Sunday, August 30, 2009

Tribe Football in 6 days !

Just 6 days from now the William and Mary Tribe will take on the University of Virginia in Charlottesville. The action starts Saturday, Septmber 5, at 6:00 PM at Scott Stadium in Charlottesville. According to Weatherunderground.com, it will be mostly sunny in Charlottesville that day, with the high in the mid-80s. Tickets are still available for the game.
Those with long memories will recall that the Tribe beat the Cavaliers 41-37 at Scott Stadium in 1986.

The summer has seen some good news for the Tribe, raising expectations for a 2009 great season!

First, Adrian Tracy has been selected as a Sports Network preseason all-American and is on the preseason "Watch List" for the Buck Buchanan award, given to the top defensive player in the FCS league (formerly 1AA) each year. Tracy registered 7 tackles against N.C. State last year and led the CAA conference with .91 sacks per game, a figure that made him 6th nationally. He also had 15.5 tackles for a loss.

Moreover, five Tribe players have been selected to the College Sports Network pre-season All-American team. The honorees are: Adrian Tracy, Jonathan Grimes (running back), David Caldwell (safety), David Miller (punter) and Brian Pate (placekicker). Tracy earned first team honors, Caldwell second team, and Miller third team, while Grimes and Pate earned honorable mention. Some will remember Caldwell for his 66 yard return of a blocked field goal for a touchdown last year against Norfolk State. Here's a video of that play:

http://www.tribeathletics.com/files/fb/2008/video/nsu/caldtd.html

Brian Pate (placekicker), Sean Lissemore (defensive tackle), C.J. Herbert (defensive tackle), Rob Varno (tight end), and Dave Miller (punter).

Finally, the Tribe has done well in some of the pre-season rankings.

According to a press release from the William and Mary Athletic Department:

"Athlon Sports gave the Tribe its highest ranking at 11th, while the Sporting News and Phil Steele’s magazine both list W&M as the 12th-best team in the nation entering the ’09 season. Any Given Saturday and USA Today College Football Sports Weekly rank the College 13th and 14th, respectively, while Lindy’s magazine has the Tribe slotted 16th."

Here is the USA Today top 25. Note that six of the top 25 are members of the Colonial Athletic Association, further confirming what a tough conference this is.

1) James Madison
2) Appalachian State
3) Cal Poly
4) Northern Iowa
5) Montana
6) Villanova
7) Richmond
8) Weber State
9) Wofford
10) Southern Illinois
11) New Hampshire
12) Elon
13) Central Arkansas
14) McNeese State
15) South Carolina State
16) William and Mary
17) Maine
18) Tennessee Martin
19) Harvard
20) Furman
21) Colgate
22) Liberty
23) Western Illinois
24) Jacksonville State
25) Tennessee State

Others receiving votes included: Holy Cross, Prairie View, Eastern Kentucky, North Dakota State, and Grambling, among others.

For more information visit the following links:

http://www.tribeathletics.com/story.php/9004/

And, for photographs of last season's action, go here:

http://www.tribeathletics.com/story.php/7123

For video highlights from last year's season, go here:

http://www.tribeathletics.com/story.php/6901/

With 8 returning starters on defense, including a very strong defensive line and a very strong backfield the Tribe should be tough to beat !

If you can't make the UVA game, don't forget to listen on 107.9 FM or 92.3 FM in Williamsburg, 1050 Am in Lynchburg, or 1450 AM in Richmond. Or, go here to listen to the game via streaming audio. http://www.tribeathletics.com/story.php/1336/. Finally, the game is apparently available on Espn360.com.

Wednesday, August 19, 2009

How To Calculate the Payoff From Investments in Prevention

Charles Krauthaumer has taken issue with the claim that health care reform can actually save the government (and private insurance companies) money by encouraging more tests and procedures that will detect diseases and other conditions early, thereby eliminating the need for more expensive treatments later on. As Krauthaumer points out, many Democratic proponents of health care reform have in fact claimed that mandating or subsidizing additional expenditures on prevention (not always well-defined) can actually save money for the government and private insurance companies. President Obama, for instance, has claimed that such reform can save lives and money. Krauthaumer argues that these claims are incorrect, and offers some logic and evidence to back up his assertion.

