Wednesday, January 31, 2007

Doyle's Universal Coverage Plan: That's It?

I liked Governor Doyle's health care plan more before it was framed as a universal health care plan.

Before, I saw the plan as an important temporary step in the movement for universal coverage, and a step that made political sense since the Assembly is still held by the GOP. Striving to cover all Wisconsin children through BadgerCare Plus was a bare minimum reform that, in my view, was going to tide the state over until broader reforms were politically tenable.

But now that Doyle is touting his ideas as a universal coverage plan, I can't help but wonder: That's it?

To be sure, 98 percent coverage -- if accurate -- is a great number (**SEE LATE UPDATE**). No complaints there. But the way Doyle plans to get there, which is to essentially work through the existing mess of a system we have, is troubling.

For starters, the plan to expand Medicaid to cover workers up to 200 percent of the poverty level is just expanding a system that reimburses providers at horribly low rates and, subsequently, shifts the leftover cost of that care onto other payers in the system.

Plus, studies have shown that Medicaid patients often have almost as difficult of a time finding non-emergency health care as the uninsured, probably because providers don't want to deal with the low reimbursement rates. This is the sign of a broken system, not one that should be relied upon for universal coverage.

(Side-Note: I realize BadgerCare is a part of the Medicaid system and therefore contributes to the problem of low reimbursement rates, but the moral imperative of ensuring Wisconsin children have the health care they need now makes the admittedly temporary fix of expanding BadgerCare a worthwhile endeavor.)

And Doyle's plan also does little to nothing to deal with the other problem of our health care system: cost. While coverage should always be a concern, cost should not be forgotten (**SEE UPDATE**).

There is tremendous administrative waste in our current system, and aside from some enrollment efficiencies realized through BadgerCare Plus (again, a portion of the plan I support), there is nothing in Doyle's plan that would tackle the issue of overhead.

And increasing costs also bring about the issue of under-insurance, which is quickly becoming almost as significant of a problem as no insurance. As health care costs rise, employers are forced to shift more costs onto employees, which either encourages or forces people to take lower and lower levels of coverage. Then when ailments do arise, unpaid medical bills are the result. And unless people can scrounge up the money or put it on their credit cards (which, needless to say, causes other issues), that unpaid cost -- like the low Medicaid reimbursements -- also gets passed on to other payers in the system.

The fact is our current health care system is full of wicked cycles like that -- the cost of the uninsured is an important one, but it's still just one -- and the only way to address all of them is fundamental health care reform. In other words, the entire system needs to change.

But perhaps my biggest concern with Doyle's plan -- now that it's being framed as a universal health care plan -- is that it will become a political straw man for universal coverage in the state. And, if enacted, I'm afraid people will see that the broken health care system around them hasn't really changed, and they'll wonder about universal coverage, "This is it?"

UPDATE: Here's an interesting conversation taking place at the American Prospect website on what components are necessary for health care reform. In the section penned by Jonathan Cohn from The New Republic, a question arises over whether coverage and cost can be tackled simultaneously in any reform measure.

Cohn writes: "The political realist in me, however, says that trying to solve both the cost and access problems simultaneously is begging for trouble. (Just ask the architects of the Clinton health care plan.) In fact, the only way to enact universal health care may be to 'buy off' various interest groups with terms more favorable to them -- terms that inflate the price."

Interesting thought, but the political realist in me thinks that any reform that deals with coverage and not cost is set-up for failure from the start. It will fail on a policy level because as costs mount, the existing system will continue to deal with it by stripping more and more people of basic coverage levels, which, in turn, replaces the problem of the uninsured with the problem of the underinsured. And it will fail on a PR level because as costs mount, critics of reform will use those costs as evidence for why universal care is just too expensive -- even for the richest nation in the world.

LATE UPDATE: Wiggy makes a good point in the comments. Considering Wisconsin already has an insured rate of 95 percent (although the DHFS has estimated another 5 percent go without coverage for a portion of each year), the governor's plan amounts to about a 3 percent increase in the insurance rate. BadgerCare Plus would account for two of those points, and the Medicaid expansion would account for the third point.

Without a doubt, Doyle's plan is significant for the 174,000 who would get access to coverage under it, but when we talk about "universal coverage" in Wisconsin, the thing is we're already pretty close to it -- certainly closer than most states and the country as a whole (the national uninsured rate is about 16 percent).

In that sense, marginal reforms like those offered by the governor are really all that's needed to push us to the brink of covering every Wisconsinite.

But what I was trying to express in the post is that while the literal meaning of "universal coverage" is covering everyone, in many ways that phrase has become shorthand for fundamental health care reform, which Doyle's plan is not.

And Wisconsin, due to its high insured rate to start, just so happens to be in a unique position among states to make its reform truly fundamental by also aiming it at the issue of cost, specifically how its spiraling effect is driving more and more people into cases of underinsurance and backing an increasing number of employers -- public and private -- into a financial wall.

But if people are lulled into thinking Doyle's plan is the only reform that's needed, which is what may happen with its framing as "universal," then it may actually have the unintended effect of setting back truly fundamental reform.

Tuesday, January 30, 2007

How to Win an Argument with Another Progressive

This is just too good not to re-post.

It's from Chris Bowers of MyDD. He lays out six points to keep in mind when trying to win an argument with another progressive:
  • Someone disagrees with you only because of his or her demographic background. The only reason any progressive holds any position that different from yours is because s/he is one or more of the following: white, suburban, non-union, upper-middle class, from a different region of the country, heterosexual, homosexual, male, female, a Baby Boomer, not a Baby Boomer, secular, religious, or from a specific type of religious background. If you are in a disagreement with someone on a topic that somehow particularly affects any given demographic, simply argue that the reason that person is disagreeing with you because s/he hails from the demographic group viewed as the oppressor when it comes to that given issue. When making this sort of argument, it is particularly helpful to point out that you are a member of the oppressed demographic. Of course, since you probably aren't a member of that demographic group, it is almost as good to point out that all of your friends from that demographic group agree with you. This tactic can also work against entire organizations if the membership of an organizations is not properly diverse.
  • Someone is only a progressive if they focus on the same issues as you. You may have noticed that not every so-called "progressive" focuses their work on the same topics as you. The reason is, of course, that those so-called "progressives" with different areas of focus are not really progressives at all! How could a progressive not focus all of their attention on the same issue you focus you attention on? They can't. Make sure you open up any discussion on your pet issue by pointing out that not enough so-called "progressives" are focusing on that issue, because that will help squelch any dissent from the start. After all, progressives want to be progressives, and will do their darndest to make sure that your issue, no matter what it may be, is not ignored. This has the added benefit of getting your diary onto the recommended list at Dailykos. It can even come in handy when you find yourself out of your depth in a discussion outside your topic area. Instead of caving, just say that the person who disagrees with is wrong for even focusing on that issue at the expense of yours in the first place.
  • What would Ghandi do? If you happen to be in the unfortunate position where your given position is considered "fringe" by the majority of progressives, always close and open any discussion on that position with Ghandi's saying "first they ignore you, then they laugh at you, then they fight you, then you win." Since Ghandi is the progressive Jesus, this tactic will work about as well among progressives as quoting Bible verses works among conservatives. You pull out a Ghandi quote, and you skip straight to stage four in any argument. Also, while this particular phrase is most effective when you are being ignored and / or laughed at, no matter what stage in Ghandi's progression you are actually in, claim that you are already at stage number three. After all, if you are in an argument, then someone is disagreeing with you, and thus in a sense fighting you. It really is the same thing as British troops throwing you in jail for a decade after beating the hell out of you for a non-violent protest.
  • Since when are they so perfect? Remember, you are not arguing with Martin Luther King or a participant in the Orange Revolution. More importantly, make sure remind whoever you are arguing with that s/he isn't Martin Luther King, or a participant in the Orange Revolution. His or her failure to be Martin Luther King and / or a participant in the Orange Revolution immediately takes them down a peg or two, and discredits what s/he has to say. After all, if someone wasn't one of the leaders of the civil rights movement, or if someone failed to overturn the results of a fraudulent Eastern European election, what business does that person have suggesting courses of action to other progressives? This argument is greatly enhanced if you can point out that you were at some watershed progressive moment, such as the 1968 Chicago protests of the DNC. Of course, participating in such an event makes you such an authority on all things progressive, that it helps to state you were in attendance, even if it isn't true.
  • You've got cred, man. This is similar to the previous tactic, but better used in a more specific circumstance. Remember that you were the top volunteer for a local campaign for a disappointing Democrat in your area, even if you only went out canvassing only once. Hell, you were beyond a volunteer--you were a staffer, maybe even the campaign manager! Remember that you donated to every campaign and every blog fundraiser, ever. You were at every rally, ever. You had every prediction right, ever. You have been there and done that, no matter where "there" is and what "that" may happen to be. There isn't a single, specific situation to which your endless activism does not apply. Remember that the person you are talking with isn't nearly as active as you are on that specific issue, and did not have as much foresight as you did. You earned your cynicism and / or the right to be an asshole--they didn't. Make sure you point out both of these things to that person.
  • You are too good for them anyway. If all else fails, just remember that whoever disagrees with you is either a corporate, DLC-lackey or a self-destructive, know-nothing McGovernick. You can end any argument in this fashion and still win it, because in the end you know that their tactics will lead to failure. Hell, not only will it fail, the person who disagrees with you is probably getting bought off by Rove, or some corporation. That is the only possible explanation for disagreeing with someone like you, who is made up of pure light. Except, perhaps, that you are arguing with a rank amateur who doesn't have the proper historical context to understand why liberals must be quiet at all times, lest conservatives dominate the country is even greater numbers. Some people are too naïve to know what is for their own good.
I like the first two and the last one the most (perhaps because they remind me of a comment conversation I just had on this blog).

