I have previously pointed out that economic regulation will ineffective in holding down health costs. Before addressing how to contain costs, discourse should begin by exploring why costs are so high. I do not pretend to have all the answers. Nevertheless there are several obvious sources of high health costs that I will explore in this and other blogs. We will start with the impact of medical research.
Much is made of the shortfalls in our investment in science and technology. That cannot be said about medical research. I doubt the world has ever seen an explosion of medical advances like those which have occurred in my lifetime. I hear it said that the quality of care in this country is not superior to other countries. That may be true, but I find it hard to believe. Every day I see myself and others who have escaped the grim reaper because of leading edge medicine.
When I was young, my father suffered from a thyroid condition that the doctors could not diagnose for two years. He almost died because of the delay. Today standard blood tests routinely identify thyroid abnormalities. My mother died of breast cancer that would be picked up in a regularly scheduled mammogram today. My brother in law died of heart attack that would have been corrected by open heart surgery today. Two aunts were institutionalized for conditions that would now be controlled by drugs. On the other hand, my prostate operation came in time to spare me of the ravages of cancer because of the PSA test which is regularly administered on a yearly basis to middle aged males. My gall bladder operation that required a three and a half hour stay in the hospital and about a twelve hour recuperation was once a dreaded massive operation that could send the patient to bed for months with a scar that stretched across the torso..
These stories are not unique. Our life expectancies are expanded because of massive investments, public and private, into medical research over the previous decades. Nevertheless, inventions carry their costs. When a new medicine is developed, its inventor receives a legal monopoly for a specified period of time. The FDA must allow the pharmaceutical company to recover its research costs of developing that drug. These companies must also recoup the costs attributable to exploratory research that did not result in producing a marketable drug. Otherwise the enterprise cannot sustain itself.
Moreover when a drug, device or procedure is invented, the costs must often be recovered out sales in a relatively small market. An MRI machine for instance can only be sold to a handful of hospitals and other diagnostic centers. You cannot sell MRI machines like automobiles that fill up two car garages.
Some demagogues argue that those costs can be avoided by letting the government control all medical research thereby eliminating “excess profits.” Don’t believe it. The costs described above exist regardless of who may bear them. If the government does not receive enough return for its investment to cover the successful and unsuccessful research as well as the cost of raising the necessary capital, then it must absorb the costs and charge us to make up the loss costs either by taxing us or borrowing the money from somebody, probably the Chinese. We are getting a full dose nowadays of the dangers of that tactic.
The costs of research are vividly revealed when our favorite medicine becomes generic and the research costs are no longer a factor. Our insurance companies have educated us to the fact that generic drugs are the same medicine at drastically reduced prices, simply because the influence of research costs on the price of medicine has ended.
Under any circumstances, I doubt that our appetite for medical innovation is waning. I do not believe that we, the consumers, will tolerate a reduction in medical research, particularly with respect to the ailment that affects us or our families. Moreover, I would not be surprised if the recoverable costs actually increase as the drugs and devices brought onto the market become more specialized treating fewer patients a thereby creating ever smaller markets for the products.
In my next blog, I will discuss American medical education and how it contributes to higher costs.
Friday, February 26, 2010
Tuesday, February 23, 2010
Obama's Price Controls- Is he disingenuous or brain dead?
Obama is in a hole. He needs to get out of it as soon as possible. He needs a bill with the title “Health Care Reform” on top of it. He needs to put this mess to bed as fast as possible and go on to other matters. I was encouraged last week that he had seen the light. This week I am not so sure.
He is now pulling out his new panacea. He is pushing for a general federal jurisdiction over price controls on health care insurance, effectively controlling all prices for hospital and medical services as well as pharmaceuticals. If he seriously pushes for this jurisdiction, he will drag the country back through the dismal swamp of partisanship. I cannot believe that a reprise of this sort will enure to the benefit of his party. It is bad politics, but it is worse economics.
It has been pretty well established since the New Deal experience that government regulation could can be quite effective in matters other than prices. such safety and environmental regulations. Business interests predicted the sky would fall in when OSCHA and automobile mileage standards were enacted, but by and large these laws have worked.
