Relevant and even prescient commentary on news, politics and the economy.

Christie’s powerful when he shouldn’t be

Via Think Progress comes Alyssa Rosenberg’s comments on one lesson from the news of Chris Christie’s politics in NJ:

What happened to people who were affected by the traffic closure was ridiculous. But a willingness to inflict ridiculous consequences on innocent people is actually a rather serious thing to do. People who want Chris Christie to suffer the consequences of the tone he appears to have set in New Jersey would do well to remember that. Lampooning him as fat (a subject on which Linda Holmes has a great number of eloquent things to say) or childish both falls into the same sort of tactics Christie himself uses, and misses the point that Christie’s vindictiveness and hectoring style has made him extremely successful. That doesn’t mean we can’t mine humor out of the bridge scandal, and anything else might follow. But that humor needs to be in service of the idea that Christie’s powerful when he shouldn’t be, rather than assuming that everyone shares the idea that he’s laughable.

And she points to Springsteen’s new parody using ‘Born to Run’ under the fold.

Comments (2) | |

Yes, Speaker Boehner, but WHOSE Fiscal Policies of the Present Are to Blame?

House Speaker John Boehner told a closed meeting of his colleagues that a Republican pollster found that for the first time, most Americans blame President Barack Obama for the economic troubles, not George W. Bush.

“Barack Obama came into office blaming George W. Bush for the state of the economy and the lack of job creation,” Boehner said, according to a source in the room. “For years, that pass-the-buck strategy worked. But at the end of last year, a turning point was reached. For the first time, a majority of Americans now say they believe the troubles in our economy are more the result of the policies of the present than the policies of the past.”

The poll, conducted by longtime Boehner ally David Winston, shows that in November 2013, 41 percent of those polled blame the economic woes on policies of the past while 49 percent blame policies of the present. After the 2012 election, 53 percent blamed past policies and 44 percent blamed today’s policies.

John Boehner: Poll finds Obama to blame, Jake Sherman, Politico, today

Each time I read about some Republican pol blaming referring to the high unemployment rate as “the Obama economy” as a way to obtain approval from the Tea Party to support an extension of unemployment compensation for the long-term unemployed (which I the last few weeks has happened repeatedly), I momentarily, but only momentarily, expect Obama to make a statement detailing the dramatic reductions in public-sector employment, virtually across the board: federal, state and local throughout the country.  In that brief moment of reflex, I expect him to point out that this is unprecedented since the Hoover administration and differs dramatically from what occurred during and immediately after recessions ever since.

I expect him, in other words, to educate the public about basic Keynesian economics.  And to point out that the economy we have is in fact the one chosen by the Republicans, not by the Democrats in Congress and not by him.

Or, to borrow Boehner’s phrasing, I expect him to explain that the troubles in our economy indeed are more the result of the policies of the present than the policies of the past.  And to explain exactly what those policies are, and who has insisted upon them.  The specifics of the sequester, for example, might be a good thing to include in an explain.  Should he provide one.

He won’t, of course. That would require him to deviate from equating family finances and government finances, and back several years ago some political advisor told him that all economics matters must be presented to the public as analogy to family economics, even when the analogy is baldly false and undermines your position.  And, Obama being Obama, he not only believed it but hasn’t since noticed the ill effects of this on fiscal policy and consequently the overall economy.

Obama has the opportunity to upend the Republican claim that this is “the Obama economy, by providing a clear, detailed statement of the actual facts–statistics, competing policy proposals, and actual economics–in his upcoming State of the Union address.  He won’t, though; that would require actual specifics placed into a coherent explanation, rather than a one-off sentence or two.  It might even require charts and graphs!

Charts, graphs, statistics, economics, and other facts are people, my president.  Just like corporations.  In exactly the same way that Romney actually meant that corporations are people, my friend.  But, no matter. He won’t employ them.

But the slack can be picked up, to some extent, at least, by Senate Dems.  Dick Durbin, Sherrod Brown, Elizabeth Warren, Patty Murray, Barbara Mikulski, Chris Coons, Sheldon Whitehouse, Jeff Merkley, Tom Udall.  And, yes, Harry Reid.  Please pick up Boehner’s gauntlet, senators. And soon.

Tags: , , , , , Comments (4) | |

Marco Rubio Says Farm Subsidies and Hurricane-Disaster Funds Should Not Be Federal Programs. Really. [Updated and typo-corrected.]

For a senator who likes to hold himself out as the future of the Republican brand, Marco Rubio has come up with a remarkably retrograde contribution to the party’s chorus of phony empathy for the poor: Let the states do it.

