Testimony Before the House Committee on Health Care in Support of HB 2128

To: Chairman Greenlick and members of the House Committee on Health Care

From: Steve Buckstein, Senior Policy Analyst and Founder, Cascade Policy Institute, a non-profit, non-partisan public policy research organization based in Portland

HB 2128 is a common-sense response to Oregon’s overreach when it became the first state to require a prescription for drugs containing pseudoephedrine in 2006. Only Mississippi has followed our lead.

While our prescription-only law was meant to reduce the incidence of meth labs in the state, federal government data show that by the time our law went into effect, we had already seen an 89 percent drop in the previous two years. Why? Because Oregon adopted its earlier behind-the-counter law for pseudoephedrine drugs in 2004.

As federal data in Figure 1 of Cascade Policy Institute’s 2012 study show, Oregon reported 467 meth lab incidents in 2004, and just 50 by 2006. By 2010 we reported 12 meth lab incidents. So, the overwhelming drop came before our prescription-only law even went into effect. As shown in Figure 1, our two neighboring states of Washington and California showed similar declines over the same period; and they only put these drugs behind the counter, as all states were required to do by federal law starting in 2006.

While I don’t have access to the meth lab incident data from more current years, we do know that according to recent reports from the U.S. Customs and Border Patrol, 99.8 percent of meth seized in the United States in 2015 was produced in Mexico.

Let’s be clear: Neither putting pseudoephedrine drugs behind the counter nor making them prescription-only did anything to reduce meth use and abuse.

Requiring prescriptions simply inconveniences Oregonians who want to treat minor cold or seasonal allergy symptoms, something consumers in 48 other states don’t have to bother with.

Oregonians have to make an appointment, take time off work to visit their doctor, ask for a prescription, and then go to the pharmacy to buy a product they previously could purchase by just asking their pharmacist.

A 2014 study found that this prescription requirement increased consumer prices for these drugs by 35 percent.

Making pseudoephedrine Rx-only is also likely to result in some patients relying on less effective treatments or avoiding treatment altogether due to additional cost and hassle. This could result in more lost work time for individuals and lost productivity for employers.

It’s time to recognize that we solved most of the meth lab problem by placing these drugs behind the counter in 2004. We didn’t need to overreach with our prescription-only law in 2006.

It’s time to repeal the prescription-only restriction and let honest consumers buy the cold and allergy medicines they prefer, just like people in 48 other states.

Thank you.

Click here for Figure 1 of Cascade Policy Institute’s 2012 study

Testimony Before the House Committee on Revenue in Opposition to Tobacco and Inhalant Nicotine Tax Bills

To: Chair Barnhart and members of the House Committee on Revenue

From: Steve Buckstein, Senior Policy Analyst and Founder of Cascade Policy Institute, a Portland-based non-partisan, non-profit public policy research organization

Re: Tobacco taxes and inhalant nicotine taxes proposed in
HB 2037, HB 2056, HB 2062, HB 2084, HB 2119, HB 2662, and HB 3178

Why the state should not depend on increased sin taxes

  • Oregon’s addiction to tobacco/nicotine revenues will only grow if we become more dependent on them to fund new or existing programs.
  • Taxes on alcohol and tobacco are frequently justified as a means of discouraging “unhealthy” behavior. But this objective quickly gives way to a different one: raising revenue. This creates a “moral hazard” problem: sin taxes cannot simultaneously both discourage consumption and raise more revenue. For one to succeed, the other must fail.
  • As cigarette smoking continues to decline, tobacco taxes will continue to shrink, punching one more hole in future state budgets.

The regressivity of Sin Taxes

Paying for any state programs by taxing smokers may make some program recipients better off, but it will also make smokers and their families worse off.  As you may know:

  • Cigarette smoking adults are more likely to be uninsured than non-smoking adults.
  • Cigarette smokers are in poorer physical condition than non-smokers.
  • Cigarette smokers generally have lower incomes and less formal education than non-smokers.
  • Cigarette smokers are more likely to be unemployed or unemployable than non-smokers.

