Why We Can't Have Nice Things

In many cases, the government's attempts at regulating health care markets are complex, convoluted operations—and seeing the consequences of those policies can be tricky.

Other times, however, it is very straightforward: the government just says "no."

When that happens, it doesn't matter what patients need or what doctors want. In its rush to prevent some people from recreationally using certain drugs or accessing certain treatments, the federal government creates huge roadblocks for patients with legitimate needs and doctors who are only trying to help.

That's what happened earlier this year when the Food and Drug Administration (FDA) decided not to approve MDMA-assisted psychotherapy as a treatment for post-traumatic stress disorder (PTSD).

"Who is harmed, primarily, are all the people with post-traumatic stress disorder who are hoping to have access to this treatment," says Julie Holland, a New York-based psychiatrist and author. "And I would argue honestly that psychiatrists and therapists are also harmed because we are having more and more people who are traumatized, and our treatment options have not changed in a very long time."

Less directly, that's also what has caused a serious shortage of Adderall and other drugs used to treat Attention Deficit Hyperactivity Disorder (ADHD). Because the Drug Enforcement Administration (DEA) strictly limits the availability of substances like amphetamine or dextroamphetamine in an attempt to reduce their recreational uses, patients with legitimate prescriptions can end up having a hard time filling their prescriptions. 

"It took me weeks to get a prescription for something that really negatively affects my life," says C.J. Ciaramella, a reporter at Reason who has written about his personal struggles with ADHD. "It kept me suffering and anxious."

Further reading for this week's episode:

"It Took Me Months To Get the ADHD Meds the DEA Says Are Overprescribed," by C.J. Ciaramella, Reason

"Dickens, Diabetes, and Positive-Sum Games," by Anne Bradley

Good Chemistry: The Science of Connection, from Soul to Psychedelics, by Julie Holland

"Adderall Shortage Led to 10 Percent Fewer Prescriptions Being Filled," by Joe Lancaster, Reason

"Founder of Adderall 'Pill Mill' Sent Back to Jail," by Rolfe Winkler, The Wall Street Journal

"FDA Declines To Approve MDMA-Assisted Psychotherapy as a PTSD Treatment," by Jacob Sullum, Reason

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: The War on Drugs appeared first on Reason.com.

When Mike Abell's young son was diagnosed with a rare form of brain cancer, a phone call proved to be a vital lifeline.

Today, that phone call might be illegal—thanks to some strict limitations that New Jersey places on telemedicine calls with doctors in other states.

"As parents of a child with cancer, you're already fighting an impossible journey," says Abell. Those rules, meanwhile, are only "making it harder."

At the other end of that phone call was Dr. Shannon MacDonald, a specialist in proton radiation therapy at Massachusetts General Hospital in Boston. She treated Abell's son, Jun, who made a full recovery.

On one hand, modern medicine makes use of incredible, cutting-edge technology. On the other hand, public policy has forced the industry to remain stuck in an earlier technological age—before phones, before the internet, before Zoom—when a doctor had to be in the same room as a patient to provide treatment.

"Physicians are confused. Our ethical obligations are in direct contradiction with the law," says MacDonald. "Your ethical obligation is the right thing to do, but it's technically against the law and it could put your license at risk."

A doctor who treats a patient in New Jersey without holding an active New Jersey medical license could face three to five years in prison and a fine of up to $15,000. Separately, the unlicensed practice of telemedicine and telehealth in New Jersey carries a civil penalty of $10,000 for a first offense and $20,000 for subsequent offenses. 

And it's not just New Jersey. More than half the states in the country have "clear barriers to across-state-line" telehealth or lack a clear way for physicians to legally use telehealth to check-in with patients in another state, according to a report published earlier this year by the Cicero Institute and the Reason Foundation (which publishes this website).

Now, both Abell and MacDonald are challenging that New Jersey law with the help of the Pacific Legal Foundation, a libertarian law firm.

