NCPA - National Center for Policy Analysis
NCPA - National Center for Policy Analysis
Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.

NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.

Daily Policy Digest

Provided courtesy of: NCPA

Daily Policy Digest

The Fantasy of Single Payer Health Care in the States
24 Jun 2016 07:00:58 CDT -

NCPA Senior Fellow John R. Graham writes in the Washington Examiner:

One of the defining characteristics of Bernie Sanders' socialism is single-payer healthcare, a fully taxpayer-funded universal medical system. Single-payer healthcare has long had a following in the United States, but it is unlikely to become federal policy. Obamacare's setbacks have made Americans less confident than ever that the federal government could operate such a system.

So single-payer advocates are focusing on individual states. This November Coloradans will vote on single-payer healthcare. A couple of years ago, Vermont's governor tried to institute it, but gave up short of the finish line. Other states will surely try. I would put Oregon and (maybe) Hawaii at the top of the list of states to watch.

If successful, this would be a Canadian-style roll-out of single-payer healthcare, which began in individual provinces in the mid-20th century and subsequently won federal support. However, there are significant obstacles to any state instituting true single-payer healthcare in 21st-century America, even if the people or politicians choose it.

First, Medicare (which covers most senior citizens) is already fully federal. States have no role in either financing or organizing its care. The system is moving from fee-for-service to managed care delivered under arrangements whereby groups of providers bear financial risk for patient outcomes.

Different models have different labels ("Accountable Care Organizations," "Bundled Payments for Care Improvement," "Alternative Payment Models," "Merit-Based Incentive Payment System"). The models are designed by federal bureaucrats in an office in Baltimore, who are highly unlikely to ever yield power to state counterparts.

Second, Medicaid (which covers most low-income residents) is also largely federal, with over half the money coming from Washington. Although it is operated by the states as part of their welfare bureaucracies, states deliver benefits under strict federal constraints.

Read entire article here.

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A Bogus Solution for High Drug Costs
23 Jun 2016 07:00:57 CDT -

Most of the drugs Americans take are lower cost generics -- accounting for about 88 percent of prescriptions, according to NCPA Senior Fellow Devon Herrick. Generics are cheap because they are no longer protected by patents and different manufacturers compete on price. Yet, drugs whose patents have not yet expired can sometimes be very expensive; especially those recently approved and those derived from living substances. As a result, national spending on drug therapies increased by nearly one-quarter (23 percent) in the past two years.  Much of that increase is on expensive brand-name drugs and high-tech, specialty drugs -- such as those used to treat cancer, hepatitis, rheumatoid arthritis and multiple sclerosis.

Lately, a few politicians (and lobbyists for pharmacies and drug makers) have been attempting to divert some of the blame for high drug prices to the administrators of employee drug plans. They worry that pharmacy benefit managers (PBMs) mark up drug prices well above the PBMs' costs or fail to pass along manufacturers' drug rebates and other discounts to their clients (employers and insurers) and consumers with drug plans. The blame-shifters have suggested that employers and their workers could potentially benefit if PBMs were forced to disclose the (net) wholesale prices they paid for drugs.

Economists, the U.S. Federal Trade Commission (FTC) and even the actuarial consulting firm Milliman, Inc. are rather skeptical of this argument. The FTC is responsible for preventing unfair or deceptive trade practices and unfair methods of competition. The agency has conducted numerous studies of the business practices of PBMs -- including the effect of mandatory price transparency on competition. The FTC is concerned that mandating price disclosure will remove a bargaining tool used by some firms to compete with others. The FTC also worries the loss of proprietary pricing information could reduce aggressive bargaining or potentially encourage price collusion among manufacturers.

According to the FTC, "…harm may result if plan sponsors are denied the ability to choose the level of transparency that best suits them, within the context of their overall plan design." This is because the market for drug plan managers (that is, PBMs) contains both large and small firms. Small firms often attempt to differentiate themselves by offering different pricing models.

Read entire article here

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Transparency Tools Work - But Require Appropriate Incentives
22 Jun 2016 07:00:56 CDT -

In the NCPA's Healthblog, Devon Herrick, argues that patients will use transparency tools if given the appropriate training -- and incentives -- by health plans:

A recent New York Times article by Reed Abelson blames the slow adoption of online transparency tools on "health care's complexity."  Abelson argues… "It is impossible to know, for example, whether a dermatologist who costs twice as much as another can more successfully diagnose skin cancer." The article briefly mentions the case study of two large employers who found online transparency tools did not reduce consumer spending.