All anti-poverty funds should be combined into one “flex fund,” he said in a speech on Wednesday, and then given to the states to spend as they see fit. He actually believes that states will “design and fund creative initiatives” to address inequality.

Rubio Demands States’ Right to Ignore the Poor, David Firestone, New York Times, Jan. 9

The last seven days were Marco Rubio’s lucky week.  And not just because the media-declared frontrunner for his party’s 2016 presidential nomination collapsed as a viable candidate even for local dog catcher, should he need a job by the next presidential election. And not because he was smart enough, unlike some other prominent Repubs and pundits, to recognize how breathtakingly offensive the Bridgegate events are across the political spectrum, and to simply demur from comment.

But also because he gave his big speech on poverty on the very day that the bridge scandal broke nationally, and diverted media and the public’s attention from the speech.  A speech that was, in substance, ridiculous.

Firestone notes some highlights from the speech:

“Washington continues to rule over the world of anti-poverty policy-making, with beltway bureaucrats picking and choosing rigid nationwide programs and forcing America’s elected state legislatures to watch from the sidelines,” he said. “As someone who served nine years in the state house, two of them as Speaker, I know how frustrating this is.”

And:

“It’s wrong for Washington to tell Tallahassee what programs are right for the people of Florida,” Mr. Rubio said. “But it’s particularly wrong for it to say that what’s right for Tallahassee is the same thing that’s right for Topeka and Sacramento and Detroit and Manhattan and every other town, city and state in the country.”

After thinking about this for a few minutes–I read the Firestone piece this morning–I’ve concluded that Rubio is onto something.  I, too, think it’s wrong for Washington to tell Tallahassee what programs are right for the people of Florida. The programs I have in mind aren’t the one’s he’s talking about, but they are nonetheless federal programs that assist certain Floridians.  Such as Floridians who have large financial interests in the sugarcane industry.  And Floridians who live in areas hit every few years with devastation from hurricanes.

A key difference, of course, between programs such as farm subsidies and natural-disaster assistance, on the one hand, and the Medicaid and food stamps, on the other, is that the latter are “federalism” federal-state-partnership programs in which states opt into program and the federal government and the states share the costs, with the federal government paying the far greater share.  Non-federalism federal programs that provide financial assistance to certain constituencies–including wealthy farmers, the sugarcane industry, owners of beachfront properties, and small businesses in hurricane country–are funded entirely by the federal government.

But Rubio’s complaint isn’t the manner in which these programs are funded. Instead, it is that people in Florida and Kansas, unlike those in Michigan, California and New York, who can’t afford enough food and who are ill but have no access to medical care don’t really need enough food or access to medical care. He does, of course, want the federal government to continue to pay the states large amounts of  money.  He just thinks there should be no strings attached.

It’s particularly wrong for the federal government to say that what’s right for Tallahassee is the same thing that’s right for Topeka and Sacramento and Detroit and Manhattan and every other town, city and state in the country. But it’s right for the federal government to continue to give money to the states without determining how the money should be spent.  And particularly right for the federal government to say that what’s right for Tallahassee is the same thing that’s right for Topeka and Sacramento and Detroit and Manhattan and every other town, city and state in the country when doling out farm subsidies, as long as the federal government continues to recognize that what’s right for Florida is huge subsidies to the sugarcane industry.

So, folks, what other federally funded programs do you agree with Rubio and me should be funded by the federal government but should actually not be federal programs?* The Comments section awaits.

And how many of you share Firestone’s and my dismay (so to speak) that the self-styled standard-bearer for future of the Republican Party hasn’t noticed that, whatever else the effects of Obamacare, the law as it has played out spells the end of new federalism-funded social-safety-net programs?  It does, of course, leave intact the non-federalism federal social-safety-net programs, such as farm, logging, and oil-and-gas-industry subsidies.  The Koch brothers need not worry.

—-

UPDATE: In a blog post this morning discussing the Republican Party’s decades-long campaign to institutionalize in American society the demeaning of ordinary workers as unworthy of respect, Paul Krugman highlights Rubio’s take on whether a raise in the minimum wage is important: “Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American dream.”

Krugman writes:

In a sense, he’s right: if the American dream means getting rich, then $10 an hour isn’t living that dream. But most people aren’t and won’t get rich. Raising the minimum wage would mean higher incomes for around 27 million people; in many cases the gains would amount to thousands of dollars a year, which is really a lot in low-income families. So what are all these people, chopped liver? Well, yes, at least in the eyes of the GOP — or maybe make that chopped losers.

Actually, making a living wage is exactly a central part of the American dream, and while a wage of $10 an hour isn’t really a living wage, it comes substantially closer to one than does $7.25 an hour.  Which may be why it polls well.

