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President Obama’s Dragnet

By  THE EDITORIAL BOARD

Published: June 6, 2013


Within hours of the disclosure that federal authorities routinely collect data on phone calls Americans make, regardless of whether they have any bearing on a counterterrorism investigation, the Obama administration issued the same platitude it has offered every time President Obama has been caught overreaching in the use of his powers: Terrorists are a real menace and you should just trust us to deal with them because we have internal mechanisms (that we are not going to tell you about) to make sure we do not violate your rights.

Those reassurances have never been persuasive — whether on secret warrants to scoop up a news agency’s phone records or secret orders to kill an American suspected of terrorism — especially coming from a president who once promised transparency and accountability.

The administration has now lost all credibility on this issue. Mr. Obama is proving the truism that the executive branch will use any power it is given and very likely abuse it. That is one reason we have long argued that the Patriot Act, enacted in the heat of fear after the Sept. 11, 2001, attacks by members of Congress who mostly had not even read it, was reckless in its assignment of unnecessary and overbroad surveillance powers.

Based on an article in The Guardian published Wednesday night, we now know that the Federal Bureau of Investigation and the National Security Agency used the Patriot Act to obtain a secret warrant to compel Verizon’s business services division to turn over data on every single call that went through its system. We know that this particular order was a routine extension of surveillance that has been going on for years, and it seems very likely that it extends beyond Verizon’s business division. There is every reason to believe the federal government has been collecting every bit of information about every American’s phone calls except the words actually exchanged in those calls.

Articles in The Washington Post and The Guardian described a process by which the N.S.A. is also able to capture Internet communications directly from the servers of nine leading American companies. The articles raised questions about whether the N.S.A. separated foreign communications from domestic ones.

A senior administration official quoted in The Times online Thursday afternoon about the Verizon order offered the lame observation that the information does not include the name of any caller, as though there would be the slightest difficulty in matching numbers to names. He said the information “has been a critical tool in protecting the nation from terrorist threats,” because it allows the government “to discover whether known or suspected terrorists have been in contact with other persons who may be engaged in terrorist activities, particularly people located inside the United States.”
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That is a vital goal, but how is it served by collecting everyone’s call data? The government can easily collect phone records (including the actual content of those calls) on “known or suspected terrorists” without logging every call made. In fact, the Foreign Intelligence Surveillance Act was expanded in 2008 for that very purpose.

Essentially, the administration is saying that without any individual suspicion of wrongdoing, the government is allowed to know whom Americans are calling every time they make a phone call, for how long they talk and from where.

This sort of tracking can reveal a lot of personal and intimate information about an individual. To casually permit this surveillance — with the American public having no idea that the executive branch is now exercising this power — fundamentally shifts power between the individual and the state, and it repudiates constitutional principles governing search, seizure and privacy.

The defense of this practice offered by Senator Dianne Feinstein of California, who as chairwoman of the Senate Intelligence Committee is supposed to be preventing this sort of overreaching, was absurd. She said on Thursday that the authorities need this information in case someone might become a terrorist in the future. Senator Saxby Chambliss of Georgia, the vice chairman of the committee, said the surveillance has “proved meritorious, because we have gathered significant information on bad guys and only on bad guys over the years.”

But what assurance do we have of that, especially since Ms. Feinstein went on to say that she actually did not know how the data being collected was used?

The senior administration official quoted in The Times said the executive branch internally reviews surveillance programs to ensure that they “comply with the Constitution and laws of the United States and appropriately protect privacy and civil liberties.”

That’s no longer good enough. Mr. Obama clearly had no intention of revealing this eavesdropping, just as he would not have acknowledged the killing of Anwar al-Awlaki, an American citizen, had it not been reported in the press. Even then, it took him more than a year and a half to acknowledge the killing, and he is still keeping secret the protocol by which he makes such decisions.

