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 Economics of NATO Expansion
09 Dec 2016 07:00:58 CDT -

In his January 1997 State of the Union speech, President Bill Clinton lauded the expansion of the North Atlantic Treaty Organization (NATO) into Central and East Europe, saying America's "first task is to help to undivided, democratic Europe." However, the president also expressed a desire to expand NATO in the hope of fostering seamless military cooperation across Europe.

Twenty-five years later, there has been little discernable improvement in NATO's military capabilities despite the addition of 12 new member nations, leaving the United States to provide most of the forces defending Europe, and to pay the tab, writes NCPA Senior Fellow David Grahtham and Research Associate Christian Yiu.

The Formation of NATO. NATO began as a mutual defense pact between the United States, Canada and 10 European nations in 1949 as a guard against Soviet aggression. The collapse of the Soviet Union and its formal dissolution in 1991, however, ushered in a new era of independence for many in Eastern Europe. The organization has since grown to 28 nations, all pledged to mutual defense under Article V, which states that an attack on one NATO member is an attack on all. The North Atlantic Council, the governing body of NATO, invoked Article V for the first time in its history after the September 11 attacks on the United States.

The Russian invasion of the Republic of Georgia in 2008 and the successful annexation of Crimea in 2014 demonstrated Russia's renewed interest in reclaiming certain territories. Putin continues to justify his annexation of Crimea and intervention in eastern European nations, claiming NATO was the first to breach the peace by moving eastward in violation of the 1990 negotiations over German unification. However, those agreements only promised that NATO would not deploy into East Germany until the Soviets had redeployed -- a fact that even former Soviet President Mikhail Gorbachev confirmed.

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Drug Affordability and the 21st Century Cures Act
08 Dec 2016 07:00:57 CDT -

NCPA Senior Fellow Devon Herrick writes for Townhall:

The high price of new drugs has become a political hot potato. Hillary Clinton made drug affordability a part of her platform --as did President-elect Donald Trump. To a significant degree, over-priced drugs are a problem partly caused by politicians. Congress allowed the regulatory regime at the U.S. Food and Drug Administration (FDA) to run rampant. But maybe the laws regulating drug discovery are beginning to change.

The House and Senate have passed the 21st Century Cures Act. Aside from $6 billion worth of mostly-unnecessary pork barrel spending, the Cures Act takes steps to reform the process of drug approval at the U.S. Food and Drug Administration (FDA).

A rational path to drug discovery is badly needed. Once a drug finally makes it through the approval process, it is guaranteed years of high monopoly prices due to the plethora of regulatory barriers that inhibit competition.

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Obamacare IS Socialized Medicine!
07 Dec 2016 07:00:56 CDT -

Senior Fellow Devon Herrick writes at NCPA's Health blog:

Have you ever stopped and considered why the government wants you to have health insurance? The Affordable Care Act (ACA) was supposedly designed to make health care affordable for millions of individuals who could otherwise not afford health coverage or would choose not to enroll due to costs. Worse yet, the ACA was designed to make medical care "affordable" for many individuals by foisting the costs on others who are not at risk of health problems. Obamacare was premised on the idea that benefits one person would never expect to use should be subsidized for others who may need them. That is the very definition of socialized medicine!

 Medical care is a service that not everyone places the same value on. Even controlling for health status, different people will want to see the doctor and pursue medical interventions at different rates. Thus, requiring everyone to have similar health benefits does those who want less medical care a disservice. This was the subject of a recent article in the New York Times column, The Upshot by economist Austin Frakt. In his column, Frakt discussed the problem with "one-size-fits-all" health insurance.  In the process, Frakt also raises a concept similar to what an economist colleague, NCPA senior fellow Gerald Musgrave, discussed with me a few years ago. You cannot buy a health insurance policy that only provides, say, 1990s technology the way you can choose to economize by buying a used car or a pre-owned home.  (As an aside, neither can you choose a hospital that buys its equipment used/refurbished. Much of medical equipment is leased and later sold abroad when the lease is up to avoid competing with new equipment)

For that matter, the ACA does not allow individuals to take out a $25,000 deductible to lower premiums. Nor does it allow individuals to forgo all coverage for medical benefits above, say, $500,000 (or $50,000 which would be enough for about 99 percent of the population). A person who has lead a healthy lifestyle and reaches middle age in perfect health does not qualify for a discount lower than a similar-aged person whose health status is a hot mess. And it doesn't end there.

