Tag Archives: Choice and Competition

Republicans introduce new federal legislation to expand school choice

If I were giving advice to the Republican party about how to win in 2020, I would advise them to focus on three priorities. Lowering unemployment, reforming the criminal justice system, and expanding school choice. They should also paint the Democrats as the party of infanticide, Green New Deal and elimination of private health insurance.

So far, Trump has done an excellent job of encouraging private sector job creators to create millions of new jobs. Unemployment is at a record low, and that’s important for persuading Black and Hispanic voters to vote for smart policies instead of tribal identity and envy. I don’t agree with with reforming criminal justice to favor criminals, but that will help with minority voters as well. But what we really need to do is provide Black and Hispanic voters with a way to get their children out of failing public schools. Public schools are filled with lazy, unionized Democrat teachers and administrators who care more about indoctrinating kids with Democrat propaganda than teaching them job skills that will make them independent, self-sufficient adults.

The Republican party knows that school choice is a win for them, and they are doing something about it.

Here’s the latest from the American Enterprise Institute, a think tank that promotes fiscally conservative policies:

Today, Secretary of Education Betsy DeVos joined Senator Ted Cruz (R-TX), and Rep. Bradley Byrne (R-Ala.), to announce new federal legislation that would establish a federal tax-credit expanding school choice. The proposal would give dollar-for-dollar tax credits to individuals and corporations who donate to state designated scholarship granting organizations (SGOs). While its particulars bear scrutiny, the “Education Freedom Scholarship” (EFS) proposal’s overall design is a solid attempt to walk a tightrope of backing state efforts at school choice while protecting against federal meddling now and in the future. Unfortunately, a number of critics on the right are too quick to react on their fears, and too slow in remembering what is holding back school choice.

Some conservatives and libertarians worry that solving the problem of underforming schools from the top down is a political overreach, but the AEI policy analyst writing the article says that the Republican bill doesn’t have that problem:

As I wrote back in 2017, backing state developed tax-credit scholarships is the best, and probably only, way the federal government could support state efforts without overreaching.  It would not be a federal program, but a tax credit that supports programs where states are explicitly responsible for policy particulars.

[…]No doubt, the bill would need to be explicitly structured to ensure the states’ primary role, and durably prevent federal overreach; fortunately defending states’ role is a paramount feature of the bill’s design.

School choice is a nice issue for Republicans, because it allows them to point out the hypocritical nature of Democrat politicians. Democrat politicians are essentially hypocritical. They want to ban guns for you, but they have armed security to protect themselves. It’s the same thing for education. They want to ban private schools for your children, but their own children all attend private schools.

Top Political Contributors in 2016 election cycle
The top Political Contributors in 2016 election cycle includes two teacher unions

Democrats are obligated by teacher unions, (e.g. – the National Education Association and the American Federation of Teachers), to vote against parents who want their children to get a better education. That’s because teacher unions are some of the biggest Democrat donors. Teacher unions just want more salary and bigger benefits, despite the evidence that clearly shows that more education spending doesn’t produce better student achievement.

Education spending has tripled since 1970
Education spending has tripled since 1970

Here’s a study from 2012 published in the journal “Education and Urban Society“. It says:

The possibility is examined that school choice programs could be a means to reducing the achievement gap. Data based on meta-analytic research and the examination of nationwide data sets suggest that school choice programs that include private schools could reduce the achievement gap by 25%. The propounding of this possibility is based on research indicating that the achievement gap in faith-based schools is generally 25% narrower than one finds in public schools. Results of these studies suggest that both the racial achievement gap and the socioeconomic achievement gap are reduced by the same degree (25%). The significance of these results is discussed, especially as it pertains to the attitudes that people frequently have toward school choice.

Not only do children do better in non-public schools, but the competition forces public schools to focus less on leftist indoctrination, and more on reading, writing and math.

This study from the on-partisan National Bureau of Economic Research (NBER) explains why.

