Sally Pipes
Sally C. Pipes is president and chief executive officer of the Pacific Research Institute, a San Francisco-based think tank founded in 1979. Prior to becoming president in 1991, she was assistant director of the Fraser Institute, based in Vancouver, Canada.
Ms. Pipes addresses national and international audiences on health care, women’s issues, education, privatization, civil rights, and the economy. She has been interviewed on CNNfn, “20/20,” Fox News, “The Today Show,” “Dateline NBC,” “Politically Incorrect,” “The Dennis Miller Show,” and other prominent programs.
She has written regular columns for Investor’s Business Daily, and the San Francisco Examiner. And her opinion pieces have appeared in the Washington Post, USA Today, Financial Times of London, New York Times, Los Angeles Times, San Francisco Chronicle, Sacramento Bee, and Boston Herald.
A Canadian who has become a naturalized United States citizen, Ms. Pipes writes, speaks, and gives invited testimony at the national and state levels on key health-care issues facing America. Topics have included the false promise of a single-payer system as exists in Canada, pharmaceutical pricing, solving the problem of the uninsured, and strategies for consumer-driven health care. Over the past year she has participated in prominent debates and public forums, testified before five committees in the California legislature, appeared on popular television programs, participated in talk radio shows nationwide, and written several dozen opinion pieces on the issue of drug importation.
Her book, “Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer” was released September 28, 2004. It is available on Amazon.com.
Monday, December 1, 2008Government Care Isn't PromisingBy Sally PipesCategories: Single-Payer FolliesHealth care reform proposals generally fall into two camps: Those that rely on government to expand access and hold prices down, and those that rely on market competition to lower prices and expand consumer choice. Proponents of government-heavy reform believe that because the health care problem itself is massive and complex, we need an equally massive and complex solution. Only the government has the requisite scale, infrastructure, and power to deliver that solution, or so goes the thinking. More than half of all health care provided in this country is already paid for by the government through Medicare, Medicaid, the State Children's Health Insurance Program (SCHIP), and health insurance programs for veterans, Native Americans, and other specific populations. To expand coverage, many suggest that lawmakers should just utilize these programs. Such a move, however, would bankrupt the country. These programs are already bloated and on weak financial footing. Take Medicaid. Originally set up in 1965 as a safety net for the poor, Medicaid has grown into an enormous welfare program for the middle class as well, covering 53 million Americans. In other words, Medicaid already insures some 15 million more people than the 37 million estimated to be living in poverty, and almost 10 million more than Medicare. In 2006, individual states and the federal government paid out an estimated $338 billion for Medicaid patients. Outlays for Medicaid amount to 22% of state spending and have surpassed even education as the biggest drain on state budgets. And that's just the national average. In Medicaid-heavy states like Florida, the program is projected to consume nearly 60% of the state's budget by 2015. SCHIP, meanwhile, covers about six million children. However, the funding formula gives states an incentive to add middle-income children and even adults to their SCHIP rolls. So in many places, the program has spiraled out of control. In 14 states, adults are enrolled in SCHIP; nationwide, about 600,000 adults are covered. In six states, more SCHIP money is spent on adults than on kids. Meanwhile, the program has still failed to enroll almost two million children who qualify. And in October, Hawaii ended the first universal program for children after just seven months. Costs skyrocketed as parents stopped paying for private coverage and switched to the government-funded plan. Even the government health care offerings for veterans are sub-par. Thus far, the health program administered by the Department of Veterans Affairs (VA) has proved inadequate for the wounded veterans returning home from Iraq and Afghanistan. Better suited to the needs of much older veterans from World War II, Korea, and Vietnam, the VA is simply unable to react with the speed and efficiency needed to treat the injuries of modern warfare. A claim now takes between 127 and 177 days to process - well above the private industry average of 89.5 days. An appeal takes a staggering 657 days. In House testimony last year, the Government Accountability Office (GAO) reported that the VA is near the breaking point. With such failures in mind, it's worth asking why anyone is interested in expanding these government programs.
