BuckeyeBlog

The Enquirer reported on Drake Hospital’s recent turnaround over two weeks ago, but it is a story worth revisiting for further thought:

Three years ago, the long-term rehabilitation hospital was losing more than $10 million a year, slightly less than Hamilton County taxpayers were pumping into it annually to keep the facility afloat. Its costs were 70 percent higher than those of other hospitals. Its chief executive officer was making more than $400,000. Meanwhile, the center was operating at 45 percent of capacity and its supporters lived in fear it would close.

Drake’s only hope was to take a dose of strong medicine. In 2005, Hamilton County commissioners ceded control of the center to the Health Alliance. The old board was dismantled, the administrative team fired, employee benefits slimmed down, and its budget and admissions policies overhauled.

The privatization not only stabilized the care center, it saved it. Now center administrator Karen Bankston, senior vice president at Drake for the Health Alliance, predicts a $9 million surplus by the end of the fiscal year. Equally important, the center has bumped up admissions and is hoping to open its doors to hundreds of Iraq war veterans with brain injuries and land a highly coveted Department of Defense contract for their care.

Alliance officials say the turnaround has been so successful that they’ll no longer need public funds after a Hamilton County operating levy expires next year.

The Drake story offers yet more evidence that private health care is superior to the public health care systems endorsed by certain major presidential candidates. May it serve as a candle, however dim, for an American public currently stumbling around in the dark when it comes to effective health care solutions.

“Doctors have complained for years that Medicare payments have failed to cover rising costs.”

Apparently some fool built fiscal responsibility into the Medicare program. Formulas require a cut in payments whenever the budget is blown, which is, let’s see, every period it’s measured. Or so this article implies, anyway.

Then Congress rushes in, ever the hero, and takes firm action. It waives the fiscal responsibility requirement, so everyone can pretend there’s no problem.

As Father PJ says, if you think health care is expensive now, wait ’til it’s free.

The folks at the American Lung Association’s Ohio chapter are calling for an increase in taxes on tobacco products such as smokeless tobacco and cigars in order to fund their anti-tobacco efforts. This comes on the heels of the Governor and General Assembly de-funding the Ohio Tobacco Prevention Fund and using its money for “economic stimulus.”

But can increased taxes on these products be justified as anything other than anti-smoking activists looking for ways to keep their jobs? I discuss this issue in some detail in my study on Ohio’s Dumb Taxes. I also sum up the issue in this Viewpoint:

It is certainly fair that people should pay for the costs they impose on society. Tobacco users are already doing that, however. Studies indicate the burden smokers place on taxpayers could be oft-set by adding about 32 cents to a pack of cigarettes. Since Ohio taxes cigarettes at $1.25 a pack, the smokers of Ohio are paying for more than their fair share.

Cigars and smokeless tobacco products are also taxed heavily compared to the cost they impose on society. Illnesses from cigars and smokeless tobacco such as chewing tobacco cost taxpayers almost nothing. These products are just not as dangerous as cigarettes. Because of this, they should have no special taxes levied on them. Instead, they have an onerous ad valorem tax imposed by the state that taxes these products based on their price. This distorts the market and unfairly penalizes high-end products.

In short, tobacco users already reimburse the government for any costs imposed on state health systems. If activists were really interested in fairness, they would be pushing for a reduction in tobacco taxes.

Of course, fiscal fairness is probably only one part of the rationale to increase tobacco taxes. Many interest groups want to see taxes raised in order to discourage tobacco usage. It is an improper use of the tax code to try and affect social policy, though. Taxes should be levied to raise revenue for government obligations, not as a way to force people to act certain ways.

Besides being an improper use of the tax code, raising taxes on products to discourage their usage also has unintended consequences. Activists do not seem to realize that not all tobacco products are equally unhealthy. While all tobacco products pose some health risk, smoking cigars or using chewing tobacco causes far fewer health problems than smoking cigarettes. By raising the cost of these less dangerous products the anti-tobacco activists may well cause some people who used these products to satisfy their tobacco habit with cigarettes.

Sherrod Brown has finally decided to go to medical school.

Wright-Patterson’s medical centers have run out of money and are telling patients to go elsewhere. That doesn’t make the good senator happy, so he’s going to fix the problem.

“Resources may be strained, but under no circumstances should a veteran be denied the right care by the right provider,” he said. “I will stay involved to ensure that outcome.”

Unless . . . maybe he’s going to go the more traditional route, and engage in some price-fixing, making sure the price is low enough to serve his voters, er, serve the good citizens of Ohio and anyone else who can cross the border. If that’s his strategy, may we suggest that he go whole hog, and set the price at zero? That way there will be plenty for everyone.