Policy option:

Currently, less than eight percent of Oregon tobacco taxes are used for the Tobacco Use Reduction Program. Funding other state programs through cigarette, tobacco and/or nicotine taxes is very regressive, targeting less educated, lower income and sicker Oregonians. If anything, these taxes should be reduced, not increased.

Oregon Leaders Must Reject ACA’s Medicaid Expansion

By Eric Fruits, Ph.D.

Despite an eight percent increase in general fund revenues, Governor Kate Brown and some lawmakers say the State of Oregon is facing a $1.7 billion budget shortfall in the 2017-19 biennium. In her inaugural address, the governor blames more than $1 billion of the shortfall on the state’s choice to expand Medicaid and other taxpayer-funded insurance. The Census Bureau estimates that about one in four Oregonians are in the state’s Medicaid program.

In addition to the expansion provided by the Affordable Care Act, the governor seeks new state money to expand single-payer public insurance to those who are not “lawfully present” in the United States, under a program called Cover All Kids.

Although the federal government pays a large portion of the costs of Medicaid expansion, the state’s share of the costs is growing under the ACA. The huge costs of Medicaid mean even a small increase in Oregon’s share has big impacts on the state’s budget. State Senator Elizabeth Steiner Hayward, incoming co-chair of the Ways and Means Committee for Human Services indicates that about one-third of the deficit at the Oregon Health Authority comes from what she called a “minuscule” reduction in the federal match. This deficit is certain to grow as federal support for expansion shrinks over time, as outlined in the ACA.

The state has massively underestimated the costs of Medicaid expansion in Oregon. A 2013 report prepared for the state estimated that the Medicaid expansion would cost Oregon’s general fund $217 million in the upcoming 2017-19 biennium. Janelle Evans, budget director for the Oregon Health Authority, now estimates a cost to the state’s general fund of at least $353 million. For the federal government, the cost of Oregon’s Medicaid expansion will cost more than $3.5 billion over the next two years.

Oregon simply cannot afford the ACA’s Medicaid expansion and Governor Brown’s expensive new entitlement. Nationally, expansion costs and enrollment have grown much faster than projected. Previous expansions of the Medicaid program have resulted in crowding out, the process by which taxpayer funded Medicaid replaces private health insurance. These earlier expansions have seen crowd-out rates ranging from 15 percent to 50 percent, depending on the type of expansion. Not only does the expansion crowd out private insurance, government spending on the expansion crowds out funding for other state and national priorities, such as education, infrastructure, and defense.

In Congress, repeal of much of the ACA is imminent. Oregon Congressman Greg Walden, incoming chairman of the House Energy and Commerce Committee, is working on a timeline for repealing major provisions of the health care law, including the expansion of Medicaid. In the absence of repeal, Congress should consider an enrollment freeze approach. A freeze would halt new enrollment while allowing current enrollees to stay in the program until their incomes climb above eligibility limits. It would be an intermediate step towards repeal with immediate benefits for taxpayers and current enrollees.

However repeal of the ACA rolls out, Oregon’s congressional delegation should be at the forefront of ending the Medicaid expansion as soon as possible. While Congress works through the details, Oregon can take steps in the upcoming legislative session to protect the state’s fragile finances. One first step would be to opt out of the ACA’s Medicaid expansion and reject Governor Brown’s proposal to expand coverage even further. As noted in the governor’s inaugural address, the state’s choice to expand Medicaid is the single largest source of the impending budget deficit. Rejecting the health care law’s expansion is the clearest path to fiscal solvency and financial responsibility.


Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor of economics at Portland State University, an Academic Advisor to Cascade Policy Institute, and author of Cascade’s report, The Oregon Health Plan: A “Bold Experiment” That FailedThis article originally appeared in The Oregonian on January 27, 2017.

What Would Jefferson Advise Today’s Supreme Court About the Little Sisters of the Poor?

In 1804 an Ursuline nun in New Orleans asked Thomas Jefferson to clarify in writing her religious community’s right to retain their property and to continue their ministries without government interference following the Louisiana Purchase. As French Catholic Louisiana was being incorporated into the Anglo-Protestant United States, the nuns were concerned about the status of their institutions under U.S. law. President Jefferson assured her that the government would not interfere with the sisters’ property, ministries, and way of life. In a letter dated May 15, 1804, he wrote:

“I have received, holy sisters, the letter you have written me wherein you express anxiety for the property vested in your institution….The principles of the constitution and government of the United States are a guarantee to you that it will be preserved to you, sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority.”

