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.
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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Tuesday, April 1, 2008Have you Fallen for the Five Myths of Health Care?By Sally PipesCategories: Individual Mandates, PharmaceuticalsFictions don't become facts through repetition.Keep that in mind next time you hear a politician breathlessly decry the horrors of the American health-care system and then explain how he intends to fix it. Some of the most popular talking points in the health-care debate pass as the gospel truth simply because, well, they're popular — not because they're true. Below, I debunk the five most prominent health-care myths: (1) Forty-seven million Americans do not have health insurance. This figure comes from the U.S. Census Bureau. What most people don't know, however, is that the Bureau counts anyone who went without health insurance during any part of the previous year as "uninsured." So if you weren't covered for just one day in 2007, you're one of the 47 million. That also includes 10.2 million illegal immigrants, and about 14 million people who are eligible for public health-care programs like Medicaid or the State Children's Health Insurance Program but have yet to enroll. And nearly 10 million of the "uninsured" have household incomes of more than $75,000 — so they can probably afford to buy health insurance but choose not to. (2) Universal health-care coverage can be achieved via "individual mandate." According to the federal census, nearly two-thirds of the uninsured are aged 18 to 34. This makes sense — healthy people aren't going to pay for expensive insurance they'll never use. Those who support an "individual mandate" — like Sen. Hillary Clinton and several governors — believe by legally requiring all Americans to buy health insurance the young and the healthy will increase the size of the risk pool and therefore lower premiums for everyone. As a way to enforce an individual mandate, Mrs. Clinton has suggested garnishing wages. But many states require insurers to charge everyone the same rate. So young people would end up paying far more in premiums than they should — or could — pay. It's patently unfair to force people to purchase insurance they can't afford. Even in Massachusetts, which offers substantial premium subsidies for low-income residents, the government had to exempt a fifth of Bay Staters from the individual mandate because insurance was still so expensive. And, the plan is already $147 million over budget. The real way to attract young adults into the insurance market is to lower premiums — not to impose draconian sanctions. This can be done by having states reduce costly mandates like coverage of in-vitro fertilization and by allowing people to buy insurance across state lines. (3) Expensive prescription drugs are a big reason health-care costs increase. The real price of prescription drugs is actually decreasing. In 2007, inflation rose more than 4 percent, while drug prices increased just 1 percent. So in real terms, drugs were 3 percent cheaper last year than in 2006, on average. What's more, drug spending is but a small slice of total health-care spending — less than 11 cents out of every health-care dollar goes to prescription meds. And drugs actually reduce health-care costs in the long-term. Medicare, for instance, saves $2.06 for every additional dollar it spends on pharmaceutical drugs, according to a paper recently published by the National Bureau for Economic Research. Prescription drugs often obviate the need for expensive surgeries and hospital stays. (4) Drug importation will save patients a fortune. At most, according to the Congressional Budget Office, foreign drug importation would save Americans 1 percent over the next decade. Brand-name drugs are cheaper in foreign countries because their governments impose price controls. Drug-makers can only afford to sell pills at cut-rate, controlled prices in Europe and Canada because Americans pay full price. If American politicians allow foreign drugs to enter the U.S. market, they'll in effect import price controls too. Such action will not only create practical problems, like shortages but also deny firms the return on investment necessary to plunge into the next round of research and development into new cures. It takes nearly $1 billion to bring a new drug to market. Investors are willing to make such a risky investment because the rewards of developing a cure for Non-Hodgkin's lymphoma, AIDS or diabetes are considerable. If the profit motive vanishes, the miracle cures for which America's drug industry is responsible would vanish. (5) The state-run health-care systems in Canada and Europe are better and cheaper than America's. People who make this claim usually note that life expectancy is higher in Canada and Europe. But life expectancy is influenced by a number of variables aside from the quality of a country's health-care system — like diet, genetics, exercise, smoking, pollution and even marital status. A study published last year in the British medical journal the Lancet suggests America is much better at treating cancer than Europe or Canada. Researchers found Americans have a better survival rate for 13 of the 16 most prominent cancers. An American man has nearly a 20 percent better chance of living for five years after being diagnosed with cancer than his European counterpart. This study's findings tell us a lot more about the quality of a health-care system than life expectancy rates do, because the relationship between treatment and outcomes is tighter, clearer and more direct.
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Thursday, February 28, 2008Candidates Need Better VisionBy Sally PipesCategories: Insurance Regulation, PharmaceuticalsCandidates from both parties claim they can lower costs — and insure everyone — through legislative mandates and increased government intervention in the health-care market. Unfortunately, Lasik is a rare exception to the general rule. In most of health care, the government is far too heavily involved. In fact, the government now pays over 60 cents of every dollar spent on health care.
