The Cato Institute

Paying Plasma Donors

About 83% of Canada’s immunoglobulin (used to treat several immune, blood, & neurological disorders) is made from plasma imported from U.S. for-profit plasma centers…

The United States allows payments for plasma donors and the establishment of for-profit plasma centers. In contrast, payments to plasma donors are illegal in several provinces of Canada, and more provinces are considering bans. 

As a result, Canada relies on imported plasma from American paid donors to meet its need for plasma-derived therapies. For example, approximately 83% of immunoglobulin, which is used to treat several immune, blood, and neurological disorders, is made from plasma imported from American for-profit plasma centers.

Canadian policymakers justify the prohibition on compensation with moral considerations and with concerns about the safety of plasma collected from paid donors. 

However, 72.6% of survey respondents in Canada are in favor of compensating plasma donors. Among those in favor of legalizing compensation for donors, the highest-rated motive was to guarantee a higher domestic supply. The majority of the respondents who were in favor of legalizing compensation also agreed that compensation would not run against mainstream Canadian moral and societal values.

Roughly half of those who declared they were against payments reported that they would reconsider their position if the domestic supply and imports were insufficient to meet domestic demand, meaning that up to about 85% of Canadian respondents could actually be in favor of compensating plasma donors.

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Is Preventive Care Worth the Cost?

Prevention of chronic disease has become a key health policy initiative in recent years. But, is preventative care actually working — and at what cost?

While the importance of disease prevention is hard to deny, relatively little attention has been paid to whether preventive care is worth its cost.

Diabetes mellitus (DM) is an incurable chronic disease of growing prevalence and, accordingly, one of the primary targets for prevention. It is often called a “silent killer” because individuals are not initially aware of the condition, but in the long-run they suffer serious complications, including eye, heart, kidney, and nerve problems.

Recent research underscores the economic and human cost of DM: in 2014, approximately 422 million adults had diabetes worldwide, incurring health costs estimated to total $825 billion per year. The disease can generally be prevented by early intervention to reduce lifestyle risk factors (such as smoking, unhealthy diet, sedentary lifestyle, and obesity). Diabetes mellitus and pre-diabetes can be detected by elevated blood sugar levels, a diagnostic test commonly included in regular health checkups.

In Japan, policymakers consider this so important that in 1972 they mandated that all employees receive an annual screening for elevated blood sugar. 

Have mandatory health checkups affected individuals’ medical care utilization, health behaviors, and health outcomes? Is the additional care worth the cost?

People do respond to health signals by undertaking follow-up visits with physicians and thus health signals can potentially promote preventive care. However, the absolute impact of the signal is small: exceeding the threshold increases the probability of visiting a physician for DM treatment by only 5 percentage points (albeit representing a 50% increase, i.e., from 10% to 15%). This small magnitude indicates that health signals do not effectively translate into preventive care for the majority of individuals. 

More importantly, despite the significant increase in medical care utilization at the borderline threshold, there is no evidence that the additional care improves health outcomes. Further, since almost all employers focus on the lower threshold to signal a warning of pre-diabetes, and neglect the threshold signifying the higher risk category of diabetes, crossing the high risk threshold does not increase medical care utilization or improve health outcomes.

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Has Obamacare Made Insurance Cheaper?

One goal of the Affordable Care Act was to reduce the cost of health insurance. Has it? 

One way Obamacare tried to reduce the cost of health insurance was by instituting minimum requirements on the share of premiums that commercial insurers must spend on medical claims. Known as the Medical Loss Ratio (MLR), this share is a measure of the actuarial fairness of insurance.

However, rather than reduce premiums, insurers increased their claims costs nearly one-for-one with their distance below the regulatory threshold.

On a state-by-state and market-segment-by-segment basis, insurers are required to maintain a MLR of at least 80% in the individual and small-group market segments and 85% in the large-group market segment, colloquially known as the “80/20 rule.” Federal regulation requires insurers to issue rebates to customers based on their realized MLR.

If an insurer collects $100 in premiums in the individual market, but spends only $79 paying medical claims that year, they are required to write a $1 check to policyholders. However, the insurer must bear the full administrative cost of keeping expenditures below $80 but reaps none of the rewards. That is, minimum MLR requirements encourage higher costs, not lower.

As a result, instead of causing a reduction in premiums in either the individual or group markets, Obamacare has incentivized insurers to cut administrative spending when the regulation was binding.

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Cracking Down on Opioid Prescriptions is Driving the Opioid Crisis

The rising opioid overdose death rate is a serious problem and deserves serious attention. But calling it a “national emergency” is not helpful…

Drug overdoses are now the leading cause of death among Americans under age 50. Driving this trend, which shows no sign of abatement, is a surge in opioid-related overdoses. The latest numbers for 2015 report a record 33,000 deaths, the majority of which are now from heroin. These types of deaths have occurred with such frequency that states — including Maryland, Florida, and Arizona — have declared medical states of emergency.

Earlier this week, President Trump convened a group of experts to give him a briefing on the “opioid crisis” and to suggest further action. Some, like New Jersey Governor Chris Christie, who heads the White House Drug Addiction Task Force, are calling for him to declare a “national public health emergency.” But calling it a “national emergency” only fosters an air of panic, which all-too-often leads to hastily conceived policy decisions that are not evidence-based, and have deleterious unintended consequences.

