In Effect

In Effect Heading Into Semi-Retirement

2007-12-06T07:15:00.000-06:00

I started this blog back in January 2006 largely as an intellectual outlet that I was missing since leaving grad school. And I've enjoyed having the ability to delve into a wide variety of topics a little beyond the surface, which is different than grad school where there's a deep focus on a few topics.

But after just under 800 posts, I'm feeling the urge to return to looking into fewer topics more deeply, so I've decided to head back to grad school to continue pursuing a Ph.D. in History starting next month.

I intend to continue working full-time, which puts me on the 8-10 year plan for completion, but taking it slow will be good for me. My first tour in grad school was marked by dissertation topic changes every few weeks, sometimes every few days, which is probably why this blog was such a nice fit for me at the time. This time around I plan to be the tortoise rather than the hare.

I will continue following the cheddarsphere on a regular basis as a commenter. And, if the urge strikes me, I may toss up the occasional post, particularly as the election season heats up next year.

Until then, take care, Happy Holidays, and thanks for reading.

Sheriff Clarke Almost Gets to Ride to the Rescue

2007-11-30T07:19:00.000-06:00

Conservative talk radio and the right side of the blogosphere have been all over the Walid Shoebat controversy. And just as Sheriff David Clarke was poised to ride in to save the day by offering up county deputies to help provide security for the event, UWM pulled the rug out by reducing the fee charged to the Conservative Union to $500.

According to the Journal Sentinel: "Clarke said he offered to provide his own officers for free in the hopes that UWM officials would change course."

I hope Clarke realizes that those officers are neither his nor would they be free.

Packers-Cowboys Recap

2007-11-30T07:18:00.000-06:00

Well, I was a few off in my prediction. That usually doesn't happen. Usually I'm much further off.

At any rate, now we get to hear the "it was just against Aaron Rodgers" line until the playoffs, which is a bit of a stretch. The fact is Rodgers played significantly better than Favre, who finished 5-14 (just 35%) for 56 yards, o TDs, and 2 INTs. If Favre continued in the game, about the best he could expect would be to finish with Rodgers stat line of 18-26 (69%) for 201 yards, 1 TD, and 0 INTs.

And while Favre is quite capable of playing a good enough game to beat the Cowboys and stat lines don't tell the whole story, the fact is last night Favre didn't play well enough and the stats are indicative of the fact that Rodgers played better.

To be honest, while this may not have won them the game, Cris Collinsworth was right that the Packers' coaching staff made a mistake by kicking a field goal on 4th and 1 from the Dallas 35 with just over 5 minutes left in the game. If you're facing just about any offense in the NFC North that move probably would be just fine, but not the high-powered Cowboy offense, which also just so happens to have a RB who specializes in grinding out the clock.

Packers-Cowboys Prediction

2007-11-29T07:16:00.000-06:00

I can understand why many of the folks in Burlington want the Packers to win and Tony Romo to have a good game, but the only hope the Packers have for victory tonight is to knock Romo off his game.

Coming off his roller-coaster year in 2006, the Burlington native has been remarkably consistent this year, which is something I've greatly appreciated having him on my fantasy team (I also had him last year, and I wasn't as appreciative).

The only game that Romo bombed this year was at Buffalo when he threw five picks and lost a fumble. The Cowboys managed to pull out a victory at the end, but the same wouldn't happen against the Packers, even playing in Dallas.

If they can stifle Romo, the Packers shouldn't have too much trouble handling the Dallas running game. While Marion Barber -- also on my fantasy team -- is one of my favorite backs to watch with his bruising running style, he's not exactly a game-changing back in the same way as Adrian Peterson or Brian Westbrook. As more of a pound-you-into-submission back, Barber's value really comes in the red zone and when the Cowboys have a lead heading into the 4th quarter; if the Packers can control Romo, they'll control both of those things.

All that said, my prediction is for a 34-24 Cowboy victory as long as Romo accounts for two or fewer more turnovers than Favre. If he has at least three more than Favre, I'll give the edge to the Packers, 31-27, but that margin would increase with the turnover margin over Favre.

Either way, it should be a good one. My condolences to those living outside of the Green Bay or Milwaukee area markets who don't have a dish on the side of their house. Time to find a friend who does or saddle up to the bar.

Debating Coexistence

2007-11-26T07:57:00.000-06:00

I'm glad Mike Plaisted wrote this post regarding the COEXIST debate, since it more or less covers my thoughts on the topic, especially this part (emphasis mine):

The bottom line on this whole imbroglio is that Sykes, McMahon and all their various defenders are, shockingly, against coexistence. "...there are some things – evils -- that we cannot simply ‘coexist with.’ These would include Communism and Nazism," writes Sykes. Fine, and the COEXIST sticker implies nothing like that.... To these deluded few, Islam - the faith of billions that happens to include a small minority of violent nut-bags - is the enemy.

To be sure, violence is hardly an issue that's unique to Islam. Religion, in fact, has been long used as a means for justifying violence, just as it's been long used to justify peace.

When the idea of "positive Christianity" developed in Nazi Germany as a means for justifying the extermination of the Jewish population, for instance, mainstream Christian churches rightly denounced it in the name of peaceful coexistence with Judaism.

And contrary to the claims that calls for coexistence ignore terrorism perpetrated in the name of Islam by a small and shrinking percentage of the world's 1.5 billion Muslims, the COEXIST message -- originally created for a museum in Israel -- is as much intended for those Muslims who support violence as it is for the many more peaceful followers of Islam and the followers of the other religions whose symbols are depicted in it.

That doesn't mean, of course, that the COEXIST message should be the sole or even primary means for combating terrorism; no one has suggested that.

But the message is helpful in that it serves as a reminder of the ultimate goal in combating terrorism and other violence perpetrated in the name of religious faith.

Dems Are Making Scott Walker Soft?

2007-11-15T07:47:00.000-06:00

Brian Fraley thinks that the Milwaukee County Board overrode almost every budget veto made by Scott Walker because Walker wasn't tough enough.

According to Fraley, "someone seems to have told Scott to extend an olive branch to the County Board with the hopes that this soft approach would curry their favor. All it did was empower them. They viewed his passivity as a weakness, and they successfully thwarted much of his agenda this budget cycle."

Who could that "someone" be? Fraley suggests the culprit a few paragraphs earlier: "Perhaps this failure is a result of some of the personnel Scott has himself empowered. While they may be good, decent individuals, he has life-long partisan democrats, bureaucrats, and liberals in many key leadership positions on his staff and throughout his Administration."

Of course, Fraley offers no examples in the post of how Walker "extend[ed] an olive branch to the County Board" during the latest budget cycle. And Fraley conveniently ignores the fact that last year, when Walker took a hard-line approach by vetoing the entire budget -- declaring, with his hands metaphorically thrown it the air, "It's their budget now" -- he essentially came away with the same thing as he did this time around: nothing.

The fact is that the board has enough votes to override Walker on just about every point of the budget, and over the years Walker's incessantly combative relationship with the board hasn't exactly endeared him to a large percentage of supervisors. While he doesn't need to be drinking buddies with anyone on the board, a respectful working relationship between the executive and the board is clearly in the best interest of the county; and hitting the talk radio circuit at every chance to bash the supervisors isn't the most effective way to forge respect.

But even more fundamental than that is Walker's unwillingness and inability to engage in meaningful budget dialogue with the board as a result of his zero-tax increase campaign pledge, which he'll almost surely make again when he officially declares his re-election bid for next year.

Walker isn't extending any olive branches when it comes to the budget. To be sure, he can't sit down at a table with supervisors to negotiate because starting and ending at zero provides him with nothing of substance to invest in a compromise.

But Fraley, ever the political consultant, is attempting the trick of making a weakness (Walker can't compromise) into a strength (Walker shouldn't compromise) by claiming it's not that Walker's approach was too rigid, it's that it was too soft.

And that line about liberal moles in the Walker administration who are causing the softness? Just pure rhetorical gold.

Scott Walker's Annual Rite of Passing the Buck

2007-11-13T07:53:00.000-06:00

Mid-November is here, which means a few things.

Football games are starting to have "playoff implications." I'm sick of raking. Thanksgiving is surprisingly close (it seems to sneak up on me more each year). And Scott Walker is about the demonstrate his penchant for negotiation by vetoing the county budget back to his original proposal.

Last year was the best. Rather than use a veto pen, Walker pulled out his veto grenade and tried to blow up the entire budget. The County Board tossed the grenade right back in a 14-5 override of that super-sized veto, leading Walker to declare in seemingly helpless fashion: "It's their budget now."

In reality, though, the veto grenade didn't remove Walker's responsibility for the annual county budget; rather, it just eliminated any opportunity he had to work with the board on any of the finer points in his budget, such as modernizing the county pool system.

This year isn't going to be any different. The County Board passed its version of this year's budget by the same 14-5 veto-proof margin, and Walker has indicated that he would use the pen, not the grenade this time, to bring the board's proposed 3.7 percent tax increase -- or $6.16 on the average annual property tax bill in the county -- down to zero in order to maintain his no-tax increase campaign pledge.

But due to this pledge, there really isn't much difference between Walker's veto pen and his veto grenade. Walker's starting and ending point is zero, which allows for no middle ground.

Granted, there's nothing that requires the board to negotiate with Walker, but at least none of them made a pledge that constrains their ability to even discuss a compromise. If Walker could come to the table with a few good faith concessions, perhaps that could enhance his ability to press to retain some other areas of his budget.

Instead, just as the uncompromising pledges took the ability to strike a deal away from dozens of legislators in the latest state budget cycle, Walker's pledge removes any chance he would have to push for his positions at the negotiating table; after all, he can't expect to get anything if there's nothing he's willing to give.

And it's one thing when a handful of legislators aren't around to deal; it's a little more conspicuous when the executive is absent from the table.

You Get What You (Don't) Pay For

2007-11-08T07:56:00.000-06:00

The Journal Sentinel is reporting this morning on the planned start of BadgerCare Plus, which will provide health coverage access to every kid and many parents in the state beginning in February of next year.

According to the article:

The state expects to pay for the expansion primarily from streamlining state programs; expanding the use of health maintenance organizations; and the premiums and co-pays paid by families.

I hate to be the contrarian -- after all, ensuring every kid and most parents in the state have access to health coverage is a really good thing -- but the total expense of the program isn't included in the direct cost.

To be sure, estimates are that by 2009 the BadgerCare Plus program will cover 12,700 more children and 13,400 more adults* than under the existing BadgerCare system. A positive development, yes, but also one that means 26,100 more people* will be contributing to low reimbursement levels that result in significant cost shifting to private payers in the system.

If only there was a corresponding plan to increase Medicaid reimbursement rates...oh, right, that one had the mistake of including the word "tax" in it, so it just must be bad.

* The adult estimate was made prior to dropping childless adults from the original proposal, so the figure may be a bit inflated.

Rudy: I Probably Wouldn't of Made It as a Brit

2007-11-06T07:53:00.000-06:00

Rudy Giuliani has a campaign ad out claiming that his chances of surviving prostate cancer would've been significantly lower had he lived in the UK.

Here's the text of the ad:

My chance of surviving prostate cancer -- and, thank God, I was cured of it -- in the United States? Eighty-two percent. My chance of surviving prostate cancer in England? Only 44% under socialized medicine.

Giuliani gets his figures from an article written by one of his advisers, David Gratzer, a senior fellow at the conservative Manhattan Institute. According to Gratzer, the numbers originate from "crude" -- Gratzer's own description -- Commonwealth Fund data on prostate cancer incidence and mortality published in 2000.

The Commonwealth Fund took issue with this use of its data, explaining: "Five-year survival rates cannot be calculated from incidence and mortality rates, as any good epidemiologist knows."

The problem with using incidence rates in combination with mortality rates to determine survival is that incidence says nothing about quality of treatment. In reality, the percentage of Americans dying from prostate cancer is not significantly different than the percentage of Brits dying from it, a fact that Gratzer even admits.

But that doesn't stop Gratzer and other conservatives from tossing in incidence rates to muddy the waters.

As health care blogger Joseph Paduda explains (emphasis in original):

What [Gratzer] may not remember from medical school is that prostate cancer is quite common among older men. It usually grows very slowly, so slowly that most of us end up dying from something else. Gratzer is correct when he says that more Americans than Britons are diagnosed with prostate cancer, but most of the diagnoses are likely of these very slow growing cancers that are unlikely to be fatal.

Here's a handy chart that illustrates the issue:

(Click for larger image.)

Put differently, Giuliani's likelihood of dying from prostate cancer wasn't any lower because he lived in the US; on the other hand, his likelihood of being diagnosed with it was higher because he lived in the US (and, importantly, was amongst the American population that had affordable access to good health care).

Although population certainly plays a role in incidence rates, the vast differences depicted above -- which correspond with the development of new detection procedures in the 1980s -- suggest that more aggressive screening in the US plays the biggest part.

And while screening and preventive medicine are good things, on the whole, Paduda describes the negative effect of intensive detection methods for a slow growing ailment like prostate cancer (emphasis in original):

What the diagnoses do, rather effectively, is scare the bejesus out of patients, and encourage them to get procedures that are not only costly and of uncertain benefit, but also may render the patient impotent, incontinent, or dead. Since the Brits don't do as much screening for prostate cancer, they don't do a lot of operations on patients that may not need them.

This is the real kicker since it strikes at the heart of the one area that conservatives have hit home in the health care debate: overutilization. By using incidence rates to boost the appearance of survival rates, conservatives are effectively undermining their argument about the need to judiciously reduce the amount of health care that's consumed.

Of course, policy consistency, like accurate figures, doesn't exactly make for supporters or voters; misleading campaign spots, on the other hand, can help quite a bit, which is why it's no surprise the Giuliani camp is refusing to stop airing its misleading ad.

UPDATE: The Washington Post news desk -- not the editorial page -- gives its take on the Giuliani ad today:

The former New York mayor would have us believe that he was off by one percentage point at most in calculating his chances of surviving prostate cancer in Britain. In fact, he was spectacularly wrong the first time and equally wrong the second time. Epidemiologists say that his claim rests on a faulty statistical methodology that would not earn a passing grade at top medical schools in the United States.

I'd say "spectacularly wrong" about covers it.

Patriots Protect BCS Ranking

2007-10-31T07:58:00.000-05:00

Coming into this season, I was a fan of the New England Patriots. I found it fun to watch the cerebral-style of football played by Bill Belichick and his crew. Every week the game plan was new, completely tailored to the weaknesses of the opponent.

While I still enjoy watching those aspects of the Patriots game, the way they've run up the score as if they were playing for a BCS bowl game has been disheartening.

Throwing deep from the shotgun formation while up 38-0 with 13 minutes left to play. Going for it on fourth down while up 45-0 with 7 minutes remaining.

As Yahoo! Sports commentator Andy Behrens noted about Tom Brady accounting for his fifth touchdown of the game mid-way through the 4th quarter, shortly after converting it on fourth down: "They elected not to go for the two-point conversion, which was classy."

The most interesting commentary on this trend, however, comes from EPSN's Gregg Easterbrook, who wonders why so many teams have largely taken the late-game pounding from the Patriots without a fight.

According to Easterbrook:

If it were 38-0 in the fourth quarter and the other side still had its starting quarterback on the field throwing deep, I would have called a double safety blitz and slammed Brady to the ground; Belichick immediately would have taken the starters out, and the mockery of sportsmanship would have ended. After the game, Colvin and other Patriots players said that in the pros, you should play full-tilt no matter how lopsided the score. If that's true, no one from New England could have complained if [Redskins defensive coordinator Gregg] Williams had called an all-out blitz to hammer Brady.

I wouldn't be surprised if defenses start heeding Easterbrook's advice if the Patriots continue their ways down the stretch.

And, heck, let's be honest, Randy Moss is going to catch the ball regardless of whether the safeties are in coverage.

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SIDE-NOTE: Also check out Easterbrook's extensive commentary, which is at the beginning of the column cited above, on the NFL Network and the Sunday Ticket option that allows viewers to pick between every game on Sunday. He provides some interesting background info on the tension between the NFL and the cable networks.

What Is and What Isn't Single-Payer

2007-10-29T07:48:00.000-05:00

John Torinus took his fifth swing at Healthy Wisconsin in his column yesterday, and the theme of the day was "single-payer."

In his previous four columns (see here, here, here, and here), Torinus used the phrase "single-payer" a total of twice. In his column yesterday, it's used seven times.

The fact is, Healthy Wisconsin isn't single-payer legislation. If the situation is right, there's much to like about single-payer models, as evidenced by the successful state farmer's cooperative, which operates under a single payer. But Healthy Wisconsin just doesn't fall into that category.

The key policy difference between a single-payer model and the consolidated payer model of Healthy Wisconsin and the Wisconsin Health Plan is that the latter allows for payer competition.

In a consolidated payer model, based on the ideas of economist Alain Enthoven, consumers are given a direct choice of health plans. If they opt for the most cost effective plan -- which would need to contract with the most cost effective providers to gain that status -- they pay nothing per month aside from what they pay into the system as a whole through some form of taxes or assessments. If consumers opt for a higher cost plan, on the other hand, they pay the difference between that plan and the lowest cost plan.

This type of competition can't exist in a single-payer model since, obviously, the one payer isn't going to be competing with itself in any meaningful sort of way.

There's no question that Torinus understands all of this -- to be sure, David Riemer explained it to him in a debate the two had back in August -- which makes it both odd and eye-rolling that he would push Healthy Wisconsin as a single-payer system.

But why let the nuances and complexity of health care models get in the way of good ol' rhetoric?

That Must've Been Some Party

2007-10-29T07:43:00.000-05:00

From the Journal Sentinel Business Watch blog (emphasis mine):

The University of Wisconsin-Madison School of Business just announced that Milwaukee native Sheldon Lubar, founder and chairman of Lubar & Co., Inc., became the thirteenth member of the Wisconsin Naming Partnership today, adding a $5 million donation and bringing the total gift to $85 million.

The business school's public relations director Tina Frailey said Lubar was at the Wisconsin football game today with business school dean Michael Knetter just hours after the major gift announcement when he decided to give.

Nothing like dropping $5 million on the spur of the moment. What do they serve in those Camp Randall luxury boxes, anyway?

By the way, Mr. Lubar is officially invited to my house tonight for the Packer game.

Our Superficial Public Policymaking

2007-10-26T07:55:00.000-05:00

Considering it stands virtually no chance of going anywhere, State Senator Roger Breske (D-Eland) has received a pretty good amount of press (here and here) for his plan to introduce standalone legislation to bring back the hospital assessment.

In his press release, Breske notes the oddness of including a transfer from the patient compensation fund in the budget but not the hospital assessment that would generate millions more in matching federal dollars than it would cost. It would be interesting if his legislation actually includes a provision to dump the patient fund transfer.

Granted, I don't think dumping the transfer would make the bill any more palatable to the GOP Assembly, which is interesting considering how Republicans have gone after Doyle for segregated fund transfers in the past and how much attention the right has given to medical malpractice suits when it comes to rising health care costs.

To be sure, while the patient fund has had an average annual surplus of $130 million over the past two decades, it's been pointed out that a surplus is necessary to keep premium rates down.

As the Journal Sentinel noted yesterday regarding the patient fund transfer, "pulling $200 million from the fund will mean higher premiums going forward." And, as conservatives love to point out, those types of costs on businesses just get passed along to consumers in the form of higher costs.

Yet, in spite of all of this, the GOP leadership agreed to the patient fund transfer relatively early in the negotiation process -- about a month ago, to be exact -- while absolutely refusing to budge on the hospital assessment that would generate more funds than it would require, leading some health systems to pledge to lower health care costs if it was implemented.

This is the result of the budget process becoming about a final overall figure rather than what makes the most sense for the state.

The hospital assessment fell into the $1.7 billion figure Republicans were denouncing since February, and reducing that amount became the goal, which meant that the hospital assessment had to go, especially if the politically safe cigarette tax was going to be the one big tax that was allowed to stay.

The patient fund transfer, conversely, wasn't part of the $1.7 billion, so it wasn't as big of a problem if it stayed, even if it actually does what Republicans wrongly, for the most part, claimed the hospital assessment would do -- increase health care costs.

It's amazing, and quite sad, that the word "tax" is allowed, without much or any consideration for the actual effect, to have such a hold on public policymaking in the state.

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SIDE-NOTE: Just to clarify, I do think the patient fund transfer is a poor public policy choice, but that's separate from the issue of increasing funds for state health care initiatives, which is what the transfer is intended to do. Increasing those funds is a reasonable goal that is worthy of debate, but doing so through a transfer from a segregated fund -- particularly one that isn't funded by public dollars -- is unwise and should be unnecessary.

I don't mean to suggest in this post that it's the job of Republicans to reject a move like the fund transfer -- it shouldn't have been proposed in the first place -- but it is interesting to examine why the transfer wasn't given much or any resistance, while the far more sensible hospital assessment was somehow a deal breaker.

UPDATE: Check out the Recess Supervisor's excellent and interesting take on the Breske bill.

Downplaying and Dramatizing the State Budget

2007-10-23T07:54:00.000-05:00

It looks like a budget will be passed today. Estimates are that at least 10-12 of the 52 GOP members of the Assembly will vote for it, which should be more than enough for it to pass, even though it wouldn't surprise me to see Dem Reps. Ziegelbauer and Wasserman vote against it.

In an email to rally the troops, Speaker Huebsch notes the following (emphasis mine):

The [LFB] memo shows that the bipartisan budget agreement increases all funds appropriations 6.6% over the biennium. GPR appropriations increase 6.0%. The increase is not 8%, which has been claimed by the governor and reported in the media.

As a point of reference, the US Department of Commerce recently announced that Wisconsin's per capita personal income grew at 4.6% in 2006. With the growth in all funds spending averaging 3.3% annually, the bipartisan budget agreement appropriates almost 1.3% per year below personal income growth and lives within the taxpayers' means.

Interesting admission considering GOPers typically prefer using inflation as the benchmark for determining "taxpayers' means." According to my math, this new standard of personal income growth means that Doyle's initial budget -- which called for an 8.5 percent increase over the biennium -- also would be within "taxpayers' means."

Who'd of thought that's how Huebsch felt all these months?

Also interesting is the budget coverage in the Journal Sentinel, which cranks up the drama dial in an article on "surprise" fees that made their way into the final budget agreement. Of course, if some consideration was given to services in the article -- a radical thought, to be sure -- the inclusion of the new fee increases might not be such a surprise.

As the JS editorial board astutely noted over the weekend regarding the budget agreement, "questions remain, including how the state will pay for transportation projects that even many Republicans agree are crucial to economic development...."

Ending the automatic gas tax increase last year and axing the oil tax from the budget left a hole in the transportation fund. Fees were a natural place to look to fill it considering how they allow Huebsch & Co. to hide behind the argument that fees go to support "specific services," regardless of the fact that it's a bit of a stretch to claim the actual cost to title a car will truly increase by 86 percent in the coming biennium.

It's beyond me why Huebsch can't just own up to the fact that money is needed for the transportation fund and, call it taxes or call it fees, it's gotta come from somewhere if you want the services.

And while the JS was happy to rile up readers about "surprise" fees on the front page of the main section, those who turned to the front page of the Metro section were treated to an article on how the budget shortchanges local governments, which puts police and fire services at risk.

Is it really too much to ask that the concept of funding and services get put together in the same article on the budget?

"Consumer Driven" Health Care Is More Than High Deductibles & HSAs

2007-10-22T07:53:00.000-05:00

The Journal Sentinel is fronting an interesting article today on recommendations for comprehensive health care reform coming out of the Committee for Economic Development (CED), which is a group that includes business leaders from around the country.

The article does a good job of explaining how the CED recommendations reject the notion that the only competition that's needed in the health care market is at the point of care. Instead, due to the existence of third-party payers, the CED backs re-working the market so that insurers are put into direct competition for participants rather than working through the employment system.

As the full CED report explains:

The earlier discussion of CDHPs expressed doubt that consumers could drive health-care efficiency by shopping for lower prices for individual treatments and therapies for serious illnesses. However, consumers could have meaningful influence on the health-care market by shopping in a more deliberate fashion for cost-efficient health-care plans.

The JS astutely recognizes the connections between this proposed model and the Healthy Wisconsin plan pushed by legislative Dems over the summer.

Both proposals involve individuals using a fixed publicly-financed credit to select from a grouping of plan options that vary in price -- individuals would pay the difference if the plan costs more than the credit -- and both employ a payroll-driven funding mechanism (an income tax mechanism similar to the "cash out" option proposed by Sen. Wyden is also listed as an option).

In a fairly obvious attempt at "balance," the article misstates the link between Healthy WI and a "Medicare-for-all" model that's rejected by the CED. While Healthy WI does include a public fee-for-service option, that option is just one of many that consumers could select, and in all likelihood it would be among the most costly -- and therefore least chosen -- of the options.

But, overall, the article did a nice job of pointing out that a good chunk of the national business community recognizes there's more to consumer-driven health care than high deductibles and HSAs, and the government is needed to fundamentally re-work the system to maximize the full competitive potential that's in the multi-layered health care market.

Rallies and Real Budget Progress

2007-10-18T07:42:00.000-05:00

I'm glad the Recess Supervisor wrote this post and the Brawler wrote this post because together they, more or less, cover my thoughts on the dueling rallies held at the Capitol yesterday.

It was unfortunate to see some of the pro-services contingent use profanity in their chants and one-on-one confrontations with the no-tax increase crowd. There's no excuse for that. But while profanity is certainly less civil, it isn't any more ridiculous or unproductive than the "we pay your salaries" line coming from the no-tax increase side.

Yeah, taxes and fees are used to compensate public workers (along with private workers doing business with the public sector), but that compensation doesn't come as a result of public benevolence, it comes because the workers provide a public service. If you don't like paying for the compensation, then call for cuts to the services (and be specific, preferably), don't hang it over the heads of the people who were offered a job to provide those services.

Meanwhile, the real budget news of yesterday is that discussions of a compromise took some small, but important, steps forward.

Assembly Democratic Leader Jim Kreuser said that making HSAs state tax free is on the table if the GOP supports the hospital assessment, while Rep. Phil Montgomery (R-Ashwaubenon) called together a session with Speaker Huebsch and "a handful of Assembly Republicans who want to find middle ground," a meeting that Huebsch, unfortunately, pooh-poohed as "routine."

