Fidel Castro, the dictator who ruled Cuba with an iron fist for almost six decades, has been dead for more than three years now. Unfortunately, his regime didn’t die alongside him. The Caribbean’s largest island is still under the burdensome yoke of communism.
Since Castro took over in 1959, Castroism has been characterized by the brutal repression of political and civil rights, as well as low economic growth. Real GDP growth averaged a meager one percent from 1959 to 2015.
Cuba’s “Low” Infant Mortality Rate
Despite the lack of freedom and the poor economic track record, Cuba is often praised for its social achievements in health care and education, some of which rival developed countries. A good example of this is the Infant Mortality Rate (IMR), which is defined as the share of children dying before their first birthday. The graph below plots Cuba’s IMR against four developed countries:
Surprisingly, Cuba’s IMR in 2017 was lower than that of both the U.S. and Canada: 4.1 deaths per 1,000 live births as opposed to 5.7 in the United States and 4.5 in Canada.
This seems counterintuitive. How could a poor country like Cuba, whose income per capita is a fraction of those of developed countries, outperform two of the world’s wealthiest nations?
There are a few possibilities, both of which involve health care spending. Are these stellar numbers the result of Cuba spending more than the U.S.?
Not according to the data. As the following chart shows, Cuba’s health care spending per capita is substantially lower than that of the United States.
But higher spending doesn’t ensure better results. According to the Bloomberg Health Care Index, which measures cost efficiency in health care, the U.S. spends four times as much as Singapore in per capita terms, yet life expectancy is four years higher in the Asian country. Therefore it could be that, despite spending less, Cuba achieves better results.
Unfortunately, Cuba’s planned economy is far from what anyone would call efficient. This means that there has to be another explanation.
Data Manipulation
In fact, Cuba’s impressive IMR has a simple explanation: data manipulation.
In a 2015 paper, economist Roberto M. Gonzalez concluded that Cuba’s actual IMR is substantially higher than reported by authorities. In order to understand how Cuban authorities distort IMR data, we need to understand two concepts: early neonatal deaths and late fetal deaths.
The former is defined as the number of children dying during the first week after birth, whereas the latter is calculated as the number of fetal deaths between the 22nd week of gestation and birth. As a result, early neonatal deaths are included in the IMR, but late fetal deaths are not.
For the sample of countries analyzed by Gonzalez, the ratio of late fetal deaths to early neonatal deaths ranges between 1-to-1 and 3-to-1. However, this ratio is surprisingly high in Cuba: the number of late fetal deaths is six times as high as that of early neonatal deaths.
This number suggests that many early neonatal deaths are systematically reported as late fetal deaths in order to artificially reduce the IMR. Gonzalez estimates that Cuba’s true IMR in 2004, the year analyzed in the paper, was between 7.45 and 11.46, substantially higher than the 5.8 reported by Cuban authorities, and far worse than the rates of developed countries.
That Cuba’s dictatorship manipulates self-reported statistics shouldn’t come as a surprise. After all, the Castros have been trying for years to prove that, despite the lack of freedom in their country, their regime has built a welfare state where high-quality public services are guaranteed for all citizens.
Nothing could be further from the truth. The only achievement of the 1959 Revolution was to turn Cuba into a huge prison where misery and repression dominate the lives of millions of Cubans that haven’t had the opportunity to flee the country in search of a better life.
Dictatorships have always resorted to data manipulation for political purposes. This isn’t new. What is really disturbing is that Western intellectuals continue to buy the propaganda of the oldest tyranny in the Americas.
Luis Pablo De La Horra holds a Bachelor’s in English and a Master’s in Finance. He writes for FEE, the Institute of Economic Affairs and Speakfreely.today.
This article was originally published on FEE.org. Read the original article.
After my study of the costs of Medicare for All (M4A) was published last July, a fierce debate erupted over whether M4A, while dramatically increasing the costs borne by federal taxpayers, might nevertheless reduce total U.S. health expenditures. Now, just one year after my findings, we have substantial additional evidence that M4A would further increase, not reduce, national health spending.
To be clear, no one on either side of this debate questioned my central finding that M4A would increase federal costs by an unprecedented amount, likely between $32.6 trillion and $38.8 trillion over ten years—a federal tab so large that even doubling all projected federal individual and corporate income taxes couldn’t finance it. Yet M4A advocates continued to believe that it could bring national health spending down. That’s become substantially more difficult to argue in light of subsequent events.
