Growing evidence indicates that NPs can perform many primary care services as safely and effectively as physicians perform them

Scope-of-Practice Laws from Mercatus.

"Scope-of-practice laws are state-specific restrictions that determine what tasks nurses, nurse practitioners (NPs), physician's assistants, pharmacists and other healthcare providers may undertake in the course of caring for patients. These rules restrict the supply of primary caregivers, a problem which is particularly serious in rural areas. Fewer primary care givers means higher costs, longer wait times, and patients who have to drive much farther to see a doctor.

By increasing the number of providers, states could dramatically reduce the cost of care for their residents and increase access to care, especially for low-income families. If all states allow NPs to practice autonomously without physician oversight, one estimate puts the potential cost savings at $810 million.

Scope-of-Practice Laws Do Not Make Us Safer

The evidence shows that nurses and physician assistants can perform just as well as doctors in terms of patient outcomes. And one study even found that “patients were more satisfied with consultations with nurse practitioners than those with doctors.”

Scope-of-Practice Laws and Healthcare Costs

A recent study by the Mercatus Center explores how the licensing requirements for physician assistants and nurse practitioners affect medical outcomes for Medicaid recipients. It found that prohibiting physician assistants from prescribing drugs to patients significantly raises costs by more than 11 percent on average, translating to about $109 in extra expenses for each Medicaid beneficiary. Relaxing these restrictions would result in savings for Medicaid beneficiaries and would not cause any changes to the availability of health care. Allowing nurse practitioners and physician assistants to prescribe drugs has not been correlated with an increase in the rate of prescription claims per Medicaid beneficiary.

Another study by Edward Timmons and Conor Norris examines the effects of the Clinical Laboratory Improvement Amendments of 1988, which allow pharmacies to apply for waivers to conduct low-risk medical tests. The study shows that pharmacists and lab technicians can accommodate routine medical testing in their current job duties without affecting the number of hours they work. This indicates that a more broad scope of practice for these healthcare professionals can increase access to care for consumers without significantly increasing cost.

Variability Across States

The good news is that dozens of states have already removed these barriers. Scope-of-practice regulations vary in stringency across states. New Mexico and Vermont, for example, are among the 23 states that allow nurse practitioners to operate full practices, meaning that they may be primary care providers and may diagnose, treat, and independently prescribe drugs. Other states, such as Virginia and North Carolina, only permit restricted practices, allowing NPs to be primary care providers but only under physician supervision.

The variability in scope-of-practice laws from state to state allows researchers to estimate the effects of these regulations. One study analyzes how these regulations affect wages, employment, costs, and the quality of certain types of medical services. On balance, it seems that these regulations privilege certain providers under the guise of consumer protection. Scope-of-practice laws reduce NP wages while boosting physician wages. The authors find that more stringent regulations limit the hours worked by NPs and that restricting NPs’ ability to write a prescription increases the cost of a well-child medical exam by about $16 (or 16 percent). Furthermore, the authors find that these regulations seem to have no discernable effect on outcomes such as infant mortality or malpractice premiums.

The Healthcare Openness and Access Project

Nurse practitioner scope-of-practice laws are one of the variables used in the occupational regulation subindex of the Healthcare Openness and Access Project (HOAP). HOAP provides a set of tools providing state-by-state measures of the flexibility and discretion that patients and providers have in managing health and health care.

Growing evidence indicates that NPs can perform many primary care services as safely and effectively as physicians perform them. States that allow healthcare organizations to determine for themselves which procedures NPs may receive a higher HOAP score for the occupational regulation indicator."

Sally Pipes On The Problems And Costs Of Single Payer Health Care Systems

See California’s ‘Free’ Health Care Won’t Come Cheap: The state may implement a single-payer system—meaning substandard care, wait lists and new taxes in the WSJ. She is president and CEO of the Pacific Research Institute. Excerpt:

"Yet the financial costs of single-payer are practically negligible compared with the human costs. Consider the Department of Veterans Affairs’ scandal-plagued single-payer health program. Last month, the agency’s inspector general found that more than 100 veterans died while waiting for care at a Los Angeles VA facility between October 2014 and August 2015.