Based on what took place on the Capitol steps yesterday and in press releases for the past nine months, though, there doesn't seem to be anything that's routine about genuine intra-caucus meetings aimed at seeking out a middle ground.

SIDE-NOTE: "[A] handful of Assembly Republicans who want to find a middle ground"...what are the others out to find?

UPDATE: Looks like Grumps and I are on the same page regarding the "we pay your salaries" line.

State Budget: What's Next?

2007-10-16T07:45:00.000-05:00

As expected, the GOP Assembly shot down the compromise budget. A couple of Dems helped out, including my own representative Sheldon Wasserman.

So, what's next?

According to today's Wisconsin State Journal, "Huebsch said it remains unlikely he could ever accept a hospital tax because he fears it would drive up health-care costs in the long run."

I truly can't figure out the logic behind that claim. But since it doesn't look like Huebsch is going to budge, and the fact is he's the GOP's leader in the Assembly, it's time to start looking at what it would mean to drop the hospital assessment and lower the cigarette tax by 50 cents.

The impact would be on health care initiatives, of course, but the Dems need to ask the LFB for a specific analysis of what would be lost and they need to share that widely with the public.

This may sound trivial, but it would represent a significant shift in the Dem game plan. So far the Dem emphasis appears to be on the effects of not passing a budget. Not a bad line, but it doesn't quite stand up to the "protect the taxpayers" line coming from the GOP.

After all, no budget can be easily framed as a result of the partisan split in the legislature rather than the actions of one particular side of the aisle.

By putting an emphasis on services lost, without abandoning the focus on the need to get a budget passed, the Dems can help remind the public that fiscal policy isn't just a one-sided equation.

Once that view is established, a new budget should be drafted without the hospital assessment and with the lowered cigarette tax. That budget could then go on record as the budget that cut health care initiatives, rather than the one that "protected taxpayers," which is the way the GOP would surely like to frame it.

It's time to get something done, and the Dems have enough votes on the record to demonstrate to voters that they were in favor of passing the health care initiatives but couldn't due to the partisan split in the legislature, which is something that only can be addressed at election time.

The Fight for the Few

2007-10-12T07:43:00.000-05:00

It's looking like Speaker Huebsch probably has the votes he needs in the Assembly to shoot down the compromise budget bill, but I'm sure the governor's office is going to be leaning pretty heavily on some Assembly Republicans over the next few days.

The Daily Cardinal highlights Rep. J.A. Hines (R-Oxford) and Rep. Brett Davis (R-Oregon) as two possible GOP votes for the compromise budget, although it seems likely that the Dems will lose at least one vote in Bob Ziegelbauer (D-Manitowoc). Sheldon Wasserman (D-Milwaukee) is the other Dem who signed a no-tax increase pledge, but he has already indicated a willingness to at least vote for the cigarette tax.

That means the governor would still need to flip 1-2 more Republican votes in addition to Hines and Davis, if those two are, in fact, flippable themselves.

Importantly for the governor, the compromise bill is getting some positive press around the state. By rejecting it, the Assembly Republicans risk getting viewed as obstructionists. To counteract that view, the GOP will scream "taxes!" as loud as possible, and the Dems will counter with the other side of the equation -- i.e., what those taxes will fund -- and the fact that not all taxes are created equal in the public eye.

To be sure, increasing the cigarette tax and imposing a hospital assessment to leverage more federal dollars for Medicaid just isn't the same -- for most people, anyway -- as boosting the income tax or the general sales tax.

At the end of the day, if the compromise bill does go down in the Assembly, it's surely going to energize the fiscal conservative base that'll show up for the Americans for Prosperity rally at the Capitol on Wednesday.

But I'm just not so sure the general public is going to look at it with as much excitement and adoration.

The GOP Tightrope Walk Is Getting Shaky

2007-10-10T07:32:00.000-05:00

I just don't understand this position:

Huebsch's offer did not include a hospital tax proposed by Doyle. Democrats had hoped Republicans would go along with it after the Wisconsin Hospital Association dropped its opposition last week.

"The hospital tax is just not on the table," Huebsch said. "It's one where we just don't agree with the policy."

The new tax would generate additional federal aid that would fund increased Medicaid reimbursement rates to hospitals. They would receive a net increase of $285 million, most of which would go to Milwaukee-area hospitals.

But Huebsch said the proposed hospital tax was "counterintuitive" because it would be passed on to regular people at a time when everyone wants to reduce health care costs.

Huebsch's argument is what's counterintuitive; that is, if you understand how health care costs operate, and I have little doubt Huebsch is privy to the notion of cost-shifting and the hidden health care tax stemming, in part, from poor Medicaid reimbursement levels. And I'm sure he understands that Medicaid works on a matching system with the federal government, so the more the state puts in the more the federal government puts in.

Connecting these dots to see how the hospital assessment will increase overall funding for Medicaid and, as a result, help reduce the hidden health care tax for people with private insurance isn't a complicated or convoluted venture, and it's certainly not counterintuitive.

So what's the deal?

I'd say it's pretty clear something is getting to Huebsch, who took a lot of flak after reports surfaced that he included the $1.25 cigarette tax in an offer a couple of weeks back.

And with the rally organized by Americans for Prosperity just a week away, I don't see Huebsch making any other meaningful proposals toward a compromise budget in the near future; unless, that is, he wants his name to be the one that's screamed alongside Doyle's on the steps of the Capitol.

That's what makes Doyle's call for a special session on Monday, two days before the rally, such a shrewd political move. It clearly pits the two forces in Huebsch's political life -- the general public and the fiscal conservatives with the microphones (figuratively and, next Wednesday, literally) -- against each other.

The call for a special session has already made a media splash, and it will continue to do so through next week, which will raise the public awareness of the budget even more. This forces Huebsch's hand rather than allowing him to bide time in fruitless closed-door negotiations until after the AFP rally.

As the Recess Supervisor points out, the special session effectively neutralizes any momentum the GOP had after passing its piecemeal bills on K-12 funding and shared revenue last month, and it places the spotlight back on the GOP as the side that's holding up a budget compromise.

Assuming, that is, Huebsch doesn't relent and bring the governor's new budget proposal to the Assembly floor on Monday. Although he's indicated he'd abide by the call for a special session, actually bringing the bill to the floor for a vote would risk watching the 47 Dems grab the few Republican votes needed to actually pass it.

And, if that happens, Huebsch better not find himself anywhere near the Capitol building on Wednesday.

How 'Bout Them Cowboys

2007-10-09T07:58:00.000-05:00

Not much political to say today, so I'm going to talk fantasy football for a bit.

Intense game last night. I'm not a Cowboys fan, exactly, but I do have Tony Romo and Marion Barber on my fantasy team.

I went into last night's game 14 points down in my weekly match-up, and considering Romo and Barber averaged a combined 42 points per week heading into the game against the 1-3 Bills, I wasn't too worried about it.

By the time I tuned into the game, Romo already had thrown two picks. That surprised me a bit, though I had Romo for part of the season last year, so I know erratic play isn't exactly out of the question. Nevertheless, it was still the first quarter, so I wasn't worried.

Then I proceeded to watch Romo throw his third, fourth, and fifth pick, and lose a fumble. Two of the INTs were returned for touchdowns by the Bills, which actually doesn't matter so much for a fantasy fan.

And therein lies the fundamental difference between a fantasy fan and a team fan. While the team fan wants to see the defender who made the pick dropped immediately, the fantasy fan doesn't lose any more points for a INT that's returned all the way; and, in fact, having it returned for a touchdown means the QB is going to get it back more quickly and probably need to air it out to make up for the opposing score.

This has always made me hesitant as a fantasy fan. Part of the beauty of team sports is the camaraderie that's forged within a team and its fans. As Wisconsinites, we know that camaraderie quite well when it comes to pro football; Packer fans are often heralded as among the most loyal and committed in the sport, and there's certainly a broader social bond that comes along with that.

And while I certainly have camaraderie when talking smack to my friends in the fantasy league, the fantasy mentality itself largely individualizes the sport in a way that works against broader social connections. When I'm cheering, I'm cheering for my players, which isn't something I'm going to have in common with anyone else around me.

But, I tell ya, when Romo threw his second TD of the game in the closing seconds to bring the Cowboys within two and finally give me the points I needed in my fantasy match-up to pull ahead, I bet my arms went up with just as much excitement as Wiggy and Owen displayed at the same time as Cowboy fans.

I just didn't care, at that point, whether they got the two-point conversion.

The New Hospital Assessment Is Much Improved

2007-10-05T07:38:00.000-05:00

The big news on the budget this morning is the Wisconsin Hospital Association withdrawing its opposition to the hospital assessment that would be aimed at leveraging federal dollars to help increase the Medicaid reimbursement rates hospitals receive.

The Journal Sentinel covers it here, although the Wisconsin State Journal provides a bit more informative of an article here.

I expressed concern about the hospital assessment when it was initially proposed back in February, and that concern was tied to the fact that the plan relied on federal dollars that aren't the most stable; even a slight regulatory change in how the federal money can be spent could tank the entire equation.

That's what makes this new agreement a really good one. Rather than making the assessment permanent, the budget bill would have it expire after the biennium. This alleviates the concern about relying on federal dollars over the long haul.

At the same time, it does require that another potentially contentious debate take place in two years over where to get the money to continue the increased reimbursement rates. And considering the new agreement calls for a fixed assessment rather than a percentage tax on hospital revenue, it's almost certain that more money will be required to sustain the same reimbursement level as health care costs continue to rise.

Of course, a big piece of the puzzle that's still missing is GOP support. According to the WSJ, Speaker Huebsch declined to comment on the new plan yesterday.

An aide to Rep. Steve Nass -- who doesn't have a position in the GOP leadership -- did, however, express opposition to the new assessment plan and display a general lack of understanding about how health care costs operate. According to the aide, the new agreement "doesn't change the equation in that the assessment is still going to be paid by anyone who goes to those hospitals."

Actually, the assessment would very much change the equation, which right now has everything to do with the fact that a significant chunk of health care costs are derived from cost-shifting. Part of that cost-shifting is as result of the uninsured, and part of it is a result of low Medicaid reimbursement rates (Medicare rates are low, too, but not as low as Medicaid).

Here's a chart (page 13) that helps to explain the situation:

(Click for larger view.)

By increasing the reimbursement rates for Medicaid patients, the hospital assessment would be able to pull down the rates paid by the privately insured. In fact, Children's Hospital -- which treats a large number of Medicaid patients as the only pediatric hospital in the Milwaukee area -- has already pledged to decrease health care costs for patients with private insurance if the assessment passes.

Of course, not every hospital would come out in the black. According to the WSJ article:

There would still be winners and losers under the plan, with about 50 Wisconsin hospitals receiving more money under the plan, 23 receiving less, and 72 remaining unaffected, according to figures provided by the Doyle administration. [WHA spokesperson Eric] Borgerding said the number of losers was actually lower, however, since about half of the losing hospitals were part of a hospital network that was an overall winner under the plan.

It's important to note, however, that even those 10-12 hospitals who would see a loss have the advantage of serving a smaller percentage of Medicaid patients, which means their privately insured patients aren't faced with the same cost-shifting that other privately insured patients face.

In other words, there are winners and losers involved in doing nothing, too.

In the end, if Huebsch and the rest of the GOP leadership do still oppose the assessment plan now that even the WHA has stepped out of the way, it'd be really interesting to see the justification. With the practical concerns absent from this new agreement, as evidenced by the WHA removing its opposition, any arguments remaining would have little to stand on aside from ideological purity.

Walker Already Spinning Tall Tales About Taylor

2007-10-03T07:24:00.000-05:00

Lena Taylor's campaign wasn't even officially off the ground when the Scott Walker campaign volleyed over its first tall tale.

Monday brought the second "Walker Weekly" in a row to my Inbox that claimed Taylor, as a member of the JFC, "voted against a compromise put together by Mayor Tom Barrett to protect Milwaukee taxpayers."

It continues: "Several media accounts contend that she voted against the Milwaukee position because of pressure from Finance Committee Chairman Russ Decker. In the end, her vote will cost local taxpayers nearly $28 million."

The Walker newsletter is referring to a plan to fix the funding flaw that exists as part of the school voucher program and results in Milwaukee residents paying more for a student to go to a voucher school than a MPS school.

The only trouble is, Walker's telling of the events is wrong on more than one count.

For starters, there was no JFC vote on Barrett's plan. The motion to consider it was never made.

That leads to the second error in Walker's claims, which is that media accounts identified Rep. Pedro Colon as the legislator who was pressured by Decker to avoid making the motion to consider Barrett's plan. Lena Taylor isn't mentioned once, at least by the JS (and I couldn't find another major outlet that covered it).

The third problem with Walker's claims is that a funding fix for the voucher program was passed by the JFC with Taylor's support. It wasn't the fix that Barrett asked for this past summer -- which would've applied to all voucher students, not just new ones -- but it would save Milwaukee taxpayers millions if it made it into the final budget.

And considering every GOP legislator on the JFC voted against the fix that passed, perhaps Walker should aim his apparent disgust at them.

Bottom line, Taylor has been focused on fixing the funding issue to protect Milwaukee taxpayers since the voucher cap was increased back in February 2006.

Has Walker ever taken the same position publicly?

---------------

Side-Note: It's worth mentioning that the Senate's version of the budget did away with the JFC fix in exchange for a new appropriation that would provide increased aid for high poverty districts like MPS. Specifically written into the legislation is a provision (pages 18-19) that allows MPS to use this appropriation, outside of revenue limits, to offset the reduction in aid that results from the voucher program.

The Assembly budget just axed the fix with no other provisions to compensate the loss.

And neither the funding fix nor the new appropriation for high poverty districts were included in the piecemeal bill passed by the Assembly a couple of weeks ago, which supposedly gave the Dems "everything they wanted" on K-12 education.

Huebsch Needs Dem Votes...Lots of Them

2007-09-28T07:34:00.000-05:00

A Journal Sentinel article this morning on the budget talks highlighted an interesting point.

It's been known that eventually it would happen, but now that Speaker Huebsch has agreed to at least increase the cigarette tax, it effectively neutralizes the 24 Assembly legislators who signed "no-tax increase" pledges, assuming none of them go back on their word.

Twenty-two of those legislators are from the right side of the aisle, which puts the number of GOPers able to vote for a budget compromise at 30 and the number of Dems at 45.

That means Huebsch needs at least 20 Dem votes to pass a budget compromise, and Assembly Democratic Leader Jim Krueser had the perfect response. According to the JS, Krueser said he could deliver those needed votes, but "that the more votes Huebsch needs, the more the budget would have to reflect Democratic initiatives."

It's not too unlikely that Huebsch could lose a few more GOP votes with his agreement on the medical malpractice fund transfer, or any other agreements he might make in the coming weeks, which could bring the total vote tally needed pretty close to an even split between Repubs and Dems in the Assembly.

Considering the Dems will be providing all of the needed votes in the Senate, at least 40 percent of the needed votes in the Assembly (and maybe more), and the governor's signature on a budget compromise, what do you suppose that should mean for the priorities of that budget?

It's becoming pretty apparent why Huebsch and the other GOP leaders cringed when those pledges were making the rounds last spring.

UPDATE (9/29): From today's JS:

Twenty-five Assembly Republicans have signed pledges saying they would not vote for tax increases, though two of them - Rep. J.A. "Doc" Hines (R-Oxford) and Rep. Eugene Hahn (R-Cambria) - said Friday they could tolerate a budget that raised the cigarette tax. Seven others said they would not. The remainder could not be reached or said they would have to see the overall package.

Two said they would vote for increased taxes, and others said they'd consider it? I'm just not following the political logic on this. Why would you sign a pledge to do something in an attempt to curry political favor, and then announce your willingness to go back on your word less than 6 months later?

Oh, well, it's their re-election...

But this does change the equation a bit by at least giving Huebsch a few more willing GOP legislators to work with when trying to pull together a vote on a compromise budget.

More on the Milwaukee-Madison Divide

2007-09-27T07:53:00.000-05:00

The Journal Sentinel is running another story this morning on the economic divide between Milwaukee and Madison.

At the center of it, once again, is UW-Madison. As an example of how the Madison economy has grown since the 2001 recession, the article notes:

The local GDP data was compiled by the Bureau of Economic Analysis based on information from individual business establishments.

When they were gathered in 2001, Virent Energy Systems Inc., Madison, contributed nothing because it did not exist.

It was started in 2002 to work on making fuels and chemicals from sugars, using technology developed at the University of Wisconsin-Madison, said Eric Apfelbach, president and chief executive officer. By 2005, it had 18 employees and added half a million dollars in sales to Madison's GDP. Now, it employs 60, has sales of about $4 million and just raised $21 million in venture capital.

"All that money comes into town from out of town and pays for salaries and contractors and leases," Apfelbach said. "These high-tech start-ups that can raise venture capital are really economic multipliers."

It was essentially the same story that the JS ran last December, except that one was based on a Wisconsin Taxpayer Alliance report on the growing income disparities between Milwaukee and Madison.

According to that article:

Madison has some "built-in advantages," such as the major research center of the University of Wisconsin-Madison and that it's the state capital, said Ryan Parsons, a research associate for the Wisconsin Taxpayers Alliance.

"But I think what Milwaukee needs to do if it wants to regain some of that balance that was lost in the last 50 years is more of a focus on education and retaining good college graduates," Parsons said. "One of the reasons Madison has such an edge over Milwaukee is having people who can fill high-tech science research jobs. A lot of that work force is missing from a city like Milwaukee."

When commenting on this article back in December, I concluded that reports like this "need to be kept in mind come budget time."

So here we are with a similar report that's released in the midst of budget talks, and part of what's on the table in those talks is the UW System's Growth Agenda, which includes provisions for both expanding the number of graduates and funneling money into the development of research capacities at UW-Milwaukee and the other campuses.

In spite of all the public squawking politicians on both sides engaged in regarding the differences over K-12 education in the budget, it's really higher education where the true budget differences exist. To be sure, the biggest difference between the Dem budget and the GOP budget on K-12 education is where the money should be spent.

In terms of higher education, on the other hand, the two sides are closer to $100 million apart on how much should be funded in the first place, including around $10 million that was dedicated specifically to enhancing the research proposals focusing on engineering and biotechnology made by Chancellor Santiago for UW-Milwaukee.

Part of the problem is how the two sides are discussing the funding issue. On the GOP side, funding is discussed as if it's just aimed at an operating budget to keep the UW System afloat. The talk is about what the UW System needs.

And that fits with the Assembly budget proposal for the UW. As the Dems have rightly pointed out, the $62 million increase for the UW budget that the GOP has proposed would only leave around $6 million in truly new funding outside of what is needed to pay off bonds and increased utility bills.

But, the thing is -- and the reports outlined above support this -- the funding for the UW System doesn't stop with the UW System. Funding for the UW System isn't just paying for stuff, it's also investing in a state resource that has a proven track record of driving and, just as importantly, transforming the economy in this state.

And attacking these investments as nothing more than money grabs isn't providing any real "protection" for the taxpayers, particularly in the long run.

Health Care Reform is Coming Back

2007-09-26T07:36:00.000-05:00

Not in the 07-09 budget, of course. That ship has sailed (or, at least, it sounds like it's sailing).

But, as expected, legislative Dems are making clear that fundamental health care reform is still in the works. As Senator Erpenbach put it bluntly: "It's not going away."

I hope this time away from the spotlight also prompts the Dems to give the Healthy Wisconsin bill a bit of an overhaul. I'd really like to see them come back with the Wisconsin Health Plan and call it a day, but that doesn't seem to be too likely.

There are, however, a couple of key areas that could be altered in the proposal to improve it and make it more politically palatable.

First, allow for HDHP options. These options could mirror those in the WHP where cost sharing isn't applied to preventive care, the deductible is set at a reasonable annual level, and there's a pre-set level of funding in a HSA to allow for first-dollar coverage.

Managing this alongside comprehensive options could be difficult, particularly if people are allowed to switch between plans during an annual open enrollment period. Nevertheless, it's something that should be explored.

Second, explore new funding mechanisms. This is a big one, but it's also the one that would be most difficult to realize. Clearly the biggest substantive objections to Healthy Wisconsin were related to its funding, particularly mandating that all employers contribute a fixed amount to health care.

The reasoning for this mandate is simply that employer-sponsored health care has developed over years and years in this country, and simply abandoning it in one swoop is difficult. But, as I discuss in more detail here, severing the tie between health care and employment should be a goal that's right up there alongside universal coverage in any reform plan.

Third, get some active state Republicans on board. I realize it's highly unlikely anyone in the GOP leadership will sign on, but Republican support for fundamental health care reform isn't impossible.

After all, former Rep. Curt Gielow was a co-sponsor of the WHP and Rep. Terry Musser was a co-sponsor of the Wisconsin Health Care Partnership Plan. And, on the national level, Sen. Bill Bennett -- one of the most conservative Republicans in Congress -- has jumped on board with Sen. Ron Wyden's sweeping Healthy Americans Act.

And, along the same lines, the support of the business community is also key. Healthy Wisconsin and the WHP have some solid business support, but more always can be done. Wyden's Healthy Americans Act is another example on this front; it has the backing of some key national corporations, most notably the CEO of Safeway.

There are other details that also should be examined, such as including more health professionals on the board that oversees the new system, eliminating the use of special affinity groups, creating a mechanism for new businesses to be phased into the plan, and loosening or eliminating the restrictions on insurance company profits.

Needless to say, let's hope the Dems use this break from pushing health care reform as a working vacation.

The Dubious Claim of a Public Worker Gravy Train

2007-09-21T07:56:00.000-05:00

Prompted by a recent report by the Wisconsin Taxpayer Alliance (WTA), Jo Egelhoff of FoxPolitics.net got on the topic of public sector vs. private sector compensation in Wisconsin.

According to the WTA report, average public sector benefits are 50.1 percent greater than the average cost of benefits found in the private sector in the state. This, Egelhoff concludes, is a sign that public sector workers are on a "gravy train" in Wisconsin.

Such a conclusion, however, doesn't tell the whole picture.

For starters, simply comparing "average" benefits packages misses a key point, which is that not all private sector packages are worse than their public sector counterparts. To be sure, a number of top executives in the private sector ride a pretty nice gravy train of their own when it comes to benefits.

And I'm not mentioning that as a "gotcha," but rather as a means for pointing out a fundamental difference between benefits in the public sector and benefits in the private sector.

As a relatively low-level administrative employee at UWM, I get paid a heck of a lot less than the chancellor (and justifiably so); but, in spite of the salary difference, I still get the exact same health care package as he gets, and so does every receptionist on campus, every custodian on campus, every full-time food service worker on campus, etc. That's not something you could say about top executives and lower-level employees at too many private sector corporations, particularly ones that come close to the size of UWM.

Just to clarify, I'm not trying to make the point here that private corporations should need to give the same benefits packages to all employees -- that's an entirely different discussion -- but rather my point is that while a wide gap has developed in much of the private sector when it comes to your position and the benefits you receive, the public sector has opted to keep everyone in largely the same boat when it comes to benefits, which is a big reason why "the average" cost of benefits for the public sector is so much higher than the private sector.

But even more fundamental than that is the issue of total compensation -- that is, benefits plus salary.

Jo addresses the issue of salary in her post, citing some average salary figures from 2005 that were included in the WTA report along with some figures crafted by the conservative Maine Heritage Policy Center (MHPC). Both suggest that even when you factor in salary, Wisconsin public sector employees are still making out better than employees in the private sector.

But, really, you don't need the WTA or the MHPC to relay the total compensation figures for Wisconsin -- the Bureau of Economic Analysis (BEA) publishes those figures on its website for everyone to see, and it even breaks it down by industry and individual county.

Using the BEA data, we can see that total compensation for the private sector in Wisconsin grew 17.6 percent between 2001 and 2005, while total compensation for the public sector grew 18.7 percent in the same period.

And, if you look at the data prior to 2001, when the economy was still kicking in high gear between 1998-2000, private sector compensation grew at 12.1% in Wisconsin while public sector compensation only grew at 9.7 percent. And if you take out the big recession years of 2001 and 2002, and just look at the last three, private sector compensation again outpaces public sector compensation in Wisconsin, 9.1 percent to 6.8 percent.

But, of course, these macro-analyses are complicated because -- although we can see in the BEA data that total private sector employment increased by 7.5 percent between 1998 and 2005, while total public sector employment jumped 6.7 percent in the same period -- that data doesn't tell us what type of jobs exist in each sector or what type are being created and, as a result, driving compensation increases.

Indeed, just as an example, it seems likely that the private sector includes more minimum wage positions than the public sector (think fast food, retail, etc.). And, even beyond wages, the lowest paid positions in the public sector are still receiving excellent benefits packages, just like the higher ups, while it's a pretty safe assumption that those minimum wage workers at places like Dairy Queen or ShopKo aren't getting much of anything in terms of benefits, especially in comparison to the management at their respective companies.

When that's factored into the aggregate -- thereby increasing the "average" compensation for public workers and decreasing it for private workers -- does it necessarily mean that all or even most public sector workers are riding a gravy train?

All in all, there always should be an eye towards how the public sector is being compensated. But using aggregate data to create alarm about a so-called special gravy train for an entire sector of workers is more problematic than it can be made to appear, particularly considering that aggregate data, in and of itself, isn't even all that alarming.

Dan Cody Running for County Supervisor

2007-09-20T07:46:00.000-05:00

I usually don't spotlight candidates on this blog, but I wanted to put in a plug for Dan Cody and his run for Milwaukee County Supervisor in the 15th district.

For those who don't know, Dan writes the "Left on the Lake" blog, and he's also a colleague of mine at UWM. We don't cross paths on campus very often, but every time we have I've been impressed by his professionalism and the respect he garners from others at the university.

Dan is a good guy, and a smart guy. He's also really good with technology, as you can see from his campaign website. Most important, though, is Dan's obvious commitment to Milwaukee County.

So, if you live in the 15th district of Milwaukee County -- see map below -- check out Dan's campaign site and listen to what he has to say if you see him out and about in the community.

(Click for larger view.)

Piecemeal Proposals Would Delay Budget

2007-09-19T07:51:00.000-05:00

The GOP leadership has caused a bit of a stir in the political media the past couple of days by pulling K-12 education funding and local government aids out of the budget; so far, at least two newspaper editorials have sung the praises of this move.

