Am I going to have to include Brad DeLong in this category?

A clever former intern of mine (who says things like “aboot”) puckishly notes that the date by which Massachusetts residents are legally required to obtain health insurance falls on Canada Day.

I’m sure it’s just a coincidence.

In his post on the differences over energy policy between the (conservative) Heritage Foundation and the (libertarian) Cato Institute, Jerry Taylor mentions that the two Washington think tanks also have differences regarding health care. For those who are curious, here’s where I see the biggest differences between Cato scholars and Heritage scholars on health policy:

The Heritage Foundation’s health policy team generally supports having the government force people to buy health insurance. Cato scholars generally do not. A couple of weeks ago, Heritage’s director of health policy studies Bob Moffit wrote in the San Diego Union-Tribune:

[M]y Heritage Foundation colleagues and I support the “personal responsibility principle.” It’s a simple idea: All adults have a responsibility to buy their own health insurance, pay their own health care bills, and not shift those costs to others.…

People who can reasonably afford it have a responsibility to buy health insurance to protect themselves and their families against the financial devastation of catastrophic illness.…

People who do not wish to buy health insurance for whatever reason should be free to do so. But, in exchange, they must demonstrate in some tangible way that they are really going to pay their own hospital bills. 

My Cato colleagues and I generally differ, for a number of reasons: such “individual mandates” are impractical, ineffective, and expand government power beyond its legitimate scope. Government should and does require people to pay their debts, meaning that patients already are legally responsible for their medical bills. The Heritage “personal responsibility principle,” on the other hand, would hold a Christian Scientist responsible for debts that he will never incur.

In addition, Heritage scholars embrace the idea that government should pursue “universal coverage.” Meanwhile, I do things like start the Anti-Universal Coverage Club (whose membership is growing).

There are many areas where Cato and Heritage scholars agree. I personally respect every member of their health policy team. Why, just yesterday Cato hosted Heritage’s Ed Haislmaier at a forum where we released a study critical of the Heritage-backed Massachusetts health plan. 

Where we disagree, we criticize. But I consider such criticism a form of praise. The only reason we bother to criticize is because what Heritage scholars say matters. A lot.

This Cato-Heritage disagreement over health care goes back more than a decade. It contributes to the free-market movement’s lack of direction on health care reform. The movement cannot move on in a unified manner until that disagreement is resolved.

Today, Cato releases a new paper on the Massachusetts health plan by David Hyman, a Cato adjunct scholar and professor of law & medicine at the University of Illinois. Hyman’s paper is titled, “The Massachusetts Health Plan: The Good, the Bad, and the Ugly.” 

Here’s an excerpt:

Although the legislation, as Stuart Altman put it, “is not a typical Massachusetts-Taxachusetts, oh-just-crazy-liberal plan,” there is enough “bad” and “ugly” in the mix to raise serious concerns, particularly when the desire to overregulate the health insurance market appears to be hard-wired into Massachusetts policymakers’ DNA…

If we want to make health insurance more affordable and avoid the “bad” and the “ugly” of the Massachusetts plan, Congress—or, barring that, individual states—should consider a “regulatory federalism” approach.

Here’s a link to an audio interview I did on Healthy Competition for a Tampa-based newspaper called — I love this — Creative Loafing.

Inspired by National Review’s recent editorial and Andrew Sullivan’s embrace of same (as well as by Greg Mankiw), I have decided it would be fun and educational to keep tally of those who reject the idea that federal or state governments should strive to provide every American with health insurance. Call it the Anti-Universal Coverage Club.

Here are the guiding principles of the Anti-Universal Coverage Club:

1. Health policy should focus on making health care of ever-increasing quality available to an ever-increasing number of people.
2. To achieve “universal coverage” would require either having the government provide health insurance to everyone or forcing everyone to buy it. Government provision is undesirable, because government does a poor job of improving quality or efficiency. Forcing people to get insurance would lead to a worse health-care system for everyone, because it would necessitate so much more government intervention.
3. In a free country, people should have the right to refuse health insurance.
4. If governments must subsidize those who cannot afford medical care, they should be free to experiment with different types of subsidies (cash, vouchers, insurance, public clinics & hospitals, uncompensated care payments, etc.) and tax exemptions, rather than be forced by a policy of “universal coverage” to subsidize people via “insurance.”