Abelson conveys a rather disparaging message. According to Abelson, transparency tools are mostly ineffective at reducing health care spending because patients aren't using them. Abelson interviewed Mitch Rothschild, executive chairman of the transparency firm, Vitals. I've met Rothschild and co-presented with him on a panel discussion at a conference. Rothschild observed, "You can't save money if people aren't shopping." That's a good point. How can employers encourage workers to use the tools? It requires the appropriate application of training - and incentives.

I'm reminded of an experiment by the California Public Employee Retiree System (CalPERS) conducted by the insurer, WellPoint. Charges for hip and knee replacements vary considerable from one hospital to the next for no apparent reason — other than the fact that most patients have little reason to compare prices. A surgery that costs $70,000 at one hospital may only cost half that at another hospital. California health insurer WellPoint (now Anthem) observed that hospital charges for joint replacement ranged from $15,000 to $110,000 with little difference in outcomes between high-cost and low-cost surgeries. Although prices varied among hospitals, dozens of California hospitals charge less than $30,000 with no discernible reduction in quality.

CalPERS and WellPoint designed an experiment to reward beneficiaries who patronized high-quality, lower cost facilities. Enrollees were encouraged to go to the lower-priced hospitals through reduced cost-sharing. This was not a restrictive network; patients could go anywhere. But patients were responsible for all charges in excess of the $30,000 reference price for a hip or knee replacement. In addition, enrollees faced a standard coinsurance percentage of 20 percent of the cost of care (limited to $3,000 annually). This meant that choosing a more expensive hospital that charged $40,000 would subject a patient to cost-sharing of $13,000 ($10,000+$3,000). By contrast, selecting a facility that only charged the reference price of $30,000 would result in cost-sharing of $3,000.

The results of this experiment were better than anyone could have anticipated. CalPERS enrollees who went to the 46 reference price hospitals (those charging less than $30,000) are represented by the solid red bars in the figure. The solid blue bars represents the additional cost for CalPERS' enrollees who chose a hospital other than one of the 46 value hospitals...

Read entire article here...

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National Security Strategy Based on Obfuscation, Denial, and Lies
21 Jun 2016 07:00:55 CDT -

NCPA Vice Chairman and Executive Director Allen West writes in Townhall:

In full disclosure, let me state that I am a newly elected board member of the National Rifle Association and I own two AR-15 semi-automatic rifles.

With that being said, one week after the largest mass shooting and second largest Islamic terrorist attack in U.S. history, I am deeply disturbed at how our nation, namely political officials, are responding. It is as if the theme is, "we have met the enemy and decided to deny their existence.'' We are turning ourselves in knots as we watch the mantra of one Rahm Emanuel evidence itself yet again, "never let a good crisis go to waste." It never ceases to amaze me how those who have a blanket of armed protection provided to them seek to tell others how to defend themselves.

It is well known that the FBI has nearly 1000 Islamic terrorist investigations ongoing in the United States. And we know that the Islamic State has taken credit for the actions of Omar Mateen, for which he pledged his allegiance to ISIS and Abu Bakr al-Baghdadi. So the seminal question is this, if Mateen had gone on a rampage through the Pulse club with a sword, knife, machete, or hammers, where would the discussion be one week later? Would the progressive socialist left and their complicit media accomplices be articulating knife control? Or would we be wasting time in our U.S. Congress over insidious legislation that will have no effect on Islamic jihadist activities in America, western civilization?

I must ask, how many of these folks clamoring for bans on semi-automatic rifles, again, a violation of our second amendment rights, have ever read the Explanatory Memorandum of the Muslim Brotherhood? That document was written in 1991 by Mohammed Akram and was uncovered in an FBI raid in the basement of a home in northern Virginia. It concisely lays out the "stealth jihad" goals and objectives, it is an open source document completely translated into English. So why do our elected officials deny this existence of the enemy and obfuscate, pivoting away towards an ideological agenda item, when 49 Americans horrifically lost their lives?