The Janesville Gazette takes its support the furthest, claiming: "We believe the Republican plan is a smart move, rather than a tactic from the conservative fringe."

I'm not so sure why "a smart move" and "a tactic from the conservative fringe" are the only two options for describing a piecemeal budget; in fact, as I've argued before, I'd say it's a smart move intended to further appease the conservative fringe.

A truly eye-raising part of the Janesville Gazette editorial is when it discusses a meeting the paper had last Friday with two Republican legislators, Reps. Brett Davis (R-Oregon) and Robin Vos (R-Racine).

Davis and Vos peddled the line that a piecemeal budget isn't unprecedented, citing how the 1994 transportation budget and the 1999 education budget were split off from the rest of the budget in those years.

Of course, the 1994 transportation budget was a case of the bulk of the budget being set first -- prior to July 1 even -- and just the transportation section was delayed due to a dispute over the gas tax. And, in 1999, the JFC did set a funding level for K-12 education on October 1 -- a mere two days prior to the agrement on the entire budget -- but, according to news reports, that was just setting the level, not actually passing a bill, which isn't even something the JFC could do on its own.

Why the Janesville Gazette -- as a news outlet that surely covered the budget in those years -- decided not to mention these finer points is beyond me.

But what was most off-the-mark in the editorial was the last line: "The 'Property Taxpayer Protection Act' might be the best hope to force compromise."

This line was echoed in another editorial that praised the GOP's attempt at a piecemeal budget, this one appearing in the Tomah Journal. The title of that editorial says it all: "Republican compromise should pave way for budget agreement."

This assumption is wrong on more than one front.

For starters, until the GOP states its willing to bend on its strict funding cap and "no tax increase" budget pledge, any additional funding for any one piece of the budget simply means there's less remaining for the rest of the budget.

As the LFB found, the piecemeal proposals by the GOP would require $115 million worth of cuts to the rest of the GOP budget or abandoning the "no tax increase" pledge. I'm sure Huebsch & Co. would gladly sit down and find $115 million more to cut, but the point is that by agreeing to the GOP piecemeal proposals without addressing the GOP's strict funding cap, the Dems would be effectively pinning themselves into a corner for the rest of negotiations.

And while K-12 education and local government aids are surely important -- arguably the most important aspects of the budget considering how they affect virtually the entire state directly and through property taxes -- that still doesn't mean the rest of the budget isn't important.

This leads to the second problem with assuming a piecemeal budget will kick-start the negotiation process. Once K-12 funding and local government aids are out of the way, a big chunk of the incentive for GOPers to pass a budget in a timely manner -- or even at all -- is largely out the window.

To be sure, if no new budget passes, funding simply continues at previous year levels. Although there are a few alterations that the GOP was on board with making -- such as the expansion of the state crime lab -- a zero-increase budget is largely what Republicans, particularly the fiscal conservatives, have wanted from the start.

And let's not forget that a flat-revenue budget is exactly what Mark Green ran on during his campaign for governor last year.

A Piecemeal Budget Avoids the Big Picture

2007-09-14T07:52:00.000-05:00

A few thoughts on the GOP proposal to split funding for K-12 schools, tech colleges, and shared revenue from the rest of the budget.

For starters, it's probably the best option Republicans have politically-speaking. Once those parts of the budget are out of the way, thereby neutralizing much of the general public's concern over the budget, the GOP wouldn't have any trouble holding firm to most of its other demands to please its fiscal conservative base.

That said, it would be foolish for the Dems to go along with it, which explains why both Doyle and the Senate leadership have already rejected the idea outright.

But even beyond making sense in political terms, rejecting the idea also makes sense in policy terms.

To be sure, from the beginning of budget talks -- even before the conference committee took up deliberations -- the GOP has demanded a "no tax-increase" budget with a strict cap on total funding. Until that stance is addressed, there is simply no way the Dems can know what they're agreeing to on any individual piece of the budget.

Take the K-12 budget as an example. While total K-12 funding was about the same under the Dem budgets -- the governor's and the Senate's -- and the GOP budget to start, there was a significant difference in where the money was being spent. The Dem budgets put about $85 million more into general school aids, while the GOP budget put $100 million more into the school levy credit. You can read more about the differences in those choices here.

But the standalone proposal that the GOP is putting forward now includes the general school aid amount proposed by the Dems and the school levy credit amount proposed by Republicans. There are some cuts to categorical funds in the new GOP proposal, such as (unfortunately) a grant to help develop more K-4 programs in the state, but a funding difference still exists.

So unless the GOP has also announced a willingness to bend on it's "no tax-increase" policy and strict funding cap, it means that the extra funding is going to need to come out of somewhere else; yet, "somewhere else" is nowhere to be seen.

In other words, while the GOP may be mostly agreeing to the Dem proposal on K-12 funding -- as Speaker Huebsch has stressed for the media in recent days -- unless they're also bending on their strict stances on overall funding, it just means they're going to agree to even less down the line.

And therein lies the difficulty with piecemeal budgets, which is why state budgets -- at least in Wisconsin -- simply don't get passed that way (the feds have the comfort of same year deficit spending).

In fact, the last time it happened, according to LFB chief Bob Lang, was in 1995, and that was a case where the vast majority of the budget was passed on June 30, and just the transportation budget was held back due to some disputes over the gas tax.

That's notably different than the current situation where the proposal is to pass a few sections of the budget first -- in mid-September, no less -- and leave the rest for...well, whenever.

UPDATE: The LFB finds that the piecemeal proposals by the GOP would require $115 million worth of cuts to the rest of the GOP budget or abandoning the "no tax increase" pledge.

Blog Slowdown

2007-09-13T08:30:00.002-05:00

Just wanted to toss up a quick note about my recent few-and-far-between postings.

While they're mostly driven by the fact that I've struggled lately to find something poignant enough to write about, for those of you who've ever ventured over to the "View My Profile" section, you've probably seen that one of my interests is fantasy football.

So, now that the season is officially underway, much of my free-time reading is being directed toward the (often bad) advice of the "fantasy experts" at Yahoo, CBS Sportsline, and any other viewpoints I can get my hands on.

At any rate, I apologize for the sporadic blogging, but, as I've noted before, I'd rather keep my virtual mouth shut if I don't have anything interesting and at least fairly original to say (today would be one of those days).

Pretty soon I'll just end the charade and make this blog a weekly, similar to Murphy's Law, which is something I've been considering for awhile.

But, in the meantime, thanks to the handful of folks who continue to stop by on a regular basis. I'll continue to get something out there as much as I think it's worth your time.

Looks Like Lena Taylor Is In

2007-09-12T07:52:00.000-05:00

I'm not aware of an official announcement, but word on the street is that state senator Lena Taylor will be running against Scott Walker for Milwaukee County executive this coming spring.

Conventional thinking is that to defeat Walker, the Dems need a candidate who can reach into the suburbs to take a chunk out of his base.

But while the suburbs might be Walker's base in terms of percentage of support and campaign donations, it's arguable that the city is what won him the election in 2004; and this makes Taylor a solid choice to upend him in 2008.

In the 2004 spring election in which Walker defeated David Riemer, the total vote was 251,158 with 88,132 coming from the suburbs and 163,026 coming from the city. And while Walker won most overwhelmingly in the suburbs -- 57,373 to 29,342 -- he also won the city by a margin of 78,726 to 71,647.

What makes this even more important is turnout. Although some may believe the suburbs would be more likely to get out to vote for a spring election, it was actually the city that had the best turnout.

In comparison to November 2004 when the presidential race was on the ballot, the suburban totals from April 2004 were only 42 percent of the suburban totals from November 2004, while the city totals from the spring were a full 59 percent of the city's fall turnout.

And in comparison to the turnout this past fall, the suburban totals in April 2004 were 59 percent of the suburban totals from November 2006, and the city totals in April 2004 were 97 percent of the city totals in November 2006.

In other words, it was really the city that showed up to elect the county executive in 2004, while the suburbs, which are often credited with being the part of the county that's kept Walker on top, largely stayed home.

So this means that Walker's opponent really needs to focus on changing, as opposed to getting out, the city vote (see UPDATE below). And Taylor is a great candidate for this task considering the wide swath of Milwaukee that she represents as state senator, including 33 wards that Walker won in 2004.

By focusing on a couple of key points, such as transit and the parks, Taylor should be able to capitalize on the media coverage of proposed cuts to these areas by Walker and, as a result, clearly differentiate herself from Walker when it comes to issues that are of high concern for much of the city.

And Taylor will have the added bonus of being recognized as a known Democratic politician, unlike Riemer in 2004, which will highlight the fact that Walker is the Republican in the technically nonpartisan race (voters don't get the handy "D" and "R" listed on the ballot for them).

Doyle won 72 percent of the city vote last November. If Taylor matches that, or even a little less, along with the suburban totals netted by Riemer in 2004 -- which shouldn't be difficult considering the bluing of the 'burbs in recent years -- then she should win the race handily.

And, if not, she goes back to her position as state senator. But, if Walker loses, he won't have such a comfy fall -- it'd be a long two years out of office before the next governor's race in 2010.

UPDATE: Xoff makes a good point in the comments that the hotly contested mayoral race for Milwaukee in spring 2004 was a big reason for the strong city turnout in that election, which suggests Taylor will need to do some getting out the vote work since there doesn't appear to be a heated race for mayor on tap, though it could get hot if David Clarke enters the fray again (this potentially creates a bit of a quandry for Clarke, who is known to be tight with Walker).

But there is still the significant issue of city voters pulling the lever for Walker once they were out to vote in April 2004, which something Taylor has the strong potential to remedy.

And even if you split the difference in the city turnout for the county exec special election in 2002 with the turnout in 2004 -- which would drop the number to around 125,000 -- garnering around 70 percent of the city vote like Doyle did last November still seems to be a pretty solid benchmark for Taylor, and that's not even considering potential gains she could make in the bluing 'burbs.

Does WI Right to Life Know Something We Don't?

2007-09-07T07:43:00.000-05:00

Throughout the summer, Wisconsin Right to Life has been pushing the line that a health care reform plan like Healthy Wisconsin would increase the number of abortions performed in the state because it follows the covered benefits currently offered to state employees.

In its latest release, titled "Wisconsin Abortions Will Skyrocket Under 'Healthy Wisconsin'!" the group states:

"[S]tate employees currently have what amounts to unrestricted coverage for abortion," said Susan Armacost, Legislative Director for Wisconsin Right to Life. "It is bad enough that Wisconsin taxpayers are currently reimbursing abortionists for the abortions of state employees and their dependents but under 'Healthy Wisconsin' they would be reimbursing them for all abortions in the state and the number of abortions will rise dramatically."

As a state employee, this was news to me, so I grabbed my handy benefits guide for 2007 and looked it up. Here's what I found about abortions in the statement uniform benefits under the "Reproductive Services" section (emphasis mine):

Maternity services for prenatal and postnatal care, including services such as normal deliveries, ectopic pregnancies, Cesarean sections, therapeutic abortions, and miscarriages.

The word "abortion" doesn't appear again in the rest of the statement of benefits. As Cory Liebmann pointed out the other day, only therapeutic abortions -- that is, abortions to preserve the health of the mother -- are covered for state employees.

But, just to be certain, I called my health plan, WPS, to double check. And, yes, only therapeutic abortions are covered; all elective abortions need to be paid out-of-pocket.

So where exactly is Wisconsin Right to Life getting its information?

Thankfully, it appears the abortion line has been a lame duck in the fight against health care reform. Wisconsin Right to Life has been pushing it in press releases since at least June, yet I haven't seen it picked up as a feature story by any major media outlet in the state.

Yet, still, simply flooding the press release sections of WisPolitics and the Wheeler Report with misinformation to further a pet cause at the expense of needed health care reform seems bad enough.

UPDATE (9/9): Rick Esenberg has come across an article that claims the state's Standard Plan that's operated by WPS covers all legal abortions, which is apparently the basis upon which Wisconsin Right to Life was making its claims.

This is worth noting, and I should've done that in the post, but I'm not sure how it really changes my basic point.

That is, the RTL aim is to drum up opposition to Healthy Wisconsin -- along with other reform plans like the WHP -- by making people think that all abortions would be covered by taxpayer money if a plan like that was implemented, which would surely, it argues, result in a sharp increase in the number of abortions performed. And, in the case of at least one person who attended a health care forum in Wausau last week, the line worked.

But I'm wondering if it would've worked so well if Wisconsin Right to Life explained that the Standard Plan is Tier 3 coverage, meaning it's the only option out of twenty-plus plans available to state employees that isn't required to follow the uniform benefits policy. And, as such, the Standard Plan costs state employees $290 more per month than Tier 1 coverage, which is enough to fund one or more elective abortions each year out-of-pocket.

This is important because it explains why the vast majority of state employees -- and state citizens, if the tiering system was implemented on a statewide basis under Healthy WI or the WHP -- don't have the Standard Plan (see UPDATE II below for exact figures). And, since the vast majority don't have the plan, the vast majority don't have access to coverage of elective abortions, which pretty clearly deflates the point RTL is trying to make about the "skyrocketing" effect Healthy Wisconsin would supposedly have on abortions in the state.

But Rick assures us in his post that RTL is a professional group, so I'm sure it won't have a problem clarifying its press releases with this important caveat.

And, what's more -- in the interest of moving the discussion forward rather than dragging it down with misleading sensationalist claims -- the group could also aim its releases at simply asking that all plans under any reform strictly adhere to the state's uniform benefits policy, at least when it comes to abortions, which would assure that only therapeutic abortions are covered.

UPDATE II (9/10): According to ETF figures, 2.6 percent of active state employees -- or 1,773 of 69,413 -- had the Standard Plan in 2006. The other 97.4 percent of state employees only have access to coverage of therapeutic abortions.

The Good and Bad of Cost-Sharing

2007-09-05T07:55:00.000-05:00

The Business Journal had an article the other day on hospital profits in the Milwaukee area. Here's the chart that accompanied the article:

Click for larger view.

The focus of the article itself was on the losses experienced by some hospitals, though all systems in the area except for Wheaton Franciscan -- whose losses were mostly attributable to the close of St. Michael's last summer -- did manage to turn a profit in 2006.

Another more nuanced theme in the article look into why profits decreased for most hospitals and systems between 2005 and 2006. To be sure, the only system to experience increased hospital profits across the board in 2006 was Children's Health System, and that's at least partly due to the fact that the board for that system consists of just one hospital.

The article pointed to four primary factors that have driven decreases in hospital profits:

Costs associated with hospital expansions
Continued poor reimbursement levels from state programs
Increased amounts of charity care due to more uninsured patients
Bad debt resulting from insurance plans that require significant cost sharing, such as high deductible health plans (HDHPs).

The last point is probably the most politically potent. On the one hand, it's a good reminder that simply making HSAs state tax free -- a major plank of the state GOP health plan -- isn't going to make health care any more affordable and, in fact, can have the reverse effect.

But, on the other hand, news that bad debt is increasing due to an increased use of HDHPs can unfortunately give others the false impression that high deductibles are inherently faulty.

To be sure, it's not the existence of cost-sharing that's the problem. But some key pieces need to be in place for cost-sharing to effectively reduce overutilization, which is its big promise.

For starters, there need to be tangible protections in place to ensure that preventive care isn't applicable to the cost-sharing and that the cost-sharing amounts are affordable for the participant, the latter of which can be done by setting the cost-sharing amount based upon income, ensuring that a significant portion of the high deductible is pre-funded, or, better yet, some combination of the two.

But just as important as these structural points is educating participants on their responsibilities. Much of the focus on educating participants is often on price transparency, which is certainly important, but there also needs to be some concern for simplifying and standardizing policies and procedures so that people know what to expect during the billing process.

According to the Business Journal article, part of the increase in bad debt is due to the simple fact the people don't understand what they're going to owe when they head in for care. This has prompted hospitals to start hiring financial counselors to work with patients when they get to the hospital to discuss payment responsibilities, which is decent, yet reactive, approach.

A proactive response would be to simplify and standardize health plans across the board, which is exactly what the Wisconsin Health Plan (WHP) does for HDHPs. In addition to fully covering preventive care and pre-funding every participant's HSA with a significant portion of the deductible, the WHP would put everyone in the same boat when it comes to cost-sharing, thereby reducing confusion when people go in for care.

Of course, there still would be some variance in coverage options depending upon the health plan that the participant selected, but what wouldn't change is cost-sharing levels -- everyone would know what to expect, which still ensures the personal responsibility desired by the right without sacrificing the necessary protections desired by the left.

Another Shot at Healthy Wisconsin Falls Short

2007-09-04T07:46:00.000-05:00

John Torinus took another swing at Healthy Wisconsin in his Journal Sentinel column on Sunday. And, again, he missed the mark.

Torinus tries to use a Lewin Group report to criticize the Healthy Wisconsin plan. He writes:

The payroll tax to fund Healthy Wisconsin has been pegged at 14.5% - 4% from every employee in the state and 10.5% from the employer.
...
Now, 14.5% is a big number, but it's not the whole story.

On page 57 of the final Lewin Report, the initial payroll tax percentages are shown as 11.55% for the employer and 3.95% for the employee. That's 15.5% going in, not 14.5%.

It's true that page 57 of the final Lewin report puts the initial payroll assessment at 15.5 percent to start. But that report deals with the Wisconsin Health Plan (WHP), not Healthy Wisconsin.

This is an acknowledgement that Torinus awkwardly makes a few paragraphs later, and he tries to use it to his advantage by saying that the use of high deductibles in the WHP should really make it less expensive than Healthy Wisconsin; hence, the 14.5 percent assessment projection for Healthy Wisconsin must really be low.

To bolster his point, Torinus cites an insurance broker who makes the obvious point that premiums decrease as the deductible increases.

On the surface, it appears that Torinus has struck gold -- he's managed to use a key piece of evidence for fundamental health care reform against the Healthy Wisconsin proposal. However, if you read that evidence a little more closely, the point virtually crumbles.

The most basic reason that the WHP costs more than Healthy Wisconsin is because it covers more people -- 225,000 more, to be exact. That's a 6 percent difference, which is due to the fact that Healthy Wisconsin incorporates the BadgerCare Plus plan that would increase participation in state health programs, thereby decreasing the number of people who would be eligible for Healthy Wisconsin.

This has an impact on the assessment rate since the WHP would have more low-income participants than the Healthy Wisconsin proposal, at least as they're both currently written.

What's more, while it's true that the premiums for plans under the WHP should be cheaper -- and they probably are -- the fact that the proposal includes funding each participant's HSA with $500, at a total cost of $1.5 billion in the first year, dries up a good chunk of that savings. There are also administrative differences between the two proposals that have an affect on costs.

Here's (page 59) the cost breakdown for the WHP:

Click for larger view.

And here's (page 12) the cost breakdown for the Healthy Wisconsin proposal:

Click for larger view.

Bottom line, David Riemer and the people at the Lewin Group aren't trying to pull a fast one on the public with the Healthy Wisconsin proposal. The numbers make sense, though sometimes it takes a little more than just cherry-picking particular points in the 170-plus page Lewin report to see that.

But it was encouraging to see Torinus continue to speak positively, though in a veiled way, about the WHP. If he -- or, more importantly, the state GOP -- preferred to use that proposal as a starting point for discussions, it would be a big step in the right direction for health care reform in the state.

Take $29,000 and Call Me In the Morning

2007-08-29T07:32:00.000-05:00

The Wausau Daily Herald is running a story on a forum sponsored by Americans for Prosperity, which featured two Marathon County docs who oppose Healthy Wisconsin and, it appears, pretty much any fundamental health care reform plan.

The title of the article is "Doctors Slam Health Plan." Not much is given to explain why the two docs would want to slam Healthy Wisconsin, except that they fear the costs of the program will be high and it could draw out-of-state patients who would strain the economy.

Both of these lines have been typical conservative talking points in the debate over fundamental health care reform, and both are largely without merit. The high cost line is relative since, of course, independent studies have shown that the cost of doing nothing is what's the greatest, and the out-of-state line fails to consider state programs that already provide health care to a large portion of low-income residents as well as simple evidence that shows people -- particularly the poor -- often don't move across state lines simply to gain health coverage.

However, I really didn't expect the Daily Herald article to get into the analytical flaws of the presentation by the two docs trotted out by Americans for Prosperity, which the article did point out is an organization that seeks "limited government and market-based economic policies."

But something that might be considered pertinent information in a clearly political article such as this is the fact that the two docs at the forum have together contributed over $29,000 to GOP state candidates since 2005. And all it takes to find that info is a quick search for "Pam Galloway" and "Chris Magiera" on the Wisconsin Democracy Campaign site.

In the end, it's the analysis of the impact of fundamental health care reform that ultimately falls short. But what's potentially most devious in the article is that it gives the impression to readers that the two docs appeared at the forum as independent, professional voices as opposed to highly politicized spokespeople, which is really what their recent spending habits suggest.

Time to Pull Healthy Wisconsin from the Budget

2007-08-28T07:52:00.000-05:00

The budget impasse is starting to make an appearance in the media -- see here and here -- as the summer comes to a close and schools begin to start-up. And the distinct flavor of the media coverage is shared guilt between Dems and GOPers for the stalling.

This is notably different than the way conference committee deliberations started off. After the Assembly released its budget in July, media accounts -- see here and here -- held that an impasse was likely because of how distant the Assembly budget was from the other three versions released up to that point (the Senate version was different in terms of total spending, but that difference was entirely due to the Healthy Wisconsin proposal).

From a political perspective, recent media accounts suggest that the Dems have largely lost that upperhand when it comes to focusing blame for an impasse on the GOP.

That being the case, the Dems need to find some way to jump start negotiations and regain some form of an upperhand -- not only because it will benefit them politically, but also because it's just time to get something accomplished with the budget.

And as much as I want to see fundamental health care reform get passed in Wisconsin, everyone has always known that 2007 isn't the year it's going to happen, which means it's time to pull Healthy Wisconsin from the budget.

Adding the proposal to the budget -- although certainly questionable in terms of timing -- has encouraged this state to both heighten and broaden the discussion of health care reform in important and positive ways. But that aim has run its course, and a plan like Healthy Wisconsin could now serve as much good in terms of raising awareness and furthering discussions as a standalone bill as it does in the budget.

If Healthy Wisconsin is pulled from the budget, the Dems could use the move as leverage to retain BadgerCare Plus, which is a solid short-term plan, along with a variety of other proposals included in the JFC budget and the governor's budget as well as focus public pressure on the GOP to also move to the middle with its positions.

The turn from restless to impatient is clearly coming in the media coverage of the budget, and just as it's in the best interest of the state to get something accomplished, it's in the best interest of the Dems to be ahead of the curve rather than being pulled under it.

Getting Health Care Out of the Labor Market

2007-08-24T07:51:00.000-05:00

Yesterday, Rick Esenberg took issue with a comment of mine regarding the rationale behind health care rationing in the US today.

Responding to my statement that "either your employer offers good coverage or it doesn't," Rick writes:

That's not quite right. Your employer does not offer good coverage or not based upon her astrological chart or whether she is a naughty or nice. She provides it if she needs to do so in order to attract the type of workers that she needs and can afford.

Of course, Rick's essentially correct that coverage is an employment benefit that's typically considered a facet of compensation, which is generally determined by the labor market.

But that's a rationale for the rationing of coverage, not care.

To be sure, there are a good number of people who would be able to utilize their position in the labor market to find new coverage if their current employer decided to drop their existing coverage. It'd surely be a hassle finding a new job, but it would be possible.

But, as health care becomes more and more expensive, there's an increasing number of people who can't easily find a new job to secure new coverage -- people who would be left without coverage, and subsequently without access to most care, if their current employer dropped their health benefits.

And that's how the rationing of care in this country is irrational. It's not determined by need or cost-effectiveness of the treatment, but instead by whether the patient can afford it (there is charity care available for some critical standalone treatments, though the cost of that care is just shifted onto those who do pay, which further contributes to the cycle).

What's more, the larger question remains, should health coverage really be dependent upon your position in the labor market?

One of the most intriguing features of reform plans like Healthy Wisconsin (HW) or the Wisconsin Health Plan (WHP) is that they would effectively sever the tie between health coverage and employment.

At the same time, however, this brings up an issue with the funding for plans like HW and the WHP. While they would separate coverage from employment, they wouldn't separate funding from employers. In fact, employers would be relied upon the most for funding under HW and the WHP.

This is a legitimate concern, and one that is largely borne out of the fact that health coverage has been largely paid for directly by employers in the US throughout the last century. Changing that in one swoop wouldn't be easy.

Of course, it's also true that employers wouldn't necessarily get stuck holding the bag entirely under HW or the WHP. Similar to the way that many employers are cutting benefits -- i.e., reducing compensation -- as health care costs go up in today's system, under HW or the WHP the compensation freeze or cut would just come from somewhere else (probably wages) if the employer assessment becomes too great.

But perhaps a better answer to this dilemma of how to separate health coverage from employment is the Healthy Americans Act (HAA) proposed by Dem Sen. Ron Wyden late last year and recently co-sponsored by GOP Sen. Bob Bennett. Importantly, the HAA also has the backing of some major employers, such as the CEO of Safeway, along with major labor unions, such as the Service Employees International Union.

The basic idea of the HAA is that employers would "cash out" their health coverage expenses in the form of increased wages for employees for at least two years. Individuals then would be required to purchase a private insurance policy or face tax penalties, which is similar to the individual mandate in Massachusetts.

This two-year "cash out" period is intended as a transition from coverage as an employer-based benefit to coverage as a personal responsibility.

After the two year period, employers would no longer need to pay the extra wages, and instead would pay an assessment based upon an equation involving the average regional premium rate, the number of FTE employees, and revenue per FTE employee. This assessment would make up only about 10 percent of the total funding for the system as a whole; so, while employers would still be contributing something directly, it would not nearly be as much as they would be contributing directly to a system like HW or the WHP.

Key to the HAA is the federal subsidies that would be given to individuals up to 400 percent of the poverty level to help pay for their coverage. These subsidies would be paid for by the employer assessment described above along with the elimination of the federal tax break for employer-sponsored health coverage and some savings to Medicaid that would come along with the plan.

It's unclear -- to me, anyway -- whether something like the HAA could be tailored to Wisconsin alone, though it seems worth a look, especially if getting health care out of the labor market is a goal, and it certainly should be.

More details on the HAA can be found here.

