Eliminating the Health Resources Board would give Delaware families lower health care costs and expanded access to quality health care

By John Toedtman, Executive Director of the Caesar Rodney Institute

March 24, 2021

The recently issued 58 page-report and recommendation penned by Amanda McAtee, who leads the internal research for the Joint Legislative Oversight and Sunset Committee, aptly described the multiple shortcomings of the current Health Resources Board (HRB) process and recommended a new Advisory Board and a Director.

The new Advisory Board would include five dedicated members to conduct the research to present to a Director that would be the final decision-maker, all of whom would report to the Governor. All this does is make administering a terrible law more efficient.

The stated purpose of the “Sunset Committee” is to determine whether a given agency meets the goals of its original purpose and, if not, change it or eliminate it.

In the 43 years of its existence, the “Certificate of Need” law (CON) renamed the “Certificate of Public Review” in Delaware has never once met its declared goals.  The stated goals were to lower health care costs by better utilization of existing facilities and expand access to quality health care. In fact, it has failed.

Over the years, the HRB has been hijacked by the influences of Christiana Care (the monopoly health care provider) in New Castle County and Bayhealth (the monopoly health care provider in Kent County). Their control of the HRB has kept new competition out of Delaware and acted as a protection racquet for the incumbents.  

Consider the following:

• According to the Kaiser Health Foundation report Delaware has the third-highest per capita healthcare spending in the U.S.

• The Medicaid panel of doctors in Delaware is so limited that Medicaid patients have difficulty finding healthcare.

• Christiana Care Emergency Room wait time is approximately 4 hours, 53 minutes. One of the longest in the U.S. due to no competition.

• The widely acclaimed Mercatus Center Study comparing 35 states with CON laws vs. 15 states without CON laws concluded that the states without CON laws (open competition) had better quality and widely available health care at a lower cost.

• The JLOSC has the Mercatus Center Study that estimated that Delaware would save $248 million in healthcare costs annually by repealing the CON Law and eliminating the Health Resources Board. Still, the study was NOT taken into consideration in the “McAtee Report.”

• The Federal Government created the original law in 1974, and after review, actually repealed the law in 1987 because it did not meet the goal of lower cost and increased health access. The Feds advised all states that the law is anti-competition and should be repealed at the state level….15 did, and 35, including Delaware, still have the law.

• The JLOSC was provided a list of 13 non-partisan government and academic studies over the past 30 years of the effects of the CON laws, all of which concluded that the CON laws are anti-competitive and failed to deliver the desired results of lower health care costs and increased health care access.

• The “McAtee Report” also did NOT consider the 13 non-partisan government and academic studies and stated that the research team had only spoken to some of the 35 states that still have the CON laws. The Caesar Rodney Institute found no studies that supported the CON laws.

• According to public IRS Form 990 reports and Wall street Bond Rating firms, the pre-tax profitability of Christiana Care and BayHealth are higher than comparable size hospital systems elsewhere in the U.S., and in the case of Christiana Care, often three or four times as high.

This terrible CON law cannot be fixed by streamlining it. The JLOSC committee’s recommendation of creating an Advisory Health Resources Board with a Director to replace the existing Health Resources Board which puts the Governor directly in charge of Delaware’s entire healthcare industry.

The “Sunset Committee” must do the right thing for all Delawareans and ELIMINATE the Health Resources Board.

MUELLER PASSES THE BATON
And Exits Stage Left

Written by: DENNIS BRUCE PHIFER, ESQ. MEMBER OF DE & DC BARS
Date: May 30, 2019

Today Robert Mueller accomplished by innuendo what he was unable to do by evidence. He insinuated that “but for” the Constitution and a Department of Justice (“DOJ”) policy that prevents a sitting president from being indicted, he would have done so. He suggested, without saying so directly, that there may well have been evidence sufficient to justify a charge of obstruction of justice. In doing so, he knew that his words would be used to fuel the fervor for an impeachment inquiry.

I wonder how a charge of obstruction of justice may properly lie against the President for seeking advice from trusted advisers. Are we trying to isolate the President? To deprive him of counsel and information? To keep him from having an honest conversation? From trying to understand the rules of engagement? From trying to right a wrong? Is our goal to render him impotent? To silence him? To make him fearful and tentative? Are we now prosecuting thought crimes? Is that the Orwellian world in which we want to live? Expansive theories of obstruction of justice are the natural enemy of civil liberties. How is it right to allow a person to be attacked ruthlessly and relentlessly, but wrong to allow him to defend his name and honor?

After allowing the “ground” to overpower the “figure” in his report, Mueller announced that he would say no more on the subject. He stated that he had closed his office as of the time of his press statement. In doing so, he did maximum damage to the President while putting himself largely beyond the reach of a Congressional subpoena and inconvenient questions. He wouldn’t have to face cross examination. He wouldn’t have to address why his office took a blind eye to Hillary’s close connection to Ukrainian and Russian agents and others at home and abroad who conspired to produce disinformation to throw the election to Hillary and, following her loss, to fuel a coup to expel President Trump from office.

If he says no more, Mueller substantially avoids the risk of impeaching his own credibility. Without an inconvenient turn of events, it is unlikely that Nadler will call him before his committee. Nor will Burr.

Mueller gave Nadler what he needs. He gave him the rationale, the “messaging”, however tortured – for a path forward to harass and demean the President, to attack his stature and credibility, to impede his agenda, to echo “impeach speak” without recrimination or restraint, and to hobble his re-election bid.

This nuanced, misleading but well-prepared statement was released in a “hurriedly” called press conference – one in which no questions were taken from the press – the day following Comey’s publication of his “we had good reason to do what we did” editorial in the Washington Post. Michael Wolff, the oft maligned author, huckstered his most recent book on the same day by claiming that Mueller had prepared a three-count indictment of Trump before setting it aside.
The likelihood of the concert of action of Mueller and Comey – and, possibly, Wolff, is hard to ignore. The synergy and sequencing of events is unmistakable.