Here is a link to the Op-Ed, which originally appeared in the Washington Post.


As Krauthaumer points out, a particular procedure may, ex post, turn out to be cost-beneficial for an individual patient. For instance, a procedure that costs the patient $1,000 might save the patient (or his insurance company) the costs of a much more expensive (say, $100,000) operation a few years later. The test might also save his life. This does not mean, however, that increasing expenditures on prevention across the board will thereby save money overall. If, for instance, there are one million 40 year olds, and each undergoes the $1,000 procedure, we have spent $1 Billion on that procedure. Let's say that the procedure detects 1,000 conditions that can be treated (at some expense) , thereby avoiding the $100,000 operation just mentioned. The result is a $900 million loss or so, at least if one is simply looking at the out of pocket expenses in question. While each of the 1,000 individuals who avoid the expensive operation are made better off by the invesment, the other 999,000 individuals in question receive no benefit, except perhaps the peace of mind that they do not have the particular condition in question.

And, in fact, Krauthaumer quotes a letter from the Congressional Budget Office concluding that:

"Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."

Thus, Krauthaumer concludes, mandating and encouraging additional prevention may well increase the costs of health care borne by the government and the private sector.

At the same time, this is not the only way to frame the inquiry. That is, an investment in prevention can do more than just reduce future medical expenses. Such investments can also save lives and/or reduce the time an individual is away from work. The $100,000 operation mentioned above might require the patient to be away from work and/or family for 6 or 8 weeks, convalescing at home or in a hospital. Even after the operation, the individual in question might be less productive than he would have been had the condition been detected earlier. He might retire sooner and/or die earlier. Thus, any true assessment of the benefits of expenditures on prevention must take into account more than just any resulting reduction in public and private health expenditures down the line. Such an assessment must also take into account the increased productivity of individuals who, because of investments in prevention, avoid illnesses that would otherwise reduce their productivity. And, of course, such an assessment must include, as President Obama has suggested, the value of human lives saved.

None of this is to say that Krauthaumer or the Congressional Budget Office is incorrect. And, I'll also note that society already spends billions of dollars on prevention of one sort or another. My only point is that, when determining whether such prevention is cost-beneficial, one must look at more than just the out-of-pocket costs borne by government and/or health insurance companies.

Monday, August 17, 2009

Tuition at Some Public Law Schools Rising Rapidly/Will The Public Law School Disappear ?

Law.com reports that tuition at some public law schools has risen dramatically this year, as schools attempt to offset reductions in state appropriations and endowment income.

The article, by Karen Sloan and entitled: can be found here:

http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1202432727154

Sloan reports the following tuition increases taking effect this fall:

1) Indiana Bloomington, 25 percent;

2) UC Davis, 19 percent;

3) Iowa, "nearly 20 percent;"

4) Texas, 16 percent;

5) U. Colorado, 16 percent.

The article also notes that some public law schools have held down their tuition increases, citing UVA and the University of Michigan as examples. Both schools, however, already charge in-state tuition much higher than the schools listed above. In state tuition at Michigan is now $43,200 per year, while in-state tuition at UVA is $38,800. Compare that to Indiana, which is just under $25,000, Iowa, which is at $21,400, and Colorado, at $25,400. Virginia receives no state support whatsoever and thus presumably is pricing at what the market will bear. Michigan, according to the article, receives only 3 percent of its budget from the state. (No doubt the proportion of state support is falling at other "public" schools as well.)

Sloan also notes that some schools are concerned that higher tution will reduce access to the schools in question, therefore compromising what many see as their mission of providing such access to the legal profession. At the same time, and in may view, one might conclude that legislators, the ultimate representatives of the public, have decided that such access is not worth the cost of providing it. Schools that nonetheless keep their tuition artifically low will thereby be furthering a mission of their own making, and not one that can be characterized as necessarily flowing from their public status.