Which is/are your favorite?

Bowers also offers a great intro and conclusion to the list, so be sure to check out the entire post if you have the time.

Subsidizing Subsidized Child Care

A key component for getting lower income people into employment is subsidized child care. If there isn't anyone to watch the kids, there isn't any way to go to work.

In other words, state subsidized child care is a deal breaker for welfare reform, particularly for single parent households. And out of the 34,000 families that benefit from the Wisconsin Shares program today, over 90 percent are single parent.

That's why news that funding for the Wisconsin Shares program will be severely cut in the upcoming '07-'09 budget is so alarming.

Rep. Tamara Grigsby (D-Milwaukee) expressed some shock that the upcoming deficit in the Wisconsin Shares program wasn't known in advance. "How did we get to this type of deficit overnight?" she asked.

The easy answer is we didn't -- it's been brewing for much of the past decade.

DWD Secretary Roberta Gassman notes that the deficit is tied to stagnate federal funding. While true, that doesn't tell the whole story, which begins in 1996 when the federal government dramatically altered the funding it gives states for welfare programs by passing the Personal Responsibility and Work Opportunity Act. This act created the program known as TANF, or Temporary Assistance for Needy Families, which provides highly flexible grant funding to states to use for welfare programs.

The following year, 1997, Wisconsin created Wisconsin Shares along with the Wisconsin Works (W-2) program. As Jon Peacock -- research director for the Wisconsin Council on Children & Families (WCCF) -- outlines in an August 2006 paper for a Brookings Institute seminar, the state greatly overestimated the number of enrollees in Wisconsin Shares for the initial years of the program.

This overestimation, among some other things, resulted in a huge surplus in TANF funding by the end of the 1999 fiscal year, to the tune of about $130 million. With the surplus in hand heading into the '99-'01 budget, Governor Thompson and the legislature decided to expand Wisconsin Shares eligibility, lower co-pays for the program, and initiate new programs and services related to W-2.

But here's the real kicker: In addition to using the TANF surplus to fund an expansion of W-2, the state also began at this time to rely more and more heavily on TANF to fund the Wisconsin Shares program as a whole (along with the state's Earned Income Tax Credit), thereby freeing up state GPR money to fund the tax cuts that were enacted in the '99-'01 budget.

Here's how that worked: The state could've received funding for Wisconsin Shares through federal Child Care Development Block Grant (CCDBG) funds, but participation in that program required a state match of 40 percent. In other words, the feds would put up $44 million to cover the costs of the program if the state put up the other $31 million. Rather than take advantage of this offer, though, the state opted in 1999 to pass on the $44 million in CCDBG funds, use the $31 million in GPR funds for other purposes (like tax cuts), and then apply $75 million in TANF funding to cover the Wisconsin Shares program.

Once the TANF surplus was quickly spent down by the end of the '99-'01 budget, Peacock notes that the state began to cut back on the new W-2 programs just as quickly. But a reliance on TANF funding for the Wisconsin Shares program has continued (although Governor Doyle restored about $6 million per year in GPR funding to W-2 as a whole in the '05-'07 budget). According to Peacock, "Child care accounted for 43.9 percent of TANF spending in FY 2004, compared with just 13.9 percent in FY 1998."

And the thing about relying on TANF funding for the Wisconsin Shares program and other W-2 initiatives is this -- it's a flat funding source. In fact, since its inception in 1997, it hasn't even increased with inflation. The total federal funding for TANF was $16.5 billion in FY 1997, and it's $16.5 billion in FY 2007.

Unfortunately, Wisconsin Shares enrollment is not flat and child care costs are not immune to inflation. Back in January 2000, when the state was digging into that huge TANF surplus, just under 18,000 families participated in Wisconsin Shares statewide; as of December 2006, long after the surplus was squandered, that number had increased 78 percent to over 32,000 families statewide.

So, in essence, it was the funding decisions that the state made in the late 1990s -- and failed to reverse in more recent years -- combined with increasing Wisconsin Shares enrollment that sewed the situation the state is facing today.

Sure, flat TANF funding contributed to the problem, but it's not like the state was expecting any increases from the feds -- to be sure, TANF funding hasn't ever increased.

This issue now becomes of matter of prioritization for the governor and the state legislature. And considering how essential it is for working families, particularly single parent, the priority placed on it should be high.

And along with a high budget priority level, Wisconsin Shares deserves to be funded primarily by money that's directly controlled by the state, not at the mercy of eroding federal dollars.

UPDATE: Scott Walker and I agree on something!

Monday, January 29, 2007

It's that Time of Year...

Friday, January 26, 2007

The Electronic Medical Records Grant Initiative

Governor Doyle is pushing for the creation of $30 million in grants to increase the use of electronic medical records (EMRs) at medical providers who do business with the state.

The biggest promise of EMRs is that they help reduce medical errors and increase administrative efficiency in the long run.

Rep. Leah Vukmir -- who chairs the Assembly Committee on Health and Health Care Reform -- supports the move, which is a big sign that it could become a reality in the upcoming budget.

There are, however, some noted issues with EMRs that deserve some attention before moving forward with the proposed grant initiative.

First is the issue of cost, particularly for smaller firms. A study in the most recent issue of Health Affairs demonstrated that community health clinics -- which provide service to low income people who are often on Medicaid -- can experience some notable quality improvement from the implementation of EMRs; however, in financial terms, five out of the six clinics studied lost money on the investment.

Hopefully the grant money helps with this, and hopefully it helps the right providers with implementation -- that is, the ones who truly can't afford it and not the ones who are large enough to not really need the assistance.

A second issue is a little more concerning, although less defined, than the first. According to a recent op-ed by Dr. Michael Wilkes, a professor of medicine at the University of California - Davis, EMRs can have "a potential for electronic forgery and dishonesty that allows for increased billing, and quick note production, but may do nothing to improve patient care. In fact, it may hinder care and could lead to major problems."

Strong words, but if what he lays out in his column is the reality for EMRs, then it's deserving.

According to Wilkes, with at least some EMRs, doctors merely enter a standard electronic template into a patient's record when they come into the office. This template, which is linked to the general type of ailment the patient has, then automatically enters into the record everything a doctor would do during an exam of that kind.

The problem is, Wilkes notes, "by inserting such a note in the EMR, a reader like me assumes that all these pieces of the exam were actually done (an exam of the neurological system, a full skin exam, asking about drug use, etc.). In fact, they were not done. Nor should they have been done for a person who came to the doctor for a twisted knee."

This is just a single op-ed on the topic, which shouldn't lead anyone to think this is the way all EMRs work or need to work. But it is concerning, and any state grants for EMRs should include a thorough review of exactly how the EMRs being purchased work.