"Tomorrow, Dr. McDonald could get a phone call from somebody in New Jersey saying 'Hey, I was referred to you. I have this problem,'" says Caleb Trotter, an attorney with the Pacific Legal Foundation. In that moment, MacDonald would have to decide whether to break the law or to put in the time and effort to first get licensed in New Jersey. Neither is ideal.

"And in the meantime, they're either going to have to wait for treatment," says Trotter. "I don't want to be dramatic, but it can be life and death."

Further reading for this week's episode:

"NJ Makes Cancer Treatment More Difficult for Children and Families," by Mike Abell, NJ.com

"It's Time To Permanently Suspend Regulatory Barriers to Telehealth," by J.D. Tuccile, Reason

"In 30 States, You Can't Use Telehealth With Out-of-State Doctors," by Caleb Trotter, Pacific Legal Foundation

"Rating States on Telehealth Best Practices," by Vittorio Nastasi, Reason Foundation

• Producer: Hunt Beaty

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: Dial 'T' for Terrible Telehealth Laws appeared first on Reason.com.

There are more than 100,000 Americans on the waiting lists to receive an organ transplant, and many of them will die without ever getting one.

At least some of those lives would be saved if the monopoly government contractors managing America's organ donation system weren't so bad at their jobs, argues Jennifer Erickson.

"Monopolies don't work and government-funded monopolies are even worse," says Erickson, a senior fellow at the Federation of American Scientists (FAS), on the newest episode of Why We Can't Have Nice Things. "It's hurting patients. It's hurting the taxpayers. And we've got to get to some real accountability."

According to researchers at the University of Pennsylvania, about 28,000 donatable organs are going uncollected each year from people who have died after agreeing to be organ donors. That total includes 17,000 kidneys. Additionally, one in every five kidneys is thrown away after being harvested, rather than making it to a recipient.

Those missed opportunities mean longer waits on the transplant list, but it also means higher costs for taxpayers. Every Medicare patient who gets a new kidney this year will save taxpayers $250,000 in future dialysis costs, according to FAS' research.

However, the government contractors who are supposed to be doing the work of connecting donors with recipients keep dropping the ball. There are 56 organ procurement organizations (OPOs) operating in exclusive territories around the country. A 2019 study found that just six of them were collecting at least 50 percent of the available donated organs in their zones.

The federal monopoly contractor supposed to oversee those local monopolies has problems too. A 2021 Department of Health and Human Services report concluded that the single-source contract for the United Network for Organ Sharing meant the organization had "little to no incentives" to improve its operations. 

Finally, that's starting to change—but could even bolder reforms make more organs available to those in need?

Sally Satel, a senior fellow at the American Enterprise Institute (and the beneficiary of a kidney donation), joins the podcast to make a case for compensating donors—something that is currently forbidden by federal law.

"We romanticize altruism," says Satel. "We shouldn't be blinded by that sentiment, which is magnificent, but blind to the point where we allow people to die, because that's the only kind of system that we will permit."

Further reading for this week's episode:

"Reforming Organ Donation in America," The Bridgespan Group

When Altruism Isn't Enough: The Case for Compensating Kidney Donors, by Sally Satel

"How To Stop Losing 17,000 Kidneys," by Santi Ruiz, Substack

"UNOS Transplant Network Depends on Out-of-Date Technology," by Joseph Menn and Lenny Bernstein, The Washington Post

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: The Case of the 17,000 Missing Kidneys appeared first on Reason.com.

Dr. Jay Singleton remembers the moment when he realized that Certificate of Need laws were serious business.

"He stood up and stared at me and hit his hands on the table," Singleton recalls. "And he said, 'well, we're going to fight you on this.'"

As we explained in last week's episode of Why We Can't Have Nice Things, Singleton has been trying to open a new cataract surgical center in New Bern, North Carolina. He'd met with the CEO of the local hospital as a friendly gesture. What he got was the promise of a protracted legal fight.