It says:

A school that is more productive is one that produces higher achievement in its pupils for each dollar it spends. In this paper, I comprehensively review how school choice might affect productivity. I begin by describing the importance of school productivity, then explain the economic logic that suggests that choice will affect productivity, and finish by presenting much of the available evidence on school choice and school productivity. The most intriguing evidence comes from three important, recent choice reforms: vouchers in Milwaukee, charter schools in Michigan, and charter schools in Arizona. I show that public school students’ achievement rose significantly and rapidly in response to competition, under each of the three reforms. Public school spending was unaffected, so the productivity of public schools rose, dramatically in the case in Milwaukee.

School choice makes public schools perform better because competition between providers always lowers the cost and increases the quality of services and products being provided to the consumers. Consumers always suffer when there is a monopoly. This is why people are more satisfied purchasing goods from Amazon and Netflix than they are lining up at the post office or the department of motor vehicles. The free market serves the consumer.

I was raised in a poor background, and I am a visible minority. If Republicans want to get the votes of people in my community, it makes sense to put in place policies that allow people like me to get a good education so we can get good jobs and do better than our parents did. Republicans should be all about equipping people to be independent and self-sufficient. These are conservative goals.

Conservative legislators introduce new consumer-focused replacement for Obamacare

Obamacare premium growth, 2015-2016
Obamacare insurers are dropping out, which raises premiums higher, 2015-2016

I have your Thursday good news ready to go – from the Daily Signal.

This is how you reform health care:

Sen. Rand Paul, R-Ky., and Rep. Mark Sanford, R-S.C., introduced a bill to replace Obamacare on Wednesday, increasing the pressure on GOP leaders who continue to discuss moving the law’s replacement at the same time as its repeal.

The legislation already has the full support of the House Freedom Caucus, a group of roughly 40 of the lower chamber’s conservative members. Conservatives in both the House and Senate have said they want to see repeal efforts move faster, and the lawmakers are hoping that the legislation is a turning point in the repeal-and-replace debate.

“We’re excited about the fact that it will finally be able to address many of the concerns that we’re hearing, whether it’s at town halls or personal calls from our constituents about pre-existing conditions, about how to empower the consumer in terms of their health care choice, and ultimately drive down the price of health care,” House Freedom Caucus Chairman Mark Meadows, R-N.C., said Wednesday.

Called the Obamacare Replacement Act, the legislation shares the hallmarks of other GOP replacement plans, and Paul said it was a “consensus bill” that pulled aspects of other proposals together.

[…]Paul and Sanford’s bill focuses heavily on the expansion of health savings accounts (HSAs), which are medical savings accounts. Their legislation allows consumers to contribute an unlimited amount annually to HSAs. Currently, consumers can contribute a maximum of $3,400 per year.

The Obamacare Replacement Act also creates a $5,000 tax credit for those who contribute to a HSA, and prohibits consumers from using the money in their accounts to pay for elective abortions.

Under Paul and Sanford’s bill, consumers who don’t receive insurance through their employers can deduct the cost of premiums from their taxable incomes, which serves to equalize the tax treatment for individuals and employers.

Additionally, the legislation allows individuals and small businesses to band together through membership in an Association Health Plan to buy health insurance. Paul and Sanford said these pooling mechanisms will decrease costs for consumers.

The bill also allows insurance companies to sell policies across state lines and eliminates Obamacare’s essential health benefits mandate, which is a list of services insurance plans are required to cover without cost-sharing.

If you want to drive down the cost of health care, you let people get covered for only what they need – no abortions, sex changes, IVF, acupuncture, drug rehabilitation, breast enlargements, fertility treatments, etc. Allowing people to buy plans across state lines will mean that consumers in blue states like California and Massachusetts won’t be forced to buy in-state plans that cover all kinds of progressive garbage that they don’t even want.