While EMRs will surely reduce medical error and improve administrative efficiency over time, electronic recording shouldn't mean automated exams, nor should they open the door for providers -- who just may feel cheated by low Medicaid reimbursement rates -- to bill for what was never done.

Thursday, January 25, 2007

Debating the Cigarette Tax

I'm not completely sure where I stand on Governor Doyle's proposal to increase the cigarette tax by $1.25 per pack. While I'm inclined to support it, how I ultimately feel is dependent upon the arguments that can be made for and against it.

And the argument that carries virtually no sway with me is the one that says, "It's someone's personal choice to smoke, so why should there be a tax that targets them?"

Crack addicts could, and probably do, argue the same thing about drug laws -- they're just doing it to themselves, so why should the state hassle them?

But, the fact is, we make decisions as a society based on what makes the most sense for the public as a whole. It's been determined -- and rightfully so -- that crack is detrimental enough to society to warrant outlawing it. And smoking, it's been pretty well documented, is an endeavor that has significant public costs (even for those who don't choose to smoke themselves) that don't necessarily warrant outlawing it, but do open the door for regulation.

So the real arguments that hold sway with me -- and should, in my view, with our lawmakers -- are the ones that focus on the actual documented cost of smoking to the state.

How much is being spent each year to treat smoke-related illnesses and complications? Does the current tax on tobacco adequately cover all of those costs? Would an additional tax significantly improve the health of the state and, subsequently, lower health care costs?

If you look at the numbers by the Campaign for Tobacco-Free Kids, a $1.25 per pack increase in the cigarette tax makes a whole lot of fiscal sense.

According to the group, smoking directly adds $2.02 billion to the state health care tab each year, and that doesn't even include costs associated with exposure to secondhand smoke, smoke-related fires, or the costs of other forms of tobacco (chew, cigars, pipes, etc.).

But perhaps even more directly related to the discussion of a cigarette tax increase -- because I'm sure the tobacco lobby would gladly contest those cost numbers -- is how much the state itself actually spends on explicitly tobacco-related afflictions each year. And that number, for the Medicaid program alone, was $422 million in 2003, while more recent estimates put the figure at $480 million.

So let's do the math. The state is directly spending $450 million (splitting the difference of the two estimates) of its already shorthanded Medicaid dollars to treat tobacco-related complications. A $1.25 cigarette tax increase would bring in an estimated $250 million per year, which would free up over half of the Medicaid money now spent on tobacco-related treatments, money that could be used for other health care needs (such as reducing the "hidden health care tax" hospitals are forced to pass on to the rest of us because of low Medicaid reimbursement rates).

On the other hand, there are legitimate concerns about the cigarette tax. For instance, I share a concern with some on the right about whether the revenue from a cigarette tax would be truly used to off-set the state expenditures for tobacco-related ailments, particularly in the long run. In other words, is the segregated fund that's supposed to be created going to remain truly segregated? Is there a way to legally ensure that the increased revenue is used for its orginally intended purpose now and in the future?

In the end, it's these types of arguments that should carry the day at the Capital this spring on the question of the cigarette tax, not merely rhetoric about personal freedom and choice, because what smoking means for the state as a whole doesn't stop at the personal decision to reach for a light.

UPDATE: It appears an identical cigarette tax debate is brewing in Maryland.

Wednesday, January 24, 2007

A Free Marketer Takes on Fundamental Health Care Reform

Economist Arnold Kling recently published a book through the Cato Institute titled Crisis of Abundance: Rethinking How We Pay for Health Care in which he lays out a reform plan for health care that fits nicely within free market principles (hence, its publication by the Cato Institute).

And, unlike many of the GOP proposals offered up, thus far, Kling’s solution doesn’t merely tinker around the edges of the current system – this is fundamental reform.

Kling laid out the basics of his plan in a recent article published at the website "Cato Unbound."

For Kling, the main problem is that we don’t currently have insurance in this country when it comes to health care, but rather what he calls “insulation.” Since consumers don’t directly pay for care at the point of service, Kling argues, they’re insulated from costs and, subsequently, making smart market decisions about what care is needed and what is not.

Kling says that this inability to distinguish between necessary and unnecessary care results in the consumption of what he calls “premium medicine.” He writes: “The only reliable way to slow the growth of health care spending is to slow the rate of increase in consumption of premium medicine.”

Kling – who, like most academics, loves to coin terms – says the solution to the dual problem of insulation and premium medicine consumption is to move toward what he calls “real insurance.” Real insurance, in Kling’s view, is essentially a high deductible health plan (HDHP), but one that reimburses consumers every five years based on cumulative health care expenses in that time.

Kling gives the following example to demonstrate how the plan might work:

For example, if I buy a policy in January of 2007 and my expenses from 2007 to 2011 total $35,000, I would be reimbursed for $5000. The policy that I buy in January of 2008 would reimburse me based on expenses that I incur from 2008 to 2012, so that if my expenses for that period were $33,000, then I would be reimbursed for $3000.

Kling doesn’t get into where the $30,000 figure comes from, perhaps that’s in his book, nor does he say whether this is for single coverage or for an entire family. These are, of course, important details that would need to be spelled out before comparing the plan – or something like it – to the universal plans out there that provide the more traditional comprehensive coverage on an annual basis.

Another important detail that needs to be worked out is what to do about the poor and the chronically ill. For these populations, Kling proposes government subsidies to pay for the care of those who can’t afford it themselves and to fund catastrophic care accounts for those whose medical bills pass a certain threshold each year (he posits the figure of $50,000).

But, aside from the shockingly high price ceiling (could you imagine paying $50K, or even close to it, each year in order to survive?), a potential problem with Kling’s proposal for the chronically ill relates to his plan as a whole.

To explain, Kling’s main idea is that many people will opt out of health insurance altogether under his system because they figure, if they’re paying the first $30,000 of their care over a five year period with insurance, anyway, why not just roll the dice that expenses won’t actually be that high and thereby avoid paying the small monthly premiums that would need to fund the policy?

This, in Kling’s eyes, is a good thing because those people won’t be stuck paying health insurance when they really don’t want it or need it. And, insomuch as those people are concerned, it is a good thing.

But the trouble is that those who are left in the system, the unhealthy and less healthy, pay the price when the healthy leave. That is, by centralizing the risk on the unhealthy and less healthy, insurance companies would need to set high policy costs in order to turn a profit – in fact, it may be pointless to even have the coverage at all considering the premium cost for participants, in addition to the high deductibles they'd be paying under Kling's formula.

(Side-Note: Encouraging the healthy to leave the insurance pool is essentially the same complaint I have with Bush's standard deduction proposal.)

The idea behind keeping the healthy and the sick in the same insurance pool is that it distributes the risk and, subsequently, lowers the policy cost. But without mandating coverage, something no self-respecting free marketer would support, there is no way to ensure that this distribution takes place in Kling's model.

Some may argue that it isn’t fair that the healthy should need to get insurance to help the unhealthy pay their bills. But, the fact is, everyone is still paying those a large portion of those bills under Kling’s arrangement through the publicly funded catastrophic care accounts.

And I imagine no one is about to suggest the chronically ill foot the entire bill on their own, without government help, considering that any one of us (or our dependents) could very quickly go from healthy to chronically ill through absolutely no fault of our (or their) own.

Of course, if it turns out centralizing all of the seriously ill into a publicly-funded catostrophic care pool is notably cheaper than distributing the risk in a larger pool that includes the healthy, then maybe Kling's on to something. Until we get some numbers to show it, including a reasonable ceiling for when the catastropic care would kick in ($50K per year sounds pretty high), color me skeptical.

But beyond all that, I have other concerns with Kling’s plan regarding the ability of consumers to make wise decisions with their health care choices. Kling tries to downplay these concerns by claiming consumers could make good choices if they were simply given good information.

The trouble with this claim is that – in addition to the studies that question the correlation between quality care ratings and actual quality care – it assumes consumers have the ability to make good choices even with good information. While that may be true with preventative care, the same isn’t necessarily true for emergency treatments or other care that requires quick attention.

