Consumers Can Now Check Medical Prices

NASHVILLE, Tenn. -- Americans can't control the economy, but they can do a much better job of educating themselves about what they should pay for healthcare. Healthcarebluebook.com, the first national effort to provide free pricing data to consumers launches today, and is designed to give people the information they need to pay fair prices for healthcare.

Americans do price/value comparisons for their homes, cars, vacations and the majority of goods and services they buy. "Why not healthcare?" asks Dr. Jeff Rice, Healthcarebluebook.com founder.

HT: Ben Cunningham

Entrepreneurs Can Solve Health Care Problems

From Devon Herrick's (National Center for Policy Analysis) study "Health Care Entrepreneurs: The Changing Nature of Providers:"

The market for medical care does not work like other markets. Providers typically do not disclose prices prior to treatment because they do not compete for patients based on price. Payments are usually not made by patients themselves but by third parties — employers, insurance companies or government (only 12% of medical costs are paid directly by patients, see chart above). And the amounts paid are not really market-clearing prices; they are "reimbursement" rates negotiated with bureaucratic institutions and networks. Furthermore, when providers do not compete on price, they usually do not compete on quality either. In fact, in a very real sense, doctors and hospitals are not competing for patients at all — at least not in the way normal businesses compete in markets.

The lack of competition results in a highly artificial market plagued by problems of high costs, inconsistent quality and poor access, according to Devon Herrick at the National Center for Policy Analysis in his study "Health Care Entrepreneurs: The Changing Nature of Providers."

But in health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. Examples include:

Cosmetic surgery: Since it is rarely covered by insurance, patients pay out of pocket and are thus sensitive to prices; they can typically compare prices prior to surgery and pay a price that has been falling over time in real terms (see chart below).


Laser eye surgery: Competition is holding prices in check and improving quality in vision correction surgery, including accurate correction, faster healing, fewer side effects and an
expanded range of conditions that can be treated.

Price competition for drugs: Wal-Mart became the first national retailer to aggressively compete for buyers of generic drugs by charging a low, uniform price ($10 for a 90-day supply). Other chain stores have responded with their own pricing strategies.

Walk-in clinics in shopping malls and drug stores compete by offering low money costs and low time costs, and electronic prescribing improves quality using error-reducing software.

Telephone-based practices: TelaDoc, provides telephone consultations to 2 million customers. It allows patients access to a doctor any time of day from any location and also
uses electronic prescribing to reduce errors.

Medical tourism provides cash-paying patients health care outside of the United States in high-quality facilities that rival domestic facilities. Patients can save 30 to 50 percent by going abroad.

Bottom Line: In health care markets where third-party payers do not pay the bills, the behavior of providers and patients is radically different. In these markets, entrepreneurs compete for patients’ business by offering greater convenience, lower prices and innovative services unavailable in traditional clinical settings. What lesson can we learn from these examples of entrepreneurship in health care? The most important is that entrepreneurs can solve many of the health care problems that critics condemn. Public policy should encourage, not discourage, these efforts.

Banks Don't Need To Be Forced to Lend

Banks are in the lending business: They do not need to be forced to lend. And contrary to popular and political opinion, banks have not stopped lending. Despite the recent financial market turmoil, a declining GDP, and an increase in loan-loss reserves, commercial bank lending actually grew $336 billion, or 4.9%, from August to Dec. 24, according to Federal Reserve data (see chart above). While lending dictates or other restrictions may be tempting, the Obama administration must discourage Congress from imposing them on recipients of TARP investments.

~Bert Ely in today's WSJ: "Banks Don't Need to Be Forced to Lend"

The Credit Crunch That Isn't

The media and the political interventionists have insisted that a huge credit crunch is going on that "proves" the failure of financial capitalism and the free market in general. What is a work is another political "fast one" to rationalize and justify the growth of the interventionist-welfare state.

The Federal Reserve's own data shows this to be another big government lie. Throughout 2008 bank loans have been increasing compared to a year earlier, both in absolute dollar terms and as a percentage increase over a year ago (see chart above, data here).

In addition, the Fed's survey of bank lending practices found that in October (the last month for which the data is available), only 25% of loan officers said they had "tightened considerably" on extending such loans, while 28% said their practices had not changed at all. About 47% said they had "tightened somewhat."

What is at work is the creation of a new version of the "myth of the failure of capitalism" to serve as the justification for why the straightjacket of even more government controls and regulations must be extended over what remains of the market economy.