Mueller is alleged to be friends with both Attorney General Barr and Former FBI Director Comey. Comey wanted a Special Counsel appointed. Comey got what he wanted. He got Mueller. Barr got thrown under the bus. Barr’s relationship with Mueller appears to be collateral damage to the larger mission. Mueller’s brief attribution of “good faith” to Barr regarding his summary of the Mueller Report was an ineffective, insincere and incomplete salve to the wounds caused to Barr’s reputation and his larger mission by Muller’s innuendo and flawed logic. Having failed to snare the President in a perjury trap, he invited the Congress to give the obstruction investigation yet another try. He impaired the first two years of the President’s first term. He is now asking Congress to go it alone and impair the next two.

Out of all the legal talent in the country, no one has ever explained why Mueller was selected to serve as Special Counsel, especially since he was just turned down for the job of FBI Director by President Trump on the previous day. How could his potential conflict be ignored? How could Mueller in good faith accept the appointment under those circumstances? Nor has anyone explained why the mandate to the Special Counsel to investigate Russia’s involvement in the 2016 election was interpreted to exclude the manifest and manifold collusion of foreign agents – including among them, Russians and Ukrainians and Brits and others – that aided and abetted both Hillary’s campaign and Trump’s wrongful and relentless persecution.

With a different choice of words, with a different emphasis, with a different focus, Mueller could have taken the steam out of the Democrats’ raging torrent of subpoenas and its echoic impeachment inquiry, but he chose to take a diametrically different tack. He all but insisted that the impeachment inquiry continue. He revealed his political purpose. I was anticipating Nadler and Schiff’s response as Mueller was speaking. He used their language and their arguments.

Why would he do this? Is it because there is some “there there”? That is unlikely. After two-years, a “there there” would have been front-and-center. Mueller would have been the poster child of the globalist elite. He would have been a “made man”. It would have been a “shot over the bow” at Farage, Salvini, Orban and others who favor self-determination and national pride over obedience to the global ruling class. The message to them would have been clear – “You are next!”

In his statement, Mueller was as honest as he could be while still poisoning the water. As a practical matter, Mueller knows that frank lies can come back to haunt you. Parsing and being cleverly “misleading” is much more defensible and harder to prove.

Mueller knew his words would be used to impeach William Barr who represented before Congress that Mueller confirmed on “three occasions” that the DOJ rule of “no indictment of a sitting President” played no part in his decision not to indict. He knew that this would support the calls for impeachment of Barr himself for lying to Congress and being “the President’s lawyer and not the nation’s.” He knew that this would trench on Barr’s credibility as Barr undertook an investigation of the investigators. He knew this would support claims that any subsequent prosecution of the “investigators” was going to be “politically motivated” and unwarranted. How hard is it to figure this out? Yesterday, Michael Avenatti, the super lawyer for the unsuspecting, claimed that his present prosecution by the DOJ was a politically motivated payback for his opposition to the President.

Mueller’s statement gave further cover to Comey, Clapper, Brennan and others. It is unlikely that this was unintentional. Each continues to try to justify the unjustifiable. Their friends in the media are all too ready to give their accusations and protestations 24-hour loops in rebroadcasts hoping the echo chamber mutes the opposing inconvenient truths. It’s as if the world of politics is populated by people for whom there are no objective truths. It seems that far too many people believe that if a lie is not falsifiable, it is true – at least true enough, — at least until they can come up with a better lie. As a nation, we all would do well to remember that he also lies who disfigures truth.

Physiognomy matters. Demeanor matters. Mueller’s voice seemed unsteady for half his speech. The question is why. He is a person of power and prestige. Why did his voice and his face betray him? Was he saying something that he believed to be regrettably true but epochal, and that it would likely be used to try to take down the President? Was he merely responding to the significance and gravity of the situation? Or was he saying something that he did not sufficiently believe to be true and knew that it too would be used in the service of epic mischief and mendacity? Was I seeing regret and resignation or a telling dissonance arising from a consciousness of guilt?

I believe it was the latter. Though powerful, he struck me as being afraid of others more powerful than he. After all, as considerable as it is, his power is derivative. His opportunity to serve as Special Counsel was itself derivative. Looking at his face and hearing his voice, I could not help but remember Senator Schumer’s admonition to President Trump, that if: “… you take on the intelligence community, they have six-ways from Sunday to get back at you.”

I fear that admonition. I fear for the country. The threat of “six-ways from Sunday” is a menacing brick on the road to Orwell’s 1984.

In investigating the investigators, Barr would do well to remember that Mueller is himself an investigator.

Let’s design a Real Estate Tax for Delaware Counties

Objectives

1. As a tax, the real estate tax (RE) is essentially a wealth tax and the wealthy folks typically have a more valuable house and property. So do the large and wealthy corporations. A RE Tax is generally a progressive tax rather than sales taxes, license fees and the like that are regressive taxes, that is they hit the lower income people harder than the wealthy. The RE Tax is also a flat tax because the tax rate for all the property is the same and this enjoys a widely held sense of fairness: If you have a $1 million value property, you will pay ten times the RE Tax than another with a $100,000 property.

From the taxpayers’ perspective, a well-designed RE Tax should be understandable, fair and fairly applied and that the proceeds of the tax be exclusively applied to local K-12 public and/or public access charter schools as the voters decide. Hence the RE Tax uniquely among different taxes links the taxpayer and community directly to their local schools and their performance. This is a key to civic involvement that has, sadly, been waning in recent decades country-wide.

In Delaware, the county RE Taxes as presently implemented are not fair since they are based upon a cost of construction plus land value according to a 1974 survey and bear no relationship to market value and as such they are not understandable. They are not fairly applied since they have not be re-assessed in 44 years in Sussex and about 36 years in Kent and New Castle which has created gross distortions in the amount of real estate taxes paid by residents with new homes compared to much older homes since the actual taxes paid on a property do not get updated when the property is sold. Also, big distortions in regions of each county that have enjoyed widely different increases in property value over the past 20 years that are in no way reflected properly in real estate taxes paid.

And lastly, the county real estate taxes include a nearly automatic feature of school district budget increases as follows: each June each local school district submits its overall budget for expenses to the County Tax Assessor who proceeds to apply the new rates to the tax calculation. There appears to be no effective accountability to taxpayers and, as a consequence, the real estate tax rates in Sussex County for example have grown at just under 5% which is twice the rate of inflation over the past 25 years.

