When Republicans were last in control of Congress they did not move aggressively to institute free market health care reforms that could have halted the slide toward ObamaCare, some of the medical doctors who now occupy U.S. House seats have acknowledged.

A trend towards government run health care began in the mid 1960s and has accelerated ever since, laments Rep. John Fleming (R-La.). Unless the Patient Protection and Affordable Care Act (PPACA) is repealed, U.S. citizens will likely find that they need to accommodate themselves to a more bureaucratic health care system akin to what citizens in Canada, the United Kingdom and other parts of Europe now experience, he warns.

Beginning with Medicare and Medicaid, the U.S. moved toward greater “governmentalization” over the health care system, Fleming explained in an interview.

Unfortunately, his own Republicans did not move forcefully enough when they the chance to push reforms that would empower consumers and limit the role of government, he said.

“The ObamaCare bill is really the culmination of a process that has been underway for some time now,” Fleming said. “It will be an uphill battle for Congress to undo the damage that could occur with the new rules and regulations if this law remains in effect.”

However, if the U.S. Supreme Court does ultimately rule against the PPACA, Republicans should take the opportunity to push for greater “price transparency” and more consumer autonomy within the health care system, Rep. Fleming, said. Allowing the government to operate as a third party that absorbs the costs upfront opened the way to higher costs and acute inefficiencies, he added.

Rep. Bill Cassidy (R-La.) concurs.

He is considering new legislation that would insert price transparency into the health care system.

Fleming and Cassidy are both medical doctors.

“If I were to go in for knee surgery, just as an example, I don’t know what the price of that surgery is for say another two months and that is part of what is wrong with our health care system,” Cassidy said. “We need to make people more aware of what the actual costs are. There is a tendency to think of medical interventions as being very benign, but you can have unnecessary procedures with unnecessary risks and this could lead to complications. One of the benefits of making consumers more aware of the price is that you limit their exposure to actions that may not be necessary.”

The kind of advertising connected with Lasik eye surgery should be broadly applied throughout the entire health care system, Cassidy suggested. Consumers typically see up front how much the Lasik surgery will cost, he noted.

Back in the 1980s, Fleming recalls that he would charge Medicare patients some out of pocket costs for lab work. Unfortunately, this is no longer an option, he noted.

“Today I would simply order the lab and the patient is totally out of it,”  Fleming said. “The patient is totally taken out of the equation and we have trained them not to care what health care costs. We can go one of two ways, we can re-engage the patient and have them pay at least a percentage of the cost, or we can leave this in the hands of the government. But when you run out of money the government gets to arbitrarily decide who gets care and who  does not.”

If the Republicans do strengthen their hand in the 2012 elections, they cannot let the opportunity go by again to institute free market changes that could alleviate existing financial pressure, both Fleming and Cassidy said.

“People fear change and not everyone is going to be on board with price transparency,” Cassidy said. “The concept is still in its infancy, there has not been a lot of work in this area.”

Going forward, Fleming said he favors the expanded of Health Savings Accounts (HSAs) as a way to mitigate against expenditures that may not be necessary.

“When there is a higher deductible involved it gives people an incentive to save money and make wise purchases,” Fleming observed. “We now instances where company employees are saving money in their HSAs many times above what their deductible.”

Fleming also favors changes that would allow health care consumers to shop across state lines for their insurance so they are not limited to just one choice in their home area.
“Make the insurance companies compete against one another so we can have a marketplace throughout the entire country,” Fleming said. “We don’t want to see one company in one state as a monopoly.”

Twenty-six states, including Louisiana, have filed suit arguing that the individual mandate included in President Obama’s health care law is unconstitutional. In August, the 11th Circuit Court of Appeals sided with the states and ruled that Congress exceeded its authority under the Commerce Clause. Previously, Florida District Judge Roger Vinson and Virginia District Judge Henry Hudson also ruled against the individual mandate. As the Pelican Institute has previously reported, the Goldwater Institute cut its own path here by challenging the constitutionality of ObamaCare’s Independent Payment Advisory Board (IPAB).

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org and followed on Twitter.

Since Hurricane Katrina struck in 2005, New Orleans East has been without an operating hospital. Two successive mayors have failed to replace the old Methodist Hospital building.

A report by the Times-Picayune this week provides ample explanation for this inertia. As usual, the responsibility for providing New Orleans with a necessary service has fallen to another unelected, mayoral-appointee board. The New Orleans Hospital District A Board came out of 2006 state legislation to “preside over redeveloping the shuttered Methodist Hospital into a community hospital,” to which it has not come close.

