Faux Health Care Update

Posted on March 16, 2012 by Mike

Better publish this before I forget.

Bunch of links from the NEJM on Medicare reform.

On the whole, we do not believe that the recent slowdown in Medicare spending growth is a fluke. There has been a long-term trend toward tighter Medicare payment policy, and policy changes that began in the middle of the 2000s have continued that tightening (see graph).2 The Deficit Reduction Act of 2005 (DRA) reduced payment rates for imaging, home health services, and durable medical equipment, and the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) made substantial cuts to Medicare Advantage plans. Even though Congress has overridden payment cuts dictated by the sustainable growth rate formula (SGR) each year, the resulting physician-fee increases have fallen further and further below the relevant index of inflation. All these specific constraints on payment rates probably also slowed growth trends in the volume of services provided, leading to a larger slowdown in spending growth.3

Slower growth in Medicare Spending

On December 15, 2011, Senator Ron Wyden (D-OR) and Representative Paul Ryan (R-WI) released a Medicare reform proposal based on the concept of premium support.1 Under their proposal, Medicare would be converted from a defined-benefit to a defined-contribution program. Instead of guaranteeing to pay for services as they are rendered, as fee-for-service Medicare does, the program would give beneficiaries a subsidy (“premium support”) to purchase coverage from one of multiple competing health plans. The motivation behind the approach is to give plans a clear incentive to provide necessary services in a cost-effective manner, which can result in lower premiums or other beneficiary costs, attracting enrollees and increasing the plan’s share of the market.

Wyden-Ryan Proposal

These proposals would offer Medicare beneficiaries vouchers toward the purchase of private insurance or traditional Medicare. Private-plan offerings could vary, but the actuarial value of these alternatives would have to be at least equal to that of traditional Medicare. Increases in the amount of the voucher would be capped by an index that is expected to rise more slowly than health care costs. Advocates claim that cost-conscious enrollees and competition among profit-seeking insurers would hold down program costs. But if they didn’t, the growth cap would do so by shifting costs to the elderly and disabled.

Is premium support along the lines now being proposed a good idea? Is now the time to be making fundamental changes in Medicare? We believe that the answer to both questions is no.

Now is not the time for premium support

Before Senator Ron Wyden (D-OR) and Representative Paul Ryan (R-WI) introduced their “Bipartisan Options for the Future” on December 15, 2011, the notion that Democrats and Republicans agreed about certain aspects of Medicare might have seemed unthinkable.1 But the pairing of a liberal Democrat who has long worked on health care reforms and a fiscally conservative Republican primarily known for work on budget issues suggests that it might be possible for the parties to reach a compromise on Medicare reform. Of course, meaningful reform is not likely to occur in 2012: any significant reform probably won’t happen until the public sends a clearer signal about the kinds of change it will tolerate, which won’t be possible until after the fall elections. Yet some Republicans and Democrats appear to be in substantial agreement about some changes that might make Medicare more efficient, effective, and fiscally sustainable — even if none of these changes are universally accepted by either party as desirable or even tolerable.

Bipartisan Medicare Reform

A surgeon writes at Reason on medical ethics, cost controls and therapeutic guidelines.

Trends in US health care spending

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Citizen’s United II

Posted on February 20, 2012 by Mike

Tom Goldstein at SCOTUSblog posted over the weekend about the upcoming challenge to the Montana SC decision upholding a ban on corporate expenditures in state elections. While the case itself is likely not going to be all that exciting (the Citizens United majority will assuredly reverse the MT SC), the inside baseball look that Goldstein provides on Ginsburg/Breyer’s grant staying the MT SC decision is very interesting.

An excerpt:

What, then, does Justice Ginsburg’s statement tell us? First, these two Justices at this stage recognize a square conflict between the Montana Supreme Court’s decision and Citizens United. They “vote[d] to grant the stay” because the state supreme court was “bound to follow this Court’s decisions” – ipso facto, the state court’s ruling did not follow Citizens United. If these two strong opponents of Citizens United see that conflict, then presumably the Citizens United majority does as well. That means that the state’s argument that its law is distinguishable because it “imposes far different obligations” than did the statute in Citizens United has no traction for a potential majority as a ground for distinction, though perhaps it could be a basis on which Citizens United could be “modified.”

Second, look to what Justice Ginsburg does not say. The statement indicates no sympathy for the claim that this case does not present an appropriate opportunity to consider the question presented. So there is no interest in the state’s contention that, with respect to these petitioners, “the Act operates as no more than a disclosure law of the sort this Court has long upheld.” As a result, the state has to work from the understanding that certiorari is certain to be granted, and the case is going to present the question whether Citizens United should be overruled or modified.

Third, and most important, the statement seemingly identifies the argument that Justices Ginsburg and Breyer think has the best chance: “whether, in light of the huge sums currently deployed to buy candidates’ allegiance, Citizens United should continue to hold sway” or instead should be “withdrawn or modified.” That argument should be based on the practical evidence of “Montana’s experience, and experience elsewhere.”

