Health care without borders

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There are new studies indicating that the number of people traveling abroad for medical treatment have been greatly exaggerated. This includes previous blogs of mine where I reported the figure to be 750,000 in 2006. This same number has re-emerged with the accounting firm Deloitte LLP for health tourists in 2007. However more recent sources come up with much lower numbers:

Josef Woodman, author of the consumer guide Patients Beyond Borders, puts the 2007 number closer to 180,000. (And the) global consulting firm McKinsey & Co. released a study in May that said the trend is far smaller than commonly reported: It put the number of all medical travelers – not just Americans – at 60,000 to 85,000 per year.

However, these numbers do not include patients seeking treatment in neighboring countries, such as people traveling from the US over the Mexican border for dental treatment.

Woodman has calculated the threshold for going abroad at $6,000 for the total amount of out-of-pocket cost for treatment in the United States including consultation, procedure and hospital stay. Only if you spend more than that are you likely to save money if you travel to get treatment abroad. In Britain with the legitmization of top-up fees,  it could be a while before this makes economic sense for most people. Although with better quality, service, speed and fewer attendant risks in healthcare abroad, those that can afford it may be tempted to splash out.

Blog Review 772

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Proof that that "proof" of a rise in social mobility since 2000 is nothing of the sort.

Here's an interesting list you can add to. Who was so harmed by the use of cannabis that they went on to become successful?

As we don't currently have a laissez faire economy, how can we say that laissez faire has failed?

Anyone remember that Kirk Douglas movie? I'm Jacqui Smith!

Why schools ought to be more like supermarkets.

The really bad lessons you can learn while earning money on Wall Street.

And finally, you'd think they would wait a little.

Milk, bread and ID cards…

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It was reported yesterday that private shops and post offices might be recruited to collect biometric data for the government’s ID card scheme. This is another addition to the elaborate plan for introducing the UK's new form of identification. Starting next year, some 200,000 airport workers will get identity cards as a condition of employment. The following year, students will be encouraged to apply for a card when opening a bank account, and eventually, the Identity and Passport Service hopes to distribute a substantial number in connection with issuing British passports.

Yet the Home Office is already encountering (justified) opposition to this plan. Many are protesting the £30 charge for an ID card, when most of the population do not see it as necessary. Airlines such as British Airways, Easy Jet and Virgin Atlantic have expressed opposition because they claim the scheme is unfounded and will not increase security. Despite the good intentions of the government, it is obvious that this scheme will build up its already mounting costs. In the next ten years, the ID cards are predicted to cost £4,740 million for British and Irish citizens, and an additional £311 million for foreign nationals. In times like these, who really wants to think about further spending on plans most people contest?

As the government tries to move forward with the ID card scheme, the British people may not be the only opposing force that they face. As mentioned earlier, the Home Office is looking to "use market forces and competition" by enlisting the services of private companies, organization and retailers to enrol UK citizens in the program. Those outside of the Home Office, however, speculate whether private companies would be willing to invest millions into a program that very well could be scrapped by a new administration.

So, we must wait and see how the execution of the ID card scheme pans out in the next few years. But getting fingerprinted while shopping for groceries at the supermarket is still a rather worrying thought.

Fighting recession

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My colleague Dr Madsen Pirie had a piece on the Telegraph blog yesterday responding to the Bank of England's decision to cut interests by 1.5 percent.

He made the point that there are two ways to respond to a recession. One is for the government to "borrow up to the hilt and beyond, and spend like a drunken monkey" in an attempt to keep the economy going. This seems to be the government's favoured approach, supported by the lie that the UK is not as indebted as other countries (on which point, see the video below).

The other, better approach is to "make it easier for private borrowing to sustain business activity", which is what the bank has done with its interest rate cut. Well, that's good in as far as it goes.

But Madsen also makes the point that cutting interest rates is not enough. If the government wants to get the economy going, they need to cut taxes as well – both to put more money in people's pockets, and to strengthen incentives for businesses, investors, entrepreneurs. The key to this working, though, is that tax cuts are coupled with spending reductions – not more borrowing. Borrowing is nothing more than deferred taxation after all, and besides, there's plenty of public sector fat that could be trimmed.

Nonetheless, there's only so much that policy changes can do. As Madsen concludes:

Neither the Prime Minister nor the Chancellor seem to have learned that governments don't pull us out of recessions. If they are wise, they might make it easier for people to pull themselves out of a recession. That's all.

Professor Norman Barry

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It is with great sadness that the ASI has learned of the death Professor Norman Barry, one of the UK's foremost exponents of classical liberal theory. He was a great friend of the Institute and authored a number of excellent papers for us, most recently Respectable Trade in 2000. He will be missed.

