By Rob RoperRob Roper

Kevin Mullin, chairman of the Green Mountain Care Board (GMCB), appeared on the WDEV radio program Open Mike (10/11/17) to discuss Certificate of Need (CON) laws in the wake of a controversy regarding Copley Hospital and their highly successful orthopedic surgery center. Copley is, apparently, generating too much revenue as the result of being highly efficient, performing more surgeries (they have not raised prices), and delivering what is recognized as superior service and outcomes for their patients. In the screwy world of CON laws, this is bad.

CON laws essentially require a special permission slip from the government, in Vermont’s case the Green Mountain Care Board, to start providing or to expand healthcare services. CON laws are supposed to control costs by limiting access to care, and are a malignant anachronism with roots in a failed federal healthcare policy of the 1970’s. Most states have done away with CON laws for good reason: they don’t work. In fact, they make every important aspect of healthcare demonstrably worse.

States that have ditched their CON laws have on average lower healthcare costs, better health outcomes for patients, and greater access to care. Vermont, however, as one might suspect, subjects more aspects of the healthcare industry (30) to the CON process than any other state. The results: as a recent study by the Kaiser Foundation determined, between 1991 and 2014 hospital expenditures in Vermont have increased faster than any other state in the US. That’s a pretty epic fail for a policy that’s supposed to keep hospital expenditures in check.

So, why do we still have CON laws? There are no good reasons. But the bad reasons are cronyism and that Vermont’s guiding principal regarding healthcare today is to ration access to it.

Politicians will deny that their goal is to ration access to care, but here’s what Mullin said when asked why we need a GMCB:

We are the regulators… we have to be the ones who are putting the breaks on utilization. And so that is our role.

“Putting the breaks on utilization.” That’s rationing.  It means denying care to someone who thinks they need it. Maybe they do, maybe they don’t, but is a six member panel of politically appointed bureaucrats in Montpelier really who we want making that decision? Mullin further reinforces the rationing argument when he says:

The cost of healthcare isn’t just what it costs for a given set of procedures, because you can hold that constant, but if people had more use of those procedures you can still have rising healthcare costs.

It’s not the cost of the procedure that’s driving up cost, it’s the number of patients utilizing the procedure. Sure. 2 x10=20 and 3×10=30. This is what was happening at Copley. But if three people need a procedure, the way the GMCB will go about “bending the cost curve” is to make sure only two people get it. Rationing.

And then there’s cronyism.

Although the original intent of CON laws was to prevent the “overbuilding” of healthcare infrastructure, the unfortunate misuse of the laws, where they continue to exist, has been to block competition from taking business away from the politically favored. Mullin laments,

What I have concerns about is when hospitals – and they hate it when I use this term… — is “poach” on another hospital.

What Mullin calls “poaching” is, by another name, healthy competition — one provider attracts customers by providing better outcomes, lower cost, shorter wait times, etc. This is the case at Copley, where the orthopedic surgical center has earned an outstanding reputation, and patients want to get their care there. Other examples of healthy competition include Vermont MRI, which had to get a CON to provide a cheaper alternative for medical imaging, and the new surgical center in Colchester that had to spend $250,000 and waste years going through the CON process.

The opposite of the “poaching” scenario is government picking winners and losers, which is what we have now. And, to paraphrase Napoleon, government is on the side of the biggest lobbing firms. This is why instead of rewarding Copley Hospital for exceptional efficiency and superior quality and using it as a model example to others, the GMCB is instead threatening to revoke Copley’s CON altogether. Is it any wonder our healthcare system is a mess of rising costs and increasing wait times?

It’s time to subject our CON laws and the Green Mountain Care Board to a Certificate of Need process. I think we’ll find we don’t need either of them.

- Rob Roper is president of the Ethan Allen Institute. He lives in Stowe.

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by Chris Campion

Tax cuts, often championed by Democrats (when they want to take credit for economic growth), are Bad, Horrible, Awful Things again, because, well, Trump and Congress.

As a fine example of a histrionic and economically illiterate analysis of the recently-proposed tax cuts, I give you the The Washington Post, that long-standing bastion of Austrian economic theory.  How will the Post provide its readers with details around a policy that will impact the half of the country that actually pays taxes?  Standing in as the sharp end of the Post’s analytic spear, the Post offers up Ruth Marcus, for the delightfully (and, one might guess, purposefully) limited take on the impacts of tax cuts and tax increases:are working on them.

