In Crisis, Supply-Side Healthcare Reforms Are Even More Important

Posted on by Patrick Ishmael

By far the most important news story of 2020 has been the coronavirus, and for obvious reasons; it has the potential to affect every person on the planet, and accordingly, we all should be taking appropriate precautions to protect ourselves and our loved ones. Recent news of the first coronavirus patients in the Kansas City and St. Louis metro areas hammer those points home. At the same time, it’s becoming increasingly clear from other countries’ experiences that good long-term healthcare policy is also terribly important, and among the most important policies for reformers to consider is promoting a flexible supply of healthcare goods and services.

Healthcare supply is an especially important issue in China. Ground zero for the pandemic, China had already long been beset by shortages of healthcare professionals, largely thanks to the surprisingly low pay and status of the health care professions in that country. Despite this, China has (as far as we can tell) mitigated this problem by shifting the supply of health care professionals from other areas into the Wuhan region. (Emphasis mine)

Sometimes it takes a crisis to highlight what’s wrong with a medical system. In China, however, the coronavirus hasn’t uncovered any surprises. Instead, it’s thrown a spotlight on problems that have festered for decades, including the lack of a primary care system, and — most critically — a shortage of qualified medical personnel. Although reform efforts have been underway for years, the situation in Wuhan is a stark reminder of how far China must go to meet the minimal medical standards expected by its fast-growing middle class. . . .

For now, China can treat Wuhan’s shortage of doctors as a health crisis and mobilize qualified personnel from across China to work in the city. Indeed, 6,000 medical workers from across China have either arrived in the Wuhan area or will soon, and they will alleviate much of the pressure building up in hospital corridors. But they’ll stay only as long as the immediate crisis requires. When they leave, Wuhan — like most Chinese cities — will be left scrambling to find enough doctors to treat a long-term health-care crisis.

Meanwhile Italy, which has also been hard hit by the virus, has also been dealing with a shortage of doctors and facilities for many years. That shortage has only been accentuated by the severe pressure the coronavirus has placed on the Italian healthcare system in recent weeks:

“We have a health-care system in southern regions, especially south of Naples, where we actually have very few facilities,” said Prisco Piscitelli, an epidemiologist and vice president of the Italian Society of Environmental Medicine. Their ability to cope may be “even worse with the increased number of occupied beds in hospitals and intensive-care units.”

Hospital berths are only part of the answer. Italy is also suffering from a shortage of doctors. As many as 1,500 leave the country every year after finishing their specialization, according to doctors’ association Fnomceo.

Thankfully the worst of the coronavirus hasn’t hit the United States yet, and hopefully the disease will be brought under control before it reaches Spanish flu epidemic levels. Whatever the outcome, the experiences of China and Italy reemphasize the threat posed by uneven and inadequate healthcare supply, both in terms of medical professionals and medical facilities. The consequences of government intervention in the United States and in Missouri that exacerbates these shortages—whether by blocking interstate licensing reciprocity or erecting barriers to new healthcare facilities—will be borne by patients, even under non-crisis circumstances.

Reformers should continue to focus on bringing supply-side reforms into law because not only will such reforms help the public during periods of healthcare normalcy, but they will also help the public when a healthcare crisis is upon us.

What’s Really Happening with Medicaid Enrollment?

Posted on by Elias Tsapelas

It’s been nearly a year since I first wrote about Missouri’s falling Medicaid enrollment, and questions remain. There are now roughly 100,000 fewer children enrolled in our state’s Medicaid program than there were at the beginning of 2018, although child enrollment has stayed relatively consistent over the past six months. In Jefferson City, there is still a fundamental disagreement about what caused the drop and what, if anything, the government should do in response. As policymakers begin considering legislation to tackle the issue, it’s important to look at what’s being said and separate the facts from fiction.