Jefferson confidently promised that the American Constitution would protect the nuns and that the government would leave them alone. So why don’t Catholic sisters today even qualify for a religious exemption from ObamaCare’s insurance mandate that requires contraception and abortion coverage? It may seem unbelievable, but according to the Obama Administration’s definition of “religious employer,” sisters are not included.

On March 23 the U.S. Supreme Court will hear oral arguments on behalf the Little Sisters of the Poor (and other religious clients of the Becket Fund for Religious Liberty) in a historic religious freedom case. The Little Sisters are a nearly 200-year-old religious community dedicated to caring for the elderly poor. They run 30 homes in the U.S. (four in the West) and care for nearly 13,000 people in 31 countries.

During implementation of the Patient Protection and Affordable Care Act (ObamaCare), the Department of Health and Human Services (HHS) directed most employers to include coverage of contraceptives and abortion-inducing drugs in their employee health insurance policies, or else pay a fine of $100 per employee, per day. The Sisters subsequently filed suit against the federal government, saying “they cannot, according to their faith, include contraceptives in their employee health plan.”

The Becket Fund, which represents the Sisters and other religious clients in their lawsuit, explains:

“The Court’s decision will finally resolve the crucial question of whether governmental agencies can, wholly without legislative oversight, needlessly force religious ministries to violate their faith….The [HHS] mandate forces the Little Sisters to authorize the government to use the Sisters’ employee healthcare plan to provide contraceptives and abortion-inducing drugs—a violation of their faith—or pay massive fines, which would threaten their religious mission.”

The “HHS Mandate” has a narrow conscience exemption that applies only to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. The exemption does not include religiously affiliated or faith-based institutions which serve all people without discrimination (like hospitals, colleges, schools, and social service agencies). And it doesn’t apply to communities of nuns.

“The Little Sisters should not have to fight their own government to get an exemption it has already given to thousands of other employers, including Exxon, Pepsi Cola Bottling Company, and Boeing,” said Becket Fund Senior Counsel Mark Rienzi. “Nor should the government be allowed to say that the Sisters aren’t ‘religious enough’ to merit the exemption that churches and other religious ministries have received….It is ridiculous for the federal government to claim, in this day and age, that it can’t figure out how to distribute contraceptives without involving nuns and their health plans.”

Thomas Jefferson explained to the Ursuline nuns of 19th-century Louisiana that American law would protect them and their institutions, regardless of the differences among American citizens:

“Whatever the diversity of shade may appear in the religious opinions of our fellow citizens, the charitable objects of your institution cannot be indifferent to any; and its furtherance of the wholesome purposes of society, by training up its younger members in the way they should go, cannot fail to ensure it the patronage of the government it is under. Be assured it will meet all the protection which my office can give it.”

We can only imagine what Jefferson might think of American women having to sue the Obama Administration to defend their First Amendment rights. But can we doubt he would be dismayed by how intrusive and coercive the federal government has become since the day he wrote so cordially to a group of French nuns about the safeguards of the American Constitution?

 

Press Release – Statement on the Supreme Court’s King v. Burwell Decision

June 25, 2015

FOR IMMEDIATE RELEASE

Media Contact:

Steve Buckstein

503-242-0900

steven@cascadepolicy.org

Cascade Policy Institute Statement on Today’s Supreme Court King v. Burwell Decision: More Oregonians will lose rather than win

PORTLAND, Ore. – The U.S. Supreme Court decision today in the King v. Burwell case is a sad reminder that the President of the United States and his Administration can arbitrarily interpret laws passed by Congress to suit their own purposes.

In this case, the Affordable Care Act clearly states multiple times in its text that federal subsidies to offset insurance premiums can only be granted to individuals purchasing policies through an exchange “established by the state.” When most states failed to establish such exchanges, the IRS arbitrarily decided to grant subsidies to individuals who purchased insurance through the federal exchange, healthcare.gov, as well. By a six to three vote, the Court told us that the President and his Administration need not follow the language of the law because in the Court’s opinion that could cause harm to the intent of the law which was to make insurance more affordable.