It’s worth noting that about 99% of Delaware tax payers are unaware that their county collects the real estate taxes and sends them to Dover. The State then sends back to the county the real total costs of the k-12 schools. At present the counties only remit about 40% of the total amount needed and the state supplies the rest from other sources of funds.

2. The design of a real estate tax that meets the above aims must include the following features:

a) Appraised property values should correlate very closely with market value of similar properties. Since real estate is often the largest portion of a family or business’ assets home and business owners pay a lot more attention to current real estate values that the government thinks.

b) Assessed property value for tax purposes is usually a lesser percentage than Appraised value in order to attenuate rapid up or down swings in market values. 80% of Appraised value should accomplish that.

c) Re-assessment of all real estate in Delaware is a bedrock issue of fairness, the uniform application of a government tax program and must be done. It probably should be paid for by the counties to keep the state out of the game since there is no supportable reason for a state real estate tax for financing schools since this is ultimately and clearly a local issue. Across the country, counties collect real estate taxes to pay for schools and the counties and localities within them run the schools.

d) Re-assessment updates. It’s this author’s opinion that the update of appraised property values should be done no more frequently than every 5-7 years- this allows for smoothing of swings in values up or down and lends some important stability for homeowners and businesses in budgeting their expenses. What happened in Maryland wherein the state used index math to annually update market values and then apply real estate taxes automatically on that data is insanity and cannot be permitted here. Whether to use real estate Index of value programs or manual assessments for updates is for discussion and a more uniform agreement on the accuracy of Indices. This author believes that a combination of both is the likely outcome in the near-term.

e) School Budgets. Nationally Delaware has the seventh highest spending per pupil and ranks 35th in student academic performance. Independent studies have placed the cause of the spending squarely on bloated administration staff (not teachers) in the schools, their rich benefits plans and the widespread duplication of people and effort expended in Dover at the State Dept of Education and the local school administrations. The State Dept of Education is redundant and should be disbanded . Delaware is either number 1 or 2 among the fifty states in the percentage of children going to private schools due to the very poor quality of public education throughout the state. Effective with the new real estate tax, the local school budgets of a county cannot, in total, exceed the rate of inflation. The County can move dollars around among its school districts.

f) Rates. Until a market value re-assessment is complete, any application of a percentage rate for RE taxes is largely guesswork. ALEC’s (American Legislative Exchange Council) most recent real estate tax review by state has Delaware with a median home value of $233,100 and RE tax at $1,274 or .55%. Recent new home county real estate taxes in Sussex approximate .50% of value. However, our sampling has confirmed that hundreds of both residential and commercial properties in Sussex and Kent don’t pay anywhere near that rate since there’s been no re-assessment in 44 years and real estate taxes only go up because school budgets go up.

New Castle is a different story due to a flattening or reduction in real estate values while real estate taxes continue their upward march. New Castle population has actually decreased over comparative census periods, the exodus of high-paying executive jobs to nearby PA, the county has billions of dollars of tax-exempt properties including several universities, private high schools, two major hospital systems, federal, state, county and city administration and court buildings. Add to that highly restrictive, anti-growth land use regulations and you have a bad situation.

So, the design of the county real estate tax scheme might look like this:

Tax rate set at .50% or if you prefer, .005 times 80% of property value (Assessed Value) which yields an effective tax of .004 times the market value (Appraised Value).

State Legislature passes a law that limits the real estate tax rate to .0075 or .75% of Assessed Value and cannot be raised without a supermajority vote.
School districts’ budgets in each county are limited to annual increases of the rate of inflation.

Real estate tax receipts can only be used for K-12 education and county administration costs

John Toedtman
Senior Advisor, CRI
April 2019

Why Wall? Why Not? Walls Work.

The FY 2019 budget is $4.407 trillion.  Each trillion is a thousand billions. That means the FY 2019 budget equals 4,407 billions of dollars. Money has been separately appropriated to fund 3/4ths of the government’s operations. The remaining ¼ awaits an appropriation bill that must be approved by both houses of Congress.

The failure to come to an agreement on the unfunded portion of the government led to a partial government shutdown on 21 Dec 2018.  Most of the government, including, for example, the Department of Defense and entitlement programs, such as Medicare, Medicaid and Social Security, are unaffected by the shutdown.  Activities that are unfunded at this time include, among other things, the National Park Service, the Transportation Security Administration, the Coast Guard, and the US Customs and Border Protection Agency (“CBP”).

President Trump is asking for $5.7 billion for border wall construction.   The wall is to be constructed in designated areas with the advice of CBP.   The lives, safety, reputations and oaths of the Border Protection Agents are at stake and they have been given their rightful place at the budget planning table.  The President’s request has their full support and input.

It’s worth looking at the order of magnitude of the President’s request.  It amounts to 0.0012934 of the total budget.  The Democrat Leadership, much of which hails from sanctuary states like California and New York, opposes the President’s request.  As a result of their opposition and the insistence of the President to protect national sovereignty and the safety and security of the people rightfully here, 800,000 federal employees (and an unknown number of civilian contractors) are now furloughed and out of work.  While the federal employees have been promised back-pay once the impasse is resolved, there is not such a guaranty for federal contractors.  Many of the employees and contractors have near term liquidity issues. How do they pay bills while the open-borders globalists do battle with the do-it-the-right-way nationalists?

The Democrat’s now control the House of Representatives and so long as they remain in lock-step, security wall funding will not pass.  The Republicans have a 53-47 majority in the Senate, but the 60-vote closture rule in the Senate means that, in the absence of invoking the “nuclear option”, the Republican majority in the Senate cannot even bring legislation to a vote without the help of their Democrat colleagues.  Without compromise or capitulation, the funding is imperiled, and national security, immigration enforcement, and the financial security of furloughed government employees and contractors are collateral damage to the differing political, economic and cultural visions for America held by the country’s major political parties.

Common sense supports building the wall in designated areas if only to allow more effective deployment of border patrol agents at the border.  Recently elected Speaker of the House, Nancy Pelosi, has called the wall immoral, but that position is counter-intuitive and is losing traction both with the American public and with significant members of her own caucus.  Yet she insists that the Congress return to “regular order”, before she will allow consideration of funding proposals to support discrete elements of border security, though she has informed the President directly that she will never agree to any money to security wall construction.  Speaker Pelosi was first elected to Congress in 1987.  Senate Minority Leader Schumer was first elected to Congress  in 1993.  He was first elected to the Senate in 1998.