What we know:

  • Medicaid eligibility criteria in Missouri are far more lenient for children than for adults – Individuals under eighteen years old qualify for Medicaid based on their family’s total income. Those whose parents make less than 150 percent ($38,625 for a family of four) of the federal poverty level (FPL) can enroll in the traditional Medicaid program. And those whose families earn between 150 and 300 percent ($38,625–$77,250 for a family of four) of the FPL can enroll in the Children’s Health Insurance Program (CHIP). The care available to individuals in both groups is identical, but those who are in the first receive the coverage free while those in the second group are asked to pay a monthly premium. While CHIP and Medicaid are separate programs, both groups are typically included in total Medicaid enrollment numbers.
  • Federal law requires at least yearly income verification for Medicaid enrollees – Since people qualify for the program based on income, the federal government requires states to check whether enrollees are still eligible to receive services at least once per year. Nearly six months ago, it was revealed that Missouri’s Medicaid agency had stopped performing annual income verifications from 2014 through 2017. Missouri resumed verification at the beginning of 2018. However, some claim that the administrative burden required to verify eligibility is too high.
  • The drop in enrollment is concentrated among Missouri’s children – Today, there are roughly 520,000 children enrolled in Missouri’s Medicaid program, but only about 25,000 of them are enrolled in CHIP. The majority of the enrollment drop has been among children in families making less than 150 percent of the FPL, but there has been a slight increase in CHIP enrollment. There are limitations to what net enrollment figures can tell us. The enrollment figures do not show how many people came off the rolls, how many came on, or why anyone’s enrollment status changed.

What we don’t know:

  • Whether the state adequately advises eligible beneficiaries on how to maintain their coverage – The decline in enrollment began once Missouri’s Medicaid agency restarted its annual verifications at the beginning of 2018 with the help of a new automated system. With the rollout of the new system, Medicaid recipients began receiving letters in the mail informing them they would need to verify their incomes and the process required to do so. Some contend that the state did not do enough to ensure each recipient received and understood the letter. Nonetheless, coverage may be canceled within 30 days absent verification in order to remain compliant with federal law.
  • How many children would still be eligible for the Medicaid program they were previously enrolled in – Some claim that many of the children removed from the Medicaid rolls were probably still eligible for coverage. The key distinction is that many might be eligible for coverage, but likely only eligible for CHIP. As mentioned previously, CHIP requires monthly premiums; traditional Medicaid is free. Without hearing from parents, should the state really enroll people who were previously receiving free coverage into a plan that requires monthly payments? The reality is that we do not know how many children removed from the rolls could have remained in the traditional Medicaid program.
  • Why the children have not re-enrolled – Eventually, some parents of kids who lost coverage must have realized their kids were still eligible. So why didn’t these parents re-enroll their children? It seems the most likely answer is that many found out their children were now only eligible for CHIP instead of Medicaid, and simply chose another option instead of enrolling in CHIP. If parents find out they must pay a premium for coverage, and they are eligible for private insurance through the individual marketplace or through their employer, it would make sense that they might not opt for Medicaid coverage.

Falling Medicaid enrollment in Missouri is certainly an important topic, but it is also a complicated one. The issue isn’t whether children should have health coverage or not, but rather how the state should administer its Medicaid program to ensure optimal care for recipients while making the best use of taxpayer dollars. Policymakers should be sure they have all the facts before acting.

The Appalling Lede Buried in Prison Guard Labor “Dispute” Story

Posted on by Patrick Ishmael

For the past few months, a fascinating labor dispute has been developing down in Jefferson City. Starting in December, the state ended automatic dues deductions for the Missouri Corrections Officers Association (MCOA, or MOCOA) more than a year after the technical expiration of the union’s contract with the state. Late last month, the St. Louis Post-Dispatch provided an update on the situation, revealing that the union was on the verge of closing completely as result of a drop in dues payments by corrections officers.

But starting in paragraph four, a massive story—with greater implications than a simple story of institutional failure—begins to emerge. The reason the union is going “out of business” isn’t just because it’s short on money; it’s because over 95% of the employees were choosing not to pay the MCOA for its representation. (Emphasis mine)

In December, Parson’s Office of Administration announced it would end dues withholding for 5,500 employees who oversee some of the state’s most dangerous rapists, murderers and drug dealers.

The administration said it ended payroll deduction because the union’s contract had expired. It was not clear, however, why the decision came in December because the contract had expired in September.

But as of Friday, the effect of that decision was clear: Just 209 of those workers are paying dues to the union, despite attempts by the MCOA to convince guards to continue paying.

That’s an extraordinary figure. Months after it became clear the government wouldn’t be withholding dues for the union, fewer than 4 percent of the covered employees chose to continue funding the organization. That so many of these workers have decided not to renew their union memberships makes the implied, potentially decades-long wrong committed against these employees all the more extraordinary.

How much money was redirected to a union that apparently didn’t have the support of its members? How much money is being redirected to other unions right now that don’t have the support of their membership?