Earlier this year, Singleton's case made it to the North Carolina Supreme Court—though he is still likely a long way away from having a final resolution. Meanwhile, his patients continue to face higher costs: Singleton says that a surgery that would cost $1,800 at his clinic instead costs about $6,000 at the hospital up the road. 

Joshua Windham, the Institute for Justice attorney who is litigating Singleton's case, says the problem lies with North Carolina's Certificate of Need (CON) law, which gives government regulators—rather than patients or consumers—the power to decide what services are needed.

"They're really permission slip requirements for innovators," says Windham. "The government can't possibly know these things in advance, in part because people's perceptions of their own needs will change, but also because the facts of reality will change."

In some places, those roadblocks to innovation in health care are starting to fall. Also on this week's episode, we'll follow up on Katie Chubb's efforts to open a new birth center in Georgia—something she'll now be able to do after the state legislature passed and Gov. Brian Kemp signed a major CON reform earlier this year.

"It's definitely propelled me forward and made me realize that even the smallest person in somewhere remote as Augusta can start some changes," says Chubb.

Further reading for this week's episode:

"New Georgia Law Allows Birthing Centers To Open Without Needing Permission From Nearby Hospitals," by Eric Boehm, Reason 

"North Carolinians Are Being Conned by Certificate of Need Laws," by Christina Smith, Citizens Against Government Waste

"The Powerful Council Overseeing North Carolina's Health Care," by Jeanette Doran, Carolina Journal

"Kemp Signs Major Reforms to CON Law," by Dave Williams, Capital Beat News Service

"The Con of Certificate of Need Laws," by Veronique de Rugy, Mercatus Center

Written by Eric Boehm; produced and edited by Hunt Beaty; fact-checking by Anthony Wallace. 

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: Permission Slips for Innovation appeared first on Reason.com.

In a functioning market, entrepreneurs feel encouraged to bring new products and services to consumers—and get rewarded when those efforts succeed.

Too often, that's not how it works in health care. Patients end up paying the price.

On this week's episode of Why We Can't Have Nice Things, host Eric Boehm dives into the murky waters of certificate of need laws, which restrict the availability of health care in many states and limit the ability of new providers to enter those markets. Though they vary a bit from state to state, these regulations generally allow state bureaucrats to determine what services are needed—often at the behest of existing providers, who use the process to cut off potential competition.

That's exactly what happened to Katie Chubb and Dr. Jay Singleton. Chubb is a mother and serial entrepreneur who has spent years trying to open a new birth center in Augusta, Georgia. Singleton is an eye doctor in North Carolina who spent more than $1 million to build a cataract surgical center, then found out the state wouldn't let him use it to full capacity. Both have been fighting their state's certificate of need systems in the hopes of making lasting changes.

"To put it simply, you have the government saying that less expensive, quality health care services that patients actually need are not needed," explains Josh Windham, an attorney with the Institute for Justice who recently argued on behalf of Singleton at the North Carolina Supreme Court. "Who is the government to say that to people? Shouldn't patients and doctors make those choices?"

Certificate of need laws are particularly pernicious because the costs are not always evident. We don't see the clinics that aren't built or the services that aren't offered. But the special interests that benefit have a strong interest in blocking reforms.

"The folks that have most at stake here are the would-be competitors, and they're very well organized," says Matthew Mitchell, a senior fellow at the Knee Regulatory Research Center at West Virginia University, who has been studying the effects of these regulations for years. "Those who stand to lose, the patients, typically don't even know these rules exist."

Further reading for this week's episode:

"A Baby Dies in Virginia," By Eric Boehm, Reason 

"Justices Wrestle With New Bern Eye Surgeon's CON Challenge," The Carolina Journal

"Companies Shouldn't Have the Right To Veto Their Competiton," by Jack Brown, Reason

"Certificate of Need Laws in Health Care: A Comprehensive Review," by Matthew Mitchell

Written by Eric Boehm; produced and edited by Hunt Beaty; fact-checking by Anthony Wallace. 