While they have been in Congress the number of illegal immigrants in America has increased ten-fold.  In all that time, there has been no success in addressing birthright citizenship, mandatory e-verify requiring employers to determine citizenship status of prospective employees, chain migration, sanctuary city, catch-and-release and asylum policies that all serve as open invitations to illegals to cross our borders with impunity.  Inexplicably, even Kate’s law – which intended to provide minimum mandatory periods of incarceration to any deportee who re-enters the United States — failed to pass the Congress.  Kate Steinle was shot to death in California as she walked with her father by an illegal immigrant who was deported five times before.

Anyone who understands “the art of the deal”, knows that once the leverage of the partial government shutdown is gone, so is the opportunity to fund the security wall.  This is not lost on Speaker Pelosi. We all know that what didn’t work yesterday, won’t work tomorrow.  My view of immigration policy and practice over the last 50 years is that there is no amount of money Congress won’t spend to address immigration as long as it is not spent effectively.  Congress has only been willing to pay for what won’t work.

At the time of this writing, the shutdown is in its 32^nd day.   Assuming, conservatively, that the average weekly compensation for a federal worker is $1,000, that means that the lost revenue to the worker and the lost productivity to the government (not counting the impacts arising from federal contract workers) is valued in excess of $800 million per week.   Think about this.  Caravans of thousands of migrants are now heading to our borders to request asylum and asylum hearings.  We presently have a backlog of 800,000 asylum hearings.  Migrants are being schooled in magic words to say to pass the initial cut for asylum status.  They then are given admission to the United States pending their asylum hearing which is usually scheduled a year or so later.  Most do not appear for the hearing.

We are jeopardizing national security and causing unnecessary hardship on 800,000 people and their families while we quibble over a $5 billion request in a $4.407 trillion budget to build a border security wall that the security experts and Customs and Border Protection Agents – the boots on the ground – say they need.

Estimates put the number of illegal immigrants in the country at somewhere between 11 million and 30 million people.    Public assistance, state and federal education budgets, law enforcement and corrections budgets all are adversely affected. And perhaps worst of all, illicit, addictive and lethal drugs coming through our southern border are terrorizing every city and town in the country.

I would like to think that that Congress’ refusal to fund the President’s request is based on scholarship, science, practically, and lofty, heartfelt principles of compassionate patriotism, rather than personal and political animus, but I am not persuaded.

For those who hate President Trump and who don’t think walls work, I challenge you to put his idea to the test.  Give him the money to build the wall.  Let the best idea win.  If the wall doesn’t meaningfully stem the tide of illegal immigration, drug importation, and the sexual exploitation of minors and female migrants, we’ll all know in time for the next election.  Of course, we’ll know if it works as well.

The $5.7 billion dollars requested in this budget to build the security wall is akin to a rounding error given its more than $ 4 trillion size. For us not to test the theory that a security wall is an indispensable tile in the security system mosaic would be a grave, some would say, HUGE mistake.

written by:

DENNIS BRUCE PHIFER, ESQ.

MEMBER OF DE & DC BARS

Dated: 012119

 

All Rights Reserved

Phifer © 2019

Listen to Reason Build the Wall: Build the Family.

Years ago we were told we had to accept the new normal of low wages, high unemployment, a loss of manufacturing jobs and civic unrest.  That doesn’t appear to have been true.

Today we are told that addiction is a constant pushed by our people’s demand for drugs, and that we can’t do anything about it.  I don’t believe that either.

Some people are willing to do anything about a problem but solve it.  They will talk about it.  They will hold vigils and lock arms.   They will donate money to drug treatment and drug prevention programs.  They will appropriate public funds for the same reasons.  All of these by themselves are good.  All of these by themselves are ineffective.  Why do I say that?  Just look around you. We have holes in our immigration system.  Our strategy should be “find a hole, plug a hole.”  Instead we just “palaver a hole”.

We need to begin at the beginning. We need to stop the flow of drugs into the country.  Addiction brings demand.  The ready availability of drugs, our unique biochemistry and the recklessness, insecurity and invincibility of youth makes us susceptible to addiction. We need to stop the flow of drugs immediately.  This is a national emergency.

In the past week a young client of mine died from an overdose.  He was a good person with a bad addiction. Another young man known to my family also died in the last two days from a drug overdose.  He also was a good person with a bad addiction.

The addiction strangled them.  It held them hostage. It foreclosed their options.  It made the possible improbable.   It made them unworthy in their own eyes.  It took the joy out of their lives.  It made sobriety a bridge too far.  It killed them.  And in some ways it killed all who loved them.

We know that most of the drugs savaging our nation are coming through our southern border.  We know that fentynal is manufactured in China.   We know that heroin laced with fentanyl is coming through Mexico into the United States.

Last year— in one year — more people died from drug overdoses in America than were killed in combat during the 17 years of the Vietnam War.  Imagine the Vietnam War memorial in Washington, DC – that interminable, congested wall of gallant mortality and lost opportunity.  Imagine a similar wall – name after name after name etched in stone — of those fallen to drug addiction.  Where is the recognition of pain and loss?  Where is the urgency?  This is a national disgrace.

The deception and the legalistic and “humanistic” arguments that have allowed this slaughter to continue unabated for decades is as enraging as it is intellectually dishonest.  This is one of those times in history when national security, national sovereignty, drug policy and immigration policy all dictate immediate concerted action.

We have to defend our borders.  We have to control the flow of people into our country.  We have to block the flow of the drugs into our country.

Why do the drug cartels get to kill 60,000 Americans a year without military reprisal?

Those who oppose the building of the wall at the border, favor the option of accepting continuing casualties without remedy.  Put differently, those who oppose building the wall favor building a drug pipeline to every city, town and state in America.  Why do I say that?  Because that’s what’s happening and that’s what’s been happening for decades.