We are not questioning the legality under the Patriot Act of the court order disclosed by The Guardian. But we strongly object to using that power in this manner. It is the very sort of thing against which Mr. Obama once railed, when he said in 2007 that the surveillance policy of the George W. Bush administration “puts forward a false choice between the liberties we cherish and the security we provide.”
Two Democrats on the Senate Intelligence Committee, Ron Wyden of Oregon and Mark Udall of Colorado, have raised warnings about the government’s overbroad interpretation of its surveillance powers. “We believe most Americans would be stunned to learn the details of how these secret court opinions have interpreted Section 215 of the Patriot Act,” they wrote last year in a letter to Attorney General Eric Holder Jr. “As we see it, there is now a significant gap between what most Americans think the law allows and what the government secretly claims the law allows. This is a problem, because it is impossible to have an informed public debate about what the law should say when the public doesn’t know what its government thinks the law says.”

On Thursday, Representative Jim Sensenbrenner, Republican of Wisconsin, who introduced the Patriot Act in 2001, said that the National Security Agency overstepped its bounds by obtaining a secret order to collect phone log records from millions of Americans.

“As the author of the Patriot Act, I am extremely troubled by the F.B.I.’s interpretation of this legislation,” he said in a statement. “While I believe the Patriot Act appropriately balanced national security concerns and civil rights, I have always worried about potential abuses.” He added: “Seizing phone records of millions of innocent people is excessive and un-American.”

Stunning use of the act shows, once again, why it needs to be sharply curtailed if not repealed.


http://www.nytimes.c...ml?pagewanted=1

Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%

By: Avik Roy - Forbes.com

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange. But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.

One of the most serious flaws with Obamacare is that its blizzard of regulations and mandates drives up the cost of insurance for people who buy it on their own.

This problem will be especially acute when the law’s main provisions kick in on January 1, 2014, leading many to worry about health insurance “rate shock.”

Lee’s claims that there won’t be rate shock in California were repeated uncritically in some quarters. “Despite the political naysayers,” writes my Forbes colleague Rick Ungar, “the healthcare exchange concept appears to be working very well indeed in states like California.” A bit more analysis would have prevented Rick from falling for California’s sleight-of-hand.
Here’s what happened. Last week, Covered California—the name for the state’s Obamacare-compatible insurance exchange—released the rates that Californians will have to pay to enroll in the exchange.

“The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”
That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.

Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.

Obamacare to double individual-market premiums
If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (By “average,” I mean the median monthly premium across California’s 19 insurance rating regions.)

The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the median cost of the five cheapest plans was only $92.
In other words, for the typical 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.

Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you’re 40, your cheapest option is the bronze plan. In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261.
But on eHealthInsurance, the median cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.

For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double.

Impact highest in Bay Area, Orange County, and San Diego
In the map below, I illustrate the regional variations in Obamacare’s rate hikes. For each of the state’s 19 insurance regions, I compared the median price of the bronze plans offered on the exchange to the median price of the five cheapest plans on eHealthInsurance.com for the most populous zip code in that region. (eHealth offers more than 50 plans in the typical California zip code; focusing on the five cheapest is the fairest comparator to the exchanges, which typically offered three to six plans in each insurance rating region.)

As you can see, Obamacare’s impact on 40-year-olds is steepest in the San Francisco Bay area, especially in the counties north of San Francisco, like Marin, Napa, and Sonoma. Also hard-hit are Orange and San Diego counties.
According to Covered California, 13 carriers are participating in the state’s exchange, including Anthem Blue Cross (NYSE:WLP), Health Net (NYSE:HNT), Molina (NYSE:MOH), and Kaiser Permanente. So far, UnitedHealthCare (NYSE:UNH) and Aetna (NYSE:AET) have stayed out.

Spinning a public-relations disaster
It’s great that Covered California released this early the rates that insurers plan to charge on the exchange, as it gives us an early window into how the exchanges will work in a state that has an unusually competitive and inexpensive individual market for health insurance. But that’s the irony. The full rate report is subtitled “Making the Individual Market in California Affordable.” But Obamacare has actually doubled individual-market premiums in the Golden State.

How did Lee and his colleagues explain the sleight-of-hand they used to make it seem like they were bringing prices down, instead of up? “It is difficult to make a direct comparison of these rates to existing premiums in the commercial individual market,” Covered California explained in last week’s press release, “because in 2014, there will be new standard benefit designs under the Affordable Care Act.” That’s a polite way of saying that Obamacare’s mandates and regulations will drive up the cost of premiums in the individual market for health insurance.

