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Opinion
Apr. 13, 2008
Copyright © Las Vegas Review-Journal

THE REGULATORY STATE: Bureaucrats helpless? Hire more of them!

Contrary to claims of the political class, higher taxes wouldn't have prevented spread of disease from medical clinics

By STEVEN MILLER
SPECIAL TO THE REVIEW-JOURNAL

Ever notice how, whenever Nevada government lays yet another egg, the "solution" that politicians and bureaucrats prescribe always turns out to be yet more government?

As they and many media handmaidens regularly frame the issue, the failure of government agencies essentially only means that you and other taxpayers simply aren't paying enough.

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    • The presumption here -- and it is very presumptive -- is that only if we fund many more government employees, and arm them with ever more intrusive powers, can we expect the continuing pratfalls of state and local government to ever come to an end.

    It's as though these savants spent the past generation in some parallel universe, where the failures of the Soviets and every other form of socialism simply never happened.

    Here in Nevada, this You-Aren't-Paying-Enough ruse has been successfully deployed for decades. It is, of course, a staple of the public education establishment's huge propaganda apparatus.

    We've also seen it used regularly following each major public failure of government-run "child protective services." Whenever a new heartbreaking case of agency dereliction appears in the news, the child welfare bureaucrats always say it's because they have too few employees.

    In actuality, as experts in the field regularly testify, child welfare systems have insatiable appetites for dollars and can absorb almost any amount of money while doing virtually nothing to improve the quality and effectiveness of services to abused and neglected children. As in public education, the most basic problems are systemic issues that the bureaucracies refuse to address, not the fact that resources are limited. Scarcity of resources, after all, is a basic condition of human existence.

    Today, in the aftermath of Southern Nevada's Hepatitis C and HIV scare, the not-enough-money refrain is again being heard. Unfortunately, here, too, it is largely self-protective noise, evading the fundamental problems of the incentive structures that come with government-dominated medicine and tend to block needed innovations.

    Ultimately, the regulatory approach itself -- Nevada's medical-regulation system included -- is an inadequate and makeshift solution. Not only do the state's insurance-coverage mandates and taxes on insurance premiums increase the cost of health insurance and price many people out of the insurance market, but significant evidence suggests state-enforced regulations developed by health professionals too often covertly serve the profession's interest, rather than those of the patient.

    Similarly, conventional wisdom today presumes that the way to minimize abuses or infractions by medical professionals is for the government to hire inspectors and bureaucrats who go around and watch doctors and nurses. In other words, some level of officious bureaucracy and cost to taxpayers is presumed to be the necessary trade-off for securing safer medical care. If the current level of bureaucracy and spending then fails, this mind-set presumes the only solution is to increase the number of inspecting bureaucrats even more.

    The weakness of this approach shows up when we learn how frequently inspector-bureaucrats -- such as Clark County building inspectors -- don't go around and do their inspecting. Yes, the health regulators say that they just have too many doctors to watch. But is that really true? Research suggests that tighter controls do not improve the quality of service. Perhaps it is simply that the essential nature of government regulation is, once again, revealing itself?

    Government regulation, even if ultimately required, is an inherently inadequate solution to the problems of modern society. One reason is that -- contrary to public impressions -- most government regulation of industries and professions actually was sought by those same industries and professions.

    The classic case was the first: the Interstate Commerce Commission, which, as historians have shown, was sought by the 19th Century's government-sponsored and government-subsidized railroads. This would-be cartel or "trust," repeatedly foiled in its efforts to collude in price-fixing, solicited help from the U.S. Congress and received the Interstate Commerce Commission. Operating through the ICC, the politically connected railroads were now able to make offering lower prices to customers a regulatory "violation."

    The restrictive licensing by states of medical professionals has been similar. Perpetrated through the political activities of the American Medical Association and county medical societies, it operates to raise the incomes of existing practitioners by denying licenses to practice medicine to graduates of non-AMA-approved medical schools.

    This process -- in which special interests form and/or control government regulatory bodies in order to disadvantage competitors -- is called "regulatory capture" and has been the subject of much academic study, most notably by Nobel laureate economist George Stigler.

    Another reason for regulation's inadequacy is that, as part of government, regulatory bodies are inherently political. Researchers have amply documented that regulators usually act self-protectively, with a wet finger in the wind, adjusting quietly to the desires of powerful politicians and interest groups -- even though this often leads to the very crises regulators are supposed to prevent.

    Because there is no magic bullet against the vicissitudes of modern life, as the political class pretends, Nevada would do well to begin looking elsewhere for new and creative solutions.

    Transparency, deregulation and competitive delivery of medical services is the frontier to explore.

    Steven Miller is vice president for policy at the Nevada Policy Research Institute.

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    Vegas Vic wrote on April 13, 2008 05:13 PM: Government, when taken to excess, does nothing but increase the cost to taxpayers. Cut the fat in every government department in Nevada and see just how much of the nearly $1 billion of debt fades into the wind.


    tim wrote on April 13, 2008 04:05 PM: larry the liberal, if all you have is capital letters and commas i feel sorry for you.