Someone who does not have Hepatitis or a rare disease cannot agree to forgo high-priced treatments for those diseases. Neither can you buy medical coverage that does not include maternity benefits just because you are male and incapable of having babies. A couple who has undergone a permanent contraceptive procedure cannot avoid coverage that omits family planning or maternity benefits. Let's say you are a Mormon, whose religious beliefs precludes alcohol, tobacco and other addictive substances. You are not allowed to sign a waiver forgoing the right to chemical dependency treatments in return for lower premiums. Neither are Scientologists allowed to forgo coverage for mental health conditions their religion does not treat using medical therapy. For that matter I know of no health insurance plans that will only cover medical care received in foreign countries. There used to be one available on the far southern border of California that only covered Mexican doctors but it's doubtful that one still exists.

The ACA was designed with the idea in mind that demand for medical care should not be a function of income. Moreover, the ACA was designed to spread the cost of medical care across diverse groups regardless of the health risks and preferences of health plan members. It was designed to maximize cross-subsidies, which is precisely what's wrong with the Affordable Care Act (ACA). Under those conditions, it's no wonder premiums in the exchange are skyrocketing.

The "Affordable Care Act" was poorly named; it did not make care affordable. It made health coverage semi-affordable only for those newly-eligible for Medicaid and those earning up to 250 percent of the federal poverty level. The ACA took away the right of consumers to purchase the benefit package and type of coverage they prefer. It also took away the flexibility for insurers to experiment with differing plan designs.  In the process, the ACA made health coverage decidedly unaffordable for millions of people who do not qualify for subsidies and have to purchase individual insurance on their own. It's time to repeal the costly regulations and replace them with something that allows coverage that is truly affordable (and flexible).

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Castro's Death and Cuban Health Care
06 Dec 2016 07:00:55 CDT -

Senior Fellow John R. Graham writes at NCPA's Health blog:

The recent death of Cuban dictator Fidel Castro brought forth a grotesque encomium from the Canadian Prime Minister, Justin Trudeau, who asserted "Mr. Castro made significant improvements to the education and healthcare of his island nation."

Michael Moore, producer of propaganda dressed as documentaries, made a film in 2007 called Sicko, in which he also praised Cuban health care. The reality was different. According to a U.S. intelligence cable published by WikiLeaks, a local person employed by U.S. intelligence covertly observed:

  • Many young cancer patients reportedly have become infected with Hepatitis C after their surgeries. Contracting Hepatitis C after surgery indicates a lack of proper blood screening prior to administering transfusions. All blood should be screened for Hepatitis B, C, HIV and Syphilis prior to use.
  • Patients have no recourse and are not fully informed of the seriousness of such an inadvertent infection. Patients had to bring their own light bulbs if they wanted light in their rooms. The switch plates and knobs had been stolen from most of the rooms so one had to connect bare wires to get electricity. There was no A/C and few patients had floor fans. Patients had to bring their own sheets, towels, soap and supplemental foods. Hospital food service consisted of rice, fish, rice, eggs, and potatoes day after day. No fresh fruits, vegetables, or meat were available.
  • The laboratory equipment is very rudimentary -- a simple CBC (complete blood count) blood test is calculated manually by a laboratory technician looking through a microscope and counting the individual leucocytes, lymphocytes, monocytes, etc.

What about the wonderful hospital portrayed by Moore in his film? The U.S. intelligence cable explains that, too:

Built in 1982, this newly renovated 600 bed, 24 story hospital is depicted in Michael Moore's film "Sicko," where some 60 surgeries are performed daily including heart, kidney, and cornea transplants, mostly to patients who receive free treatment as part of Operation Milagro (mostly from Venezuela, but also from the rest of Latin America). The two top floors (shown in the movie) are the most modern and are reserved for medical tourists and foreign diplomats who pay in hard currency.

Ordinary Cuban patients are not allowed in this hospital. To attract medical tourists, it promotes its services on an English-language website. Here is the irony: The hospital attracts Western patients by offering bundled prices for procedures, such as a range of $9,000 to $15,000 for open-heart surgery. An American patient would find it all but impossible to get such transparent pricing from a U.S. hospital.

Of course, the problems American patients have with hospital, insurance, and government bureaucracy pale beside the tragedy of Cuban (lack of) health care.