~Richard Ebeling

MP: The chart above shows the volume of business loans, real estate loans and consumer loan volume, based on an index that is equal to 100 in January of 2004 for each series (data here).

Spending on "Infrastructure"

Washington Post: The package Congress is compiling is expected to include fresh investments in infrastructure.

Bloomberg: Obama is working on a package combining tax cuts and spending on infrastructure, such as roads, bridges and transit systems, to boost growth.

Thomas Sowell: Take the idea that much of this money will be spent on "infrastructure." This certainly sounds good-- until you stop and think about it. So do most political notions.
Does spending on infrastructure mean that the money is going to be spent filling potholes and repairing bridges? Or will it be spent creating new things?

One of the key reasons why infrastructure gets neglected in the first place, is that there is very little political pay-off to filling potholes and repairing bridges, compared to spending that same money creating community centers, bike paths and other things. These new things create opportunities for ribbon-cutting ceremonies that give politicians favorable free publicity in the media. But nobody holds ribbon-cutting ceremonies for filling in potholes or repairing bridges.

The whole process is biased toward doing new things, even if the repair and maintenance of existing infrastructure would serve the public interest better. But, even in the unlikely event that the public interest triumphs over special interests, there is another very important difference between repair and maintenance activities, on the one hand, versus building new things on the other.

New things require long delays before they can get started, especially when they have to be done by politicians. Someone once said that Congress would take 30 days to make instant coffee-- and Congress is just the beginning of the delays, as all sorts of competing interests jockey for position at the public trough. Just putting together an environmental impact report for something new to be built can be a long process, especially if its findings are challenged by environmental extremists, who pay very little price for challenging, even if the delays caused by their challenges cost others millions of dollars.

In short, it can be years before the money that is supposed to stimulate the economy actually gets into the economy. And nobody knows what the economy will be like when that money finally gets into circulation. A common problem with government economic policies in general is that it is very hard to predict how long it will be before the policy actually affects the economy. An economic stimulus policy created during a contraction in demand can take effect during an inflationary expansion of demand-- and fuel still more inflation.

Should Govt. Reduce Life-Expectancy Inequality?

In 2005, life expectancy at birth was 7% higher for American women (80.4 yrs.) than for American men (75.2 yrs.). Governments could certainly reduce this life-expectancy inequality by redistributing medical research funding on women's health to research on men's health, and general medical care funding from women to men. Consider that men are more likely to die from prostate cancer than women are from breast cancer. Yet in 2005 federal expenditures for prostate cancer research were $390 million compared to $698 million for breast cancer research (see chart above), and the American Cancer Society contributed almost three times as much for breast cancer research ($98 million) as for prostate cancer research ($36 million).

I find that people generally agree with, and rarely strongly oppose, forcible government transfers of income from the rich to the poor to reduce income inequality. But when I suggest that the government transfer medical expenditures from women to men to reduce life-expectancy inequality, I get a very different reaction. Often, the listener will simply give me a strange look and quickly depart. Those who do respond verbally, however, typically say that I couldn't possibly be serious because my idea is outrageously silly. I agree. It is silly. But I am completely serious in suggesting it.

When we seriously consider an attempt to use government power to reduce the gender inequality in life expectancy, the problems that we have always faced when government uses its power to reduce income inequality suddenly become crystal clear. Government transfers to reduce the gender gap in life expectancy would do little more than reduce improvements in both women's and men's life expectancies. For similar reasons, government transfers have done little more than reduce the income growth of both the rich and the poor. So government attempts to reduce life-expectancy inequality by transferring medical expenditures would be silly, but no sillier than its attempts to reduce income inequality by transferring money.

There are several reasons why redistributing medical expenditures to reduce gender inequality in life expectancies would not work. And there are parallel reasons for the failure of redistributing money to reduce income inequality.

Read more here of economist Dwight Lee's article "Should Government Reduce Inequality in Life Spans?"

Extinction Timeline

Timeline to 2050 of what will disappear from our lives, including video rental stores, fax machines, letter writing, physical newspapers, coins, keys, trade unions, ties, telephone directories, national currencies, desktop computers, and blogging (but not until 2025).

UAW-Ford Master Contracts: 2007 vs. 1941

Ever wondered what a modern UAW contract looks like? Pictured below is all 22 pounds of Ford’s 2,215 page 2007 master contract with the UAW.