In any event, it's hard to imagine state legislatures reversing the recent trend of declining to provide increased or even level financial support to public law schools. When it comes to support for education, K-12 education always goes to the head of the line. This is not surprising because: (1) K-12 teachers are often unionized and thus well-organized politically and (2) save for those who attend private schools, all children in a state attend such schools at one time or another, thereby enhancing the magnitude of public support for such expenditures. By contrast, many children, upon graduation from high school (if they do graduate) do not attend college at all or, if they do, attend a school in another state. Hence, support for investments in higher education are is predictably weaker than support for investments in K-12 education. And, of course, college faculties are often not unionized and thus lack the political muscle found among K-12 teachers.

Perhaps, 50 years from now, we will look back and view the state-funded law school as a sort of anomalous relic.

Sunday, August 16, 2009

More On Health Care Reform/How Really to Lower Health Care Costs

Over at Conglomerate, Gordon Smith has posted a thoughtful analysis of the politics and policy of President Obama's health care reform efforts.



Among other things, Smith notes that most Americans are generally happy with the health care they receive. Moreover, despite some initial promises, there is no indication that the plans promoted by President Obama and his allies will improve the amount or quality of care that most Americans receive. Instead, Smith suggests, providing health insurance for 45 million additional Americans will only increase the cost that everyone else pays for health care, and perhaps reduce its quality. (I'll add here that it will increase cost in two ways: first, it will increase the demand for health care services (according to some sources the uninsured currently receive 50-60 percent of the care received by others), without any increase in the supply of health care, thus driving up the price of such services. ("Where are the additional doctors ?" Smith asks.) Second, it will increase expenditures, by the government and the private sector, on health care, hence the $1 trillion (minimum) price tag of the proposals in the Congress., and that is just the price tag for the national government.) Smith concludes that, unless the Democrats can convince Americans that that their plans will actually improve their health care and/or lower the price they pay for it, no ambitious plan will actually pass Congress.

I certainly agree with Smith's cogent analysis of both the policy issues and the politics of health care reform. I will also add that President Obama is missing a real opportunity here. There may in fact be a way to BOTH increase access to health care (certainly an important policy objective) AND reduce costs, but no one is talking about it. That is, the government could take various steps to reduce the costs of producing and financing health care, shifting the supply curve of such services so that, despite increased demand for care, prices might actually fall. Or, at least such steps could mitigate any price increase that would otherwise result from increasing health care expenditures on the 45 million or so individuals who are not insured.

Here are the sort of steps that I have in mind:

1) Increase the number of doctors educated here in the USA. The government could require states, as a condition of receiving Medicaid funds for instance, to increase the size of their medical schools, thus increasing the supply of physicians.

2) Relax immigration restrictions. Such restrictions prevent foreign-educated doctors from becoming U.S. citizens or prevent American-educated citizens of foreign countries from remaining in the USA. A growing number of Americans are travelling abroad, e.g., to India, for surgery. Why not bring the Indian doctors here, instead, thereby increasing the supply of physicians, as Smith seems to suggest?

3) Eliminate so-called "certificate of need" laws that prevent entry by hopsitals into underserved markets. Most states have such laws, which require individuals to obtain a state's approval before building a new hospital. According to one report, New York was the first state to adopt such laws, in 1964, and numerous other states followed suit at the behest of the American Hospital Association. Here's the report, from the National Conference of State Legislatures.  The Department of Justice and the Federal Trade Commission have criticized such laws, pointing out that they increase concentration in health care markets, reduce competition and drive up prices. The national legislature has the authority to preempt such laws, so long as they burden interstate commerce, which many of them do.  Moreover, Congress could also decline to provide, say, Medicaid subsidies to states that maintain such laws.

4) Reform the McCarran-Ferguson Act.  As explained in a previous post, the McCarran-Ferguson Act exempts health insurance companies from the sort of antitrust regulation that other companies live under, whenever states regulate or purport to regulate such companies themselves. McCarran-Ferguson also allows states to block out of state insurance companies from entering their markets. Both provisions, of course, naturally raise economic concentration in local health insurance markets and thus likely raise the price of health insurance.

So far as I can tell, none of the bills currently in play in the House or Senate includes any of the measures listed above. If the President and members of Congress really want to take on "special interests," why not take on the American Hospital Association and the AMA by attempting to preempt certificate of need laws and significantly increase the number of doctors? The failure to do so is perplexing.