Donations (in lieu of floral tributes) will be gratefully received by the MS Society, c/o Heritage & Sons Funeral Directors, 1A Bristle Hill, Buckingham, MK18 1EZ (tel: +44 (0)1280 813188).

Blog Review 771

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More on our free and happy land. Wearing fancy dress now brings the attentions of the police, what joy.

Worth remembering, that no one is really arguing for more or less regulation, only the method of it. By bureaucrats or by markets?

Yes, "food miles" is a ridiculous concept. It looks at a tiny part of the system and arguably the least important.

While it's a cartoon, it's not a joke. Just a simple description.

The best of the retorts to Hazel Blears and her misunderstanding of blogs.

Can we get this clear, it really, really, hasn't been the derivatives markets which have crashed. It's the credit markets.

And finally, how funny you find these jokes says something about your politics. Apparently.

Why the Republicans lost

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Whatever happened to the Republicans? In a recent syndicated article, my friend John Baden of the Montana think-tank FREE has some suggestions.

First, he suggests, it's the economy, stupid. Years of boom eventually turned to bust. In response to various problems like the dotcom crash and 9/11, the Fed flooded the markets with so much credit that the bankers were able to buy themselves fancy houses in private streets while ordinary people are now struggling to keep hold of their homes. It causes resentment, and people feel the Bush administration is to blame.

Then of course there is the long list of senior Republicans who have been caught with their hands in the public till, using their power to win themselves favours and financial gains. That's bad enough in itself, but the Republicans have always preached financial probity and honest government, so it's hypocritical as well as venal.

Lastly and most importantly, thinks Baden, the Republicans lost their intellectual roots. Ronald Reagan owed a debt to the ideas factories of Cato Institute, the Heritage Foundation, Heartland, National Centre for Policy Analysis, Reason, and many more. But since Reagan the focus has been more on power and position at any price. Principle has given way to tactics. Economic promises were broken, moral legitimacy has been lost. And when that happens, public support collapses – for the public has rather greater judgement than politicians often suppose.

Power to the people

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Good news for freedom today as the House of Lords has defeated the government over the issue of keeping peoples' DNA and fingerprints on the police national database. Peers backed a Conservative amendment calling for national guidelines for deleting material by 161 votes to 150.

The amendment by Tory frontbencher Baroness Hanham would require the Government to publish national guidelines to establish procedures for people to find out what information was held on them or their dependants, how to ask for it to be deleted, and the circumstances where police chiefs could refuse. Such regulations would have to be approved by both Houses.

The National Policing Improvement Agency - which released the figures under Freedom of Information rules – estimates that 4,631,838 individuals are now on the database. This includes people who have not been convicted of any crime. And they have big plans for your DNA: A senior scientist from the Forensic Science Service said the Home Office would like the DNA database to be the same size as the national fingerprint database, which has more than 7.3million prints.

Europe may offer some salvation. Next month a case will be heard in the European Court of Human Rights. It will rule on whether it is lawful to keep DNA samples from individuals that have not been convicted for any crime. If successful, over 1 million DNA records will have to be destroyed.

With this government readily tearing through the foundations of freedom in the UK, the House of Lords and the European Court of Human Rights at times appear to be last lines of defence we have. And yet for very different reasons, both are rather suspect protectors of our liberty.

What this country needs is a new contract between the individual and the state. One in which power hungry politicians can be kept at arms length from our private space. We are all suffering from the intrusive state, the consequent lack of liberty demands redress. In 1100 we got the Charter of Liberties; in 1215 we got the Magna Carta Libertatum. Now about to enter 2009, we need another contract to restrain executive power.

The failure of the EU Savings Tax Directive

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Keith Boyfield, a Senior Fellow of the ASI and chairman of our Regulatory Evaluation Group (REG), has co-authored a new report for the European Policy Forum, released today.

In Challenges facing the EU Savings Tax – the first independent study of the EU Savings Tax Directive – Keith and his co-author, Graham Mather, reveal that the European Commission is in danger of scoring an own goal in its move to raise larger tax receipts and crack down on perceived tax evasion. The report shows that the Directive has not fulfilled its original goals. Member state governments have found the exchange of information model difficult to apply with a number of countries reporting long delays, inaccurate data and a range of problems centering on pursuing reports of interest income received by taxpayers in other countries.

Based on a wide-ranging survey, the report estimates that calculates that the 1,243 leading banks in the EU and Switzerland have incurred compliance costs of €753m to implement the current Savings Tax Directive. In addition, they face annual compliance costs of a further €693m. And if the European Commission’s current review of the Directive leads to the scope of the tax being extended, we are likely to see Europe’s increasingly financially vulnerable banking sector presented with an estimated bill of an additional €682m to comply with the Directive’s wider remit.

For more information, visit the European Policy Forum's website.