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

Veterans Health Administration Realizes it Should Buy, Not Build, Software
22 Mar 2017 07:00:58 CDT -

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

Imagine if you learned a government agency built its own office furniture, HVAC, or telephones. Even if there were a massive amount of corruption in government purchasing, it would be remarkable if a bureaucracy could do a better job building than buying.

Yet, for decades, the Veterans Health Administration has tried to do that with its Electronic Health Record (EHR). I cannot think of another health system that has built its own EHR, rather than buy it from a vendor. It makes as little sense as a health system manufacturing its own MRI machines.

President Trump's newly appointed VA Secretary has confirmed he will throw in the towel on the VA's home-brew system, VISTA, and buy a commercial EHR. Back in 2014, the VA and Department of Defense scrubbed a failed project to make their EHRs interoperable -- after churning through $24 billion of taxpayers' money in a vain attempt to overcome turf wars between and within the departments.

The reason it took so long for the VA to take this step is the VISTA EHR was cutting edge in the late 1990s. At the time, the installation was led by an idiosyncratically outstanding leader, Dr. Ken Kizer, from 1994 to 1999. Then, he went to the private sector.

VISTA began to track towards obsolescence pretty quickly. However, absent market forces, the VA could not make an effective "build or buy" decision for almost two decades.

Buying a commercial EHR will not solve the VA's crisis, but least it is a sensible step.

For more on Health Issues:

The "Troubles" with Pharmacy Benefit Managers
21 Mar 2017 07:00:57 CDT -

Senior Fellow Thomas Hemphill writes in Regulation Magazine:

Whenever U.S. policymakers and business executives discuss health care, the issue of ever increasing costs quickly arises. And for good reason. According to a recent analysis by the Kaiser Family Foundation,
U.S. per capita expenditures on health care are expected to increase from $9,695 in 2014 to
$15,618 in 2024, an average annual growth rate of 5%.

Drug therapy, compared to hospital treatment and surgical procedures, is often the most efficient form of medical treatment.  But it is costly nonetheless. For 2014, prescription drug costs made up 9.8% of total annual health care expenditures, with total retail prescription drug spending accounting for $297.7 billion.
That is a 12.2% increase over 2013.

To hold drug costs down, many private employers, insurers, and even states and the federal government use pharmacy benefit managers (PBMs). PBMs are third-party administrators of prescription drug programs. Some 266 million Americans -- approximately 82% of the total U.S. population -- are covered by these programs as part of their commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefit Program, state government employee plans, and Managed Medicaid plans.

Continue reading.

For more on Health Issues:

Great Moments in Government Waste, Fraud and Abuse
20 Mar 2017 07:00:56 CDT -

Senior Fellow Pamela Villarreal writes at NCPA's Taxes and Retirement blog:

Donald Trump's proposed "skinny budget" was released last week.  Of course, the outrage and howls of indignation have begun.  Already, there are Twitter hashtags referencing cuts to programs for the poor (#Mealsonwheels is trending) and "hair on fire" claims that people and puppies will die because of EPA cuts, education cuts, public television cuts, and of course, the expansion of the "military industrial complex."

In the era of Trump resistance, there is no such thing as a measured response or a little bit of contemplation.  Every reaction must be emotional, outlandish and knee-jerk with no fact checking involved.   But it's time to take a breather. Regardless of the reactions of anti-Trumpers or Trump supporters, there are some things about politics and policy that remain a constant: government still wastes lots of money.  And any budget policy that might force agencies to control waste, clamp down on fraud or follow internal controls make government employees a little nervous.  After all, such measures smack of accountability and upend the status quo, meaning that some federal employees may be ushered out the door.

Let's take a look at some of the goings in a couple of agencies that Trump proposes cutting the most:

Trump proposes cutting the EPA budget about 31 percent.

  • According to the EPA's Office of Inspector General (OIG), the employee credit card and convenience check system is rife with abuse.  In 2014, the OIG found that out a sample of $152,602 in transactions, over half of the amount was for "prohibited, improper and erroneous" purchases.
  • On February 14, 2017, the OIG determined that the program's risk was high enough to warrant an audit.  A review of 18 transactions found that none of them complied with the agency's 14 internal controls. They also pointed out that "two of the 18 transactions, totaling $14,985, were for fitness memberships improperly paid for in advance."
  • The OIG also found that EPA's $10 million "transit subsidy" program for employees for parking or  public transportation is vulnerable to abuse, as employees use their transit cards after they have quit the agency.
  • In another area, EPA often fails to account for grant money awarded to states and  localities for pollution cleanup, and the EPA's lack of oversight allows groups to spend the money without completing required grant work.  Clean water state revolving funds are not continuously reviewed, resulting in hundreds of millions of dollars in "misuse."

