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OpenMarket: Health Care

  • Taxmageddon Comes Just After the Election

    February 19, 2012 9:54 PM

    On December 31, shortly after the November election, tax rates will rise across the board in what congressional aides call "Taxmageddon," notes The Washington Post. Not only will the Bush tax cuts come to an end, but new taxes will kick in to pay for Obamacare's rising costs:

    On Dec. 31, the George W. Bush-era tax cuts are scheduled to expire, raising rates on investment income, estates and gifts, and earnings at all levels. Overnight, the marriage penalty for joint filers will spring back to life, the value of the child credit will drop from $1,000 to $500, and the rate everyone pays on the first $8,700 of wages will jump from 10 percent to 15 percent.

    The Social Security payroll tax will pop back up to 6.2 percent from 4.2 percent under the deal approved Friday by Congress. And new Medicare taxes enacted as part of President Obama’s health-care initiative will for the first time strike high-income households.

    And this doesn't even take account into new tax increases Obama has proposed, including but not limited to the "Buffett Tax." Liberals want to raise taxes to European levels to pay for an expanded welfare state. But many American wealthy people already pay more in taxes than they would in much of Europe, so this idea won't pay for all the new government entitlements liberals yearn for. (Thus, major liberal spending proposals will inevitably require large middle-class tax increases.) Indeed, the U.S. tax code is already more progressive than the tax codes of France, Germany, Belgium, or the United Kingdom. And America already has higher capital gains taxes and taxes on investment income than most countries, and soon, that will get much worse, since "the tax on dividends will skyrocket from 15 percent to 43.4 percent."

  • CEI Podcast for February 16, 2012: Washington's Prescription Drug Shortage

    February 16, 2012 4:08 PM

    Patients are suffering from a nationwide shortage of more than 260 different prescription drugs, many of them for different types of cancer. Senior Fellow Greg Conko explains why the biggest culprit for the drug shortage is Washington. DEA and FDA regulations make it difficult to ramp up supply, or to change prices to more accurately reflect demand.

  • Congress Seems Intent on Making Drug Shortages Worse

    February 15, 2012 12:01 PM

    Now that the problem of prescription drug shortages has begun to affect children, members of Congress want to be seen as doing something – anything, really – to avert the crisis. A bi-partisan group of House members led by Rep. John Carney (D-Del.) introduced a bill two weeks ago. And yesterday, Sens. Amy Klobuchar (D-Minn.) and Robert Casey (D-Penn.) moved to attach their drug shortage bill to a piece of transportation legislation moving through the Senate. Unfortunately, most of the proposed action will have little to no affect on the fundamental underlying problems associated with drug shortages. Worse still, by ignoring the real problems and trying to put a defective bandage on the symptoms, the bills very well may make the shortages worse.

    First, some background. There are currently around 250 prescription medicines -- most of them generic versions of cancer drugs and surgical anesthetics -- that are considered to be in “short supply”, according to the American Society of Health System Pharmacists. That’s up sharply from well below 100 drug shortages in a typical year -- rising from just 58 in 2004 to 149 in 2008 to 211 in 2010. And, though there are alternatives for many of these drugs, several have no good alternatives for certain conditions. As USA Today’s Liz Szabo discusses, a shortage in the cancer drug methotrexate is particularly troublesome for children with acute lymphocytic or lymphoblastic leukemia (ALL). There are alternatives to methotrexate for other cancers, but not for ALL.

    So, why the recent spate of shortages? In some cases, it’s due to a shortage in raw materials. And, for drugs like Ritalin and other ADHD treatments, heavy-handed DEA regulations have made it difficult to increase production of the raw materials. But only a relatively small portion of the shortages can be attributed to a shortage in raw materials. Still other regulations have significantly contributed to the shortages in many other products.

    John Goodman summarized some of these other issues nicely in a post last summer. One contributing factor is the FDA’s increasingly strict regulation of drug manufacturing facilities, which Goodman calls a “zero tolerance regime” that is “forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving.” FDA has been more aggressive in shutting down production facilities when even small quality control problems arise. A decade or two ago, a paperwork problem or some inappropriate handling procedure that didn’t directly affect drug safety or quality might have been addressed with a slap on the wrist. But over the last several years (and not just since the beginning of the Obama administration) FDA has, more and more, addressed these problems by temporarily shutting down plants until the problems could be resolved.