But, this obfuscation and denial is the pattern of the current Obama administration who began referring to Islamic terrorist attacks as "man-caused disasters" and combat operations as "overseas contingency operations." Early on, we had the jihadist attack of Carlos Bledsoe. Remember him? He was a young man from Memphis who traveled to Yemen and Somalia, returning to the United States to shoot two Soldiers at a Little Rock recruiting station, killing one. And then there was of course Nidal Hasan and Ft. Hood and the Islamic jihadist attack that was referred to as "workplace violence." In Chattanooga, we had an Islamic jihadist who fired upon a recruiting station then headed to the Naval Reserve Training Facility gunning down five Marines and Sailors, killing them. His family gave us the same tired story, he was a good boy and we cannot understand what happened. The question was one of mental health even in the face of overwhelming evidence of jihadism.

In Boston, the Tsarnaev brothers executed their sick jihadist attack, all the while the indicators and warning signs were clear, but no action taken. We have made profiling a very dirty word, it should not be. It is called trend analysis. And I doubt that anyone remembers what happened in Moore, Oklahoma at the chicken processing facility where an Islamic jihadist beheaded a woman and was in the process of beheading another. Thank God, a reserve law enforcement officer retrieved his semi-automatic rifle rom his vehicle and took down the assailant.

All the gun control laws and bans did not stop Syed Farouk and Tashfeen Malik in San Bernadino, and the response from President Obama and his acolytes again was gun control. Even for our deployed men and women in uniform, civilian service, and security contractors, an Islamic jihadist attack in Benghazi, Libya was denied, excused away, and lied about.

If you sit quietly, listen, you will hear the Islamic terrorists and jihadists laughing at us. There are strict gun bans and control in Paris, France and Brussels, Belgium. Did that deter or stop Islamic jihadist terrorist attacks? No, it only enables them and makes their actions and targeting easier. Why? Because we have rigid ideologues who are incapable of protecting and defending us and our freedoms. They would prefer to obfuscate, deny, and lie in order to advance their own agenda and erode our individual personal liberties. They would prefer us defenseless, unable to enjoy our first unalienable right endowed by our Creator, life.

The fact that there were three FBI inquiries of Omar Mateen should have sent up clear signals -- after all in baseball you get three strikes, then you are out. Mateen has associations with the American suicide bomber who died in Syria. Tashfeen Malik lied on her fiancée visa application. Nidal Hasan had communications with radical Islamic cleric Anwar al-Awlaki. In every case you will find that somewhere along the lines, the ball was dropped. Why? After 9-11, President Barack Obama has had a stack of Islamic jihadist attacks on his watch. Yet, he allows certain stealth jihad groups such as the Council for American Islamic Relations (CAIR) to have access to his administration and even recommend changes, purging of Islamic terrorist training materials in the FBI and the DoD.

After the Imperial Japanese attack on Pearl Harbor, there were Japanese leaders who recommended a full invasion of America. Admiral Yamamoto, the architect of the Pearl Harbor assault, replied that is was not feasible. He feared that they had indeed awakened a sleeping giant, and some quote him as saying, "there is a rifle behind every blade of grass." That, Ladies and Gents, is called a deterrent, something the progressive socialist left wants to eradicate and evidence our weakness.

A week after the second largest Islamic terrorist attack on American soil there has been no response against ISIS. There has been no action, just politicized, misguided rhetoric while ISIS sits in Raqqa laughing at us planning, inspiring, the next attack. In 490 BC at the Battle of Thermopylae, the invading tyranny of Xerxes and the Persian horde was met by 300 Spartans led by King Leonidas at the head of a Greek vanguard. Freedom was told by evil to lay down their weapons to wit Leonidas replied "Molon Labe," which means "Come, take." The sad reality of the past week is that it is the tyranny of our own government, in the face of evil, that is obfuscating, denying, and lying to the American people while seeking to force us to lay down our weapons.

For more on International Issues:

Reforming Medicare Part D to Improve Access to Medicines
17 Jun 2016 07:00:54 CDT -

(A version of this Health Alert was published by Forbes.)

Specialty drugs are typically high-cost prescription drugs used to treat complex chronic and/or life threatening conditions. Many do not have substitutes available at lower costs.  Over the last decade, the Medicare Part D benefit has imposed high out-of-pocket costs as a way to control costs of specialty drugs. This is causing many patients not to fill prescriptions. Some patients may be adding costs to the system by getting drugs more expensively by injection in doctors' offices, where they are covered by Medicare supplemental insurance, writes Fellow John R. Graham in NCPA's Healthblog.