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Wednesday, February 6, 2008NY Plan Puts Patient Health at the Mercy of the Fiscal CycleBias against prescription drugs counterproductive By Sally PipesCategories: PharmaceuticalsTo help close New York's $4.4 billion budget deficit, Gov. Spitzer has put prescription drugs on the chopping block. His budget proposal for the next fiscal year would axe drug spending by $172 million from the $1.9 billion otherwise expected.The governor describes this as a way "to control the cost of government." In fact, cuts like these simply guarantee that long-term health-care expenses will actually increase. And in the short term, there's a very good chance that they'll deny Medicaid patients the medications that would help them the most. Spitzer's mistakes start with his claim that drug prices have "increased dramatically." In fact, the price of prescription drugs has fallen. In 2007, inflation grew by more than 4 percent, while drug prices rose by just 1 percent. So, in real terms, drugs averaged 3 percent cheaper last year than in 2006. What's more, drug spending is a small fraction of overall health-care spending. New York's Medicaid program only spends 5.3 percent of its budget on medicine. So slashing it nearly 10 percent, as Spitzer proposes, would barely dent the deficit. More important, buying prescription drugs is a good investment. Studies show that spending more on prescription drugs today reduces total spending on health care tomorrow. A recent paper from the National Bureau of Economic Research (NBER) found that Medicare, the government health-care program for seniors, ultimately saves $2.06 for every dollar it spends on medicines. The main reason: prescription drugs often obviate the need for expensive surgeries. Another recent NBER study estimated that switching from older, cheaper medicines to newer, more expensive ones reduced non-drug health-care expenses 7.2 times as much as it raised drug spending. Yet Spitzer's budget is stuffed with financial incentives for pharmacists and patients to use older, cheaper drugs. It would raise by $1 per prescription what pharmacists get from the state for doling out generics and brand-name drugs in Medicaid's "Preferred Drug Program." Patients who take these drugs would see co-payments cut from $3 to $1. Some of Spitzer's plans make sense - on paper. His budget expands the state's Clinical Drug Review Program, which tests whether newer drugs are more effective than their older counterparts. (Results from these tests factor into which drugs Medicaid covers.) And it creates a "physician education program" to give doctors "unbiased clinical information" to balance marketing efforts by manufacturers. Again, this sounds sensible - if the generic version of an older drug works just as well as a newer medicine that's still under patent, why use the pricier one? But these proposals ignore the government's inescapable conflict of interest here. If its primary concern is cost, it has a strong incentive to push older drugs even if tests show that newer versions work better. Just look at Britain's experience with a similar program. In 2001, the British equivalent of New York's Clinical Drug Review Program concluded that Gleevec, a molecularly-targeted medicine, didn't treat leukemia more effectively than its older counterparts. But in 2002, Americans with a rare stomach cancer started taking the new drug thanks to its ability to target and kill cancer cells without attacking healthy cells. It took almost a full two years after US approval for Britain's drug reviewers to approve Gleevec's use for those with the cancer. Cost concerns tainted - and trumped - the agency's scientific objectivity. If Spitzer's budget passes, Medicaid patients will become dependent upon Albany's fiscal swings. After all, those who qualify for Medicaid can't afford to pay retail prices for prescription drugs. So if Spitzer's bureaucrats won't approve the drug a Medicaid patient needs, his or her doctors will have no choice but to prescribe them older, less effective medicine. Per capita, New York's Medicaid budget is already the most expensive in the nation. Pinching pennies now by cutting spending on drugs will only exacerbate the state's bloated Medicaid budget down the road. And taxpayers and poor patients alike will pay the price. Blaming prescription drugs and their makers may be politically easy, but it's a foolish, counterproductive way to cut health-care spending. There may well be fat in New York's health-care budget - but it's most likely in the areas with strong political support.
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Saturday, January 19, 2008Counterfeit Prescription Drugs Threaten HealthBy Sally PipesCategories: PharmaceuticalsMillions of Americans will look to weight-loss drugs to help them keep their New Year's resolution to slim down. And if they can't get a prescription from a doctor, many will go online to purchase the pills from foreign distributors. But beware: Most of these Web sites are glossed-up fakes selling dangerous counterfeits. The World Health Organization estimates that around 10 percent of the global drug supply is counterfeit. When fraud expert MarkMonitor recently examined 3,160 online pharmacies, it found just four that were accredited by the Verified Internet Pharmacy Practice Sites, the industry standard for quality control. So if you illegally purchase prescription meds online, you're playing Russian roulette with your health. The FDA recently reported on a scam where customers made online purchases of what they thought was Xenical, a popular anti-obesity drug. What they received, however, were pills made of talc and starch. Considering the risks of online meds, they lucked out. In December 2006, a Canadian woman died from taking counterfeit anti-anxiety drugs and sedatives. The bogus e-pharmacy she bought them from claimed to be Canadian, but was based in Eastern Europe. Online scams are employing increasingly sophisticated tactics to dupe consumers and evade law enforcement. Some change their Web site and company name every few weeks. And most use packaging that's indistinguishable from the real thing. What's more, identifying and prosecuting perpetrators in the developing world, where many of these phony pharmacies operate, is next to impossible, especially since the FDA has yet to develop a reliable track-and-trace system of electronic purchases.Even if the letter of the law requires suppliers to be from trustworthy countries, fraudulent sites are incredibly adept at fooling people about where they're based. A 2005 FDA investigation at airports in New York, Miami and Los Angeles found that over 40 percent of the drugs imported from four selected countries to American buyers falsely claimed to be from "Canadian pharmacies.” So here's the reality we'll be stuck with if prescription drug importation is legalized: Frauds that can't be traced. Scam artists that can't be caught. Web sites that can't be trusted. And customers who can't discern what's genuine from what's genuinely dangerous.