On the other hand studies have shown that efforts to control pricing have not effectively reduced costs. Price control has been tried in industries classified as so called natural monopolies such as transportation, communication, natural gas and electrification It is pretty well established that these control have resulted in no significant savings to the consumer.
Instead regulated industries have often become inefficient and unncompetitive as a result of regulation. For instance, when the airline industry was deregulated, prices were reduced drastically because of competitive forces in the industry. Regulation was actually holding prices up rather than down.
Nixon’s attempt to resurrect price controls during the spiraling stagflation was ineffective. Market forces are simply too strong to be controlled by a bureaucracy.
So, when Obama suggests that health costs can be controlled by the government for any length of time, he is either disingenuous or brain dead.
Sen. Judd Gregg of New Hampshire claimed on the PBS Newshour last night that this attempt to regulate health care insurance is a predicate for going to a single payer system, which is a euphemism for extending Medicare to all persons. Democratic Senator Sherrod Brown did not deny the allegation.
If Gregg’s assertions are correct, we are really facing a debacle. It is generally agreed that the federal budget problems are caused primarily by the rigid entitlements found in Social Security, Medicare, and Medicaid.. Our president voices concern about that deficit and at the same time seems to be working toward quadrupling Medicare, which is our biggest fiscal problem. He reminds me of a lawyer person I once knew whose nkickname was Gator. That is, he smiled at you and ate you up.
He is now pulling out his new panacea. He is pushing for a general federal jurisdiction over price controls on health care insurance, effectively controlling all prices for hospital and medical services as well as pharmaceuticals. If he seriously pushes for this jurisdiction, he will drag the country back through the dismal swamp of partisanship. I cannot believe that a reprise of this sort will enure to the benefit of his party. It is bad politics, but it is worse economics.
It has been pretty well established since the New Deal experience that government regulation could can be quite effective in matters other than prices. such safety and environmental regulations. Business interests predicted the sky would fall in when OSCHA and automobile mileage standards were enacted, but by and large these laws have worked.
On the other hand studies have shown that efforts to control pricing have not effectively reduced costs. Price control has been tried in industries classified as so called natural monopolies such as transportation, communication, natural gas and electrification It is pretty well established that these control have resulted in no significant savings to the consumer.
Instead regulated industries have often become inefficient and unncompetitive as a result of regulation. For instance, when the airline industry was deregulated, prices were reduced drastically because of competitive forces in the industry. Regulation was actually holding prices up rather than down.
Nixon’s attempt to resurrect price controls during the spiraling stagflation was ineffective. Market forces are simply too strong to be controlled by a bureaucracy.
So, when Obama suggests that health costs can be controlled by the government for any length of time, he is either disingenuous or brain dead.
Sen. Judd Gregg of New Hampshire claimed on the PBS Newshour last night that this attempt to regulate health care insurance is a predicate for going to a single payer system, which is a euphemism for extending Medicare to all persons. Democratic Senator Sherrod Brown did not deny the allegation.
If Gregg’s assertions are correct, we are really facing a debacle. It is generally agreed that the federal budget problems are caused primarily by the rigid entitlements found in Social Security, Medicare, and Medicaid.. Our president voices concern about that deficit and at the same time seems to be working toward quadrupling Medicare, which is our biggest fiscal problem. He reminds me of a lawyer person I once knew whose nkickname was Gator. That is, he smiled at you and ate you up.
Monday, February 22, 2010
Gambling In Alabama
Recent newspaper reports show that Milton McGregor has donated in excess of a million and half dollars to the campaign to legalize bingo gambling. This current effort is a part of the ongoing fight to bring the gambling industry to the state.
I am opposed to the whole idea. My objection is not based simply the issue of morality of gambling. Like most of us, I find a small wager to be entertaining and do not feel that I have committed some mortal sin in doing so.
I do not feel the same way about the gambling industry. It is a fact that the leading employers in a community have a direct effect on the quality of life. Our governor has successfully brought industries into Alabama that employ many of our citizens who were previously unemployed or under employed. These companies are good citizens and serve to bring about a better community life. Does the gambling industry offer the same? I do not think so.