Trump proposes cutting the State Department budget by nearly 29 percent.  It could use a good haircut:.

  • The State Department's OIG found abuse of the department's travel program, with several hundred thousand dollars of unauthorized or improper charges on department travel cards in FY 2013-2014..
  • OIG reports also reveal that lack of grant monitoring by grant officers or grant offer representatives resulted in grant funds being misspent.  One audit in 2015 found $7 million in misspent grant funds simply due to lack of oversight.
  • Under former Secretary of State Hilary Clinton, the department wasted billions of dollars, including $600 million in failed projects in Iraq and Afghanistan, $5.4 million on crystal stemware and $6 billion that went "missing" during her tenure.

These are just a few of many examples in just two government entities.  I could probably spend the next year reading OIG reports from every agency and department, detailing example after example of improper and misused grants, no-bid contracts, employee benefit abuses, missing funds and the like.

What about Trump's cutting programs that help the poor?  There has been a lot of panic today about cuts to Meals on Wheels.  MOW is a non-profit that was originally started by a community of faith-based organizations.  While it does receive some government funding in communities through the Housing and Urban Development's Community Development Block Grant program, it is not a government entity. In fact, local Meals on Wheels programs existed 20 years prior to the CDBG program and are primarily supported by individual and corporate donations.  Unfortunately, CDBG funds are known for being misappropriated, not to Meals on Wheels per se, but to community redevelopment and housing renovation and construction programs.  If citizens are serious about caring for the poor, they would work to prevent the numerous abuses and misuses of funds as documented in San Diego, Bayonne and Union City, New Jersey, and lots of others.  Federal funding of local programs breeds corruption, mismanagement and misuse of funds.

And finally, while Trump proposes a major boost in defense spending, they are not immune to billions of dollars in fraud, waste and abuse as evidenced by their list of audit reports here.

For more on Tax and Spending Issues:

The Economic Effects of Repealing the Affordable Care Act
17 Mar 2017 07:00:55 CDT -

The Congressional Budget Office (CBO) recently analyzed the effect of repealing and replacing the Affordable Care Act on federal revenues and the uninsured. There was much hype about their conclusions that 24 million people would be added to the ranks of the uninsured (although about 14 million of those would choose not to buy insurance because they would no longer be forced to). Also, federal deficits would fall by $337 billion over 10 years. However, the CBO did not measure the economic effects of repealing some of the most burdensome aspects of Obamacare, which would create hundreds of thousands of jobs and increase Americans' personal incomes.

The Repeal of ACA Taxes. Taxes shrink the economic activities on which they are imposed. For example, a tax on labor income will cause a reduction in the number of workers hired. Using the NCPA-DCGE model, we estimate the effects on jobs and revenue of repealing eight taxes that were implemented under the Affordable Care Act:

  • Medicare tax of 0.9 percent on incomes over $200,000.
  • Net investment tax of 3.8 percent on income over $200,000.
  • Higher AGI floor for medical reimbursement of 10 percent, up from 7.5 percent.
  • Tax of 40 percent on high cost health insurance plans (delayed to 2020).
  • Tax on branded prescription drug manufactures and importers.
  • Tax of 2.3 percent on medical devices (delayed to 2018).
  • Tax of 10 percent on tanning services.
  • Patient-centered outcomes research trust fund fee tax (ends 2019). Repeal of the ACA will end the exchange subsidies.

Under these subsidies, some 33 million full-time workers can qualify for exchange subsidies only by working part-time or reducing their incomes below 400 percent of the poverty level. This creates an implicit "full-time employment tax" of 4.5 percent on payrolls.