Look how Obamacare is falling apart:

At the Future of Healthcare event put on by the Wall Street Journal, Aetna CEO Mark Bertolini said that Obamacare was only “getting worse” because there weren’t enough young, healthy enrollees to pay for the sick people covered by the Obamacare exchanges. Bertolini said it was due to “how poorly structured the funding mechanism and premium model is,” as premiums keep increasing with the death spiral, causing less people to sign up, and thus resulting in even higher premiums.

“I think you will see a lot more withdrawals this year of plans,” Bertolini said.

On Wednesday, Humana–which came to a mutual agreement with Aetna not to merge–announcedthat it was withdrawing from Obamacare altogether. In 2016, UnitedHealth also announced that they would be pulling out of the Obamacare exchanges, and Aetna itself said they would only stay in four Obamacare exchanges.

Bertolini stated at the event that the company has not decided if it will remain in these Obamacare exchanges.

“There isn’t any risk sharing going on in Nebraska,” Bertolini said, pointing to the fact that Aetna was the only insurer left in that exchange. “It will cost us a lot of money.”

Now is the time to replace it!

The problem with Obamacare is that it didn’t do anything to leverage the strengths of the free enterprise system. Instead of turning health care purchasing into competitive online e-commerce (i.e. – Amazon), they turned it into the DMV and the post office. What else would you expect from clowns who were born rich, and never held private sector jobs in their entire lives? You don’t expect the people who run the single-payer VA health system that is killing people on waiting lists to do a good job of reforming health care, do you? Let the free market solve it. Choice and competition means lower prices.

International tests show US children lagging despite record spending on education

Jay Richards tweeted this article from the Wall Street Journal.

Excerpt:

Since 1998, the Program for International Student Assessment, or Pisa, has ranked 15-year-old kids around the world on common reading, math and science tests. The U.S. brings up the middle—again—among 65 education systems that make up fourth-fifths of the global economy. The triennial Pisa report also shows—again—that East Asian countries like Hong Kong, Japan and South Korea produce the best outcomes.

U.S. performance hasn’t budged in a decade. For 2012, U.S. students placed 26th in mathematics, a bit below the Organization for Economic Cooperation and Development average, and 17th in reading and 21st in science, close to the average. The U.S. slipped in all categories compared to international competitors, plunging from 11th in reading as recently as 2009.

American teenagers seem especially weak in core academic subjects with high cognitive demands, such as translating concepts into solutions for real-world problems. A quarter never become proficient in math. In Shanghai and Korea, the comparable figure is 10% or fewer. Some 7% of U.S. students reached the top two scientific performance levels, compared with 17% in Finland and an amazing 27% in Shanghai. Is it tiger moms or tiger schools, or maybe both?

The U.S. is way out front in one measure: per-student spending. Only Austria, Luxembourg, Norway and Switzerland spend more. Despite laying out $115,000 per head, the U.S. did no better than the Slovak Republic, which spends $53,000.

Perhaps most depressingly, the data show no statistically significant U.S. achievement improvement over time. None. In an era when it pays to be thankful for small mercies, at least we’re not getting worse, but America’s relative standing is falling as other countries improve.

[…]Massachusetts has been running public schools since 1635 and today is home to some of the best performers in the nation. The state entered Pisa as if it was its own country—but students of the same age in Shanghai performed as if they had two more years of math instruction than those in the Bay State.

[…]Pisa also adds another count to the bill of indictment for the Democrats who block reform to serve their teachers union patrons. Education Secretary Arne Duncan called the report “a picture of educational stagnation,” but liberals are major impediments to more accountability, merit-based compensation and school-choice competition. The Justice Department has even gone so far as to sue Louisiana to block its modest voucher program, which is a moral crime against the students consigned to failing schools.

There are a few areas of economics that I think that Christians really ought to understand, and education is one of them. We definitely need to be concerned about policies that make it harder for poor, minority students to get ahead. We keep throwing money at the unionized public school system, and we get no results. We need to think about making education more like online shopping. What makes online shopping great is choice and competition. If schools were allowed to compete with one another, then the customer would be assured of getting more quality for less money. The public school system is a monopoly, and it serves the teachers and the education bureaucrats – not the children.