The cost of building the wall is estimated at $25-30 billion dollars. It is a bargain at that price.  Considering the alternative, it is a bargain at any price.  It will more than pay for itself in 2 years.  The social and economic costs associated with illegal immigration would substantially abate as a result and allow a more effective deployment of human, technical and tactical assets to secure our border and interdict drug shipments and human trafficking.  The annual cost savings derived from a more effective border security policy would dwarf the cost of construction of the wall.   Some economists estimate the annual costs of illegal immigration to be many times the cost of construction.  Left to its own devices, illegal immigration will bend the curve of our economy toward insolvency and socialism.  Like night follows day, one follows the other.

Aside from the money, consider the human misery resulting from drug addiction.  Consider the angst and anger and helplessness in families across the nation as drug addiction continues to escalate with no solution in sight.  Consider the sleepless nights, the wondering, the waiting, the worrying about whether those they love are in harm’s way.

Consider the unsafe streets.  The bullets of the drug distribution teams searing the flesh of innocents.  The needs for more police, more EMTs, more facilities, more judges, more public defenders, more jails, more social workers, more probation and parole officers, and, importantly, adequate access to more effective drug treatment programs.  The cost of a month in a private inpatient drug treatment program can easily exceed $25,000 – $30,000 per month.  And where are those beds when you need them?  The window for the addict to seek treatment is narrow and fleeting.  Telling him, “You’re on a list and we’ll get to you as soon as a bed opens” is more responsive to economics than it is to addiction treatment psychology.

Consider the impact on medical care, hospital and equipment capacity, the construction of new facilities, and the impact on state Medicaid and public assistance budgets.

Consider the increased costs of education, the building of new schools, of bi-lingual education programs, of more teachers, more administrators, more counselors, more in-class aids, more kitchen workers, more buses and more supplies.  All of these mean more taxes and more debt. You have to pick a lot of low wage peaches to offset the cost of construction of a single $30 million school.

Consider the cost of apprehension, conviction and detention of criminal illegal aliens.  The costs of holding a person in prison is more than $30,000 per year.  I have seen recent estimates that nearly 30 percent of all inmates in federal prison are illegal immigrants.  The numbers routinely range between 20 – 40 percent.

A recent Yale University study estimated the number of illegal immigrants in America to range from 22-30 million.  The dimension of that number gives you some indication of the sheer magnitude of the cost of illegal immigration to the American public. If the Yale study is correct, that means that nearly 1 in 10 people in America are here illegally.

The brazenness of this series of caravans defiantly approaching our borders and insisting on access to the United States and its public support systems is mind-boggling.  More disturbing is the level of public support for the proposition that they should be admitted without question and without detention.  There are even those who believe that such people should be allowed to vote and participate prominently in the development of American public policy.   The magnitude of these caravans approaches the size of a small city.  As a nation, we simply can’t accept this trespass.  The precedent would implode our sovereignty.

We need to build the wall.  It is a statement.  A symbol.  A strategy.  A fact. It is the cornerstone of a coherent and comprehensive immigration policy. There is nothing wrong with putting America First.  It’s common sense.  It’s a biological imperative. There is nothing wrong with putting yourself first.  Once we have secured ourselves, our Judeo-Christian ethic – our immersion is western civilization — then insists that we voluntarily act responsibly to help others in need.

We need to prioritize.  Life is a series of concentric circles.  We and those we love along with our core values and beliefs are at the center.  The primacy of the self is a biological fact.  In healthy individuals, it matures into a complementary concern for the well-being of others and an appreciation of enlightened self-interest.  Like a pebble thrown into a pond, the circles widen to the shore but they never displace the original compass.

The progression is from the “I” to the “Other” in order of importance.  The nihilism inherent in globalism insists not on a balance between “I” and “Thou” but on an abdication and repudiation of the “I” in favor of the “Other”.   Until recently, the failure properly to prioritize in life was recognized as a sign of mental defect and bad judgment. You can’t be an effective human or an effective country if you are always negating your own interests and reflexively doing what’s second, first.

Don’t let the drug cartels and the globalists diminish American sovereignty.  Don’t let them pull at your heartstrings to plead for open borders.  Open borders means social disorder.  Challenge me?  Where is that not the case.  England? France?  Germany?  Sweden?

Don’t allow yourself to participate in the destruction of American culture, American confidence, and American pride. We are a generous nation.  We are a great nation teeming with good people, people willing to wash their plate and at least one more.

To be genuine, generosity and charity must be the product of a free will, not compelled by government action.   It involves the transfer of knowledge, time and property valued and owned by the donor to the donee out of a concern for his well-being.  Real charity goes on a mission to Guatemala, Honduras and El Salvador and says to the people, “I value this.  This is mine.  I want you to have it.”  Collectivism and Fascism invites them here and says, “You want this. This is theirs.  I want you to have it.”

If we stay strong, economically and socially, if we insist on truth, we can help others and do it without unduly and unreasonably imperiling ourselves.  Why put the goose that laid the golden egg at risk by housing it with a multitude of wolves of contrary and uncertain mind?  If we do not stay strong, we will not be able to help ourselves or anyone else.

Build the wall.  Stop the drugs.  Stop the killing.  Heal the country.

Keep these thoughts in mind when you go to vote tomorrow.

 

Dennis Bruce Phifer, Esquire

Newark

Dated: 11/05/18

DP

The Truth about Maryland’s Offshore Wind Project

Wind power isn’t free.  There is a very large upfront construction cost that has to be paid back over the life of the project.  Based on information from Maryland’s Public Service Commission that approved the two projects, the net cost of electric supply will be about 13.7 cents per kilowatt hour.  The average electric supply cost from existing power plants, according to regional gird manager PJM Interconnection, was only about 3.5 cents per kilowatt hour in 2017.  So, offshore wind power will be about four times as expensive!

In fact, Maryland electric customers will pay an extra $177 million average a year for offshore wind compared to buying from existing power plants.  Those existing power plants already produce enough electricity to meet expected demand.  The wind mills are only being built because they are required by law!

You may hear these projects will create thousands of jobs, and people will certainly be needed to build these massive windmills.  However, those construction jobs only last a few years, the cost continues for decades.  The extra money spent on electricity premiums could have been left in consumer pockets to be spent on the things they want, and the money you spend also creates jobs.  Economic models show that $177 million in electric premiums might create over 1000 direct permanent jobs if voluntarily spent elsewhere.  Compare that to an expected 50 permanent jobs for the people operating and maintaining the wind mills.  One way to look at this is each of those 50 jobs is costing $3.6 million a year!