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Monday, December 1, 2008Healthy Living Programs Are No Cure for High CostsBy Sally PipesCategories: Nanny StateLegislators have been tripping over each other to lead the fight against public smoking, soft drink machines in public schools, and trans fats. In July of this year, for instance, the California legislature passed - and Gov. Arnold Schwarzenegger signed - a measure banning trans fats in restaurants and other public food facilities. Such legislative actions seem to make sense. Health care costs would seemingly be lower for everyone if people took care of themselves from the get-go, rather than seeking crisis care when years of smoking, for instance, revealed their full consequences. But history shows otherwise. To date, state-run programs to promote good health haven't worked very well. In fact, they've often worsened the very problems they set out to solve and in the process driven up overall health care costs. In 1994, the federal Nutrition Labeling and Education Act mandated that nutritional and caloric readouts be placed on all packaged foods. The idea was that if Americans knew the facts about what they were ingesting, they'd choose to eat healthier. Between 1995 and 2007, however, the percent of obese Americans increased by two-thirds. Many "healthy living" programs are based on dishonest or even fraudulent interpretations of medical research. The Centers for Disease Control and Prevention (CDC) once attributed 400,000 deaths per year to obesity; a year later, other CDC and National Institutes of Health researchers arrived at a figure of 26,000 deaths per year. That's a mighty big discrepancy. Even though some government-funded prevention programs are able to effectively promote healthier living, they're certainly no cure for high health costs. One obvious reason is that healthier people live longer. Individuals who live into old age require some of the most expensive health care there is: late-life care. As people age, they become more susceptible to illnesses like osteoarthritis, prostate cancer, osteoporosis, and cognitive illnesses like Alzheimer's disease. These diseases make the final years of a person's life incredibly costly.
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Wednesday, November 5, 2008State Drug Importation Plans FailBy Sally PipesCategories: PharmaceuticalsAdvocates of legalizing drug importation fail to mention that drug importation has already been tried in the United States. And it has failed miserably. A number of states and cities have shirked federal law and established their own local drug importation programs. Not one has been popular. Take Illinois. In 2004, Governor Rod Blagojevich implemented the "I-SaveRX" program which, in conjunction with neighboring Wisconsin, allowed state residents to buy meds from Canadian pharmacies. The program cost taxpayers $1 million, requiring input from 500 public employees and two dozen state agencies. After 19 months of operation, only 3,689 Illinois residents -- 0.02 percent of the population -- had used the I-SaveRX program. It's a similar story with other importation programs. The one in Missouri has attracted all of 460 customers; Wisconsin's has 321; Kansas, 267; and Vermont, 217. So even when they've had the opportunity, Americans have roundly rejected importation. But what's the harm in opening our borders to foreign drugs, even if the savings are minuscule? Bluntly speaking, there's quite a bit of harm. The safety concerns associated with foreign drugs far outweigh any potential savings, as the recent Belgian drug seizure makes apparent. A quick examination of the world pharmaceuticals’ market shows that the counterfeit drug trade is thriving. According to the World Health Organization, about 10 percent of the world's pharmaceuticals are counterfeit. And while many believe that buying drugs from internet pharmacies in developed nations like Canada and the United Kingdom lowers the risk of encountering lethal fake drugs, that's simply not true. Drugs exported from Canada don't have to meet the same safety requirements as those sold within Canada and are most likely manufactured not in Canada but in India, China, or Pakistan. And in the U.K., a policy of "parallel trade" among all EU countries means that drugs sold in Britain could easily have originated in EU nations with spottier records of regulation, like Cyprus or Lithuania. The threat of counterfeit drugs isn't the only problem with importation. In fact, just last month the Food and Drug Administration (FDA) banned the importation of at least 30 generic drugs made by Ranbaxy Laboratories, an Indian drug manufacturer, because of poor production practices. Consumers are lucky the FDA caught the problems at Ranbaxy, as the agency's resources are stretched frighteningly thin. Earlier this year, tainted Chinese shipments of the blood thinner Heparin caused the deaths of 81 people. The FDA had never inspected the factory that manufactured the contaminated Heparin. Countless other factories avoid FDA screenings as well; a hearing in the House of Representatives last year found that foreign factories are inspected once every 13 to 30 years. Legalizing drug importation would cause drugs to flood the American market from all over the world, putting even more strain on a regulatory body woefully unequipped to handle it. In short, the benefits of legalized drug importation have been much exaggerated, while the real dangers associated with such a policy have been understated.
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Friday, October 17, 2008The Trilemma of Health CareBy Sally PipesHealth care presents policymakers with three competing goals: insulating people from costs of care, keeping total costs down and providing access to top-quality care. Economist Arthur Kling dubs this the "trilemma." No health care system can maximize all of these goals. Our system maximizes providing access to top quality care. Hyperbole aside, it actually does a fair job of insulating citizens from experiencing the direct cost of their care. Americans pay out of pocket for a mere 12 percent of the health care they consume. It's not until Americans reach age 55 that they spend more on health care than they do on entertainment. Our relief valve is total expenditures. The sky is the limit. The countries to which the United States is so unfavorably compared place different weights on these values. Some seek to insulate their citizens from costs at point of consumption. They keep total costs down through global budgets and rationing. Those that reject global budgets and rationing – notably the Netherlands, Switzerland and France – either embrace HMO-style gatekeepers or employ significant patient cost sharing.They are, it just so happens, also quite expensive. There are no new ideas under the sun, simply different tradeoffs to be made. The effective ingredient of every system now being touted as models for a reformed American health care system has been utilized at some point in our system. Some are in force in limited areas – the British-style National Health Service (NHS) government-run model is reflected in our Veterans Administration system, for example. Others, such as the gatekeepers that parcel out care in the Netherlands, practically started a revolution when used in the United States. Our experiment with managed care actually succeeded at controlling expenditures on health care. Yet it came at the cost of perceived access to top quality care. The bipartisan response was a Patients' Bill of Rights to guarantee access to top-quality care.