Related posts

Louisiana governor Bobby Jindal unveils education reform plan

Here are the details on Bobby Jindal’s new education plan, from New Orleans Online Access.

Excerpt:

 Gov. Bobby Jindal on Tuesday outlined a far-reaching set of proposals aimed at improving education in Louisiana, including a state-wide voucher program for low-income students, an expansion of autonomous charter schools and steps to link a teachers’ classroom performance to their job protections and their compensation. The governor has been promising for months now to make education reform the centerpiece of his second-term agenda.

[…]The voucher program may prove the most controversial aspect of the plan. Jindal is proposing to help pay tuition at private and parochial schools for any child of a low-income family who attends a school that receives a letter grade of C, D or F.

More than 70 percent of Louisiana’s public schools would fall into that category, opening up districts across the state to competition for public funding from private institutions. Parents who opt out of those public schools would be able to take the public funding set aside for their child with them to pay for tuition.

Voucher opponents argue that offering private school tuition siphons money away from public education, but the governor is framing the idea as a way to put decision-making in the hands of parents.

Also toward that end, Jindal is proposing to fast-track the approval of new charter schools for proven charter operators. Charters are publicly funded but privately managed and typically overseen by nonprofit boards. They compete with traditional public schools in their area for students.

Jindal is also proposing to end regular annual pay increases for teachers based on years in the classroom, ban the use of seniority in all personnel decisions and weaken the power that local school boards have in hiring and firing decisions in favor of superintendents.

Teachers coming into the classroom for the first time would also see major changes under Jindal’s plan: districts would have greater flexibility to establish their own pay scales for new teachers and tenure would be set aside only for those who earn high ratings on evaluations five years in a row.

I thought it might be helpful to also post this quick introduction to the issue of school choice, from the Cato Institute.

I don’t agree with the Cato Institute on everything, but they’re right on this issue. The Heritage Foundation also has 3 small videos explaining school choice – with cartoons!

There’s an even longer video narrated by John Stossel that you can watch, that really explains the why school reform matters – and why it’s a conservative issue. Like the sex-selection abortion issue that I blogged about here before, this is an issue that conservatives need to seize on. Here, we can really let our compassionate side show by helping the poorest students, especially those in visible minorities, who simply cannot get a quality education in a public school monopoly that is not responsive to the needs of parents, or their children. This is an issue where we can win – the only losers are the educational bureaucrats and the teacher unions. But the kids are more important.

New survey finds that Canadian health care system quality is declining

Map of Canada
Map of Canada

A story about a recent survey on Canada’s universal health care system, from the National Post.

Excerpt:

A new survey on attitudes about the health-care system reveals some interesting responses, confirming that Canadians have widespread misgivings about the system, even while not fully understanding how it works. They also favour using tax incentives to encourage healthier living and eating.

The survey of 2,300 Canadians carried out in April by the consulting firm Deloitte was part of a larger poll covering 12 countries. It is considered accurate to within two percentage points, 95% of the time.

Some of the highlights include:

– Just 5% of respondents gave the system an A grade; 45% giving it a B, 36% a C, 10% a D, and 4% a failing F.

– 33% of Canadians said they understood how the system works, down from 39% in 2009 when Deloitte did a similar survey.

– 69% feel that the system has not improved in the last two years, while there were slightly more who thought it had deteriorated, as opposed to improved, in that period.

– 36% believe that half the money spent on health care is wasted; interestingly, half of those skeptics blame the waste on people failing to take responsibility for their own health.

– 13% reported that they are caring for another person, up from 10% in 2009, a possible sign of the increasing personal burden posed by the aging population. In a third of those cases, the individual is caring for a spouse.

– 55% rated their health as excellent or very good … even though 52% report having been diagnosed with one or more chronic diseases.