There are also claims these wind mills will provide cleaner, healthier air.  The Maryland Public Service Commission hired a consultant that carefully considered the net regional impact, and found no air quality benefits.

David T. Stevenson, Director, Center for Energy Competitiveness

 

Caesar Rodney: Delaware Patriot

Caesar Rodney was born to two young, first-time parents living in the three lower counties on the Delaware – in fact, he came into this life so quickly that his mother was relieved of her labor and able to hold her newborn baby before the midwife even arrived at their home, situated on a small farm outside of Dover. More children came, but both parents died by the time Caesar was 17. Although he had been attending Latin school in Philadelphia, Caesar saw it as his duty to come home and care for his younger siblings. Fortunately, the influential Ridgely family took Caesar under their wing, helping him get his affairs in order and ushering him into the study of law and a life of public service. Caesar became High Sheriff of Kent County at the ripe age of 26 and would go on to fill more Delaware public offices than anyone since.

Never the ambitious politician, and too busy with public service to even keep a personal diary, Rodney would soon find himself in the midst of the American Revolution, choosing to side with the patriot cause while keeping a cool head as the gentleman his constituents and fellow statesmen knew him to be. As things were heating up in the conflict between the colonies and the crown, Rodney had his own health issues to worry about. He had a condition we now know as asthma, which had no treatment in Rodney’s day. Worse yet, a cancerous tumor developed on his face, and the doctor had to remove the entire thing, operating down to the bone and cauterizing the wound with liquid-hot mercury. Although he was rather good-humored about his body’s poor humor, Rodney wore a green silk scarf around his face and neck in order to spare others the site of his disfigurement.

When the time came to vote on Lee’s resolution of independence on July 1, 1776, Caesar Rodney was resting at his family farm after several weeks spent quelling a loyalist rebellion near Lewes. Delaware’s other two delegates, Thomas McKean and George Read, were in attendance and had previously agreed to vote “yes” as this was the understanding amongst the three men and the remainder of Delaware’s legislature. For several reasons, the July 1st vote on the resolution was unsuccessful, and Delaware’s vote was split, with McKean voting for and Read voting against. Rodney received a letter from McKean that night, pleading for his presence at the next day’s vote. Riding through thunder and rain – and perhaps even a hailstorm – Rodney rode the eighty miles in an unprecedented fourteen hours and arrived in time for the vote with mud splattered up to his waist and still wearing his boot spurs.

Thanks to Rodney, Delaware’s vote was for independence, and all thirteen colonies were in agreement. For his devotion to the common good instead of his personal comfort, Caesar Rodney is honored by Delaware through the placement of his statue in the crypt of the U.S. Capitol.

-By Rachel Rohm, Historical Interpreter, The First State Heritage Park

I applied to six high schools to avoid my local public school…

In 1995, the Delaware legislature passed a law allowing the creation of “charter” schools. These schools were created to add more choice into the Delaware education system, and since the first charter school opened its doors in 1996, they have strived to do just that. As a former student of the Charter School of Wilmington, I have had the opportunity to gain an in-depth look at the way a charter school functions. And as an even older alumnus of H.B. du Pont middle school, I have also seen the way a traditional public school runs. While there are noticeable differences in my experiences at these schools, the key differences stem from the way these two types of schools operate.

Charter schools are given more flexibility than public schools in their operations due largely to the way they are funded. While charter schools are partially funded the way public schools are— through state funding per pupil— they lack state funding for capital expenditures, which is why schools like the Charter School of Wilmington find themselves sharing a building with Cab Calloway School of the Arts. Because many charter schools have far different curriculums than public schools, they receive much more supervision from the state education agency and are subject to increased accountability academically. However, this increased accountability and decreased funding gives charter schools something priceless: freedom. Teachers are given more freedom to teach how and what they want. For example, students at the Charter School of Wilmington can take classes such as Anatomy, Differential Equations, and even Kinesiology, which are not offered at other high schools. This incentive draws more qualified teachers to charter schools, even when compensation is equal to or below that of public schools. Schools like the Charter School of Wilmington offer a base pay plus an end of year bonus to all of their teachers, thus promoting accountability and giving their teachers the opportunity to make more money than their public school counterparts. This freedom is also why many charter schools have focuses on STEM classes or other subjects. Ultimately, charter schools and public schools both exist to benefit the students of Delaware. However, charter schools take a tradeoff of increased pressure from the state and a loss of funding in order to have the freedom necessary to run the school the way they believe is best for their students.

According to a study done by the Rodel Foundation of Delaware, in the past decade charter school attendance has risen 106% while private schools have seen their enrollment drop about 29%. At the same time, public school attendance has steadily increased. Many people argue that charter schools take high achieving students from public schools. However, statistics like these show a different picture, and the argument can be made that charter schools are actually drawing kids that would normally go to private schools, thus increasing the attendance of the Delaware education system in total. The rise in charter school attendance is also likely a result of mounting frustrations with the Delaware public school system, which ranked 26^th in US News’ ranking of state public education systems. Rising academic expectations of charter schools has led many parents, who would normally choose private schools, to view charter schools as a viable option. And with schools like the Charter School of Wilmington and Newark Charter scoring far above the average on state testing, parents are trying harder than ever to get their kids into successful charter schools.

As a Charter School of Wilmington school alumnus researching charter schools, I was surprised to learn that the history of charter schools in Delaware is not as clean as one might hope. Many charter schools, even some opened as recently as last year, suffered from financial troubles and administrative mismanagement. Others found issues meeting enrollment expectations and even saw below average student academic performance on state testing. Many charter schools have been closed since 1996, when the first charter schools were opened, and most people would see this as an example for why charter schools are not the answer for Delaware’s education problems. However, I believe that these closings are healthy and represent a higher level of accountability not found in public schools. Meanwhile, the charter schools that do remain open offer specialized education, often at a higher level than public schools. And with the help of groups like the Delaware Charter Schools Network, charter schools can help one another overcome starting issues and successful charters can show the way for struggling ones.