But rather than acknowledge that truth, the agency decided to ignore it completely, instead comparing Obamacare-based insurance to a completely different type of insurance product, that bears no relevance to the actual costs that actual Californians face when they shop for coverage today. Peter Lee calls it a “home run.” It’s more like hitting into a triple play.

Obama attacked insurers in 2010 for much smaller increases

That Obamacare more than doubles insurance premiums for many Californians is especially ironic, given the political posturing of the President and his administration in 2010. In February of that year, Anthem Blue Cross announced that some groups (but not the majority) would face premium increases of as much as 39 percent. The White House and its allies in the blogosphere, cynically, claimed that these increases were due to greedy profiteering by the insurers, instead of changes in the underlying costs of the insured population.
“These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy,” said Health and Human Services Secretary Kathleen Sebelius. “[Anthem’s] strong financial position makes these rate increases even more difficult to understand.” The then-Democratic Congress called hearings. Even California Insurance Commissioner Steve Poizner, a Republican running for governor, decided to launch an investigation.

Soon after, WellPoint announced that, in fact, because of lower revenues and higher spending on patient care, the company earned 11 percent less in 2010 than it did in 2009. So much for greedy profiteering.
So, to summarize: Supporters of Obamacare justified passage of the law because one insurer in California raised rates on some people by as much as 39 percent. But Obamacare itself more than doubles the cost of insurance on the individual market. I can understand why Democrats in California would want to mislead the public on this point. But journalists have a professional responsibility to check out the facts for themselves.

*   *   *

UPDATE 1: On Twitter, Jonathan Cohn of The New Republic argues that I’m being unkind to California (1) by not describing the mandates that Obamacare imposes on insurers in the individual market, and (2) not explaining that low-income people will be eligible for subsidies that protect them from much of the rate shock.
For an extensive discussion of Obamacare’s costly insurance mandates, such as its requirement that plans cover you whether you’re healthy or sick, read this post. For a discussion of how Obamacare’s insurance mandates dramatically increase the cost of insurance for younger workers, go here.
Jon is right that low-income individuals will be protected from these rate increases because of Obamacare’s subsidies, but if you’re not low-income, you face a double-whammy: higher taxes to pay for those subsidies, and higher indvidual-market insurance costs for yourself. A better approach would be to offer everyone access to low-cost consumer-driven health coverage.

UPDATE 2: A number of writers did call out California for the apples-to-oranges comparison last week, including David Freddoso, Philip Klein, and Lanhee Chen.
Lanhee, writing in Bloomberg View, does the useful exercise of showing that even for plans with the same generous benefit package that Obamacare requires, eHealthInsurance is significantly cheaper:

To put it simply: Covered California is trying to make consumers think they’re getting more for less when, in fact, they’re just getting the same while paying more.
Yet there are many plans on the individual market in California today that offer a structure and benefits that are almost identical to those that will be available on the state’s health insurance exchange next year. So, let’s make an actual apples-to-apples comparison for the hypothetical 25-year-old male living in San Francisco and making more than $46,000 a year. Today, he can buy a PPO plan from a major insurer with a $5,000 deductible, 30 percent coinsurance, a $10 co-pay for generic prescription drugs, and a $7,000 out-of-pocket maximum for $177 a month.
According to Covered California, a “Bronze” plan from the exchange with nearly the same benefits, including a slightly lower out-of-pocket maximum of $6,350, will cost him between $245 and $270 a month. That’s anywhere from 38 percent to 53 percent more than he’ll have to pay this year for comparable coverage! Sounds a lot different than the possible 29 percent “decrease” touted by Covered California in their faulty comparison.
While Covered California acknowledges that it’s tough to compare premiums pre- and post-Obamacare, at the very least, it could have made a legitimate comparison so consumers could fairly evaluate the impacts of Obamacare.