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: Who Decides What Health Care Is 'Needed'? appeared first on Reason.com.

Why are prescription drugs so expensive in the United States?

"Drug prices in this country are so high because there is zero transparency in the system, and when there's zero transparency in a market, there is no way for it to be efficient," says Mark Cuban, the serial entrepreneur, investor on Shark Tank, and guest on the first episode of the second season of Why We Can't Have Nice Things. 

When a market is inefficient, adds Cuban, "people learn very quickly how to take advantage of those inefficiencies to their own profit, and that's exactly what's happened in the health care and pharmacy side."

Cuban is trying to do something about the lack of transparency in the prescription drug market. In 2022, he launched CostPlusDrugs.com, a website that offers low prices and direct shipping for hundreds of pharmaceuticals and generics. By showing their markup—a standard 15 percent on everything—and encouraging consumers to make their purchases without going through insurance plans, Cuban's project is attempting to inject a bit of capitalism into a health care market that sorely needs it.

It's the perfect story to kick off the new season of Why We Can't Have Nice Things, which focuses on how bad regulations and anticompetitive rules are making Americans poorer and sicker. Over the next six weeks, this limited-run Reason podcast series will dive into some of the acute problems with the American health care system, examining how poor policy making is keeping doctors from treating patients and blocking patients from getting needed treatment.

The lack of transparency in drug pricing is one of those problems. Price signals are essential to a functioning market—but the prescription drug market seems designed to hide those signals as much as possible.

The result is higher prices for everyone. For a lot of Americans, those prices are a source of economic hardship. According to the Kaiser Family Foundation, 21 percent of adults say they have not filled a prescription because of the cost. Meanwhile, about one in 10 adults say they have cut pills in half or skipped doses of medicine in the last year because of the cost.

Cuban's newest venture could be part of the solution. A Vanderbilt University Medical Center study published last year found that the federal government could save taxpayers up to $2.15 billion annually if insurers operating in the Medicare prescription drug plans purchased seven generic oncology drugs at the prices obtained by Cost Plus Drugs.

More transparent pricing would have a bigger impact if more Americans were in control of their own health care spending, argues Michael Cannon, the director of health policy for the Cato Institute.

"You can show them the prices, but they're not going to care unless it's their money on the line," Cannon says. Unfortunately, close to 90 percent of all health care spending in the United States comes from the government or from private insurance companies, leaving individuals with little influence.

"As a result, we get a health sector that doesn't serve the needs of consumers and patients," says Cannon. "We get a health sector that serves the needs of employers and of the government and whoever controls the government, which ends up being the health care industry."

Further reading for this week's episode:

"Mark Cuban Has a New Job: Working at an Online Discount Pharmacy," by Joseph Walker at The Wall Street Journal

Recovery: A Guide to Reforming the U.S. Health Sector, by Michael Cannon

The War on Prices, by Ryan Bourne

Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy, by David Hyman, Ge Bai, and T. Joseph Mattingly II

Overcharged: Why Americans Pay Too Much for Health Care, by David Hyman and Charles Silver

Written by Eric Boehm; produced and edited by Hunt Beaty; fact-checking by Anthony Wallace. 

• Producer: Hunt Beaty

The post Why We Can't Have Nice Things: Can Mark Cuban Make Prescriptions Affordable Again? appeared first on Reason.com.

What's wrong with American health care?

That's the question that drives the new season of Why We Can't Have Nice Things, the Reason limited-run podcast series. Over the past few months, host Eric Boehm has been speaking with some of the doctors, medical professionals, and activists who are pushing back against the special interests, government contractors, and bad laws that make the American health care system such a mess.

Some of those problems are obvious. Prescription drugs are often too expensive and sometimes not available when you need them.

Others are less obvious, such as a series of state-level regulations that make it harder for medical professionals to offer their services. Or a monopoly government contractor that's a big part of the reason why thousands of Americans die every year waiting for a new kidney.