What a difference sixty years makes. Pictured below is the 1941 Ford-UAW contract, which easily fits in the palm of your hand.

It measures about 3.5 inches by 5 inches, and is shown below with a 5-inch pen and 2-inch paper clip.

Here's a side shot to show its thickness - only 24 pages long.

Do You Speak 2009? Have You Read a Wovel Yet?

Check out the 2009 Buzzword Glossary including words and phrases like junior moment, BlackBerry prayer, staycation, upcycling, instapreneur and negawatts.

Thanks to Ben Cunningham.

Related: In 2009, we also have the "wovel," short for "web novel." There's an installment every Monday. At the end of every installment, there's a binary plot branch point with a vote button at the end.

99.65% of Commercial Banks Survived 2008

According to FDIC data, 25 commercial banks failed in 2008, out of 7,146 banks in the U.S. The failed banks represent about 1/3 of 1% of all banks, meaning that 99.65% of banks survived the 2008 recession. The chart above displays annual bank failures back to 1970 (data here), showing the S&L crisis (shaded) when almost 3,000 U.S. banks failed.

Before we make comparisons to the Great Depression, we might want to first compare today's financial troubles to the S&L crisis of the 1980s and 1990s, when almost 3,000 banks failed.

Top 10 Reasons Life Is Getting Better All The Time

Be prepared to see a lot of doom and gloom this week. Those year-end video and photo montages, year-in-review summaries, and "a look back" reflections are inevitably gloomy even in boom times. That's likely to be especially true in 2008, a year that, admittedly, wasn't particularly filled with hope.

The last 12 months may prove not to be the most fondly recalled in recent American history, but things aren't all that bad. Most social indicators are still moving in the right direction. In general, our standard of living continues to improve. Advances in technology are helping us beat the diseases most likely to kill us; giving us more leisure time; making us more comfortable; giving us more convenience; and with the Internet, putting much of the world—quite literally—at our fingertips.

So here's the good news:

1. Crime rates are falling.

2. Sex crimes are down.

3. The divorce rate is at its lowest point in four decades.

4. Life expectancy is up.

5. Mortality rates for eight of the 10 leading causes of death in America are dropping. Deaths from the two biggest killers—cancer and heart disease—have been in decline for a decade. Deaths from the third leading cause of death, stroke, are also down.

6. For six years, both incidence of and deaths from cancer have been in decline.

7. Since 1991, fewer teens are having sex, fewer are having sex with multiple partners, and more are using condoms when they do engage in intercourse.

8. The abortion rate is also at its lowest point in 30 years.

9. Juvenile violent crime is still 40% lower than it was in 1994. The juvenile murder rate is a whopping 73% below its high in 1993.

10. We have more leisure time. Americans work on average eight fewer hours per week than we did in the 1960s.

Source: Randy Balko at Reason Magazine

Quote of the Day: As Likely As Anthrax on Cheerios

Beginning this week, US representatives and senators will be paid $174,000 a year. That represents an increase of $4,700 and the 10th time since 1998 that congressional pay has been given a boost.

As has become routine, this salary hike is taking place automatically - there were no hearings, no vote, no debate. No members of Congress stepped before the microphones to explain why their performance over the past year entitles them to a fatter paycheck. Or to make the case for helping themselves to more money at a time when so many Americans are out of work, the economy is in recession, and financial distress is spreading.

Hard as it may be to believe, there was a time when members of Congress didn't make it an annual priority to pad their pay envelopes. In 1932, during the Great Depression, the House and Senate even cut their pay by 10%, then cut it by another 5.5% in 1933. Today's lawmakers, save for a handful of honorable exceptions, are about as likely to follow that precedent as they are to sprinkle anthrax on their Cheerios.

~Jeff Jacoby

Google Custom Search Added to Carpe Diem

In response to several requests and inquiries about improving the search function of CD, I have added a "Google Custom Search" feature that allows comprehensive searches of Carpe Diem. You'll find it on the right hand side of the blog, scroll down and you'll see it right below the SiteMeter. I might try putting it up higher on the screen later, but for now it's available in its current location.

Nice Non-Work, If You Can Get It; Union Bosses Get +$100,000 Per Year for Beer, Bowling and Haircuts

WDIV-TV News 4 in Detroit did an expose of two union bosses who routinely rip off the UAW and Ford Motor Co. with fake time cards that allow them to get paid for not working, including unworked overtime hours (see Part 1 here and Part 2 here).