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Thursday, October 16, 2008The Health Care We WantBy Sally PipesEveryone knows that American health care is in crisis. Its poor quality arrives accompanied by a huge bill and lack of universal coverage. Like dining in an amusement park, Americans are captives to a cafeteria that serves up cold, fatty food at double the price, leaving those who can't pay, hungry. Nonsense. Americans have created the health care system that suits our culture. It's expensive in total, uneven in quality, and totally non-egalitarian. It has no central point of control, a frustrating fact for social reformers. Multiple streams of revenue allow providers to innovate and cater to niches. Private payers subsidize the uninsured and those on government-paid insurance. Although designed for those who can pay, it uses collective dollars to ensure that everyone has access to care. But it does not ensure that everyone has the same health care plan or even a plan at all. It provides prompt, comfortable care to the sick. It's a mix of public goals, payers and private providers, entrepreneurs, and administrators. Profit-seeking drives innovation at all levels of the system, from hospitals that compete based on who has the best oncology, birthing and cardiac care to physician practices offering white glove service for flat annual fees. This is a horrific description for egalitarians. Yet it's akin to how Americans produce and consume life's other necessities: food, housing clothing, transportation and even education. In short, we've built the health care system we want. Reformers are unable to change it because we don't really want it changed.That may not be what Americans tell pollsters, but it is how Americans will vote. In the abstract, they are happy to ration the next fellow and provide subsidized insurance for the "near poor" (those above the poverty line but well below middle class). But you better not ask them for a sacrifice to make it happen. It1 1994, we didn't want to be German, when President Clinton, First Lady Hillary Clinton and White House health policy adviser Ira Magaziner proposed we all get together in health collectives and purchase managed care plans. We've never wanted to be Canadian, forking over high taxes to provincial governments in exchange for what is essentially a Medicaid plan and a place in line. Today's politicians will discover that we don't want to be French, Swiss or Dutch, either.
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Saturday, September 27, 200845.7 Million or 8 Million?By Sally PipesOfficials at the U.S. Census Bureau recently released new health insurance figures purporting to show that the number of Americans officially classified as uninsured in 2007 was 45.7 million, down from 47 million in 2006. Despite the decline, the new figure is being spun as proof positive that America's healthcare system is still in awful shape. Advocates of socialized medicine are repeating it ad nauseam, arguing that the main problem with the country's health system is the massive uninsured population. After all, if a whopping 15 percent of the population is uninsured, then the current system must be failing. As Dr. Oliver Fein of Physicians for a National Health Program wrote when the figure came out, "[t]he plight of the uninsured… shows how the for-profit, private health insurance model of financing health care has outlived its usefulness." But it’s grossly misleading to use the Census Bureau number as an indication of a crisis. A closer look at the agency’s survey methods reveals that the situation isn’t nearly as bad as the pundits and the politicians would have you believe. To generate this figure, the Census Bureau relied entirely on a questionnaire known as the Current Population Survey (CPS). The survey is intended to garner information about, among other things, the income, age, race, living situation, and, of course, health insurance status of individuals living in the United States. As with any survey of this size and scope, the accuracy of the data it produces has substantial margins of error. As the Census Bureau itself explains in its annual report, "health insurance coverage is likely to be underreported on the Current Population Survey." The Census Bureau doesn't tell us that 45.7 million people are chronically uninsured for the entire year. The agency has stated elsewhere that "the CPS estimate of the number of people without health insurance more closely approximates the number of people who are uninsured at a specific point in time during the year than the number of people uninsured for the entire year." In other words, many of the survey respondents counted as "uninsured" may have experienced only a temporary interruption in their insurance. This circumstance is quite common. When workers quit or lose their job, they are technically uninsured. But they are usually in transition between one employer-provided insurance policy and another. Despite the media’s tendency to depict the 45.7 million uninsured as a single, homogeneous group, the demographic character of these individuals cuts across age, ethnic, and socioeconomic categories. Many are uninsured for reasons unrelated to cost and don’t need to be “rescued” by mandatory socialized medicine. We may be accustomed to thinking of the uninsured as low-income individuals and struggling families. But the Census Bureau data show that many are relatively affluent. Over 17.5 million -- 38 percent -- of the uninsured make more than $50,000 a year. And 9.1 million have an annual income of over $75,000 a year. How can this be? In part, it's because a number of financially comfortable young