How this decision will affect Oregon is fairly clear. Oregon originally set up its own state-established exchange, Cover Oregon. But when that $305 million project failed to sign up one person for insurance on its flawed website, the Cover Oregon board voted to scrap the exchange and migrate Oregonians over to the federal exchange, healthcare.gov. Board members didn’t seem to care how this decision might impact subsidies for Oregonians, and after the fact said they were relying on federal assurances that they considered this arrangement a “supported state based marketplace”—meaning that it would still qualify for subsidies even if the Court were to rule opposite of how it ruled today.

What is clear now is that today’s decision could actually harm more Americans, and more Oregonians, than it helps. According to a March 3rd press release by Michael Cannon of the Cato Institute and Cascade Policy Institute’s Steve Buckstein, “If subsides are denied under a King ruling, Oregon will join the majority of states in reaping benefits.” Now that the King ruling has found for the government, the Cato Institute believes that “approximately 157,000 [Oregon] individuals likely will continue to be subject to the law’s individual mandate requirement,” and 890,000 working Oregonians “also will continue to be subject to the employer mandates that are putting downward pressure on our economy.” These negative results stem from the ACA’s provisions that as long as subsidies make insurance somehow “affordable,” then the act’s mandates to purchase it remain in place.

Cascade Senior Policy Analyst Steve Buckstein says, “Today’s Court decision does not end the discussion about who should control your health care and who should decide what, if any, insurance you must purchase at what price; but it does push that discussion farther into the future. It unfortunately postpones our ability to move toward a more individual, patient-centered health care and health insurance world. Oregonians who watched their state government bungle an expansive insurance exchange project using other people’s money should be a big part of this discussion.”

Shouldn’t the Terminally Ill Have the “Right to Try” to Save Their Lives?

By Matthew Hayes

Last Friday, Michigan approved Right to Try legislation with overwhelming bipartisan support. Colorado, Missouri, and Louisiana all passed similar measures this year, with Arizonans voting on the issue this November. What is Right to Try and why is it gaining steam?

Spearheaded by the Goldwater Institute, an Arizona-based public policy organization, Right to Try legislation allows terminally ill patients access to drugs, biotics, and implants that have completed basic FDA safety testing but are still awaiting further approval.

The FDA offers a similar program, known as Compassionate Use. Unfortunately, the process isn’t easy. Physicians typically face 100 hours of paperwork and research per applicant. The entire process can take several months, a luxury many terminally ill patients don’t have.

These costs are seen in the usage statistics. In 2011, fewer than 1200 patients received expanded access, while more than 1500 people died of cancer each day. Right to Try legislation removes many of these barriers, making the process easier and faster for patients. While it can’t be known how many lives these save, the number is undoubtedly greater than zero.

Since 1997, the Death with Dignity Act gives terminally ill Oregonians the right to end their lives. Bringing Right to Try to Oregon offers these citizens the chance to do more than just hasten death; it offers a chance to beat their illness.

If you have the right to die, shouldn’t you have the right to fight to live?

Matthew Hayes is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

No Death Panels Here―Yet

ObamaCare mastermind Dr. Ezekiel Emanuel recently published an Atlantic magazine essay explaining why he hopes to die at age 75, which for him is eighteen years away.

He won’t kill himself, but plans to refuse any medical treatment other than palliative care for pain or disability. He says that like death, “…living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived.”

Psychotherapist Michael Hurd explains that Emanuel takes his position from “the oldest, most primitive creed of ethics in human history: Self-sacrifice….Like all self-conscious advocates of selflessness, he seems proud of his willingness to hurt his family by proclaiming his wish to die. ‘Hey, look at me. I’m so selfless I don’t even wish to live. It hurts my family, but that shows how willing I am to be sacrificial.’”

Hurd notes, “This is what passes as the standard of sophisticated, high-end, state-of-the-art ethics, at least among the sophisticates and elite whom we have given permission to run our lives.”

Of course, Emanuel leaves himself an out: “I retain the right to change my mind and offer a vigorous and reasoned defense of living as long as possible.”