Plus, preventative care has the added bonus of being able to be delivered through small clinics that are often located relatively close to each other geographically. The same isn’t true for hospitals, which demand a high amount of capital to put up and keep up. In Milwaukee County, for instance, there are only four main systems for adult hospital care (Aurora, Wheaton Franciscan, Froedtert, and Columbia St. Mary’s) and just one for pediatric hospital care (Children’s Hospital).

In short, the consumers in Milwaukee County, like most places, don’t have all that much choice when it comes to hospital care (and rural areas have even less choice).

Other issues also arise from making consumers fully responsible financially for the care they receive, such as the extreme difficulty in accurately projecting in advance what a procedure is going to cost and the fact that consumers may be convinced to avoid preventative care if they are forced to pay for it all out of pocket – “I feel fine, why should I pay to go to the doctor?” – which eventually puts more weight on the health care system as a whole as small ailments turn into large ones after going untreated in the early stages.

Nevertheless, in spite of my mounting objections to Kling’s plan, at least he’s put one out there that does more than just tinker with our existing health care system. It would be nice to see a Republican, perhaps one from our state Assembly or Senate, put Kling’s plan – or something like it – into an actual bill specifically designed for Wisconsin so that it could be compared to the other universal coverage plans already before the state legislature.

The more plans for fundamental reform the merrier. And it also helps to get everyone talking about what should be done, rather than just what shouldn’t be done.


Side-Note: In addition to Kling's essay, Cato Unbound also published reaction pieces by Matthew Holt, Jonathan Cohn, and Clark Havighurst, along with a virtual conversation between all four. Holt and Cohn are on the opposite side of the fence as Kling, while Havighurst is on the same side. It's all well worth the read.

Tuesday, January 23, 2007

State of the Domestic Union

I haven't watched the State of the Union address in about five years. Too much applause. And it's not that I don't like to see the president receive applause, it's that all the cheering makes what should be a 15-20 minute speech ridiculously long.

So, rather than watch, I'll just read it tomorrow. But, really, with the advent of planned leaks, much of address is already known.

For instance, we already know that Bush will focus on domestic issues. (Gee, I wonder why?)

Part of the domestic agenda is supposed to be an acknowledgement that global warming exists and that humans have contributed to it. Word is that Bush won't actually take concrete steps to directly limit greenhouse gas emissions, but he will offer support for technologies that allow the market to take us in that direction.

As half-assed as I think this approach is, it is a big step for an administration that just last year was caught doctoring global warming reports to make their conclusions appear ambiguous.

But the admission is timed well. Reports are that a massive global warming study is set to be released in four parts in the coming months. The first segment, which spans 1,600 pages, was written by more than 600 scientists and reviewed by another 600 experts.

And, according to top US climate scientist Jerry Mahlman, who was one of the expert reviewers, when it comes to proving human-caused global warming, "The smoking gun is definitely lying on the table as we speak."

Also on tap for tonight's domestic address is health care tinkering. Bush plans to announce an alteration of the tax code so that some without health care will get tax breaks to help pay for coverage, while others who currently have insurance will see a tax increase to help the first group pay for their coverage.

Here are the details: Family coverage will start to be taxed after $15,000 per year and single coverage will start to be taxed after $7,500 per year. The revenue generated from this taxation will help fund the same tax break for people who purchase insurance on their own.

The proposal is sure to bring a lot of heat for Bush, who in the past has promised not to increase taxes, but I happen to agree, in part, with Ezra Klein on the proposal. Klein has written that "so far as incrementalism goes, this is supportable." [SEE UPDATE BELOW.]

After all, the president's plan essentially creates an even playing field for those who have coverage and those who don't when it comes to purchasing health coverage. I don't see anything wrong with that, although I do see some issues with thinking a tax break is enough to make coverage affordable for the majority of the 47 million uninsured, along with attempting to provide coverage for the uninsured by encouraging the insured to reduce their coverage (or pay more).

Plus, it's still just a band aid approach -- small and temporary, not significant and long term. Senator Ron Wyden -- who made a truly fundamental health care reform proposal in December -- nailed it when he said, "The [health care] market is broken. Private insurance companies cherry-pick. They’re trying to take just healthy people and send fragile people over to government programs more fragile than they are, and I’m not sure what this does to fix the broken market."

So there's global warming and health care on tap tonight, and rumor has it that immigration and energy policy will also be included.

But no State of the Union would be complete without the wild card issue. Past addresses have included a mission to Mars (actually a serious proposal) and Laura Bush heading an anti-gang task force (pure comedic gold). I'm on the edge of my seat waiting to hear what it'll be this year.

UPDATE: Ezra Klein pulls back his tentative support for the president's health care proposal: "What the early reports either didn't make clear or didn't know was that the plan's changes to health care deductibility don't set limits, they're creating, instead, a standard deduction of $7,500 for individuals and $15,000 for families."

A standard deduction? Is the White House kidding? So not only would this plan encourage those whose health care expenses exceed $15,000/$7,500 to reduce coverage, it would effectively encourage everyone to get as below those amounts as possible since they could apply the difference as an additional deduction on their income taxes.

As Klein writes, "The intent here is clear: To incentivize the purchase of low-quality, high-deductible care, particularly among the healthy, young, and/or rich. To degrade the risk pool, and encourage HSAs. To reduce coverage, costs, and health security."

If the standard deduction speculation is true, this proposal is nothing more than par for the course from this White House. Before it was just overly-optimistic tinkering; now it's actively-destructive tinkering.

Thankfully, as Klein notes, it's tinkering that doesn't stand a chance at passing the Congress.

We Need Aurora More Than It Needs Any of Us

The profile of outgoing Aurora Health Care chief Ed Howe in Sunday's Journal Sentinel contained this interesting section (emphasis mine):

But even critics would have to acknowledge that many of the small hospitals that became part of the Aurora system are stronger today than they would have been as independent hospitals.

The benefits and economies of scale that come with being part of a large health care system range from additional leverage when negotiating contracts with health plans to being able to hire experts in health care quality.
What this means, of course, is that Aurora has been able to push its weight around not only with its competitors, but also its patients -- that is, the people who are a part of those health plans.

This all harks back to a line spoken by an Aurora representative to the insurance group WPS last year. As the Aurora rep told WPS: "You need us more than we need you."

Aurora has an all-or-nothing approach to negotiations with health plans. In other words, the health insurer either includes all Aurora hospitals and clinics in its plan, or it gets none of them.

And since Aurora is the largest health provider in the state, it's nearly impossible for many health plans to choose nothing. This, in turn, drives health care costs up.

Of course, this is just the free market at work. Assuming it can weather the anti-trust lawsuit WPS recently filed against it, Aurora will continue to be free to negotiate as it sees fit.

And here's the real kicker: Aurora's right, we do need them more than they need any of us.

At least, that is, as long as we're disbursed in fragmented health plans while Aurora continues to gobble up more of the health care provider space in the market. But Aurora would quickly find itself on an even playing field with us in negotiations if we were all pooled into fewer or, better yet, a single health plan. Then they would need us at least as much as we need them.

But that doesn't seem likely to happen, at least anytime soon. That's also just the free market at work -- it's just not working for me and you.

Monday, January 22, 2007

The Voucher Program Funding IS Flawed

An article appearing in Saturday's Journal Sentinel on the funding of the school voucher program troubled me a bit. And I'm not even a City of Milwaukee resident.

To refresh everyone's memory, when Governor Doyle and GOP legislative leaders agreed on an expansion of the Milwaukee school voucher program last year, both sides promised to address how the system is funded in the upcoming '07-'09 budget.

In the article from a couple of days ago, Doyle said that he intends to keep his promise to address the funding flaw, but he didn't promise to alleviate concerns entirely. We don't get the details on exactly what that means, although the specifics will be rolled out in the next few weeks with the governor's budget recommendations.

But what's particularly concerning is this statement from Doyle: "The so-called funding flaw, to other people in the state, is not a funding flaw at all, but it is a belief that other parts of the state should not be picking up the costs of the voucher program."

This is a fairly common outstate complaint: Why should we pay more because Milwaukee can't get its act together?

And while it's a complaint that may apply in some instances, the voucher program is not one of them. To put it bluntly, the funding for the program is flawed.