Yes, the economy grew robustly after John F. Kennedy proposed and Lyndon B. Johnson signed a tax cut in 1964 (the top rate went from 91 percent to 70 percent) and after Reagan cut taxes in 1981 (he later raised them, because of fears of the ballooning deficit). But the economy also grew robustly after Bill Clinton raised taxes in 1993 and anemically after George W. Bush cut taxes in 2001 and 2003.

What’s missing in Ruth’s cursory review of the economy, after tax cuts and tax increases, is telling.  Clinton, for example, after raising taxes in 1993 (which included an increase in the taxable portion of Social Security benefits, because, y’know, he’s a dude of the people), signed an enormous tax cut in 1997, which spurred even larger and more consistent growth.  These tax cuts are consistently attributed with spurring the growth in the 1990s – not the primary driver, but certainly a major contributor.  From the study:

From 1993 until 1997, the economy grew at 3.3 percent per year.4 While solid, this growth was certainly not exceptional. During that same time, real wages declined, despite the perception that the 1990s were an era of unmitigated abundance.

It was not until after a 1997 tax cut, passed by Congress—a tax cut President Clinton resisted but ultimately signed—that the spectacular growth kicked in. While small in static revenue impact, the 1997 cuts included a reduction of the capital gains rate from 28 percent to 20 percent. This opened the capital floodgates necessary for entrepreneurs to develop, harness, and bring to market the wonders of the new information technologies. business investment skyrocketed after the tax cut,6 and the economy grew at an annualized rate of 4.4 percent—33 percent faster than after the Clinton tax hike—from 1997 through the end of the Clinton presidency. Real wages reversed their downward trend and grew 1.7 percent per year during the same time.

Oh, and as for George W. Bush’s tax cuts – I’d also like to add that something else happened in 2001 that dramatically affected the country, and the economy, but hey, tax cuts didn’t spur growth.  I get it.

But because we’re having trouble finding people who are for tax increases, here’s the former tax-increaser himself, Bill Clinton, calling for a corporate tax cut rate, in 2011.  Which runs kind of counter to Ruth’s argument above.  But let’s let the Hayek (not Salma) – loving President call it in his own words.

“When I was president, we raised the corporate income-tax rates on corporations that made over $10 million [a year],” the former president told the Aspen Ideas Festival on Saturday evening.

“It made sense when I did it. It doesn’t make sense anymore — we’ve got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.

Bill’s point isn’t a new one.  The US is at a competitive disadvantage with foreign corporations that pay a much lower rate

than the current 40% we’re sporting here in the US.  In fact, if you stack us up with the EU, etc., the disparity becomes starkly clear:

Simply put, if you believe that the real engine for growth isn’t the government, but rather the people choosing what to do with their money, what to buy, invest in, or save, then you’re probably not a Democrat.

The sad fact is, though, that the other party, the Republicans, isn’t much better on this front, and have voted for massive spending increases, and have justified those increases in much the same way that Democrats do, which is that they try to pitch the spending to the groups that vote for them, to demonstrate the ways that spending benefits that specific group.  In other words, they’re buying votes, with tax dollars.

As Ruth Marcus continues, though, apparently now we’re supposed to care about debt, when Republicans offer a way to improve the economy.  I’m guessing Marcus’ track record as being a deficit or debt hawk was a weak one from 2008-2016:

Meanwhile, the national debt is 77 percent of the economy, the highest since the end of World War II. It is on track to exceed the entire gross domestic product by 2033. That is even without a $1.5 trillion tax cut, the amount envisioned in the just-passed budget resolutions.

The debt doubled in 8 years under Obama.  It took 240 years to get to $9 trillion in debt or so, and in 8 years, that debt doubled.  But even that misses the point – it’s not

the tax revenues we’re collecting that drives the debt, it’s the spending.  The enormous gap between revenues and spending is startling – not just the gap, but how much more money we’re both collecting and spending.

Not one peep from Marcus about spending.  Not one mention in her article about the enormous leap in federal spending.  If the tax cut decreases revenues, which it should, of course the gap will widen.  But is the problem revenues?

Or is it, eternally, the unshakeable belief that all spending is a net good, that people keeping more of the money they earn is bad, that rich people (who pay 97% of all income taxes collected) are bad, only those who would spend the money other people earn are inherently, and by default, good.