– 63% favour some kind of tax-based incentive to encourage more healthy diets and lifestyles.

– About 80% favour expanding medical-school enrollments to increase the supply of doctors.

You can find some more videos describing horror stories in the Canadian system in this previous post.

Everyone agrees that the American health care system is too expensive, but do we at least get better quality outcomes? Let’s see.

How good is the American health care system?

Consider this article from the Hoover Institute at Stanford University.

Medical care in the United States is derided as miserable compared to health care systems in the rest of the developed world. Economists, government officials, insurers, and academics beat the drum for a far larger government role in health care. Much of the public assumes that their arguments are sound because the calls for change are so ubiquitous and the topic so complex. Before we turn to government as the solution, however, we should consider some unheralded facts about America’s health care system.

1. Americans have better survival rates than Europeans for common cancers. Breast cancer mortality is 52 percent higher in Germany than in the United States and 88 percent higher in the United Kingdom. Prostate cancer mortality is 604 percent higher in the United Kingdom and 457 percent higher in Norway. The mortality rate for colorectal cancer among British men and women is about 40 percent higher.

2. Americans have lower cancer mortality rates than Canadians. Breast cancer mortality in Canada is 9 percent higher than in the United States, prostate cancer is 184 percent higher, and colon cancer among men is about 10 percent higher.

3. Americans have better access to treatment for chronic diseases than patients in other developed countries. Some 56 percent of Americans who could benefit from statin drugs, which reduce cholesterol and protect against heart disease, are taking them. By comparison, of those patients who could benefit from these drugs, only 36 percent of the Dutch, 29 percent of the Swiss, 26 percent of Germans, 23 percent of Britons, and 17 percent of Italians receive them.

4. Americans have better access to preventive cancer screening than Canadians. Take the proportion of the appropriate-age population groups who have received recommended tests for breast, cervical, prostate, and colon cancer:

  • Nine out of ten middle-aged American women (89 percent) have had a mammogram, compared to fewer than three-fourths of Canadians (72 percent).
  • Nearly all American women (96 percent) have had a Pap smear, compared to fewer than 90 percent of Canadians.
  • More than half of American men (54 percent) have had a prostatespecific antigen (PSA) test, compared to fewer than one in six Canadians (16 percent).
  • Nearly one-third of Americans (30 percent) have had a colonoscopy, compared with fewer than one in twenty Canadians (5 percent).

5. Lower-income Americans are in better health than comparable Canadians. Twice as many American seniors with below-median incomes self-report “excellent” health (11.7 percent) compared to Canadian seniors (5.8 percent). Conversely, white, young Canadian adults with below-median incomes are 20 percent more likely than lower-income Americans to describe their health as “fair or poor.”

6. Americans spend less time waiting for care than patients in Canada and the United Kingdom. Canadian and British patients wait about twice as long—sometimes more than a year—to see a specialist, have elective surgery such as hip replacements, or get radiation treatment for cancer. All told, 827,429 people are waiting for some type of procedure in Canada. In Britain, nearly 1.8 million people are waiting for a hospital admission or outpatient treatment.

7. People in countries with more government control of health care are highly dissatisfied and believe reform is needed. More than 70 percent of German, Canadian, Australian, New Zealand, and British adults say their health system needs either “fundamental change” or “complete rebuilding.”

8. Americans are more satisfied with the care they receive than Canadians. When asked about their own health care instead of the “health care system,” more than half of Americans (51.3 percent) are very satisfied with their health care services, compared with only 41.5 percent of Canadians; a lower proportion of Americans are dissatisfied (6.8 percent) than Canadians (8.5 percent).

9. Americans have better access to important new technologies such as medical imaging than do patients in Canada or Britain. An overwhelming majority of leading American physicians identify computerized tomography (CT) and magnetic resonance imaging (MRI) as the most important medical innovations for improving patient care during the previous decade—even as economists and policy makers unfamiliar with actual medical practice decry these techniques as wasteful. The United States has thirty-four CT scanners per million Americans, compared to twelve in Canada and eight in Britain. The United States has almost twenty-seven MRI machines per million people compared to about six per million in Canada and Britain.