There's Two in the Hole for Rudy, Too

2007-08-23T07:49:00.000-05:00

Michael Mathias points out that Russ Feingold was tabbed by Forbes as DC's most eligible bachelor alongside the city's most eligible bachelorette, Condoleezza Rice.

According to the snippet on Feingold, a "second divorce probably puts the kibosh on any presidential ambitions he may harbor."

A second divorce would do him in, huh? Someone from Forbes better tell Rudy.

And, while they're at it, they should tell Steve Forbes, who's co-chairing Giuliani's presidential campaign.

UPDATE: I initially included the word "messy" in the quote above from Forbes, which it uses to describe Feingold's second divorce. In reality, it appears that Feingold's second divorce was quite amicable. I should've checked more into it prior to relaying the quote -- my mistake.

WMC Survey Shows Support for Healthy WI & WHP

2007-08-22T07:55:00.000-05:00

Wisconsin Manufacturers and Commerce (WMC), along with the conservative Club for Growth, released a survey yesterday that found 64 percent of respondents believe:

[T]he best way to reform the current private health care system is to cut costs and provide more choices by increasing competition among private insurance companies and by requiring health care providers to be more transparent with their actual costs.

Of course, WMC thinks this means that people oppose a reform plan like Healthy Wisconsin or the Wisconsin Health Plan (WHP); but, in reality, this is essentially what those plans would do, especially the part about increasing competition among private insurance companies (the WHP would also increase the push for transparency via its use of HDHPs).

The alternative that respondents to the WMC/Club for Growth survey were allowed to choose was the following, which was supposed to represent plans like Healthy WI and the WHP:

[T]he best way to reform health care is to replace the current private health insurance system with a new universal insurance system that is run by the Wisconsin state government.

It isn't difficult to see how this survey is part of a broader attempt by conservative critics to frame Healthy WI and the WHP as "government run health care," thereby utilizing the negative connotations associated with that phrase; yet, both plans solidify, as opposed to replace, our system of private payers and private providers.

What's more, most polls -- such as this NY Times/CBS poll from February (see questions 27 and 28) -- are clear that the public widely supports the government involving itself in the health care market to ensure the entire population has adequate coverage; it's the issue of care that most people want to protect from government intrusion.

The more astute conservatives try to link the two by putting forward a rationing argument that claims by controlling coverage, the government would be, in effect, controlling care.

But this argument assumes the government would be able to limit coverage without public oversight. After all, if the government gets to the point where reducing coverage is on the table in an effort to avoid increasing revenue, the public still has a choice -- reduce coverage, increase revenue, or some combination of the two.

Some universal coverage countries, like the UK, have opted to limit coverage in an effort to reign in revenue. But others, like Switzerland, Germany, France, etc., have not.

And figuring out this coverage vs. revenue equation is an ongoing discussion that each country -- or state, in the case of Wisconsin -- should be able to have in a rational, democratic, and open manner, rather than the irrational way that rationing occurs in our current fragmented system (i.e., either your employer offers good coverage or it doesn't).

Further complicating the conservative argument about "government run health care" is the other argument the same commentators put forward about state mandates. The mandates argument is that the government in Wisconsin, and some other states, has been guilty of requiring insurance companies to increase benefits too much, which has driven up the cost of coverage.

So, on the one hand, government would surely reduce coverage and, thereby, interfere in decisions that should be left to the doctor and the patient. Yet, on the other hand, government is increasing doctor-patient options too much by mandating certain amounts of coverage.

It's quite a tangled web, and one that ultimately raises the question: At what point does opposition become merely opposition for opposition's sake?

----------------------

UPDATE I: Check out the Brawler's take on the re-hashed "Healthier Choices" plan from the WMC.

The main thrust of WMC's Healthier Choices proposal is allowing for a supposed "diversity" of health care plans, which is essentially a euphemism for keeping the door open to under-insurance and adverse selection, as I discuss in this post.

UPDATE II: Cory Liebmann offers more on the WMC/Club for Growth survey.

Aaron Rodgers' Improvement Is His Own

2007-08-21T07:48:00.000-05:00

I have a confession to make: I'm not a big Brett Favre fan.

Don't get me wrong, I do think he's had a great career and he's a clear-cut Hall of Famer.

But my reasoning for not being a big fan doesn't have much to do with Favre's play on the field. Rather, it comes from the way Favre has largely shunned any sort of role as mentor for Aaron Rodgers.

That's why it's particularly frustrating to read an article on Rodgers' noticeable progress this pre-season, in terms of both play and maturity, and see this smack-dab in the middle of it: "Clearly, Brett Favre has rubbed off on him. The Packers hoped that would happen."

The paragraph comes after a discussion of how Rodgers' has ditched the California hair gel he sported out of college for a scruffy beard -- an apparent sign of humility.

Who else sports the scruff look in Green Bay? Well, Brett Favre, of course, so he must be the reason for Rodgers' scruff and his subsequent improved maturity and his subsequent improved play on the field.

It's quite a leap, particularly given the not-so-secret disinterest Favre has for providing Rodgers with that sort of help. Yet, if there's one benefit of not getting help from Favre, it's that Rodgers' improvement and success would be his own.

The Packers media at least needs to let him have that.

The Lone "No" Vote on Reciprocity

2007-08-17T07:21:00.000-05:00

As expected, the JFC approved a new tuition reciprocity agreement with Minnesota yesterday in a 15-1 vote.

The lone vote against the new agreement was Sen. Glenn Grothman (R-West Bend). Grothman's complaint was that Wisconsin will be sending about $12 million per year to Minnesota to compensate for the fact that Wisconsin students pay less than U of M tuition while Minnesota students pay more than UW tuition.

According to Grothman, that means the state is subsidizing Wisconsin students who want to go out of state for their higher education.

This, of course, is quite a stance to take considering -- as higher education board director Connie Hutchinson explained to Grothman -- the extra money that Wisconsin makes off Minnesota reciprocity students more than makes up for the subsidy payment.

In spite of this explanation, apparently Grothman still voted against the agreement.

I know it's a nit-picky question to ask considering the agreement passed, and overwhelmingly so, but what was Grothman's reasoning for voting against the agreement?

Did he have data that contradicts Hutchinson's statements -- in which case the entire JFC should probably know about it -- or does he just generally oppose a program that at least breaks even fiscally while simultaneously providing more affordable higher education options for Wisconsin students?

While Grothman was the lone JFC vote against the new reciprocity agreement, he wouldn't be the only GOP legislator to just oppose reciprocity altogether.

Is a Productive Health Care Debate Possible in Today's State Legislature?

2007-08-16T07:48:00.000-05:00

The Brawler came across an interesting article the other day on the state GOP leadership's reaction to the Wisconsin Health Plan when it was initially announced in summer of 2005.

Here's a snippet from the article, which appeared in the June 16, 2005 issue of the Cap Times:

Despite its backing by [Rep. Curt] Gielow, a Republican, other Republicans quickly blasted the proposal as a big-government scheme.
Rep. Robin Vos, R-Racine, described the plan as a form of government-mandated "Hillary-care," referring to former first lady Hillary Clinton's health insurance proposal of the 1990s.
"It's hard to know what to say," Vos told Gielow. "Radical is a kind term for this program, in my opinion."
Rep. Leah Vukmir, R-Wauwatosa, called it "nothing short of a framework for socialized medicine in Wisconsin" that would create a "slippery slope of compulsory managed care and unending tax increases."
Sen. Ted Kanavas, R-Brookfield, said he was "outraged" by the "ludicrous" plan. "I do not want a system where a Madison bureaucrat decides on a whim what doctors I am able to see or who provides care for my family," he said in a statement.
"Socialism and more government should not be the way of this new millennium," he said.

This is interesting because many of the specific complaints conservatives have been raising about Healthy Wisconsin wouldn't be an issue under the WHP:

Healthy WI was hastily thrown together and into the budget. The same couldn't be said of the WHP, which was made public over two years ago. And the WHP also has been brought before numerous public forums since its announcement.

No detailed report on the estimated effects of Healthy WI exists. The same can't be said for the WHP, which underwent a detailed review by the Lewin Group resulting in a 170+ page report.

Healthy WI doesn't include enough consumer involvement. The same can't be said of the WHP, which is entirely comprised of high deductible health plans. It's possible to haggle over the specific deductible amount and how much should be pre-funded into the HSA, but the basic idea of consumer-driven health care is on prominent display in the WHP.

There are other smaller complaints raised about Healthy WI that wouldn't exist under the WHP, such as the 92 percent requirement for private insurers, the use of fee-for-service plans, the existence of affinity groups, etc.

And if we could get the two sides of the legislature to come to the table over a proposal like the WHP -- I'm not saying they need to agree on it as is, but just come to the table over it -- it would be a major step forward for the health care debate in Wisconsin.

But, as the Brawler deduces from the above quote, the current leadership of the state GOP doesn't seem all that interested in coming to any table where a fundamental solution to our health care woes is on tap.

The Health Care Debate Deserves Better

2007-08-15T07:45:00.000-05:00

I've always enjoyed reading Christian Schneider's work. He's a smart commentator, and it didn't surprise me at all when the Wisconsin Policy Research Institute lured him out from behind the puppet to become one of its more prominent voices.

But I must say that his recent work on the Healthy Wisconsin plan is not among his better stuff.

There are certainly points where someone could critique Healthy WI, such as its use of affinity groups, its capping of extra payments for fee-for-service coverage, the fact that no HDHP choice exists, etc. But rather than hitting on these substantive points or others like them, Schneider has been tossing out some critiques that are, well, rather superficial.

The first was a post about how Healthy WI is supposedly going to draw a bunch of free-loading low income people to the state where they'll be able to enjoy publicly-sponsored health care through their job at Dairy Queen.

However, considering most low income families can already get free health care through BadgerCare and virtually all low income individuals would be able to get it through BadgerCare Plus -- a plan that even Republicans are considering -- the charge that Healthy WI would draw free-loaders to the state comes off as baseless rhetoric. (I offer more about why it's baseless here.)

Schneider followed up that post with another last week on how cutting health care spending must inevitably hurt the quality of care, just as cutting a proportionate sum from the UW budget would hurt -- at least in the eyes of Dems -- the quality of higher education in the state.

This argument way oversimplifies the health care market, which is far more complex than the UW budget. There are multiple layers within the health care market, mostly due to the existence of third party payers, which has created fragmentation that's led to administrative inefficiencies, cost-shifting, overutilization, poor disease management, etc. Restructuring the system as a whole to close these inefficiencies, stop cost-shifting, cut overutilization, etc., does nothing to the quality of health care delivery except make it more consistent and coordinated.

Indeed, this argument would mean that there's no way to cut health care costs without negatively impacting quality. So that means someone like John Torinus must have wreaked havoc on the quality of care for Serigraph employees when he instituted cost saving measures in recent years. And when the state revamped its health plan, a move that saved millions, it must have put a major dent in the Cadillac that state employees have been riding. (I can't speak for Serigraph, but I can say that the quality of care received by state employees didn't drop a bit after the system overhaul.)

And now Schneider's latest post is an attack on Healthy WI via one of the right's favorite, if grossly misleading, points of comparison: the UK. The post deals with the decision by the UK health care board to limit Alzheimer's drugs to later-stage patients due what was determined to be limited cost-effectiveness for early-stage patients.

Using this as an example of rationing, Schneider writes: "While supporters of Wisconsin’s proposed government-run health care system continue to speculate as to how the program will work, they forget that similar programs already exist."

Similar programs? Health care in the UK is entirely controlled by the government -- it owns the payer and it owns all of the providers. No one is proposing anything close to that for Wisconsin. What's being proposed is a coordinated system of private payers and private providers, very similar to what state employees have now.

(Side-Note: You want to talk about a lapse in logic, conservatives have made a sport out of deriding the rich "Cadillac" health care benefits enjoyed by state employees for years. Yet, when an offer is made to bring everyone under a similar system with benefits that are virtually as rich as what's currently offered by the state, conservatives attack the offer as a dastardly ploy for more government control that will inevitably make private sector health care worse.)

If conservatives want to pick a point of comparison abroad, the best place to look is probably Germany, which has a publicly-coordinated system of mostly private payers and private providers -- which is financed through an employee/employer payroll assessment -- just as Healthy Wisconsin, the Wisconsin Health Plan, the Healthy Americans Act, and the many other serious reform plans propose for the US.

If there are any allegations of substantial rationing in Germany, those would be far more on point than instances in the UK or Canada. (And, of course, it's always important to consider rationing in other systems in the context of the rationing that already takes place in the US system.)

In the end, I struggled with whether to center this post on Schneider's commentaries since my preference isn't to single out other voices in such a focused manner. But, similar to my reasons for critiquing John Torinus, I see Schneider as an important and respectable voice in the political sphere.

And, on the issue of health care, I just think Schneider can do better, and I know the debate itself deserves better.

The JS Continues to Pound Aurora

2007-08-13T07:48:00.000-05:00

The latest article -- which follows a heated editorial and an already-skeptical initial article -- continues to hit the question of whether Aurora's plans to build new hospitals less than five miles from existing hospitals, which it's doing in both Ozaukee and Waukesha counties, will serve to help or hurt health care costs in the area.

Somewhat amusingly, the only response Aurora could muster to the charge is that it has an advisory board that includes community representation. So, community, don't say you didn't have any input on this!

As I explained last week, the move by Aurora is just profit-driven business. Likewise, the reporting on it by the Journal Sentinel is just good journalism.

But what I can't seem to figure is why, in the midst of its sharp stories on Aurora, the JS continues to give a free pass to actions by Columbia St. Mary's that are largely the same in nature and entirely the same in purpose.

The Budget is Halfway Done!

2007-08-09T07:52:00.000-05:00

Or, to put it more accurately, it's not even close to being finished.

Assembly Speaker Mike Huebsch has been going out of his way at conference committee hearings to stress for the media in the room that 571 items have been agreed upon, which must mean serious progress has been made. Of course, those 571 uncontroversial items represent only 2 percent of the budget in terms of total dollars.

This suggests, to me, a couple of things.

First, the Dems went into conference committee deliberations with a much stronger hand than the GOP. The Assembly budget took a whooping in the press not only because of its positions, but also because of how drastically it differed from the budget that came out of the JFC.

A GOPer might respond that the JFC hearings were skewed to favor the Dems since a split vote sided with Doyle's budget. That's true, but that's also fair considering Dems control two out of the three budget pieces.

And, the fact is, Huebsch & Co. on the conference committee wouldn't even agree to the hundreds of proposals that passed the JFC with support from at least half of the GOP delegation, which is a clear testament to how far the Assembly budget strayed from the little progress that was made during the JFC portion of the process.

Plus, the bottom line for the point is that the public perception -- I happen to think it's accurate -- is that if the budget is delayed, it's the Assembly that's delaying it because of its outlandish budget positions, which is why Huebsch is so focused on stressing glass-is-half-full lines that don't really add up to significant progress.

The second thing these lines suggest is that the GOP isn't in all that much of a hurry to pass the budget. On the surface, this point may not seem to fit with the last, but it becomes clearer when you think of it in terms of two constituencies the GOP is trying to juggle.

On the last point -- the point of progress -- the GOP is aiming to pacify the feelings of the public at large. On the second point -- the point of putting up a fight -- the GOP is aiming to please the demands of its base, specifically the fire-breathing fiscal conservative base that resides most heavily in the SE part of the state.

The longer the GOP can hold out on the budget, the happier the base will be that it's sticking to its zero-tax-increase pledge. But, of course, it's a tightrope walk since the GOP doesn't want to simultaneously give the appearance that it's stalling progress.

This is largely the same tightrope walk that Mark Green tried to navigate in last year's gubernatorial election, and it was surely a big reason he wasn't able to craft a central message that could drive his campaign (of course, it didn't help that the Doyle campaign drove home the "Green is extreme" message perfectly, which prevented Green from making effective pleas to the public at large while simultaneously exciting the base).

I'd be surprised to see the GOP Assembly succeed where Green failed, especially since time is quickly running out. As Rep. Jeff Fitzgerald (R-Horicon) has said on more than one occasion about the budget, "I've got all summer. This is the only thing we have to pass."

Although the last day of summer is officially September 22, most tend to associate it with Labor Day weekend, which gives the conference committee three short weeks -- and meeting 1-2 times per week means they're really short -- to work something out before the kids go back to school and more folks start paying attention to what the heck is taking so long at the Capitol.

Torinus Responds to Inquiries

2007-08-07T07:29:00.000-05:00

I noted yesterday that I would post an update when John Torinus responded to my questions, but it seemed worthwhile to separate the responses into a follow-up post.

One of my questions stemmed from this line that appeared in the August 5 column by Torinus:

Health maintenance organizations, another grand scheme that is a form of what the Riemer plan proposes, has been roundly rejected by patients and doctors alike. Why? Because it limits choice, narrows competition and often defaults to rationing.

Since the Healthy Wisconsin plan actually would be based upon the coordinated system of managed care plans currently used by the state, I asked Torinus if he was aware of any instances of limited choices or rationing for state employees.

Torinus' response: "I am not aware of complaints in particular about the ETF plan; nor did I cite them in my column. I am aware that the backlash against HMOs in the late 1990s was enormous, and almost all the major health plans backed off the rationing, off the 'management.' That comes from the heads of the heads plans [sic] who I have talked with many times."

Fair enough. But the fact is the Healthy Wisconsin plan is modeled after the state health plan, which doesn't contain any issues with limited choice or rationing (remember, it's a Cadillac).

Another question of mine pertained to this paragraph from the August 5 column, which immediately followed the quote above about HMOs:

In sharp contrast, employees in consumer-empowered plans generally rate their health benefits as excellent. Why? They are in control. They are given health accounts. It's their money to spend or not spend. They make the choices. They collaborate with their doctors on decisions about treatments. Some large system isn't managing them.

I presented Torinus with some recent independent survey data (see here and here) that shows HDHPs actually have low satisfaction rates from participants, particularly in relation to comprehensive coverage plans, and I asked if he has any data that suggests the opposite.

Torinus' response: "My satisfaction readings come from companies I have visited in Wisconsin and from an employee survey at Serigraph. I take my stuff from the real world, up close and personal."

This answer doesn't quite seem to cut it. The independent surveys I cited for Torinus come from the real world, too, and they are undoubtedly more representative than an internal company survey from Serigraph and the undocumented visits that Torinus has made with some companies around the state (who did he meet?, what did he ask?, etc.).

In addition to those two main questions, I also followed-up with Torinus on the initial question I asked a couple of week ago about the total costs for a family policy at Serigraph, including all cost-sharing amounts. The question came in response to Torinus citing "$7400 per employee" costs at the company in one of his July columns.

Shortly after I sent him the question the first time, Torinus forwarded my request to a benefits specialist at Serigraph, but I never heard back from that person. In this latest email, I asked Torinus if he could ask that person again to send me the figures.

Torinus' response: "When I gave you the number of $7400 per covered employee, that was all charges. It comes off total net charges. So, the deductibles and co-insurance and co-pays are included. At Serigraph, the split works out to about 78% company and 22% employee."

This, of course, still doesn't answer my question. Furthermore, the discussion about "total net charges" suggests that Serigraph self-insures, which means it uses an employer-sponsored fund to pay medical expenses rather than contracting through an insurance company.

Since the "per covered employee" figure is coming off total net charges, that means $7400 is the total amount Serigraph and its employees have spent in health care -- premiums and cost sharing -- divided by the number of employees at the company. This invariably deflates the cost because it includes single policy people along with those who didn't ever use their coverage and therefore didn't add up any cost sharing charges.

What's more, since the company self-insures, that means it needs to contract on its own with health care providers to get discounted prices once the deductible is paid and benefits kick in. Based on the response by Torinus, the $7400 figure doesn't include the administrative costs associated with this task.

In a reply, I laid out these concerns for Torinus, explaining that the $7400 figure really doesn't answer my question. He emailed back to say this is "an unproductive dialog," and he asked that it not continue.

So that's that. I'm disappointed I wasn't able to get a figure for total costs of a family policy, including all cost sharing, at Serigraph. I think it's an important question, and it gains in importance each time the $7400 figure is cited on the second page of the Business section in Sunday Journal Sentinel.

A Couple More Questions for John Torinus

2007-08-06T07:53:00.000-05:00

John Torinus wrote his third column on the Healthy Wisconsin plan yesterday, and it raised about as many questions as the rest.

Here's the opening line from the latest: "When I challenged David Riemer, the architect of the pending bill for a Wisconsin single-payer system for health care, that his concept was Swiss cheese, more holes than solutions, he challenged me for my plan."

Feel free to check out the transcript of the debate here. I don't see a single place where Torinus points out "holes" in the Healthy Wisconsin plan that Riemer doesn't immediately address; in fact, the "swiss cheese" line doesn't even appear until the final comments.

And when Torinus pulled out his patented line about public health costs vs. private health costs, Riemer addressed it, and Torinus never broached the topic again during the debate. Although that didn't stop him from using it again in yesterday's column.

In fact, to better answer the public vs. private health costs question, I asked Torinus a couple of weeks ago for the total cost of a family policy at Serigraph, including all cost sharing. Even though I still don't have a response for that question, I have a couple more questions that I just sent to Torinus.

In his column from yesterday, Torinus writes:

Health maintenance organizations, another grand scheme that is a form of what the Riemer plan proposes, has been roundly rejected by patients and doctors alike. Why? Because it limits choice, narrows competition and often defaults to rationing.

In sharp contrast, employees in consumer-empowered plans generally rate their health benefits as excellent. Why? They are in control. They are given health accounts. It's their money to spend or not spend. They make the choices. They collaborate with their doctors on decisions about treatments. Some large system isn't managing them.

Since the Healthy Wisconsin plan is based upon the coordinated system of managed care plans used for the state health plan, does Torinus have any examples of situations where state employees have experienced limited choice or rationing?

Secondly, I'm hoping Torinus can share some evidence for his claim that "employees in consumer-empowered plans generally rate their health benefits as excellent." In fact, multiple studies have shown the consumer satisfaction is significantly lower under HDHPs than traditional comprehensive coverage.

According to a June article in the Wall Street Journal (which I imagine Torinus reads):

[T]hose who are in consumer-directed health plans often report lower satisfaction and confusion about how the plans are supposed to work. The general idea is for patients to conserve money in their savings accounts, which are meant to pay for care until they reach their high insurance deductible. In theory, patients who shop carefully could have money left over, which they can keep and let build into savings for bigger health-care costs down the line.

In a survey published last month by Towers Perrin, an employee-benefits firm, employees enrolled in them said they felt less capable of finding a quality doctor or hospital, though they often were in the same network as colleagues in other plans. Only 29% said they tried to save money in their accounts for future medical expenses.

The WSJ also cited a Kaiser Family Foundation survey that similarly found low satisfaction rates and high confusion for consumers enrolled in HDHPs. According to that survey, when given a choice between a HDHP and comprehensive coverage, only 19 percent of employees opt for the HDHP.

And yet another survey conducted by the Commonwealth Fund and the Employee Benefits Research Institute found that 63 percent of individuals with comprehensive coverage were extremely satisfied or very satisfied with their coverage, while only 42 percent of individuals in consumer-driven health plans felt the same.

As with my last question for Torinus -- which I'm still waiting on -- I'll post an update when I hear back.

UPDATE: See a rundown of Torinus' responses here.

A Hospital Arms Race -- What'd You Expect?

2007-08-03T07:29:00.000-05:00

The Journal Sentinel editorial board is justifiably skeptical about the claims by Aurora and Advanced Healthcare that the newly proposed hospital in Grafton will reduce health care costs. It clearly won't.

But is it all that surprising of a move? Yes, Aurora is non-profit on paper, but it's still clearly a business. And so is health care in general. It's not like the move by Columbia St. Mary (CSM) to cut 33 percent of its licensed beds in Milwaukee County -- an area the CSM's CEO admits has "a ton of unmet needs" -- is any different. They're both profit-driven moves made by businesses.

We're talking about companies whose executives pull in over a half million dollars in salary alone each year -- and rising -- and they likely have a number of docs on the payroll who make as much, if not more.

Needless to say, these aren't your Habitat for Humanity-type non-profits.

And if you want to do something about these types of non-profit profit-driven moves, asking the businesses to explain themselves isn't the answer. Really, there are two fundamental options.

First, you require health systems to justify their hospital expansions through instituting a Certificate of Need (CON), as Jack Lohman mentions in this comment. A CON would require non-profit health systems to put their expansion plans in front of an impartial public board to assess whether the community truly needs the added services provided by the expansion.

But this would really only limit moves to create an overabundance of services in highly profitable areas -- read: well-insured areas -- such as the Aurora plan to build a hospital less than five miles away from a CSM hospital that is currently undergoing a $72 million expansion of its own.

A second avenue of reform is needed to prevent systems from downsizing in less profitable areas -- read: poorly-insured areas -- in spite of the unmet needs that may exist there, which is what CSM is doing in Milwaukee County. And you can't simply demand a health system remain in an area where it's going to lose money.

But what you can do is level the playing field so that there isn't any significant difference between the profitability of one area in relation to another.

In other words, you can institute fundamental health care reform that ensures equitable universal coverage and increases the Medicaid reimbursement levels to at or near the levels of private payers that would cover the rest of the population (or, better yet, eliminates Medicaid altogether and puts everyone under the same reimbursement structure).

Without these types of fundamental reforms, expecting a business to willingly not follow the profit is a little like expecting Bonds to hang it up at 754 -- it's not gonna happen.

See No Debate, Hear No Debate

2007-08-02T07:57:00.000-05:00

David Riemer and John Torinus engaged in a barely-publicized online debate yesterday on the Healthy Wisconsin initiative.

Based on what I can tell, the only mention of the debate came on the JS DayWatch blog a few minutes before the debate started. I can't even find a link to it off the JS site today; but, if you're interested, you can find the transcript here.

In the end, it wasn't an overly exciting exchange. Both are clearly smart commentators, but what did shine through is that while Torinus knows his company's general position on health care quite well, Riemer has a stronger grasp of the overall nuances of how the health care market operates.

The most interesting part came when Torinus trundled out his argument about "per employee" health care costs being higher for the state than the private sector. He asks: "Why model after a high price plan, the state employeem [sic] plan at $11,000 to $13,000 per employee, versus $6,000 at private companies with rich benefits?"