    Larry wrote on April 13, 2008 10:43 AM: Tim: I was responding to Lee's sweeping generalization about the nature of government. His comment "Government is an organization of men who want to harm us all" does indeed imply that government has no legitimate and useful purpose and thus should "disband" (your words).
    To point out that there are problems in the way government functions is to accomplish the unremarkable feat of stating the obvious. However, while we are taking the public sector to task, let's not give the private sector a pass. The "free market" should not be above scrutiny, unless of course you are one of those folks who worships capitalism as if it were a religion. BTW: there are, believe it or not, a few socialist or quasi-socialist countries on this planet that fare better than us on just about every social-justice and quality-of-life indicator that exists.

    P.S. In English, sentences begin with a capital letter and do not conclude with commas.


    tim wrote on April 13, 2008 09:42 AM: there goes the typical liberal,lets disband gov.and turn into a third world country.what a bunch of bull,nobody says lets get rid of our gov.,they are saying it has become bloated and un-responsive,duplicating agency after agency.then there is titles for people in each agency,lets not even get into that,we,ll be here all day.you cant argue with them because most get their checks from the taxpayer,the other half are socialist but wont admit it.remember gov.can solve everything if we just have enough of it,baaa baaa!


    mike wrote on April 13, 2008 08:56 AM: Mr. Miller

    I couldn't agree more with your editorial, and will try to find the NPRI website for more of the institute's very well thought out work.


    Larry wrote on April 13, 2008 08:15 AM: Lee: if government is so harmful, why not find out firsthand how great life is without government? Relocate to any one of the dozens of third-world countries that have no functioning government, where the roads remain unpaved, no power grids or sewer systems are established or maintained, the local populace is uneducated and unskilled and malnourished and routinely victimized, and everyone wears the law on his or her hip. Sounds appealing, doesn't it?


    Botched Investigation wrote on April 13, 2008 08:05 AM: IMHO, it seems to be pretty clear that not even these yahoos themselves believe their "unsafe injection practices" theory. If they did, every person who ever had a procedure at Shadow Lane or any of the sister facilities would be notified of the need to be tested.

    The foundation of the "unsafe injection practices" theory is that the clinic failed to follow the "manufacturer's instructions" on medications.

    The government bureaucrats didn't bother to find out that many drugs, if not most drugs, are not given according to "manufacturer's instructions." If not following "manufacturer's instructions" on medications caused hepatitis, we'd all have it.

    IMHO, the government bureaucrats notified 40,000 people on the basis of a c0ck-and-bull theory built on a false premise. I guess they're hoping nobody will notice.

    Since the government bureaucrats seem to have no idea as to what actually caused the hepatitis at the clinic, it seems like the prudent thing to do would be to test everyone who ever had a procedure there or at a sister facility.


    Lee wrote on April 13, 2008 08:05 AM: Government is an organization of men who want to harm us all.


    Somebody Rent A Big School Bus! wrote on April 13, 2008 07:33 AM: I think a lot of people are waiting for the government "experts" from the Southern Nevada Health District to explain a couple of things:

    1. Why would changing the color of the paint on the walls at the endoscopy clinic have any effect AT ALL on how injections were given at the clinic? Why would patients who had a procedure before the 2004 remodel be at less risk than those who had a procedure after the remodel?

    2. How would the unsafe health care providers at Shadow Lane magically become safe and responsible when they drove across town to sister facilities? Is there's something about a driving across town that endows a person with moral character and common sense??

    If that's the case, PLEASE have somebody rent a big school bus, load all the bureaucrats from the Southern Nevada Health District and the Bureau of Licensure and Certification, and just keep driving back and forth from Burnham to Shadow Lane until they become enlightened. And please do it when the bureacrats are OFF THE CLOCK!


    More Ignorant Bureaucrats, NOW! wrote on April 13, 2008 07:10 AM: An excellent example of how ignorant bureaucrats makes things worse is how Nevada's bureaucrats have "helped" with the hepatitis scare.

    The Southern Nevada Health District and the Bureau of Licensure and Certification reached the conclusion that the infections happened because of failure to follow the "manufacturer's instructions" on the medications. It's kind of like reaching the conclusion that when it rains, it means God is crying. It's not a scientific grown-up conclusion we can work with.

    Presumably at their urging, the Governor enacted "emergency regulations" requiring that all medications be "safe," "effective" and "administered according to manufacturer's instructions."

    So far, no doctors or nurses have reported any big change in the effectiveness of medications. Apparently, the bureaucrats forgot to tell the medications themselves about the new emergency rules.

    It was also too much trouble for the lazy government bureaucrats to find out whether drugs are *supposed* to be given according to the "manufacturer's instructions." A lot of medications, including most pediatric medications, are NOT. Many, many medications safely used in pediatrics and adult medicine are not "indicated" for the use for which they are often prescribed.

    The Governor, the Southern Nevada Health District, and the Bureau of Licensure and Certification continue to pretend that they've done something meaningful to help with the hepatitis scare.

    The "emergency regulations" are largely meaningless and are being ignored. They have to be ignored, otherwise patients would be harmed and the system could not function.

    The most unbelievable aspect of the hepatitis scare is the fact that headline-seeking political hacks in Nevada Legislature are still calling these ignorant wingnuts "heroes."


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