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Posts Tagged ‘Cost-Benefit Analysis’

I’m an over-protective parent. Even now, with my kids ranging between 18 and 23, I will try to herd them together while skiing so I can follow them down the slopes and watch for potential injuries. And I never got them a jungle gym when they were young, even though I somehow managed to survive childhood with one in my backyard.

But at least I recognize what I’m doing. And I certainly would never consider imposing my mother-hen impulses on the overall population.

I’m not surprised to discover, however, that bureaucrats in New York wanted to go way overboard with regulations to ban just about anything with even tiny risks of injury. This list included things such as archery and rock climbing, which might cause me to fret, but also things such as (I’m not joking) kickball and tag.

With those standards, you may as well require kids to be enclosed in bubble wrap every morning.

The only good news is that people found out about the state’s regulatory overreach and the government was forced to cancel the rules after widespread mockery.

Here are some excerpts from a story by NBC in New York.

Day camp games like tag, wiffle ball, Red Rover and kickball are no longer at risk in New York after state health officials yanked a proposal that threatened the future of those mainstays of child’s play.

Towns, villages and other camp operators had begun revamping upcoming indoor summer programs after the Department of Health sent out a long list of familiar games and activities it said presented a “significant risk of injury” and needed to be regulated more closely.

…On Tuesday, Richie, a Republican whose district includes three mostly rural north-central New York counties, said she was pleased by the reversal.

“At a time when our nation’s No. 1 health concern is childhood obesity, I am very happy to see that someone in state government saw we should not be adding new burdensome regulations by classifying tag, Red Rover and Wiffle Ball as dangerous activities,” she said. “I am glad New York’s children can continue to steal the bacon and play flag football and enjoy other traditional rites of summer.”

The proposal would have revised the definition of a summer day camp to include potentially risky organized indoor group activities like archery and rock climbing — as well as things like kickball, tag and Wiffle Ball.

Ritchie said that would have required camps in many smaller towns and villages to add staff such as nurses and pay $200 for a state permit. Other critics argued the regulation was a hysterical approach that stood to take all the fun out of summer.

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I try to visit the Drudge Report  once a day because he has a knack for finding quirky stories. One of his recent gems is a report from the UK-based Sun about an obese man who is suing the government’s healthcare system because he got close to 1200 pounds (assuming I’m right about a “stone” being 17 lbs) before getting weight-loss surgery. [CORRECTION: A “stone” is 14 lbs, so he was close to 1000 lbs]

Man mountain Paul Mason plans to sue the NHS – claiming they ignored his plight as he rocketed towards 70 stone. …Paul said: “I want to set a precedent so no one else has to get to the same size….” At his heaviest Paul was eating 20,000 calories a day – ten times what a normal, healthy man should consume – and the cost of caring for him is thought to have hit £1million in 15 years. …He finally had the £30,000 operation last spring but before it could take place floors at St Richard’s Hospital in Chichester, West Sussex, had to be reinforced at a cost of £5,000 to take his weight.

I’m not a fan of Britain’s wretched health system, but my immediate instinct is to take the side of the NHS and make some snarky comment about personal responsibility. Perhaps, for instance, we should ask Mr. Mason whether a government official was holding a gun to his head and forcing him to eat an average of 20,000 calories every day?

But that’s too easy. So I got to thinking about the public policy issues involved, particularly in the context of second-best solutions. In other words, if I’m not allowed to assume an ideal policy such as the dismantling of the National Health Service and restoration of a genuine free market, how would I deal with the issues raised in this story? There are two difficult questions we have to decide.

The first quiz deals with how to spend taxpayer money, combined with a bit of moral hazard analysis. Which option would you pick?

A. The NHS should have given him the operation right away to save money for the taxpayers in the long run. The operation cost nearly $50,000, but he was already costing taxpayers (I assume) $100,000 every year. Sounds like a smart investment that will pay for itself in just a few years.

or:

B. The NHS should not have given him the operation at all because that is akin to forcing taxpayers to subsidize personal irresponsibility.Moreover, it sends a signal to others that it will be marginally less costly to engage in similar self-destructive behavior. Last but not least, taxpayers probably will still pay through the nose to subsidize Mr. Mason’s annual expenses.