For more on Health Issues:

Health Jobs Grow 1.5 Times Faster Than Non-Health Jobs
05 Dec 2016 07:00:54 CDT -

Senior fellow John R. Graham writes at NCPA's Health blog:

This morning's jobs report maintained the trend of high growth in health services, which grew 1.5 times faster than non-health jobs (0.18 percent versus 0.12 percent). With 28,000 jobs added, health services accounted for almost one in six of 178,000 new jobs.

The disproportionately high share of job growth in health services is a deliberate outcome of Obamacare. While this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals. This was concentrated in offices of physicians and other practitioners, and outpatient care centers. Physicians' offices alone added 7,000 jobs, more than the 6,000 jobs added by hospitals. This is a good sign because hospitals are high-cost locations of care versus doctors' offices and other ambulatory sites.

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Surprise Medical Bills A Growing Problem Requiring Price Transparency
02 Dec 2016 07:00:53 CDT -

Senior Fellow John R. Graham writes at NCPA's Health blog:

Donald Trump's health reform proposal during the presidential campaign promised to deliver price transparency to health care:

Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

Doctors and hospitals are infamously terrible at sharing price information with patients. It is a problem for both scheduled procedures and visits to emergency rooms. The root problem is not that providers are unwilling to share prices, but that prices are not formed through a normal market process. Instead they are administratively determined between government, insurers, and providers.

I have spoken with doctors who believe it would be illegal for them to disclose the price of a procedure to a patient before the insurer or government approved the claim! On the other hand, insurers' and employers' price transparency tools are not useful to most patients, and go largely unused.

A recent Consumers Union survey found nearly one third of Americans who had hospital visits or surgery in the past two years were charged an out-of-network fee when they thought all care was in-network. Other research from the Brookings Institution suggests this problem is getting worse.

This pushes against another trend. A survey by the Physicians Advocacy Institute and Avalere Health, a consulting firm, shows a significant increase in the number of physicians leaving independent practice and joining hospital-based health systems:

  • From July 2012 to July 2015, the percent of hospital-employed physicians increased by almost 50 percent, with increases in each six-month period measured over these three years.
  • In 2012, one in four physicians was employed by a hospital.
  • By 2015, 38 percent of physicians were employed by hospitals.

Obviously, this should be reducing, not increasing the problem of surprise medical bills. These occur when a patient undergoes surgery in a hospital in his insurer's network, but is then surprised by an expensive bill from an out-of-network anesthesiologist, pathologist, or other specialist who attended him in the hospital.

Patients control an almost insignificant share of the dollars spent on our health care. Only about ten cents of every dollar spent on our health care is spent directly by us. The rest is controlled by insurers or governments (while we pay indirectly through premiums and taxes).

No wonder out of network specialists unwittingly inflict so much financial anxiety on patient. They really do not have an incentive to worry about the pain they cause patients' pocketbooks, because their incomes do not depend on ensuring a patient is able and willing to pay his bill in a relatively frictionless way.

Professors Zach Cooper and Fiona Scott Morton have published a new article reporting their research on surprise medical bills in emergency rooms. Examining 2.2 million claims from a database of privately insured patients, they found over 99 percent of visits to emergency rooms were at in-network hospitals, but over one fifth of those visits generated a claim from an out-of-network doctor. At the extreme, one patient faced a bill of almost $20,000.

Professor Cooper proposes a common-sense solution: State laws making hospitals price all services, including physicians', in a bundled contract with insurers. How much doctors charge would then be subject to private negotiation between them and hospitals.

Within the current system, it is a reasonable step. Nevertheless, it invites the question: Why are hospitals, physicians and insurers not already operating like this? The answer must lie in the overly complex regulatory morass governing how these actors interact with each other.

No other service business would try to get away with this. Remember when President Obama was trying to convince us that the Obamacare health-insurance exchanges would operate like Expedia or Travelocity? It is laughable in hindsight. Nevertheless, while most people agree that actual airline travel (which is regulated by the federal government) is miserable, buying a ticket to fly is a convenient and transparent process. A passenger does not get a bill from the co-pilot a month after his flight, stating the co-pilot was not in the airline's network, and the passenger must pay extra!

Bundled pricing is a characteristic of a normally functioning market. In health care, that invites less, not more regulation. My own proposal would rely on solutions based on common law, not top-down rule-making.


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Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

Health Care Reform Tax Will Hurt Franchisees
04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...


Saving Jobs from Health Reform's Harmful Regulations
04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...


Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...


The Case for Competition in Medicare
04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...


Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...


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