After Mayor Landrieu took office, he quickly dismissed Mayor Nagin’s appointees to this board, backed by a law which essentially left the composition of the board up to the Mayor’s discretion. In response, the Nagin-era board members filed a suit challenging the legality of Landrieu’s actions. The board must now focus on a time and money-consuming lawsuit.

Now, HB 353, authored by Rep. Jeff Arnold (D-Algiers) and backed by Landrieu, seeks to “retool” the appointing process. According to Arnold, his bill would give the public more say over the composition of the board.

The bill, however, misses the point. It would merely reinforce the flawed notion that unelected bureaucrats are qualified to have critical influence over the city’s hospitals and that more boards and commissions are a prerequisite to progress.

The city currently has planned a public-private partnership with the Franciscan Missionaries of Our Lady Health System to operate the proposed hospital. However, Hospital Board agreed to this partnership behind closed doors and gave the public no say in the matter. Moreover, the closed-door selection in lieu of an open bidding process meant that the city did not necessarily choose the most fiscally prudent course of action for a hospital which taxpayers will certainly subsidize.

The most practical and responsible way towards achieving a new hospital in the East is taking the reins from the hands of bureaucrats and putting private contractors in the driver’s seat. A competitive, transparent bidding process for a new hospital does not require the oversight of an entirely new board.

The East’s hospital charade is testament to the ineptitude and destructiveness of government interference.  Government, as a business model, is habitually a failure, and something as indispensable as a hospital should be left to health care professionals, not unelected boards.

Do not wait for the U.S. Supreme Court.

This is the central message free market health care policy analysts have for state officials who agree with recent court decisions against the new federal health care law. Although federal judges in Florida and Virginia have both ruled that the insurance mandate provision violated the Commerce Clause of the U.S. Constitution, analysts say state lawmakers should act now to expand consumer choice and reduce costs.

Christopher Jaarda, president of the American Health Care Education Coalition (AHEC), supports a tax deduction for individuals who purchase insurance, as companies already receive. He also recommends reforming Medicaid, the state-federal health insurance for low-income children, pregnant women, senior citizens and the disabled. The idea here would be to use the program to help cover the premiums, the fees people pay to receive medical care.

“First, [individually purchased insurance] would make consumers more cost conscious of premium costs and the cost of medical care (co-pays, deductibles, etc.) which would in turn lead to better consumer choices,” Jaarda explains.  He believes health care inflation would finally be restrained or even reversed, as has occurred with lasik eye surgery and other procedures for which clients pay out-of-pocket.

“Second, it would be the most efficient way to eliminate concerns over denial of coverage for pre-existing conditions.  Once an individual had insurance, they would take it with them and continue their coverage even if they switched jobs.”

These policy changes would also benefit people on the verge of Medicaid eligibility and would help to ensure continuity of care, Jaarda continues.

“When someone’s income falls so that they move from non-eligible to Medicaid-eligible, they often lose access to the doctor of their choice, including many specialists, because many doctors don’t accept Medicaid… We could eliminate the problems associated with moving in and out of Medicaid eligibility. People would continue with the same insurance regardless of whether their incomes rises or falls.”

Louisiana’s health officials are already set to experiment with Medicaid funded Coordinated Care Networks (CCNs), which they say will provide consumers with greater autonomy and decision making authority.

“More than a quarter of the state’s population receives health care coverage through Medicaid, and coordinating care will improve these enrollees’ health and lead to a higher quality of life. The state has submitted a notice of intent as the official rule to implement CCNs for Medicaid, and expects the first recipients to enroll with CCNs early next year.”

Gov. Bobby Jindal also recently announced that the state will decline to set up the exchange system that would enable new federal insurance regulations. The exchanges would create new state level bureaucracies that serve as a conduit for the purchase of insurance. They would create a new framework to expand coverage and to enforce federal standards for participating plans.

Other states should follow Jindal’s lead and resist setting up the exchanges. Otherwise, the ObamaCare regulations will begin to take root.

“Ultimately, we believe that ObamaCare will fail,” Jaarda said.  “It will be struck down by the Supreme Court, it will collapse of its own weight and budget impact, or Congress will repeal it. ObamaCare is attempting to get states hooked on the federal law early so that ObamaCare becomes `too big to fail.’”

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on Twitter.

Lafayette-based free market activists have asked House Speaker Jim Tucker and other state lawmakers to help set up an interstate compact that would negate the federal health care law. With the state legislature going back into session this April, Louisiana is strategically positioned to advance an innovative, but underutilized constitutional mechanism, proponents point out.