It’s this sort of acquiescence to a large, centralized, and politicized government that’s caused the deaths of tens of millions in the 20th century, and as the hoary governments of places like Venezuela demonstrate, the catastrophes will continue, no matter how many times the lesson is thrown in our faces.

That reality doesn’t change Marcus’ conclusion, though – that tax cuts are reckless.

Trump wants tax cuts — the biggest ever! — because he promised them. Republicans take tax cuts as a matter of faith; they are desperate for a legislative win, any win, to take to voters next year. So deficit-financed tax cuts may be a political imperative. As an economic matter, they are simply reckless.

No word yet on Marcus’ forthcoming article that might state why the spending is reckless, or the debt incurred under the last administration might also be reckless, and mentioned, en passant, in her article how the biggest drivers of future economic disaster are Social Security, Medicare, and Medicaid, and their unfunded liabilities in the trillions.  Those are not even mentioned, en passant, in her article.

Maybe that was just an oversight in her article.  Or maybe it was just reckless.

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by John McClaughry

Former Australian Prime Minster Tony Abbott gave a speech last month that got worldwide attention. He took a hard nosed look at the effect of the rush to wind and solar power on Australia’s power grid. Here are some excerpts.

“In September last year, the wind blew so hard that the wind turbines had to shut down – and the inter-connector with Victoria and its reliable coal-fired power failed too. For 24 hours, there was a state wide blackout. For nearly two million people, the lights were off, cash registers didn’t work, traffic lights went down, lifts stopped, and patients were sent home from hospitals.”

“Because the weather is unpredictable, you never really know when renewable power is going to work. Its marginal cost is low but so is its reliability.”

This echoes what Christine Hallquist of Vermont Electric Coop has been saying. Too much intermittent renewable power causes increasing problems of grid management.

Abbott continues: “A market that’s driven by subsidies rather than by economics always fails. Subsidy begets subsidy until the system collapses into absurdity. In Australia’s case, having subsidized renewables, allegedly to save the planet; we’re now faced with subsidizing coal, just to keep the lights on.”

And finally, said Abbott, “Primitive people once killed goats to appease the volcano gods. We’re more sophisticated now but are still sacrificing our industries and our living standards to the climate gods to little more effect.”

- John McClaughry is the vice president of the Ethan Allen Institute

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By David Flemming

In the recent VT Digger article “Imagining a Vermont that functions more like Finland,” Anu Partanen argues that the United States- and by extension Vermont- should follow Finland’s lead in public policy. Partanen’s book “The Nordic Theory of Everything” might just be one public policy publication among thousands, but she has gotten the attention of some rather high profile Vermonters. Partanen will appear in a panel discussion with Lt. Governor David Zuckerman on Friday.

Partanen claims “nordic countries are in many ways free-market, but at the same time they’ve taken universal social policies to serve everyone.” Far from promoting free-market policies, Finland’s policies severely restrict individuals from making even the most mundane of decisions.

Start with the hospitality industry. Imagine that one day Vermont legislators woke up and discussed making Vermont into a Finlandish utopia.

Legislator 1: “Ice cream and chocolate is unhealthy.”

Legislator 2: “Why don’t we tax them, since Finland did so as recently as 2016?”

Legislator 1: “But that would hurt an awful lot of Vermont businesses, like Lake Champlain Chocolates and Ben & Jerry’s.”

Legislator 2: “Oh well. Vermont consumers will just have to make do with prune filled tarts, a traditional Finnish desert.”

And the legislation wouldn’t stop at sugary substances.

Finland has a state monopoly on beer that has alcohol content greater than 4.7%. If Vermont were to impose a similar restriction on craft beer entrepreneurs, that would outlaw 99 out of the top 100 beers brewed in Vermont, including the world-renowned Heady Topper. Only the Greensboro, Vermont farmhouse ale “Flora” would escape this beer busting, because its alcohol content is 4.00%.

All of these sugar and alcohol policies help explain why Finland was ranked #1 out of 28 countries on the Institute of Economic Affairs’ Nanny State Index, which highlights the “worst places in the European Union to eat, drink, smoke and vape.” Vermont may have problems, but we can be thankful that we live in a state that doesn’t lack for places of merriment.

Since it would be difficult for Vermonters to stomach Finland’s draconian consumption laws, perhaps Vermonters push the US to adopt Finnish fiscal policies? Partanen claims Finland is a “clear road map for dealing with growing inequality,” but Finland may actually impose far more taxes on the middle and lower classes to pay for their government programs. In 2014, the bottom 95% of American income earners paid 40% of all income taxes. In 2015, the bottom 96% of Finnish income earners paid 73% of income taxes. The average Finnish worker actually paid a larger percentage of their income taxes than the average American worker did in 2016.