Hospitals in the United Kingdom’s single-payer system, the National Health Service, are so overcrowded that the British Red Cross earlier this year labeled the situation a “humanitarian crisis.” In my native Canada, patients face a median wait time of 20 weeks from seeing a primary-care doctor to getting treatment from a specialist, according to a November 2016 report from the Fraser Institute, a Canadian think tank. These delays have more than doubled since 1993. Is it any wonder that around 45,000 Canadians left the country in 2015 to seek medical treatment?"

WSJ On Problems With The Paris Climate Agreement

See Trump Bids Paris Adieu Growth and innovation are better forms of climate insurance. Excerpts:

"The 195 signatory nations volunteered their own carbon emission-reduction pledges, known as “intended nationally determined contributions,” or INDCs. China and the other developing nations account for 63% of annual global CO ₂ emissions, and their share is rising. They submitted INDCs that pledged to peak the carbon status quo “around” 2030, and maybe later, or never, since Paris included no enforcement mechanisms to prevent cheating.

Meanwhile, the developed OECD nations—responsible for 55% of world CO ₂ as recently as 2000—made unrealistic assurances that even they knew they could not achieve. As central-planning prone as the Obama Administration was, it never identified a tax-and-regulation program that came close to meeting its own emissions pledge of 26% to 28% reductions from 2005 levels by 2025."

"The Paris target was to limit the surface temperature increase to “well below” two degrees Celsius from the pre-industrial level by 2100. Researchers at the Massachusetts Institute of Technology’s Joint Program conclude that even if every INDC is fulfilled to the letter, the temperature increase will be in the range of 1.9–2.6 degrees Celsius by 2050, and 3.1–5.2 degrees Celsius by 2100."

"The best form of climate-change insurance is a large and growing economy so that future generations can afford to adapt to whatever they may confront.

A more prosperous society a century or more from now is a more important goal than asking the world to accept a lower standard of living today in exchange for symbolic benefits."

"Energy intensity—the amount of energy necessary to create a dollar of GDP—has plunged 58% in the U.S. since 1990, according to the U.S. Energy Information Administration.

Over the same period, intensity declined merely 37% in OECD Europe, 20% in Japan, 22% in Mexico and 7% in Korea."


"Superior efficiency helps explain why U.S. carbon emissions fell by 145 million tons in 2016 compared to 2015, more than any other country."

"Over the past five years U.S. emissions have fallen by 270 million tons, while China—the No. 1 CO ₂ emitter—added 1.1 billion tons.

All of which make the claims that the U.S. is abdicating global leadership so overwrought."

"Private economies that can innovate and provide cost-effective energy alternatives will always beat meaningless international agreements."

Scott Sumner On How Regulations Make The Banking System More Risky And Fragile

See American banking: Socialism or laissez-faire?

"Imagine a banking system where the public would lend money to the Treasury at X% interest, and the Treasury would then lend the same funds to commercial banks at the same X% interest rate. All bank deposits were held by the Treasury. That sounds kind of socialistic, doesn't it? And yet this might also be viewed as a description of the actual American banking system, during the 1990s and 2000s. The Treasury backstops all FDIC-insured deposits.

Of course in recent years, progressives have complained that the 1990-2007 system was a product of radical deregulation, and the 2008 banking crisis was blowback from public policies that reflected a laissez-faire ideology. So which is it?

I'd say neither. Ideological framing gets in the way of understanding what's actually going on in banking. After a recent post criticizing FDIC, commenters suggested that removing deposit insurance would hurt small savers. But if protecting small savers were the goal, surely there are much less costly ways of doing so.