Thursday, August 13, 2009

President Obama Awards Jack Kemp Medal of Freedom


Yesterday President Obama awarded Jack Kemp the Medal of Freedom.

The White House website contains the following statement about Kemp, explaining the award:

"A statesman and a sports icon, Jack French Kemp advocated for his beliefs with an unwavering integrity and intellectual honesty. On the football field, he earned the respect and admiration of his teammates for his judgment and leadership. As a public servant, he placed country before party, and ideas before ideology. Jack Kemp saw bridges where others saw divisions, and his legacy serves as a shining example for all who strive to challenge conventional wisdom, stay true to themselves, and better our Nation."

Moreover, at the ceremony itself, the President had this to say:

"Told he was too small to play college football, Jack Kemp became a pro quarterback. Cut by four teams, he led the Buffalo Bills to two championships. Football, he once said, gave him a good sense of perspective about politics: He'd "already been booed, cheered, cut, sold, [and traded]." (Laughter.) Makes me feel better. (Laughter.) A conservative thinker, a Republican leader, and a defender of civil rights, he was that rare patriot who put country over party, never forgetting what he learned on the gridiron -- that it takes each of us doing our part, and all of us working together, to achieve a common goal. It's a life from which we can all draw lessons, Democrat and Republican alike."

Unfortunately, Kemp was not alive to receive the award. One has to wonder why, in eight years, George W. Bush did not get around to awarding Kemp, the pro-life, hawkish supply-side tax cutter the medal.
Bravo to President Obama for making the award.

Sunday, August 9, 2009

Damn It Jim, I'm A Doctor, Not A Quizmaster . . . .

The New York Post (of all places !) features a Star Trek "Video Quiz" on the front page of its website, interlaced with clips from the original episode. Careful, some of the questions deal with subsequent movies, and not the original series.

http://www.nypost.com/entertainment/comicsgames/popjax_game.htm?gameId=1593&campaign=NYP_PCW_20090805

And, if you want to watch some full-length episodes, including at least one in HD, go to the CBS website here. Thanks CBS !

http://www.cbs.com/classics/star_trek/

Saturday, August 8, 2009

More (Health Care) Privatization in . . . . .Sweden !!!!!!!

Earlier this blog reported that Sweden had rejected GM's plea for a government Bush/Obama-style bailout of GM subsidiary SAAB. We also noted the irony that a country known for its Socialism had reject the sort of policy adopted by a country known for its Capitalism.

See here.

Now comes word that Sweden has taken another step toward a free society, just as America seems poised to lurch toward more central control of our health care sector. That is, Sweden has announced plans to privatize its pharmacies, previously owned by a state monopoly Apoteket. That's right, until now, a private Swedish citizen, no matter how qualified, could not open a Pharmacy. (Sorry Sweden's equivalent of Linus Pauling !) Instead, someone who wanted to pursue the pharmacy vocation would have to apply for a civil service position with Apoteket.

Here's the story about the end of Apoteket's monopoly, July 1.

At the same time, it does not appear that Sweden's decision was entirely voluntary. Apparently Swedish citizens challenged the state monopoly as a violation of Article 31 of the European Community Treaty. One Swedish retailer simply wanted to sell some non-prescription Nicorret Gum but was with threatened with criminal prosecution for selling a product over which Apotekek had a state-conferred monopoly. In 2005, the European Court of Justice held Sweden's state monopoly violated Article 31 of the EC Treaty because there was no mechanism in place for assuring that Apoteket's purchasing decisions were free of bias against non-Swedish manufacturers. Bascially, the opinion, located here, requires such monopolies to adopt a transparent system of competitive bidding, so that manufacturers whose goods are not purchased will know why, say, Sweden has excluded their products from the market.

Apparently Sweden decided to privatize its pharmacy system instead of keeping its monopoly and implementing the sort of reform necessary to comply with the Court's ruling. Of course, a truly free market will do a better job of ensuring that manufacturers have access to Sweden's markets, anyway.

Tuesday, August 4, 2009

Happy Birthday Mr. President/From Russia with Love !