Various Cost Estimates
To understand how the picture has clarified, let’s review some of the specifics of my cost estimates as well as those of other experts. Prior to the introduction of Sen. Bernie Sanders’s M4A bill in 2017, various experts—including a team from the Urban Institute, Emory professor Ken Thorpe, and others—attempted to score the costs of M4A. These studies concluded that M4A would not only dramatically increase federal spending, but increase total national health spending as well.
Subsequent to these studies, but prior to mine, Sen. Sanders introduced his M4A bill. That bill specified that health provider payment rates under M4A would be determined by the same methods used to set Medicare payment rates, which would average about 40 percent less than private insurance rates over the first 10 years of M4A.
Obviously, if one assumes that payments for all health treatments now covered by private insurance are reduced by about 40 percent, such a dramatic cost-reduction assumption would likely lead to the conclusion that total health spending would decline. My study duly reported the numbers that would derive from this cost-saving assumption but at the same time noted that “it is likely that the actual cost of M4A would be substantially greater than these estimates,” and that they should be regarded as a “lower bound.”
For one thing, federal lawmakers have historically balked at implementing provider payment reductions much smaller and less sudden than those. For another, dramatically reducing provider payments (and thus health care supply) at the same time that M4A markedly increases the demand for health services would almost certainly disrupt Americans’ timely access to quality health care, precipitating unpredictable political fallout.
Although my study was clear that the actual costs of M4A would likely be substantially higher than they would be under the aggressive assumption that all provider payments are suddenly cut to Medicare rates, mischaracterizations of my conclusions proliferated. Some M4A advocates wrote (and continue to write) that my study concluded that M4A would reduce national health spending, even though my study did not say this, and despite various Fact Checkerscalling out this claim as a distortion.
Is M4A Less Expensive Than National Health Spending?
It was certainly fair for M4A advocates to express their belief M4A could and would reduce all provider payment rates to Medicare levels, thereby lowering national health spending. At the same time, it was never accurate to misattribute this finding to my study, which had found that such severe cuts were unlikely to be implemented. But now we know more about these dynamics than when my study was published. Based on events over the last year, even M4A’s strongest advocates can’t expect that such dramatic provider payment cuts would be successfully implemented under M4A.
When my study was first released, some M4A supporters argued that my lower-bound estimate was the best one because it most closely reflected the literal text of the Sanders bill. As one wrote in defense of my lower-bound projection’s credence,
For now, the Sanders bill would pay health care providers at Medicare rates, which are on average 40 percent lower than private insurance rates.
In other words, they argued that regardless of whether that course of action was politically realistic, it was nevertheless what was written into the bill, and so it was fair to assert that M4A “as written” would lower national health costs (setting aside the issue of whether my lower-bound estimate’s other assumptions of substantial savings in drug prices and administrative costs were too optimistic).
However, more recently M4A advocates have been rapidly backing away from this interpretation. For example, an Aug. 20 letter to The Wall Street Journal argued that
nowhere in the House or Senate Medicare for All bills does it state that Medicare for All would reimburse hospitals at current Medicare rates. The Senate bill states that payment would be established in a manner consistent with current processes.
An expert recently interviewed by Politifact offered a similarly revised interpretation of the Sanders language: that the text of the bill only requires that a Medicare-style rate-setting process, not actual Medicare rates.
The article states,
the Medicare for All bill sponsored by fellow Democratic candidate Sen. Bernie Sanders (I-Vt.) doesn’t actually say hospitals would be paid at Medicare rates. . . . Politically, Anderson argued, the odds are ‘quite low’ that the government would decide to pay all hospitals the current Medicare rates for all services, though it would set a lower price than what many private plans now pay.
High-Cost vs. Low-Cost Visions for M4A
The intended message to health providers of these statements is clear: don’t worry, if M4A is enacted, lawmakers won’t really cut your payments down to Medicare levels.
As interpretations of the M4A bill’s legislative language, these assertions are a stretch. The bill language says specifically that the federal government will establish “fee schedules” for M4A that are consistent with those that result from Medicare’s rate-setting process. My study observed that such stipulations were likely to be amended on the way to enactment, not that they would be enacted as is and then simply ignored. It’s difficult to construe the legislative language as leaving the federal government free to arrive at whatever payment levels are deemed politically acceptable, rather than those that arise under the current-law Medicare process.