Finally, Finland ranked 58th out of 63 counties in a survey that explored “cultural variation in empathy and rank countries based on how likely their residents were to show compassion and appreciate the views of others.” The US ranked #7.

Vermonters have the sweets, the hops and the ability to put ourselves in the shoes of others. Perhaps Finland can learn from us.

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By Guy Page

If some in agencies of the Scott Administration pursue their  dream to restore the Vermont Yankee site to “residential standards” (Oct. 18, “Changes could endanger Vermont Yankee sale”), they will be responsible for a deal-killer that makes little sense from the standpoint of past agreements and likely future use.

If required to restore the Vermont Yankee site and spent fuel storage facility to a contrary use, NorthStar CEO Scott State confirmed that the company will drop the plant purchase and decommissioning project. If that happens, current owner Entergy says it must mothball the site in SAFSTOR for 25-50 years.  SAFSTOR is an acronym used by the U.S. Nuclear Regulatory Commission to describe the longterm shutdown of a closed nuclear plant site, deferring decommissioning and site restoration until many, many years down the road.

As planned, NorthStar would return the site to a green field. It would move all contaminated structures and material, as well as all structures to a depth of four feet below grade (one foot deeper than required by regulations and previous agreements). It would replace all removed material with clean fill, then grade and seed the entire property. The land could be returned to farming, with background radiation levels almost half as much under the federal minimum levels.

But the Town of Vernon has bigger plans than farming. A few acres with material four feet below grade works just fine for the kind of new high-tech employer the town wants: for example, a data center, large manufacturer, or another power plant. (The power plant concept has particular appeal for many town residents who are proud of their community’s century-long legacy of hosting cutting-edge power generating facilities like the Vernon Dam and Vermont Yankee.) For such a project, any competent site designer can work around a handful of in-ground obstacles.

Housing is a different story. The term “residential standards” presumably means what it sounds like: a restored site sub-divided into building lots with potential basements and leach fields.  For this purpose, four feet isn’t deep enough.

And who would build housing on the Vermont Yankee site, anyway? The Town of Vernon envisions a new tax-paying, job-creating clean industry on the Vermont Yankee site. There’s plenty of housing for sale in and around Vernon, and plenty of land on which to build new housing, but there is only one uniquely-advantaged industrial development site – Vermont Yankee. No one is even considering the site for housing. From out of the proverbial left field, the State has introduced a new requirement that is as unnecessary as it is certain to kill the project.

It’s not clear why the State of Vermont would pursue standards not needed for industrial development. Perhaps the gambit is to negotiate the best deal for Vermont by pushing the envelope. That’s good for Vermont as long as we don’t kill the proverbial golden opportunity that the sale to NorthStar provides – an opportunity to regain some of the jobs and revenue lost when Vermont Yankee closed. According to an October 23 article in E&E News, Vermont Yankee’s total annual payroll when operational was $66 million, with a regional economic impact of almost $500 million.

Hopefully, the Public Utilities Commission knows what’s real and what’s not; for example, a housing development on the VY site. For the long-term wellbeing of Vernon and Windham County, let’s hope so.

- Guy Page is a Berlin, Vermont resident and the communications director for the Vermont Energy Partnership, a coalition of more than 90 members in support of policies for clean, safe, affordable, and reliable power. Vermont Yankee is a VTEP member.

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by David FlemmingIMG_0471

Recently, Raise the Wage Coalition member Nathan Suter wrote an editorial entitled “Economic Evidence Points to Broad Benefits of a $15 Minimum.” The letter makes several dubious claims in support of Vermont raising the minimum wage to $15/hour. To make his case, Suter relies on four Berkeley studies, one of which was subjected to political interference by the pro-minimum wage Seattle mayor, and four Economic Policy Institute studies (EPI received 27% of its funding from labor unions, which often peg their contracts to a minimum wage baseline).

If Vermont’s experience with a $15 minimum wage is anything like Seattle’s experience, workers are in for a rude surprise. The University of Washington discovered that Seattle businesses adapted to an increase in the minimum wave to $13 minimum wage by reducing the hours for workers in low-wage jobs ($13-$19/hr.) by about 9 percent. The result was a loss of 14 million hours annually. Hourly wages in low-wage jobs did increase by 3 percent, but the net impact was that low-wage earners lost an average of $1,500 annually because of the cut in hours. And Seattle’s minimum wage has not even reached its zenith of $15/hour in 2021.