*Sentence typo-corrected to insert the key word “not,” inadvertently omitted from original post. 3:08 p.m.

Tags: , , , , , Comments (4) | |

Why Attorneys Will Not Always Sue In Malpractice

Hat Tip to Crooks and Liars; ProPublica When Attorneys Refused My Medical Malpractice Case”. I wrote on this topic one time before. What attracts me to it again is newer data as presented by Publica, which expresses the same finding I noted before. Attorneys will not take a case unless they can win and make a living. The investment of $50,000 to $100,000 by an attorney to litigate a malpractice case presents a high economic hurdle.

Many well-meaning people believed the words of President George W Bush;

“The health care system looks like a giant lottery. That is what it looks like these days with these lawsuits and somehow the trial lawyers are always holding the winning ticket.”

In reality, far more people do not get their day in court to rectify a wrong done upon them through accident or negligence by doctors, hospitals, or the industry. Attorneys are the gatekeepers to whether a plaintiff receives their day in court.

Before taking a case, “personal injury lawyers in both reform and non-reform states take into consideration the same three factors;

• the monetary value of the injury (damages);
• the factual components of the case, including their assessment of their ability to demonstrate wrongdoing or negligence on the part of a doctor or product manufacturer;
• their estimation of how the potential client will be evaluated by a jury (“likeability”).

Across cases, each of categories can vary dramatically in what impacts the decision; damages can be either significant or trivial; liability can be clear, difficult to prove or even nonexistent; and lawyers decide whether clients are perceived as “likeable” or “unlikeable” by a jury.”

The decision-making criteria identified above will vary in significance by whether the state is a reform state with caps on rewards or a non-reform state; however and in the end, the decision still pivots on whether an attorney can win the case and recoup his investment. Mary Nell Trautner’s paper examines the differences between reform and non-reform states; “Tort Reform and Access to Justice: How Legal Environments Shape Lawyers Case Selection”. By reviewing such non-reform states as Pennsylvania and Massachusetts, reform states Colorado and Texas and within the select cities of Philadelphia, Boston, Denver and San Antonio of each state; the author then assessed how attorneys from the selected cities within each state come to a decision as to whether to accept a case.

Likeability appeared to be important criteria. The closer the match to the jury pool, the greater the tendency a jury might like them. Understand though, there are always 12 different opinions making up a jury; consequently, it is always better to settle than go to trial. “A ‘perfect” personal injury case, then, would have unquestionably significant damages, strong and clear liability, and a ‘likeable’ client” to which a jury can identify.

Given plaintiffs and the cases they bring are not perfect, lawyers must contend with the various legal, social, and political factors of the environments in which they practice deciding which cases to take or not take regardless of whether the case has legal merit.

Case Selection in Non-Reform States:

Attorneys in non-reform states such as Pennsylvania and Massachusetts rely more on the likeability of the potential client after the damages portion of the case has been established.

“If the clients are really good, I know they’re good, I like them, but not enough evidence pops up…I’d probably take that case…because the case is easier to be received by the jury if they like the people. They’re more willing to give the benefit of the doubt if the client is real likeable.”
85% of the attorneys surveyed said they would take the case whereas 61% of the same attorneys said they would reject a case if the client was not likeable regardless of legal merit. Likeability can extend to paying taxes, past record, race, etc.

Case selection in Reform States:

Attorneys in reform states such as Colorado and Texas stress the strength of the case as being more important than likeability and after the damages/wrong doing has been established.

“I don’t care how likeable the person is, because juries don’t like plaintiffs anyway, and so a likeable plaintiff is not going to carry a weak case. A strong case is much more likely to carry a less likeable client. You can’t go in with a weak case.”

75% of the attorneys in Reform states said they would accept a case where there was clear liability even if the client was not likeable. 62% of the attorneys rejected cases where the liability was not clearly established.

In either reform or non-reform states, the decision to take or not take a case does not indicate there was no wrongdoing. The selection was based upon likeability or the strength of the case after other factors in the selection process were established. Furthermore, likeability does not go away in the courtroom either. Juries which do not like a plaintiff’ mannerisms, physical characteristics, etc. will still focus on the plaintiff and determine whether they are worthy after the case has been established. In which case, the jury may award less to a plaintiff they do not like or nothing at all. An attorney who accepts such a client runs the risk of losing the case unless the strategy is to settle before a trial.