On the new season of Why We Can't Have Nice Things, you'll hear a whole new set of stories about how the government is making Americans poorer and sicker, and how we can cure those ills. 

It all kicks off next Thursday, September 5, with special guest Mark Cuban. He's the co-founder of Cost Plus Drugs, an innovative attempt to inject some market competition into the prescription drug industry.

Tune in to new episodes every Thursday through October 10—and if you haven't listened to the first season of the show, check it out now on Spotify and Apple Podcasts. 

• Producer: Hunt Beaty

The post Trailer: Why We Can't Have Nice Things Season 2 appeared first on Reason.com.

You probably don't think much about tin cans, even when you're buying one. It's the product inside the can—soup, beans, maybe hairspray or sunscreen—that seems to matter.

But the humble tin can is both a crucial component of modern, globe-spanning supply chains and a product of them: About half of the metal used to make tin cans in the U.S. is imported from abroad. And that's why tin cans—more specifically, tinplate steel, the type of metal used to make those cans—are at the center of a behind-the-scenes fight over tariffs that illustrates so many of the problems with protectionist policies.

On one side of that fight is Cleveland-Cliffs, one of just two companies in the U.S. that produces tinplate steel. In a recent petition to the Commerce Department, Cleveland-Cliffs asked for tariffs of up to 300 percent against imported tinplate steel—the products that account for over half of the supply of tinplate in the American economy.

Those tariffs will translate into reduced supply and higher prices, says Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association.

"When the tariffs go into effect, they raise the cost of steel, they raise the cost of the packaging," says Madrecki. The can itself is often the most expensive element of a canned food item, so those prices quickly cause the overall price tag to rise. "You [will] see food prices go up 19 to 30 percent. That translates to 36 to 58 cents per can," he says.

And while new tariffs might protect some tinplate-making jobs at Cleveland-Cliffs, research suggests the higher prices will cause far greater losses throughout the rest of the economy. The Trade Partnership, a think tank, estimates that the proposed tariffs could cause up to 40,000 jobs to be lost in downstream industries, including blue-collar jobs like can-making and food production. If the steel in their tin cans is suddenly more expensive, food production companies might simply purchase finished—and less-highly-tariffed—cans overseas.

"You're going to go to the grocery store one day…and you're going to look at the receipt in disbelief and say, 'How did this happen?'" says Gerard Scimeca, chairman of Consumer Action for a Strong Economy, a free market group that opposes the tariff proposal. "Well, this is how that happened: You had a company trying to take advantage of our trade policy for personal gain."

And here's the real kicker: As a rule, the Department of Commerce doesn't even consider the potential (and often obvious) consequences of these decisions. The tariff petition process is one-sided and skewed heavily in favor of companies seeking protectionism at the expense of consumers and workers throughout the economy.

Government policy, no surprise, is one of the big reasons why we can't have nice things.

Further reading for this week's episode:

"Biden Administration Considering New Tariffs That Will Hike Prices for Canned Goods," by Eric Boehm, Reason.

"U.S. Plans New Tariffs on Food-Can Metal From China, Germany, and Canada," by Yuka Hayashi, The Wall Street Journal

"Tinplate Steel Tariffs Will Harm American Consumers and Manufacturing Jobs," by the Consumer Brands Association

"Four Areas for Congress To Exercise Trade Policy Oversight," by Tori Smith, American Action Forum

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact-checking by Katherine Sypher.

The post Why We Can't Have Nice Things: Can You Afford Tariffs on Tin Cans? appeared first on Reason.com.

The brief trade war between the U.S. and Europe in the early 1960s might seem hardly worth remembering—and it pales in comparison to the political and cultural upheaval that defined that decade.

But any American who has bought a pickup truck in the past 50 years has been collateral damage in that conflict—a conflict that started because European farmers were mad about American exports of frozen chicken.