Health Care Compacts would insulate participants from the insurance mandates included in the Patient Protection and Affordable Care Act, also known as ObamaCare, say policy specialists with the Texas Public Policy Foundation (TPPF). The compacts are built around agreements between two or more states and must secure congressional approval.

If approved, compacts would enable states to directly confront ObamaCare and could be used as a shield against federal overreach in the future, says Mario Loyola, director of TPPF’s Center for Tenth Amendment Studies. However, it was imperative that states move beyond filing to actually enacting the legislation, he said in an interview.

“We have not yet reached a critical mass on filings,” he observed. “But now is the time to move on this and get the laws enacted at the state level. It could become a compelling campaign issue in 2012. The question is do you want Washington D.C. to decide everything, which it can’t do, since its programs are heading toward catastrophic bankruptcy? Or, do you want the states to control this in a rational way?”

HCC’s would shift the responsibility and authority for regulating health care away from the federal government back to state officials, according to the Health Care Compact Alliance (HCCA), an organization devoted to offering Americans more influence over health care decisions.

“Choice is the operative word here,” Monica Scott, a local coordinator for the Acadiana Patriots, said in an interview. “We should be the ones who decide at the local level how to direct health care policy. The idea of forcing someone to buy insurance whether they want to or not to me is unconstitutional.”

The objective is to have legislation placed on the agenda by April 10.

Scott said she has good reason to believe Speaker Tucker (R-Terrytown) will be supportive. In the upper chamber, Sen. Elbert Guillory (D-Opelousas), has already expressed strong support for the concept.

“Everyone agrees that health care as presently structured is a failure,” he said.  “But the Congress only replaced failure with another failure.  We’re going to pass a law limiting and directing how health care delivery will be organized in the State of Louisiana, returning power to the people and their doctors.  That law is the Health Care Compact.”

In January, Scott, the Acadiana coordinator, represented Louisiana activists at an HCC Alliance meeting in Houston where organizers presented the actual compact language.

Activists from Texas, Colorado, Missouri, Florida, Minnesota, Tennessee, Massachusetts, Arizona, Virginia, Wisconsin, Georgia, North Dakota, Iowa, Illinois, Connecticut and Michigan also participated in the session. Compact proponents have said they would need over 20 states involved to place sufficient pressure on Washington D.C.

Unlike other efforts, HCCs would also have the capacity to cancel out the individual mandate of ObamaCare. Federal courts have ruled that congressionally approved interstate compacts are the equivalent of federal law. The U.S. Supreme Court decision in U.S. Steel v. Multistate Tax Commission established that interstate compacts could be used to increase the sovereign powers of each state relative to the federal government.

There is a long history here.

The U.S. Constitution specifically provides for compacts under Article One Section 10, which reads:  “No State shall, without the Consent of Congress … enter into any Agreement or Compact with another State.” The courts have broadly interpreted this provision to allow for any activity that does not infringe on the national government’s authority.

Over 200 compacts are now in force including The Port Authority of New York and New Jersey and the Washington Metropolitan Area Transportation Authority.

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on Twitter.

After the recent Florida court ruling, Two Republican governors – Alaska’s Sean Parnell and Florida’s Rick Scott – have said they will not implement ObamaCare.

In his decision, Judge Roger Vinson concluded that ObamaCare’s  individual mandate violated the Commerce Clause of the U.S. Constitution. Cato Institute scholars contend that the ruling applies nationwide, that both state and federal officials should cease imposing it.

Michael Cannon, Cato’s director of health-policy studies, and Illya Shapiro, Cato’s editor of Supreme Court Review, say that at minimum, “the government lacks authority to implement ObamaCare where the case was decided, in the Northern District of Florida, and the 26 state plaintiffs need take no action to do so.”

“Moreover, it is not unreasonable to argue that Vinson’s ruling applies to the nation as a whole,” the article continues. The decision did not limit itself to the complaints of particular parties and instead attacked the federal health care law root and branch, the Cato scholars explain.

This interpretation of Vinson’s ruling would stop ObamaCare dead in its tracks,” they argue.

But Timothy Jost, a professor at the Washington and Lee University School of Law, describes Vinson as a “renegade judge” and expects the ruling to be overturned on appeal. He also described Alaska as an “outlier” among states in an interview with the Associated Press.

The U.S. Department of Justice has filed a motion asking Judge Vinson to clarify whether his judgment “does not relieve the parties of their rights and obligations under [ObamaCare] while the declaratory judgment is the subject of appellate review.”

Administration officials are ambitious to “further entrench ObamaCare – so it will be harder to dislodge,” Cannon and Shapiro warn in their article. But in terms of legalities, they see no need for further clarification.