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Prop 8 ruling

Posted on February 7, 2012 by Mike

The Ninth Circuit has come out with a ruling on the Prop 8 case. There were three issues before the Court: 1) do the Prop 8 proponents have standing?; 2) should Judge Walker’s decision be summarily dismissed because he is gay and has a long-time partner?; and 3) is Prop 8 constitutional?

The judges were unanimous on the first 2 points (standing, dismissal), ruling that the proponents had standing and denying summary dismissal. The 2-1 majority decided that Prop 8 was unconstitutional, but ruling only on Prop 8 in the narrow sense that it “stripped same sex couples of the ability they previously possessed” to marry under CA law (Equal Protection argument). They do not decide on the constitutionality of SSM.

For the SCOTUS nerds, the majority was written by Judge Reinhardt (Judge Hawkins concurring) and the dissent by Judge Randy Smith. I don’t have the exact stats, but I know that Judge Reinhardt is one of the, if not the, judge whose opinions are most frequently reversed by SCOTUS.

Filed under: gay marriage | Tagged: , | 11 Comments »

Participate in the FL GOP primary!

Posted on January 20, 2012 by Mike

Hope I embedded the poll properly.  But do vote … winner will get my vote on Jan. 31 (or earlier).

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Morality and economics

Posted on December 1, 2011 by Mike

Senator Doctor Coburn has an op-ed at CNN about ending “welfare for the wealthy.” Perhaps some of us have an opinion on the good doctor’s prescription.

Every year, politicians on both sides engage in a process of reverse Robin Hood in which they steal $30 billion from low- and middle-income Americans and provide handouts to the rich and famous.

Millionaires receive tax earmarks and deductions crafted by both parties that allow them to write off billions each year. These write-offs include mortgage interest deductions on second homes and luxury yachts, gambling losses, business expenses, electric vehicle credits and even child care tax credits.

Meanwhile, direct handouts for millionaires have included $74 million in unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion in retirement checks and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. Millionaires have even borrowed $16 million in government-backed education loans to attend college since 2007.

The goal of highlighting these excesses is not to demonize those who are successful. Instead, by highlighting the sheer stupidity of pampering the wealthy with lavish benefits through our safety net and tax code, I hope to make a moral and economic argument for real entitlement and tax reform.

The most troubling gap in America today is not an income gap. It is an integrity gap — and even intelligence gap — between Washington and the rest of the country.

Families are struggling to make ends meet and are making painful economic choices as politicians in Washington borrow billions to provide welfare to the wealthy. Politicians on both sides refuse to fix big problems and defend stupid policies because changing those policies would involve upending a comfortable political status quo.

End welfare for the wealthy

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My Saturday morning

Posted on November 21, 2011 by Mike

I forgot to write a post this weekend about our Saturday morning. There’s a charity that builds houses for wounded veterans and they had one built by a developer in our community for Army Sgt. Joel Tavera. His “homecoming” was this weekend, complete with a flag-lined parade route, police/fire escort, and several members of Rolling Thunder. A big to-do, with some top brass present as well (no doubt due to the proximity of MacDill and JSOC, since Gen. McRaven was there). I didn’t know about it until Sat. morning when I saw the flags lining the street and asked my neighbor what was going on. Sgt. Tavera now lives about 1.5 miles from me.

Pix and the story are here:

Home for Sgt. Tavera

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Fusion and the private sector

Posted on November 9, 2011 by Mike

Thought I’d post this story from NPR on a start-up company trying to compete with the big boys (governments) in developing an economically viable fusion reactor.

The world would be a very different place if we could bottle up a bit of the sun here on Earth and tap that abundant and clean energy supply. Governments have spent many billions of dollars to develop that energy source, fusion energy, but it’s still a distant dream. Now a few upstart companies are trying to do it on the cheap. And the ideas are credible enough to attract serious private investment.

One such company is hidden away in a small business park in the suburbs of Vancouver, British Columbia. Nothing seems unusual here — there’s a food distributor, an engineering firm and small warehouses. But on one door there’s a sign suggesting that all is not normal.

NPR on General Fusion

This would be really cool if it pans out. FairlingtonBlade can explain the science behind magnetized target fusion better than I, but the basic idea that it’s kind of a hybrid between magnetic confinement (tokamak, ITER) and inertial confinement (laser, NIF) fusion. Heavy hydrogen is heated up to a plasma, injected into a spinning lead sphere (which creates a magnetic field to contain the plasma), then the sphere is compressed with a series of pneumatic pistons. This results, theoretically, in fusion and the production of large amounts of energy, heating up the lead, which is then piped out and used to produce steam. Electricity is then generated by a typical turbine system.