  • Misconceptions about the Obama Administration's Contraception Mandate for Religious Employers

    February 14, 2012 10:54 AM

    There are a number of misconceptions about the Obama administration's recent rule requiring employers' health insurance policies (including those of religious schools and hospitals) to cover contraceptives and certain abortifacients. First, as a commentator notes, it's not true that states in general already require such coverage:

    HHS chose the narrowest state-level religious exemption as the model for its own. That exemption was drafted by the ACLU and exists in only 3 states (New York, California, Oregon). Even without a religious exemption, religious employers can already avoid the contraceptive mandates in 28 states by self-insuring their prescription drug coverage, dropping that coverage altogether, or opting for regulation under a federal law (ERISA) that pre-empts state law. The HHS mandate closes off all these avenues of relief.

  • Government Thwarts Cancer Cures and Production of Life-Saving Drugs

    February 13, 2012 11:10 AM

    The federal government thwarted a promising cancer treatment. The Food and Drug Administration (FDA) put Dr. Stanislaw Burzynski on trial twice, saying "it did not matter" whether his "unconventional cancer treatments saved people's lives," only "that he had failed to get the FDA's permission first." But as Reason’s Jacob Sullum notes, the Phase II clinical trials that the FDA belatedly carried out “under congressional pressure have supported what the teary testimonials of patients and their families suggested: Although Burzynski’s antineoplastons are far from a cure-all, they seem to be more effective, and are certainly much less devastating in their side effects, than radiation and chemotherapy for certain deadly, intractable cancers."

  • CEI Podcast for February 2, 2012: The FDA's Latest Power Grab

    February 2, 2012 3:52 PM

    Fellow in Consumer Policy Studies Michelle Minton breaks down the FDA's behind-the-scenes push to regulate dietary supplements nearly as strictly as prescription drugs.

  • Justice Kagan Should Recuse Herself from Obamacare Case

    January 30, 2012 2:49 PM

    Only in Bizarro World can you claim someone is your attorney -- and thus shielded by attorney work-product privilege -- and then insist in the very next breath that they never represented you. But that is what the Obama administration and Supreme Court Justice Elena Kagan are doing. The Obama administration refuses to release its communications with Kagan about health care litigation back when she was the administration's Solicitor General, on the grounds that they are covered by attorney work-product protection. Yet, contradictorily, it and Kagan insist that she never acted as the administration's lawyer in the matter, and thus doesn't need to recuse herself from hearing the constitutional challenges to Obamacare that will be decided by the Supreme Court this year.

    Law Professor Ronald Rotunda, the co-author of a leading constitutional law treatise, says that Kagan should have recused herself from hearing the case based on the federal statute, 28 U.S.C. 455(b)(3), that forbids former government attorneys like Kagan from being involved in cases they earlier were consulted on, and the Judicial Conference's ethical guidance for federal judges. As he notes:

    [Commentators have been] calling on Justice Elena Kagan to disqualify herself in the ObamaCare litigation because of her role, as Solicitor General, in preparing its constitutional defense. These calls have intensified with the release of recent emails. Justice Kagan’s supporters respond that she testified in her confirmation hearings that she had nothing to do with ObamaCare

    First, her phraseology was much more precise. She said she would only recuse herself from any case in which she “officially formally approved something,” or “served as counsel of record” or “played any substantial role.” But the statute requires disqualification if Kagan, as a federal employee (she was the former Solicitor General) “participated” as an “adviser” on a matter, even if she did not give any formal advice. She also must disqualify herself if her impartiality might reasonably be questioned.

    In response to a Freedom of Information (FOIA) request, the Obama Administration has turned over some emails but it refuses to turn over many others because, it says, these emails are “protected by the attorney work product doctrine.” That doctrine, the DOJ affidavit explains, covers discussion by “OSG” (Office of Solicitor General) lawyers about “legal issues, arguments, and strategy concerning anticipated” litigation over ObamaCare. So, the DOJ is simultaneously claiming that it completely walled off Kagan from any discussions involving the constitutional defense of ObamaCare, while admitting that Kagan was participating in emails discussing “legal issues, arguments, and strategy concerning” the anticipated ObamaCare litigation.