So there you have it: Emanuel’s 57-year-old self making the sacrificial case for not wanting to live more than 18 more years, but admitting that his 75-year-old self might very well make a different choice. Who would have guessed?

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

Will the Supreme Court’s Ruling on Subsidies Be ObamaCare’s Downfall?

By Sally C. Pipes

The battle over ObamaCare has shifted to the courts. This time, the president is on the defensive. Last month, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2-1 in Halbig v. Burwell that the federal government lacks the authority to provide subsidies to offset the cost of health insurance to folks shopping for coverage on HealthCare.gov, the federally run exchange. The federal government has since asked the full Circuit Court to hear the case.

The same day that the D.C. Circuit panel issued its ruling, the Court of Appeals for the Fourth Circuit, based in Richmond, Virginia, arrived at the opposite conclusion in a similar case, King v. Burwell, and upheld the federal subsidies as legal. The disagreement practically begs the U.S. Supreme Court to weigh in. The plaintiffs in King v. Burwell have petitioned the U.S. Supreme Court for cert. If granted, the case will go to the high court. It’s unlikely that the high court will hand down a decision until spring or fall 2015.

The D.C. Circuit panel has the law on its side. Should the Supremes agree with them, then ObamaCare could quickly unravel. And if it does, Congress should be ready with a replacement health care reform plan that empowers doctors and patients, not the federal government.

The Affordable Care Act’s text is unambiguous about how the insurance exchanges are supposed to work. According to the law, federal subsidies are available through exchanges “established by the State.” Thirty-six states didn’t set up exchanges. In some cases, their elected leaders decided not to. Other states tried to build their own. In many cases—among them Oregon, Maryland, Vermont, and Hawaii―they failed.

The law provided that the federal government would step in if the states did not. As a result, the federal government has found itself running an exchange that serves more than two-thirds of the states. And it’s decided, based on the counsel of the legal eagles at the IRS, to ignore those four words— “established by the State”—in order to dole out subsidies.

Even as it sided with the federal government, the Fourth Circuit observed, “If Congress did in fact intend to make the tax credits available to consumers on both state and federal Exchanges, it would have been easy to write in broader language, as it did in other places in the statute.” The court, which ruled for the government, went on to say that it “cannot ignore the common-sense appeal of the plaintiffs’ argument; a literal reading of the statute undoubtedly accords more closely with their position.”

ObamaCare’s supporters argue that “congressional intent” justifies direct federal subsidies. But they’ll have a tough time proving that before the Supreme Court. An early version of the health care reform bill did include an explicit authorization to distribute subsidies through a federal exchange. But it was absent from the final version.

That’s a problem for the Obama Administration, as U.S. Supreme Court precedent holds “that Congress does not intend sub silentio to enact statutory language that was earlier discarded in favor of other language.” Or as another Supreme Court decision put it, “the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.”

If the Supremes forbid the Obama Administration from distributing subsidies through the federal exchange, the law will crumble. That’s because many, if not most, exchange shoppers will be unable to afford policies without subsidies. As more and more people go without insurance, the exchange pool will skew sicker and premiums will head higher.

Already, average monthly premiums for a mid-level silver plan are $324. They’ll rise 8 percent next year, according to Avalere, a consulting firm. Eighty-seven percent of the people in the 36 states that rely on the federal exchange are receiving subsidies. Without those subsidies, premiums for some 5 million people will spike dramatically. The disappearance of subsidies would also destroy the employer mandate, which requires employers with more than 50 full-time workers to provide insurance coverage.

Fortunately, there are other ways to expand access to affordable insurance. Subsidizing insurance does little to encourage insurers to rein in premiums. In fact, if distributed as a percentage of premiums, subsidies can reward them for hiking prices. Expanding competition among insurers, by contrast, can make insurance more affordable and drive down costs. Creating a truly national marketplace—where Americans could purchase health insurance across state lines—would do just that. There’s no reason insurance should cost 2.5 times more in Rhode Island than in Alabama.

Allowing individuals to purchase health insurance tax-free—just as those who have employer-sponsored insurance through their work can—would also make coverage more affordable. Most Americans get health insurance through their place of work. So they have little incentive to consume care judiciously. After all, they’re not paying the bill. Increased usage of the health care system leads to higher overall premiums.