It must be nice to be liberal advocacy group Families USA. Whenever they put out a report light on facts and heavy on rhetoric blasting the free market they get friendly media play from coast to coast. Their latest report, attacking the fact that some insurance policies aren’t as heavily regulated as Families USA would like, got the usual uncritical coverage from Ohio newspapers.

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One of the trendy ideas in health care reform is a “slacker mandate” — requiring insurance companies to cover “children” on their parents insurance up to the age of 25 or 30. The idea is meant to address the fact that young adults make up a large portion of the uninsured. This idea has hit Ohio in the form of SB 115, which is ostensibly aimed at covering “dependent children” up to the age of 30.

One, there is no requirement in the bill that those covered be dependent. It merely states that they can’t be working at a job that offers health care benefits.

Two, since when are adults up to the age of 30 still considered “children”?

New Jersey was the first state to adopt such a mandate. It didn’t really go too well.

On the subject of former Republican presidential candidates and the Wall Street Journal, the WSJ had a great editorial a couple days ago that exposes the flaws in former governor Mitt Romney’s health care plan. Unfortunately, there are some who think this Massachusetts Plan is a good idea. A commission looking at health care reform for Ohio is considering a similar plan for Ohio. The WSJ editorial should be required reading for every person on that commission:

First, the plan isn’t “universal” at all: About 350,000 more people are now insured in Massachusetts since the reform passed. Federal estimates put the prior number of uninsured at more than 657,000, so there was a reduction. But it was not secured through the market reforms that Governor Romney promised. Instead, Massachusetts also created a new state entitlement that is already trembling on the verge of bankruptcy inside of a year.

Some two-thirds of the growth in coverage owes to a low- or no-cost public insurance option. Called Commonwealth Care, it uses a sliding income scale to subsidize coverage for everyone under 300% of the federal poverty level, or about $63,000 for a family of four. Commonwealth Care also accounts for 60% of statewide growth in individual insurance over the last year, and the trend is expected to accelerate, perhaps double.

One lesson here is that while pledging “universal” coverage is easy, the harder problem is paying for it. This year’s appropriation for Commonwealth Care was $472 million, but officials have asked for an add-on that will bring it to $625 million. For 2009, Governor Deval Patrick requested $869 million but has already conceded that even that huge figure is too low. Over the coming decade, the expected overruns float in as much as $4 billion over budget. It’s too early to tell how much is new coverage or if state programs are displacing private insurance.

In a news report yesterday on the state pork capital budget, there was this interesting tidbit:

State Budget Director J. Pari Sabety told legislators yesterday that the budget needs another $344 million ($122 million in state funds) to cover increased Medicaid costs because 66,000 more people than expected are using the state-federal health-insurance program for the poor and elderly.

I hate to say “I told you so,” but:

Expanding Medicaid can lead to large increases in Medicaid spending when states can least afford it — during recessions. Ohio saw this earlier this decade when Medicaid spending increased dramatically during the recent recession. Spending grew at 11 percent annually during 2001 and 2004, squeezing other budget priorities at a time when the state was seeing reduced revenue. Expanding Medicaid now will only repeat this cycle during the next recession.

Just as Ohio can learn something from Florida regarding education choice and taxes, it can also learn something from the Sunshine State about health care reform. The Florida legislature just passed a bill that would allow a “no-frills” health insurance policy to be sold in the state. These policies would be much cheaper than other policies because they would not include a variety of politically-motivated mandates, such as the kind Ohio is adding.

Unfortunately, Ohio is pursuing health care “reform” that is going to have the opposite effect of Florida’s. Governor Strickland’s health care task force, according to Gongwer News Service ($):

A group of health care stakeholders appointed by Gov. Ted Strickland has generally agreed that the state should require Ohioans purchase health insurance and subsidize low-income individuals who can’t afford it….

However, for an individual mandate to be feasible, members generally believe there should also be a guaranteed issuance of coverage…

This type of plan to increase government control will only result in higher prices for health insurance in the state. Florida is looking better all the time.

It’s a line you see regularly in news stories – two people in Ohio die every day because they lack health insurance. It’s based on a “study” by left-wing Families USA that has some severe flaws, as John Goodman points out:

How is Families USA able to tally up all this carnage with such pinpoint precision? As it turns out, these claims are based on a 15-year cascade of studies - each repeating the errors and misinterpreting or mischaracterizing the findings of the previous one and ultimately relying on data that is 37 years old…

there is no point at which anyone from Families USA actually examines a medical record. There is no interview with any doctor, any patient or any family of a deceased patient. There is only algebraic mumbo jumbo in support of an unsupportable claim.

Read the whole analysis here.