Prescription drug plans maintain lists of drugs, called formularies, which define their benefits in terms of which drugs are covered by the plan. Over the years, formularies have become tiered, making patients liable for higher out-of-pocket costs for medicines placed on higher tiers.

Most prescription drugs plans offered under Medicare Part D have five tiers, according to research by Jack Hoadley and colleagues at the Kaiser Family Foundation. The fifth tier consists of specialty drugs, which Medicare defines as drugs that cost at least $600 per month.

These drugs are subject to very high coinsurance of up to 33 percent under Part D's initial coverage period. This year, after having spent $2,960 on drugs, a Medicare patient who does not qualify for low-income subsidies hits the coverage gap (or "doughnut hole"). In the doughnut hole, the patient pays 45 percent of the drug cost. Eventually, the patient's out-of-pocket liability declines to five percent after the patient. This benefit design is reducing access to medicines used by very sick patients, according to research conducted by Professor Jalpa A. Doshi, of the Perelman School of Medicine at the University of Pennsylvania, and colleagues (and presented at the annual meeting of the International Society for Pharmacoeconomics and Outcomes Research in May).

Doshi and colleagues examined the relationship between out-of-pocket costs and initiation of treatment among Medicare Part D beneficiaries newly diagnosed with leukemia in 2011 through 2013. These cancer patients were prescribed tyrosine kinase inhibitors (such as Gleevec®). Although in clinical use for just a decade and a half, these drugs have transformed leukemia from a death sentence to a chronic condition for many patients.

The average out-of-pocket cost for a 30-day supply was $2,600 or higher for Medicare Part D beneficiaries who did not receive low-income subsidies. This caused many of these patients not to fill their prescriptions. Low-income patients got extra help with their costs, resulting in out-of-pocket payments of just $5 or less. Only 21 percent of the patients with potentially high out-of-pocket costs had initiated treatment within one month of their diagnosis, versus 53 percent of patients with nominal out-of-pocket costs. And this remained a problem in subsequent months. Within three months, the proportions were 36 percent versus 65 percent. At six months, they were 45 percent versus 67 percent. The patients with potentially high out-of-pocket costs may have struggled to pay the high coinsurance for their medicine and hence may have delayed or abandoned filling their prescriptions.

Doshi and colleagues found similar results for Medicare beneficiaries with rheumatoid arthritis, from 2007 through 2009. Although the study design was different, the difference in outcomes between non-poor and low-income patients was similar. During the initial coverage period at the start of a new plan year, the non-poor paid (on average) $484 for a 30-day supply of biologic medicines, while low-income patients paid only $5.  Only 61 percent of the non-poor filled their prescriptions, versus 73 percent of the low-income patients.  Even among those who filled their prescriptions, non-poor patients were more likely to have interruptions in their biologic treatments than the low-income patients.

Read entire article here.

For more on Health Issues:

Obamacare Slightly Increased Short-Term Uninsured
16 Jun 2016 07:00:53 CDT -

The best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in 2015. There are two things to note, writes Senior Fellow John R. Graham in NCPA's Healthblog.

First: About 70 percent of residents, age 18 to through 64, had "health insurance" in 2015, which is the same rate as persisted until 2006. Obamacare has not achieved a breakthrough in coverage. It has just restored us to where we were less than a decade ago.

What has also happened is a significant change from private coverage to government welfare (primarily Medicaid). The shift has been about five percentage points since 2006, and ten percentage points since 1997. (That is, there was no net change in coverage before the Great Recession, but there was crowding out of private coverage in favor of welfare.)

Categorizing people on welfare programs like Medicaid as having insurance is inaccurate, for the same reason categorizing people receiving cash welfare with employed people into one category of people "earning incomes" would be inaccurate.

Second: The National Health Interview Survey is the best survey because it asks people three questions: Whether they were uninsured at the time of the interview, whether they were uninsured for any time within a year, and whether they were uninsured for more than a year. Unfortunately, it does not differentiate between private coverage and welfare.

Between 2013 and 2015, the number of people who were uninsured for one year or more declined by 12.7 million, from 30.5 million to 17.8 million. However, the number uninsured for less than a year increased slightly from 16.9 million to 17.7 million.

I believe this reflects churning between private coverage, Medicaid, and Obamacare exchanges in the increasingly fragmented post-Obamacare landscape. People fall through the cracks, overwhelmed and confused by an unnecessarily complicated "market."

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Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

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NCPA - National Center for Policy Analysis Web Site

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