The Leaflet: Heartland Uncovers Shocking Medicare Wasteful Spending

Published December 9, 2011

As you may already know, The Heartland Institute produces and sends out six monthly newspapers addressing the major domestic public policy issues to every national and state elected official in the U.S. plus 8,400 county and local officials and thousands of civic and business leaders.

Earlier this week you may have seen the story highlighted on the Drudge Report and the Sean Hannity radio show that Medicare has spent nearly a quarter of a billion dollars on “penis pumps” since 2001. Benjamin Domenech, Managing Editor for Heartland’s Health Care News, broke the story after analyzing data collected by the Centers for Medicare and Medicaid Services (CMS).

These newspapers highlight the biggest public issues facing elected officials all over the country.  In addition to reporting on public policy trends they also serve to uncover examples of egregious wasteful spending by government. I hope that you read them in print or online at our digital magazine, The Heartlander, at

This week’s edition of The Leaflet features research and commentary addressing major pension reforms in Rhode Island, broadband rankings, ACOs, overpaying teachers, inhaler bans, and insurance reform.


John Nothdurft
Director – Government Relations

Lead Story  

Rhode Island Lawmakers Pass Major Pension Reforms
Budget & Tax

Rhode Island lawmakers had a choice: Keep the state’s pension system as is, forcing big tax increases, service cuts, or both; or change the pension system to improve solvency and control the growth of future obligations.

Lawmakers chose the latter in November when they overwhelmingly approved an effort spearheaded by Treasurer Gina Raimondo (D) that, among other things, requires certain state workers and schoolteachers to move some of their retirement funds into a 401(k)-style account. The legislation also suspends annual cost-of-living raises until pension funding levels reach 80 percent, raises age requirements, and re-amortizes pension system debt to lower and smooth future payments. Employee contributions will also rise.

Gov. Lincoln Chafee (I) signed the bill into law upon receiving it.

The Heartland Institute has done significant work on the issue, including putting out “The State Public Pension Crisis: A 50-State Report Card.” If you would like a copy of our report card, more information on the subject, or to have a speaker come to your state please contact me at [email protected].

What We’re Working On 

U.S. Broadband Is Not Falling Behind

This op-ed in USA Today written by Jim Lakely, the co-director of the Center on the Digital Economy at The Heartland Institute, explains that the digital economy is vibrant and needs government to further get out of the way of broadband innovation and deployment.
“Bret Swanson of Entropy Economics points out, if you measure Internet usage by gigabytes used per month — a better measure of the speed and utility of networks — the USA has nearly lapped Western Europe once and Asia twice.”

Research & Commentary: Accountable Care Organizations
Health Care

In this Research & Commentary, Legislative Specialist Kendall Antekeier discusses a dangerous component of President Barack Obama’s health care law, Accountable Care Organizations (ACOs).  She writes that “ACOs are not a patient-centered health care model, instead enacting cost-saving tactics at patients’ expense, notes Dr. Daniel H. Johnson Jr. in The Washington Times: ‘If ACOs become the only possibility for organizing, financing and delivering care, physicians and patients alike will find themselves in a treatment straitjacket.’

“To ensure accountability in health care and cut costs while maintaining quality, government should empower patients and doctors instead of creating new bureaucracies.”

Surprise: Teachers Are Overpaid

A new study concluding public schoolteachers earn, on average, 152 percent of what comparable private employees do has enormous implications for today’s state deficits and public policy. The discrepancy means schools “overcharge” taxpayers approximately $120 billion each year, the Heritage Foundation/American Enterprise Institute study says. State budget deficits currently equal about $103 billion.

Banning Epinephrine Inhalers: FDA Making It Harder to Breathe

Asthmatics face a deadline of December 31, 2011 to switch from using epinephrine inhalers to other prescription treatment methods under an order from the Food and Drug Administration. At issue are the chlorofluorocarbons (CFCs) contained in the inhalers, which are subject to regulation by the Environmental Protection Agency (EPA). Although President Obama’s administration recently allowed a bypass of new ozone regulations at the EPA, which were cited as too costly, the administration has announced no intention to allow an inhaler exception.

Heartland Submits Insurance Reform Proposals to Federal Insurance Office
Finance, Insurance and Real Estate

The U.S. Treasury Department’s Federal Insurance Office has scheduled a Dec. 9 conference on improving and modernizing insurance regulation. In comments submitted Nov. 29 by The Heartland Institute, we suggest that the office take a closer look at state-level regulations on rate-making and underwriting in property and casualty insurance, as well as the accumulation of risk in residual markets and state-run insurers and reinsurers in states where rates have been suppressed. We note that when states were granted authority under the McCarran-Ferguson Act to have sole regulatory authority over the business of insurance, virtually all insurance rates and forms were established collectively by industry-owned rating bureaus, which raised the specter of anticompetitive collusion


Join The Legislative Forum Today

The Heartland Institute has been delivering exactly what state legislators need since 1984.

Now for as little as $59 you can join more than 200 elected officials and begin receiving even more benefits from The Heartland Institute


Policy Newspaper

School Reform News

The December issue of School Reform News reports on efforts by Pennsylvania lawmakers and advocacy groups to increase school choice options available to parents and their students. Gov. Tom Corbett said a voucher plan is one of his top priorities.

Quick Hits 

Report says income-tax phaseout would spur economic boom

Tax Holidays Benefit Economy

Shale Gas Supports More Than 600,000 American Jobs Today; by 2015, Shale Gas Predicted to Support Nearly 870,000 Jobs and Contribute $118.2 Billion to GDP, IHS Study Finds