10. Americans are responsible for the vast majority of all health care innovations. The top five U.S. hospitals conduct more clinical trials than all the hospitals in any other developed country. Since the mid- 1970s, the Nobel Prize in medicine or physiology has gone to U.S. residents more often than recipients from all other countries combined. In only five of the past thirty-four years did a scientist living in the United States not win or share in the prize. Most important recent medical innovations were developed in the United States.

Despite serious challenges, such as escalating costs and care for the uninsured, the U.S. health care system compares favorably to those in other developed countries.

The author of that article is a senior fellow at the Hoover Institution and a professor of radiology and chief of neuroradiology at Stanford University Medical School.

So, we saw that the quality of the U.S. health care system is good, but how can we lower the costs? Is government controlled rationing (like Canada) the answer, or is there another way?

Choice and competition in health care

The Center for Freedom and prosperity seems to have found another way: choice and competition.

Excerpt:

In many ways, America’s health care system is the best in the world. It has state-of-the-art technology and highly-skilled medical professionals. America is also home to most of the cutting-edge medical research in the world. However, there are also important problems, such as the “third-party payer” model where consumers rarely pay the full cost of their own health care. This creates an incentive for both excessive and expensive use of health care, a problem that would be exacerbated by current proposals for greater government control of the health care system.

But the third-party payer problem is not the only reason that health care costs are high. State governments impose health insurance coverage mandates, often for “gold-plated” coverage, that drive up the cost of insurance. These regulations, which are unique to each state, are imposed at the behest of interest groups seeking to increase demand for their services. Combined with protectionist barriers that prevent consumers from buying policies from providers in other states, these mandates have severe unintended consequences:

  • They limit competition in the health insurance market by preventing insurance buyers from shopping across state lines, creating monopolistic and oligopolistic situations in many states;
  • They impose coverage mandates that force health insurance buyers to purchase coverage that they either do not want or cannot afford;
  • They force insurers to use community rating instead of experience rating, which means healthy people are forced to subsidize unhealthy people – to the effect that insurance premiums rise for many buyers and healthy people are driven out of the market.

The symptoms of a dysfunctional health insurance market – foremost the significant number of uninsured, but also rising costs – are recognized by many legislators. But the problem cannot be solved, as some suggest, by means of increased government regulation. Indeed, government regulation is the cause of most problems in the health insurance market, not the solution.

Restoring a free market health care system would be a daunting task, one that would involve, 1) sweeping reforms to the 45 percent of health care directly financed by government programs, and 2) a complete rewrite of the tax code to remove the distortions that exist in employer-provided health insurance. This paper focuses on the so-called third leg of the stool – policies to remove government barriers and restore competition to the market for individual health insurance.

Reforming the government-financed programs is definitely necessary because there is so much fraud and waste, as there always is with government, when compared to the private sector. Private sector businesses have to turn a profit, so they actually try to prevent fraud and waste.

Here’s a documentary featuring John Stossel that explains the health insurance problem. (And featuring Regina Hertzlinger, too)

Part 1 of 5:

Part 2 of 5:

Part 3 of 5:

Part 4 of 5:

Part 5 of 5:

Choice and competition govern the way we buy things that we want normally, especially when we buy things online. I am pretty happy buying things from online retailers, because I have so many stores to choose from, with lots of product reviews and retailer ratings. I usually like what I buy, because I know that I am buying a good product from a good seller. And if I don’t get a good outcome, I can leave a review of the product, service or seller as a warning for the next person. That helps to encourage producers to make quality products and services Seller rating helps to make sellers care for customers, and to accept returns on items that don’t perform. Maybe we should do that with health care, and just leave health insurance for catastrophic care – like car insurance is for accidents, but not for oil changes.