To explain, it comes down to the fact that the state pays about 79 percent of the cost to educate an MPS student while only covering 55 percent of the cost of educating a voucher student. So who picks up the rest of the tab? City of Milwaukee residents, who pay $1,816 per MPS student while forking over $2,858 per voucher student.

At this point, a reasonable person could still argue that this set-up is fair because it simply means Milwaukee residents are paying more for a benefit that only they can access.

But the flaw doesn't stop there.

According to a Legislative Fiscal Bureau review, if the voucher program was eliminated last spring rather than expanded, the annual property tax levy would have decreased by $25.6 million in Milwaukee while increasing in other districts by a combined $121.4 million.

In other words, as it's currently set-up, the voucher program is a money-maker for every district in the state except Milwaukee.

How fair does that sound?

To rectify the flaw, Milwaukee Mayor Tom Barrett came forward with a very modest proposal last spring. His plan was to
take 1/3 of the savings that the state gets from having students attend voucher schools, which comes out to about $1000 per student (i.e., the extra amount Milwaukee pays for each voucher student), and use it to even out the score for Milwaukee taxpayers. The state would still get to keep 2/3 of the savings, or $2000 per voucher student, it gets from the voucher program to put in its coffers.

(Side-Note: Jay has provided a great explanation of why the voucher schools are cheaper for the state than the public schools, and it's nothing to celebrate.)

As if that wasn't fair enough, Barrett's proposal only included the voucher students who would be part of the expansion. In other words, Milwaukee, under Barrett's plan, would have continued to pay about $1,042 extra for the 14,571 FTE students who were in the voucher program at the time, which would've continued an annual tab of $15.3 million for the city.

But the governor and GOP legislative leaders left that more-than-reasonable plan on the table last year.

And, again, it's not clear what Doyle means when he says his budget proposal won't fix the funding flaw entirely -- is he using Barrett's modest proposal as a benchmark or the flaw itself? If the fix comes up short of even Barrett's plan, I don't see how it could be considered a true fix at all.

But, however the details shake out, any talk of a "so-called funding flaw" should be dropped. The voucher program funding is flawed. And any discussion moving forward needs to focus on what to do about it.

Friday, January 19, 2007

Wisconsin Makes the Honor Roll!

Take that, WMC!

Countering the right-wing claims about how bad Wisconsin is for business, the (truly) nonpartisan Corporation for Enterprise Development (CFED) recently ranked Wisconsin as one of the top states in the country for performance, business vitality, and development capacity.

The differences between the business rankings by the CFED and the business rankings by the Tax Foundation, a favorite of conservatives, couldn't be starker.

While Wisconsin is ranked 38th in the country in the Tax Foundation rankings, it's ranked 7th for performance, 18th for business vitality, and 16th for development capacity in the CFED rankings. While Wyoming is ranked 1st in the Tax Foundation rankings, it's ranked 15th/45th/25th in the CFED rankings. While Alaska is ranked 3rd in the Tax Foundation rankings, it's ranked 42nd/48th/43rd in the CFED rankings.

You get the idea.

So why the big differences?

The easy answer, of course, is methodology. The Tax Foundation, predictably, focuses solely on taxes. The CFED rankings, on the other hand, take into account a number of factors such as average annual pay growth and greenhouse gas emmisions on the performance side, manufacturing investment and start-up business job creation on the business vitality side, and energy costs and patents issued on the development capacity side.

In other words, while the Tax Foundation looks at one factor and makes assumptions (or, more accurately, others make assumptions) about how that impacts business performance, the CFED rankings rate how businesses are actually performing in the states and how they are poised to perform in the future.

To be sure, if the Tax Foundation rankings were simply used for what they are -- a tax ranking -- that would be fine. Who can fault them for doing what they set out to do?

But that's not the only way the Tax Foundation rankings -- and others like it that focus solely on taxes -- are used. Instead, these rankings are used as rhetorical ammunition to help craft public policy.

"High taxes are driving businesses out of the state!" went the common charge during the (second) TABOR drive last spring. While TABOR failed miserably (twice, I might add), it's bound to be back at some point. And, in the meantime, corporate lobby groups like WMC will continue to use business tax rankings to push special interest policies under the threat that businesses won't be able to survive in the state without them.

What's most unfortunate is that these tactics derail public policy from focusing on initiatives that would really help business in the state such as comprehensive health care reform and putting state resources into creating more university spinoff companies.

The latter, it just so happens, is one of the areas that the CFED study found Wisconsin could use significant improvement. And it's not that the opportunities for improvement aren't ripe for the picking in Wisconsin -- they are.

For Madison, improvement means opening the gates on stem cell research. For Milwaukee, improvement means committing funds to Chancellor Santiago's research initiative. For Stevens Point, improvement means putting resources into promising research on developing and manufacturing alternative energies from renewable resources like wood chips.

Indeed, when the Journal Sentinel covered a study that exposed the growing economic disparities between Madison and Milwaukee, just about everyone agreed -- including a researcher from the Wisconsin Taxpayer Alliance, which published the study -- that what helps Madison get a big leg up economically is the UW.

The same could be true throughout the state. After all, Wisconsin has one of the most highly rated public university systems in the country. There's absolutely no reason the state should rank so low in university spinoffs; but, the fact remains, the UW hasn't received a lot of fiscal love from the state legislature in recent years (I even heard GOP legislator Alberta Darling say that very thing recently).

Now, if this post turns out like others like it, at least one anonymous commenter will read this section and claim that I'm advocating a tax increase. That's not true. What I'm talking about here is prioritization.

Heading into the '07-'09 budget process, for instance, the state will be dealing with accounting for millions of dollars in new tax breaks that were promised in the last legislative session. And most of these tax breaks are not the kind that will help you and me, but rather the kind that the Recess Supervisor astutely called "
boutique tax credits and exemptions" in a recent post. In other words, they're special interest handouts.

Perhaps this upcoming budget cycle is shot because of these promises that already have been made. But when it's all said and done, and the regular business of the legislature kicks into gear, the special interests will again come with their hands out for more.

And, when that happens, let's hope our elected officials are looking at the most appropriate studies in terms of our state's business needs.

UPDATE: The WMC line, from WisBusiness: " 'But this sounds like it is weighted more toward quality of life factors rather than hard economics,' [a WMC spokesperson] said, noting that the WMC will continue to push for lower taxes as well as regulatory and liability reform."

Sorry, WMC. These measures include quality of life factors and hard economics; and, if anything, it's weighted toward the latter, regardless of how good news "sounds" to your organization.

LATE UPDATE: Sen. Mary Lazich (R-New Berlin) peddles the latest Tax Foundation rankings for 2007.

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Wednesday, January 17, 2007

Barack Obama: The Question of Experience

Now that Barack Obama has officially entered the presidential fray and Hillary Clinton is set to do the same in the next few weeks, the top tier of the Dem nomination race is set between those two and John Edwards.

Sure, others like Wesley Clark could shake up things a bit, but barring the entry of Al Gore, the race is essentially between Obama, Clinton, and Edwards.

Regarding Obama, the big downside that everyone points to is his lack of experience. I know this has been said before, but it's worth saying again: How exactly does Obama's prior experience make him any less capable of being president than the person who current resides in the White House?

Prior to being president, Bush had six years as Texas governor, but that's it. Before that he was a businessman who owed his entire career to his family's vast wealth and connections.

Prior to entering the US Senate, in which he'll have clocked 4 years by the time the general election rolls around in 2008, Obama served in the Illinois state Senate for 8 years. And before that he worked as a civil rights attorney after graduating from Harvard Law School where he served as the first African American president of the distinguished Harvard Law Review.

However, if there's one legitimate gripe about Obama's experience, it's not his lack of political or policy experience, but his lack of electoral experience.

Bush was around the electoral block prior to his "win" in 2000. He worked on his dad's presidential campaigns in 1988 and 1992, and he also fought and won a tough (and very dirty) election against incumbent Texas governor Ann Richards in 1994.

Obama, on the other hand, was the landslide winner over Republican joke candidate Alan Keyes in 2004 after the original GOP candidate Jack Ryan dropped out amid embarrassing sexual allegations by his ex-wife, actress Jeri Ryan.