While Suter claims that past research shows “little negative impact on employment or hours,” Vermont’s Joint Fiscal Office (JFO) estimates that Vermont’s economy will have 2,830 fewer jobs by 2028 if Vermont enacts a $15 minimum wage. The Heritage Foundation estimates that Vermont could lose as many as 11,000 jobs. It is difficult to estimate the job loss because the “academic literature” has been confined to minimum wage increases “affecting 10% or less of those employed,” according to the JFO, while the $15 minimum wage increase is projected to impact 25% of Vermont’s workforce.

To compound the risk, there is the possibility that the Vermont-New Hampshire border could become what the JFO calls the “largest historical (wage) spread on record.” Should New Hampshire keep its minimum wage at $7.25 (and they show no signs of changing), this would be less than half of the proposed $15/hour minimum for Vermont. According to 2015 data from the Census Bureau, all six Vermont counties that share a border with New Hampshire have a lower median household income than the Vermont average. This suggests Vermont businesses along the border are less able than other counties in Vermont to afford a minimum wage increase. Vermont businesses will be forced to lay off workers in order to remain competitive with their New Hampshire counterparts who will have far lower labor costs.

The JFO notes that a $15 minimum wage’s “positive effects will be largely offset” by 1) lower quantities of products produced at Vermont businesses (not the “boost in business sales” Suter claims) 2) fewer federal transfer payments that the State has no control over, 3) higher Federal income and payroll tax payments for Vermont employers and workers, 4) higher local prices resulting in lower quantity demanded, and 5) an increased reliance on technology to take over work that is too expensive to pay employees to accomplish.

So, far from “offset(ing) a significant portion of the higher cost for employers” as Mr. Suter claims, a $15 minimum wage would not only make Vermont employers lives more difficult, it would make the lives of Vermont workers more difficult.

- David Flemming is a policy analyst at the Ethan Allen Institute.

 

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by John McClaughryJohn McClaughry

Back in 1999 Robert Reich, President Clinton’s very liberal ex-Secretary of Labor, penned an op ed piece that said “The era of big government may be over, but the era of regulation through litigation has just begun.”

Reich argued that Congress, since 1994 under the control of pro-business Republicans, will not enact liberal proposals for regulating and taxing the tobacco and firearms industries, and it won’t change the antitrust laws to benefit the competitors of Microsoft. Therefore, wrote Reich, forget Congress – we’ll sue. He conceded that this regulation through litigation isn’t efficient, and may not serve the public interest, but “perhaps regulating through lawsuits is better than not regulating at all.”

As I wrote back then, “The result of this new strategy has been a rash of novel lawsuits and expansive judicial holdings, pressed by flamboyant trial lawyers allied with liberal politicians. Thanks to their aggressive advocacy, courts are abandoning long-established tort law precedents to hand down what only yesterday were considered to be purely legislative decisions. In 87 recent cases, courts have overturned legislatively-enacted limits on extravagant damage awards. Courts are even awarding damages where no injury has been demonstrated.”

Here in Vermont, a group of out of state trial lawyers appeared to propose to attorney general William Sorrell that he appoint them to sue the tobacco industry. Unlike traditional tort suits, where a lifelong smoker seeks damages for health injuries from smoking, the new attack would be brought on behalf of the State itself.  Instead of putting smokers on the witness stand where they could be cross-examined, the State would only need to exhibit Medicaid statistics on smoking-related Medicaid expenses.

The ultimate goal of this “regulation and taxation through litigation” is to force selected industries to the wall. It threatens them with extinction, then lets them off in return for accepting judicially-decreed regulatory controls and paying what amounts to extortion, up to a third of which ends up in the pockets of the plaintiff attorneys.

This is profoundly anti-democratic. No legislator ever votes on this expanded regulatory control, and the cost of the judicially-imposed regulations turns up as an unlegislated hidden tax in the price of the products.

Back then the thrust was on expanding tort law, but that’s not the only area where “sue and settle” litigation is now common. Here’s a typical scenario.

An environmental group files suit against the Environmental Protection Agency (EPA) demanding that it enforce the group’s interpretation of environmental laws on businesses, landowners, and municipalities. Then the group’s lawyers huddle with the EPA lawyers, many of whom are in full sympathy with the demands for stricter regulation.