In response to an inquiry from The Pelican Institute, Gov. Jindal did not say whether or not he would halt implemetation of ObamaCare as other governors have done. However, he did predict the U.S. Supreme Court would eventually rule the federal legislation unconstitutional.

“I have requested, along with twenty-seven other Governors, an expedited appeal of the Virginia and Florida health care lawsuits to allow each case to reach the United State Supreme Court as soon as possible,” Jindal said in statement.  “We expect this case to eventually be decided in the Supreme Court and for it to ultimately put an end to ObamaCare – the largest unfunded federal mandate in history that would cost our state billions of dollars to implement.”

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on Twitter.

The Department of Health and Human Services has unwittingly illuminated a key fallacy in the Patient Protection and Affordable Care Act, as noted by The American journal. The granting of waivers by HHS for certain insurance policies confirms the negative implications for health care costs if PPACA is not fully repealed.

Once PPACA is fully implemented in 2014, it will prohibit insurers from imposing annual limits on payments to individuals. HHS representatives say this regulation will improve employer-based “mini-med” plans, which they assert do not adequately cover employee health care. By removing a maximum amount on benefits, individuals ostensibly receive more extensive coverage.

Between 2011 and 2014, however, there is a transitional period when the ceiling on payments rises incrementally. In 2011, the annual limit per enrollee must be at least $750,000. In 2012, this amount increases to $1.25 million, and then to $2 million in 2013. Come 2014, the PPACA abolishes all limits on payouts for an individual’s care.

This transition is meant to assist insurance providers and employers in adjusting to the new stipulations. Despite this grace period, however, the HHS’s granting of 500 waivers for 2011 has exposed foundational flaws of PPACA. HHS granted waivers because the requirement would result in “large” increases in premiums or “significant” declines in access for health care coverage.

By exempting providers from the very regulations that it imposed, the Obama Administration is acknowledging that the regulations will strain the quality and affordability of insurance plans. Hoff and Calfee, in their The American journal article, make an acute realization in this regards.

“If waivers are necessary to keep 733 insurance plans in place now, think of what will be necessary in 2013, when the amount policies must cover in a year will be nearly three times that cost, or in 2014, when full-blown PPACA kicks in and insurers are prohibited from offering a policy without unlimited coverage.”

The unfortunate repercussion of increased costs to insurers will inevitably be higher unemployment.

From 2014, unable to limit contributions to employee health care plans, employers will release employees to meet financial demands. While they may apply for waivers, these only last for a year and only to prevent large premium increases or reductions in access to health coverage. Thus, the existence of waivers is unlikely to reduce the fallout.

The latest estimates, from the Congressional Budget Office, are that Obamacare will reduce employment by 800,000 people in its first ten years.

This may be the first time that the Obama administration have acknowledged PPACA’s pernicious effects, but may they continue to educate themselves on the reality of his bill.

State Treasurer John Kennedy recently laid out 16 measures that would save nearly $3 billion in state funds, which can then be allocated to health care and education. Treasurer Kennedy’s listed measures are grounded in common-sense and practicality. His first suggestion is axiomatic: “Do not raise taxes or fees. We do not need to. It won’t work anyway. Ask California.”

Likewise, he illuminates one of the biggest problems with our state government, the disproportionately large size of per capita state employees, which siphons funding away from schools and hospitals into unnecessary administrative positions. By eliminating 5,000 of these positions each year for three years, Kennedy estimates annual savings of $500 million. The Treasurer also stresses restructuring the state’s consulting contracts by eliminating 10% of the current 16,000 contracts and by reducing costs by 5%. Over $1 billion a year will be saved by implementing these two suggestions.

Also central to Kennedy’s plan is overhauling our currently unsustainable Medicaid plan. The amount of unnecessary and superfluous government expenditures on the Ponzi scheme that is Medicaid is astounding. Kennedy points out that implementing a provision of the state law will allow the state to purchase private insurance for low-income citizens, which is cheaper than Medicaid and will result in $100 million in annual savings.

Furthermore, the lack of transparency in the Medicaid program often means that tax-payers fund emergency room trips for non-emergencies and Medicaid patients receive egregious state-subsidized hospital stays. Simple measures to increase oversight into the Medicaid system will greatly reduce wasteful government spending that could be better used on hospitals or struggling schools.

One hopes that suggestions such as these will receive due attention. Whether every recommendation on the list is ideal is beside the point. Serious cuts in spending need to be made and Kennedy should be commended for proposing reforms that address the deficit without further burdening the taxpayers of Louisiana.