The House Plan. The House plan will award tax credits per family member based on age and income, ranging from $2,000 individuals under 30, to $4,000 for individuals aged 60 and over, with a maximum family limit of $14,000. The credits will phase out by $100 per $1,000 of income over $75,000 for a single filer and $150,000 for joint filers. The House plan also increases Health Savings Account contribution levels to match the out-of-pocket expenses for high deductible plan and allows both spouses to make catch-up. Repealing the ACA and replacing it with the House Plan would by 2027 (see tables):

  • Increase real GDP by $426 billion, or 1.5 percent.
  • Increase private sector employment by 940,000, or 0.49 percent.
  • Increase personal income by $185 billion, or 0.76 percent. Reduce federal revenue by $132 billion, or 2.51 percent

Continue reading 

For more on Tax and Spending Issues:

Health Insurance A Cause of Past-Due Debt?
16 Mar 2017 07:00:54 CDT -

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

study of past-due medical debt by Michael Karpman and Kyle J. Kaswell of the Urban Institute demonstrates the expansion of coverage subsequent to the Affordable Care Act is associated with a reduction in the proportion of adults with past-due medical debt.

In 2012, 29.6 percent of U.S. adults had past-due medical debt, versus just 23.8 percent in 2015. The study does not define "past-due," nor the average amount of medical debt that is past-due. However, it cites research that almost half of debt in collections is owed to hospitals and other providers.

Although health insurance is supposed to protect us from such a situation, it often does not. Among insured people, 26.6 percent had past-due medical debt in 2012, versus 22.8 percent in 2015. However, among uninsured people it declined more: 39.8 percent in 2012, versus 30.5 percent in 2015. What to make of this?

If Obamacare is associated with a bigger impact on past-due medical debt among those who remained uninsured than the insured, that would be an odd outcome. (Actually, it is more likely the large improvement among the uninsured is a result of adverse selection into insurance due to Obamacare. Those who remained uninsured were more likely to be healthy, therefore less likely to have medical debt.)

Further, other research indicates no change in the proportion of Americans having trouble paying medical bills from 2005 through 2015. What really stands out in the Urban Institute study is the proportion of 18 to 24-year olds with past-due medical debt: 27.3 in 2012 versus 21.1 percent in 2015.

Seriously? One in five Americans aged 18 through 24 has past-due medical debt? What could possibly  drive that? I suggest health insurance itself is a cause. We still have a system where insurers control prices and charges. People have little idea how much they will pay out of pocket until long after they receive care. Claims have to be processed, Explanations of Benefits (EOBs) and invoices have to be mailed.

Another Urban Institute study defines credit card debt past-due if it is over 30 days late. That study also reported 35.1 percent of adults had debt in collection in 2014! The average amount was $5,178, or 7 percent of average household income of $72,254. As noted above, a big chunk of this is medical debt.

Indeed, it would be virtually impossible for an American patient to pay a medical bill within 30 days. If we paid our doctors directly, instead of sending our money on a convoluted voyage through insurers' bureaucracies, medical debt would go down a lot -- especially among young adults.


For more on Health Issues:

Repealing the ACA Would Bring Economic Growth
15 Mar 2017 07:00:53 CDT -

The recent CBO analysis of repealing the Affordable Care Act focused on the number of people who become "uninsured" because they would no longer be forced to purchase insurance.  What they didn't show, however, was how the Affordable Care Act has been a burden to job creation, GDP growth and personal income growth.  The NCPA's analysis finds that repealing the burdensome taxes that were imposed as a result of the ACA would improve the national economy.

In modeling the American Health Reform Act, David Tuerck, NCPA Senior Fellow and Executive Director of Beacon Hill Institute and his team estimated the effects on jobs and revenue using some core assumptions:

  • Eight ACA taxes would be repealed.
  • Exchange subsidies would end.  Under these subsidies, some 33 million full-time workers can qualify for exchange subsidies only by working part-time or reducing their incomes below 400 percent of the poverty level.
  • This creates an implicit "full-time employment tax" of 4.5% on payrolls.
  • The House plan tax credits impose an implicit 10% tax on the benefits received by eligible taxpayers.

 Thus the repeal of the ACA would have various positive economic effects:

  • Health care reform would increase real gross domestic product (GDP), relative to the current baseline, by 1.34 percent in 2018 and by 1.50 percent in 2027.
  • Private sector employment would exceed baseline by 745,000 jobs in 2018 and 940,000 jobs in 2027.
  • Personal income would increase $111 billion in 2018 and $185 billion in 2027.
  • Business investment would increase $22 billion in 2018 and $67 billion in 2027.

 Revenue effects:

  • However, federal revenues would fall $84 billion in 2018 and $1 trillion over a 10-year period (2018-2027) compared to baseline estimates.
  • State and local revenues would increase $26 billion in 2018 and $325 billion over a 10-year period (2018-2027) compared to baseline estimates.C

Continue reading


For more on Tax and Spending Issues:

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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