Because of where I live and the construction of Delaware feeder patterns, in 8^th grade I was on track to go to Dickinson High School. In the 2015-2016 year, Dickinson recorded a 28.11/50 on ELA Proficiency, a 16.67/50 on Math Proficiency, and a 3.51/25 on Science Proficiency. Conversely, the Charter School of Wilmington scored a 50/50, 49.85/50, and a 23.13/25 on the same tests in 2015-2016. Based on results like these, I applied to St. Marks, Salesianum, Delaware Military Academy, Conrad School of the Sciences, the Charter School of Wilmington, and I choiced into A.I. du Pont. I applied to six high schools to avoid my local public high school. When I told this story to my cousins from Georgia, they could not believe it, as they had just enrolled to their local high school as their first and last resort. However, with the variability in state testing shown above, my application process was a necessary one. The inconsistency of academic success of schools in Delaware reinforces the lack of faith many Delawareans have in their education system. The results of my very own one-person study reveals obvious results: charter schools allow an opportunity for a specific and often higher level of education than do public schools in Delaware.

-By Patrick Archer, Summer 2017 CRI Intern

 

Should Health Insurance Be Sold Across State Lines?

With the withdrawal of Aetna from Delaware’s Obamacare exchange, some consumers will face a health insurance monopoly. The benchmark silver plan for a 40-year old nonsmoker in Wilmington is projected to cost 49% more in 2018 than 2017, and to be the highest cost such plan in the US at $631/month (Kaiser Family Foundation). While those who receive subsidies are protected from this increase (between 80-90% of Obamacare exchange enrollees), those making over 400% ($47,550 for an individual in 2017) of the federal poverty level are not.

Why can’t consumers buy health insurance policies from insurers in other states where premiums might be lower or coverage better? The federal McCarran-Ferguson Act (1945) granted states the right to regulate health insurance plans within their borders, which resulted in a patchwork of 50 sets of regulations and highly concentrated health insurance markets within each state.^[1] Market share of the dominant insurer (by state) averages 57% (individual policies), 58% (small group policies), 59% (large group policies); in Delaware these shares are 92%, 75% and 71% (2016, Kaiser Family Foundation).

Are these premiums high because of market power? Can they be reduced by encouraging out-of-state insurers to sell policies in Delaware? As we discuss below, the short answer is maybe.

Can Delaware Allow Cross Border Sales of Insurance?

Since states are the regulators of health insurance inside their borders, Delaware could already unilaterally allow insurers in other states to sell plans in the state. Eighteen states considered laws to allow such practices prior to ACA passage. Of those, only 2 states signed the bill into law: Rhode Island (SB 2286, 2008) and Wyoming (HB 128, 2010). Post-ACA, 13 states have considered such laws, with only 3 states passing them: Georgia (HB 47, 2011), Kentucky (HB 265, 2012), and Maine (HB 979 2011).

Some have suggested that states, like Delaware, may be too small to support more than one or two insurers without combining with other states’ markets. For this reason Section 1333 of the ACA permits states to form health care choice interstate compacts to allow insurers to sell ACA-compliant policies in any participating state.^[2] No ACA compacts have been formed nor does there appear to be much interest by any state in doing so. Since many insurers already have a multi-state presence, such as Delaware’s dominant insurer Highmark Blue Cross Blue Shield, this could be less of a problem than the designers of the ACA imagined.

A nine-state health care compact was formed outside of the purview of the ACA (KS, AL, SC, UT, GA, OK, MO, TX, IN). The objective is to obtain federal funds as block grants and to take over primary responsibility for regulating the health care system, rather than being governed by ACA, Medicaid and Medicare regulations. Interstate compacts can be formed without Congressional approval although their legal status is ambiguous.^[3] In this case since federal funds are involved, it seems almost certain that formal Congressional approval is needed. However, efforts to get Congressional approval have languished, although this could change.^[4]

Clearly there already exist several avenues for states to allow insurers to sell policies across state borders. But there has been little effort to do so. Why?

Experiences with Cross-Border Sales

In none of the six states that permit cross-border sales of policies has an out-of-state insurer entered the market. Insurers cite the difficulty and high cost of establishing a provider network as the major reason for this, far more important than a state’s regulatory climate or benefit mandates. In fact, one insurer described Maine’s provider network as ‘locked up’ and one in which ‘[we] can’t make a deal [on reimbursement]’.^[5] Moreover, they claim that the main reason for interstate differences in premiums is interstate differences in provider prices. An Institute of Medicine study in 2013 indicated that 70% of the differential in commercial insurance costs was due to differentials in provider prices.

Thus, the market power of dominant insurers may not be the only reason for interstate premium differentials and may not even be the main reason.  Instead, it appears that two highly concentrated industries, health insurers and healthcare providers, negotiate with each other and divide the revenue stream from policyholders between them. Potentially they could collude to keep the revenue stream as high as possible. Less pejoratively, they could work less diligently to reduce costs, hence policy premiums.

What Should Delaware Do?

Competition should be improved simultaneously in both health insurance and healthcare. The reason is illustrated by Ho and Lee in a 2013 NBER study where they demonstrate that introducing more competition in the insurer market potentially increases the bargaining power of providers, which would offset the effect of competition on insurer premiums. Liberalizing one industry and not the other merely changes the bargaining power and the amount of the revenue stream directed to each, but does not reduce costs for consumers.

Other states have implemented pro-competition measures for the provider industry, such as elimination of certificate-of-need laws and price transparency (see previous columns). Regrettably, the ACA created incentives for additional provider consolidation via ‘accountable care organizations’ (a type of HMO). These should not be allowed to violate anti-trust laws. The FTC has been stepping up enforcement, unfortunately states have not. Delaware’s state government can do more on these measures.

One of the few mechanisms that is reducing healthcare costs is the spread of health savings accounts/high deductible health plans, which cause both patients and providers to be more price/cost-sensitive.  HSA-compatible plans had been available in Obamacare exchanges through 2017, however a regulation passed in March 2016 may eliminate them in 2018.^[6] Delaware should do whatever it can to make HSA plans accessible to those who want them.