One of the bosses, Ron Seroka, a union job security officer, takes off half a day nearly everyday to go home to lounge around the house while he is on the clock. Seroka punches in at the plant at 6 a.m. every single day and is home by 11:30 a.m. for some nice leisure time at home. Yet he gets a steady 10 hours pay every single day despite the fact that he is rarely at work.

Seroka’s union boss is even worse. Union chairman Jim Modzelewski buys beer on a daily basis while on the clock and clocks himself in for overtime pay hours before he even wakes up to go into the plant. TV 4 found that after he punches in, he typically leaves for a beer run mere hours later. Again, all this is on a daily basis. He is also paid overtime pay on a daily basis as he sits home drinking his daily beer. With over 2,500 hours of overtime, Modzelewski made a six-figure salary last year. TV 4 also discovered that Modzelewski even played in a bowling tournament while on the clock — at overtime pay, too!

Together, just these two union chiefs clocked in over 3,500 hours of overtime pay for the year. Makes one wonder how many union bosses are abusing their positions this way, doesn’t it?

Link.

As Michelle Malkin asks: "At least the groveling Big Three CEOs gave up their corporate jets. Where's the public flogging for the greed-infested UAW fat cats reaching into our pockets to keep them afloat?"

First, By Golly, Sarah Palin; Now, You Know, Caroline Kennedy, You Know

Is it really possible to say "you know" 30 times in 2 minutes? Find out here:

Killing a Toyota

The Top Gear team attempts to destroy a Toyota pick up truck. Are they successful? Find out in these amazing videos from the BBC Worldwide.

Killing a Toyota, Part 1, click here

Killing a Toyota, Part 2 below, click arrow:



HT: Sanil Kori

Markets In Everything: One Joke for Sale

On Ebay, current bid is $365.

HT: Ben Cunningham

Google's Advanced Search

To clarify some discussion in the comments section of a previous post, you can go to Google's Advanced Search here, and use the "Search within a site or domain" option to conduct a comprehensive Google search of Carpe Diem or any other blog or website. It has been my experience that Blogger's "Search Blog" function (top left corner of the blog) will only return the most recent 20 postings with a keyword. The Google Advanced search (available on the right side of the Google home page) will do a comprehensive search of all posts with a keyword.

No Bailout Necessary, Just Reduce Punitive Tariffs to Save and Create More U.S. Jobs

Tariffs are usually used to protect domestic industries from more efficient foreign competitors. But domestic firms also buy inputs, raw materials, supplies, parts and inventory FROM foreign producers, and in fact more than half of U.S. imports are industrial supplies and parts, and NOT finished consumer goods. In that case, tariffs are a tax on the inputs of domestic businesses and can put them at a significant competitive disadvantage.

Case in point: There is a punitive tariff of up to 17.2% on an imported specific micro-denier suede fabric used extensively by Mississippi furniture manufacturers Lane, Bauhaus, and H.M. Richards. This tariff is about to be removed, saving each of these three firms more than $1 million annually, and saving close to 1,000 jobs in NE Mississippi.

Read about it here, here and here.

HT: Taxing Tennessee

Mortgage Rates Fall to Record Low Level

30-year fixed rate mortgages closed out the year at 5.14% (data here, see graph above), the lowest rate on record (data back to 1964 here). Falling mortgage rates and falling home prices will be important factors in the real estate market's recovery in 2009.

Top Earners Are the Vital, Economic Activists

It’s not Obama’s middle-class tax cut that’s going to get us out of this economic jam. At best his vision is incomplete. But at worst his aversion to successful earners and investors is a real obstacle to full economic recovery.

Social historian and early supply-side activist Irving Kristol taught us three decades ago that the top earners are the economic activists. They’re the ones with the highest propensity to consume and invest. They’re the ones who buy the yachts, which are built by blue-collar workers. And they’re the ones who run the small businesses and provide the capital for the new entrepreneurial start-ups that are the lifeblood of the economy. It is they who energize free-market capitalism.

If we had an economy without rich people we wouldn’t have much of an economy. That’s why lower tax rates to reward the economic activists — the most prominent capitalists — are so essential.

~Larry Kudlow

MP: The economic activists who energize the economy also pay most of our income taxes: the top 1% pay about 40% of all income taxes paid, the top 10% pay about 71%, and the top 25% pay more than 86% (2006 data here).