UPDATE 3: Yuval Levin at National Review further addresses Jonathan Cohn’s argument that people should be ok with these rate increases, because the Obamacare insurance plans are more financially generous:

Some people will receive subsidies to help cover that cost, some won’t, but whether it’s taxpayers or beneficiaries paying the premiums those premiums will be significantly higher than they are now.
The comparison offered in the California press release helps make it clear why that is: Obamacare’s new insurance rules. Those rules would certainly help some people—people with pre-existing conditions in the individual market will find it easier to buy coverage for instance—but they will also raise premium costs very significantly.
Obamacare’s defenders can certainly point to the former fact, but they cannot deny the latter one and insist the new California data show there will be no rate shock, as many tried to do over the past week.

http://www.forbes.co...iums-by-64-146/

The Myths of Single-Payer Health Care
By David Hogberg

A single-payer health care system is one in which a single-entity -- the government -- collects almost all of the revenue for and pays almost all of the bills for the health care system. In most single-payer systems only a small percentage of health care expenses are paid for with private funds. Countries that have a single-payer system include Australia, Canada, Sweden and the United Kingdom.

Single-payer is popular among the political left in the United States. Leftists have emitted tons of propaganda in favor of a single-payer system, much of which has fossilized into myth.

Here are some of the more prominent single-payer myths:


Myth No. 1: Everyone has access to health care a single-payer system.

Everyone in a single-payer system has health insurance, not necessarily health care.
While the government in a single-payer system will pay for everyone's health care, it limits the access to health care. In a single-payer system, citizens often believe that "the government" is paying for their health care. When people perceive that someone else is paying for something, they tend to over-use it. In a single-payer health care system, people over-use health care. This puts strain on government health care budgets, and to contain costs governments must ration care.
Governments in a single-payer system ration care using waiting lists for surgery and diagnostic procedures and by canceling surgeries. As the Canadian Supreme Court said upon ruling unconstitutional a Quebec law that banned private health care, "access to a waiting list is not access to health care."

Myth No. 2: Claims of rationing are exaggerated.

Jonathan Cohn, author of Sick, wrote that the "stories about [rationing in] Canada are wildly exaggerated." Yet advocates of single-payer never say what they mean by "exaggerated."
The fact is that people often suffering great pain and anxiety while they spend months on a waiting list for surgery. Others spend months waiting for a surgery, only to have it cancelled, after which they will spend even more time waiting for another surgery. Sometimes people even die while on the waiting list.
Media in foreign nations are full of stories about people suffer while on a waiting list. In Canada, Diane Gorsuch twice had heart surgery cancelled; she suffered a fatal heart attack before her third surgery. In Great Britain, Mavis Skeet had her cancer surgery cancelled four times before her cancer was determined to have become inoperable. In Australia, eight-year-old Kyle Inglis has lost 50 percent of his hearing while waiting nearly 11 months for an operation to remove a tumor in his ear. Kyle is one of over 1,000 children waiting over 600 days for ear, nose and throat surgery in Warnbro, a suburb in Western Australia.

These are not mere anecdotes. Much academic literature has examined the impact of waiting lists on health. A study in the Canadian Medical Association Journal found that 50 people died while on a wait list for cardiac catheterization in Ontario. A study of Swedish patients on a wait list for heart surgery found that the "risk of death increases significantly with waiting time." In a 2000 article in the journal Clinical Oncology, British researchers studying 29 lung cancer patients waiting for treatment further found that about 20 percent "of potentially curable patients became incurable on the waiting list."

Myth No. 3: A single-payer system would save money on administrative costs.

Single-payer advocates often claim that the U.S. private sector health care system is wasteful, spending far more on administrative costs than do government-run single-payer systems. According to single-payer advocates David Himmelstein and Steffie Woolhandler, "Streamlining administrative overhead to Canadian levels would save approximately $286.0 billion in 2003, $6,940 for each of the 41.2 million Americans who were uninsured as of 2001."
Yet comparisons of private sector administrative costs with those of government are misleading. Many government administrative expenses are excluded in such comparisons, such as what it costs employers and government to collect the taxes needed to fund the single-payer system, and the salaries of politicians and their staff members who set government health-care policy (the salary costs of executives and boards of directors who set company policy are included in private sector administrative costs).

But even if the U.S. would save money on administrative costs by switching to a single-payer system, the savings would prove temporary. The main cause of rising health care costs is not administrative costs, but over-use of health care. A single-payer system would not solve that problem. Indeed, it would make it worse.

Myth No. 4: Single-payer will provide fair and quality care for everyone.