If the plaintiffs’ lawyers win most of their demands in this closed door negotiation, both parties will seek a judicial consent decree – often including taxpayer financing of the “prevailing” plaintiff’s legal costs – and drop the lawsuit. The EPA bureaucrats, with no authority from elected lawmakers, will then use the authority of the consent decree to put the regulatory hammer down on the targeted businesses, landowners, municipalities, and others.

“Sue and settle”, at least at EPA, took a body blow last week. Since 2009 EPA agreements with environmental groups have resulted in 137 new Clean Air Act regulations. The costs of several of these rules run well into the billions, including some of the most expensive ever written.

Administrator Scott Pruitt announced that EPA would stop participating in this undemocratic charade, because “it forecloses meaningful public participation in rulemaking, effectively forces the Agency to reach certain regulatory outcomes, and costs the American taxpayer millions of dollars.”

Among other steps, Pruitt promised to publish a list of consent decrees and settlement agreements that govern Agency actions within 30 days, along with any attorney fees paid, and open public hearings on request.

Breaking up these “sue and settle deals” at EPA is a huge step forward for the public interest. EPA Administrator Pruitt, who will attract an avalanche of abuse from the “sue and settle” industry, deserves a lot of credit for putting an end to the practice. Vermont could well emulate his decision.

- John McClaughry is vice president of the Ethan Allen Institute (www.ethanallen.org)

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by Rob Roper

As most Vermonters are aware, the EB5 scandal in the Northeast Kingdom involved Jay Peak, Bill Stenger, and Ariel Quiros. The alleged crimes involved securities fraud, misuse of $200 million, kick-back payments, and a Ponzi-like scheme to defraud investors. What’s less clear is the involvement and responsibility of the state government and state officials. Attorney General, T.J. Donovan (D) wants to keep it that way.

Donovan’s argument is that state employees were “acting in good faith,” and are therefore immune from prosecution for negligence, or corruption in their roles in allowing the fraud to occur under rules of “sovereign immunity.” Sovereign immunity is defined as “a legal doctrine by which the sovereign or state cannot commit a legal wrong and is immune from civil suit or criminal prosecution.”

According to a recent article by Vermont Digger, the potential crimes committed by state actors include “falsely claim[ing] the projects were audited by the state, actively promot[ing] the projects to new potential investors after state officials were made aware that investor monies had been misused, and engag[ing] in a cover-up.” Moreover, “The investors say the state ‘directly sold’ the Jay Peak projects to investors by promising faster green card approvals, quarterly reports and an assurance of compliance. Legal agreements between the state and the developers that were given to investors included guarantees that state officials would be responsible for oversight, management and compliance.” And, “They cite an example of the state’s alleged complicity in a new affidavit from an EB-5 expert who claims that the state knew in 2012 about kickbacks to Jay Peak immigration attorneys.”

“Meh,” says Donovan. “Sovereign immunity!” No one will be held accountable. No information will be released. Move along.

Now, this is exactly why we should not want government to be in charge of, well, ANYTHING. Especially things that are important, complicated, and involve lots of money. Think healthcare.

We so often hear that government needs to get involved with this or that because otherwise there would be no accountability to the people. But the opposite is true. If crimes are committed by actors in the private sector, they are investigated, prosecuted, and, if found guilty, punished. They are held accountable, and it is possible for the victims of negligence and fraud to exact some sort of restitution or justice. This is a powerful incentive for private sector entities to truly be responsible act to genuinely in good faith. Those that don’t are weeded out.

Not so when government is in charge.

We may never find out if the state was corrupt or incompetent in regard to the EB5 scandal. We may never know what officials made mistakes or committed crimes. Victims may never get justice. And that’s how the system is set up to work. Is that how we want our healthcare system to work, too?

Rob Roper is president of the Ethan Allen Institute. 

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by John J. Metzler

UNITED NATIONS—A dangerous and potentially riveting political fault line stretches from Spain across Europe to Ukraine as smoldering separatist movements have gained new strength and standing.

From Catalonia in Spain to the eastern regions of Ukraine with Corsica in between, the nationalist rift runs through the European Union to Russia. Deep cultural and linguistic divides are prevalent. Equally the political populism which triggered Britain’s BREXIT vote to leave the European Union has fueled separatist sentiments.