Here's Riemer's response:

Sorry, John, the facts tell a different story.
I've double checked the numbers, and it turns out that the per-enrollee cost of Healthy Wisconsin, about $4,000, is not that distant from the SEHP's per-enroll cost, which Legislative Fiscal Bureau has calculated to be about $4,980. Last time I took a math refresher course, $4,980 was not "two to three to four times" higher than $4,000.

Yes, SEHP is more costly. But there are reasons for that.

First, although Healthy Wisconsin is modeled on the core principles that drive the state employee plan (such as consumer empowerment, consumer choice, price sensitivity at the time of plan selection, and price sensitivity in buying prescription drugs), SEHP has much “richer” benefits because it has no deductibles and far lower co-pays—and thus it costs more.

Second, SEHP has an older membership—and thus it costs more.

Third, while Healthy Wisconsin would bring to bear a large purchasing pool in every county, the SEHP has a strong purchasing pool in only a single county (Dane)—and thus, exercising far less market pressure, it costs more.

Finally, while Healthy Wisconsin would end cost-shifting from the uninsured and non-insuring employers to organizations that cover all their employees, the SEHP plan is on the receiving end of massive cost-shifting in today’s environment—and thus it costs more.

This is interesting because of the vastly different figures Riemer quotes for the state health plan -- Torinus says $11,000-$13,000 "per employee," Riemer says $4,980 "per enrollee." I'll try to locate that LFB report that Riemer mentions, and I'll post an update if I can find it.

But, as I've argued before, "per employee" or "per enrollee" costs really don't tell us that much since they mix single and family policies into one cost figure and they fail to consider cost sharing that can drastically decrease the initial costs of the coverage.

And that's why it's the latter part of Riemer's response that I find the most impressive of the entire debate. Rather than just relying on these "per enrollee" numbers, which are lower under Healthy Wisconsin, Riemer takes the time to explain why those numbers would be lower.

When Torinus has quoted his company's "per employee" numbers in the past, he's just left it at that, as if it tells the entire story. But there are a number of factors that can skew those figures, including the number of single vs. family policies, the risk factors associated with the covered population, and -- perhaps most importantly -- the cost sharing levels associated with the policies.

As reader John Foust put it in an email recently, there are no "magic beans of low-priced health care." There are certain factors that can make a policy cost more or cost less in our current fragmented health care environment -- such as the size of the purchasing pool and the risk factors associated with it -- but, for the most part, you get what you pay for.

We can always change the landscape of the current market to increase administrative efficiencies, more effectively leverage purchasing pools, and distribute risk more evenly -- which is what Healthy Wisconsin does -- but health care is still going to be expensive and the cost is still going to increase in the coming years unless we drastically cut provider payments or ration care, which no one is proposing. As Riemer put it in the online debate yesterday, "what we're all striving for [is] a significant reduction in the RATE of growth compared to the unacceptable status quo."

In any event, I'm still waiting to hear about the total policy costs for family coverage at Serigraph, including all cost sharing amounts. I did hear from Torinus that his "per employee" numbers only include covered employees and that they mix single and family policies, but he had to direct me to a company benefits specialist regarding total policy costs. I'll update back when I hear something.

UPDATE: The Brawler offers his take on the debate, along with a broader discussion of media coverage of Healthy WI, here.

Follow the Profits, Not the Patients

2007-08-01T07:24:00.000-05:00

"It'll increase health care costs" has become the label of choice for health care executives commenting on a competitor's moves, while "it'll decrease health care costs" is shorthand for the moves that an executive's own company makes.

Case in point, the recent move by provider giant Aurora to buyout clinic giant Advanced Healthcare. This move is allowing Aurora to build a new hospital in Grafton, just under five miles from a Columbia St. Mary's hospital that's going through a $72 million expansion.

According to Advanced Healthcare president in the joint press release announcing the buyout:

If we can coordinate care for our patients, ensuring that they receive the right care at the right time and in the right place, we can improve outcomes and reduce costs. That’s what integrated care is all about, and that’s what Advanced and Aurora will work toward.

Contrast that with the reaction by Columbia St. Mary's CEO Leo Brideau:

You have a community that has a ton of unmet needs in Milwaukee County. And the last time I looked around, there were no unmet needs in Ozaukee County.

Adding: "There is no question among health care economists that adding excess capacity in a market drives up health care costs."

My guess is that Aurora's move won't do much at all to health care costs; they'd continue to go up either way. The idea that coordination of care is going to increase significantly under this buyout is a bit of a stretch. All that will change is that Advanced Healthcare patients will start getting referred to the new Aurora hospital rather than Columbia St. Mary's or Froedtert. That's not more or better coordination, nor is it less or worse coordination; it's just different coordination.

But what I love the most about this buyout is the reaction it's brought by execs like Brideau. While Brideau is certainly more on target about the impact of the buyout than the press release by Aurora and Advanced Healthcare, in the process of explaining his point, he essentially shots himself in the foot.

The line about "a ton of unmet needs in Milwaukee County" was obviously a shot at the placement of this new hospital in the well-insured, yet not that densely populated, Ozaukee County.

But it also brings into question the lines Brideau was giving the Journal Sentinel just a few days ago about his system's plans to cut licensed patient beds by 33 percent in Milwaukee County. And this is a little over a year after Wheaton Franciscan closed the only other hospital on the north side of Milwaukee, leaving Columbia St. Mary's as the lone hospital provider in the immediate area for many residents.

Just as I pointed out the other day, the question of why Columbia St. Mary's would reduce its beds by 1/3 in an area with "a ton of unmet needs" -- while funding a $72 million expansion in an area with "no unmet needs" -- is answered perfectly by another quote from Brideau in today's JS:

Let's be honest about this. It's not about integration. It's about moving into a market they think can be profitable.

It's gotta be like looking in a mirror sometimes.

-------------

Side-Note: On Monday I mentioned an online debate that's supposed to be taking place between John Torinus and David Riemer on the Healthy Wisconsin plan today at noon on the JS website. However, I haven't seen anything advertised for it, so I'm double checking to see whether it's still going to take place. I'll update back when I hear something.

UPDATE: I'm told the online debate is still on, even though advertising by the JS has been sparse to non-existent. If you're interested, I suppose your best bet is to check out the JS site at noon to see if anything about it is there.

UPDATE II: You can find the Torinus-Riemer debate here.

Columbia St. Mary's Gets a Freebie

2007-07-30T07:48:00.000-05:00

Come on, Dorn, get in front of the damn ball. Don't give me this "ole" bullshit!
- Lou Brown, Major League

That's the line I kept thinking about while reading this article that appeared in the Journal Sentinel on Sunday. The premise of the article is pretty straightforward -- Columbia St. Mary's is building a new hospital to combine two of its three campuses, and the project is largely on target in terms of time and money.

That's all well and good, but at a couple of important points in the article, comments are slipped in about this project somehow lowering health care costs. The last two lines sum it up the best:

But increasing efficiency is essential in any effort to slow the rise in health care costs. Columbia St. Mary's has repeatedly said the new hospital will help do that, and, so far, it's on track to fulfill that promise.

Let's see. Columbia St. Mary's is constructing a new hospital that cuts patient beds by 33 percent, increases room sizes, makes all rooms private (most with a lake view), includes the latest medical technologies, and focuses on specialty care, and that's supposed to lower health care costs?

Not too surprisingly, the only quotes in the article come from the Columbia St. Mary's CEO and the Columbia St. Mary's COO.

No outside expert voice was quoted, which is something the JS wisely did in the article it was spoon-fed by Columbia St. Mary's and Froedtert a couple of months ago on the still-undefined merger plans (it even published a follow-up emphasizing the question marks surrounding the claims that the merger would lower costs, and both pieces were by the same writer as the article from yesterday).

In actuality, the emphasis on fewer patients, lush surroundings, and more specialty care suggests Columbia St. Mary's is following the nationwide trend toward aiming services at privately-insured patients and away from uninsured and Medicaid patients who tend to have a difficult to impossible time getting access to specialists.

And the simple fact that Columbia St. Mary's will have 1/3 fewer beds under its new set-up may mean lower overall costs for the system, but it doesn't seem likely per patient costs will go down at all. In fact, the emphasis on specialty care -- the most expensive and increasingly expensive kind around -- suggests those per patient costs will actually go up.

What'll also likely go up in this new set-up are the profits reaped by the non-profit health system, which has done pretty well lately as is, taking in a total of $161 million in profits over the past three years alone.

In the end, the suggestion that the direction of Columbia St. Mary's is going to reduce health care costs in any meaningful way for the people of SE Wisconsin is on the verge of ridiculous.

Hopefully the JS will publish a follow-up to flesh out this side of the story.

It Depends How You Define "All In"

2007-07-27T07:10:00.000-05:00

Jo Egelhoff over at FoxPolitics has been following up on the questions I raised about the numbers John Torinus used in his recent columns critiquing the Healthy Wisconsin plan.

Torinus claims that "per employee" costs are "less than $6,000" for KI in Green Bay, where he is on the board of directors, and around $7,400 for Serigraph, which is the company he runs.

My response focused on the fact that high deductible health plans (HDHPs) have lower premiums -- the bulk of which are typically paid by the employer -- and, true to their name, higher deductibles, the bulk of which are typically paid by the employee. As a result, comparing premium costs for a HDHP to premium costs for a traditional comprehensive plan is comparing apples to oranges.

Another issue is using "per employee" costs. The trouble with that is it doesn't account for those employees who opt out of the company plan, and it also doesn't allow for any distinguishing between those employees who opt for a less expensive single plan and those who opt for a more expensive family plan.

Egelhoff acknowledges the "per employee" issue, though not by explaining it for her readers; rather, she just tells them there are "good additional questions" that have been raised about the figures cited by Torinus.

But I think Egelhoff mistakenly believes that the other issue about comparing HDHPs to traditional plans was addressed when she received this response from Torinus about what exactly "all in" costs mean:

[It] includes every drop of health cost, employee and employer, dental, mental, drugs, HRA, prevention, wellness, disease management, on-site nurses, administration -- everything.

Notice the key word missing from that list is "deductible." Sure, the deductible is alluded to in the reference to an HRA -- or Health Reimbursement Account -- but that really only covers the employer-funded portion of the deductible since employees can't contribute to HRAs.

According to a report in the medical journal Pediatrics, the average employer HRA contribution is $1,556, while the average deductible amount is $3,686. That leaves a $2,100 doughnut hole for the employee to fill in each year.

Who knows, perhaps KI and Serigraph are very generous with their HRA contributions and put in well over the average while still keeping costs down to $6,000-$7,400 "per employee." Or maybe the two managed to convince the health plan to keep the deductible lower than the average while simultaneously decreasing the premium well below $8,530, which is the average for a family HDHP with a HRA.

But, in the end, I'm struggling to see how an army of cost-conscious consumers is going to lower premium and deductible rates that are privately negotiated with health care providers in advance of care.

I can see how that army could avoid overutilization (the key would be simultaneously avoiding underutilization, which can result in an increase in costs) and potentially shop around for the best price on certain non-immediate treatments (although studies suggest that even with pricing data, consumers really aren't in a good position to shop around for care, nor do they really want to shop around for it).

But how does that affect pre-set premium and deductible levels? Seems to me it's just about stretching your deductible dollar further. In terms of contracting with the lowest cost provider in the area, health plans already typically try to do that, hopefully while considering some quality measures at the same time. And in that game, what really makes a difference is the size of the health plan. The bigger the pool, the more negotiating power it has.

The key to lowering overall costs -- rather than just focusing on non-immediate procedures that tend to be relatively inexpensive, anyway -- is by addressing administrative inefficiencies on both the payer and provider sides (streamlining billing procedures, utilizing electronic medical records, etc.), along with reducing or ending the cost-shifting that takes place between uninsured and insured patients.

In any event, I've put in an email to Torinus to find out for sure what his numbers actually represent, and I'll update if I hear back.

And if it turns out KI and Serigraph are providing employees with adequate family coverage that runs $6,000-$7,400 per plan when you include the total premium and deductible costs for the employer and the employee, then I'll gladly lobby to include whatever steps they implemented within a universal structure. As I've explained before, I'm certainly not adverse to the use of HDHPs, as long as certain protections are in place.

Ultimately, I'm just after an honest and open debate about fundamental health care reform in the state, and that includes critiquing the Healthy Wisconsin plan with an apples to apples comparison. I know Jo Egelhoff is after the same.

On the topic of contacting Torinus, I want to mention an online forum that's being sponsored by the Journal Sentinel next Wednesday, August 1 from noon until 1:30pm. Torinus and David Reimer will be engaging in a moderated debate using questions sent in by viewers. It should be interesting, so check it out and submit a question if you get a chance.

Torinus Swings and Misses Again at Healthy WI

2007-07-23T07:49:00.000-05:00

Serigraph CEO, WMC board member, and Journal Sentinel business columnist John Torinus took his second swing at the Healthy Wisconsin plan yesterday using the same misleading argument he did a few weeks ago.

In his July 1 column, Torinus compared the premium costs of his company's high deductible health plan (HDHP) with the premium costs of the state's traditional comprehensive health plan; the latter is similar to the plans that would be offered under the HW plan.

As I pointed out at the time, the trouble with such a comparison is that HDHPs are premium light and deductible heavy, while traditional plans are premium heavy and deductible light (or deductible non-existent, as is the case with the state plan).

According to a report in the April 2007 issue of the medical journal Pediatrics, the average traditional comprehensive health plan has an average family premium of $11,090 per year and an average family deductible of $646 per year. The average family HDHP, on the other hand, had an average premium of $7,909 and an average family deductible of $4,070.

So, in other words, each plan costs about the same in relationship to the benefits that are offered. The only difference is how the money is being paid (and who's doing the paying, since the bulk of premiums are typically paid by the employer while the bulk of deductibles are typically paid by the employee).

Torinus never mentions this in the July 1 column, or when he trundled out the same argument yesterday by comparing the premium cost of a HDHP offered by the company KI in Green Bay and the premium cost of the average traditional plan in the state. The cost of the HDHP offered by KI, according to Torinus, is less than $6,000 per employee, which, expectedly, isn't as much as the $11,000-$12,000 premium for the average traditional plan.

Of course, there's another little wrinkle in Torinus' argument since he claims the total cost of covering the 1,429 KI employees who get insurance through the company is $8.8 million per year, which comes out to $6,128 per employee (a little over $6,000 per employee, not a little under). This is important because unless all of KI's employees are under a family plan, the $6,128 figure is going to be skewed low by everyone who is on a less expensive single plan.

But even setting that wrinkle aside, the fundamental point Torinus tries to make for a second time is simply off the mark. If we're going to have an honest debate here, why not also share how much the employee is paying into the premium and how much is being paid through the annual high deductible?

With two down, hopefully the JS is keeping track of Torinus' swings because he really shouldn't have that many left.

------------------

Side-Note: I won't have access to my home computer for most of the week, so postings probably will be sparse. In fact, unless something big or frustrating happens -- the column by Torinus is an example of the latter -- this may be the only post for the week. Next week I'll be back to my typical 3-5 posts per week.

Critics Continue to Reach for Arguments Against Healthy WI

2007-07-19T07:48:00.000-05:00

If the critiques of it are any indication, Healthy Wisconsin (HW) must be one good fundamental health care plan.

Initially there were the critiques that came up short trying to attack the way the HW was structured. Now they're developing into shots at what might happen if the plan was instituted.

According to a number of conservatives in the past few days (here, here, and here), the HW plan will result in a tide of out-of-state people looking to scam the system by getting menial jobs just to meet the minimum requirements for insurance under the HW.

Christian Schneider sums up the conservative position with a question and warning:

Why would any poor person in Illinois or Minnesota with a serious illness not immediately pick up, move to Wisconsin, and get a job at Dairy Queen? How hard can it be to claim you’re “self employed” or work for a farm? OB/GYNs could be flooded with out of state pregnant women seeking free care, as they are immediately eligible.

To be honest, I'm surprised the flood of OB/GYNs out of the state hasn't already happened considering pregnant women under 185 percent of the FPL can already get free coverage through the state's Medicaid or BadgerCare programs.

And that's where the conservative charge falls woefully short. Since BadgerCare already picks up the health care tab for all low income families with kids, yet without a flood of them into the state, that really leaves childless adults as the big concern.

Of course, if a low income childless adult from Illinois or Minnesota wanted to come here now and get care without even getting a job, they could always move to Milwaukee County and wait 180 days to qualify for GAMP (and if you do land that gig at Dairy Queen, just make sure it doesn't pay you more than $902 per month). I'm sure there are a number of other medical programs out there for low income people in other areas of the state.

And even if the HW plan is scrapped, our concerns over a flood of poor childless adult scammers at our borders isn't over since it's really Doyle's BadgerCare Plus plan -- which is incorporated into the HW plan -- that's the driver of universal health care. It would get us up to 98 percent insured by increasing the current BadgerCare FPL maximums and extending care to, you guessed it, childless adults up to 200 percent of the FPL! Dairy Queen managers across the state aren't going to know what to do with all of those applications.

I don't mean to be glib about this, but I'm having a tough time putting a lot of stock in this argument.

Once you widdle down the population of potential flooders to sick and poor childless adults with the means to move across state lines -- a population that becomes virtually non-existent under BadgerCare Plus -- it appears to be quite a logical leap to frame this as a significant issue that could bankrupt the system. Add to that the somewhat obvious fact that health coverage is only one of many factors that could prompt someone to move across state lines, even if they have the economic ability to do so, which is why thousands of uninsured people remain in states with less generous Medicaid programs when they could move to another state and get covered.

Another argument against HW that is less of a logical leap, yet equally as unconvincing, is coming from a recent press release by Senate Minority Leader Scott Fitzgerald (R-Juneau) who is now dubbing the employee payroll assessment as the "Success Tax." As Fitzgerald sees it, "The $15.2 billion government-run health care plan included in the state budget by Senate Democrats would punish Wisconsin workers every time they received a pay raise or a promotion by forcing them to pay more for the same health care coverage."

It's true that as a flat tax on social security wages, the employee assessment would increase with any raise as long as the total salary remains under $97,500. This is no different than how the income tax works -- except the employee assessment is flat and has a cap -- which comprises the bulk of GPR dollars that go to fund all sorts of services that remain the same for people regardless of their earnings, including public education. Does that mean UW tuition should be income-rated so that wealthier residents pay less in tuition because they pay more in taxes?

A raise is still going to be a raise under the HW plan, and no one is going to mistake it for a bad thing because they'll pay more under the flat employee assessment.

In the end, I just can't believe these are some of the discussions we're having about the prospect of fundamental health care reform. It could be that HW is just that good of a plan, but I think the more likely culprit is that while conservatives will recognize health care as a significant problem, conservative ideology just doesn't allow them to offer a significant solution.

Rep. Nass Wants Say on UW Research

2007-07-17T07:40:00.000-05:00

Evidently it wasn't enough that UW-Madison professors Erica and Rich Halverson cleared their new research project through the MacArthur Foundation, which gave them a grant to do it.

Assembly Colleges and Universities committee chair Steve Nass (R-Whitewater) apparently thinks he needs to approve it, too.

The press release by Nass tries to make a connection between the research by the Halverson's -- which focuses on studying competitive fandom and gaming through an exploration of fantasy baseball leagues -- and the need for adequate funding for the UW in the biennial budget.

Setting aside the fact that the research is funded through the private MacArthur Foundation, it is breathtakingly arrogant for Nass to think that he can judge (or even has any business judging) the validity of a study based upon a single article on it -- which he grossly short-changes in his press release -- that ran through the UW news service.

Here's Nass: "Maybe with higher taxes the Ivory Tower elites at UW-Madison can solve the great psychological mystery posed by the joy that adults and kids get while playing dodgeball or kickball. It couldn’t be that most simple of reasons – it’s fun."

Ivory Tower elites? Does Nass think that by attacking a university he's shielded from sounding pompous himself?

The Halverson's are taking time to critically examine an aspect of a much larger cultural phenomenon, fantasy gaming, that has grown extremely popular in recent years amongst a wide swath of the American public. Elitism would be to shun the fantasy phenomenon as the mindless meddling of the working classes, and it wasn't all that long ago that academia would've done just that.

Nass, meanwhile, is barking out press releases from his Capitol office with the notion that he has special oversight of and insight into how UW professors should run their research simply because he was given a chairperson post by his caucus leader.

And it's a good thing Robert Putnam didn't stop at just considering whether "it's fun" when crafting one of the most important studies on public society in recent memory, which started with an interest in bowling leagues.

Closeout Sale on Emergency Appendectomies

2007-07-16T07:39:00.000-05:00

State Senator Kathleen Vinehout (D-Eau Claire) relayed to the Journal Sentinel a not-too-uncommon situation regarding her family's health care before she entered public office.

As a farm family, there was no option for employer-sponsored health coverage. Given the choice between $1000 per month family health insurance or sustaining their farm business, the family opted for the latter.

A little over a year later, Vinehout's son was rushed to the hospital for an emergency appendectomy. The family had to refinance the mortgage on the farm to pay the $10,000 bill.

When told of this story, here was the response by Sen. Ted Kanavas (R-Brookfield):

"Senator Vinehout's story is heartfelt," said Republican Sen. Ted Kanavas of Brookfield. "But their plan is completely misguided. They've decided to blow up a health care system that is the best in the nation."

Instead, Republicans back what they call a "consumer-driven model" of health care reform in which Wisconsin residents would get more information, compare costs of procedures and insurance, and make informed choices that would cut health care costs.

Huh? Was Kanavas even listening to the story?

Vinehout's response is right on the mark:

That's a fine goal, Vinehout said, but it doesn't work when someone you love is critically ill in a hospital emergency room.

"The whole idea that consumers would actually be able to shop around for that particular surgery looks a little silly when my husband was in that emergency room and said to me: 'What am I supposed to do? Call a La Crosse hospital and see if they have a special on emergency appendectomies?' " Vinehout said.

"It simply doesn't work. . . . The patient doesn't have the power to be able to negotiate."

There is absolutely a place for consumerism in a health system, but the reality of health care and the health care market is simply too complex for it to be the same type of consumerism that's applied to purchasing common household appliances. The completely off-the-mark response by Kanavas and the right on-the-mark reply by Vinehout exemplifies that perfectly.

Economist Alain Enthoven's ideas for managed health care competition represent a far more responsible way to use the market for cost reductions. By linking payers to providers -- e.g., the Dean Health System is serviced by the Dean Health Plan in Madison -- the health plan cost most accurately represents the actual prices of the provider.

Consumers are then given a choice of health plans that all contain a uniform set of minimum benefits. If they opt for the least expensive plan -- which, in turn, would service the most cost effective provider -- they pay nothing per month aside from what they pay into the system as a whole through some form of taxes or assessments. If consumers opt for a higher cost plan, on the other hand, they pay the difference between that plan and the lowest cost plan.

This system offers significant economic incentives for consumers to pick the lowest cost plan and for the providers to be the lowest cost network so that consumers pick the plan that's associated with them.

The system can further use the market by including a responsible cost sharing formula that drives consumers toward procedures that have proven to reduce long term health costs -- like most preventive care -- while driving them away from unnecessary over-utilization of care.

Utilizing this type of nuanced consumerism within a centralized universal system has the capability to answer the complex issues like the one the Vinehouts faced a year ago, as opposed to the standalone consumerism of Kanavas and other conservatives that acts as if getting health care is no different than buying a TV.

The GOP's School Funding Shell Game

2007-07-13T07:41:00.000-05:00

***UPDATED BELOW***

When the GOP budget was being debated on the Assembly floor earlier this week, Rep. Sondy Pope-Roberts (D-Madison) commented on the cuts to K-12 education in the budget, and Rep. Brett Davis (R-Oregon) responded that the GOP proposal includes $464 million in new money for schools while Governor Doyle's budget only includes $448 million.

Really? Well, it depends on how you define "money for schools."

According to a LFB memo released yesterday, it's true that the GOP budget spends $16.3 million more in what's typically defined as "support of K-12 education." But, at the same time, the GOP budget would actually send $83.7 million less to schools than the governor's budget.

The issue is that state support of K-12 education comes in four ways:

General school aids
Categorical aids
School levy tax credits
State residential schools

The GOP budget and Doyle's budget spend the same on state residential schools and virtually the same on categorical aids (the GOP budget spends $1.6 million more). On general school aids, however, Doyle's budget spends $85.4 million more than the GOP budget, while on school levy tax credits, the GOP budget spends $100 million more than Doyle's budget.

That all washes out into a $16.3 million lead for the GOP budget; but, the thing is, school levy tax credits aren't actually spent on the schools. These are payments made to municipalities based upon a formula that considers (see page 33) a municipality's three-year school levy average in relation to the average statewide municipal three-year school levy average.

The municipalities then pass this credit on directly to their property taxpayers; none of it goes to the school districts. So the $100 million more that the GOP budget spends on the school levy tax credit than Doyle's budget is really a property tax cut, not an increase for the schools.

And that's fine; in fact, I'm sure most property taxpayers would cheer it on the surface. Except it's not funding for schools, as Rep. Davis and other conservatives have made out, and the fact is the bulk of that $100 million is coming on the back of $83.7 million less in overall state aid to schools.

It seems the GOP wants to have its cake and eat it, too, on this one. But, as with trying to eat a cake twice, you just can't take credit for cutting costs and improving on the services that those costs would've funded.

UPDATE (7/16): I was wrong. The shifting of funds from general aids to the school levy credit in the GOP budget wasn't an attempt to short K-12 education as a whole. Based upon my understanding now, the effect actually will be to short property-poor districts and benefit property-rich districts based upon the way the levy credit is dolled out in relation to the distribution formula for equalization aid.

Check out the comments for more.

Scott Walker's Measured Take on the Budget

2007-07-11T07:27:00.000-05:00

I was wondering how Milwaukee County Executive Scott Walker was going to respond to the shared revenue and other county aid cuts in the Assembly GOP budget. Here it is, in its entirety:

Both the Assembly and Senate versions of the state budget have items that are good and bad for Milwaukee County. Now, I want to encourage the members of the Conference Committee to do more for local governments than just create a committee on mandates. We need relief from state mandates or the resources to meet them during the next two years, specifically in areas like juvenile justice and mass transit.

I can't blame Walker for the ambiguity or brevity. Milwaukee County arguably has more riding on this budget than any county in the state due to its tenuous fiscal position, and it isn't difficult to see that the budget passed by Walker's own party would only add to the problems.