Insurance companies, doctors, and some states have launched publicity campaigns calling for tort reform proclaiming lawsuits as frivolous, increasing the cost of healthcare and/or business, or driving doctors and/or businesses out of state. Without commenting directly on the merits of the points made in these campaigns, potential jurors carry these points against liability or malpractice suits into the courtroom. Attorneys going into the courtroom must consider these factors also with a particular need to do so in Reform states.

Healthcare Insurance companies, medical associations and the healthcare industry have focused on tort reform as one of the biggest drivers of the steadily increasing cost of providing healthcare. They point directly at greedy lawyers, generous juries, and people who bring frivolous cases to trial. In reality, all of the cases make up a fraction of the total cost of healthcare. The income and profit motive driven attorneys screen out cases in either one manner or another leaving only those which are winnable. Attorneys do not take unwinnable cases as they can not afford being stuck with the cost. As referenced here Patient Harm: When An Attorney Won’t Take Your Case and above, there are many reasons why an attorney will not take a case and some are the most trivial such as age, etc.

One of the biggest drivers of malpractice lawsuits are the mistakes made in hospitals that go unacknowledged and/or uncorrected. Some hospitals such as University of Michigan, University of Illinois, and Stanford University have started to meet with patients and admit to making errors. This goes a long way towards soothing the anger many feel from being the victim of errors. The PPACA has within it a forced readmission at hospital cost of patients who are not fully cured and suffer reoccurrence of a disorder. This takes the financial burden off of the patient. What has not happened is the correction of reoccurring mistakes by some doctors as pointed out in a 2007 Public Citizen paper.

“The vast majority of doctors – 82 percent – have never had a medical malpractice payment since the NPDB was created in 1990.” The Great Medical Malpractice Hoax Public Citizen January 2007 The remainder of the doctors have been left without oversight as to why the mistakes or errors. Fixing the issues would directly impact the number of lawsuits.

NAMMP

Are the lawsuits for malpractice frivolous and commonplace? If we are to believe the manner in which attorneys screen potential cases, the answer would be no. The numbers of lawsuits is a result of the screening process which would suggest they are legitimate. Is there an increase in the numbers of lawsuits and subsequent payouts? Public Citizen would say no. As I suggested above, there are in which to decrease lawsuits, own up to errors and better oversight of doctors who make more errors than others.

References
When An Attorney won’t Take Your Case Marshall Allen and Olga Pierce

Ten Patient Stories . . . ; Marshall Allen and Olga Pierce

Tort Reform and Access to Justice: How Legal Environments Shape Lawyers Case Selection Mary Nell Trautner, September, 2011.

Great Benefit is like a Giant Slot Machine that never pays off

Malpractice Risk and Cost are Significantly Reduced after Tort Reform

Tags: Comments (6) | |

Yes, Virginia, there really IS a (rapidly-increasing) possibility of a healthcare insurance public option. The private insurance companies are inviting it.

 

When millions of health-insurance plans were canceled last fall, the Obama administration tried to be reassuring, saying the terminations affected only the small minority of Americans who bought individual policies.

But according to industry analysts, insurers and state regulators, the disruption will be far greater, potentially affecting millions of people who receive insurance through small employers by the end of 2014.

Second wave of health-insurance disruption affects small businesses, Ariana Eunjung Cha, Washington Post, today

[W]ith the single exception of the disastrous rollout of Healthcare.com, which is purely a technology issue, the high-profile issues concerning Obamacare since Oct. 1 highlight not generic problems with government involvement in healthcare insurance but instead the problems of a system that piggybacks on the for-profit private insurance industry and neo-federalism-structured federal programs that rely heavily or entirely upon cooperation of state governments.

What to Do When a High-Profile U.Chicago Economist Says the Airline, Telephone and Package-Shipping Industries Prohibit Use by Preexisting Flyers, Callers and Shippers: If you’re a liberal, take this ball and run with it!, Me, Angry Bear, Dec. 26

The Washington Post article goes on to say that many of the small-business cancellations are occurring not because the current policies are substandard under the ACA, but instead are only indirectly related to the statute. Insurers, the article explains, want to “move customers to new plans designed to offset the financial and administrative risks associated with the health-care overhaul.” To that end, “they are consolidating their plan offerings to maximize profits and streamline how they manage them.”

To which I say: Go for it, insurance industry. Please do.  In my Dec. 26 post, I wrote:

[W]hat’s happening, suddenly, is something I predicted in recent posts here: That the individual-market insurance industry’s fall-of-living-dangerously, during which (led apparently by the various Blue Cross companies) it drastically overplayed its hand in the last three months by, for example, telling premium-holders, falsely, that their cancelled policies could be replaced only by vastly-more-expensive policies, would trigger reinvigorated calls for a “public option for the single-payer market and maybe even for a single-payer option across the board.