  • Michigan SEIU Scam the Product of Government Collective Bargaining

    January 30, 2012 2:42 PM

    Proponents of government collective bargaining view it as a fundamental human right. The shameful actions of SEIU in Michigan, however, undermine this claim.

    In 2005, Michigan lawmakers signed off to create the Michigan Quality Community Care Council (MQC3). MQC3 maintains a registry of homecare providers to assist Medicaid recipients looking for a caregiver. In reality, the primary function of MQC3 was to make 45,000 private homecare providers government employees and dues-paying union members.

    In 2006, SEIU took advantage of Michigan law deeming homecare providers government employees. To gain exclusive representation SEIU organized a covert union campaign. The stealth-organizing tactic led to 20 percent voter turnout and SEIU won a landslide victory.

    Soon thereafter, SEIU obtained a collective bargaining agreement (CBA) with the state. The events following the CBA expose the dangers of government union political influence and permanence of CBAs.

    MQC3, acting as a “dummy” employer for homecare workers, created a mechanism for union dues to be siphoned off Medicaid checks. Not only is it illegal to unionize homecare workers who are private contractors, homecare workers already have employers: their Medicaid beneficiaries. Worse, the scheme wholly rejects the purpose of Medicaid by diverting funds from individuals who cannot afford medical care to Big Labor.

  • Doctors Grow Disenchanted With Obamacare's Costs and Burdens; Health Care Law Arbitrarily Discriminates

    January 20, 2012 4:55 PM

    69% of physicians are "pessimistic about the future of medicine" because of the 2010 healthcare law, notes Dr. Marc Siegel in USA Today. "Just 13% of those surveyed backed the Affordable Care Act."  "When surveyed by" the Deloitte Center for Health Solutions, "83% of doctors said one likely change to the medical system as a result of the law would be increased wait times."  "73% said it would not reduce costs." "The concern of doctors is reflected among the American people: Support for the law has sunk to 29% in the latest Associated Press poll."

    Obamacare is full of pork, special-interest favors, and political payoffs and mischief. Health policy analyst Michael Cannon writes about how an obscure provision of the health care law discriminates in favor of hospitals in one state -- Massachusetts -- at the expense of hospitals in all other states.

  • Obama Administration to People Needing Bone Marrow Transplants: Drop Dead

    January 19, 2012 4:54 PM

    In December, a federal appeals court ruled in Flynn v. Holder that the National Organ Transplant Act of 1984 (NOTA) does not forbid compensation for the majority of "bone marrow donors." That was great news for patients needing bone marrow transplants: As CEI's Greg Conko noted earlier, the court's ruling clarified that it is legal for approximately 70 percent of donors to be paid for their life-saving contribution, compensation that is essential because around 3,000 Americans die every year waiting for a marrow transplant because an appropriate match cannot be found. Only compensation provides an incentive for additional donors to come forward and contribute their life-saving cells.

    I put "bone marrow donors" in quotes, because the majority of "marrow donations" are not actually donations of marrow at all. Instead, peripheral blood stem cells are isolated from circulating blood, and those stem cells develop into bone marrow in the new patient. That procedure is not covered by the plain language of the NOTA statute, which only bans sales of organs and organ parts, not blood parts.

    Now, the Obama administration is asking the appeals court to vacate its ruling allowing donors to be compensated, and to rehear the case en banc. It argues that whatever the text of the NOTA statute may say, its reach should be judicially extended beyond organs to peripheral blood stem cells, in order to guard against the evil of "market forces”:

    The Obama administration has asked a federal appeals court to reconsider its decision last month to allow compensation to people donating bone marrow cells harvested from their bloodstreams.

    In a petition for rehearing by the full U.S. 9th Circuit Court of Appeals, Atty. Gen. Eric H. Holder Jr. argued that the court ignored the intent of Congress to shield all organ sales from "market forces" when a three-judge panel ruled unanimously on Dec. 1 that marrow cells collected from blood aren't covered by the 1984 National Organ Transplant Act.


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