Leftist Dave Zweifel claims that the U.S. "could make the system so much more fair by enacting a national single-payer health plan." Jonathan Cohn, when asked why he had faith that the government could run the health care system for all when it didn't do it very well for the poor, responded, "My answer is that they do it, and do it well, abroad."
Well, no they don't. According to Canada's Fraser Institute:

... a profusion of research reveals that cardiovascular surgery queues are routinely jumped by the famous and politically-connected, that suburban and rural residents confront barriers to access not encountered by their urban counterparts, and that low-income Canadians have less access to specialists, particularly cardiovascular ones, are less likely to utilize diagnostic imaging, and have lower cardiovascular and cancer survival rates than their higher-income neighbours.

It isn't much better in Great Britain. Take a look at the Saga 'Good Hospital Guide' for British hospitals. Compare the ones in Inner London, which tend to be in wealthier areas, to the ones in Outer London, which tend to be in poorer areas. You'll notice that in general, the ones in Inner London have more doctors and nurses per bed, shorter wait times for MRIs and hip replacements, and lower mortality ratios.

Myth No. 5: A single-payer system will leave medical decisions to a patients and his or her doctor.

According to Physicians for a National Health Program (PNHP), a group pushing for a single-payer system in the U.S.:

There is a myth that, with national health insurance, the government will be making the medical decisions. But in a publicly-financed, universal health care system medical decisions are left to the patient and doctor, as they should be. This is true even in the countries like the UK and Spain that have socialized medicine.

Yet PNHP seems to be talking out of both sides of its mouth. Here is how PNHP addresses the question of how to keep doctors from doing too many procedures in a single-payer system:

[Doing too many procedures] is a problem in systems that reimburse physicians on a fee-for-service basis. In today's health system, another problem is physicians doing too little for patients. So the real question is, "how do we discourage both overcare and undercare"? One approach is to compare physicians' use of tests and procedures to their peers with similar patients. A physician who is "off the curve" will stand out. Another way is to set spending targets for each specialty. This encourages doctors to be prudent stewards and to make sure their colleagues are as well, because any doctor doing unnecessary procedures will be taking money away from other physicians in the same specialty.

In practice what this will mean is medical decisions will be left up to you and your doctor as long as your doctor isn't doing too many (or too few) procedures and is within a spending target.

The truth is that single-payer systems often interfere with treatment decisions. For example, most single-payer systems have bureaucracies that delay the approval of new drugs, preventing patients from using them. Alice Mahon, a former member of the British parliament, needed the drug Lucentis to slow her macular degeneration. Because of delays due to the National Health Service not yet having approved Lucentis at the time of her diagnosis, Mahon lost much of the sight in her left eye.
In 1999, Canadian patient Daniel Smith, a cystic fibrosis sufferer, and his doctors agreed that he needed a lung transplant. But his surgery was cancelled by administrators because an open hospital bed could not be found.
So much for medical decisions being left to patients and their doctors.

Myth No. 6: Single-payer systems achieve better health outcomes.

Most single-payer advocates point to life expectancy and infant mortality as evidence that single-payer systems produce better health outcomes than the U.S. And, indeed, the U.S. has lower life expectancy and higher infant mortality than many nations with a single-payer system.
The problem is that life expectancy and infant mortality tell us very little about the quality of a health care system. Life expectancy is determined by a host of factors over which a health care system has little control, such as genetics, crime rate, gross domestic product per capita, diet, sanitation, and literacy rate.
The primary reason is that the U.S. has lower life expectancy is that we are ethnically a far more diverse nation than most other industrialized nations. Factors associated with different ethnic backgrounds -- culture, diet, etc. -- can have a substantial impact on life expectancy.
A good deal of the lower life expectancy rate in the U.S. is accounted for by the difference in life expectancy of African-Americans versus other populations in the United States. Life expectancy for African-Americans is about 72.3 years, while for whites it is about 77.7 years. What accounts for the difference? Numerous scholars have investigated this question. The most prevalent explanations are differences in income and personal risk factors. For example, one study found that about one-third of the difference between white and African-American life expectancies in the United States was accounted for by income; another third was accounted for by personal risk factors such as obesity, blood pressure, alcohol intake, diabetes, cholesterol concentration, and smoking and the final third was due to unexplained factors.
Infant mortality is also impacted by many of the same factors that affect life expectancy -- genetics, GDP per capita, diet, etc. -- all of which are factors beyond the control of a health care system. Another factor that makes U.S. infant mortality rates higher than other nations is that we have far more pregnant women living alone; in other nations pregnant women are more likely to be either be married or living with a partner. Pregnant women in such households are more likely to receive prenatal care than pregnant women living on their own.
Perhaps the biggest drawback of infant mortality is that it is measured too inconsistently across nations to be a useful measure. Under United Nations' guidelines, countries are supposed to count any infant showing any sign of life as a "live birth." While the United States follows that guideline, many other nations do not. For example, Switzerland does not count any infant born measuring less than 12 inches, while France and Belgium do not count any infant born prior to 26 weeks. In short, many other nations exclude many high-risk infants from their infant mortality statistics, making their infant mortality numbers look better than they really are.
In areas where a health care system does have an impact, such as treating disease, the U.S. outperforms single-payer systems. For example, the U.S. has a higher five-year survival rate for victims of heart attacks than Canada, due to the fact that we do more bypass surgeries and angioplasties in the U.S. Hospitals in the U.S. also commit fewer errors than hospitals in countries with single-payer systems like Australia, Canada, New Zealand, and the United Kingdom.