Russian Birthday Present ?
CBS News reports that the President of Russia called President Obama today to wish him a happy birthday.
Isn't that special ! Apparently he also sent two Akula class nuclear powered submarines to set up station off the Atlantic coast. The submarines are capable of carrying twelve nuclear armed anti-ship cruise missiles as well as torpedos and antitship missiles. The New York Times has the story on the subs' deployment --- the first such deployment in 15 years --- here.


Monday, August 3, 2009

More on Health Care/How to Lower Costs

Over at Conglomerate, Gordon Smith has posted a thoughtful analysis of the politics and policy of President Obama's health care reform efforts.

http://www.theconglomerate.org/2009/08/the-problem-with-health-care-reform.html

Among other things, Smith notes that most Americans are generally happy with the health care they receive. Moreover, despite some initial promises, there is no indication that the plans promoted by President Obama and his allies will improve the amount or quality of care that most Americans receive. Instead, Smith suggests, providing health insurance for 45 million additional Americans will only increase the cost that everyone else pays for health care, and perhaps reduce its quality. (I'll add here that it will increase cost in two ways: first, it will increase the demand for health care services (according to some sources the uninsured currently receive 50-60 percent of the care received by others), without any increase in the supply of health care, thus driving up the price of such services. ("Where are the additional doctors ?" Smith asks.) Second, it will increase expenditures, by the government and the private sector, on health care, hence the $1 trillion (minimum) price tag of the proposals in the Congress., and that is just the price tag for the national government.)

Smith concludes that, unless the Democrats can convince Americans that that their plans will actually improve their health care and/or lower the price they pay for it, no ambitious plan will actually pass Congress.


I certainly agree with Smith's cogent analysis of both the policy issues and the politics of health care reform. I will also add that President Obama is missing a real opportunity here. There may in fact be a way to BOTH increase access to health care (certainly an important policy objective) AND reduce costs, but no one is talking about it. That is, the government could take various steps to reduce the costs of producing and financing health care, shifting the supply curve of such services so that, despite increased demand for care, prices might actually fall. Or, at least such steps could mitigate any price increase that would otherwise result from increasing health care expenditures on the 45 million or so individuals who are not insured.

Here are the sort of steps that I have in mind:

1) Increase the number of doctors educated here in the USA. The government could require states, as a condition of receiving Medicaid funds for instance, to increase the size of their medical schools, thus increasing the supply of physicians.

2) Relax immigration restrictions. Such restrictions prevent foreign-educated doctors from becoming U.S. citizens or prevent American-educated citizens of foreign countries from remaining in the USA. A growing number of Americans are travelling abroad, e.g., to India, for surgery. Why not bring the Indian doctors here, instead, thereby increasing the supply of physicians, as Smith seems to suggest?

3) Eliminate so-called "certificate of need" laws that prevent entry by hopsitals into underserved markets. Most states have such laws, which require individuals to obtain a state's approval before building a new hospital. According to one report, New York was the first state to adopt such laws, in 1964, and numerous other states followed suit at the behest of the American Hospital Association. Here's the report, from the National Conference of State Legislatures.
http://www.ncsl.org/default.aspx?tabid=14373 The Department of Justice and the Federal Trade Commission have criticized such laws, pointing out that they increase concentration in health care markets, reduce competition and drive up prices. The national has the authority to preempt such laws, so long as the burden interstate commerce, which many of them do. Moreover, Congress could also decline to provide, say, Medicaid subsidies to states that maintain such laws.

4) Reform the McCarran-Ferguson Act. As explained in a previous post, the McCarran-Ferugson Act exempts health insurance companies from the sort of antitrust regulation that other companies live under, whenever states regulate or purport to regulate such companies themselves. McCarran-Ferguson also allows states to block out of state insurance companies from entering their markets. Both provisions, of course, naturally raise economic concentration in local health insurance markets and thus likely raise the price of health insurance. Here's that previous post, by the way.

http://bishopmadison.blogspot.com/2009/08/r-ohio-liked-competition-d-illinois.html

So far as I can tell, none of the bills currently in play in the House or Senate includes any of the measures listed above. If the President and members of Congress really want to take on "special interests," why not take on the American Hospital Association and the AMA by attempting to preempt certificate of need laws and significantly increase the number of doctors? The failure to do so is perplexing.