But like Spain’s Basque regions, Catalonia already has autonomy within the central government in Madrid. Culturally and linguistically Catalonia’s moves are rooted in centuries of a proud identity and reflect a reality that the small northeast region of 7.5 million people centered in Barcelona remains of hub of prosperity. Yet despite its wealth, Catalonia remains the most indebted autonomous region in Spain.

On October 1st, Catalonia held a independence referendum in which the regional government claimed an epic victory; while 90 percent of voters backed independence, only 43 percent of those eligible even cast a ballot! The vote moreover was illegal under the Spanish constitution.

Yet the brash referendum move by the left wing regional government in Barcelona, while also igniting a constitutional crisis, deliberately gave the false impression of a Catalan David facing down a Spanish Goliath in the central government in Madrid.

The Spanish daily ABC asserted editorially that Catalans had been brainwashed by a
‘radicalized and intransigent minority.

All was set for the next act by the region’s pugnacious president Charles Puigdemont; a full declaration of independence!   Happily at least for the moment reality intervened.

Massive popular marches across Spain and in Barcelona itself, rallied to Spanish unity. El Pais, the national newspaper headlined, “Historic Manifestations against Separatism and for the Constitution.”

Spain’s conservative Prime Minister Mariano Rajoy launched a political counteroffensive underscoring that the regional government had acted outside the Law and the Constitution. He warned that “Catalonia is a battle for Europe.” Soon even the Socialists and the leftist mayor of Barcelona opposed independence.

Catalonia’s delirium soon turned to disappointment when Puigdemont pulled back from the brink and delayed his planned formal call for independence. Whether the populists reverse this stand is

open to question as many far Left elements in the regions have turned the issue from pro Catalan independence to anti-Spain sentiment.

“A romantic framing of foreign crises where self-determination is involved is a common trap. The imagery of ‘oppressors” vs ‘freedom fighters’ is appealing and, to their credit, the leaders of Catalonia have been successful in promoting their agenda abroad in just such terms …

Combined with the soft power appeal of cosmopolitan Barcelona, there is much confusion abroad on the nature of the current crisis in Catalonia, and myths and stereotypes abound,”according to Spanish political observer Francisco de Borja Lasheras of the European Council on Foreign Relations in Madrid.

Britain’s Spectator magazine opined, “So the illegal referendum in Catalonia last week was a long-meditated revenge by the left and an attempted coup d’état. It affected the rights not only of all Catalans, but of all Spaniards.”

Moreover what of the European Union angle? An independent Catalonia would be outside the European Union much as would an independent Scotland. The idea that after unilaterally breaking with Madrid, an independent Catalonia would automatically be admitted into the EU with its trade and political benefits is simply nonsense.

During this giddy but worrying episode, neighboring France was particularly critical of the Catalan independence gambit. Why? The Mediterranean island of Corsica (birthplace of Napoleon ), has long been a hotbed of militant separatism. The French government knows that a spark from nearby Spain can easily revive the smoldering Corsican debate.

Moreover Ukraine which equally has a cultural/ethnic fault line in the eastern regions, has endured violent manipulation by Russia over the past few years.

Though some of the nationalist cultural aspirations are valid, they threaten the wider European Union not to mention established democratic nation states such as Spain.

Lessons of Yugoslavia in the 1990’s not to mind the bloody Spanish Civil War of the 1930’s where Catalonia had become an epicenter of the conflict, serve as somber signposts to the often ultimate consequence of untamed separatism.

Many of these issues are rooted in an affair of the heart more than of the mind; in other words what would be the viability of an unrecognized Catalan micro state the size of Belgium.

Catalans must open dialogue within Spain to sort out the widening rifts before they become entrenched divisions. As Mariano Rajoy asserted, “It is urgent to put an end to the situation that Catalonia is living.”

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues. He is the author of Divided Dynamism The Diplomacy of Separated Nations: Germany, Korea, China.

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by Rob Roper

Kevin Mullin, chairman of the Green Mountain Care Board, appeared on the WDEV radio program Open Mike (10/11/17) to discuss Certificate of Need laws in the wake of a controversy regarding Copley Hospital and their highly successful orthopedic surgery center. Copley is, apparently, generating too much revenue as the result of being highly efficient, performing more surgeries (they have not raised prices), and delivering what is recognized as superior service and outcomes for their patients. Mullen’s comments demonstrate many reasons why the Certificate of Need process is a terrible policy and why the GMCB is incapable of managing the healthcare market.