Several weeks ago it was reported that a prominent politician who had been friendly to gambling interests visited a casino in Mississippi and encountered unbelievable good luck hitting jackpot after jackpot until he won over a million dollars. Welcome to the real world of gambling.
What does the gambling industry offer to the state? It can provide a handful of low paying jobs and a little entertainment for their patrons. From time to time some patrons lose their pay check, or their car, or their house, and receive nothing in exchange. The casinos flood the highways with billboards containing false advertising puffing all the winnings, when we know that losing is ultimately inevitable. Consider the millions that Toyota is expending because of the public outcry over perhaps a hundred incidents worldwide. Yet the gambling industry wipes out its customers regularly and not a peep is heard.
And now they gambling interests are using what appears to be phenomenal profits to push for more and more of the same. What kind of leaders will we have when they, too, “enjoy phenomenal good luck” in the slots or at the crap table? Next time it will be casino gambling. What next? Nevada has pushed the envelope now to cover legalized prostitution. Before we aspire to be the next gambling Mecca, I suggest that we consider whether we want Las Vegas and Atlantic City to be our future.
I am opposed to the whole idea. My objection is not based simply the issue of morality of gambling. Like most of us, I find a small wager to be entertaining and do not feel that I have committed some mortal sin in doing so.
I do not feel the same way about the gambling industry. It is a fact that the leading employers in a community have a direct effect on the quality of life. Our governor has successfully brought industries into Alabama that employ many of our citizens who were previously unemployed or under employed. These companies are good citizens and serve to bring about a better community life. Does the gambling industry offer the same? I do not think so.
Several weeks ago it was reported that a prominent politician who had been friendly to gambling interests visited a casino in Mississippi and encountered unbelievable good luck hitting jackpot after jackpot until he won over a million dollars. Welcome to the real world of gambling.
What does the gambling industry offer to the state? It can provide a handful of low paying jobs and a little entertainment for their patrons. From time to time some patrons lose their pay check, or their car, or their house, and receive nothing in exchange. The casinos flood the highways with billboards containing false advertising puffing all the winnings, when we know that losing is ultimately inevitable. Consider the millions that Toyota is expending because of the public outcry over perhaps a hundred incidents worldwide. Yet the gambling industry wipes out its customers regularly and not a peep is heard.
And now they gambling interests are using what appears to be phenomenal profits to push for more and more of the same. What kind of leaders will we have when they, too, “enjoy phenomenal good luck” in the slots or at the crap table? Next time it will be casino gambling. What next? Nevada has pushed the envelope now to cover legalized prostitution. Before we aspire to be the next gambling Mecca, I suggest that we consider whether we want Las Vegas and Atlantic City to be our future.
Tuesday, February 16, 2010
Books of the Bible- Answers to the test
1. Which of the following books does not begin with the words “In the beginning”?
C. Matthew
Genesis opens with “In the beginning God created the heavens and the earth”. John begins with “In the beginning was the word...”
2. Which of the following books is found in the New Testament?
C. Philemon.
Philemon is a short letter from Paul to a friend recommending to him the services of Onesimus. Though short in length, this letter is considered an authentic example of the fellowship of the early Christian believers.
Ezra is the story about the priestly rule of Israel when Israelites returned from captivity. Nahum is a minor prophet.
3. Which of the following books takes place totally outside the land now known as Israel?
D. All the above.
Daniel took place in Babylonia under the rule of Nebuchadnezzar and Daniel lived during the time after the Persians conquered Babylonia. Numbers chronicles the wandering of the Israelites in the wilderness after leaving Egypt but before they reached the promised land.
4. Which two books did Martin Luther say should have been excluded from the bible?
B. James and Revelations.
5. Which of the following letters was not written by Paul?
A. Jude
6. Which of the following books (Genesis, Matthew, and Romans) does not mention Moses by name?
A. Genesis
The events in Genesis took place before Moses was born. Matthew stated that Jesus directed the leper he had healed to present the offering that Moses commanded (8:4) he also reported that Moses appeared to Jesus at the time of the transfiguration (17:3) and Jesus later discusses his stricter attitude toward divorce as compared with Moses (19:7-9). Paul argues that the law did not exist up until the time of Moses and thus “Death reigned “ but for grace. (5:14).