Obama did have a bit of a challenge to get the Democratic nomination for US Senate in 2004, but a tough state primary is nothing compared to a national race for president. Edwards has been through it all once before, and Clinton -- while never in a national race herself -- witnessed what it takes firsthand with Bill and essentially has served as a national candidate in terms of exposure since announcing her first US Senate run in 2000.

What Obama has going in his favor, at least according to the inside-the-beltway blog "The Fix," is that he's surrounded himself with top-notch talent heading into this race. A strong team behind the scenes will certainly help Obama navigate the dirty waters of a presidential run.

It's clear Obama generates much of his political support through his outward charisma and composure. Aside from Bill Richardson and, to a lesser extent, Edwards, no one in the Democratic field can touch Obama on these facets.

However, the doubled-edged sword to building support on charisma and composure is that you need to maintain them at a high level in order to stay competitive. And in a very long -- the general is still over 20 months away -- and highly public campaign for president, that's a hefty challenge to say the least.

Tuesday, January 16, 2007

New "Health Care Reading" Feature

By all accounts, health care reform is ramping up across the country.

Here in Wisconsin, there are a number of comprehensive reform measures before the state legislature. While the governor and others do not expect comprehensive reform to be enacted in the next couple of years, and are opting instead for smaller reforms first, at the very least the templates exist and there’s no denying reform is in the air.

The same is true on the national level, which most experts have claimed is far too vast to experience any fundamental reform in the coming years. In spite of these claims, however, a number of eye-opening coalitions are popping up – coalitions that were unthinkable the last time comprehensive health care reform was discussed at the national level a little over a decade ago.

For instance, the LA Times is reporting this morning that a coalition of business and labor groups are set to announce a joint plan for comprehensive reform later today, and on Thursday another improbable coalition involving the insurance industry, health care providers, and lefty activist groups will do the same.

To understand the significance of these coalitions only requires a glimpse at how diametrically opposed these very groups were back in the mid-1990s on the issue of health care reform.

To help bring the mindset change home, here’s Karen Ignagni of the health insurance industry lobby group, AHIP: “The health insurance problem has been with us for decades. With all these different efforts, you are seeing a consensus emerge that the time for action is now.”

Yes, that’s really a representative of the insurance lobby talking there.

Granted, calls for universal care from the insurance industry are as much an attempt to save their own hides as anything (if reform comes in the form of single payer, albeit a highly unlikely scenario, much or all of the insurance industry will find itself essentially unemployed).

But the fact that insurance industry is teaming with health care reform advocacy groups gives the appearance that they’re actually serious about not just saving themselves with half-hearted proposals – such as the one AHIP churned out in November – but also truly solving “the health insurance problem.”

In terms of this blog, I often find myself coming across articles and studies on the health care issue that are worthy of mention, but, for whatever reason, the context (or, perhaps, time) isn’t there to warrant a full post on them. Since I don’t want to put out posts that merely cite links, I usually just tuck these articles away until there’s a context where they can be used.

However, as the number of these articles has grown, it’s become increasingly difficult to track and remember them when the context does arise. Plus, since these articles contribute to much of my own thinking on the topic of health care reform, I think they’re important to get out there.

So to solve the issue of not wanting to put mass amounts of citations directly in posts, I’ve decided to create a “Health Care Reading List” in the right-hand column of the blog where the best of these articles and studies can be listed. I plan to update this list as regularly as possible.

If you’re so inclined, check it out. I should have it up shortly.

UPDATE: It's up. You may need to refresh your browser to see it.

Monday, January 15, 2007

NFL Playoff Fever

If you've been inclined to watch, the NFL playoff games have been excellent, thus far, and it seems likely this coming weekend will be no different.

In fact, the wild card and divisional playoff games this year boast the smallest margin of victory in at least the past five playoffs at just 7.25 points per game (I didn't look back any further than 2002). And the average margin of victory in this past weekend's divisional games was just over 4 points.

To compare, last year's average margin of victory in the first two rounds was 13, while in 2004 the margin was 14. And in the divisional rounds, when the competition is supposed to get tighter, the average margins in those years were 8.75 and 15.75, respectively.

Although conventional wisdom is that the real Super Bowl is being played this weekend in the AFC Championship game between New England and Indianapolis, based on what was displayed this regular season and in the playoffs up to this point, the showdown set for Dolphin Stadium next month is really anyone's game.

And, as it turns out, the last time playoff games were this close was in 2003, when the average margin of victory was 9.75 points per game in the wild card and divisional rounds. That also happens to be the only time the NFC team won the Super Bowl in the last six contests.

What To Do About the Troop Escalation

The obvious answer for the public -- at least the two-thirds who oppose the plan -- is to protest.

Toward that end, a host of organizations are planning a "March on Washington" for January 27:

Here are the details of the demonstration. If you're interested in participating, go here if you live in Madison, here if you live in the northwoods, and email or call 414-964-5158 if you live in Milwaukee.

Assuming the Dem Congress won't be able to find a constitutionally appropriate way to stop the White House from actually sending the 21,500 troops, what it does about the escalation is in a bit more of a grey area.

By far the most interesting purely political story surrounding the escalation focuses on John McCain. Everyone knows by now that McCain has been a major proponent of a troop escalation for some time. But now that the White House is actually moving forward with the plan, it seems McCain is going to be forced to have his cake and choke on it, too.

Perhaps the best rundown of McCain's quandary comes from Peter Beinart in the latest issue of The New Republic. Although the official title of the article is "Binge and Surge," the more apt headline given on the TNR website is "George W. Bush Screws John McCain One Last Time."

As Beinart astutely notes, "
One of Vietnam's great ironies is that, rather than empowering the American left, it ended up empowering the American right." Anyone who wants to know how needs only to look as far as the rhetoric of Ronald Reagan leading up to his presidential victory in 1980, which stands as the moment modern conservativism reached its zenith in American mainstream politics.

The conservative line, of course, is that the US lost the Vietnam War because it didn't have the willpower to fight long and hard enough to win. Once Bush goes through with the plan to send more troops, though, the same can't be said for Iraq.

And since the troop escalation plan is McCain's political baby, it's failure will surely take a noticeable toll on his presidential aspirations in 2008. With McCain's popularity among independents -- his base in 2000 -- already sinking fast, according to a Washington Post poll from December, this could just be the brick that breaks the camel's back.

Of course, McCain could always try to claim 21,500 troops isn't enough; and, hence, his escalation plan would've worked if simply more troops were sent.

And, lo and behold, that's exactly what Greg Sargent finds McCain laying the groundwork to do less than a week after his escalation plan was officially adopted by the White House. Over the weekend, the NY Times and the Washington Post both ran stories that included comments from the McCain camp that the Arizona senator would've preferred if more troops were sent.

Unfortunately for McCain, that's not what he said just a few months ago. According to an article in the NY Sun from late October, McCain had this to say in a visit to New Hampshire: "
Roughly, you need another 20,000 troops in Iraq."

And Sargent, along with Media Matters, found a number of other occasions in recent months where McCain made comments that as few as 17,000 more US troops in Iraq could bring victory.

Moral of the story, be careful what you wish for...especially if you also wish to run for president.

Thursday, January 11, 2007

Darling on the Spot

Following up on my New Year's resolution, I went to my first local school board meeting last night.

The 2 hour and 20 minute length gave me a good glimpse into why I was the only resident watching the meeting, but I actually found it quite interesting.

Most of that interest is driven by the fact that I have a daughter who in a couple of years will start spending a good portion of her childhood in these schools, and I find it important as a parent to be at least aware of what's going on behind the scenes.

Beyond that, though, I think there's also something exciting and rewarding about becoming more involved in your local community. And, in addition, it's a good learning experience. It'll take a little more time before I'm comfortable enough with the issues to start writing about them intelligently, but last night was a good start.

All-in-all, the most intriguing aspect of last night's meeting for me came during a visit to the board bythe district's state senator, Alberta Darling. Right before Darling was set to talk, the chair of the board thanked her for her time, commenting that in his nine years on the board, Darling's visit last night was a first for him.