While waiting out endless delays at the airport, I recently came across a magazine that specialized in commenting on major New Your City real estate developers. (No, this story has no Trump angle.) This article caught my eye:

Sometimes it seems like Bank of the Ozarks is the only show left in town, lending hundreds of millions to developers across the city amid a condo financing drought. Its aggressive approach has led some industry insiders to question whether the Arkansas-based lender is becoming overexposed to a downturn in the New York City condo market. . . . Ozarks, which was for most of its history a small community bank with a handful of branches in Arkansas, has been one of the most prolific lenders in the city in recent years. It recently provided a $108 million construction loan for Xinyuan Real Estate's new condominium project at 615 10th Avenue in Hell's Kitchen. It's also a lender on JDS Development and the Chetrit Group's Brooklyn megatower rental project at 9 Dekalb Avenue and on Tishman Speyer's Macy's development in Downtown Brooklyn. . . .
Last year, Carson Block, founder of Muddy Waters Research, said he was shorting Ozarks' stock because he believed the bank was moving too aggressively in the real estate space.

I don't believe in "bubbles", so don't take this as a prediction that Bank of the Ozarks will run into trouble. Rather, my point is that this sort of aggressive strategy makes far more sense in a world of FDIC, than without deposit insurance. How many people would want to put their life savings into this sort of bank, if FDIC did not guarantee the deposits?

Back in the 1920s, banks were managed far more conservatively than today. Patrick Sullivan recently reminded me of a study by Eugene White, which pointed out that the huge 1920s real estate boom and bust did not cause a banking panic:

Although long obscured by the Great Depression, the nationwide "bubble" that appeared in the early 1920s and burst in 1926 was similar in magnitude to the recent real estate boom and bust. Fundamentals, including a post-war construction catch-up, low interest rates and a "Greenspan put," helped to ignite the boom in the twenties, but alternative monetary policies would have only dampened not eliminated it. Both booms were accompanied by securitization, a reduction in lending standards, and weaker supervision. 'Yet, the bust in the twenties, which drove up foreclosures, did not induce a collapse of the banking system. The elements absent in the 1920s were federal deposit insurance, the "Too Big To Fail" doctrine, and federal policies to increase mortgages to higher risk homeowners. This comparison suggests that these factors combined to induce increased risk-taking that was crucial to the eruption of the recent and worst financial crisis since the Great Depression.

Many people are surprised to find out that banks were managed much more conservatively during the 1920s than today. After all, weren't there frequent bank failures prior to the enactment of FDIC in 1934? Yes, but this reflected two special factors:

1. Because of unit banking laws, the US had thousands of small, poorly diversified banks in rural areas. Many of these banks failed during the 1920s and 1930s.
2. Monetary policy was far more unstable during this period, resulting in a roughly 50% fall in NGDP between 1929 and early 1933, as well as other big declines in 1920-21 and 1937-38. In contrast, NGDP fell by only 3% during the Great Recession.

The importance of the unit banking laws is obvious when you consider than Canada had no bank failures during the Great Depression, despite a similar fall in NGDP. Today, that sort of decline in NGDP would wipe out virtually the entire US banking system. Canada owed its success to having large well-diversified banks with branches all across the country.

So why doesn't Congress fix the moral hazard problem? Because for Congress, moral hazard is not a bug, it's a feature. Cloud Yip recently interviewed Charles Calomiris, who had this to say about moral hazard in banking:

The pattern is that the governments, on the one hand, protects banks in the forms of deposit insurance or government bailouts when a crisis happens, or give banks certain opportunities. In exchange, the government asks things from the banks. In the last 40 years, especially across democracies, the thing that the government was asking the bank to do is to get heavily involved in residential real estates funding or to subsidize mortgages. One of the thing that has been happening all over the world is that people in democracies are hoping that their governments can come up with programs that would make housing more affordable. The easiest way for governments to do that is to get banks to subsidize mortgage risk. The way the governments get the banks to subsidize mortgage risk is by protecting the banks. They give the banks something in exchange and then tell the banks "OK. Now we have given you the protections. We have given you these new rights. They are very valuable to you. The cost is that you have to do something that we, the government, found politically expedite." What Sophia Chen and I are finding now is that the story about the US in our book "Fragile by Design" may actually be a broadly-based story.

There are many possible solutions to moral hazard. For instance, my checking account is a Fidelity MMMF, invested in safe government bonds. We don't need FDIC to offer safe investments to small savers. Another option is requiring all FDIC-backed deposits to be invested in save assets such as Treasuries, and let banks use uninsured deposits for riskier loans. In that case we could basically repeal all of Dodd-Frank. Indeed, we wouldn't need any bank regulation at all. But that sort of reform would hurt bank profits, especially at smaller banks. And they have far more political power than America's taxpayers, who will again be on the hook when another round of go-go bankers runs into trouble.