But something else is happening, as well: The right is recognizing that the problems with Obamacare, rather than broadening the appeal of a return to the status quo, is instead more likely to dramatically broaden the appeal of a public option.  And, because employers that provide healthcare coverage are scapegoating Obamacare for their unrelated decisions to further limit their already-increasingly-limited premium contributions and the like, the formerly unthinkable–a single-payer-for-all option–may well soon become the very thinkable.

The “right,” in that last paragraph, refers to U.Chicago Business School economist John Cochrane and a recent article of his that my post’s title summarizes. Cochrane’s piece, an op-ed published in the Wall Street Journal titled “What to Do When Obamacare Unravels,” struck me as bearing the earmarks of rightwing desperation.

Late this month in his State of the Union address, Obama will discuss Obamacare.  He will use the tired-but-by-now-obligatory tactic of having real Americans in the audience, whom he will name and whose family is benefiting tremendously from the law. He may even be astute enough–although I doubt this, since astuteness is not his thing–to include among those Americans people who panicked after receiving cancellation notices from one of the Blue Cross affiliates (it’s virtually always one of the Blue Cross affiliates, usually but not always an AnthemBlueCross affiliate) and was profiled in some news article as being told in the cancellation letter that the only option henceforth was some poorer-coverage or wildly-more-expense (or both) policy, only to learn later about the actual options.

What he won’t do, though, is what most he should do: Explain, in actual detail, using genuine specific data depicted in charts, that for decades now the unremitting and rapidly-accelerating trends in healthcare insurance have been ever-narrowing provider networks and large increases in premiums and out-of-pocket costs in both the individual market and the employer-based group-insurance market.  And to say that it soon will be clear whether or not the private for-profit healthcare-insurance market can meet the needs of the general public or whether instead those needs can be met only through a government-run single-payer insurance system or some other non-profit system similar to one or another approach that works so well in, say, Australia, France, or Germany. And then propose a public option, not just for the individual market but also for employer-based group insurance.

No, Obama himself won’t propose this.  But progressive Democratic congressional candidates should, and soon. Obama, like most Washington pols and almost all political pundits, is always incredibly late to the change-in-progressive-and-mainstream-political-winds party. If he ever arrives at the party at all. (He’s still appointing federal judges whose main credential is a history as a prosecutor or some other tough-on-crime, pro-police background–he hasn’t noticed that this no longer appeals even to Republicans, at least not those of the libertarian variety–but that’s a subject for a later post.) The Washington Post piece notes that most of the small-business-group policy cancellation notices will be sent in October, near the start of the open-enrollment period and also just before the midterm elections.  This, the writer points out, “could be difficult for Democrats who are already fending off Republican attacks about the Affordable Care Act and its troubled rollout.”

Then again … maybe not so difficult, after all. The political winds are moving forward, not backward. All the Dems need is a coherent progressive policy proposal.  And a few coherent messengers for it, who no longer need fear that they will be killed.

Tags: , , , , , Comments (2) | |

Sunday Reads

50% of Congress Are Millionaires
“The nonprofit Center for Responsive Politics reports at least 268 of the 534 lawmakers were worth an average of $1 million in 2012. These millionaires are the people debating issues like unemployment benefits, food stamps and the minimum wage, which affect people with far fewer resources — it’s no wonder that it seems we’re seeing such a ‘Let them eat cake!’ attitude from many elected officials.”

Maddow: Did Christie Retaliate Over Supreme Court Filibuster?
Why would Christie risk being caught over harassing a small town mayor? Rachel Maddux suggests there is more to it:

“Kansas Court Could Kill the Right to a Decent Public Education”

“In 2012, tea party-aligned legislators in the reliably red state of Kansas, backed by deep-pocketed outside groups, were able to purge Republicans they viewed as insufficiently devoted to Governor Sam Brownback’s (called Brown Shirt by many) right wing agenda. Since then, Kansas, like North Carolina, has become a test bed for conservative policy-making.

Deep spending cuts to education, health care and other social services were central to that agenda. And this month, the Kansas Supreme Court is expected to issue a ruling in a lawsuit precipitated by those cuts which could have profound consequences for public education in America.”

“Freedom to lie”

“The U.S. Supreme Court on Friday said it will hear a challenge to an Ohio law that forbids candidates and issue groups from making false campaign statements.

The case, involving an anti-abortion group’s claim that Ohio’s False Statement Law violates free speech, will likely be argued in April, with a ruling announced during the last months of the Supreme Court’s term in May or June.”

We could not get SCOTUS to hear a fundamental case concerning the lack of capacity resulting from brain disorders and yet they will hear this nonsense? ~85 case are heard annually by the court.