First, Vermont’s answer to rising healthcare costs is rationing care. They say it isn’t. They’d like us to think it isn’t. But it is. Here’s what Mullin said about why we need a GMCB:

We are the regulators… we have to be the ones who are putting the breaks on utilization. And so that is our role.

“Putting the breaks on utilization.” That means denying care to someone who thinks they need it. Maybe they do, maybe they don’t, but is a six member panel in Montpelier really who we want making that decision? Mullin further reinforces the rationing argument when he says:

The cost of healthcare isn’t just what it costs for a given set of procedures, because you can hold that constant, but if people had more use of those procedures you can still have rising healthcare costs.

It’s not the cost of the procedure that’s driving up costs, it’s the number of patients utilizing the procedure. Sure. 2 x10=20; 3×10=30. But if three people need a procedure the GMCB sees the way to lower costs is to make sure only two get it. Rationing.

Mullin keeps digging this hole:

I do have some gut concerns about whether or not in some respects we’re building a “Field of Dreams”; if you build it they will come. And the reason why I say that is because what we’re not seeing is, because Copley has more orthopedic business, we’re not seeing a decline in orthopedic business elsewhere.

Now, a Certificate of Need (one would hope) is supposed to determine what a community’s healthcare needs are and make sure they are being met, though not exceeded. If you build it and they come, that’s a real world reflection of need. If Copley Hospital is demonstrating that there is a need for more orthopedic surgeries, the GMCB should be looking into expanding their CON, not revoking it as they are now. But, as Mullin confessed, that’s not really the role of the board. Their role is keep people from accessing that care.

Mullin then uses a rationale to justify clamping down on Copley that contradicts the data he cited regarding a lack of decline in other hospitals’ orthopedic output:

What I have concerns about is when hospitals – and they hate it when I use this term but I’m going to repeat it because my gut tells me that in some respects that’s what they’re doing – and that is “poach” on another hospital.

First of all, if other hospitals are not experiencing a decline in services, Copley isn’t “poaching” anything. They are filling an otherwise unmet demand. But even if they were taking customers away from other hospitals, who cares? It’s just a reflection of customers seeking the best service and outcomes – something Mullin says the GMCB wants.

So, you know, nobody here at the Green Mountain Care Board is trying to interfere with someone’s decision about where they should or shouldn’t have their surgery.

Yet, this is exactly what they’re doing. If GMBC tells Copley they can’t perform as many surgeries, the inevitable result is that some patients who want to will not be able to have their procedure done at Copley. Mullin also stated that he does not think hospitals should be able to market their services (In state! More on this later.), which would limit patients’ ability to learn what their best options for care might be.

Mullin tries to give himself a moral “out” here by saying one option Copley has is to perform the same amount of surgeries, but charge less for each one so as not to bring in too much revenue. But, really? If you’re a doctor and are given the choice of performing three surgeries in return for $2000 total, or two surgeries in return for $2000  plus time for dinner with your family and the chance to see your kid’s soccer game, which option are you going to choose?

As mentioned earlier, Mullin does not like hospitals advertising their services to Vermonters. However, he also says,

What I’ve been trying to make very clear to hospitals is, if they’re bringing in business from out of state, that’s economic development.

True enough, and it’s a good thing. But in a command and control system designed to “put the breaks on utilization” locally, what this will do is create an incentive for Vermont hospitals to prioritize out-of-state patients, much like state colleges that get more money for out-of-state students, further limiting access for Vermonters. That’s a bad thing.

Finally, Mullin acknowledges,

            Despite all the best efforts that everyone is making costs continue to rise…

Indeed. A study by the Kaiser Foundation determined that between 1990 and 2014 hospital expenditures in Vermont have increased faster than any other state in the US.

Or, as UVM economist Art Woolf noted in a recent article in the Burlington Free Press, “Over the last two decades Vermont went from being a low health-care cost state with a small percentage of uninsured to one of the highest spending states.” Everything our government has done to help make healthcare more affordable has backfired in spectacular fashion.

This is not a knock on Kevin Mullen. His contradictions are inherent in the policy he’s tasked with carrying out and the impossibility of a six member group of political appointees successfully understanding, much less managing, a massively complicated market. States without CON laws have lower costs, better outcomes, and more access to healthcare. It’s time to subject our CON laws and the Green Mountain Care Board to a Certificate of Need process. I think we’ll find we don’t need either of them.

Rob Roper is president of the Ethan Allen Institute. 

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