PS. You don't see either party trying to fix the moral hazard problem. There's a reason for that."

More on the statistical chicanery of the AFL-CIO’s artificially inflated CEO-to-worker pay ratio

From Mark Perry.

"The Wall Street Journal reported today on its front page that “The median pay for CEOs of the biggest U.S. companies was $11.7 million in 2016, up from $10.8 million in 2015 and a postrecession record, according to a Wall Street Journal analysis of S&P 500 firms.”

According to the AFL-CIO’s annual report on CEO pay released in May: “In 2016, CEOs of S&P 500 Index companies received, on average, $13.1 million in total compensation, according to the AFL-CIO’s analysis of available data.” Last year, the AFL-CIO reported that “the average CEO of an S&P 500 company made $12.4 million per year in 2015.”

I’ve previously documented the statistical chicanery and legerdemain employed by the AFL-CIO to exaggerate and inflate its “CEO-to-Worker Pay” ratio (see CD posts here and here) that includes:

1. Using a small sample of the highest paid CEOs in America, the AFL-CIO compares the total annual compensation of about 400 S&P 500 CEOs to the average annual pay of about 100 million rank-and-file workers, most of whom don’t work for S&P 500 companies. A more accurate comparison would be of S&P 500 CEO compensation to the average pay of employees of those same companies.

2. Comparing the total compensation of CEOs in the S&P500 (including all fringe benefits) to the cash-only wages of rank-and-file workers (excluding all fringe benefits), resulting in a distorted apples-to-oranges comparison. To be fair, the AFL-CIO should either: a) include fringe benefits for both CEOs and rank-and-file workers or b) exclude fringe benefits and compare only cash compensation.

3. Comparing the total compensation of CEOs who are working full-time and likely putting in 50-60 hour workweeks managing large multi-national corporation to the cash-only income of rank-and-file workers whose average workweek is only 33.6 hours (less than the 35 weekly hours required to be classified as a full-time worker). How about comparing CEO compensation to the compensation of rank-and-file workers (including fringe benefits) who are working the same number of weekly hours as a typical CEO?

4. CEOs of the S&P 500 are typically in their peak earning years, and their average age is about 57 years. In contrast, the 100 million rank-and-file workers considered by the AFL-CIO include workers of all ages, including many young and part-time workers. A more accurate, apples-to-apples comparison would adjust for age and would compare CEO compensation to the compensation of full-time rank-and-file workers in their prime earning years, e.g. workers in their late 50s.

Based on today’s WSJ article, here’s another item to add to the long list of shady statistics used by the AFL-CIO to calculate an inflated CEO-to-worker pay ratio:

5. The AFL-CIO uses average CEO compensation instead of median CEO compensation, which inflates the figure used for the annual compensation of a typical S&P 500 CEO by about $1.5 million ($13.1 million average vs. $11.7 million median CEO compensation for 2016, and $12.4 million vs. $10.8 million in 2015). By using average CEO pay, the figure is unfairly biased upwards by the influence of a small group of very highly paid outlier CEOs. For example, in 2016 Charter Communications CEO Thomas Rutledge was paid $98.5 million, and six other CEOs were paid more than $40 million.

It’s a standard statistical practice that whenever there are extreme outliers (e.g., home prices, household income) in a sample, median values should be used (median home price, median household income) to more accurately reflect a typical or representative value. If the AFL-CIO had used median instead of average CEO pay, its CEO-to-worker pay ratio would have declined from 347-to-1 to 310-to-1 in 2016, and from 335-to-1 in 2015 to 291-to-1. Therefore, in addition to all of the other questionable statistics used by the AFL-CIO, the use of average CEO pay instead of median CEO pay has artificially inflated its CEO-to-worker pay ratio in the range of 12-15% over the last several years.
Bottom Line: As I reported in this recent CD post, when you correct for many of the questionable statistics used by the AFL-CIO (using median CEO pay of the Russell 3000 companies, including fringe benefits for rank-and-file workers, and assuming a workweek for rank-and-file workers that more closely matched the average weekly hours of a CEO) a more realistic statistical approach deflates the CEO-to-worker pay ratio down from the 347-to-1 ratio reported by the AFL-CIO to a ratio in the 40-to-1 to 60-to-1 range. As I concluded in that post (slightly revised):

