Bad Health Awards
by John Goodman
Issue 111 - July 9, 2008
 New York Times op-ed writer Paul Krugman has offered up so many
candidates for worst editorial award it's hard to be fair to all
the other columnists. In a recent entry, Krugman blames tainted
spinach, poisonous peanut butter and killer tomatoes on Milton
Friedman, the Republican Party, conservatives in general and
basically anyone else who has any common sense.
I have analyzed this claim before, but this time around we get a
100-year overview. Here is history according to Krugman: Upton
Sinclair's The Jungle exposed meat packers willing to poison the
public with tainted meat. To stop these greedy, profit-seeking robber
barons, Congress passed the Pure Food and Drug Act and the Meat
Inspection Act in 1906. For the next 90 years all went well until a
Republican Congress with George W. in the White House held back the
regulators and let the poisoners run wild again.
Trouble is: all this is fantasy.
As a college student reading The Jungle, I remember wondering: why
wasn't everybody dead? Then as a graduate student I discovered the
historian Gabriel Kalko had the answer. Federal regulation had little
impact on the behavior of the large Chicago meat packers. In fact, they
lobbied for the legislation. The reason: it raised the costs for their
smaller competitors and put them out of business. As for recent history,
Tyler Cowen has put the sword to that myth as well, showing a downward
trend in food-borne disease outbreaks over the past decade.
Families USA has so many strong entries for the worst propaganda award
by an organization, the chance for most other competitors is remote.
In its latest media-orchestrated broadside, the organization
criticizes states for lacking consumer protections--including guaranteed
issue and community rating. Yet far from protecting the average
consumer,
these laws benefit about 5% of policy-holders while doubling the
premiums
paid by everyone else.
Specifically, Families USA would deny the vast majority of people the
opportunity to insure at a premium that reflects their real expected
costs and instead force them to pay two or three times as much for their
health insurance. Far from defending consumers, FUSA has a history of
defending mandated health insurance benefits-which almost always reflect
the lobbying power of provider interests rather than the desires of
ordinary patients.
The group also claims the individual market is worse than the group
market for sick people and turns this judgment into an attack on John
McCain. Yet Pauly and Lieberthal discovered that people with a health
problem hold on to their insurance longer if they have individual
insurance rather than small group insurance.
There are two nominees for the Worst Legislative Proposal that Actually
Has
a Chance of Becoming Law
Entry No. 1: Studies show that doctor-owned hospitals are typically more
efficient and deliver higher-quality care than traditional hospitals.
Further, they give doctors financial incentives to hold down costs and
create opportunities to specialize in the delivery of hospital care. So
what does Congress propose to do? Close them down, of course. See New
York
Times story.
Entry No. 2: Ordinarily, Medicare pays for such items as wheelchairs,
scooters, oxygen supplies, etc. by relying on a fee schedule
determined by the bureaucracy rather than in the marketplace. Yet in a
demo project that used competitive bidding by suppliers, Medicare's
costs were lowered by 26%. So what does Congress propose to do? End
the demonstration and go back to administered prices, of course. See
CMS Fact Sheet.
Maybe we will have more awards later.
John Goodman is President of the National Center for Policy Analysis. To
view these and other blog posts, visit John Goodman's blog at http://www.john-goodman-blog.com
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