But putting aside the interpretative stretch, advocates’ recent efforts to massage the bill’s intent would, if successful, clearly negate the basis for any claim that M4A would lower national health costs. Such claims of cost savings were always based entirely on the assumption that M4A would lower private insurance payment rates not just a little bit, but all the way down to Medicare levels. Indeed, projections by multipleexperts indicate that if instead M4A’s payment rates were set higher than Medicare’s current rates—even if only at the bare minimum that enables hospitals to break even—national health spending would rise, not fall, as a result of M4A’s substantial coverage expansion.
Of course, the aforementioned quotes represent the perspectives of just certain individuals, and by themselves are not proof that every M4A advocate is now embracing a higher-cost vision for the program. But the quotes also align with what happens, and is now happening, when government-run health plans are developed.
As previously noted, M4A advocates’ recent shift to supporting higher provider payments is exactly what my study anticipated upon an actual attempt to enact M4A. The initial promises of lower costs would give way to the realities of federal government deal-making. It is always an analytical mistake to unfairly compare the messy reality of existing policies, which have been run through the real-world legislative wringer, to an idealized fantasy alternative that hasn’t. But we don’t need to wait to see these messy compromises rearing their heads with respect to M4A. The shift to countenancing higher government expenditures under M4A is already happening.
One such scenario recently played out in the state of Washington, which was attempting to set up its so-called “public option”—i.e., a state-run plan through which those lacking other health coverage could acquire it. Here, too, the initial idea was to pay providers participating in the public option at Medicare rates—until, that is, the legislation actually started to move.
Crumbling Rationale
By the end of the process, the legislation had shifted from paying providers at levels no higher than Medicare rates, to paying them at levels no higher than 160 percent of Medicare rates. Faced with the reality that providers wouldn’t support or participate in the plan at Medicare rates, sponsors simply buckled and promised more public funds until opposition was defused and the legislation could pass.
It should be obvious that this cost-increasing dynamic is even more inevitable with a federal M4A program than it was with Washington state’s “public option.” Under M4A there would be only the one single-payer plan, and providers would either have to participate in it, or cease to practice. Obviously, America’s health providers would fight several times as hard against payment cuts under M4A that they could not escape, as they needed to do against Washington state’s public option in which they could simply have chosen not to participate.
One M4A advocate understood the significance of the stakes in Washington state:
This would be a massive game changer . . . if they were able to somehow not only convince a statewide network of doctors and hospitals to agree to a 40% pay cut, but to also manage to make such an arrangement work without driving those hospitals, clinics or physicians into bankruptcy.
But they didn’t do so, because they couldn’t.
The great promise of M4A for its advocates is that it will be able to simultaneously offer Americans more comprehensive coverage while also bringing health costs down. But M4A can’t bring health costs down unless it dramatically cuts payments to providers. What we’ve learned over the last few months is that, when faced with a choice between abandoning government-run health care and abandoning cost containment, supporters are choosing to abandon cost containment. By so doing, the core rationale offered for Medicare for All—that it would deliver better health care for less money—is being undone.
Charles Blahous is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, a public trustee for Social Security and Medicare, and a contributor to e21.
This article was originally published on FEE.org. Read the original article.
Senator Rand Paul is no stranger to public criticism. As one of the few principled members of Congress and an heir to his father’s legacy of anti-authoritarianism, he has grown accustomed to falling under public scrutiny for standing up for his beliefs. But this week he isn’t being condemned for his foreign policy views or his stance on criminal justice reform. Instead, the progressives have chastised the senator from Kentucky for going outside of the United States for medical treatment.
When Paul was attacked by his neighbor while doing yard work in 2017, he was left with six broken ribs, a bruised lung, and a hernia, which has since been left unresolved. Needing surgery and being well-versed in the atrocity that is our overpriced and overregulated American health care system, Paul decided to join the 150,000 to 320,000 Americans who travel abroad each year in search of lower costs and high-quality health care. But since the medical facility in question happens to be in Canada, Paul has suddenly found himself a target of those accusing him of utilizing the same socialist system he so fervently decries.
Paul’s Detractors Are Intentionally Misleading the Public
It wasn’t long after Senator Paul announced his intention to travel to Canada for surgery that the accusations began to make their rounds on social media. Democratic Coalition tweeted, “Oh, the irony: Kentucky Sen. Rand Paul, one of the fiercest political critics of socialized medicine, will travel to Canada later this month to get hernia surgery.” Likewise, Talking Points Memo also took a jab at Paul when it tweeted, “Rand Paul, enemy of socialized medicine, will go to Canada for surgery.”