7. Which of the following books (Genesis, Matthew, and Romans) does not mention Abraham by name?
D. None of the above.
The narrative of Abraham’s life appears in Genesis. Matthew leads off the genealogy in the first chapter with Abraham (1:2) Jesus chastised the Pharisees for claiming that they had Abraham as their father (3:9) In chapter 8 Jesus states that many will recline at the table of Abraham in heaven (8:11). He reminded those who said that God is the God of Abraham that the Father is the God of the living (22:32). In Romans Paul
7. Which of the following books does not contain words spoken by Jesus?
A. Mark
B. John
C. Acts
D. None of the above.
8. Which of the following books were written to a person known as “Theophilus”?
A. Luke and Acts.
9. What is the last book in the Old Testament?
B. Malachi
10. In which book did the Jews finally arrive in the promised land?
B. Joshua.
C. Matthew
Genesis opens with “In the beginning God created the heavens and the earth”. John begins with “In the beginning was the word...”
2. Which of the following books is found in the New Testament?
C. Philemon.
Philemon is a short letter from Paul to a friend recommending to him the services of Onesimus. Though short in length, this letter is considered an authentic example of the fellowship of the early Christian believers.
Ezra is the story about the priestly rule of Israel when Israelites returned from captivity. Nahum is a minor prophet.
3. Which of the following books takes place totally outside the land now known as Israel?
D. All the above.
Daniel took place in Babylonia under the rule of Nebuchadnezzar and Daniel lived during the time after the Persians conquered Babylonia. Numbers chronicles the wandering of the Israelites in the wilderness after leaving Egypt but before they reached the promised land.
4. Which two books did Martin Luther say should have been excluded from the bible?
B. James and Revelations.
5. Which of the following letters was not written by Paul?
A. Jude
6. Which of the following books (Genesis, Matthew, and Romans) does not mention Moses by name?
A. Genesis
The events in Genesis took place before Moses was born. Matthew stated that Jesus directed the leper he had healed to present the offering that Moses commanded (8:4) he also reported that Moses appeared to Jesus at the time of the transfiguration (17:3) and Jesus later discusses his stricter attitude toward divorce as compared with Moses (19:7-9). Paul argues that the law did not exist up until the time of Moses and thus “Death reigned “ but for grace. (5:14).
7. Which of the following books (Genesis, Matthew, and Romans) does not mention Abraham by name?
D. None of the above.
The narrative of Abraham’s life appears in Genesis. Matthew leads off the genealogy in the first chapter with Abraham (1:2) Jesus chastised the Pharisees for claiming that they had Abraham as their father (3:9) In chapter 8 Jesus states that many will recline at the table of Abraham in heaven (8:11). He reminded those who said that God is the God of Abraham that the Father is the God of the living (22:32). In Romans Paul
7. Which of the following books does not contain words spoken by Jesus?
A. Mark
B. John
C. Acts
D. None of the above.
8. Which of the following books were written to a person known as “Theophilus”?
A. Luke and Acts.
9. What is the last book in the Old Testament?
B. Malachi
10. In which book did the Jews finally arrive in the promised land?
B. Joshua.
Monday, February 15, 2010
Books of the Bible
The following is a test of your knowledge of the Books of the Bible. The answers will appear in tomorrow’s blog:
1. Which of the following books does not begin with the words “In the beginning”?
A. Genesis.
B. John.
C. Matthew
D. None of the above.
2. Which of the following books is found in the New Testament?
A. Ezra.
B. Nahum.
C. Philemon.
D. None of the above.
3. Which of the following books takes place totally outside the land now known as Israel?
A. Daniel
B. Esther
C. Numbers
D. All the above.
4. Which two books did Martin Luther say should have been excluded from the bible?
A. Ezra and Nehemiah.
B. James and Revelations.
C. Song of Solomon and Ecclesiastes.
D. None of the above.
5. Which of the following letters was not written by Paul?
A. Jude
B. Philippians.
C. Titus.
D. All of the above.
6. Which of the following books does not mention Moses by name?
A. Genesis
B. Matthew
C. Romans.
D. None of the above.
7. Which of the following books does not mention Abraham by name?
A. Genesis
B. Matthew
C. Romans.
D. None of the above.
7. Which of the following books does not contain words spoken by Jesus?
A. Mark
B. John
C. Acts
D. None of the above.
8. Which of the following books were written to a person known as “Theophilus”?
A. Luke and Acts.
B. Corinthians I and Corinthians II.
C. Chronicles I and Chronicles II.
D. None of the above.
9. What is the last book in the Old Testament?
A. Haggai.
B. Malachi
C. Revelation.
D. None of the above.
10. In which book did the Jews finally arrive in the promised land?
A. Deuteronomy.
B. Joshua.
C. Kings I
D. None of the above.
1. Which of the following books does not begin with the words “In the beginning”?
A. Genesis.
B. John.
C. Matthew
D. None of the above.
2. Which of the following books is found in the New Testament?
A. Ezra.
B. Nahum.
C. Philemon.
D. None of the above.
3. Which of the following books takes place totally outside the land now known as Israel?
A. Daniel
B. Esther
C. Numbers
D. All the above.
4. Which two books did Martin Luther say should have been excluded from the bible?
A. Ezra and Nehemiah.
B. James and Revelations.
C. Song of Solomon and Ecclesiastes.
D. None of the above.
5. Which of the following letters was not written by Paul?
A. Jude
B. Philippians.
C. Titus.
D. All of the above.
6. Which of the following books does not mention Moses by name?
A. Genesis
B. Matthew
C. Romans.
D. None of the above.
7. Which of the following books does not mention Abraham by name?
A. Genesis
B. Matthew
C. Romans.
D. None of the above.
7. Which of the following books does not contain words spoken by Jesus?
A. Mark
B. John
C. Acts
D. None of the above.
8. Which of the following books were written to a person known as “Theophilus”?
A. Luke and Acts.
B. Corinthians I and Corinthians II.
C. Chronicles I and Chronicles II.
D. None of the above.
9. What is the last book in the Old Testament?
A. Haggai.
B. Malachi
C. Revelation.
D. None of the above.
10. In which book did the Jews finally arrive in the promised land?
A. Deuteronomy.
B. Joshua.
C. Kings I
D. None of the above.
Thursday, February 11, 2010
Travel - The legacy of the Khmer Empire
Angkor Wat Archeological Park is located near Siam Reap, Cambodia. The park contains a series of the millennium-old temple ruins of the Khmer Empire dating back to 1000 A.D. If it were located in this hemisphere or near Europe, it would be as famous and as popular with travelers as the pyramids and Machu Picchu. It has been designated by UNESCO as a World Class Heritage Site.
Angkor Wat, is a massive 'temple-mountain' dedicated to the Hindu god, Vishnu. It is surrounded by a moat and an exterior wall measuring 1300 meters x 1500 meters. The entire temple is covered with murals and art images .but the most memorable are the bas reliefs on the exterior walls depicting stories and characters from Hindu mythology and the historical wars of the rule at that time. These pictures are an unparalleled display of the life and times of the Khmer Empire.
There is much more to see at Angkor Wat with countless numbers of other temples. The entire area was abandoned for many centuries. As a result many of the structures were invaded by enormous trees that cannot be fully extricated from the ruins. Thus, it is a fascinating study of the power of unabated jungle growth
It is not necessary to live in a hut in Cambodia either. Like most Southeast Asia destinations Siam Reap has a world class hotel called the Angkor Wat very close to the ruins. The rates are quite reasonable, too.
Angkor Wat, is a massive 'temple-mountain' dedicated to the Hindu god, Vishnu. It is surrounded by a moat and an exterior wall measuring 1300 meters x 1500 meters. The entire temple is covered with murals and art images .but the most memorable are the bas reliefs on the exterior walls depicting stories and characters from Hindu mythology and the historical wars of the rule at that time. These pictures are an unparalleled display of the life and times of the Khmer Empire.
There is much more to see at Angkor Wat with countless numbers of other temples. The entire area was abandoned for many centuries. As a result many of the structures were invaded by enormous trees that cannot be fully extricated from the ruins. Thus, it is a fascinating study of the power of unabated jungle growth
It is not necessary to live in a hut in Cambodia either. Like most Southeast Asia destinations Siam Reap has a world class hotel called the Angkor Wat very close to the ruins. The rates are quite reasonable, too.