How To Inject Real Competition Into the Health Insurance Market

(R-Ohio)
Liked Competition


(D-Illinois)
Pretends to Like Competition

The Richmond Times Dispatch editorial board has identified (yet) another contradiction in President Obama's plans for health care reform. On the one hand, the President and his supporters claim that they want to inject more "competition" into the nation's health insurance markets, by creating a so-called "public option." At the same time, none of the bills proposed by President Obama's allies in Congress would amend laws that both exempt insurance companies from federal antitrust laws --- which are supposed to encourage competition --- and empower states to block competition that might take place across state lines. The brief editorial, which is worth reading in full, can be found here.

http://www2.timesdispatch.com/rtd/news/opinion/editorials/article/ED-COST30_20090729-190409/282857/

The chief culprit here is the McCarran-Ferguson Act, which Congress passed in 1945 in response to the Supreme Court's decision in United States v. South-Eastern Underwriters, 322 U.S. 533 (1944). Southeastern Underwriters held that the Sherman Antitrust Act (named for its sponsor, Senator John Sherman, R-Ohio, pictured above) applied to the business of insurance and banned a horizontal price fixing agreement between insurance companies selling insurance across state lines. The decision was correct and made perfect sense. However, in its infinite wisdom, Congress responded to the decision by passing the McCarran-Ferguson Act, which, among other things, granted antitrust immunity to insurance companies who are regulated by state insurance authorities. The only exceptions to such immunity are for instances in which the company engages in "boycott, coercion or intimidation." McCarran-Ferguson was one of several New Deal-era federal statutes that undermined competition by encouraging price fixing and creating barriers to entry. Another classic example is the Motor Carrier Act of 1935, which required anyone wishing to transport goods across state lines in a truck to obtain a federal license to do so. The Act also empowered the Interstate Commerce Commission to sets prices for such transportation and pass on truckers' applications to serve particular routes. Put another way, the Act empowered the ICC to engage in Central Planning of the trucking industry.

Thus, so long as insurance companies are subject to state oversight, they may engage in the sort of horizontal price fixing that would be a felony if practiced by, say, automobile manufacturers. They may also engage in exclusionary tactics that do not rise to the level of "boycott, coercion or intimidation." Moreover, such companies can merge with one another with impunity, thereby producing concentrated markets without regard to whether such concentration is necessary to produce efficiencies. As the Times-Dispatch editorial notes, 94 percent of state insurance markets are "concentrated" if one applies Department of Justice Merger Guidelines. The problem is compounded in this context, where, because of McCarran-Ferguson, insurance companies can agree on the prices they will charge consumers without any threat of liability under Federal law.

Ordinarily, concentration itself it not necessarily a problem, since the threat of new entry can sometimes prevent firms in concentrated markets from raising prices above the competitive level. If, say, Dominos and Pizza Hut agree on the price of delivered pizza, Papa Johns and others can enter the market and defeat the cartel. However, McCarran-Ferguson empowers a state to prevent entry by out-of-state insurance companies into the state's own market, thereby preventing consumers in, say, Virginia from seeking health insurance from firms based in New York. In the end, then, McCarran-Ferguson is a sort of one-two punch: insurance companies may agree on prices they will charge consumers in a particular state, and consumer may not seek to avoid such price fixing by seeking insurance elsewhere.

There are various ironies here. The Obama administration and its allies generally support, or claim to support, aggressive enforcement of the antitrust laws. At the same time, they have made no effort to undo the pernicious anti-competition effects of McCarran-Ferguson. Moreover, some arguments for the so-called "public option" rest on the assumption that the Federal Plan will become so large that it will have bargaining leverage over providers of health care, an assumption in tension with a professed desire to enhance competition.

There is final irony. President Obama and his allies claim that failed markets justify additional government involvement in the health care industry. In this case, however, the problem seems to be failed government. To quote the Times-Dispatch:

"The market gets blamed for a lot these days, but it is absurd to pin high health insurance premiums on markets when excessive regulations are much more culpable. Any health care overhaul should repeal the ban on interstate health insurance shopping."

Enough said !