spending levels?”

“Yes, sir, Mr. President.”

“And raising the debt ceiling?”

“Yes, sir.”

“How the hell are you going to pay for it?”

“Price controls, sir.”

It’s a complete disgrace, and I expect Trump will not take kindly to an outcome where he gets taken for a ride by Nancy Pelosi.

The price controls under discussion are a “Squad”-caliber idea, the “Squad” being the quartet of Socialist Democrats led by Alexandria Ocasio-Cortez who spent last week attacking Pelosi as a racist for not being left-wing enough (you can’t make this up!).

I describe it that way because the proposal is the same combination of Che Guevera-t-shirt-wearing ideological zealotry and breathtaking economic illiteracy responsible for such gems as AOC’s comically melodramatic pronouncement that “the world is going to end in 12 years” because of global warming.

Price controls are already the economic equivalent of a child demanding a pony: they demand an outcome without any regard or awareness of the reality of making it so. We want lower prices, so we’ll order them lower! Except, the cost of production remained just the same, or even increased once the people putting nation-state-level amounts of capital on the line just noticed the infantile children bickering in Congress are about to make a big mess.

The cost of producing one new drug is typically $2.5 billion. Private companies have to pay that up front, without knowing if the effort will succeed or fail, or in this case whether Wyden and Pelosi will decide they need some of that moolah to pay for women’s studies departments, free abortions and sex changes, and only Heaven knows what other insanities they can dream up.

But, you know, some children at least know something about ponies. Some demand a Shetland, for example. The Wyden child doesn’t even know what a pony is, he’s just throwing a tantrum. That’s my best attempt at explaining how stupidly designed these particular price controls are.

First, the proposal punishes price increases of individual drugs compared to inflation. Not only does this ignore any particular circumstances (sudden spike in supply cost for a particular compound, for example), it creates a giant incentive to pad price increases across the entire product line, untethering the price of any individual drug from actual production costs.

Second, the vehicle for delivering these price controls is the Medicare Part D, otherwise known as the one part of the entire federal health care system that shows any sanity and cost-effectiveness — thanks to its use of market principles.

Part D is the only large government program in the history of humanity to come in 40% under budget, which is practically on par with feeding the crowd of 5000 from a basket when you think of the endless list of failed health care “reforms” that cost an eye-watering amount above their price tag.

Why did Part D work? Because it managed to install some semblance of a market, which consumer choice, and real competition, in the form of the plans that compete for patients. Exactly the opposite of the price controls we may be on the verge of adopting to “pay for” Pelosi’s world domination tour — sorry, the obscene spending she demanded and the Senate Republicans appear all too happy to accept.

It’s shameful. Something deep inside the chests of Senate Republicans should cause them to reject a bad Pelosi proposal — simply as a matter of self-respect!  But if you believe that most politicians have anything more than trace amounts of self-respect, boy have I got some wonderful price controls to sell you!


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