Myth No. 7: The U.S. systems also engages in rationing - 18,000 people die each year due to lack of insurance.

According to PNHP, "Rationing in U.S. health care is based on income: if you can afford care you get it, if you can't, you don't. A recent study by the prestigious Institute of Medicine found that 18,000 Americans die every year because they don't have health insurance."
The Institute of Medicine study purporting to show that 18,000 people die each year due to a lack of health insurance is actually a "meta-analysis," a study that summarizes the results of other studies. Yet many of the studies the Institute relied on have some rather odd results. One study in the New England Journal of Medicine found that women with private insurance were more likely to survive breast cancer than those uninsured. However, data in the study also showed that those who were uninsured had a higher survival rate than women covered by Medicaid. This suggests that factors other than health insurance, like education and income, were at play in determining breast cancer survival.

Furthermore, everyone in the U.S. can get care regardless of income. In 1986 the U.S. Congress passed the Emergency Medical Treatment and Active Labor Act. This requires emergency rooms to treat any person who shows up seeking medical treatment, regardless of their ability to pay.

Myth No. 8: A single-payer system will not hamper medical research.

The PNHP claims:

Medical research does not disappear under universal health care system. Many famous discoveries have been made in countries that have national health care systems. Laparoscopic gallbladder removal was pioneered in Canada. The CT scan was invented in England. The new treatment to cure juvenile diabetics by transplanting pancreatic cells was developed in Canada.

While it is true that medical research will not "disappear," it will surely decline. Consider what has happened to pharmaceutical research in single-payer systems, where the government imposes price controls on prescription drugs. A study (PDF) conducted by U.S. Commerce Department found that drug price controls in other nations reduced annual investment in pharmaceuticals by $5-8 billion, resulting in 3 to 4 fewer drugs being launched each year. The Boston Consulting Group found (PDF) an even bigger effect of price controls, showing a loss of $17-22 billion annually in pharmaceutical research resulting in the loss of 10 to 13 new drug launches.
In a free market, producers make a profit by providing services that consumers find useful. Profits also act as a signal to research - research dollars go toward services that make more profit. This is desirable because services that make more profit are the ones that consumers find most useful. Medical services that make profit -- i.e., the ones that patients find most useful -- will attract more research dollars.

In a single-payer system, government sets the prices for medical services. Since government is not good at setting prices, it inevitably over-pays for some services. Research dollars will go not necessarily toward the services that patients find most useful but toward the services that government over-pays since those will be the ones that will be most profitable.

Myth No. 9: Single-payer will save money because patients will seek care earlier (since they will no longer face financial barriers to health care) when it is easier and more affordable to treat diseases.

This assumes that patients will be able to get access to health care easily in a single-payer system. But as nations with single-payer have shown, even the most basic health care, like routine doctors visits, are rationed. According to a report by Statistics Canada:

• Despite the fact that most individuals had a regular family doctor, almost one in five individuals of those who required routine care experienced difficulties accessing care. The rates were significantly lower in Saskatchewan (12%), Alberta (13%) and British Columbia (12%), and significantly higher in Newfoundland and Labrador (20%) and Quebec (19%).
  