Perhaps CEO compensation is an issue that deserves attention. But to bring attention to the issue, the AFL-CIO’s annual reports on the CEO-to-worker pay ratio use a bogus statistical methodology that is so flawed, deceptive and distorted that the union group’s yearly gripes about CEO pay really can’t be taken very seriously. It’s pretty obvious that the AFL-CIO’s approach is to artificially inflate the CEO-to-worker pay ratio for publicity purposes and to generate sensationalized media attention by comparing the average (not median) total compensation of a small group of the highest paid CEOs in America to the cash-only income of 100 million rank-and-file workers who work an average of only 33.6 hours per week. It’s a dishonest approach that wildly exaggerates economic reality."

Why Do Federal Subsidies Make Renewable Energy So Costly?

By James Conca in Forbes. Dr. James Conca is an expert on energy, nuclear and dirty bombs, a planetary geologist, and a professional speaker. Excerpt:

"On a total dollar basis, wind has received the greatest amount of federal subsidies. Solar is second. Wind and solar together get more than all other energy sources combined.

However, based on production (subsidies per kWh of electricity produced), solar energy, has gotten over ten times the subsidies of all other forms of energy sources combined, including wind (see figure).

Source: University of Texas

Figure Caption: Subsidies for various energy sources normalized to total energy produced by each source for the years 2010, 2013, 2016 and projected for 2019. Data Source: University of Texas

According to the Energy Information Administration (EIA) and the University of Texas, from 2010 through 2013, federal renewable energy subsidies increased by 54%, from $8.6 billion to $13.2 billion, despite the fact that total federal energy subsidies declined by 23%, from $38 billion to $29 billion.

Subsidies then decreased dramatically from 2013 to 2016, because:

• tax incentives expired for biofuels,
• the American Recovery and Reinvestment Act (ARRA) stimulus funds were used up,
• energy assistance funds decreased,
• there was a 15% decrease in fossil fuel subsidies from $4.0 billion to $3.4 billion, and
• a 12% decrease in nuclear subsidies from $1.9 billion to $1.7 billion.

But the subsidies for nuclear and fossil fuels are indirect subsidies like decommissioning and insurance assistance, leasing of federal lands, and other externalities, unlike the subsidies for renewables which are directly for the production of electricity and directly affect cost and pricing.

Within the renewables, electricity-related subsidies increased more than 50% for wind and solar, whereas conservation, end-use, and biofuel subsidies deceased more than 50%. This is unfortunate since conservation and efficiency usually yield great results with little cost or infrastructure requirements.

The Institute for Energy Research and the University of Texas calculated the subsidies per unit of energy produced, or cents per kWh. This is a more relevant number for comparing different energy sources as it normalizes to the amount of energy produced (see figure above).

Between 2010 and 2016, subsidies for solar were between 10¢ and 88¢ per kWh and subsidies for wind were between 1.3¢ and 5.7¢ per kWh. Subsidies for coal, natural gas and nuclear are all between 0.05¢ and 0.2¢ per kWh over all years.

Much of the subsidies in 2010 and 2013 resulted from ARRA stimulus funding following the economic crash of 2008 and the end of ARRA is why the 2016 and 2019 numbers are so much lower.

Solar also gets the most state-funded subsidies, some of which greatly exceed the federal subsidies. In my own State of Washington, where electricity prices are 8¢/kWh, the State pays me 54¢ for every kWh generated by my rooftop solar array, whether I use it or not. This has made my total electricity costs -7¢/kWh over the past two years, and will for the foreseeable future.

Yes, that’s negative (-)7¢ per kWh. And this is on top of my 30% installation federal tax credit which came to about $6,000 for my 4 kW array.