Whether it’s a statewide union or a local union, government workers should have a regular opportunity to opt into paying union dues—or to simply keep their money. It’s appalling that the MCOA was able to survive so long without the apparent support of its members, and it’s broadly concerning for all other public union members for whom the government remains a union dues collector.

 

The Latest Episode of the Show-Me Institute Podcast

Posted on by Show-Me Institute Staff

On the latest episode of The Show-Me Institute Podcast, Dr. Susan Pendergrass is joined by Cato’s Neal McCluskey. They discuss student debt forgiveness, the difference between the experience of touring a U.S. university campus and a U.K. campus, and try to determine if having a water park at your college is worth the spike in tuition.  

 

Good Riddance to Bad Policy

Posted on by Patrick Tuohey

The Joplin Globe recently reported that Joplin’s disaster recovery tax-increment financing (TIF) district is being closed after eight years, and any funds therein will be paid out to the appropriate taxing jurisdictions. This is good news in that the district could have lasted up to 23 years; instead, it was shuttered after only 8 years. The fact remains that the TIF district should have never been created in the first place.

Joplin’s city council created the TIF district following the devastating tornado that hit Joplin in 2011. As I detailed in my 2017 case study:

While Joplin was certainly blighted, the speed with which the city was rebuilt—and the overwhelming amount of private, unsubsidized capital that was used to do so—give the lie to the claim made by Wallace Bajjali in Joplin, and other developers around Missouri, that capital just won’t move without taxpayer subsidies. In this case, the developer never delivered on promises, leaving the redevelopment corporation to just buy and sell land while the real work of redevelopment was done by individual homeowners and private companies.

What makes the Joplin experience different from most others is that for whatever reason, the partners in the development firm had a falling out. The company vacated its offices and none of its grand TIF plans were realized. This allowed us a rare opportunity to examine the rebuilding in the absence of subsidized TIF activity. When a TIF plan results in new construction, the plan itself is typically credited with the result. But in Joplin, the reconstruction was just the result of individuals and businesses rebuilding on their own.

That rebuilding was impressive, and TIF subsidized development did not play a significant role (just over $20 million was collected by the TIF district from its creation to closure, compared to more than $2 billion in insurance claims). As I observed in the 2017, this is what Joplin had accomplished a mere six years after the tornado:

Joplin has been rebuilding itself—largely from the proceeds of insurance claims that the but-for test never considered! Not only has Joplin recaptured all lost assessed property value and then some, but the city claims that the population was higher in 2015 than it was in 2010 before the tornado.

We know from study after study after study that TIF is ineffective at spurring business growth or job creation. Instead, TIF frequently just lines the pockets of developers with taxpayer cash—often for doing what there were going to do anyway. If there were any doubt of this, one need only look to the people of Joplin, who rebuilt without TIF and in a quarter of the time promised by the TIF plan.

It is long past time that Missouri legislators rein in the use and abuse of economic development incentives such as TIF. Municipal policymakers are diverting hundreds of millions of dollars away from important public projects and for no appreciable gain.

 

Environmental Misconceptions Can Be Costly

Posted on by Jakob Puckett

Being environmentally conscious is all the rage these days. But many popular ideas about environmentalism are fueled by misconceptions. For instance, your Tesla might not be as environmentally friendly as your neighbor’s gas-powered car, and the safest and cleanest energy source is one that we’ve already been using for decades—nuclear.

How so? For electric vehicles, their net environmental impact is more than what comes out of the tailpipe. Materials must be mined and processed—at significant environmental cost—and their electric charge must come from somewhere. Nuclear power emits close to zero greenhouse gas emissions, but is often misunderstood, especially regarding safety.

I address these matters in more detail in a recent op-ed posted at Real Clear Energy. 

 

Government Sues Government over Government’s Common-Sense Decision

Posted on by Graham Renz

Truth is stranger than fiction.

The Post-Dispatch recently reported that the City of Maryland Heights is suing the St. Louis County TIF commission. Back in January, the TIF commission voted down a proposal to use upwards of $150 million in subsidies to help develop 2,000 acres in a floodplain in Maryland Heights. As Patrick Tuohey then noted, this was finally something to cheer about regarding economic development policy.