• The top two barriers to receiving routine or on-going care were difficulties getting an appointment, and long waits for an appointment.
  
• Overall, 16% of Canadians who had required health information or advice indicated that they had experienced difficulties accessing care. The rates were significantly lower in Saskatchewan (13%) and Alberta (13%), and significantly higher in Ontario (18%).

Seeking care earlier will make little difference if patients have trouble getting a routine appointment with a doctor.


Myth No. 10: The free market in health care has failed in the U.S.

What has failed in the U.S. is government micromanagement of the health care system. Over the past 40 years government's role in the health care system has continually expanded, from programs like Medicare, Medicaid and SCHIP, to regulations like HIPPA and COBRA. Like most government interventions, it has only made the problem worse.

The fact is we do not have a free market in health care in the U.S. Ask yourself: How many markets in the U.S. do you get a tax break for buying a product, but only if you buy it through your employer, as we do with health insurance? In how many markets are you prohibited from purchasing a product out of state, as we are with health insurance? In how many markets are employers prohibited from providing bonuses to employees for improving quality and productivity, as hospitals are prevented from doing with doctors? If government policy inhibited other markets that way, those markets would be dysfunctional too.

The solution to our health care problems is to reduce the role of government, not increase it by switching to a single-payer system.


http://www.freemarke...epayermyths.php

A rare peek into a Justice Department leak probe

J. David Ake/AP

When the Justice Department began investigating possible leaks of classified information about North Korea in 2009, investigators did more than obtain telephone records of a working journalist suspected of receiving the secret material.
They used security badge access records to track the reporter’s comings and goings from the State Department, according to a newly obtained court affidavit. They traced the timing of his calls with a State Department security adviser suspected of sharing the classified report. They obtained a search warrant for the reporter’s personal e-mails.

The case of Stephen Jin-Woo Kim, the government adviser, and James Rosen, the chief Washington correspondent for Fox News, bears striking similarities to a sweeping leaks investigation disclosed last week in which federal investigators obtained records over two months of more than 20 telephone lines assigned to the Associated Press.

At a time when President Obama’s administration is under renewed scrutiny for an unprecedented number of leak investigations, the Kim case provides a rare glimpse into the inner workings of one such probe.

Court documents in the Kim case reveal how deeply investigators explored the private communications of a working journalist — and raise the question of how often journalists have been investigated as closely as Rosen was in 2010. The case also raises new concerns among critics of government secrecy about the possible stifling effect of these investigations on a critical element of press freedom: the exchange of information between reporters and their sources.

“Search warrants like these have a severe chilling effect on the free flow of important information to the public,” said First Amendment lawyer Charles Tobin, who has represented the Associated Press, but not in the current case. “That’s a very dangerous road to go down.”
Obama last week defended the Justice Department’s handling of the investigation involving the AP, which is focused on who leaked information to the news organization about a foiled plot involving the al-Qaeda affiliate in Yemen. AP executives and First Amendment watchdogs have criticized the Justice Department in part for the broad scope of the phone records it secretly subpoenaed from AP offices in Washington, Hartford, Conn., and New York.

“The latest events show an expansion of this law enforcement technique,” said attorney Abbe Lowell, who is defending Kim on federal charges filed in 2010 that he disclosed national defense information. A trial is possible as soon as 2014. “Individual reporters or small time periods have turned into 20 [telephone] lines and months of records with no obvious attempt to be targeted or narrow.”

The president said press freedoms must be balanced against the protection of U.S. personnel overseas. According to the office of Ronald Machen Jr., the U.S. attorney for the District, its prosecutors followed federal regulations by first seeking the information through other means before subpoenaing media phone records. Machen’s office is investigating both the Kim and AP cases. The Justice Department said in a statement that in both cases it had abided by “all applicable laws, regulations, and longstanding Department of Justice policies intended to safeguard the First Amendment interests of the press in reporting the news and the public in receiving it.”

The Obama administration has pursued more such cases than all previous administrations combined, including one against a former CIA official charged with leaking U.S. intelligence on Iran and another against a former FBI contract linguist who pleaded guilty to leaking to a blogger.