More Evidence of the Demobilizing Impact of High Housing Costs

“Those of you who read Tim Noah’s important article in the November/December 2013 issue of the Washington Monthly will recall his argument that the gap between high housing costs and middle-class incomes is distorting what would otherwise be a market-driven migration of Americans to places with higher wages and more opportunity. The Atlantic’s Derek Thompson has more on the housing cost problem.”

How Bad are Junk Healthcare Polices

Everyone seems to concentrate on the loss of healthcare policies resulting from Insurance Companies making changes to the low cost policies or canceling them altogether. In either case, what healthcare insurance companies do as well as employers and states; the fault does not lie with the PPACA. Neither does anyone look to see what the policies consisted of in content.

Dianne Barrette’s story was widely covered in the media after she found out that her $54/month policy was getting cancelled and a new one would cost ten times as much. (Red flag alert: Before the ACA’s subsidies, there was no such thing as good individual health insurance for a 56-year-old for $54 a month. Prices like that disappeared a generation ago.) As it turns out, Barrette’s policy would have paid $50 towards doctor visits and some limited preventive care, but otherwise it covered almost nothing.

We know that Barrette’s old policy was worthless. But what did real health insurance in Florida cost prior to 2014? The statewide average monthly premium for individual health insurance in 2012 was $243/month. For a 56-year-old, the premium would have been significantly higher.

Barrette’s income makes her eligible for a sizable subsidy on a 2014 plan, bringing the cost of real health insurance down to the $100-$240/month range. The 2014 plans are better quality than even the non-junk plans that were being sold in 2012. And yet someone like Barrette, earning $30,000 a year, will pay less in 2014 than she would have for a real health insurance plan in 2012, even though the new policy is better.” Read more at the site.

“The legal march to personhood (and de-personhood)”

I live in the increasingly backward state of Michigan, which appears to have found the “WayBac” mechanism to take it back to the fifties when abortions were done in alleys, minorities rode in the back of busses, and poverty was at its highest. The state has even made it impossible for abortion to be covered on the exchanges unless women buy a separate policy. I found this article by “Digsby” to be interesting.

Digsby: Keep in mind that the laws were never so designed before. It may have been true that women did not have the same rights as men. But this new approach is making them have fewer rights than a fetus that cannot survive outside the woman herself. That is just bizarre. And this movement is growing.

Lynn Paltrow at National Advocates for Pregnant Women has been tracking these laws for years and advocating for women to be full citizens in the eyes of the law. In 2010, she wrote a piece for The Huffington Post exposing the move towards ‘personhood’ as part of this sinister agenda. She points out that recognizing the humanity of others has never before come at a cost to an entire class of people. When women were recognized as equal citizens under the constitution, this did not come at a cost to men. She states that “efforts to legally disconnect fetuses and to grant them entirely independent constitutional status would not merely add a new group to the constitutional population: it would effectively denaturalize pregnant women, removing from them their status as constitutional persons.

Worth the read even if you do not agree with abortion as this has now taken a different hue.

Tags: Comments (16) | |

New series on Social Security: Angry Bear and Committee on Responsible Federal Budget

This post is simply a short note to let readers know that a series of posts and topical threads will be published over the next weeks by staff at the Committee on Responsible Federal Budget and contributors to Angry Bear blog and several outside authors in our network.

Marc Goldwein,  Policy Director for the Committee for a Responsible Federal Budget (see Wikipedia) and I have been trading e-mails discussing how to have a debate on one of the issues confronting us, namely the role of Social Security in the retirement process, how it is working at the moment, and what is projected over the next few decades .

Of necessity some posts must be ‘wonkish’ and arcane to the general reader, but such information needs explaining and interpreted as data and then secondarily as a ‘story’ is developed. The other part of the debate is the actual narrative of how we think about Social Security, the role of private and government programs, and of course the narrative on the nature of our federal budget, what is responsible, and what seems to work.

The first post by CRFB is a direct response to Dale Coberly’s post Setting the record straight on Social Security.  The following posts and topical threads are in the works.

Dan

 

 

 

 

 

 

 

 

 

 

Comments (21) | |

On the Horizon "After Obamacare"

Many of us have talked about bending the healthcare cost curve by changing the services for fee healthcare cost model to a model of better outcomes for those fees. This is precisely what the PPACA does. Phillip Longman based his book “Best Care Anywhere” on how the VA brought about such a change in the rendering of services to the nation’s veterans. Much of the cost savings today will come from a consolidated healthcare industry delivering healthcare more efficiently and at lower costs. STR has pointed out a few times without explanation the issue of consolidation within the healthcare industry, which if left unchecked, will cause its cost to increase. Both Phillip Longman and Paul Hewitt in a Washington Monthly article take-on the issue of healthcare industry consolidation “After Obamacare” and the monopolistic results. A keynote finding points to the future of America’s healthcare unless certain actions take place outside of the PPACA or whatever evolves.