Typically, when the FDA recommends to revoke the license of a drug for distribution, such a decision is founded on concrete evidence of dangerous or adverse side effects to the user. In the case of Avastin, however, this decision was rendered on less compelling grounds. Avastin, when taken in conjunction with chemotherapy, has been shown in studies to slow the growth of cancer by up to 5.5 months in women with metastatic (Stage IV) breast cancer. Although a study cited by the FDA panel indicates that Avastin is not consistently effective and may lead to side effects, this is no different than many other approved drugs on the market.

This is tantamount to taking options off of the table for women battling breast cancer and their families. If a drug is safe, then the consumers (the patients) should be the ones to decide whether or not to purchase it. In accordance with the FDA’s initial decision, however, women who want to continue to use Avastin will have a significantly harder time procuring the drug at affordable rates if it is moved to off-label.

This decision comes on the heels of another FDA panel recommendation to limit the amount of mammograms and Pap smears taken by women, which Vitter contested in a bipartisan effort with Sen. Barbara Mikulski (D-Md). Vitter’s advocacy for consumer choice in the health care market is heartening to Americans contesting the intrusion of government agencies into our lives.

Douthat correctly diagnoses these assorted meltdowns not as failings of capitalism or democracy, but as the implications of an unprecedented collusion of government and private industry. “The panic of 2008 happened, in part, because the public interest had become too intertwined with private interests for the latter to be allowed to fail.” In the wake of the financial meltdown, many were quick to point out the supposed failure of free market and/or unregulated capitalism. This, however, is a poor interpretation of what has actually been transpiring.

Despite the constant growth of government mechanisms to prevent disasters of all kinds – economic, ecological, national defense – these apparatuses have not succeeded in their duties, even with the untold trillions of dollars which prop them up and the innumerable laws and policies which are created to empower them. In spite of these failures, we continue to trust the system. So much actually, that we vest it with even more responsibilities, allowing the government to keep expanding in scope and further collude with our private sectors.

In his brilliant assessment of the state of American health care, David Goldhill makes the analogy to a dilapidated house. If before the passage of comprehensive “health care reform,” American health care was a rotting house, the recent legislation merely made cosmetic changes. The rotting foundation remains, and the government just added a few more stories to the decrepit structure.

His analogy does not just hold water in regards to health care, but illuminates other sectors of our economy which are currently being bailed out and subsidized to no end. As long as we continue to think so finitely, we are sentencing ourselves to another economic catastrophe. What we need, as both Douthat and Goldhill implore, is a paradigm shift altogether. For instance, Goldhill is adamant that “the most important step that we can take toward truly reforming our system is to move away from comprehensive health insurance as a single model for financing care.”

Likewise, Douthat criticizes the rapid consolidation and centralization of government:

“From the Troubled Asset Relief Program to the stimulus bill, from the auto bailout to health care reform, we’ve created a vast new array of public-private partnerships – empowering insiders at the expense of outsiders, large institutions at the expense of small ones, and Washington at the expense of state and loval governments.”

Instead, we need to reduce the size of government and its reach into private businesses and industries, disassemble and reconfigure those government departments which don’t work, rather than adding on to them, and stop treating public workers and labor unions as a client class of its own. Slight modifications to the current system are only delaying the inevitable- we need to think beyond the status quo and create a sustainable system independent of the welfare state which we reside in now.

Would you like to read an excessively optimistic view on health care reform? Sen. Mary Landrieu’s op-ed highlights what she believes to be the greatest ObamaCare achievements, praising the full coverage of Louisiana’s children, young adults, and seniors.

Claiming that “congress has finally delivered meaningful health care coverage to all Americans,” Sen. Landrieu argues that the new reform will “save businesses thousands of dollars each year which will allow businesses to potentially increase wages or hire more employees.”

But Sen. Landrieu is overly confident – and even deceptive – because she is neglecting important facts behind the new health care reform: its costs. As Michael Cannon from the Cato Institute points out:

“Obama’s plan [aka: ObamaCare] would vastly increase the size and scope of the federal government, and increase our already record federal deficit”

The Congressional Budget Office estimated costs to be around $940 billion, but this projection takes into account only the costs to expand current health insurance coverage. Considering other unavoidable spending provisions, the costs would amount to around $1.2 trillion. And that is a conservative estimate. Further, the new health care reform will force nearly all Americans to purchase health insurance, set price controls on the private health insurance industry, and increase the federal deficit by providing more than $1 trillion in subsidies.

Sure, Landrieu is right to claim that these reforms will extend coverage to more children, seniors, and sick individuals. Unfortunately she fails to acknowledge that this will not be sustainable in the long run.