Some states have reduced the ability of insurers and providers to collude and to shut out potential competitors, most commonly by banning the most-favored-nation (MFN) clause, also referred to as a “most favored customer clause,” “prudent buyer clause,” or “nondiscrimination clause”. These ensure that the insurer will receive the best price from the provider.^[7] Healthcare providers then cannot offer a better price to another (out-of-state) insurer, thus denying a new insurer the incentive to enter the market. A 2012 DOJ study shows these clauses result in higher prices across the board.^[8] The DOJ has prosecuted on this basis and 18 states have enacted the ban (AK, CT, GA, ID, IN, KY, MD, MA, ME, MI, MN, NC, NH, NJ, ND, OH, RI, VT, WV). At a minimum, Delaware could follow the lead of these states. Delaware could also ban anti-steering clauses. In these clauses, an insurer is restricted from steering consumers to competitively priced providers (e.g. out-of-state providers), thus reducing local providers’ incentives to be competitive. Insurer guarantees that a provider will not be excluded from the network create the same problem.

Conclusions

The goal of increasing competition in health insurance by allowing cross-border sales of policies is a good one, but is unlikely to reduce premium prices much unless there is also price competition in the provider network. Additionally, the difficulty and cost of building a local provider network for potential entrants must be reduced as much as possible. Several measures are outlined in this column. Delaware is suffering some of the highest insurance premiums in the country, yet is lagging in investigating and implementing these measures. This has a high cost for its citizens, not just monetarily, but in their health.

-by Stacie Beck, Associate Professor of Economics, University of Delaware

& CRI Advisory Council Member and John Libert, CRI Summer Research Intern.

^[1] Large employers who self-insure are exempt from these state regulations.

^[2] Compacts require the approval of the US Department of Health and Human Services. HHS has been slow to issue regulations for this, but there has not been any reason to hurry, given states’ disinterest.

^[3] See Jackel and Green, The Atlantic, Feb 4, 2017

^[4] http://www.ncsl.org/research/health/states-pursue-health-compacts.aspx

^[5] Corlette, et al Selling Health Insurance across State Lines Georgetown University Health Policy Institute, 2012, p.11. See also a recent summary by Jenson and Riley “Selling Health Insurance across State Lines” National Academy for State Health Policy, February 2017.

^[6] We were unable to discover this regulation’s current status.

^[7] It has occurred to us that this might be an unstated reason for providers’ resistance to posting prices for direct pay patients but we are not familiar enough with these contracts to know.

^[8] Sznol, Issue Brief: Most Favored Nation Clauses, Blog: The Source on Healthcare Price & Competition, UCSF/UC Hastings Consortium on Law, Science & Health Policy, accessed Aug 18, 2017.

Regional CO2 Cap & Trade Fails as National Model

Nine northeastern states from Maryland to Maine sell power plant carbon dioxide emission allowances in quarterly auctions, reducing the number of allowances over time, and the allowance cost is added to electric bills.  A new study from the Caesar Rodney Institute titled “A Review of the Regional Greenhouse Gas Initiative”, finds there were no added emissions reductions, or associated health benefits from the cap and trade program.  Spending of program revenue on energy efficiency, wind and solar power, and low income fuel assistance had minimal impact.

The allowance costs added to already high regional electric bills, and the combined pricing impact resulted in a 13 percent drop in goods production and a 35 percent drop in the production of energy intensive goods.  Comparison states increased goods production by 15 percent.  The regional program shifted jobs to other states.  A national emissions tax would shift jobs to other countries.  A better policy to reduce emissions is to eliminate carbon dioxide emission taxes and regulation, and encourage innovation.

The nearly decade-old Regional Greenhouse Gas Initiative (RGGI) was always meant to be a model for a national program to reduce power plant carbon dioxide emissions.  The EPA explicitly cited it in this fashion in its now-stayed Clean Power Plan.  The program is often called a “cap and trade” program, but its effect is the same as a direct tax or fee on emissions.  That is because RGGI allowance costs are passed on from electric generators to electric distribution companies to electric consumers.

Most emissions reductions track lower generation from coal-fired power plants.  Coal’s decline began with dramatically falling natural gas prices beginning in 2009, and was accelerated by restrictive EPA regulations beginning in 2012.  Many older, smaller power plants were shut down rather than invest in expensive filtration equipment that would be needed to meet new standards. Lower natural gas prices indirectly influenced the decisions to close down the coal-fired generation.  We can parse the relative impact of these two forces and find, both nationally and in the RGGI states, EPA regulations impacted 28% of coal’s decline with 72% directly due to lower natural gas prices.

RGGI revenue expenditures had a marginal impact.  Between 2007 and 2015 low income utility bill assistance from RGGI revenue added only about $5 a year net to an existing federal program.  Grants for wind and solar power only accounted for about 1% of all the wind and solar power added by the RGGI states.   Over the same time period non-RGGI comparison states saw a 20% greater increase in energy efficiency.

New power plant construction in RGGI states didn’t keep up with closings leading to a doubling of electricity imports to 17% between 2007 and 2015.  Importing more power results in effectively exporting carbon dioxide emissions accounting for almost a fifth of the RGGI state emissions reductions.  A similar national loss of power plants could lead to electricity outages.

The United States has already reduced emissions more than the rest of the world since 2005 through innovative natural gas drilling techniques.  Emissions are down 12 percent in 2015 from the 2005 base year, about twice the rate of other developed countries, while emissions are up 45 percent in the rest of the developing world according to the European Commission in their report “CO2 time series 1990 – 2015 per region/country”.  We have many other opportunities to invest in innovation, such as, improved solar photovoltaic cells, more efficient batteries, small modular nuclear reactors, or nascent technologies that use fossil fuels without emitting carbon dioxide.

So, RGGI states exported carbon dioxide emissions and jobs.  It is one thing to export well-paying manufacturing jobs from one state with poor energy policies to another with better policies.  There is quite a more profound impact on the U.S. economy from exporting those jobs to countries with even worse emissions.  That is what a national cap and trade, or tax policy on carbon dioxide emissions would do.  The regional example has failed to show emission reductions, and there is little to show for several billion dollars in expenditures of RGGI tax revenue.  What do you know, the RGGI experiment did work as a national example of what not to do!  The RGGI states are thinking about extending the program for ten more years.  Perhaps they should kill it instead.

Link to full working paper: https://www.cato.org/publications/working-paper/review-regional-green-gas-initiative

-by Mr. Stevenson is director of the Caesar Rodney Institute center for Energy Competitiveness, and author of the Cato Institute working paper “A Review of the Regional Greenhouse Gas Initiative”