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Thursday, January 17, 2008Redefining ObesityBy Sally PipesIf you're like most Americans, you've probably stuffed yourself like a holiday turkey during the past few weeks. So it should come as no surprise that the average American gains about one pound between Thanksgiving and New Year's, according to the National Institutes of Health. That pound a year really adds up over the decades. Today, 17 percent of children are overweight.By the time they reach adulthood, that number climbs to 66 percent. It's a common political refrain that America faces a childhood obesity epidemic that's turning us into a nation of blubbery diabetics. Underlying this is the premise that we're helpless before gingerbread cookies and honey-roasted hams – unable to resist these and other foods and incapable of putting down our forks. We can be cured, it seems, only by government intervention such as the banning of trans-fats and sodas from public schools. But is it the food, or is it us? Is it a proper role of government to tell us what we can or can't eat? And are we really as fat as the NIH numbers suggest? Before we let Uncle Sam into our kitchens, at school or at home, these questions deserve some exploration. For starters, government data about what constitutes "overweight" and "obese" are misleading. The standard metric for this measurement is a person's body-mass index, or BMI – the ratio of one's height to one's weight. But at best, BMI is a rough tool that does not take into account an individual's body type. A six-foot-two athlete who weighs 210 pounds would be classified as "obese" according to BMI charts – despite his 32-inch waistline, 17-inch biceps and his less than 6 percent actual body fat. If you believe the BMI tables, most of the best players in the NBA and NFL are "overweight," including superstar athletes Kobe Bryant and Tom Brady. Many Hollywood heartthrobs also qualify as fatties – Brad Pitt, Matt Damon, Tom Cruise and George Clooney, to name a few. What's more, the acceptable BMI continues to be ratcheted downward – transforming those who were considered perfectly healthy yesterday into "overweight" and "obese" today. Before 1998, a "healthy" BMI was anything less than 27. Then, suddenly, the government changed the "healthy" number to anything less than 25. Overnight, more than 25 million people who were previously considered to be a healthy or normal weight were reclassified as overweight. Looked at another way, the government artificially manufactured an obesity crisis by moving the BMI goal posts. This raises the question: Are supposedly overweight people in fact heavier than they ought to be? While more people might be overweight now, and it's true that people who are seriously overweight tend to have a higher risk of developing some illnesses, the government flip-flop suggests how difficult it is to determine what truly is overweight. Even the Centers for Disease Control and Prevention had to publicly concede in 2005 that its estimate a year earlier of "400,000 obesity-related deaths per year" should have been 112,000. But once prevented deaths are factored in, the figure is closer to 26,000 deaths per year – one-fifteenth its original estimate. The President's Council on Physical Fitness and Sports has stated that what matters most, in terms of overall health, is whether a person is active. People who happen to be a few pounds overweight but who exercise regularly "have a lower morbidity and mortality than normal weight individuals who are sedentary." More important, is it government's role to help us reduce our rolls? Or is it a matter of personal responsibility? We know that fries and cheeseburgers aren't healthy fare. And thanks in part to heightened concerns about obesity, we can now buy low-fat salads at just about every fast-food outlet in the country. The same supermarkets and convenience stores that sell popcorn and candy bars also sell healthful foods. People make choices. And government should protect – not restrict – the freedom to make those choices so long as we're not harming others. While we may not always like the choices others might make, it is essential that we all have the freedom to choose for ourselves. Once we accept the idea that the Nanny State should step in when it's "for our own good," we've taken a very big step down the road to something like the scene painted in George Orwell's "1984" – when citizens wake each day to mandatory exercise classes on the Telescreen. Most of us would prefer to choose for ourselves whether to exercise or have an extra helping of apple pie. And if we gain an extra pound over the holidays – so what? That's why we have New Year's resolutions.
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