Wednesday, February 10, 2010
Travel: An Overlooked Gem in Alabama
Travel: A Gem in Alabama
I have previously suggested trips to distant lands in Asia and Africa in this series. You may recoil at the time, effort, and expense needed to reach those places. You have no such excuse with respect to today’s posting. It surprises me that so few of my acquaintances have ever been to what I regard as the second best travel destination in Alabama, Tuskegee University.
Booker T. Washington was an amazing man. He was employed in the late Nineteenth Century to run an impoverished school for Negroes in an unlikely locale in Southeast Alabama. When he completed his work, Tuskegee Institute was one of the finest educational institutions for African American in the United States and remains so today. He had a remarkable ability to raise funds from rich Yankees and Southern white politicians. He also became the primary spokesman for African Americans during the first two decades of the Twentieth Century.
Tuskegee University campus remains a reflection of the man, Booker T. Washington. He believed that true liberation to the black man would come from education, particularly education that qualified his graduates to have the skills necessary to be gainfully employed. His students constructed the early buildings on the campus out of materials that they had manufactured themselves. These buildings remain today. They are simply designed but an eloquent statement of the history of the school
Monty and I visited Tuskegee primarily to see the “Singing Windows,” portraying various Negro Spirituals. It is probably the best known window in the state. The window was nice enough, but I was stunned by the chapel itself. The old chapel had burned down and the new one was designed by the famous architect and Auburn graduate, Paul Rudulph. It is the most impressive contemporary building I have seen in Alabama, and there are few that can match it anywhere.
Other sites well worth the trip are the Booker T. Washington-George Washington Carver museum. We saw the movie on Booker T. Washington, and it is well worth the twenty minutes or so. Washington’s home is now on display on the campus. The airport where the Tuskegee Airmen were trained during World War is a few miles out of town. One of those flyers, Chappie Hayes, a Tuskegee graduate, became the first African American General in the Air Force. I had the privilege of hearing him speak at the Birmingham Rotary Club in the early seventies, where he received a rarely bestowed standing ovation.
Spend a day at Tuskegee and you will not regret it.
I have previously suggested trips to distant lands in Asia and Africa in this series. You may recoil at the time, effort, and expense needed to reach those places. You have no such excuse with respect to today’s posting. It surprises me that so few of my acquaintances have ever been to what I regard as the second best travel destination in Alabama, Tuskegee University.
Booker T. Washington was an amazing man. He was employed in the late Nineteenth Century to run an impoverished school for Negroes in an unlikely locale in Southeast Alabama. When he completed his work, Tuskegee Institute was one of the finest educational institutions for African American in the United States and remains so today. He had a remarkable ability to raise funds from rich Yankees and Southern white politicians. He also became the primary spokesman for African Americans during the first two decades of the Twentieth Century.
Tuskegee University campus remains a reflection of the man, Booker T. Washington. He believed that true liberation to the black man would come from education, particularly education that qualified his graduates to have the skills necessary to be gainfully employed. His students constructed the early buildings on the campus out of materials that they had manufactured themselves. These buildings remain today. They are simply designed but an eloquent statement of the history of the school
Monty and I visited Tuskegee primarily to see the “Singing Windows,” portraying various Negro Spirituals. It is probably the best known window in the state. The window was nice enough, but I was stunned by the chapel itself. The old chapel had burned down and the new one was designed by the famous architect and Auburn graduate, Paul Rudulph. It is the most impressive contemporary building I have seen in Alabama, and there are few that can match it anywhere.
Other sites well worth the trip are the Booker T. Washington-George Washington Carver museum. We saw the movie on Booker T. Washington, and it is well worth the twenty minutes or so. Washington’s home is now on display on the campus. The airport where the Tuskegee Airmen were trained during World War is a few miles out of town. One of those flyers, Chappie Hayes, a Tuskegee graduate, became the first African American General in the Air Force. I had the privilege of hearing him speak at the Birmingham Rotary Club in the early seventies, where he received a rarely bestowed standing ovation.
Spend a day at Tuskegee and you will not regret it.
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