There is no doubt that these subsidies incentivize renewables, but what do they do to the cost of the electricity generated by them?

They actually increase the cost. However, this cost is transferred from the ratepayer to the taxpayer, and so goes unnoticed by most Americans.

Using the per-kWh subsidy numbers from EIA and UT in the figure above, each kWh of solar produced in 2010 received 88¢, more than ten times the actual cost of any other energy source. These subsidies have to be added to the retail cost of that energy to determine total costs since that’s what was actually spent to produce it.

So in 2010 and 2011, solar cost about 100¢ per kWh, and in 2013 and 2014, solar cost about 80¢ per kWh. Even after the ARRA funds were depleted after 2013, the cost of solar is still double what is usually given as its cost.

For comparison, nuclear energy cost between 4¢ and 5¢ per kWh to produce over this time period. Remember, though, the cost to produce energy is not the same as the price charged for it. Price is set by the region and the market, and has add-ons for transmission, grid maintenance and other non-production costs. Subsidies decrease the price while increasing the cost.

Although wind received more total subsidies, wind received much less subsidies per kWh produced than solar as it produced much more energy. However, it is nonetheless significant for 2010 and 2013 and about 50 times that of nuclear and fossil fuels, allowing wholesale prices for wind and solar to become negative, unfairly undercutting nuclear, hydro and coal prices."

Trump should kill the failing Paris Agreement

By Brooke Rollins and Chip Roy. Brooke L. Rollins is the president and CEO of the Texas Public Policy Foundation. She served as Governor Rick Perry’s deputy general counsel, and later as his policy director. Chip Roy serves as the director of the Center for the Tenth Amendment Action at the Texas Public Policy Foundation. He is a former chief of staff for Sen. Ted Cruz. Excerpts:

"It limits energy independence. As residents of a state whose development of fracking technology has unlocked oil and natural gas reserves that exceed those of OPEC nations, we applauded Trump’s Executive Order 13783, on “Promoting Energy Independence and Economic Growth.” Adherence to the Paris climate agreement would stall or preclude unleashing American energy, a prodigious stimulant for economic growth.

It may not be legal. The legal status of the Paris deal is not settled. It currently drifts in a legally gray area. Is it an international agreement requiring only a presidential signature or is it a treaty requiring the Senate’s vote of approval? The law does not clearly indicate that the signature of one president can bind the U.S. beyond that president’s term of office. As the constitutional question remains, note that a global system of energy governance under U.N. auspices would adversely affect not just the energy sector but also the entire U.S. economy. And what percentage of U.S. citizens supports the U.N.’s global governance of any matter?"

"It is anti-American. The Paris accord imposes far more onerous measures on the U.S. than any other country. While then-President Obama agreed to mandatory economy-wide carbon cuts enforceable under our rule of law, the climate accord allows other countries to pledge aspirational goals along the lines of "we might try to reduce greenhouse gas emissions if it won’t hurt our economy and if we receive billions of dollars from rich countries to do so." This makes no sense. Poor countries know better than to undermine their struggling economies by complying with voluntary pledges to cut carbon.

It is designed to fail. The Paris agreement packs a double-sized wallop. Not only will it create a chokehold on economic growth, it will not actually reduce greenhouse gases enough to avoid the “dangerous warming” predicted by the models of the U.N.’s official Intergovernmental Panel on Climate Change. At the end of the day, the restrictions advanced by countries with little to lose and everything to gain from shackling the U.S. economy will ultimately prove destructive to all involved.

The EPA’s Clean Power Plan, fortunately, stalled in the courts, would mandate re-engineering our nation’s entire electric system from one controlled by cost, reliability and safety to a system controlled by the carbon content of the fuels. Yet this upheaval would only decrease the Intergovernmental Panel on Climate Change’s predicted rate of future warming by 0.02 percent. Statistically speaking, that amounts to nothing.

The most aggressive climate crusaders in the U.K. and Germany are actually increasing their greenhouse gas emissions while their retail electric rates are, respectively, two and three times higher than the average retail rate in the U.S. German media now characterizes electricity as a “luxury good” for middle and low-income families. The world’s energy future looks increasingly grim through the lens of Paris."