“A frenzy of hospital mergers could leave the typical American family spending 50 percent of its income on health care within ten years – and blaming the Democrats. The solution requires banning price discrimination by monopolistic hospitals.”

As it stands and even with its faults, the PPACA is a viable solution to many of the issues faced by many of the uninsured and under insured; but in itself, it only addresses the delivery half of the healthcare problem. The other half of the problem rests with the industry delivering the healthcare and the control of pricing through the inherent monopolistic power coming and pushing the industry into greater integration of delivery. As Longman and Hewitt posit, “the message from Department of Health and Human Services stresses the vast savings possible through a less ‘fragmented’ and more ‘integrated’ health care delivery system. With this vision in mind, HHS officials have been encouraging health care providers to merge into so-called accountable care organizations, or ACOs”; while on the other side of Mall, “pronouncements from the FTC are about the need to counter the record numbers of hospitals and doctors’ practices that are merging and using their resulting monopoly power to drive up prices.

This is not solely the result of the PPACA implementation as it has been going over the last decade and has increased in intensity with the signing of the PPACA.

clip_image001

Announced Hospital Consolidations by Year

The result is a lessening of competition in and about major cities. The Herfindahl-Hirschman Index (HHI) was used to measure competition in and around cities. The results of the HHI revealed an increase in the concentration of hospitals from mergers and acquisitions. Going from moderately concentrated in 1990 with an HHI numeric of 1570; the concentration can be described as highly concentrated in 2009 with a HHI of 2500 and some cities purely monopolistic at 10,000.

Today, much of the struggle exists between the providers of healthcare and the buyers of healthcare. Before the PPACA, this was broken down between the uninsured, the healthcare insurance companies, and the doctors, clinics, and hospitals. With little power, the uninsured absorbed the highest prices while the insured and the providers battled it out with the larger and more powerful of the two getting the better of the negotiation. Today and with the PPACA, many of the uninsured are insured with just the citizens of states not expanding Medicaid at risk. With growing consolidation of provider, the balance of power is shifting towards providers as competition lessens amongst them and they supersede the size of the buyers of healthcare. With the greater concentration of hospital and doctor networks come the higher prices often as high as 20% and sometimes higher. You can witness this phenomenon today with some of the well-known hospitals being able to demand higher fees from insurance companies and in concentrated markets.

– “Berkeley health care economist James C. Robinson studied the prices hospitals charge insurance companies (and, by extension, insured patients) for different procedures. In concentrated markets, the price for a pacemaker insertion averages $47,477; but in markets that remain comparatively competitive, the cost of the procedure averages $30,399.”

“in concentrated markets, the average hospital makes a return of $20,000 above its direct costs on every angioplasty it performs. But in more competitive markets, while the margin is still astoundingly high, at $10,900, it is nonetheless 90 percent less than in concentrated markets.”

– “Massachusetts Attorney General Martha Coakley subpoenaed claims data (reflecting negotiated prices) and contracts from health plans and providers in her state. By examining the behavior of individual hospitals and physician practice groups, a strong link between market concentration and price was established. Within markets, prices charged for the same services typically varied by 200 percent or more. This variation correlated almost exclusively with ‘leverage’ – the relative market position of the provider.”

Very much my own experience between two hospitals reveals similar pricing inconsistencies. One out-of-town hospital in the top 5% for cardiac procedures; billed me for 8 days of hospitalization, catheterization, surgery and the associated doctors, radiologists, and nurses besides home care resulted at ~$80,000. Returning home and going to a major well known local hospital for a hospital walk-about of my heart (catheterization) resulted in a bill of $16,000 for a stay of less than a day, a cardiologist, and a couple of nurses beating me up as I wanted to leave (they took good care of me). One year later and I still do not feel 100%. In any case, the fees would have been lower in the out of town hospital. Why?

So what is the solution if the PPACA will not resolve it and the industry balks at controlling pricing? The authors, Phillip Longman and Paul Hewitt, propose rigorous action by the FTC; however, the FTC has in place a staff 22 lawyers and economists monitoring a $3 trillion industry. It is understaffed to take on such a large industry which would overwhelm it with legalese and paper.