The "do more for local governments than just create a committee on mandates" line is the only explicit shot at the GOP budget, but the lack of details about what's good and what's bad about each version speaks volumes.

If Walker wasn't a GOPer with aspirations for running the party from the governor's mansion someday, you have to imagine he'd have a little more to say about decisions that could either help float or help sink the county he's running today.

Assembly GOP Budget: Mission Accomplished

2007-07-10T07:34:00.000-05:00

If I can pass a budget in the Assembly that has no tax increases, I will certainly go to the conference table and show them how we can do it.
- Assembly Speaker Mike Huebsch

Our focus was to make sure Wisconsin had a no-tax budget; we met that goal.
- Assistant Assembly Majority Leader Mark Gundrum

Well, the state GOP now has its show budget. It's one Republicans can trundle out to the fire-breathing fiscal conservatives as a sign of good faith. But the bulk of it isn't going to stick.

Sure, a handful of Republicans in the Assembly will hold out for a budget like this one, but enough will ultimately side with a budget that looks far more like what came out of the JFC last month.

All in all, the Assembly budget doesn't include much that wasn't expected. When you need to cut $1 billion to meet a self-imposed goal, not many stones are going to be left unturned.

Working from the budget that passed out of the JFC, the GOP cut K-12 funding by $85 million, the UW budget by over $100 million, shared revenues to local governments by $58 million, county circuit court support by $19 million, county youth aid by $27 million, low income child care subsidies by $52 million, Family Care for the elderly by $61 million, and those are just some of the big ones.

Dozens of other areas have tens of thousands to millions cut from their funding, such as $8 million from public radio and television, $1.2 million from the state's child abuse prevention program, $3 million in grants to community health centers, and $3.2 million from the school breakfast program.

And there are policy items galore, ranging from altering state laws on self-defense to pushing abstinence-only education to naming a major stretch of US Hwy 14 after Ronald Reagan.

I could go on and on.

But, of course, none of this is worth getting worked up about, although it is an interesting glimpse into what the actual budget could've looked like if Mark Green was elected last November and the GOP would've held onto the Senate.

Nevertheless, in the end, the Dems will drop a couple of big ticket items such as the Healthy Wisconsin plan and perhaps the oil company assessment, and the GOP leadership will back away from the vast majority of their proposed cuts.

And, once the ink is finally dry, we can all sit back and watch some football. Let's just hope it's not the playoffs.

UPDATE: Righty Jo Egelhoff of FoxPolitics.net on the long-term impact of the Assembly budget:

The Assembly budget ends in 2009 with a paltry surplus of $5.6M – including $0.00 proposed for what is currently a required $65M rainy day fund. Compare that to the Senate budget, ending 2009 $180.7M in the black, including a rainy day fund of $130 million.

The Fiscal Bureau is still massaging the numbers a bit, but the structural deficit in the Assembly budget is over $900 million! $900 million that’s directed to be spent in this biennial budget, but to be paid in July, 2009, a brand new budget year. What a mess. The structural deficits projected in the Governor’s, JFC and Senate budgets were bad enough – but “just” in the $700M range.

It isn't difficult to picture the GOP leadership crawling to the finish line when crafting this budget. After scrapping together enough cuts to reach the bottom of the $1 billion crater required for a no-tax-increase budget, there just wasn't anything left to dice up for a healthier long-term outlook.

Cracks in the Risk Pool

2007-07-09T07:32:00.000-05:00

Hewitt Associates -- a national firm that helps companies manage their health benefits -- has completed an analysis that projects HMO premiums could increase by 14.1 percent in 2008. The highest increases are projected for here in the Midwest at 18.4 percent.

It's worth noting that Hewitt predicted the 2007 increase would be 11.7 percent, and the actual increase was just 8.2 percent.

But the fact that the projection is higher for 2008 than it was for 2007 suggests that the actual increase will be more next year -- Hewitt says at least 10 percent.

What's particularly noteworthy about this report is one of the major reasons given for the increase. According to a director for Hewitt, as younger and healthier employees opt for high deductible health plans (HDHPs), HMOs are left with a sicker risk pool. This, in turn, has led to rate increases since the HMOs have "become conservative in their trend assumptions and less willing to bend on negotiations."

This is the reality of a fragmented health system at work. Unless everyone's playing in the same pool -- which is only possible through a centralized structure -- the system will become increasingly less affordable for those who need it.

And the real kicker is that virtually everyone needs it, at some point.

New Healthy Wisconsin Website

2007-07-06T07:54:00.000-05:00

Just wanted to make a quick plug for a new website on the Healthy Wisconsin plan. It was put together by the folks at the Institute for One Wisconsin.

The site includes an overview of the plan, the plan details, news about the plan (including in the blogs), some handy links to plan documents, and a section to write to your legislators about the plan.

Check it out.

Why No GOP Budget?

2007-07-03T07:43:00.000-05:00

Initially, Assembly Republicans were scheduled to release their version of the budget today. But late last week, after the close of the "working groups" that members broke into to discuss the budget, a decision was made to postpone the release until next week.

Hmm. Maybe I'm just reading into it, but I keep coming back to something the Recess Supervisor wrote about a week and a half ago (emphasis mine):

Word is the informal target for the Assembly Republican working groups looking for budget cuts is around $800 million - $1 billion. The Governor's budget rang in at just over $58 billion (excluding bond revenue), which means that the fierce fiscal hawks of the Assembly are trying to come up with a whopping 1.5% in cuts - and so far, they're mostly failing. There are some working groups in the Assembly that feel they shouldn't have to cut anything, some members have resigned from their working groups in protest, and still others have reportedly offered - get this - spending motions. Tuesday's closed caucus should be a real hoot.

I'm not sure where the "word" was coming from, but, if accurate -- and the delay seems to support it -- it sounds to me like Assembly Republicans are engaged in an intense reenactment of their TABOR battles from last spring.

I hope they're able to finish in time for parade duty tomorrow.

Critiques of Healthy WI Keep Coming Up Short

2007-07-02T07:54:00.000-05:00

As expected (by me, at least), Serigraph CEO and WMC board member John Torinus took a shot at the Healthy Wisconsin plan in his weekly JS column yesterday.

At the start of the column, Torinus makes a curious claim. He writes that the HW plan is solely about coverage and not costs. This is curious because the Lewin Group actually found that HW would reduce health care spending by over $750 million in the first year alone.

The thing is, Torinus has a monolithic view of health care costs. It's like every other market to Torinus in which consumers purchase a service for a price that's entirely driven by the cost and value of that service from the perspective of the seller.

There is certainly some of that in the health care market, but the reality is much more complex. Since health care typically works with third-party payers -- which is necessary if you want to distribute risk -- there is the added cost of paying for those third-parties. Also, since health care is unlike most other markets in that its services are often required to sustain life, people's ability to pay does not always dictate whether they receive the service. And when they can't pay, others pay more to compensate.

In short, when consumers pay for their health care -- or, more accurately, their third party payers pay for it -- they're not just paying for the health care they received. To be sure, in its recent review of the Wisconsin Health Plan (WHP), the Lewin Group estimated (page 13) that health care services actually cost private payers 70 percent more, on average, than the true cost of those services.

So when we talk about reducing health care costs, there's much more that needs to factor in the equation than simply the literal cost of that care.

But, actually, the literal cost of care is something that the HW plan addresses, Torinus just doesn't acknowledge it. He laments that the HW doesn't include a higher deductible with a HSA like the Wisconsin Health Plan does. On that we're in agreement.

But Torinus ignores the fact that there is a significant deductible -- $300 for individuals and $600 for families -- included in the HW for non-preventive adult care. So there is some incentive to shop around for care under the HW plan; and, if it's raised as a substantive issue, perhaps Dems would be willing to include a HSA option in the mix.

However, the majority of cost savings under the HW plan comes from increased administrative efficiencies and reduced cost shifting. And this is really the most appropriate place to target cost savings. As studies have shown, even with pricing data, consumers really aren't in a good position to "shop around" for health care, nor do they really want to shop around for it. And with the increasing geographic disbursement of different hospital and clinic systems -- a byproduct of provider consolidation -- the options for shopping around are decreasing by the year.

The rest of Torinus' column relies on a numbers game in an attempt to demonstrate how businesses are already handling health care costs in a much better way than the HW would. He writes:

The Democratic rhetoric is that every citizen of Wisconsin should have the same coverage as do state employees. The problem is that many private companies are offering essentially the same level of benefits as does the ETF plan, but at about half the cost. Last I checked, the ETF plan was more that $11,000 per employee.
Best practice private sector plans are at about $6,000 per employee for all-in costs. (My company is at $7,400.)

This is disingenuous on a couple of levels.

For starters, when Dems say every citizen of Wisconsin should have the same coverage as state employees, they truly mean coverage, not cost. Under the HW plan, health care costs would increase for state employees (although they would decrease significantly for their employer). The 4 percent payroll assessment would be a lot more than virtually any state employee currently pays in premiums, and while co-payments would be about the same, the deductible would be something new for state employees that would significantly increase their cost sharing.

So that $11,000 figure Torinus cites is little more than a red herring since that number, from the ETF perspective, would decrease under the HW plan even though coverage would remain the same.

What's more, the "best practice private sector plans" that Torinus refers to are high deductible health plans (HDHPs) that may or may not include a HSA. The thing about HDHPs is that they're low on premiums and -- true to their name -- high on deductibles.

According to a report in the March 2007 issue of Pediatrics, the average traditional comprehensive health plan -- which is what the HW plan would involve -- had an average family premium of $11,090 per year and an average family deductible of $646 per year. The average family HDHP, on the other hand, had an average premium of $7,909 and an average family deductible of $4,070.

So when Torinus puts these "best practice private sector plans" up against the ETF plan -- which, again, isn't the same in terms of employer cost as the HW plan -- he's really comparing apples to oranges since the figures are weighted toward premiums (which is always going to be higher in a traditional comprehensive plan) rather than deductibles (which is always going to be higher in a HDHP).

There's more. Torinus writes:

My company, where management and co-workers aggressively and collaboratively manage health costs, spends about 14% to 15% of payroll on overall health costs. The Riemer plan calls for an initial payroll tax of 14.5% - 10 1/2 % from the employer and 4% from the employee.
The Senate bill allows, however, for 16% - 12% from the employer and 4% from the employee. You just know that the 16% - or more - will become the assessment once the government is in charge of the system.

For the life of me, I can't find where Torinus is getting that "16%-12% from the employer" figure. Here is what the HW bill literally says about the employer assessment (page 48): "Subject to sub. (4), the board shall calculate an assessment, based on its anticipated revenue needs, that is a percent of aggregate social security wages that is at least 9 percent and not more than 12 percent."

That's 9-12 percent of social security wages, not even payroll, so any portion of an individual employee's pay that exceeded $97,500 (in 2007) wouldn't be subject to the assessment. When you add in what employees would pay, the percentage goes to somewhere between 11 percent and 16 percent, but that's not what Torinus wrote. He wrote that employers alone would pay 12 to 16 percent, with employees contributing 4 percent more, which just isn't the case.

So Torinus' company right now has health care costs at 14 to 15 percent of total payroll, and he fears a universal health care plan that would run his company 9 to 12 percent of social security wages?

In the end, a couple of things about the Torinus column did make me happy, though. One, he speaks pretty highly of the WHP, which is certainly still an option that's on the table (actually, the HW isn't all that much different than the WHP to start). And, two, his inability to make solid points against the HW is, to me, little more than a demonstration of the plan's overall strength.

SCOTUS Decision Shouldn't End Chapter 220

2007-06-29T07:55:00.000-05:00

The US Supreme Court struck down school integration plans in Louisville and Seattle yesterday since they used race as a deciding factor in "some assignments," the JS reports today.

This is important for Milwaukee, of course, because the Chapter 220 program that ships students of color into the suburbs and -- on a much smaller scale -- white students into the city is based exclusively on race.

Certainly there's more to the decision, but this quote from the majority opinion by Chief Justice John Roberts jumped out at me:

It was not the inequality of the facilities but the fact of legally separating children on the basis of race on which the court relied to find a constitutional violation in 1954. . . . What do the racial classifications at issue here do, if not accord differential treatment on the basis of race?

There's a curious transition that takes place in that quote between "legally separating children on the basis of race" and "racial classifications" in general. In other words, Roberts argues that any significant consideration of race, whether it's for separation or integration, is discriminatory and, as a result, not in line with the Brown decision or the US Constitution.

Roberts offers a compelling quote from the Brown case in his opinion (pages 39-40) to demonstrate his point. As the brief from the plaintiff in Brown put it: “[T]he Fourteenth Amendment prevents states from according differential treatment to American children on the basis of their color or race.”

A corresponding quote wasn't cited from the actual Warren court decision in Brown, and that decision pretty clearly focuses on racial classification for the purpose of segregation rather than the purpose of integration.

But for those seeking absolutism, any state classification of race in public policy -- whether for separation (i.e., bad) or integration (i.e., good) -- is inherently discriminatory, as Chief Justice Roberts argues, since it tries to subjectively differentiate between what's a good use of race and what's a bad use of race, while simultaneously and inevitably placing restrictions on what any other race can do.

In practice, however, there are more considerations. There have been great strides made in race relations since the Brown decision, and many of those strides are a result of a conscious consideration of race when crafting public policy. Did anyone truly expect significant steps to be made, practically speaking, based upon good will and deference to the Warren court?

Much of this harks back to the difference between de jure segregation in the South -- upon which the Brown decision was based -- and the de facto segregation in the North. At the same time of the Brown decision, massive suburbanization was taking place across the North, and much of that suburbanization had an explicitly racial component.

For instance, in the first Levittown that was built in Long Island, NY -- considered by most to be the prototypical postwar suburb -- there was a direct policy that barred "members of other than the Caucasian race" from living there. When I was researching my senior thesis on the school integration battles fought in Milwaukee in the 1960s, I recall coming across a similar policy for some of the North Shore suburbs (if I can find it, I'll post it here).

The basis for programs like Chapter 220 was established in this reality of de facto segregation. Put differently, the difficulty with completely removing considerations of race from public policy is that considerations of race are made every day through interpersonal relations and personal decisions. The Supreme Court can't change that, nor does (or should) it attempt to change it; but by restricting public policy from including a classification of race for any purpose, it can exacerbate its negative effects.

Perhaps basing programs like Chapter 220 solely on race is no longer necessary today since the explicitly racial barriers to neighborhood integration have since been removed in the suburbs, thereby eliminating the direct creation of de facto school segregation.

This doesn't mean, however, that these programs are inherently discriminatory and, as a result, unconstitutional. Indeed, most observers would be hard-pressed to explain how a program like Chapter 220 -- which explicitly categorizes students by race -- has increased or even worked to sustain racial discrimination in the Milwaukee metro area.

But if the greatest barrier -- not necessarily the only barrier -- to school integration today is economic, perhaps the state should consider either adding an economic component to the Chapter 220 criteria or making the criteria exclusively economic. Either would be preferable to elimination, and the latter would bring Chapter 220 in line with the criteria for the school voucher program that's beloved by Republicans, which is typically the party that crows the most about Chapter 220.

I'm not sure what an economic component would do to the nearly 400 white suburban students who head into MPS each year under Chapter 220. And some serious consideration would need to be given to ensuring that an economic component wouldn't unreasonably stop any of the roughly 3,000 families of color who now participate in Chapter 220 from sending their children to a suburban school through the program simply because they earn above an arbitrary income limit.

But, in the end, while the SCOTUS decision yesterday may have been based on shaky grounds, even if it results in a challenge to Chapter 220, that doesn't need to mean the end of what's ultimately an effective program.

Health Care Reform: Making It Fairer

2007-06-27T07:59:00.000-05:00

One of the more compelling arguments against any universal health care plan, not just Healthy Wisconsin, is that it's unfair to require employers -- particularly those who don't already offer their employees health insurance -- to contribute to a program; rather, the labor market should dictate their participation.

As with most of the other arguments against universal health care, this line assumes that the system that we have now is fair or another type of system could be fairer.

For starters, just because you don't have health insurance doesn't mean you're not going to need health care. And when the uninsured -- or underinsured -- go in for care that they can't pay for themselves, which is happening on an increasing basis each year, the costs get shifted onto paying patients and, in all likelihood, their employers through increased premiums, deductibles, co-payments, co-insurance, etc.

The same is essentially true for employed people who are forced into Medicaid because their employer does not offer them affordable health insurance. Not only do individuals and businesses pay for these people to get onto BadgerCare, those individuals and businesses that pay for health insurance pay more for that insurance because of low Medicaid reimbursement rates.

So if a set of employers chooses not to offer its employees health insurance because the labor market doesn't demand it, that decision is actually costing other employers and employees more.

What, then, are the options? Really, there are a few:

Do nothing. The result of this will be a cycle in which cost shifting increases as more and more employers skimp on health insurance or remove it from their employment benefits altogether, which, in turn, places more pressure on those who are still in the system who, as a result, leave the system and so on.

Refuse care to those who don't have health insurance -- or enough health insurance -- and cannot afford the care out-of-pocket. This reduces cost shifting and would likely put more pressure on the labor market, at least the middle and upper class portion of it, to have health insurance be a part of employment. However, the moral implications are obvious.

Mandate that everyone carry an adequate level of health insurance, just as we do with car insurance, to reduce or eliminate cost shifting.

For most people, options 1 and 2 are out because of the economic and moral issues that arise with each.

That leaves option 3, which, if done centrally, has the added bonus of holding down costs through increased administrative efficiency and purchasing power. But the big issue for that option is how it's going to be funded. Do we place the onus on employers, individuals, or some of both? There's going to be winners and losers -- in terms of both cost and coverage -- any way to slice it.

The Healthy Wisconsin initiative involves both, but the weight is on the employer. Germany, which also offers its citizens universal coverage through an array private payers and providers just like Healthy Wisconsin proposes, also involves both, but the funding split is equal with employees putting in about 6.5 percent of wages and employers matching that amount.

You could opt to place the entire -- or even the vast majority -- of the onus on individuals, but would the resulting decrease in after-tax wages be any more desirable than requiring employers to foot the bulk of the bill?

As some critics have pointed out, some minimum wage employees -- mostly in the retail and service sectors -- would lose their jobs if all employers were required to pay into a health care system like Healthy Wisconsin, while other jobs -- the ones that currently don't get health insurance through their employer -- would see a decrease in wages to compensate for the increased labor costs associated with the employer assessment (of course, they'd now also have adequate health coverage).

But if the onus was placed on the individual, similar results would likely happen, except minimum wage workers would be quitting rather than getting fired since their after-tax income would decrease beyond the levels that would make it livable (it's pretty much beyond that point already for most who rely on minimum wage for their livelihoods).

Even if you split the difference like Germany, there will still be a drop in employment -- probably through a combination of firings and quittings -- as a result. There's simply no magic way around it.

And that's the reality -- there's no easy way out of the health care situation. Tinkering just won't cut it.

The quicker we start facing that reality in substantive discussions rather than politically-charged rants, the quicker we can move to a system that isn't without losers, but also doesn't have the amount or level of losing that we currently have or what other alternatives would bring.

Critiquing Healthy Wisconsin: Where's the Substance?

2007-06-26T07:52:00.000-05:00

Conservatives were up in arms yesterday over the announcement of the Healthy Wisconsin initiative.

The Senate GOP had the fear-mongering in full effect with a press release stating that pregnant women, children, and seniors could lose access to their doctor under the initiative, while others focused on using politically-charged soundbites like "big government" and "socialized medicine" to generate alarm over the proposal.

There was little to no substance in any of these attacks. That doesn't mean, however, there are no substantive challenges that could be made to the Healthy Wisconsin initiative.

Here are a couple of points conservatives -- and liberals -- might want to try on if they're interested in a substantive discussion on health care reform.

The Deductible
If free marketers usually get one thing right and progressives usually get one thing wrong about health care reform it's that over-utilization of health care services is a serious problem. Some of this over-utilization is on the provider end -- for instance, utilizing unnecessary treatments and tests to generate more reimbursements -- but much of it is on the patient end.

Providing incentives for consumers to use health care wisely and consciously is an important piece of any universal health care reform plan. The Healthy Wisconsin initiative does this through its use of a $300 deductible for individuals and a $600 deductible for families. Aside from care of children and pregnant women, along with proven preventive care measures, other services under the proposal would be subject to the deductible.

It's good that the Healthy Wisconsin proposal involves cost-sharing through a deductible, co-pays, and co-insurance, but why not raise the deductible and include a HSA, which would make the plan virtually identical to the well-vetted Wisconsin Health Plan?

That way, if a portion of the deductible was state-funded through the HSA, it would give consumers some breathing room knowing that the first non-preventive treatment they receive won't be coming out of their regular bank account. Yet, since it still would be coming out of their HSA, the financial disincentive for over-utilization would remain.

Plus, then there's the added bonus of having a tax-sheltered account that could be self-funded (or employer-funded) to cover the remaining portion of the deductible or other cost-sharing, or rolled over from year to year to prepare for the more expensive catosphrophic or chronic care that could be needed in the future.

Special Affinity Groups
There is a clause in the Healthy Wisconsin bill that would allow health networks to restrict access to participants who are part of certain pre-defined "special affinity groups," such as farmers or teachers.

Part of the purpose of fundamental health care reform is to put everyone in the same boat when it comes to health benefits. This is important for practical purposes, such as community rating, but it's also important for conveying trust to the public that the system is equitable. Siphoning off a portion of the population works against this trust and -- to an extent -- the viability of community rating.

Perhaps there's a good practical reason to restrict particular health networks to a certain trade group, but I'm not seeing it on the surface. This is one point that Dems should explain in more detail.

The Healthy Wisconsin initiative -- in spite of likely being added to the Senate version of the budget today -- is very much a work in progress. The time now is much better spent parsing the substantive points of it rather than clinging to divisive and hyperbolic soundbites.

UPDATE: You can see a more reader-friendly detailed account of the Healthy Wisconsin plan here.

Senate Dems "Healthy Wisconsin" Initiative

2007-06-25T07:48:00.000-05:00

UPDATED BELOW

As of this morning, the Senate Dems have released the major points of their universal health care plan, called "Healthy Wisconsin," and here's what can be gleaned from them:

Payer structure (see UPDATE below): Although it's not completely clear from what's been released so far, the payer structure under the Healthy Wisconsin initiative would mimic the structure under the Wisconsin Health Care Partnership Plan, in which a single plan would be created through a public-private trust that would negotiate directly with providers. Private insurance still would be available, but at a "nominal cost."

Funding mechanism: There would be a 4 percent assessment on employee Social Security wages (i.e., wages up to $97,500) and a 10.5 percent assessment on payroll for employers. Aside from preventive care and care for children, all visits and prescriptions would involve co-pays and a deductible set at $300 for individuals and $600 for families.

Bottom line: Based upon a Lewin Group study, the plan would save the state $1.3 billion, which would most likely come from reduced public worker benefit costs. The plan would use this money for property tax relief for households and businesses.

Republicans are jumping all over the funding, calling it the "largest tax increase in the history of the state," even though that soundbite ignores what employers and employees are already paying for health care -- which, on average, is a lot more than what they'd pay under the Healthy Wisconsin initiative -- and the property tax savings that would come under the plan.

The tax increase line is a predictable point of opposition to start with since it's an easier sell than what I think will ultimately be the biggest roadblock for this plan (aside, that is, from the Republican Assembly), which is the payer structure. Even though the plan isn't explicitly single payer, it looks quite close (unless I'm misreading the info that's been released on the plan, thus far -- look for an update later in the day if that's the case).

While single payer has great promise in terms of administrative efficiencies and putting payers back in a strong negotiating position with an increasingly consolidated provider side, it also has the political baggage that comes with shutting out an entire industry and the ideological heat that comes with involving the government directly in health care negotiations, even if those negotiations take place through a public-private trust.

It would help if the plan allowed for direct private competition in a similar way as John Edwards' national proposal, which lets consumers choose between a public plan and an array of private plans. Or the public plan could provide basic coverage while private plans are relied upon for supplemental coverage, which is essentially how the French do it. Any way you slice it, the Dems need to find some place for private plans, and it remains to be seen if allowing them at "a nominal cost" is enough.

The details will be telling, and -- since this is by no means a final offer -- so will the discussions that take place between now and when something actually gets passed, which -- as I noted last week -- won't happen before 2009, at the earliest.

UPDATE: The full text of the Healthy Wisconsin bill is out (the meaty details start on page 22).

Importantly, the text of the bill makes clear that this proposal is NOT single payer. The "health networks" it refers to are -- based on my reading -- private insurers who submit bids to the public-private trust. Based upon cost and coverage, the trust will determine the "low cost" networks and everything else will be categorized as a "higher cost" network. If people opt for one of the low cost networks, the trust will cover the entire cost of premiums. If people choose one of the higher cost networks, they will be reponsible for the premium cost difference between that network and the low cost network rate.

This is similar to how the tiering works under the Wisconsin Health Plan, which is the system currently used for state employees.

This is an important point because it avoids the political pitfalls of single payer and ensures that the direct negotiations between payers and providers will be a market endeavor rather than one that's overly-dictated by the state.

The Three Musketeers: Taxes, Health Care, and the Economy

2007-06-22T07:54:00.000-05:00

The latest Badger Poll found the following three issues to be the top concern among Wisconsin residents:

Taxes (23 percent)
Health care (12 percent)
Economy (11 percent)

I understand the general purpose of getting public responses on "the most important issue," but as I look at those top three, I can't help but wonder how you can possibly separate any one from the others.

Health care costs are the biggest strain on public revenue, and unpaid medical bills are one of the biggest factors behind personal debt and bankruptcy. And as costs continue to rise and put pressure on employers, wages will continue to stagnate and gradually the level of insurance will decrease for employees, which in turn leads to an increase in unpaid medical bills and -- in addition to more personal debt and bankruptcy -- results in more costs shifting onto the payers who remain in the system, such as public employees and private employees who are still receiving affordable coverage.

To simply aim public policy at the monolithic goal of "cutting taxes" has the potential for handling a portion of the cycle by shifting more health care costs onto public employees -- if the tax cuts are realized in that way -- which I'm sure would please a number of conservative commentators, but it wouldn't deal with the fundamental problem of rising health care costs or the economic troubles that come as a result.