Two years ago, ObamaCare’s individual mandate survived before the U.S. Supreme Court. The law’s exchange subsidies may not be so lucky.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

Oregon’s Prescription-Only Cold Medicine Law Needs a New Look

In recent years, Cascade Policy Institute has tracked and analyzed the effectiveness of a 2006 Oregon state law that requires all citizens to obtain a doctor’s prescription before buying pseudoephedrine-based cold and allergy medication.

Overall, our analysis found that the law produced a minimal impact on the state’s methamphetamine problem, based on the fact that not only did Oregon see a significant decline in meth lab incidents prior to the law’s passage, but that Oregon’s neighboring states experienced a similar decline in meth labs over the same time period without enacting such a prescription law.

Since Cascade published our study in 2012, Oregon’s meth problem has shown no signs of improvement.

Last month, Oregon’s High Intensity Drug Trafficking Area (HIDTA) program released its 2015 Program Year “Threat Assessment and Counter-Drug Strategy.” Within the report, a number of new data points and law enforcement survey findings cast fresh doubts on the 2006 law. Among the most troubling findings:

  • While the number of meth lab seizures remains low, volume confiscated in Oregon has grown dramatically since 2007. Ninety percent of law enforcement officials indicate crystal meth was highly available in their area.
  • Meth-related arrests in Oregon nearly doubled from 2009 to 2014.
  • According to Oregon law enforcement officials, meth is the drug that contributes most to violent crime and property crime and is the primary funding source for major criminal activity.
  • According to the Oregon State Medical Examiner Division, the number of fatalities related to meth use rose to a historic high of 123 deaths in 2013, over twice the number of fatalities in 2001.

By any reasonable measure, the 2006 law has failed in spectacular fashion. The newly released 2015 HIDTA report should compel Oregon policymakers to reexamine the law and look for anti-meth measures that actually will lead to progress in the fight against meth.

Oregon’s pseudoephedrine prescription requirement law is poor policy because it fails to address the fundamental causes of meth crime. Clearly, Oregon’s meth users and dealers have been able to bypass the prescription requirement in the same manner criminals have done so relative to prescription medicines, despite strict controls on those products. Meanwhile, law-abiding Oregonians live in one of two states in the entire country that prohibit over-the-counter purchases of popular and effective pseudoephedrine-based cold and allergy medicines. Those products offer powerful relief that allows patients in other states to avoid the costly hassle of making a doctor’s appointment and asking for a prescription.

It doesn’t have to be this way.

A number of other states, including Oklahoma, Alabama, and Kentucky, have experienced drastic success against meth criminals due to targeted legislative solutions that penalize criminals, not consumers. Each of those states employs an electronic pseudoephedrine tracking system that automatically blocks illegal pseudoephedrine purchases and provides law enforcement with critical evidence that leads to meth busts and arrests. Oklahoma, for instance, uses a meth-offender block list, which prohibits certain drug offenders from being able to buy pseudoephedrine products. Since 2012, the state has seen a decline in meth-lab incidents of more than 50 percent.

Oregon’s law enforcement officers regularly put their lives on the line to make our communities safer. Given what is at stake, elected officials have a responsibility to debate and pass legislation that fixes problems and improves the quality of life for the people they serve. Equally important, however, is the responsibility to make changes to laws that have failed to deliver results, especially when those laws inconvenience law-abiding consumers without solving crime-related problems.

It’s time to take a look at the prescription requirement law. The stakes are too high not to.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

U.S. Has the Worst Health Care? Not by a Long Shot

By Sally C. Pipes

Few complaints about the U.S. health care system are as common as the claim that we spend too much on health care and get too little for all that spending in return—especially compared to other industrialized nations.

A new Commonwealth Fund report is the latest to indict U.S. health care. It pegs the American system dead last in a survey of 11 developed countries. But like virtually every other study that trashes the U.S. health care system, Commonwealth’s rankings rely on questionable assumptions, like giving weight to those systems that treat people equally rather than well. At the same time, Commonwealth ignores the problems that countries with socialized health care systems have actually treating people once they’re sick. And on that metric—that is, actually delivering care to those who need it—the United States is without peer.