But the powers that be don’t appear to be happy with the common-sense decision that had been rendered. So in response, they’re filing suit because of a technicality: The state law dictating how the TIF commission could be set up no longer applies because it governs counties with at least one million people. St. Louis County no longer has a population over one million, so the city claims that the commission’s decision to decline the subsidy was illegal.

If you’re head is spinning, don’t be alarmed—you’re not the only one.

First off, the lawsuit seems petty. I mean, come on. I’m not saying the lawsuit is frivolous, or of no consequence—it clearly is—but that the city would resort to such a move on behalf of a developer is sad. Our government is supposed to be better than this.

Secondly, that the city would so brazenly cast aside the commission’s decision is especially disappointing. The commission’s job is to evaluate TIF plans and then approve or reject them based on the merits of a proposed development. In this case the commission had at least two good reasons to reject the development. First, the area is a floodplain, and so, developing it would cause significant environmental harm. Second, taxpayers shouldn’t be burdened with the costs of an especially risky development. How could city officials disagree with this? Why do they think developing in a floodplain with taxpayer money is a good idea? Why would they go through the trouble of a court battle to develop a floodplain?

The city will probably respond to these sorts of questions with promises of economic growth and boosted sales tax revenues for the city. But these supposed benefits of TIF rarely materialize. And when they do, they often come at the expense of other cities in the area.

Time will tell whether the commission was formed illegally or not, and whether its recommendation is valid. But even if the city wins in the courtroom, should the TIF proposal move ahead, city officials will have lost another battle: the battle for common sense and fiscal responsibility.

 

Tax First, Provide Detail Later

Posted on by Patrick Tuohey

Members of The Kansas City Star’s editorial board have lamented that the one-eighth-cent sales tax adopted by a citywide vote in 2017 to help spur development on the east side of Kansas City has failed to yield any results. They opine:

Almost three years after voters approved the levy, conditions in the targeted district — 9th Street to Gregory Boulevard, The Paseo to Indiana Avenue — remain largely unchanged, and unacceptable. The initial promise of revitalization and renewal in those neighborhoods remains just that, a promise.

They point out that much of the funds collected from the sales tax remain unspent and urge the new oversight board to get to work improving the lives of citizens. Unsurprisingly, the editorial board endorsed the tax increase at the time of its creation. Writing skeptically of this and other ballot questions at the time, I suggested in a Star guest column:

While supporters of Question 4 are to be congratulated for wanting to address economic injustice, one more tax-funded subsidy will not solve the problem. In fact, one more increase to an already-high sales tax likely will do more harm.

. . . Without substantive long-term solutions to the problems that got us here, voters risk spending more to get the same outcome we have in the past.

Policymakers and observers are united in wanting the best for Kansas City, but that does not mean every proposal is a good one. This sales tax is not alone in failing to deliver on promises—nor does the proposal even articulate a policy for making people’s lives better. We are just now learning that the convention hotel was costlier than we thought—likely because city leaders didn’t do the work of vetting the proposal and questioning its assumptions.

The Kansas City Council is considering enacting free bus fare in the city, something else the Star’s editorial board has endorsed. But none of the important legwork work has been done to assess the viability of such a program, including even a survey of Kansas City’s transit riders. (If you assume that transit riders think fares are a priority, read this.)

City leaders need to do their homework so we can avoid this cycle of adopting new policies, including raising taxes, before we define success.

 

Now in the Senate, Local Transparency Initiative Moves Closer to Becoming Law

Posted on by Patrick Ishmael

The ability of government to tax you—to take your money through force—comes with an obligation of stewardship and openness, and those obligations don’t have a minimum size requirement. Big city or small, the obligations are the same.

It’s why I’m following with great interest legislation now proceeding through the Missouri Senate proposed and being carried by Rep. John Wiemann. Previous versions of his legislation required that all cities provide their “checkbook” information to the state, at which point the state would make those spending documents public. The latest version includes counties, but reporting is voluntary.

As our previous research shows, it is oftentimes the activities of governments that don’t want to voluntarily provide their spending records that raise the greatest questions. After all, why would any government shield its spending records from the public? With few exceptions, every dollar of taxpayer money spent should be an open record and a record that every level of government should be happy to provide.

Suffice it to say, I would much prefer the state take a mandatory approach to cities and counties providing these records than a voluntary one. Very much. However, establishing a reporting system, even on a voluntary basis, opens the door to greater reforms later. I hope the senate moves quickly on this important legislation.

 

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