Our other quiz is about Mr. Mason’s lawsuit. As noted above, part of me thinks this case has no merit, but the article notes that it took five years before the NHS got him in the operating room after an initial surgery was canceled. In other words, it appears the lawsuit is happening because of the incompetence and waiting lines of a government healthcare system, so the real issue is the remedy. Which option would you pick?

A. Mr. Mason should win the lawsuit, both to compensate him for the government’s presumed incompetence and to punish the NHS for being so inefficient.

or:

B. Mr. Mason ate his way into trouble, so doesn’t deserve to win his lawsuit. Regarding the NHS, it is horribly inefficient, but any court-imposed damages would just get passed on to taxpayers, so there’s no possible upside.

So how do I answer these questions, assuming the Sun reported all the relevant facts and did so correctly?

For the first question, I reluctantly pick A. I’m guessing that the surgery will somewhat reduce the long-run burden that Mr. Mason is imposing on taxpayers. I realize there’s a genuine moral hazard issue, and that decisions like this make is marginally easier for other people to become morbidly obese (and thus impose costs on taxpayers), but my gut instinct is that surgery is still the best choice from a cost-benefit perspective. Finally, even though I’m not overflowing with sympathy for Mr. Mason, I’m a sucker for happy endings and maybe this will turn his life around.

For the second question, I do realize that governments should not be immune from lawsuits. And I say that even though it galls me that taxpayers pay for any damages awarded, either directly or because tax dollars are used to purchase insurance policies (it would be much better if successful lawsuits meant that damage awards were financed by cuts to agency budgets and/or reduction in bureaucrat pay, but I’m only allowed second-best solutions here). Nonetheless, I still pick B, and I make that choice with a decent degree of confidence. My decision is based two factors. First, I don’t want taxpayers to pay even more just because the government is incompetent. In many cases, that might not matter, but now we come to the second key factor, which is that Mr. Mason’s problems are self-inflicted.

To be sure, a court might be bound by the law rather than what’s right and therefore rule differently, but we already know from a previous blog post that I’m not similarly constrained.

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For those who follow the Drudge Report, you’ve presumably seen several stories about “Big Sis” and her plans to require either body imaging or a full pat down. I’ve always viewed this as a cost-benefit issue. There are crazies out there who want to blow up planes, so it is a legitimate function of government to figure out sensible ways of stopping this from happening.

But is the Secretary of Homeland Security, Janet Napolitano, using a sensible approach? Setting aside issues of modesty and privacy (as well as possible radiation risks), will this new approach stop terrorists? Steve Chapman of the Chicago Tribune is not overly optimistic.

When it comes to protecting against terrorism, this is how things usually go: A danger presents itself. The federal government responds with new rules that erode privacy, treat innocent people as suspicious and blur the distinction between life in a free society and life in a correctional facility. And we all tamely accept the new intrusions, like sheep being shorn.

Maybe not this time.

…The agency is rolling out new full-body scanners, which eventually will replace metal detectors at all checkpoints. These machines replicate the experience of taking off your clothes, but without the fun. They enable agents to get a view of your body that leaves nothing to the imagination.

…Besides the indignity of having one’s body exposed to an airport screener, there is a danger the images will find a wider audience. The U.S. Marshals Service recently admitted saving some 35,000 images from a machine at a federal courthouse in Florida. TSA says that will never happen. Human experience says, oh, yes, it will.

For the camera-shy, TSA will offer an alternative: “enhanced” pat-downs. And you’ll get a chance to have an interesting conversation with your children about being touched by strangers. This is not the gentle frisking you may have experienced at the airport in the past. It requires agents to probe aggressively in intimate zones — breasts, buttocks, crotches. If you enjoyed your last mammography or prostate exam, you’ll love the enhanced pat-down.

…Though the harm to privacy is certain, the benefit to public safety is not. The federal Government Accountability Office has said it “remains unclear” if the scanners would have detected the explosives carried by the would-be Christmas Day bomber. They would also be useless against a terrorist who inserts a bomb in his rectum — like the al-Qaida operative who blew himself up last year in an attempt to kill a Saudi prince. Full-body scanning will sorely chafe many innocent travelers, while creating only a minor inconvenience to bloodthirsty fanatics.

I travel enough that all I care about is getting through the security line without losing an hour of my time. But I’ve been through these machines and they don’t seem to speed up the process (and if anybody checked me out, at my age, I’d be flattered). So chalk this up as another victory for senseless government policy.

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