The Commonwealth Fund report begins by asserting that the U.S. health care system “is the most expensive in the world.” It’s true that the United States spends a larger share of its Gross Domestic Product—17.9 percent, or almost $3 trillion—on health care than other countries. But by itself, that statistic means nothing.

The United States also happens to be one of the richest countries in the world. Once basic needs are taken care of, an increasing share of each extra dollar will go to what were once considered luxuries. That’s borne out by national spending data. Between 1990 and 2012, for example, spending on health care climbed 290 percent, significantly faster than overall GDP growth of 171 percent.

But household spending on live entertainment went up more than 500 percent over those same years, while spending on pets climbed 353 percent. By the Commonwealth Fund’s logic, America also faces a pet-care spending crisis. In contrast, spending on staples like food, clothing, housing, and furnishings climbed more slowly than overall GDP.

The Commonwealth Fund concludes that the United States “underperforms relative to most other countries on most other dimensions of performance” despite having the most expensive health care system in the world. But a closer look at those “dimensions” calls that claim into question.

Take infant mortality rates, where the United States typically places far down the list behind France, Greece, Italy, Hungary, even Cuba.  This comparison is notoriously unreliable, because countries either use different definitions of a live birth—or fudge their numbers. The United States, for example, counts every live birth in its infant mortality statistics. But France only includes babies born after 22 weeks of gestation. In Poland, a baby has to weigh more than 1 pound, 2 ounces to count as a live birth. The World Health Organization notes that it’s common practice in several countries, including Belgium, France, and Spain, “to register as live births only those infants who survived for a specified period beyond birth.”

What’s more, the United States has significantly more pre-term births than other countries. That fact alone accounts for “much of the high infant mortality rate in the U.S.,” according to a report from the Centers for Disease Control and Prevention (CDC). The CDC found that if the United States had the same pre-term birth rate as Sweden, our infant mortality rate would be cut nearly in half.

What about life expectancy, where the United States ranks below its peers as well? International measures of longevity typically fail to account for differences in obesity, accidental deaths, car accidents, murders, and the like, all of which shorten lives no matter how good a nation’s health care system is. The U.S. murder rate, for example, is far higher than all the other countries in the Commonwealth Fund study. The United States has a worse highway death rate than all but one of them. And U.S. obesity rates are more than double Canada’s and more than four times Switzerland’s.

A far more meaningful comparison of international health systems would take stock of how people afflicted with diseases such as cancer fare in different countries. And on this measure, there’s no question the United States stands above the rest. Five-year survival rates for breast cancer are higher in the United States than England, Denmark, Germany, and Spain, according to the American Cancer Society. In the United States, the survival rate for prostate cancer is 99.1 percent. In Denmark it’s 47.7 percent. For kidney cancer patients, the survival rate here is 68.4 percent. It’s just 45.6 percent in England—which the Commonwealth Fund ranked as the number-one health care system in the world.

Finally, the Commonwealth Fund study also ignores massive problems with actual access to care in the countries it heralds. Every citizen of a country with socialized medicine may have insurance. But that doesn’t mean they can get the care they need.

Treatment delays were so chronic in the United Kingdom, for example, that the government had to issue a formal requirement that patients shouldn’t have to wait more than four months for treatments authorized by their general practitioner. The Royal College of Physicians found that poor care—including doctors trying to keep costs down—caused nearly two-thirds of asthma deaths in the U.K. in 2012.

In Canada, the average patient seeking an elective medical service has to wait four-and-a-half months between being recommended for treatment by their primary care physician and actually receiving it. Waiting for care is the norm in Canada, even though Madam Chief Justice Beverley McLachlin of the Canadian Supreme Court declared nine years ago, in a ruling holding a ban on private health insurance in Quebec illegal, “Access to a waiting list is not access to health care.”

The Commonwealth Fund is right about one thing—the U.S. health care system is too expensive. But rationing care—as Commonwealth’s favored systems do—is not the answer. Oregonians should pay special heed to this warning since your “Bold Experiment That Failed,” the Oregon Health Plan rationing scheme, is still seen by many as a model for all of you.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

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