If you’d like to join the Anti-Universal Coverage Club, let me know by posting something to your own blog, or by emailing me here. Feel free to forward items from other like-minded individuals.

I predict that neither the American Medical Association, nor the Federation of American Hospitals, nor America’s Health Insurance Plans will join the Anti-Universal Coverage Club.

A certain segment of the political left is, shall we say, lazy in its critique of letting consumers control their health care dollars and decisions. 


For example, I recently wrote about my experience using my health savings account (HSA) to pay for medical care after I tore my anterior cruciate ligament. When my orthopedist learned that I faced a high deductible, he helped me weed out unncessary expenses that would provide little benefit. In particular, we skipped an X‑ray because I didn’t hear or feel any bones break, and he agreed there (probably) would be no harm in doing so. The only reason I shared that information about my injury, indeed the only reason we gave the X‑ray a second thought, was because I had a financial incentive to do so: I was paying for the X‑ray.



Big deal, says Ezra Klein:

That’s all for the good, when it’s all for the good. On the other hand, that’s just a hop, skip, and a jump away from “She had shortness of breath, but no radiating arm pain, so she decided to wait through the weekend because she couldn’t afford the ambulance ride. She died.”

Here’s why that’s lazy. 


Klein knows that when people face additional cost-sharing, some patients will forgo some medical care and some of those patients will end up less healthy. But he also knows that when people have HSA-like coverage, on balance, people do not end up less healthy. 

That’s right: for every lady who loses her life because she didn’t call an ambulance, someone else’s life is saved because he or she kept the doctor away. (Remember: guns don’t kill people, doctors do.) So it’s no refutation of HSAs to note that some people who forgo care will suffer.


Klein’s critique is of course more nuanced than “HSAs…bad!” After all, he himself supports cost-sharing — if done smartly, by people with expertise. If cost-sharing is devised willy-nilly, he says, people get hurt. For example:

A recent study looked into what happens if you increase cost sharing on pharmaceuticals in Medicare. In other words, what happens when the patients have what Cannon calls a “financial incentive to avoid unnecessary spending.” The answer? “[S]ubjects whose benefits were capped had higher rates of nonelective hospitalizations, visits to the emergency department, and death. In addition, subjects whose benefits were capped had lower pharmacy costs but higher hospital and emergency department costs, with no significant difference in total medical costs between the two groups.”

Here’s why that’s lazy. 


First — and I’m sorry that I have to repeat this — the best evidence available instructs that, regardless of what the cost-sharing looks like, cost-sharing does not lead to worse overall health outcomes.


Second, if greedy insurance companies can save money and lives by eliminating cost-sharing on certain medical expenses, they will do so. (Why? Because they’re greedy, and offering more health for less money gives them a competitive advantage.) Of course, the literature is mixed on whether cost-sharing for pharmaceuticals increases or decreases overall medical spending. But assuming that coverage for certain medical services will actually save money overall, who does Klein think will sooner identify and eliminate cost-sharing for those services: government or the market? Before he answers, he should consider that the market brought prescription drug coverage to consumers, oh, 30 years before Medicare did.


Third — and this is the kicker — Klein’s preference for planning-by-experts is what produced the very style of cost-sharing that he derides. The requirements for an HSA-qualified high-deductible health plan were devised by Congress, not the market. The Medicare drug benefits in the study he cites (above) also were not designed by the market. They were designed by Congress and employers. And when Medicare finally brought drug coverage to all seniors, Klein still didn’t like the result.


Klein may object that it wasn’t his experts who wrote those laws, or even that he doesn’t want Congress meddling with what his experts decide. But the loyal opposition’s experts will always be around. And I don’t know how he plans to get around that whole Article I thing. 


If Klein wants experts to calibrate cost-sharing, he has to include the entire political process — including his ideological opponents (hellooo!) and every wretched lobbyist for the health care industry — in his model. He has to argue that that process will calibrate cost-sharing better than greedy insurance companies who have to provide value to consumers who control their health care dollars. 


I look forward to him making that case.