‘Medicare and Freedom’

Greg Mankiw has a new post that begins by pointing to an op-ed by Paul Krugman. Krugman writes:

the modern G.O.P. considers itself the party of Ronald Reagan — and Reagan was a fierce opponent of Medicare’s creation, warning that it would destroy American freedom. (Honest.)

Mankiw continues by quoting an article from today’s Wall Street Journal written by three past presidents of the American Medical Association:

the right of patients to privately contract with physicians to ensure they have the medical care they want, without penalty—regardless of what the government pays—must be recognized and protected. Today, if a doctor wants to bill a patient for additional payment over the Medicare reimbursement, he has to withdraw from Medicare entirely for two years. A patient who agrees with this arrangement can’t receive any Medicare money for that service, either.

Mankiw concludes:

So, if you include the right to sign mutually advantageous contracts and engage in the gains from trade as part of “freedom,” then President Reagan was not so far off the mark.

The problem, it seems, is that Medicare sometimes tries to push the price of medical services below their equilibrium levels (a phenomenon that will likely get more severe with the Medicare cuts being envisioned in the pending healthcare reform bills). Such price controls naturally lead to private attempts to circumvent them, which in turn lead to regulations to prevent that behavior. These new regulations cannot help but impinge on economic freedoms.

Below is the audio of Ronald Reagan giving his case against socialized medicine:

South Africa’s Illegal Saliva Trade

From the Guardian:

South Africans in an impoverished township are profiting from an illegal trade in a precious new currency ‑ saliva.

Tuberculosis sufferers in Khayelitsha, Cape Town, were found to be selling samples of their sputum to healthy people to pass off as their own in a scam to gain medical grants.

An investigation by the West Cape News identified people with TB charging R50-100 (£4.10-£8.20) for saliva samples contained in bottles stolen from health clinics.

The paper said that buyers of the samples were then able to get a card from a clinic indicating they have TB and use this to fraudulently obtain a temporary disability grant of R1,010 per month from the department of social development.

One Reason European Health Care Works: America

From “The Pharmaceutical Umbrella,” by Benjamin A. Plotinsky in City Journal:

A 2006  article by Henry G. Grabowski and Y. Richard Wang in the peer-reviewed journal Health Affairs makes plain, the lion’s share of new chemical entities (NCEs)—that is, genuinely new drugs—are invented in the United States. Between 1993 and 2003, the authors found, 437 NCEs were introduced around the world. America was responsible for 152 of them—far more than any other country—with Japan coming in second with 88 and Germany a distant third with 42 (see chart above).

Why is this important? One reason for America’s drug dominance (though far from the only one) is America’s unsocialized medicine. Here, with the exception of a few programs like Medicaid and the VA system, the government doesn’t regulate the price of drugs, so when a company invents something big—the latest miracle cancer drug, say—it strikes it rich, making its executives hunger for more. Take away the profit motive, as government-run medicine often does by forcing drug companies to sell at discounted prices, and innovation will dry up.

So socialist Europe, by using American drugs is profiting from good old-fashioned American free enterprise. the lesson is to be skeptical of reports speaking glowingly of socialized health-care systems.

HT: Carpe Diem

Top 5 Medical Tourism Destinations (U.S. at #5)

From Property Abroad (via Carpe Diem):

Medical tourism is where people travel abroad to receive medical treatments like cosmetic surgery, which they could not afford in their own country.

Those travelling abroad for such treatments usually come from developed countries, where treatments are very expensive. The UK and the US are two of the biggest markets. That said: wealthy people in countries with poor health sectors often travel to countries that offer better healthcare for major treatments.

When people travel abroad for medical treatments they have two main criteria: cost and quality of healthcare.

They are looking for a place that they can both get to and be treated in cheaply, but which has a top-class health sector so that they know they will be safe. Below are three destinations which meet the criteria for perfect medical tourism destinations, and as such are some of the most popular destinations with medical tourists.

Malaysia:

Malaysia was recently found to be the most popular medical tourism destination with the growing numbers of Asia’s wealthiest. They travel to Malaysia for major treatments because it has one of the best health services in, not only Asia, but the world.

Malaysia is also one of the most popular destinations with those travelling from English speaking destinations (US and UK). This is because, as an ex-British colony there is a high prevalence of English speakers in the health sector. Tourism from the two combines to make Malaysia one of the fastest growing medical tourism destinations, and well worth a property investment tailored to that market.

Costa Rica:

Costa Rica is massively popular with American medical tourists. Costa Rica disbanded the military in 1980 because of the safety and stability of the country. This makes people feel safe about visiting the country, but it also freed up billions of dollars to spend on education on healthcare.

For that reason Costa Rica now has one of the best, and most efficient health sectors in the world. Of the top destinations Costa Rica is also among the cheapest for procedures, which makes it very popular with medical tourists from around the world including the UK.

India:

India also benefits from cost effectiveness when it comes to medical tourism. People from around the world can afford surgeries and procedures in India that they would never be able to afford in the UK or even America. India is also an ex-British colony, and for that reason it has a developed, very efficient and safe health service, which again is a draw for medical tourists from abroad and within the region.

Brazil:

Brazil is fast growing into an economic giant, on the back of its massive production and agricultural sectors, and massive growth in the services sector fuelled in part by tourism growth. Though Brazil has been affected by the international downturn, it is a testament to its economic potential that its recession only lasted 2 quarters with growth resuming at 1.9% in Q2.

Over the years of economic growth, developing the infrastructure, including the health services has been a major priority of the government(s). The fact that it has been a success is testified to by FIFA choosing Brazil as host for the 2014 World Cup.

America:

Yes, that’s right. America is a medical tourism destination. In fact it is one of the longest-standing medical tourism destinations in the world. That’s right: Brits have been taking advantage of the dollar exchange rate and travelling to America to get their bits tucked in or pushed out since the 80s.

America’s health service is first-rate. Brits trust it because it is on a par with the UK (please don’t start a politics debate), and procedures are just over half the price they would be in the UK — used to be half the price before the Pound plummeted.

Extras:

Panama is also a popular destination with American medical tourists. Its economy grew by an average 10% every year for the last few years, and a lot of this increased revenue was invested in improving the infrastructure, including the health service. Now Panama has an excellent health service and — despite the dollarized economy — surgery is still cheaper than America.

Many Americans are also travelling to Mexico for cosmetic surgery on the cheap. While Mexico’s health service isn’t known for being world class, there are some decent surgeons and people are finding them through word of mouth. Of course there are some horror stories as well from Mexico, so don’t go unless you know.

Is the anti-nuke movement partly to blame for global warming?

Stephen Dubner and Steven Levitt, co-authors of Freakonomics, argue that the unintended consequences of the anti-nuke movement are partly to blame for global warming.

Read ‘The Jane Fonda Effect’ here.

‘Cost, Not Universal Coverage, is Top Health Care Concern for Voters’

According to Rasmussen Reports,

Sixty-one percent (61%) of voters nationwide say that cost is the biggest health care problem facing the nation today. The latest Rasmussen Reports national telephone survey finds that just 21% believe the lack of universal health insurance coverage is a bigger problem.

Only 10% believe the quality of care is the top concern, and two percent (2%) point to the inconvenience factor of dealing with the current medical system.

HT: Greg Mankiw