Larger scale (and) integrated healthcare systems can (will) lead to better quality outcomes and efficiencies overcoming today’s fragmented healthcare system – “of specialists ordering up redundant tests and contraindicated drugs as they each treat one body part at a time, often with costly treatments of dubious effectiveness.” Promoting the integration of healthcare systems making them larger in scope also runs the risk of pricing abuse by the industry as evidenced today. In Maryland, pricing established by a review board has lowered costs from a high of 26% over the national average in 1976 to 4% less than the national average today. Maryland also has generous Medicare payments as set by an AMA committee, which has been blamed for lower costs experienced on the commercial side. Providers with their hand still opening the till for their own kind.

Bureaucrats establishing pricing is acceptable in some places; but then, there are those who believe their freedom is impinged upon by government keeping a watchful eye on business which the impinged upon have no control over anyway. If you do not believe so, attempt to negotiate your pending care in an emergency. You will be unconscious or dead first and will receive the care in such a state. The authors go on to suggest a hybrid regime of better antitrust enforcement tied to a “common carrier” methodology.

A common carrier offers its services to the general public under license or authority provided by a regulatory body. The regulatory body has usually been granted ‘ministerial authority’ by the legislation created by it. The regulatory body may create, interpret, and enforce its regulations upon the common carrier (subject to judicial review) with independence and finality, as long as it acts within the bounds of the enabling legislation.”

This moves the competition to delivering the best product or service as opposed to leveraging market power to the market place due to size of the company. A similar methodology was used to prevent monopolistic railroads from offering better rates to other monopolistic enterprises such as Standard Oil and US Steel. Recently, courts used the same methodology with Microsoft. Historically same is being used in the transportation of oil, in phone service, internet, etc. Prices must be the same for the same service.

A similar logic should apply to healthcare. Nowhere does it makes sense that some providers are offered special rates by buyers when the service provided is the same.

“Uwe Reinhardt and other health care economists have noted, in this realm charging different people radically different prices for the same procedures does not even in theory lead to greater efficiency or lower prices. Rather, it just wastes enormous resources as different parties scheme to shift costs onto one another (buyers of service) through secret, special deals.”

In the end, it does not cost a hospital or a doctor to scan a patient through a CAT, X-Ray a patient, do a urine or blood test whether that person has insurance or not. So what makes sense for increasingly consolidated hospitals, doctors and clinics?

If for example, a market threshold was established setting the number of beds or doctors within a locality as controlled by a business was exceeded; that hospital and/or business might have to make public its pricing for all procedures and services to the general public which is already established on the establishment charge master. All customers whether insured or not or out of network would pay the same fees. Affiliated and independent doctors would also pay the same overhead charges. In effect, hospitals and doctors organizations would be similar to public utilities and a basic part of the community infrastructure.

Those organizations of doctors or hospitals which did not meet common carrier thresholds would be free to set their own pricing giving way to competition between common carriers and themselves in pricing, services, and procedures. The over ruling authority as to monopolistic tendencies would remain the FTC. The FTC would warrant competition between providers within certain areas.

References:

After Obamacare, Phillip Longman and Paul S. Hewitt, Washington Monthly January/February 2014

Tags: Comments (19) | |

Boeing Saga Ends with 51% Favoring New Contract

As I argued last month, the Puget Sound area of Washington state was easily the best place, from a strictly economic point of view, for Boeing to build its new 777x jetliner. This was confirmed when, despite the rejection of  its union contract offer by a 2:1 margin and opening an auction for a new facility, Boeing came back to the union with a second contract offer (h/t New York Times). Yesterday, by a 51-49 margin, workers voted to accept the contract.

The new contract ends the company’s pension plan in favor of a 401(k), although it does not “affect the pensions already accrued.” This was unchanged from the previous offer. However, the company did make concessions on the time to raise to the top of a pay grade (6 years instead of the originally proposed 16) and by adding a second bonus payment, of $5,000, in 2020.

The closeness of the vote shows how difficult a decision this was. In addition, there was a rift between the international office of the Machinists’ union, which all but openly supported the contract, and the local union, which quite openly opposed it. Though the workers had a good bargaining position, it’s hard to negotiate with a gun to your head, and the company had also shown its willingness to do something stupid (from an economic point of view) when it put a production line for 787 in South Carolina rather than Washington.

So, yet another company ends a true pension plan, contributing to the coming retirement crisis. Washington state gets to set another record for the largest incentive package in U.S. history, although it is surely a violation of World Trade Organization subsidy rules, as was Boeing’s 2003 package. And we see yet again the need to ban job piracy, which strengthens the kind of job blackmail we have seen in this case, like so many others.

Cross-posted at Middle Class Political Economist.

Comments (8) | |