The "just cut taxes" line is great for a stump speech, TV commercial, or press release, but it's fundamentally short-sighted at best, and at worst it misses an opportunity to address one of the fundamental causes of high taxes and economic distress, which is our inefficient and inequitable health care system.

Feeling the Need to Post

2007-06-21T07:55:00.000-05:00

I've looked far and wide over the past two mornings for something to write about, and both times I've come up with nothing. My feeling is that if I can't write something fresh and substantive, I'm better off not writing anything at all.

But, yet, there's still this nagging feeling I have during the stretches where I haven't posted anything for two or more days. I feel as though I'm doing my voice a disservice by not saying anything, even if I don't feel I have anything worthwhile to say.

Part of this is driven by an article I read by one of the MyDD writers -- I think it was Chris Bowers -- just as I was starting this blog. Among the points Bowers suggested for generating and maintaining readership was the need for continued and consistent blogging. If you have stretches where you don't say anything, people will stop coming back to your blog.

I can see where this is very true on the national scene, particularly a few years ago, which is when I think Bowers (or whoever it was) wrote that article. There are literally hundreds of national blogs to choose between and you need a very large number of readers in order to be considered successful. Plus, there's usually something newsworthy happening every day on the national scene, and readers are going to be turning to their favorite blogs for commentary. If that commentary isn't there, they'll learn to start turning elsewhere.

But with the advent of blog readers, like Bloglines, I'm not so sure that's as much of an issue anymore. I have roughly 70 political blogs on my Bloglines -- about 25 national and the rest local -- and I simply read the posts as they pop up. If someone didn't have anything to say for three, four, or five days, I probably wouldn't even notice.

In addition, the local blogosphere is different than the national scene in the sense that it's just flat out smaller in terms of blogs, readers, and -- perhaps most importantly -- significant news stories that are deserving of commentary.

And I get the vast majority of my hits from WisOpinion, typically when one of my posts is featured there, and most of the rest come from LeftyBlogs. Even if I take a few days off, I can get my readership back up pretty quickly by landing a link on WisOpinion and LeftyBlogs.

In spite of knowing all of this, the feeling that I need to post something still persists on days like today.

What do all of you think? As a reader, do you prefer it when a blog only says something when the blogger has something fresh and substantive to say, or is it more important to you that bloggers are consistently demonstrating they have a pulse by getting something out there just about every day?

And, if you're a blogger, do you feel a similar pressure to get something out there and, if so, does it bother you if that something really doesn't say all that much?

Health Care Reform in the Budget

2007-06-19T07:31:00.000-05:00

It appears the Senate Dems are getting set to include fundamental health care reform in the version of the state budget they pass in the coming weeks.

The GOP is attacking this move because it won't guarantee public hearings on the plan. On the surface, Republicans have a point. Something as significant as health care reform deserves to go under public scrutiny (real public scrutiny, not the conveniently-orchestrated stuff). Republicans clearly aren't interested in repeating another situation like we had with the Milwaukee school voucher program where a major public policy was passed through the budget without a single public hearing.

But, on the other hand, the Dems spent the entire spring bringing their three health care reform plans before the public in countless cities and towns throughout the state, and the plan that's going to be in the budget is an amalgamation of those plans and the input lawmakers received from the public hearings on them.

Plus, the Dems freely admit that fundamental health care reform is not going to be a part of the final budget that gets signed by the governor. It's not like they're going to stall the budget until they get their way; I mean, who does that?

Fundamental health care reform is going to need to wait until the Dems control the Assembly, the Senate, and the Governor's office. Before then, it doesn't matter if the bill is a standalone or part of the budget, it's just not going to pass.

Including the reform plan in the budget does, however, have one important difference than simply introducing it as a standalone bill: media coverage.

The media -- at least the political media -- is going to be all over the budget for the next few months, especially considering how contentious the talks will be between the Democratic Senate and the Republican Assembly. Tossing fundamental health care reform into the mix is sure to bring it a decent amount of press, as opposed to the cricket chirps that accompanied all three standalone measures the Dems introduced during the last legislative session.

In the end, though, this is just a set-up year. Next year the task will be to leverage the lack of health care reform -- among other points -- in the election. And, if all goes well, fundamental health care reform will be in a position to make it all of the way through the next budget process (with its own public hearings, of course).

GOP to Force a Mark Green Budget

2007-06-14T07:47:00.000-05:00

A little over a year ago, while campaigning for governor, Mark Green made a pledge to freeze state spending levels in the '07-'09 budget if he was elected.

Many observers didn't put much stock in Green's pledge considering he also pledged to decrease revenues through tax cuts and increase costs through some new programming, most of which was never detailed. All-in-all, the Journal Sentinel estimated that Green would've needed to cut state operations by over $1 billion to make all of his pledges work.

But even though Green lost the November election by around 160,000 votes, it looks like his campaign promise for a frozen state budget might come true, at least for awhile. Assembly Speaker Mike Huebsch (R-West Salem) has been making the media rounds to tell everyone about the possibility of a budget impasse over new tax revenues in the budget that made it out of the JFC last week.

I tend to agree with the Recess Supervisor that stalling the budget process is going to create significant PR problems for the state GOP. Those on the right side of the blogosphere will almost certainly celebrate the move, but they're also the ones who enthusiastically supported TABOR and Mark Green's candidacy.

Although much of the state surely doesn't like the idea of tax increases, they also won't like the idea of risking important public services on the grounds of maintaining ideological purity. For most people, there's a balance that needs to be made between what they pay and what the public gets back in return. This is a balance that's completely ignored by one-sided arguments for either increased services regardless of cost or -- the avenue the GOP is heading down -- one-sided arguments for tax freezes regardless of services.

But, then again, Huebsch really isn't talking about a true freeze, certainly not in the way that Green talked about a freeze that wouldn't even touch normal revenue growth.

Huebsch has raised the prospect of passing a budget for some big ticket items, like schools, while holding back the rest, and he's suggested that while the Assembly budget will include no tax increases, fee increases -- which amount to a little over $270 million in the governor's budget -- are still very much on the table (much to the chagrin of the fiscal conservative base).

Nevertheless, it's still going to be a tightrope walk for the GOP leadership. Even setting schools aside, there are still a number of other issues ranging from child care subsidies for low income families to GPS tracking of sex offenders to health coverage for all children through BadgerCare Plus to expansion of the state crime lab, among many more, that will remain stagnant until a budget passes and become jeopardized unless a budget passes that includes adequate funding.

And, even more than that, what's probably most detrimental to the GOP heading into this confrontation is that it will be perceived as fighting for ideology above all else.

The language will be populist -- "The taxpayers can't afford it" -- but the overriding perception still will be that Republicans are standing in the way of funding necessary and popular services since the GOP formula for what the taxpayers can "afford" doesn't ever actually consider the "it" portion of that ambiguous tag line.

School Voucher Funding: The Circus is in Town

2007-06-13T07:47:00.000-05:00

UPDATED BELOW

Last winter, Milwaukee Mayor Tom Barrett proposed increasing state funding for new voucher students so that Milwaukee taxpayers would pay the same amount for those new voucher students as they do for MPS students.

At the time, the governor and Republican legislative leaders agreed with Barrett in principle, but said that the funding fix would need to wait until the 2007-2009 biennial budget.

Fast-forward to this winter, Governor Doyle included in his '07-'09 budget proposal the exact funding fix that Mayor Barrett asked for last year. However, now Mayor Barrett and other leaders in Milwaukee feel that plan doesn't go far enough and want the funding fix to apply to all voucher students, not just new ones, a decision that's helped to split the Dem position on the issue and create a space for the GOP to play it like a political fiddle.

Republicans on the JFC let out word that they were prepared to support the plan to have the fix apply to all voucher students, but they didn't want to actually make the motion during budget deliberations. Dem legislator Pedro Colon was expected to raise it, but he didn't because JFC co-chair Russ Decker (D-Weston) told him that doing so would cost Milwaukee other funding proposals.

As a result, the Doyle proposal made it through the JFC intact. However, some predictions are that Doyle's proposal may get axed in conference committee, possibly because outstate Dem legislators, like Decker, aren't too fond of the voucher program to start, while Republicans -- who do support the voucher program -- don't really care if Milwaukee residents need to pay more for it.

To be sure, while Republicans on the JFC pledged to support the more expensive (for the state, that is) proposal to fix the funding flaw for all voucher students, they also all voted against the less expensive proposal by Doyle to only have the fix apply to new voucher students.

Why? Well, in the end, Republicans are more than happy to feed a situation that has the Dems fighting amongst themselves to the point that the voucher funding comes out of the budget in the same form that it went into it: inequitably. And the Dems, apparently, are more than happy to go along with it.

Oh, and to top it all off, some expect that those other Milwaukee funding proposals -- the ones Colon was trying to protect in the JFC budget deliberations by not proposing the funding fix for all voucher students -- may get cut, anyway, in conference committee.

Too bad the Ringling Brothers already have the copyright on that "Greatest Show on Earth" line.

UPDATE: I received a note from Mayor Barrett's office today clarifying that the mayor's position always has been that fixing the funding flaw for new voucher students was a minimum fix.

This is a distinction worth noting because it suggests Barrett's position didn't change, exactly, but rather he viewed his proposal last winter as a start to correcting the funding flaw, which is a position backed by comments Barrett makes in this Journal Sentinel article.

That said, the effect of the situation is still the same -- the GOP is gladly exploiting a rift in the Dem position on fixing the funding flaw. It's just that the rift is more a result of proximity to Milwaukee than political shifting, as I made out in the post.

A Soundbite's a Soundbite

2007-06-11T07:45:00.000-05:00

Cost is unquestionably a factor that deserves top consideration with any budget. But right alongside cost is another top consideration: What are you getting in return for the cost?

An informed decision on any budget, whether it's a state budget or a personal budget, takes consideration of both cost and what you're getting in return for that cost.

The GOP has left the latter part of that equation out of its criticisms of the governor's budget proposal over the course of the spring. To an extent, this focus on one half of the equation from state Republicans is understandable, at least politically speaking.

The GOP thrives on making public finance about taxes alone. And it's an efficient political strategy that's played well for many years. Few people like paying taxes, and even fewer people like the idea of paying more in taxes.

(Side-Note: Tax rhetoric makes for good campaign fodder, but not, however, good governing. Case in point, Tommy Thompson didn't become one of the most popular governor's in Wisconsin history by living up to the fiscal conservative message he ran on during the mid-80s; that just helped get him elected. His broad popularity came by opening up the state wallet as governor in the mid-90s.)

So that's the GOP's excuse. What do you suppose is the Journal Sentinel's excuse?

On Saturday, the biggest daily in the state ran an article on the JFC's passage of a budget that's virtually the same size as the one the governor proposed. Nearly the entire article was focused on cost.

After a subtitle that reads, "$58 billion spending plan includes higher car registration, cigarette tax," here are the two lead paragraphs:

The Legislature's Joint Finance Committee on Friday forwarded a $58 billion budget that largely strengthens Democratic Gov. Jim Doyle's position on many key issues.

Hundreds of budget provisions are a step closer to becoming law, including higher fees for residents registering their cars and renewing their driver's licenses; a rise in the cigarette tax; and increasing University of Wisconsin System tuition.

There was a small section on the goal of the hospital assessment to generate more federal Medicaid dollars to better reimbursement rates, but, other than that, proposed services were absent from the discussion. Even the section on the proposed Stewardship fund extension failed to explain to readers the purpose of the program; instead, it just focused on how much that extension would cost.

The JS followed-up that article with another on Sunday that asked readers to consider: "What will survive budget battle?" Here's the second paragraph:

The budget drafted by the Legislature's budget-writing panel includes Democratic Gov. Jim Doyle's plans to impose new taxes on oil companies, hospitals and cigarettes. It also includes proposals that could mean higher fees for residents registering their cars, renewing their driver's licenses, selling their homes or paying tuition at University of Wisconsin System schools.

The article goes on to explain a variety of instances where costs would go up, and, in a few, it does explain what the increased revenue would fund. But the overriding emphasis is clearly on cost, just as it is exclusively in the lead paragraphs.

Getting back to my question about the JS's excuse, some may read it as the workings of a right-wing news desk. And there may be some truth to that. But I'd say what's an even bigger driving factor is the plain old desire of the JS to sell newspapers.

If you want to catch a reader's attention on a story about the budget, you're not going to ask them to consider a nuanced equation of cost relative to services to determine the most equitable route for the state to head. Nope. You're going to hit them with a $58 billion price tag and how much more in individual taxes and fees they're going to need to pay in order to fund not the services, but the price tag.

In this sense, the paper's aims are tied to the GOP's not in ideology, but in expediency. The GOP wants voters; the JS wants readers.

And who can blame them? Soundbites make great business sense for media outlets, just as they make great electoral sense for politicians.

So what if they don't make a whole lot of civic sense? Civics is boring, anyway, right?

The WHP: A Level Playing Field with Choice & Personal Responsibility

2007-06-08T07:46:00.000-05:00

If nothing else, the new Lewin Group report on the Wisconsin Health Plan makes the WHP the most well-vetted of any of the three fundamental reform proposals being considered by legislators.

All fundamental health care plans level the playing field for consumers, and the WHP is no different on this front. Leveling the playing field for health coverage is most beneficial to the less healthy, which tends to be the older population.

This chart from the Lewin report demonstrates how average health care costs increase with age:

Putting everyone in the same boat regardless of health status is the idea of community rating. The more healthy essentially subsidize the less healthy and in return they get the security of knowing that if (or, more likely, when) they or one of their dependants move into the category of less healthy, they will retain a solid set of benefits at an affordable price.

Community rating is going to be an aspect of any fundamental health plan, but there are a couple of aspects that distinguish the WHP from the rest of the field: choice and personal responsibility.

While the other two fundamental health care plans are essentially single payer, the WHP retains the multiple payer system. There are some downsides to this on the administrative side -- costs are typically higher under a multiple payer system -- the advantage is that it retains some level of consumer choice.

This choice is heightened under the WHP by the tiering that's involved; consumers can choose between plans in the first tier, which would be funded entirely through the WHP, or they can opt for broader coverage in one of the higher tier plans by paying the difference in the premium between that plan and the first tier plans.

In addition to choice, the WHP also retains a strong level of personal responsibility through its implementation of cost-sharing, specifically in the form of a high deductible. This cost-sharing ensures that while there is a social safety net for the less healthy that will be largely subsidized by the more healthy, there is still a place for personal responsibility in terms of both health care costs and a focus on wellness.

I've been critical of High Deductible Health Plans (HDHPs) before on this blog, but I've also noted that when structured with proper patient and consumer protections -- such as a reasonably low deductible, at least partial annual funding of the HSA, and no cost sharing on preventive care (all of which the WHP includes) -- they can be a good tool for keeping health care costs in check. More specifically, studies have shown that HDHPs can lower some of the unnecessary health care utilization costs that have contributed to our expensive system.

But the same leveling that makes the WHP -- and all fundamental reform -- so attractive is also what makes it a politically challenging issue. In any fundamental reform there are going to be winners and losers.

That's not to say there isn't plenty of winning and losing in our current system, and it's hardly questionable that the winning and losing would be less drastic after fundamental reform. Nevertheless, under fundamental reform, some people are going to see their coverage go up, while others will see their coverage go down. And that fact alone is going to cause political problems, even if it puts us in a better position than we are in today.

And the troubles don't end with just coverage. While those who are seeing their coverage decrease are also seeing their costs decrease -- although in the WHP they could always increase their coverage by moving to one of the higher tier plans or putting more money into the HSA -- those who are seeing their coverage increase are also seeing their costs increase. And it's this latter point that will probably prove the most politically difficult to overcome in the upcoming health care reform debate.

As the Lewin study makes clear, employers who do not currently offer health care benefits to their employees are going to get hit harder under the WHP than those who do. This isn't really a surprise. The Lewin Group predicts that most employers will be able to withstand the cost increases for health care benefits by reducing some other form of compensation, most likely wages.

Lewin estimates the average employer who doesn't offer health benefits now will reduce wages by about $2,800 per worker, while the average employer who does offer health benefits now will reduce wages by about $173 per worker (mostly because the WHP payroll tax will include wages for part time and seasonal employees who typically don't get health coverage today). But since employer costs would be tied to payroll level, Lewin estimates that the bulk of the wage cuts would be focused on the higher income levels, as this chart demonstrates:

This isn't to say, however, that the most paychecks would necessarily drop under the WHP. This is particularly true when tax cuts are taken into consideration. Not only would personal property taxes for busineses be eliminated entirely, businesses would also see their general property taxes drop by $213 million while households would see their property taxes decrease by $550 million in the first year. After these tax cuts are taken into consideration, it's likely many employers wouldn't find any wage cuts necessary.

It's also important to note that, in relation to the wage question, the savings associated with the WHP -- which the Lewin report placed at $8.9 billion over the first decade -- aren't really realized for the first couple of years after the plan is in place (see chart below). So while some wages may be impacted initially, the long term effect should be to strengthen wages in the state.

And it's also necessary to remember that these wage effects do not take into consideration the increase in worker assets that would come from the funding of HSAs by the state, which starts off at $500 annually and accumulates from year to year.

But, nonetheless, is it fair to expect that wages might decrease for some workers as a result of the WHP, even if only initially? If you consider health benefits to be a part of compensation, which most economists do, then the answer is "yes." In fact, many unions have opted for wage freezes, or sometimes cuts, in order to avoid greater cost sharing for health care benefits -- it's the same idea here.

But is it fair to those who really don't want health coverage and would prefer to just get the money in wages? There the answer -- at least on the surface -- is probably "no," but that can't be the only consideration when it comes to health care coverage. After all, just because someone chooses not to get health insurance doesn't mean that person isn't going to need health care at some point.

And when the uninsured person eventually does need health care -- and all of us do, at some point -- it's not like the costs of that care just go away. Instead, those costs get shifted to those of us who do have health insurance. How fair is that? It's the same basic idea as requiring everyone in the state to have car insurance if they own a car.

In the end, there are many complex and important points to debate and consider when it comes to health care reform. Fundamental reform will unquestionably have great overall benefits in the future -- over 99 percent coverage and $8.9 billion in health savings in the next decade highlight that fact -- but, as with any change, there will be some costs, especially up front, and those costs will effect certain segments of the population more than others.

It will be interesting to see what aspects of the WHP get included in the "unity plan" that's expected to be announced by Senate Dems in the next month. It's sure to level the playing field in a similar way as the WHP, but how much choice and personal responsibility it includes will be important aspects to focus on.

The WHP Goes Through the Actuarial Wringer

2007-06-07T07:53:00.000-05:00

I'll leave the details to future posts, but it looks like the Wisconsin Health Plan stood up well in a 170-plus page review by the gold standard of health care actuaries, the Lewin Group.

There wasn't anything new to the overall structure of the WHP, which the Wisconsin Health Project discusses here and I discuss here, but some of the funding details were altered and the Lewin Group also provided a definitive say on the savings from the WHP, which amounts to around $8.9 billion over the first decade. And that's with providing coverage to over 99 percent of the Wisconsin population.

And the Lewin study also details how the WHP would result in a hefty property tax cut for homeowners and businesses -- to the tune of just under $1 billion -- which would be funded through pulling the "Rolls Royce" public worker health benefits into the WHP fold. I imagine that would be music to a fiscal conservative's ears (but I know better than that).

More to come later...

Time to Renegotiate UW/UM Reciprocity

2007-06-06T07:45:00.000-05:00

Every so often, you'll hear talk of the University of Minnesota system pulling out of its reciprocity agreement with the UW System. Now is one of those times.

The U of M's Board of Regents is getting set to vote on June 27 on whether to phase itself out of the reciprocity agreement. If it decides to start doing so in the fall of 2008, it would need to tell the UW of its plans by July 1 of this year.

The issue is that U of M tuition has grown faster than UW tuition in recent years. And since participants in the reciprocity agreement pay their home state tuition rates, this has resulted in Minnesota students paying slightly more than Wisconsin residents at UW schools -- the way it should be -- and Wisconsin students paying slightly less than Minnesota residents at U of M schools, which is understandably an issue for Minnesota.

I wasn't a big fan of U of M president Bob Bruininks when I was a grad student there a few years ago -- mostly because of the poor way in which he handled renegotiating a contract with clerical staff on campus, which resulted in a strike in 2003 -- but he did come up with a reasonable proposal for how to handle the reciprocity agreement with the UW.

Rather than simply paying home state tuition in all instances, reciprocity students would pay either their home state tuition or the resident tuition of the receiving campus, whichever was higher.

That way tuition for students from both states would remain at reasonable levels, and it would eliminate the need for compensatory payments from the UW to the U of M to cover the cost to tuition differences in the current set-up. And, if the UW wants (and the state approves), it could transfer these compensatory payments -- which amounted to $7.8 million last year -- into subsidizing the tuition costs of Wisconsin reciprocity students, thereby keeping those rates at roughly the cost of attending an in-state UW campus.

This route also has the added bonus of making sure the extra funds are going to U of M campuses via tuition, rather than into the Minnesota state general fund as the compensatory payments currently do. And, by going to the campuses rather than the general fund, the money could be used to reduce tuition levels, enhance educational offerings, or some of each.

In the end, it would be a fairer and, as a result, more sustainable arrangement than the one we currently have, and that's something that's beneficial to the systems and the families in both states.

WI Hospitals Fight for Their Right to the Privately Insured

2007-06-05T07:56:00.000-05:00

The trend of hospital systems seeking privately insured patients over those on Medicaid is pretty obvious to most observers.

In the last year, for instance, Milwaukee has seen one of its city hospitals close -- St. Michael's -- while the big systems in the area have fought over control of outlying areas in Waukesha, Ozaukee, and Washington counties.

And, to be sure, the decision to move outward is a sound business strategy. The fact is privately insured patients pay more than Medicaid patients and significantly more than uninsured patients. Typically, you're going to find privately insured patients in the 'burbs and Medicaid patients in the city, so the move outward is clearly the way to go from a business standpoint.

Enter the governor's proposal to leverage an assessment on hospital revenues in an attempt to generate more federal matching dollars for Medicaid. The ultimate purpose of the plan is to increase the Medicaid reimbursement rate for hospitals from a paltry 63 percent to a more reasonable 83 percent.

Hospitals have questioned the likelihood that they'll be the sole benefactors of the matching federal dollars, while others -- myself included -- have questioned how wise it is to bank on the federal government for money, at least for the long term, considering even the slightest administrative change on its end can result in costly problems on the other end of the equation.

But all this is masking the broader shifting that's taking place in our existing fragmented health care system toward a focus on care for the privately insured on the provider side and coverage of the healthy on the payer side.

In spite of its questionable long term viability, one good thing that the governor's hospital assessment would do is close some of the cracks that create incentives for our health care system to cater to some segments of the population over others.

Indeed, those health systems that see a lot of Medicaid patients would do quite well under the hospital assessment. Children's Hospital, for instance, would be looking at a $50 million increase in revenue over the biennium. The Waukesha-based ProHealth Care, on the other hand, would lose $1.1 million over the biennium because it cares for a much smaller percentage of Medicaid patients.

Some may view this as unfair that some hospital systems would lose out over others, but it's not exactly a zero-sum game. For starters, there would be more winners than losers under the hospital assessment (again, at least in the short term); overall, the net increase for all systems and individual hospitals in the state, put together, would be $284 million.

Secondly, due to the existence of the "hidden health care tax" -- which is the amount privately insured patients pay to cover the loses hospitals take on by caring for Medicaid and uninsured patients -- what the hospital assessment is really doing is helping to level the playing field for those privately insured people who go to hospitals that also have a large Medicaid population.

In fact, according to the Journal Sentinel this morning, Children's Hospital has pledged to reduce prices for privately insured patients should the hospital assessment go through. The same should be true, ostensibly, for every health system that's coming out ahead under the assessment.

Nevertheless, Children's Hospital is remaining neutral on the hospital assessment. Why? If it can lower health care costs for its customers, why wouldn't it support the proposal?

The simple answer is that it's closing ranks. The Wisconsin Hospital Association is against the plan, so it would be a really bold move to go against the grain.

But, again, there's more to it than that. After all, the biggest health system of all, Aurora, is scheduled to make $47.7 million off the hospital assessment over the biennium. And not only is Aurora not supporting the plan, it's actually opposing it.

Why? For them the answer is likely a little different than the answer for Children's. While Aurora may be pulling in $47.7 million in 2007-2009, that number is probably going to be a lot less in the future when it gets its hospitals built in Waukesha and, eventually, Ozaukee counties.

And compared to how much it'll make from all those privately insured patients in the 'burbs, $47.7 million over two years is next to nothing.

A TABOR for UW Tuition

2007-06-04T07:53:00.000-05:00

Chairperson for the Assembly Colleges and Universities Committee, Rep. Steve Nass (R-Whitewater), has proposed to the GOP members of the JFC a number of motions concerning the UW.

First and foremost on the list is capping tuition increases to the level of inflation, which is essentially a TABOR for tuition.

According to the press release by Nass:

Over the last ten years, the annual increase in UW System tuition has been 8.5%, while inflation has been running about 2.5% per year during that period. In 1996-97, UW System students covered only 35% of their instructional costs. Today, UW System students now pay for 58% of the instructional costs.

It's true that tuition now covers a larger portion of instructional costs. But it's also true that state GPR dollars cover a smaller portion of it. In fact, according to the LFB, while the UW System generated 34 percent of its total funding from the state in 1996-1997, only 24 percent came from the state in 2006-2007.

Yet, not once does Nass suggest putting more state money into the UW to make up even a portion of the cuts that would come through tying tuition to inflation.

And why would he? According to Nass, the difference is just waste, anyway. As he sees it:

Families in this state have no problem with paying the lion’s share of the costs of higher education. However, these families have the right to know that their hard earned money won’t be wasted on continuing the scandalous behavior and poor management that has plagued the UW System. The problem isn’t with the rank-and-file faculty and staff, it’s with the leadership of the System and it starts right at the top.

While Nass doesn't provide specifics on what wasteful scandals he's referring to, it's probably safe to assume that among the list would be the failed HR computer system and the hubbub over back-up jobs for executive level administrators like Paul Barrows.

The HR system ran up a tab of $26 million (which includes the salaries of permanent state employees who worked on the project) and Barrows was paid about $110,000 while on personal leave for seven months a few years ago.

These are troubling, indeed. And I'm sure Nass could come up with a few others to add to the list.

