Yesterday we wrote about Niskanen's big new healthcare report. We have had time to look at it. We like its framing: to focus on barriers to the supply of healthcare. The idea is to focus on "abundance," an increasingly popular buzzword for policies that seek to bridge (or rather transcend) partisan divides by focusing on providing, well, abundance.

We like this framing. The report also has lots of very good suggestions.

For example, the report proposes repealing "Certificate of Need" laws limiting new healthcare facilities. These state-level laws require permission of the state to open new facilities, build new hospitals, expand existing facilities, or even, in some cases, acquire new equipment. It allows existing hospitals to challenge new healthcare facilities, which is obviously a recipe for nothing ever happening. Of course such laws are absurd and need to go.

We also learned that the ACA explicitly prohibited physicians from owning or operating hospitals. This is also obviously deranged and should be repealed.

Some recommendations are a bit strange to us. One of the report's main preoccupations is supply of physicians. But while the report recommends making it easier to import foreign doctors, it doesn't recommend increasing medical school places, even though they are capped. In fairness, the report notes that in 2022, over 3,300 medical school graduates failed to match with a residency, and this is attributed to the 1997 Balanced Budget Act cap on Medicare-funded residency slots. The report identifies residencies as the main bottleneck. This is fair enough but if the residency bottleneck is removed, medical school graduates is the next bottleneck, so why not tackle them both at the same time? There is no evidence that the US has a shortage of smart hard-working people who can and should become doctors.

One of the report's most interesting proposals has to do with "Direct Primary Care" (DPC). This is a model your correspondent has championed for years. The way this works is that it offers patients "virtually unlimited access" to a primary care doctor, charges a fixed monthly fee (typically $40-$85 per month), and does not accept traditional insurance. DPC doctors spend less time on paperwork and have lower administrative costs, have more time available for patient care. Meanwhile, for patients, the monthly cost is lower and more affordable. Another way to call this is family medicine, and it used to be the standard for most of the existence of modern medicine, and still is in many countries, including most of Europe.

Another huge problem in US healthcare is provider consolidation. While the report does address this, its pro-market framing doesn't make room for calling for antitrust action, which would be the most straightforward and, probably, effective way to go about it. Instead it goes for a "root causes" approach. The problem with the "root causes" approach is that while the proposed reforms might be good, and should be pursued, it doesn't address the existing cartel and the existing local monopolies.

We would go further with some suggestions:

Vouchers for family medicine. Go further than just promote DPC. Give every American a voucher for it. Give every American access to a family doctor.

Increase medical school spots. As we said, this is the way to get more doctors out there.

Cap medical school tuition. The other way to get more doctors, especially if we want American doctors rather than imported ones, is to make the medical profession attractive. It is less and less so as talented students can go into STEM or financial careers that require less study years, no less but no more hours, often less bureaucracy, and so on. One of the biggest problems with the attractiveness of the medical profession is that while doctors are well paid, they also have enormous student debt burdens. The average cost of medical school is around $57,574 per year, resulting in about $230,296 total for four years. The average cost for in-state students at public medical schools is $39,905 per year. In the UK, whose medical schools are just as good as the US's, total spending per student (taxpayer spending plus tuition) is £36,417. Conservatives don't like price controls, usually, but price controls in markets where supply is already highly constrained for regulatory reasons is legitimate. We know that tuition in the US has exploded because the higher ed system is a cartel and because of ballooning administrative costs, not because of any reason intrinsic to teaching. Capping medical school tuition at $35,000 per year seems conservative, but it would be a big signal to aspiring future doctors that we want them to make a good living with their valuable skills.

Policy News You Need To Know

#Chyna — A big new Bloomberg report “shows that Made in China 2025 — an industrial policy blueprint unveiled a decade ago to make the nation a leader in emerging technologies — has largely been a success.” Meanwhile, the US is lagging. "The world outside the US is increasingly driving Chinese electric vehicles, scrolling the web on Chinese smartphones, and powering their homes with Chinese solar panels." US "efforts to contain Xi's push for tech supremacy" are "faltering," Bloomberg believes. Of note: Sen. Rubio's report on the same topic last month reached similar conclusions.

#Politics — Ok, maybe now we believe the vibes. Buzz Aldrin endorsed Donald J. Trump for President.

#Economics — That said, financial reporter Jordan Weissmann points to improving economic numbers: "Core inflation fell to 2.2% in the third quarter, according to the Fed’s preferred measure. GDP grew at a 2.8% rate. Unemployment is at 4.1%." He comments: "Took a while to get there, but it looks like we’ve achieved a low-inflation, full employment economy." The economic record of the Biden-Harris Administration is bad for the average person overall, but it is also the case that the economy has been steadily improving over the past year. How will voters respond to this? Will they think of how things are right now, or how they have been over the past four years? This may determine the result of the election.

#VotingRights — The Supreme Court granted Virginia's emergency stay to purge its voter rolls of admitted non-citizens. This is good news, though obviously it's insane that it even had to get to that.

#Space — Great op-ed today in the WSJ: FAI's Jon Askonas has a very interesting idea to free SpaceX and other space entrepreneurs from red tape. "The Space Coast Compact, an interstate compact creating an independent agency with the power to issue launch licenses for joining states."

#AI — Speaking of regulating new technologies: important report from the Centre for Policy Studies, authored by the excellent bias researcher David Rozado, one of the most venerated British think tanks, demonstrating significant and repeated left-wing bias among all of the most popular LLMs on questions of politics and policy. "The report found left-leaning political bias displayed in almost every category of question asked by 23 of the 24 LLMs tested. The only LLM which did not provide left-wing answers to the political questions was one designed specifically to be ideologically right-of-centre," the report states. "When asked to provide policy recommendations across 20 key policy areas, more than 80% of LLM-generated responses were left of centre. This was particularly marked on issues such as housing, the environment and civil rights."

#K12 — Very useful article in Education Next: a review of public opinion surveys over the past year on US K-12 education policy. "Collectively, the results of these surveys portray an American public disappointed in the current state of K–12 education and pessimistic about its future. But Americans have always dreamed big when it comes to the promise of education, and that remains true today. The way back to those grand aspirations, according to the polls, runs through a renewed focus on issues such as student safety, attracting and retaining good teachers, high-quality curriculum, and school spending rather than the many ancillary debates that have come to dominate media coverage."