The new federalism, New Hampshire style

A lot of governors don't want high-speed rail and at least one state is wondering whether it wants a new hospital:

New Hampshire Public Radio ran a story yesterday about Governor Lynch's request that hospitals in the state stop building new facilities.  Normally, governors never miss an opportunity to encourage new business in their state, because in most markets, greater investment leads to better services or lower prices.  Finally, policy makers understand that the normal rules don't apply in health care:

[T]hese facilities are driving up utilization and driving up health care costs. Those are costs that we all see in our ever-increasing health insurance premiums. To that, I say enough.

That is from Andrew Samwick.  This shows how deeply the current system of both health care finance and American federalism is broken.  It is not that the governor was suddenly persuaded by…Robin Hanson.  Instead, the shadow value of "money to spend as the governor wants it spent" is rising rapidly and old political equilibria are falling away, in Wisconsin too.

Comments

The idea that increases in health care utilization from new facilities outweighs the distortions from lack of competition is not at all the current belief among health economists, and hasn't been for 20 years (see Cutler and Dranove and McClellan and all the other usual suspects for the relevant citations). This just looks like regulatory capture by existing health care providers to me...

If you're interested in "white collar protectionism", though, check out the regulations on hospital construction/addition. Many, many states still require new hospitals to prove a need before they are allowed to add beds.

@Russell

As opposed to what exactly?

Not even to mention the fact that the words "morally deficient" are devoid of any objective meaning.

@Russell,

Robin Hanson is the most intellectually honest, least ideological or interest beholden thinker in all of social science academia. The morally deficient and defective person is you for engaging in personal ad hominem against a man who relentlessly seeks nothing but the truth regardless of affiliation or implication of its content. Like anyone he can and does make mistakes, but to imply that he's corrupt and/or in someone's pocket is as ludicrous as it is spiteful.

I doubt that such a lion of a thinker would even deign himself to respond to such petty, insipid demagogic attacks from a lesser, two-bit pseudo-intellectual partisan hack. So I will: Get bent.

I will believe that ruling class at state level is serious when they will start closing down perfectly worthless state institutions of "higher learning".
Perhaps starting with a certain very young (as universities go) and quite mediocre university near city of Fairfax.

@Russel

The key thing to remember when you're in a hole is to stop digging.

In other words, you've already proven you're an ignoramus. Now go away.

Do I have to read the Hanson paper? I once read a paper called "Showing that You're Smart: The Evolution of Pointless Contrarianism" that talked a lot about signalling.

the solution is simple: corporate tax cuts

The idea that increases in health care utilization from new facilities outweighs the distortions from lack of competition is not at all the current belief among health economists, and hasn't been for 20 years. If people think government controls in health care are good, I wish they would go talk to someone in Cuba or from the old Soviet Union about their health care systems.As for price, every time Apple comes out with a new product (innovation) the price is high. And so are the profits. But competitors enter and increase the supply and drive prices down.

Russell L. Carter,

At least we don't suck cock.

Is there a misprint in the quotation? How can additional hospital capacity increase utilization? Are these facilities doctor-owned, like MRI centers, where after the docs invest, nothing can diagnosed without an MRI? I wouldn't have thought hospitals were the proximate cause of such supply-induced "demand". What am I missing?

Comments for this post are closed