The Obama administration got a rare piece of good news today when the U.S. Supreme Court declined to…
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Supreme Court Declines Challenge to ObamaCare’s IPAB

The Obama administration got a rare piece of good news today when the U.S. Supreme Court declined to overturn a Ninth Circuit Court of Appeals decision upholding part of ObamaCare.

The case, Coons v. Lew, is an Arizona-based challenge to the Independent Payment Advisory Board (IPAB), the 15-member group of experts empowered to reduce Medicare spending below a certain threshold.

In declining the plaintiffs’ appeal, the Supremes did not in any way indicate that this case is without merit. Rather, it may have been filed too early. Courts are typically loathe to strike down parts of laws that have yet to go into effect. IPAB won’t be making any decisions until 2019 at the earliest.

As usual, the issue is whether IPAB is constitutional. “Its decisions cannot be overridden…[more]

March 30, 2015 • 07:23 pm

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President Obama’s Health Care Snake Oil Print
By Sam Batkins
Thursday, January 14 2010
President Obama has forced an economic agenda on U.S. taxpayers that has thus far been successful only at keeping Americans unemployed. Now, he’s trying to force-feed us snake oil disguised as health care reform – higher taxes and reduced care for the low, low price of $222 billion.

The health care claims peddled by White House pitchmen over the past several months might just as well have been snake oil.  The most laughable claim is that their 2,000-page, $2 trillion monstrosity of a bill will actually reduce health care spending in the U.S. 

According to the Administration’s own Centers for Medicare & Medicaid Services (a branch of the Department of Health and Human Services), the Senate version of the bill would drastically increase health care spending in the U.S.

Richard Foster, chief actuary, released a detailed report earlier this month outlining a myriad of false promises contained in the Senate legislation. The most damning language: “[W]e estimate that overall national health expenditures under this bill would increase by an estimated total of $222 billion (0.6 percent) during calendar years 2010-2019.” 

Sorry, Mr. President, your legislation is only going to make Americans shell out more in taxes and health care payments to buy inferior care.

Last year, the same Centers for Medicare & Medicaid Services published a report showing that the increase in annualized health care spending actually slowed in 2008.  That study noted that the U.S. spent $2.3 trillion on health care last year, or $7,681 per person, an increase of 4.4 percent.  

While $2.3 trillion represents a huge sum (more than the economic output of Canada and Australia combined), the 4.4 percent increase in health care spending “was the slowest rate of growth since the Centers for Medicare & Medicaid Services started officially tracking expenditures in 1960.”

The slower growth rate in health care spending surely correlates with the worst economic output in a generation, and President Obama should take note of the blatant correlation.  Government can’t simply press a button to restrain health care spending.  Government can encourage or discourage consumption of health services through subsidies, taxes and regulations, but only the disparate effort of millions of consumers can “determine” health care spending for a given year.

Economic Sciences Nobel Laureate Robert Fogel wrote about the “paradox of rising expenditures on health [care]” last year for the American Enterprise Institute.  He determined that for every one percent increase in family income, health care spending will rise on average by 1.6 percent.

As Dr. Fogel explained, higher incomes lead to a greater consumption of health services, a trend which has persisted since 1875.  With greater disposable income, Americans consume more health care services. 

Thanks to advancements in productivity and wage growth, it now takes just 260 hours of labor to purchase an annual supply of food for a family, according to Dr. Fogel.  In the 1800s, it took 1700 hours of work to feed that same family.  What do Americans use that extra 1,440 hours of income to purchase?  They spend it on products and services like health care (CAT scans, X-rays, medical specialists, prescription drugs), and of course, HD-TVs.

It is supply and demand (a concept foreign to most in government) at its most basic.  As Dr. Fogel concluded, “Expenditures on healthcare are driven by demand, which is spurred by income and by advances in biotechnology that make health interventions increasingly effective.”

Judging by the known contents of ObamaCare, either the President fails to understand this basic economic concept or he’s taking Dr. Fogel’s economics lesson to heart in an effort to bend the cost curve downward on health care spending at the expense of quality care.  After all, as the old adage goes, “If you want less of something, tax it.” 

The mantra in countries with government-run health care is:  Keep taxes as high as possible and keep people in long lines for MRI’s, CAT scans and other expensive medical procedures.  That’s how they keep costs in check.  The Canadian government, for example, consumes 39.3% of all economic output through taxation, and there are only 6.7 MRI machines per million patients, versus 26 machines per million in the U.S.

Canada has already figured out that keeping taxes high and limiting the availability of cutting-edge technologies and treatments is the real trick to bending the health care cost curve.

Here at home, keeping Americans stuck in an economic malaise, through the passage of ObamaCare, sums up the Administration’s and Congressional Democrats’ chosen plan to ensure we won’t spend “too much” money on health care.  Then again, given the latest estimate by the Centers for Medicare & Medicaid Services that health care spending will actually increase by $222 billion during calendar years 2010-2019 under ObamaCare, it would seem they can’t even get that right.

President Obama has forced an economic agenda on U.S. taxpayers that has thus far been successful only at keeping Americans unemployed.  Now, he’s trying to force-feed us snake oil disguised as health care reform – higher taxes and reduced care for the low, low price of $222 billion. 

But, if you call right now, he’s offering no interest and no payments until April 15, 2011.

Question of the Week   
Senator Ted Cruz (R-TX), the first major political candidate to formally announce his 2016 candidacy for President of the United States, was born in which of the following?
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—Pascal-Emmanuel Gobry, Ethics and Public Policy Center Fellow
— Pascal-Emmanuel Gobry, Ethics and Public Policy Center Fellow
 
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