Had any of these overzealous Twitter users bothered to do some research, they would have quickly discovered that contrary to their claims, Senator Paul was not being a hypocrite at all. In fact, staying true to his beliefs, the senator plans to go abroad next week to make use of a top-notch private medical facility that offers competitive rates to patients.
The Shouldice Hernia Hospital is a private facility in Thornhill, Ontario, that prides itself on being “the global leader in non-mesh hernia repair.” It also offers competitive pricing for those paying out of pocket, which is a huge plus for the uninsured. And since it is private, the facility also has more control over its pricing structure, giving it more autonomy to work with health care consumers.
Paul, who has likened socialized medicine to slavery and who himself is an ophthalmologist, has always been an advocate for private solutions to our health care woes. And while many would like to condemn this decision to go to Canada as hypocrisy, it is actually right on brand for the senator.
Kelsey Cooper, a spokesperson for Paul, defended his decision and wrote in an email to the Courier Journal, which broke the story,
This is more fake news on a story that has been terribly reported from day one—this is a private, world-renowned hospital separate from any system and people come from around the world to pay cash for their services.
While the media and talking heads continue to waste their breath gossiping about Paul’s personal medical decisions, the senator is demonstrating what a truly free market health care system could look like.
I looked for a place that did primarily that type of surgery. A place that actually accepts Americans who pay cash. It’s a private hospital. The funny thing is, people had an agenda that wanted to attack me said, “Oh, you’re going to choose socialized medicine.” I’m actually choosing capitalistic medicine because they only take cash from foreigners.
He continued:
We have some centers like this. Oklahoma has a center like this but doesn’t specialize in the surgery I need. I chose (Shouldice) because they are good at it and actually the price is right.
Choice in Health Care Knows No Borders
Once it was made widely known that Paul would not be partaking in Canada’s socialized medicine, the critics switched to condemning the senator for going outside of the US for treatment, as if doing so was somehow anti-American in nature. And while many are using this instance as a means of shaming Rand Paul, his actions offer a great teaching moment for the country.
It’s a mistake to view health care as some sort of phenomenon unrelated and immune to the market process. Health care is a commodity just like any other consumer good. And when choice in medical treatment is limited, health care consumers suffer greatly.
Keeping health care options confined only to one’s own country of origin is an outdated concept. Medical tourism is a booming industry that gives patients more control over their health care by giving them the opportunity to go wherever the best possible care is available at the lowest costs. This has resulted in a boom for countries like India and Costo Rica.
For anyone unfamiliar with the term, medical tourism is when someone chooses to travel outside their country of origin, usually to less-developed countries, in search of affordable, quality medical care. And it also happens to be one of the fastest growing global industries. In 2016, this burgeoning sector was valued at $100 billion and is expected to experience 25 percent year-by-year growth by the year 2025. And in an era of soaring medical costs, it is saving health care consumers thousands of dollars and providing them with the care they so desperately need.
The thought of traveling abroad for health care might scare a fair number of Americans. After all, we tend to think our own medical system as more advanced than others. But the truth is that excessive government regulation has actually stifled medical innovation and caused the cost of treatment to skyrocket. And while American politicians argue about how to best fix this problem, other countries have been innovating and relaxing regulations in order to offer competitive care to medical tourists.
[T]he critically acclaimed Narayana Hrudayalaya heart hospital offers cardiac surgeries from $5,000- $7,000. The same surgery in the US would cost a patient upwards of $50,000. And as far as other medical procedures are concerned, in Costa Rica, a knee replacement surgery can cost a patient around $23,000. However, the same surgery, obtained in the US can cost anywhere from $35,000-$60,000.
The dramatically lower costs have encouraged some US employers to encourage their employees to seek treatment outside the country rather than use their insurance policies to see an American doctor. For employees who need knee replacement surgery, Hickory Springs Manufacturing began offering a choice: pay $3,000 dollars out of pocket and have the procedure performed in the United States, or opt to take an all-expenses-paid vacation to Costa Rica for the surgery instead. And on top of the free trip, you will also receive a $2,500 bonus check. Since switching to this model, the company has saved more than $10 million on health care costs.
The free market is not constrained to the political borders of one’s own country. And in order to have a robust health care market full of choice, consumers need to be able to go wherever the best care is available. Senator Rand Paul’s decision to go to Canada for surgery should not be condemned; rather, it should inspire the rest of the country to take a look at all the medical options available to us.