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FINOs

Posted on October 19, 2011 by Mike

I thought I’d share a post by Randy Barnett at Volokh, from which the title of this post derives its name, FINOs (federalists in name only). Senate Republicans have apparently attached S.197 to their jobs bill. The justification for S.197 includes this little nugget:

“EFFECT ON INTERSTATE COMMERCE- Congress finds that the health care and insurance industries are industries affecting interstate commerce and the health care liability litigation systems existing throughout the United States are activities that affect interstate commerce by contributing to the high costs of health care and premiums for health care liability insurance purchased by health care system providers.”

S.197

That health care and insurance affect interstate commerce, so that Congress can regulate them under the Commerce Clause, is one of the major pillars of the DoJ’s defense of PPACA. Not only that, but the Senate Rs are also saying that state courts where health care liability is litigated also affect interstate commerce and can be regulated by Congress under the Commerce Clause.

Here’s Prof. Barnett’s post
FINO Republicans

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In the weeds

Posted on October 17, 2011 by Mike

I heartily admit that I am not the equal of most of you when it comes to posting. While I enjoy the back-and-forth, I often get lost in the weeds. So, I’ve pulled out the income inequality argument from the Sun. night comments and am posting the following IMF study entitled “Equality and Efficiency.”

An excerpt:

Do societies inevitably face an invidious choice between efficient production and equitable wealth and income distribution? Are social justice and social product at war with one another?

In a word, no.

In recent work (Berg, Ostry, and Zettelmeyer, 2011; and Berg and Ostry, 2011), we discovered that when growth is looked at over the long term, the trade-off between efficiency and equality may not exist. In fact equality appears to be an important ingredient in promoting and sustaining growth. The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.

Inequality matters for growth and other macroeconomic outcomes, in all corners of the globe. One need look no further than the role inequality is thought to have played in creating the disaffection that underlies much of the recent unrest in the Middle East. And, taking a historical perspective, the increase in U.S. income inequality in recent decades is strikingly similar to the increase that occurred in the 1920s. In both cases there was a boom in the financial sector, poor people borrowed a lot, and a huge financial crisis ensued (see “Leveraging Inequality,” F&D, December 2010 and “Inequality = Indebted” in this issue of F&D). The recent global economic crisis, with its roots in U.S. financial markets, may have resulted, in part at least, from the increase in inequality. With inequality growing in the United States and other important economies, the relationship between inequality and growth takes on more significance.

Equality and Efficiency

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Common Sense

Posted on October 5, 2011 by Mike

After wading through the 14th A discussion between Scott, QB, and Mark, lms’ comment about common sense coincidentally reflected one of Prof. Volokh’s posts on VC. So, I thought I’d quote it here, not in response to lms, but just because of my own frustrations with the idea of “common sense.”

I’ve often seen people — usually on my side of the political aisle — praise “common sense,” and condemn those who make fancy arguments that defy common sense. Here’s an example, from a Reason column: 

So why do intelligent people consistently make such a hash of things? Because they are smart enough to talk themselves into anything. Ordinary mortals don’t engage in fancy mental gymnastics to reach conclusions that defy common sense. But intellectuals are particularly prone to this. 

I’ve always been skeptical of such praise of common sense, for two related reasons.
First, common sense often leads us to the wrong results. That’s especially evident in places where the rightness of the right result can be proven, such as mathematics, physics, astronomy, and so on. It often takes some pretty “fancy mental gymnastics” rather than “common sense” to solve problems in those fields. 

And it’s also true in more practical fields, such as economics. I suspect that to many people it’s common sense that if you want the store shelves to always be filled, you need to have someone centrally planning production or distribution; the “invisible hand” can easily be dismissed as “fancy mental gymnastics” by those whose common sense inclines them against that explanation. Likewise, it was probably common sense to many that alcohol kills lots of people, directly and indirectly, and therefore banning it might be good — and it’s still common sense to many that guns kill lots of people, directly and indirectly, and therefore banning them might be good. 

Second, even if your reaction to these matters is, “no, my common sense tells me that the free market is great, and this common sense is correct,” perhaps your common sense is in large measure molded by the “fancy mental gymnastics” of others — Adam Smith, Milton Friedman, and the like. And while your and my common sense may be well-tutored on these particular points, it’s likely that there are many other points, in the policy world and out of it, on which our common sense misleads us. 

Of course, this isn’t to say that common sense always leads us astray even in the policy world. 

Moreover, common sense may often be more helpful in day-to-day personal and business decisions — where we have been tutored by repeated exposure, and by having a strong personal incentive to get those decisions right — than it is with policy or scientific judgments in which we have little experience. And I’ll be the first to admit that intellectuals often get things wrong. But I’m not sure that extolling common sense, and condemning conclusions that defy common sense, is a good rule of thumb for dealing with complicated questions of science, economics, social policy, or foreign policy.-

The comments are somewhat entertaining: Comments

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