Many dangerous misconceptions persist around opioids, addiction, and chemical dependence.

Despite all the hype, prescription opioids are not that dangerous, even in heavy doses, when used under medical supervision. 

Most opioid-related deaths do not occur via medically prescribed opioids. Instead, as doctors curtail their opioid prescriptions for pain patients, many in desperation seek relief in the illegal market. These alternate sources may be adulterated, of higher dosage than the user realized, or consumed with other drugs that generate adverse reactions.

Nonetheless, fears about opioid addiction drive restrictions on opioid prescribing, which, in turn, increase opioid poisonings.

While most states have made the opioid overdose antidote naloxone more readily available to patients and first responders, policies have mainly focused on targeted health care practitioners trying to help suffering patients, as well as efforts to cut back on the legal manufacture of opioid drugs.

The CDC has reported that opioid prescriptions are consistently coming down, while the overdose rate keeps climbing and the drug predominantly responsible is now heroin. But the proposals we hear are more of the same.

We need a calmer, more deliberate and thoughtful reassessment of our policy towards the use of both licit and illicit drugs. Calling it a “national emergency” is not the way to do that.

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Porn Is Not a ‘Public Health Crisis’

A Republican National Convention platform committee has declared pornography “a public health crisis.” Committee members don’t seem to know what “public health” means.

Language matters. Calling something a “public health problem” suggests that it is different from a personal health problem in ways that demand collective action. And while it doesn’t strictly follow, either in principle or historically, that “collective action” must be state action, that distinction is easily elided in the face of a “public health crisis.” If smoking and obesity are called public health problems, then it seems that we need a public health bureaucracy to solve them — and the Public Health Service and all its sister agencies don’t get to close up shop with the satisfaction of a job well done. So let’s start using honest language: Smoking and obesity are health problems. In fact, they are widespread health problems. But they are not public health problems. Nor is pornography, despite the views of the right-wing groups lobbying the Republican convention.

Read more in David Boaz’s op-ed in The Hill…

Fall 2015 Issue of Regulation Magazine

In recent decades, policymakers have attempted to overcome zoning constraints on new development by granting special zoning exceptions in return for various developer-provided public benefits. This strategy is proving inadequate as zoning continues to suppress needed development of lower- and middle-class housing and employment. However, broader zoning reform is politically difficult because of incumbent-homeowner political coalitions. 

In the new issue of Regulation, law professors Roderick M. Hills Jr. and David Schleicher recommend an unlikely cure for zoning regulations that are strangling our cities: binding, comprehensive, citywide plans. In Can ‘Planning’ Deregulate Land Use? , Hills and Schleicher propose a return to the use of comprehensive, citywide planning for land use regulation, which can only be approved or rejected, without amendment, by legislative bodies.

Also in this issue, Richard A. Booth argues against adopting the European approach to insider trading; Pierre Lemieux illustrates how “public health” as a concept has become divorced from its original, intended meaning; Omri Ben-Shahar and Kyle Logue criticize government-subsidized weather insurance for subsidizing the wealthy and encouraging development in disaster-prone areas; and Joseph Michael Newhard shows how domestic firearms manufacturing has actually benefitted from gun control policies. 

Read the new issue…

Medicaid and Medicare Turn 50

50 years ago today, President Lyndon B. Johnson signed legislation creating Medicare and Medicaid. 

Despite their popularity with seniors, the disabled, the needy, and those who might otherwise have to care for them, Medicare and Medicaid have done enormous damage to the U.S. health care sector and to individual liberty.

Read recent Cato Institute research and commentary on this topic: 

• Nicole Kaeding discusses the recent GAO report citing rampant fraud and waste in Medicaid on NBC WLUC TV6 Morning News
  
• The Size and Scope of Fraud in Medicare, Cato Blog Post by Nicole Kaeding

Does the Internet Need Saving?

Originally posted by themobilemovement

As Title II “net neutrality” moves toward implementation, some proponents are having second thoughts. What is to be done?  

In the new issue of Regulation, Gerald R. Faulhaber says that we wish to avoid the Internet being sucked into the vortex of Title II public utility regulation, we must depend upon Congress to act.  

Also in this issue, Christopher T. Robertson and Keith A. Joiner offer some new approaches to cutting health care costs while expanding access to care, and Edgar O. Olsen suggests reforms to low-income housing assistance.

Read the Summer 2015 issue of Regulation…

Synthetic Drugs Are Very Dangerous. Let’s Legalize Them.

Originally posted by randilynn426

Lately, the media has been in a tizzy about synthetic or “designer” drugs. These produce physical and psychological effects similar to traditional, mind-altering substances like marijuana, cocaine and heroin. But they’re different in a crucial way. Not only are they frequently marketed as potpourri, pet food, air freshener and other legal products, but because they are artificial substances, even a slight change in the chemical composition can make the targeted drug no longer covered by existing law.

Here’s why they should be LEGAL….

What Will Obama Do if He Loses King v. Burwell?

Originally posted by garhedlund

We’ve famously been told that the Department of Health & Human Services has no Plan B if the Supreme Court decides against the administration in King v. Burwell. But what if the Supreme Court forces the executive branch’s hand?

 Ilya Shapiro takes a look ahead to what President Obama will do if the government does indeed lose King v. Burwell. 

Read more….