Americans choose not to purchase health insurance. Known in the healthcare trade as the "invincibles" -- because they’re so sure they won't get sick -- these young singles would rather keep their money than shell out for expensive monthly insurance premiums because of the many mandates and regulations place on insurers by the states. This intentional avoidance of health insurance is quite common. According to the Commonwealth Fund, Americans age 19-29 comprise one of the largest and fastest-growing segments of the uninsured population. If the fact that over a third of the uninsured are pulling down more than $50,000 a year isn’t shocking enough, how about this: Nearly 10 million uninsured aren't even U.S. citizens! It's certainly unfortunate that these individuals don't have health insurance, of course. But they can still get free treatment in emergency rooms. And even a fully nationalized healthcare system would be unlikely to provide them with health insurance. Another 14 million of the uninsured are fully eligible for government assistance through programs like Medicare, Medicaid, and SCHIP. How does that break down? A 2008 study by the Georgetown University Health Policy Institute showed that a whopping 70 percent of uninsured children are eligible for Medicaid, SCHIP, or both programs. And roughly 27 percent of non-elderly Americans who are eligible for Medicaid haven’t enrolled and simply live their lives without health insurance, according to the Urban Institute. Is it really fair to say that such individuals don’t have health insurance? Further, if millions of Americans aren't availing themselves of taxpayer-funded coverage, why should we think that an even bigger government healthcare bureaucracy would solve the problem? Of course, there are people who really do fall through the cracks. These are the chronically uninsured -- the working poor. They are people who struggle to hold down jobs and support their families. They earn less than $50,000 per year but too much to qualify for government help. They simply can’t afford insurance. There are roughly 8 million of these chronically uninsured. Any attempt to solve the problem of the uninsured should focus on this narrow slice of the 45.7 million person pie. The key to helping these people isn’t to create more government red tape. In fact, too much regulation is why health insurance is so expensive in the first place. What these people need is straightforward, affordable coverage that will cover them in the event of a health catastrophe. They should be able to purchase insurance in the state that has the best plan for them, regardless of where they live. It's true that far too many Americans go without health insurance. And that is a serious problem. But the Census Bureau figure shouldn’t be presented as anything other than what it really is: an imprecise snapshot of a heterogeneous group of Americans, many of whom wouldn't benefit from additional government intrusion into the healthcare market.
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Monday, August 25, 2008Reality Check, PleaseBy Sally PipesCategories: Single-Payer FolliesWith Democrats convinced 2008 is their year, the campaign trail is awash with promises to make universal health care a reality by the end of the next president's first term. The basic argument of those who support a government takeover of the health care system is familiar. As New York Times columnist Paul Krugman once put it, "America's health care system spends more, for worse results, than that of any other advanced country." Krugman's line has been repeated so often it's considered gospel truth in most public debates - people rarely check to see if it matches the facts. As the American humorist Josh Billings quipped, "the problem with the world ain't ignorance, it's the things people know that just ain't so." If they did, they'd probably be surprised. Socialized health care isn't all it's cracked up to be. (Read the rest in Sunday's DCExaminer)
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Friday, August 8, 2008Biotech Under Mass. AttackBy Sally PipesCategories: Massachusetts(This op-ed appeared in Wednesday's Boston Herald.) On the last day of July, the Massachusetts Legislature passed the Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care. It’s both a mouthful and a mess. If Gov. Deval Patrick doesn’t veto the bill by Aug. 13, the law will put a needless chill on clinical research and pharmaceutical innovation in the commonwealth. Among other provisions, the bill would require public disclosure when payments of $50 or more are made between pharmaceutical research firms and health-care providers. The information from these transactions - which includes physicians’ names - would be posted on the Internet.
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Monday, June 9, 2008Give Them an Eye ChartBy Sally PipesCategories: Individual MandatesThe campaign trail is awash with promises to make universal health care a reality. Candidates claim they can lower costs — and insure everyone — through legislative mandates and increased government intervention in the healthcare market.
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Friday, May 30, 2008Two Visions and the Big Picture of Health Care PolicyBy Sally PipesThere are two main visions for the American health care system. One is based in government, mandates and taxes. The other is grounded in free markets, free will and innovation. I expanded on these two different visions in a talk I gave to some high-school students at a conference held by the Young America's Foundation. You can listen to it here.
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