The Kim case began in June 2009, when Rosen reported that U.S. intelligence officials were warning that North Korea was likely to respond to United Nations sanctions with more nuclear tests. The CIA had learned the information, Rosen wrote, from sources inside North Korea.


The story was published online the same day that a top-secret report was made available to a small circle within the intelligence community — including Kim, who at the time was a State Department arms expert with security clearance.
FBI investigators used the security-badge data, phone records and e-mail exchanges to build a case that Kim shared the report with Rosen soon after receiving it, court records show.

In the documents, FBI agent Reginald Reyes described in detail how Kim and Rosen moved in and out of the State Department headquarters at 2201 C St. NW a few hours before the story was published on June 11, 2009.

“Mr. Kim departed DoS at or around 12:02 p.m. followed shortly thereafter by the reporter at or around 12:03 p.m.,” Reyes wrote. Next, the agent said, “Mr. Kim returned to DoS at or around 12:26 p.m. followed shortly thereafter by the reporter at or around 12:30 p.m.”
The activity, Reyes wrote in an affidavit, suggested a “face-to-face” meeting between the two men. “Within a few hours after those nearly simultaneous exits and entries at DoS, the June 2009 article was published on the Internet,” he wrote.

The court documents don’t name Rosen, but his identity was confirmed by several officials, and he is the author of the article at the center of the investigation. Rosen and a spokeswoman for Fox News did not return phone and e-mail messages seeking comment.
Reyes wrote that there was evidence Rosen had broken the law, “at the very least, either as an aider, abettor and/or co-conspirator.” That fact distinguishes his case from the probe of the AP, in which the news organization is not the likely target.

Using italics for emphasis, Reyes explained how Rosen allegedly used a “covert communications plan” and quoted from an e-mail exchange between Rosen and Kim that seems to describe a secret system for passing along information.

In the exchange, Rosen used the alias “Leo” to address Kim and called himself “Alex,” an apparent reference to Alexander Butterfield, the man best known for running the secret recording system in the Nixon White House, according to the affidavit.

Rosen instructed Kim to send him coded signals on his Google account, according to a quote from his e-mail in the affidavit: “One asterisk means to contact them, or that previously suggested plans for communication are to proceed as agreed; two asterisks means the opposite.”

He also wrote, according to the affidavit: “What I am interested in, as you might expect, is breaking news ahead of my competitors” including “what intelligence is picking up.” And: “I’d love to see some internal State Department analyses.”

Court documents show abundant evidence gathered from Kim’s office computer and phone records, but investigators said they needed to go a step further to build their case, seizing two days’ worth of Rosen’s personal e-mails — and all of his e-mail exchanges with Kim.
Privacy protections limit searching or seizing a reporter’s work, but not when there is evidence that the journalist broke the law against unauthorized leaks. A federal judge signed off on the search warrant — agreeing that there was probable cause that Rosen was a co-conspirator.

Machen’s office said in a statement that it is limited in commenting on an open case, but that the government “exhausted all reasonable non-media alternatives for collecting the evidence” before seeking a search warrant.

However, it remains an open question whether it’s ever illegal, given the First Amendment’s protection of press freedom, for a reporter to solicit information. No reporter, including Rosen, has been prosecuted for doing so.

In the hours before Rosen’s story was published, Kim was one of more than 95 people who saw the intelligence report through a classified database, according to court documents.

Kim’s phone records showed that seven calls lasting from 18 seconds to more than 11 minutes were placed between Kim’s desk telephone and Rosen’s cellphone and desk phone at the State Department, according to the court documents. Investigators pulled at least two months of phone records from Kim’s desk and found 36 calls with numbers associated with Rosen.

Investigators also scrutinized computer records and found that someone who had logged in with Kim’s user profile viewed the classified report “at or around” the same time two calls were placed from his desk phone to Rosen, according to the documents.
Two months later on an August evening, diplomatic security secretly entered Kim’s office and found a copy of Rosen’s article next to his computer. Kim, who worked in a secure facility, was subject to daily office inspections. The Fox News article was also in “plain view” during follow-up visits in late September.

Kim initially told the FBI in an interview that month that he had met the reporter in March but had not had contact since. Later, Kim admitted to additional contacts, according to the affidavit.

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