The 25 percent retaliatory tariffs that President Lyndon B. Johnson set on imported light trucks have fenced off the American pickup truck market from foreign competitors for decades. As a result of the so-called chicken tax, consumers pay higher prices, and a handful of brands have become dominant in the marketplace. The other tariffs that were part of that long-ago trade war have been repealed. This one remains.

"There are a few people highly invested in keeping it around and no one really cares to get rid of it," explains Jordan Golson, a freelance automotive journalist. When it comes to tariffs, he says, "It's not easy to make one of these rules, but it's a thousand times harder to get rid of one."

On this week's show, Golson also discusses the lengths that some foreign truck-makers have gone to in order to avoid those tariffs. That includes the story of the Subaru BRAT: a small pickup truck that was imported to America with seats installed in the truck bed—so it would be classified as a passenger vehicle rather than a cargo vehicle and, thus, exempt from the 25 percent import tax.

Daniel Griswold, an adjunct scholar at the Cato Institute, reminds us that the chicken tax has caused real economic harm in addition to those funny, creative attempts at tariff dodging.

"The U.S. government is artificially constricting competition in that market, and that means higher prices, it means less choice," Griswold says.

Automobiles can be imported to the U.S. with tariffs of just 2.5 percent, and the result has been a far more robust market for consumers and greater foreign investment in making cars in the U.S.—something that hasn't happened in the truck market due to the trade barriers.

The chicken tax has been "a losing proposition all around for Americans, consumers, and the American economy," says Griswold. It's also a great example of how tariffs can stifle, rather than protect, domestic markets.

Further reading for this week's episode:

"Cheap American Chicken Gave Us This Weird Subaru Pickup," by Golson, Wired

"Why Are Pickups So Expensive? Blame the Chicken Tax," by Griswold, Cato Institute

"How a Tax on Chicken Changed the Playing Field for U.S. Automakers," by Sonari Glinton, NPR

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher

The post Why We Can't Have Nice Things: The 'Chicken Tax' That Makes Pickup Trucks More Expensive appeared first on Reason.com.

Arkansas has some of the strangest liquor laws in the country—or at least the most politically contentious.

Unlike a lot of other places, the state allows counties to hold referendums to decide whether they will allow the retail sale of alcohol. That is, whether they will be "wet" or "dry." And when those elections take place, it's often existing liquor stores—the very businesses that earn money by selling booze—that campaign the hardest to keep county-level prohibition going.

And they often have a powerful, but unexpected ally: churches.

In the fourth episode of Why We Can't Have Nice Things, a new podcast series from Reason, we take a deep dive into the political dynamics that drive Arkansas' local alcohol legalization elections. Jeremy Horpedahl, an economist at the University of Central Arkansas, says public choice theory explains why special interests that might have very little in common sometimes team up to push protectionist regulations.

"What's especially powerful about this coalition is that you have the liquor stores which can provide the money to prevent legalization of alcohol sales," he says, "and the churches, which can provide the moral argument the public face of the campaign to keep these things, keep the rules, how they are."

Chris Swonger, CEO of the Distilled Spirits Council of the United States, says that arguments about morality are often used as cover when one faction or another wants regulations to boost their own competitive interests.

Once you know what to look for, there are "bootleggers" and "baptists" to be found just about everywhere.

Further reading for this week's episode:

"Bootleggers and Baptists: The Education of a Regulatory Economist," by Bruce Yandle

"Bootleggers, Baptists, and Ballots: Coalitions in Arkansas' Alcohol-Legalization Elections," by Jeremy Horpedahl

Check out the full range of the "Bootleggers and Baptists" phenomenon at Reason.com.

Find out which states allow spirits to be shipped directly to consumers' homes at ShipMySpirits.org, a project of the Distilled Spirits Council of the United States.

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher

The post Why We Can't Have Nice Things: Bootleggers, Baptists, and Ballots appeared first on Reason.com.