I don't think the chair meant it to put Darling on the spot -- he appeared legitimately thankful that she was there -- but you could see Darling get a little rustled in her seat before she churned out a half-baked response about how she had been busy visiting the other school boards in her district, which amounts to about six or seven, over the past decade, and then just realized recently that it's been awhile -- just 10 years plus, or so -- since she visited the Whitefish Bay board.

Yeah, right. Or it could have something to do with the fact that it appears Darling will be facing an actual challenger for her senate seat next year. And it probably doesn't help that while Whitefish Bay used to be a GOP stronghold, that trend is quickly changing.

Wednesday, January 10, 2007

Parsing the WPRI Study of the Wisconsin Health Plan

I took some time to read the new report by the right-wing Wisconsin Policy Research Institute (WPRI) on the Wisconsin Health Plan (WHP) proposal.

For those interested in reading it, allow me to offer some suggestions.

First, you can skip the first 8 pages. All those do is lay out a theoretical groundwork for why we shouldn't have health insurance (and for why the authors wouldn't support the WHP, no matter how sound it could be); according to the authors, consumers need to learn how to go it alone for their health care.

Second, you can either read pages 9-15, or you can just read the Legislative Fiscal Bureau report on the WHP that was written last summer. The info is the same (although the spin is heavier in the WPRI report). The big critique in this section -- first made in the LFB study -- is that the WHP cost estimates are about $4.3 billion less than what health care costs totaled in Wisconsin in 2005.

As I've noted before, comparing estimated WHP costs to actual health care expenditures is risky business because it assumes total costs will not change at all under a new structure of health care. Part of the promise of fundamental health care reform – such as what’s outlined in WHP – is that it streamlines and simplifies the system in a way that increases purchasing power of payers in the system and reduces administrative costs. Hence, to assume the WHP would cost as much as the existing system is like assuming your new Prius should cost you as much in gas as your old Hummer (a bit of an overstated analogy, perhaps, but you get the idea).

For instance, the state employee health plan recently switched to a tiered health plan structure similar to the one proposed in the WHP, and that move saved the state over $14.5 million in negotiations in the first year alone, according to the plan administrator for the Department of Employee Trust Funds. And the state's drug plan -- which moved all the way to single payer -- has realized savings in the tens of millions of dollars in the first couple of years since the switch.

The other significant point offered in this section -- again, lifted directly from the LFB study -- is that negotiation discounts rates assumed in the actuarial studies for the WHP appear high. That is, while commercial insurers only get about a 23 percent discount in today's health care market in Wisconsin, the WHP actuaries estimated discounts of 40-45 percent, which is in line with government run health plans like Medicare and Medicaid. Since WHP is made up of commercial insurers, the 40-45 percent estimate appears to be wishful thinking. As I've written before, more study of this point needs to be done.

Third, you can read pages 15-17 at your own risk. This section deals with current employer/employee health care costs in comparison to what they'd pay under the WHP.

When comparing employer costs, the WPRI study uses the figure of 12 percent of payroll for employers under the WHP. This is just flat-out wrong. The WHP assessment on payroll caps out at 12 percent, it doesn't start and stop there. In fact, it starts at 3 percent of payroll, and, depending on the size of the payroll, it gradually increases to 12 percent.

The WPRI study, however, pits that 12 percent figure against what small and mid-sized businesses currently pay, which leads it to falsely claim that for "most private-sector firms, the new payroll tax required to fund the plan would almost certainly exceed what they currently spend on health insurance." In actuality, those small and mid-sized employers would be paying signficantly less than 12 percent in payroll.

On the point of employee costs, during its study last summer, the LFB shied away from estimating what employees currently pay for health care in order to make comparisons to what they would be charged under the WHP because those payments can very greatly and getting accurate data is nearly impossible.

The WPRI study, however, decided to toss caution to the wind, although it did admit that its comparison figures for private sector employees were based on a "limited, and somewhat anecdotal, study."

In addition to the use of a "limited, and somewhat anecdotal, study," a big and glaring problem with the WPRI comparison is that it pits deductible costs under the WHP against current deductible costs paid by public and private sector employees. This comparison is largely meaningless because the WHP is made up of HDHPs for which most of the cost is shifted from premiums into deductibles, while most employees currently have coverage that is premium-heavy and deductible-light (although many are seeing their deductibles quickly catch up to their premiums in recent years).

The WPRI study conveniently ignores the question of how much employees currently pay in premiums versus what they'd pay under the WHP, and instead it focuses solely on deductibles.

Fourth, page 17 until the end of the report posits conclusions based on the previous pages, so, unless you buy what the study's selling up until that point, it may or may not be worth it to read on.

All-in-all, the WPRI makes some good points -- such as the one about negotiation discount rates -- but all of those good points are the same ones made in the LFB study last summer. And, rather stop at those good, objective points, the WPRI study clouds them with questionable free market theory and misleading comparisons.

So, in the end, if you want to learn more about the WHP, your best bet is to just read the LFB report on it and save yourself from the ideological fluff.

Tuesday, January 09, 2007

Framing the Plan to Increase Troop Levels

Odd as it may sound, the White House is poised to put the newly Democratic Congress between a rock and a hard place with its plan to increase troop levels in Iraq.

While the Dems have no say over the actual choice to send more troops to Iraq, although that's something Senator Kennedy and others are trying to change, Congress does control the purse that would help get them there. However, by simply refusing to fund the increase, the Dems open themselves up for accusations that they don't support the troops.

The issue seems to hinge on the framing for the public. If the emphasis is on the troop increase, which hardly anyone in the country wants, the Dems will win. If the emphasis is on funding for troops, which the public doesn't want to see limited as long as troops are over there, the Dems will lose.

So how do the Dems keep the focus on the troop increase and away from funding?

You can't simply say the country can't afford to fund the increase because that brings into question your commitment to the troops and it also has the potential to hamper any domestic agenda the Dems put forward later.

But where you can focus is on military recruitment, which has faced widely-publicized troubles over the past few years. In fact, the latest recruitment blunder just happened last month when, a few days after Christmas, the Army sent letters to about 5,000 officers asking them to reenlist for another tour of duty. As it turns out, 75 of those officers were already killed in action and another 200 wounded.

Hence, the emphasis put forward by the Dems should be on how a troop surge will jeopardize US security not just in Iraq, but around the world by further stretching an already strained military that has come to rely on "stop gap" measures and reenlistments -- even of the dead and wounded -- just to survive.

And I'm just spitballing here, but the Dems could even take it a step further by demanding that funding for a troop level increase only take place if the White House agrees to expand the military ranks by allowing the inclusion of gay and lesbian soldiers. In other words, no more "don't ask, don't tell."

How would the White House react to such a compromise offer? I'm not sure. But I do know that it would help keep the emphasis on troop levels and not funding, while at the same time it would effectively toss the political ball back into the GOP's court (so it's the Republicans who get the "house divided" headlines, not the Dems).

Over the past 12 years, over 11,000 soldiers have been discharged under "don't ask, don't tell" -- nearly 1/3 of those have taken place after September 11 -- and it seems likely that hundreds to thousands more have been dissuaded from even joining in the first place. And, in 2005, the Government Accountability Office estimated that the "don't ask, don't tell" policy cost the US government over $190 million in training replacement costs since 1993.

The Dem line could be that it can't fund a troop increase in Iraq if it would potentially weaken an already thin military. Thus, the funding increase needs to be tied to the most effective and immediate recruitment tactic, which is to open the military to the thousands of willing and capable Americans who have been denied the opportunity to serve their country entirely because of their sexual orientation.

Some on the left may see this as too drastic of a compromise. But, the fact is, if the Dems aren't able to directly stop a troop increase from happening, it's going to happen. And by merely cutting off funding, the Dems only hurt the troops and themselves.

Plus, they'd be giving an all-too-convenient out to proponents of an increase like John McCain who could claim the only reason the increase didn't work is because Dems didn't fund it. This effectively flips the culpability for the ongoing conflict from the GOP -- where it belongs -- and onto the Dems.

It goes without saying that this issue is as much political as it is policy-based. The Dems would be wise to start playing both sides of the coin.

Monday, January 08, 2007

College Football Fans: A Reason Not to Watch the Game Tonight

Tonight's the college football national championship game between Ohio State and Florida. My guess is that Ohio State will win, but just about anything is possible in one game (for instance, I don't think USC is that much better than Michigan).

