American Elephants

Glimmers of Health-Care Hope on the Horizon. by The Elephant's Child
August 26, 2012, 8:37 pm
Filed under: Capitalism, Economy, Health Care | Tags: , ,

Here’s some good news about health care. Wal-Mart will soon offer vaccinations for a wide variety of ailments. Now, in addition to low-cost vaccines for influenza and pneumonia, it will add 10 other common vaccines, including shingles, meningitis, hepatitis and the human papillomavirus. This will provide millions of customers the chance to get inexpensive preventive care.

Wal-Mart has had a positive  influence on inflation. A 2007 study by Global Insight estimated that in 2006, Wal-Mart’s low prices saved consumers roughly $287 billion, or about $2,501 per household.  A few years ago, the National Bureau of Economic Research estimated that the government’s consumer inflation data were overstated by about 15% due largely to the unrecognized impact of Wal-Mart’s everyday low prices on the economy.

Wal-Mart has been moving into health care since 2006, when they began selling generic drugs at a flat $4 fee. Now they are looking at low-cost primary health-care clinics, as are other retailers. Retail prescription drug outlays rose only 1.2% last year compared to 14% a year just a few years ago. This is partly due to Wal-Mart.

The free market solves problems, the government creates more. “There has never been an industry, a business or a product that competition has not improved.”*

*Ted Forstman, Wall Street Journal

The Ideological Attack on the World’s Finest HealthCare System by The Elephant's Child

Remember “the Spiraling Cost of Health Care?” That was the imperative for a rush by the Democrats, newly in complete control of Congress, to push through ObamaCare in back rooms with no input from Republicans at all. But the “spiraling cost” wasn’t a matter of the nation’s health care, it was a matter of Medicaid and Medicare.

So their brilliant reform enacted behind locked doors stretched to some 3000 pages and created some 159 new boards, agencies and commissions, and made the problems of Medicaid and Medicare worse than when they started. As Charles Kessler describes it in the Claremont Review, “It attempts to control a huge swath of the economy through collusive  price-fixing, restraints on production, an aversion to competition, and corporatist partnerships between industry and government. ”

“President Obama’s solution to the problem of two health care entitlement programs quickly going bankrupt — Medicaid and Medicare — is to add a third?”

The general Leftist intention seems to envision a single-payer future healthcare when everybody is essentially on Medicare or Medicaid.  One program for all — except the ruling class, of course. There are not enough doctors to go around, we are around 50,000 short today, and will be 90,000 short before 2020.  Medical schools and teaching hospitals offer no way to catch up. That would seem to suggest a general nationalization of doctors, making them employees of the government. Which will solve…?

The federal government is currently waging a  two-pronged war on medical innovation. The first prong is new taxes on medical device manufacturers. Cook Medical company has announced hat it is cancelling plans to open five new factories because of the impending ObamaCare 2.3% tax on total sales (not profits) will cost Cook $20 million dollars a year. Each of the plants would have employed 300 people.

Stryker, which manufactures artificial joints and examination tables will cut 5% of its workforce. Medtronic has announced that the tax will cut into it profits. The CEO of Zoll Medical has stated that the tax will mean “less innovation, fewer jobs and fewer lives saved. ” They make advanced cardiac defibrillators. The other prong is regulation. The FDA has regularly been criticized for overzealous regulation and far longer approval times than necessary.

Hepatitis C is a ticking time-bomb for some four million Americans, yet the contraction and decline of the American pharmaceutical industry virtually guarantees that innovation will suffer.

A deadly ‘superbug,’ an infection untreatable by nearly every antibiotic, spread through the NIH Clinical Center last year.  Eleven patients died. Between 1945 and 1968 drug companies invented 13 new categories of antibiotics. Between 1968 and today just two new categories of antibiotics have arrived.

The problems are inventing new antibiotics is technically challenging, the FDA has made it difficult to get new antibiotics approved, and there isn’t much money in it.  So only four of the world’s 12 largest pharmaceutical companies are researching new antibiotics.

Last year, Pfizer, the world’s biggest drug company, closed it’s Connecticut antibiotics research center, laying off 1,200 workers. The company said it was moving the operation to Shanghai, but Pfizer has largely abandoned antibiotics. A new antibiotic may bring in a billion dollars over its lifetime, but a drug for heart disease may net ten billion dollars.  Congress has inserted a provision in an FDA authorization bill to grant an additional five years of market exclusivity for companies inventing new antibiotics.

The free market and competition improve pretty much everything. Of course pharmaceuticals require regulation, but it is a delicate judgment to regulate with a firm but light finger. Contrary to big-government type thinking there is no one solutions that fits all, whether speaking of individual reaction to drugs or regulations for every manufacturer.

The tax on medical devices is particularly onerous. Without getting into the marvelous innovations in prosthetics, our hospital is proceeding with robotic-assisted surgery and I can’t wait for Dr. McCoy’s little gadget he just waves over your body to diagnose — absolutely everything.

Obama’s Policies Have Been Brutal For Middle Class Incomes. by The Elephant's Child

The 2007-2008 recession ended in June of 2009, and theoretically the recovery began — but it didn’t happen. In January 2009, the month President Obama moved into the Oval Office, and just before he signed his stimulus spending bill, median household income was $54, 983. By June of 2012, median household income has collapsed to $50,964 (adjusted for inflation).  That’s $4, 019 lost real income or roughly a month’s income lost every year.  There was only a 2.6 percent that was the direct result of the recession from December 2007 to June 2009.

That is a loss in median income — which simply means that some people did fine and others saw their income collapse, freeze or vanish. The Fed claims that this is not a big deal since “core inflation” has been more or less contained.  Core inflation excludes food prices and energy prices, and have you been to the grocery store lately? Gas prices are heading up, and Mr. Obama is reportedly considering opening the Strategic Petroleum Reserve. I guess winning an election is a national crisis.

We are, of course, putting a large chunk of the corn crop (which is diminished this year because of the drought) into our gas tanks, where it raises the price of gas for less energy, corrodes your engine and damages the environment.  The big problem is that corn is a wonderfully versatile grain. It’s in everything. It raises the price of animal feed, which in turn raises the price of meat. It is in all sorts of food as corn, as corn starch, corn syrup, and in things like wallboard and other building materials.

Higher wages in the 1980s and 1990s came from higher productivity caused by higher investment in computers, plant and equipment. When Mr. Obama demands higher taxes on investment income — capital gains, dividends, and small business profits — he is making it harder and more costly to modernize, which fails to increase productivity, and increase wages.

America already has the world’s highest corporate tax rate.  A 2011 study from AEI found that capital flight from the U.S. meant that every additional dollar of tax revenue from the corporate tax led to a $4 decrease in aggregate real wages.  There’s a multiplier effect for you.

President Obama claims that he wants to help the middle class. Yet every group except the elderly has seen a decline in real income. The teachers and government workers that Obama claims are hurting saw their incomes decline less than households with private-sector workers. Black Americans have suffered the most  during this recession, their incomes have fallen by more than 11 percent.

Only 34% of the public, according to a Pew survey, put the blame where it belongs, saying Mr. Obama deserves “a lot” of the blame for the problems of the middle class. More blame George W. Bush, foreign competition, Congress, banks and corporations. The recession ended in June 2009. Since that time, the economy has been Barack Obama’s responsibility, and his policies are choking economic growth.

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