As usual, the national championship game is shrouded in controversy, which is heightened by the improbable Boise State victory over Oklahoma last week. At 13-0, many feel Boise State deserves a shot at the national title.

Although I don't think Boise State can match up with the likes of Ohio State, Florida, USC, or Michigan on most days, again, just about anything is possible in one game. And, the fact remains, at 13-0, it seems reasonable that Boise State at least deserves a shot.

The obvious answer to the controversy is to change the college bowl format into a playoff, similar to what exists in college basketball. That way, all of the top teams at the end of the regular season are afforded a shot at the title.

But standing in the way are some powerful conference commissioners. And no one is more powerful, they say, than Big Ten chief Jim Delany.

Here's what Delany has to say about the prospect of a playoff system for college football: "If the public walks away from our games during the regular season and walks away from television during the regular season and walks away from the bowls, they're saying, 'We won't support this anymore. We want something else.' But I don't see them walking away from anything."

Here that, public? If you want a playoff system, you're best chance at getting one is to not watch the national championship tonight, or any other Division I-A college football game, for that matter.

I don't have any trouble taking Delany up on his "the market knows best" challenge; but, then again, I'm not a huge fan of the college game (I much prefer the NFL). If the Badgers or a top NFL prospect aren't playing, I'm probably not watching. (I know a few prospects will be on display tonight, but I'm not all that interested in seeing Troy Smith or Ted Ginn. I did, however, take some time to watch Brady Quinn of Notre Dame take on JaMarcus Russell of LSU last week, and I came away really impressed by Russell.)

For those big fans of the college game -- who probably want a playoff the most -- not watching tonight's game would be nearly impossible. And that's the tough hand that Delany and the other college commissioners hold.

The only other way to get a playoff system is to show people like Delany that as profitable as the existing bowl system is, a playoff would be even more profitable. After all, just take a look at how many clueless bystanders (like myself) take the time to fill out a college basketball tournament bracket in March despite not taking even the faintest interest in any game up until that point.

A college football playoff could be that big, thereby reaching a set of people who otherwise could care less about the game.

But I'll let college football analyst Josh Peter explain the trick with that tactic:

The so-called BCS conferences – which include the ACC, Big East, Big 12, Pac-10 and SEC – outnumber the less powerful conferences six to five. Thanks to that slim majority, the six conferences grant themselves automatic bids to the five BCS bowls and this year will take in more than three-quarters of the estimated $120 million the BCS will generate.

The annual yield since has widened the financial gap between the haves and have-nots, and since the formation of the BCS eight years ago, no conference has benefited more than the conference Delany runs. He appears determined to protect the Big Ten's economic interests even if it means preserving a flawed system.

So, college football fans, it seems the quickest way to your dream of a playoff is to do the unthinkable tonight: Don't watch the game.

Friday, January 05, 2007

The False Promise of Employer-Funded HSAs

Earlier this week, Jay highlighted a Journal Sentinel article that discussed the sharp increase in unpaid medical bills due to the rise in high deductible health plans (HDHPs).

The assumption in the article was that medical bills were going unpaid because people in HDHPs didn't have the money to pay their high deductibles. While this is true, it masks another story lurking beneath.

When the GOP was first pushing HSAs in 2002 and 2003, one of the big claims was that switching to an HDHP would be cost-neutral (or nearly cost-neutral) for the employee because the employer would take the premium savings (or a lot of it) and fund the HSA at (or near) the deductible amount each year.

So, if that actually has turned out to be the case for the thousands of employees who have switched (or have been switched) to HDHPs, why are many still having trouble paying their medical bills?

Surprise, surprise -- a recent study has found -- employers actually haven't been using the premium savings from switching to HDHPs to fund employees HSAs. They've just been pocketing the savings and leaving their employees to fend for themselves.

In its new study, the health industry group Vimo found that while over 3 million people are enrolled in HDHPs, only 820,000 have bothered to open a HSA. What's more, while the average HDHP deductible is $2,378 for single coverage and $4,760 for family coverage, the average HSA balance is only $1,180, which is less than half of the single coverage deductible.

As the Vimo study concludes: "Certainly there are immediate and significant savings available when companies or individuals migrate to HDHPs. This cost differential can be pocketed as a one time gain, or it can be used to fund most or all of the HDHP deductible by depositing the difference into an associated Health Savings Account. It would seem that many employers are opting for the one time gain."

And what's most eye-opening about this study is that Vimo is a recent health industry start-up that's aimed at providing comparison shopping for health care, which means -- and as health policy expert Matthew Holt explains -- the company actually has a lot to gain from the success of HSAs.

So why be so forthright? Holt figures it's because by pointing out the trouble with HDHPs and HSAs now, Vimo can potentially avoid their ultimate demise if the problems were allowed to subsist.

Makes some business sense to me. But I still wonder, how exactly does Vimo, along with others who rely on the viability of HDHPs and HSAs, plan to either convince employers not to pocket the savings or expect employees to magically come up with the money to pay their still skyrocketing medical bills?

Thursday, January 04, 2007

My Political Compass

(Update 2 - one more blogger added to the grid.)

(Update 1 -- more bloggers added to the grid.)

I had 10 minutes to kill on what to me is a slow news morning, so I took Dave's suggestion and tried my hand at the Political Compass test.

The test is designed to see where you sit on a two dimensional political spectrum. When you finish, you get two scores -- one for your views on economics, and one for your views on social control. If your score is negative, then you're to the left. If your score is positive, then you're to the right.

My score was -5.25 (economic), -5.33 (social). Dave ended up with -2.38, -5.54, Jay Bullock scored a -6.13, -5.95 when he took the test, and Nate (from The Nate Report) wound up with -8.5, -5.28.

UPDATE 1: A few more bloggers to add to the grid. Ben (Badger Blues) scored -2.63, -4.36, Scott (Scott Feldstein) scored -4.38, -5.69, and Tom (Marginal Utility) scored -6.13, -6.97. Everyone's still hanging around the 4-7 range for social, while the economic ranges from 2 to 8.

UPDATE 2: Dean (Thoughtful Conservative) gave his score in the comments section, which came out to 4.13, 0.77. It's nice to have a righty out there.

Here's how that looks on a graph:

It's interesting that most of the differences, thus far, are on the economic scale. It seems likely the differences between myself, Jay, and Nate are a matter of responding with "Agree/Disagree" rather than "Strongly Agree/Strongly Disagree." I rarely used the "Strongly" options in my responses; I imagine Jay used it slightly more often, and Nate used it a lot more often, at least on the economic questions. Dave explains his economic views in his post.

If I took this test six or seven years ago -- in the midst of my college days -- I probably would be much closer to the bottom lefthand corner. My mid-twenties have certainly moved me more toward the middle.

If anything, though, rather than this demonstrating a shift in my core beliefs, I think it exemplifies a growing conviction that it's possible (and, often, best) to work from within an established structure for change. In other words, my spectrum shift is more tactical than ideological. But, I do admit, as my tactics ease, what and how I think changes, too.

For instance, back in college "capitalism" was a negative word for me. While I participated in it everyday, I felt it was out of necessity rather than acceptance. Now, however, I don't see capitalism as the evil, but rather the way the market is manipulated by particular players.

So rather than denouncing capitalism, I prefer to work toward reforming it from within by advocating sensible regulations along with using my purchasing power as a consumer to reward the companies who are, in my view, responsible market players.

But enough about me. If any other bloggers give the Political Spectrum test a shot in the next couple of days, let me know how you score in the comments and I'll try to put it up on the grid. As Dave noted, it would be interesting to see where we all sit.

UPDATE: Dave added more to explain his economic position here. While reading his exposition, I found myself agreeing with every point he makes; yet, I find myself a few points to the left of him on the scale above.

This suggests, to me at least, an obvious problem with these political spectrum tests. Due to the absolute nature of the responses (SA, A, D, SD), much of how people respond is based upon what they have in their mind at the time. A certain amount of psychology enters into play, as the responders try to work the system in order to account for those inevitable exceptions to the rule that most people, at least, can imagine.

Nevertheless, the tests can be interesting and fun in a broad brush type of way.