But I'm wondering if he could come up with enough in the past 10 years to justify the roughly $1.8 billion that an inflationary tuition cap would've cost the UW System between 1996-1997 and 2006-2007?

Yep, a little over $1.8 billion is what the UW System would be out in funding if tuition was limited to the inflation rate during each of the past ten years. You can check the math using the tuition numbers on page 18 of this LFB report and the inflation numbers on page 7 of this LFB report.

It's truly no problem to examine how we can keep UW tuition down, just as it's no problem to examine ways to keep general taxes and fees down for the state as a whole.

But we need to do so with realistic and fiscally responsible proposals that consider cost and services, as opposed to those with rigid adherence to restrictive revenue caps or uncompromising budget pledges.

The Relevant Question: What Do You Want to Cut?

2007-06-01T07:17:00.000-05:00

I don't want to get into whether or not the proposed oil assessment would be passed on to consumers. It's certainly an important question to consider before passing a budget with the provision included, and already a number of attorneys have weighed in on the issue with far more insight than I could provide here.

But it's also important to consider another question if the decision is made to not include the provision in the budget: What should be cut to allow it to be removed?

The oil assessment is scheduled to bring in about $272 million over the biennium. All of the revenue is slated for the transportation fund.

When Republicans on the JFC proposed deleting the oil assessment yesterday, they included a few other additions and subtractions that would've led to a net decrease in $160 million in revenue over the biennium.

As Rep. Mark Pocan (D-Madison) pointed out, the JFC has already added $50 million in GPR spending to the governor's budget over the course of its deliberations, yet the GOP side of the table was now proposing to simply eliminate $160 in revenue from that budget. So where are these cuts going to be made on the services side?

Rep. Kitty Rhoades (R-Hudson) offered a campaign trail type non-response, claiming that Pocan's comments highlighted a basic philosophical difference between Republicans and Democrats. As she sees it, Dems want to spend more, and Republicans want to spend less.

It's a bit of a curious defense to merely say your side is about spending less considering that Pocan was specifically asking where the GOP intended to spend less.

As I wrote back in February: "[T]he easy part where the GOP gets to talk only about what revenue it doesn't want to raise will eventually come to an end. Soon it'll need to start talking about what programs it wants to cut."

But the response by Rhoades suggests that in all the time the GOP spent hammering Doyle's budget over the course of the spring, it still hasn't figured out exactly how it plans to live up to its uncompromising talk on cutting revenue.

The Other GOP Presidential Pickle

2007-05-30T07:43:00.000-05:00

I haven't paid much attention to the health care plans proposed by John Edwards, Bill Richardson, Barack Obama, Hillary Clinton, or any of the other Dem presidential contenders. While I think health care is a national issue, it's my feeling that fundamental health care reform has the best chance of passing at the state level.

But that doesn't change the fact that health care is one of the top domestic priorities in this country. And I'm not alone on that one. Just about every poll to broach the subject shows that Americans agree on this point, and the agreement often spans the political spectrum.

For instance, a Pew poll last summer found that 89 percent of Dems believe health care is a "very important" issue, while 79 percent of independents and 69 percent of Republicans feel that same way.

So it's certainly not surprising that the Dem candidates have all spoken out on the issue. But what's a bit surprising is the silence on the issue from the right.

Health care blogger Bob Laszewski recently took a peek at the web pages for the three top GOP contenders -- Rudy Giuliani, John McCain, and Mitt Romney -- to find out their thoughts on the issue of health care.

Giuliani and McCain both offer up comments on about ten issues, but none of them even touch on health care. Romney does list health care as the tenth out of eleven issues he discusses, but his thoughts are limited to a couple of statements that center on the idea of personal responsibility for health care. (Side-Note: This is interesting because, as Laszewski notes, "the Massachusetts health reform bill [Romney] signed...does create a new and very large government program.")

So why, if 69 percent of Republicans say health care is a "very important" issue, do the presidential candidates on the right largely avoid talking about it?

One answer, which Laszewski hints at, is that the GOP base is made up mostly of the 1/3 of Republicans who don't see health care as a "very important" issue, and therefore hitting on the topic isn't necessary for winning the GOP nomination.

While I think there's some truth to that, I don't think that tells the entire story. After all, winning the nomination is just one piece of winning the presidency. It would greatly benefit a GOP candidate to start discussing health care, even if only as a side issue during the primary, so that a foundation on the issue is there when the general election rolls around.

But I'd say that the silence exists because it's extremely difficult to blend right-wing free market ideology with a proposal for universal health care. That's why you see Romney actually rejecting the very foundation of his own signature issue as governor of Massachusetts now that he's trying to court the GOP base.

The fact is the government is going to be an integral part of any universal health care plan, let alone one that fundamentally changes the system and, as a result, reduces costs. Simply relying on "market forces" to do the trick is little more than a pipe dream; to be sure, already 1 in 4 Americans relies on either Medicare or Medicaid for their health care, and another 15 percent don't have coverage of any kind.

As Froedtert Hospital CEO William Petasnick put it recently: "We've had 14 years of basically market-driven solutions. And market-driven solutions work up to a point, but I think the outgrowth of the failure of market-based solutions is . . . the 45 million Americans who are outside of the market."

The bottom line is that the government is going to be a necessary part of any viable fundamental health care reform plan. But proposing to use the government as a means for reform isn't anything the Republican base wants to hear.

It's been noted that the GOP candidates are going to have a tough time crafting a message on Iraq that pleases the base for the primary, and then reinventing that message to play to a wider audience in the general.

It seems the same may be true for the top domestic policy issue, as well.

What a Joke: GOP Reaction to Dem Sick Leave Bill

2007-05-24T07:16:00.000-05:00

I know disingenuousness is just part of the normal political game. But for legislative Republicans to claim that Dems are "late to the party" for recently announcing a bill to eliminate the sick leave conversion policy for legislators is truly eye-rolling.

Let's hop on the truth trolley for a moment: Democratic state legislator Sheldon Wasserman drafted a bill to eliminate the sick leave policy in 2003. The response he got from both sides of the aisle was a combination of blank stares and crickets chirping.

Now digest that nugget of reality with this statement that Republican Senator Ted Kanavas released yesterday:

It's about time. This issue has been a no-brainer from day one. While I am pleased that some Democrats in the Senate have finally seen the light, I wish they would have reached this obvious conclusion six months ago rather than blocking our common sense reform.

Ah, and who was running the legislature in 2003 when Wasserman floated his bill around? Oh, that's right, the GOP controlled both the Assembly and the Senate. Didn't "common sense" exist back then?

What a joke.

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Side-Note: See this post for my take on the policy side of the proposal (here's a teaser: I'm skeptical of its value and the resulting impact). Be sure to check out the good discussion that ensues in the comments; and if you have further comments on that post, feel free to leave them here.

Assembly Republicans Did Learn Their Lesson

2007-05-23T07:43:00.000-05:00

See LATE UPDATE Below (5/24)

Owen from "Boots and Sabers" has created a bit of a stir in the Republican Assembly caucus by asking members to sign a pledge not to pass a budget bill with any tax or "unnecessary" fee increases.

In a post yesterday, Owen relays a rumor that Assembly Speaker Mike Huebsch was telling Republicans not to sign the pledge. Rep. Robin Vos denies this claim, but a number of Assembly Republicans are still refusing to sign it.

Owen's view is that by refusing to sign a budget with any increases, the Assembly Republicans will be sending a strong message to "the base" for 2008. The fact that this would result in no budget being passed and, subsequently, freeze state funding to agencies and local units at FY 2006 levels would demonstrate Republican resolve, Owen argues.

A few Assembly Republicans have signed the pledge, including Rep. Lasee, Rep. Zipperer, Rep. Nass, Rep. Kramer, Rep. Vukmir, Rep. LeMahieu, Rep. Lothian, and Rep. Pridemore. But it appears the bulk, including most of the leadership, is trying to walk a tightrope of agreeing in principle with the pledge while refusing to actually sign it.

Does any of this sound familiar? For those who followed the demise of the failed "Taxpayer Protection Amendment" last spring, it probably does. It was quite a spectacle.

At least six versions of the amendment were proposed in a two month span (five coming in a flurry at the end); the sponsors organized invite-only public hearings that sometimes were hidden from the media and the public; Assembly Republicans stayed up to all hours of the night to finally pass a version that those in favor of the initial proposal wouldn't even support; all the while, Republican leaders in the state Senate along with gubernatorial hopeful Mark Green spoke the language of the amendment without ever formally pledging their full support for it.

It seemed most in the state GOP, particularly those outside of the grasp of the southeastern part of the state, just wanted the amendment to go away. (And it's no coincidence that all of the representatives who have signed Owen's pledge, thus far, are from around the southeastern part of the state.)

But what's really a bit astounding to see now is how the "the fire-breathing tax-limiting fiscal conservatives of southeastern Wisconsin," as Charlie Sykes once described them (he included himself in that group), are apparently reacting to this utter failure to pass any of the TABORs.

As Sykes put it on his blog yesterday in response to the rumors that Assembly Republicans were conspiring against Owen's pledge: "Do you think the GOP learned it's lesson last year? Apparently not."

The logic there is truly eye-opening. An upset electorate supposedly tossed Republicans for not passing TABOR, and in their place elected Dems who didn't campaign on the premise of pushing anything close to TABOR and who undoubtedly would vote against it if given the chance.

It seems to me that the Assembly Republicans who are refusing to sign Owen's pledge did learn their lesson from last year, and it's those "fire-breathing tax-limiting fiscal conservatives of southeastern Wisconsin" who just won't let the party move on.

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Side-Note: Before any commenters mistake what I'm writing here, I want to clarify that I don't think taking a position against the governor's budget is a problem. Rather, the problem is signing on to stringent and uncompromising pledges for virtually no revenue increases. This is essentially the same critique I put forward regarding WMC's reaction to the budget.

Similarly, the most fundamental problem with TABOR was how it wrote fiscal policy into the state constitution. That's why each version that was written came out a loser. Yeah, the details were bad, too, but it's the basic premise of inflexibility and loss of local control that truly made any incarnation of TABOR a non-starter.

I understand conservative voices like Owen, Sykes, and Belling believe that taking an uncompromising attitude toward the state budget is the most ideologically pure tactic, and they're probably right about that.

But, for much of the state, ideological purity is just another way of saying extreme.

LATE UPDATE (5/24): Check out Cory Liebmann's post on how at least one Republican legislator characterizes his colleagues across the aisle. Hint: It isn't complimentary.

Restoring Wisconsin Shares as a State Priority

2007-05-22T07:41:00.000-05:00

The Joint Finance Committee is scheduled to take up funding for the Wisconsin Shares child care subsidy program today.

It's not difficult to see how Wisconsin Shares is a deal breaker for welfare reform. If there isn't anyone to watch the kids, there isn't any way to go to work, especially 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.

The fiscal problem facing Wisconsin Shares is a result of two related factors: 1) stagnate federal TANF funds, and 2) decreasing state GPR funding for the program.

I cover all of the details in this post, but, to make a long story short, the state had a surplus of TANF funding at the end of the 1990s. Rather than maintain state GPR funding levels for the Wisconsin Shares program, the state decided to increase reliance on federal TANF dollars and divert the GPR funding to help cover the cost of tax cuts in the '99-'01 budget.

This wasn't so much of a problem in '99-'01, '01-'03, or '03-'05. But in this latest budget, '05-'07, the Wisconsin Share costs caught up and actually surpassed funding levels for the program, resulting in a $46 million shortfall in the current fiscal year. And if this funding level is continued into the '07-'09 budget, the program will face another shortfall.

Putting greater reliance on TANF funding back in 1999 was a big mistake. Yes, there was a surplus, but TANF funding has been stagnate since its inception in 1997. The total federal funding for TANF was $16.5 billion in FY 1997, and it's $16.5 billion in FY 2007. It doesn't take too much foresight to realize that putting greater reliance on TANF funding would eventually result in a fiscal shortfall.

But dwelling on past missteps will only get us so far. The fact is the JFC has the opportunity today to step up and restore Wisconsin Shares as a state priority. There's nothing the state legislature can do about TANF funding, but there is something it can do about GPR funding.

Governor Doyle has increased state funding for Wisconsin Shares by $3.3 million over the biennium in his budget proposal, but to cover the shortfall that increase comes along with freezing provider payments at 2006 levels, increasing copays by 10 percent, reducing income eligibility to 175 percent of the federal poverty level to enroll (from 185 percent of the FPL) and 190 percent of the FPL to continue (from 200 percent of the FPL), and authorizing waiting lists.

Even replacing a few of these administrative changes with additional funding can go a long way toward keeping the Wisconsin Shares program not only viable, but also successful.

The changes to copays, FPL eligibility, and waiting lists pertain mostly to access, while freezing payment levels is more of a quality issue (although it could impact access, too, if some providers decide to drop Wisconsin Shares participants as a result of non-competitive payment rates). The JFC needs to give Wisconsin Shares as a whole a higher priority in the state budget and determine what internal facets of the program -- related to both access and quality -- deserve a higher funding priority.

According to September 2006 numbers, the bulk of participants (roughly 90 percent) appear to be under 175 percent of the poverty level, which means most would stay eligible with the FPL change. However, that certainly doesn't mean the roughly 2,000 families that would lose access under the change are unimportant.

But if you raise the FPL back to 185 percent, what will that cost or do to the ability to reduce copays, increase payment levels, or eliminate waiting lists? How much will the copay increase impact access for the lowest income participants? Is some sort of copay scaling possible so that those who are 175 percent of the FPL or above can stay in the program by paying more?

These are the type of questions our JFC should be considering today. I've criticized the JFC in a couple of posts (here and here) for too often privileging style over substance in this year's budget process; today is one opportunity for it to put the horse and pony show aside to hammer out a better deal for 34,000 Wisconsin families.

UPDATE: In a 14-2 vote, the JFC approved $70 million in extra funding for the Wisconsin Shares program over the course of the biennium, thereby eliminating the need for the drop in income eligibility and the authorization of waiting lists. Also, copays will only increase by 2.8 percent rather than the 10 percent proposed in the governor's budget. I didn't see anything on the proposal to freeze payment levels at 2006 rates, so I imagine that was kept.

On the whole, this is good news for the 34,000 families in the Wisconsin Shares program, but unfortunately the funds are coming out of other programming for lower income families. This press release from the Wisconsin Council on Children and Families has the details.

Health Care CEOs Pushing Fundamental Reform?

2007-05-21T07:52:00.000-05:00

The Journal Sentinel ran an interesting "Crossroads" section yesterday on health care reform. The feature article was an excerpted transcript of the roundtable discussion of a panel that included top executives from the big health systems in the Milwaukee area and a couple of academics.

To be honest, I was a little taken aback by some of the points that I read. Not only were the academics pushing for fundamental health care reform that would result in restructuring the system and providing universal coverage, but a few of the execs did the same.

In the words of Froedtert Hospital CEO William Petasnick:

We've had 14 years of basically market-driven solutions. And market-driven solutions work up to a point, but I think the outgrowth of the failure of market-based solutions is . . . the 45 million Americans who are outside of the market.

Here's Columbia St. Mary's CEO Leo Brideau:

If you take a look at a dollar spent on health care premiums today, about 70 cents of that gets spent on health care. The other 30 cents of that goes to shareholders in those insurance companies or to administrative costs.

And it seems to me that when the government can manage the Medicare and Medicaid program for about 3% or 4% administrative costs, we ought to be asking insurance companies . . . why is it costing them 30%?

And Medical College of Wisconsin CEO T. Michael Bolger:

I think the health care system is broken in America. And . . . this country has not made a fundamental decision, and that is whether health care is a right of citizenship in a Jeffersonian democracy or whether it's a privilege for those who can afford to pay for it. . . .
Until we do answer that question, we will not be able to derive a health care system that is going to be fundamentally fair and equitable to the people of this country. I think that the current system of an employer-based reimbursement system in our country is unsustainable. . . .

The failure of market-based solutions, excess administrative costs, government efficiency, health care as a right, the need to end employer-based insurance -- I thought for a bit that I was reading some reincarnation of Pravda!

Part of this, of course, was just plain old finger pointing. Aside from a couple of swipes at drug companies and medical equipment manufacturers, the bulk of the target practice -- at least that of the execs -- was aimed at the insurance industry.

This is an interesting outcome considering most observers put the health system industry right alongside the insurance industry in the fight against fundamental reform. You can bet that just about any of the three proposals being considered by the legislature will have an opponent in both the Wisconsin Hospital Association and the Coalition for Sensible Health Care Solutions (an umbrella group for the insurance industry in the state).

I have little doubt that if the JS invited just insurance industry execs along with a couple of academics to the talk, the finger pointing would've been aimed at the big health systems that have been raking in near double-digit profit margins -- in spite of their non-profit status -- along with increasing their oligopoly status and, as a result, their negotiation position against payers through heightened consolidation in recent years.

As an article in the Denver Business Journal documented last August, all of the major players -- providers, insurers, Big Pharma, etc. -- are making lots of cash in our current system, and so all of them aren't going to jump at the chance to fundamentally change it.

Which brings us back to the question: So why did the provider industry execs not only point the finger elsewhere, but also sound like true reform proponents in their roundtable talk?

Part of me wants to believe that they do truly see the benefit in fundamental reform. Sure, they're making money now, but their industry is also under constant criticism, which inherently breeds instability. And getting the system as a whole on solid footing doesn't mean profits need to -- or even should -- evaporate.

But there also could be a subtle opposition within the verbal support for reform. After all, it's not a lack of public will that's preventing fundamental reform -- surveys show enormous support for doing away with our existing system. Rather, the same disease that's killing the system is killing reform: fragmentation.

The mere fact that there are a number of major players in the current system assures that any reform plan is not only going to be attacked from multiple sides, but also attacked from multiple sides by organized groups with plenty of special interest cash to do their convincing. It's easy enough for one segment to talk the talk of reform -- and save face in the process -- knowing that it would require far more than just talk to actually get anything done.

At one point in the roundtable talk, Aurora exec Sue Ela harked back to the early 1990s when special interests killed the Clinton health care reform plan, and she wondered if there would be enough political will to get something accomplished this time around.

She should really be asking the special interests that represent her organization and others at the table why so much political will is necessary when so much public will is already there.

Race For The 22nd Assembly District Is On

2007-05-18T07:51:00.000-05:00

With Rep. Sheldon Wasserman (D-Milwaukee) leaving to challenge Sen. Alberta Darling (R-River Hills) next year, the race is on to replace his post in the 22nd Assembly District.

WisPolitics reports that at least two people are interested enough in the position to publicly toss their names into the ring. One is Sandy Pasch of Whitefish Bay -- who appears to be running for sure -- and the other is Russ Hinz of Glendale, who is just considering a bid at this point.

Pasch and Hinz both would be running as Dems. The RPW spokesperson says that some GOPers have expressed interest in the seat, but I'm not so sure. The 22nd includes the heavily Democratic east side of Milwaukee -- specifically around the UWM campus -- and up into the North Shore suburbs, which have been trending solidly blue lately (a fact that'll have Darling working harder than usual in an election year, especially when facing a strong challenger like Wasserman).

Without a doubt, health care reform is going to be a big campaign issue in the 22nd next year. Bearing out this fact, WisPolitics reports that Pasch and Hinz have already staked out early, if vague, positions on the issue, and the two -- like Wasserman -- also both work in the health care field.

Hinz describes himself as a "Blue Dog Democrat," which is a coalition of Democrats in Congress who pride themselves on fiscal conservativism. It's a bit difficult to judge where Hinz would land on the issue of health care reform. According to the WisPolitics story, he's at least generally aware of the reform proposals being floated around the Capital, but he didn't divulge -- as least to WisPolitics -- exactly where he stands on any of them.

Adding to the ambiguity around Hinz is his position as an executive at Aurora Health Care, the biggest health system in the state. That certainly doesn't necessarily disqualify him from backing fundamental health care reform, but there's little doubt that his support for it as a legislator would put him in a precarious position with Aurora -- which is making a bundle off our existing fragmented system -- should he remain in some capacity there (or even rely on colleagues for campaign funds).

Pasch, a registered nurse who teaches at the Columbia College of Nursing, appears to be more of a grassroots person. She also has a degree in ethics and has extensive experience advocating for mentally ill patients in the community.

Based on the minimal information provided in the WisPolitics story about the two candidates, it appears Hinz would be more focused on the cost aspect of health care reform (key quote: the health insurance system is "squeezing the middle class") while Pasch would put more of an emphasis on the uninsured (key quote: "Pasch said she spent most of her timeout in the community, working with the homeless and those with inadequate or no health insurance who suffer from chronic illnesses that often is left untreated").

This, of course, isn't to say that Hinz isn't interested in coverage and Pasch isn't interested in cost. In fact, the key is going to be in the ability of both to bring those two aspects together and articulate specifically what they would do to advance health care reform -- we're much to far along in the debate for vagueness on even the smallest detail.

For Pasch it'll be important to not try to tug at the heart strings too much on the issue. The health issues of the poor and homeless is undoubtedly important and connected to the lives of everyone in the Milwaukee area, but she's going to be running for a seat in a district that predominantly has good health care. In this sense, it's really rising costs, as opposed to not enough coverage, that's most personally important to the constituents of the 22nd district.

The big challenge for Hinz will be crafting his fiscal conservativism in a liberal-friendly way; that is, there needs to be an emphasis on public finance as a whole -- services in addition to cost -- rather than a "just cut 'em" attitude that prevails in the districts in Ozaukee, Washington, and Waukesha counties. Health care is one place he can do that by emphasizing the significant public sector savings that can come through fundamental reform, but that also means he'll need to be willing to potentially stand up to the wants of the many friends he's probably made as an Aurora exec.

The race for the 22nd should make 2008 all that much more interesting of an election year. As a constituent of the district, I look forward to following it closely; and, if everything works out, I'll be looking at entirely Democratic representation: in the White House, in the Senate, in the House, and in both houses of the state legislature.

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Side-Note: Yes, I know, the House is a long shot. Damn you, Sensenbrenner, for jeopardizing my chance at a full sweep!

Deep-Fried Testicle, Anyone?

2007-05-17T07:17:00.000-05:00

The blogging on political stuff has been slow this week, so it seemed like a good time to bring up deep-fried livestock testicle eating at an annual festival in Elderon, WI.

The festival just ran for the ninth time this past weekend. Thankfully for the rest of the country (but perhaps not so much for the rest of Wisconsin), the AP was there to capture all of the nutty details.

More than 300 people consumed 100 pounds of $5 all-you-can-stomach deep-fried sheep, lamb, and bull testicles at this year's festival. But what I love most about the AP story is the quotes. You couldn't make up more fitting one-liners if you tried.

According to Buster Hoffman, "Once you get over the mental (aspect) of what you're eating, it's just like eating any other food, and it tastes good."

Ah, I'm not so sure. As Jules from Pulp Fiction put it: "Hey, sewer rat may taste like pumpkin pie, but I'd never know 'cause I wouldn't eat the filthy motherfucker."

But another festival goer struck a similar note as Hoffman, adding: "They taste like chicken nuggets. You just have to get past the testicle part."

Again, I'm not sold. After all, if they taste like chicken nuggets, why not just eat chicken nuggets?

But not everyone agreed with the comparison to chicken nuggets. Butch Joubert, for one, thinks the deep-fried sheep, lamb, and bull testicles are more like meatballs. "After a few beers, you can't really tell the difference," he told the AP.

Festival founder Nancy Fenske said she got the idea for "a nut fry" after a trip to Montana introduced her and her family to the delicacy of lamb fries.

"What else can you do in a small town?" Fenske added.

As an undergrad at UW-Eau Claire, I remember some light-hearted discussions in classes between small towners and city folks about where is better to grow up. I just wish I knew about this Elderon festival and the justification for having it back then.

JFC: What Are We Doing Here?

2007-05-16T07:36:00.000-05:00

To provide a brief explanation of how the JFC is handling the budget, those items that were in the governor's budget when JFC talks started require a majority vote (at least nine) to be removed while those items that are not in the governor's budget when JFC talks started require a majority vote (again, at least nine) to be added.

Here's a list of items that were proposed to be added to the budget yesterday:

Reduce the per pupil adjustment for school districts to $100 (GOP)
Require 70 percent of school district operating expenditures to go to instructional activities (GOP)
Have the DPI reimburse state universities and colleges for Wisconsin high school graduates who need to take remedial coursework (GOP)
Eliminate the requirement that MPS teachers live within the City of Milwauke limits (GOP)
Gradually phase out the ability of sender school districts to count transferred students in membership for revenue limits or state aid purposes (GOP)
Increase funding for SAGE by $3 million over the governor's budget proposal (Dem)
Require the LAB to conduct an audit of the SAGE program (GOP)
Allow districts participating in SAGE to elect not to reduce class sizes in particular schools or grade levels and subsequently not receive aid for those areas (GOP)
Institute a pay-for-performance pilot program for teachers in select school districts (GOP)
Authorize $2.5 million to reimburse school districts for safety expenditures (GOP)
Cut the reimbursement rate for school breakfasts from 15 cents per breakfast to 10 cents per breakfast (GOP)
Eliminate the governor's proposal to increase funding for bilingual and bicultural education aid (GOP)
Cut $3 million from the governor's proposal for four year old kindergarten, along with proposals to cut funding for world language instruction, science, technology, engineering, and math education, and eliminating a new program for low income driver education at MPS (GOP)
Authorizing $50 million in bonding for school districts to install energy efficient and renewable energy systems (Dem)
Allocate $250,000 for the Boys and Girls Club of Milwaukee and $950,000 for 21st century community learning centers in MPS (Dem)
Provide $21 million in funding for districts with at least 50 percent of the school population eligible for free or reduced lunches (Dem)
Drop the school voucher program cap back to 15,000 (Dem)
Continue the requirement that the City of Milwaukee pay more for voucher students than MPS students (GOP)

All of these items failed to make it into the budget. Most of them failed on an 8-8 vote, although there was some crossover to defeat a few of the motions.

And aside from a few relatively minor additions of funding for school district consolidation studies and library aids, along with the removal of the Milwaukee residential charter school plan, the governor's budget ended the day in the same form that it started the day.

So, JFC members, what exactly are you doing? What's with all of these motions that you know are going to fail?

Are you just looking for some press? I'm pretty sure you're not getting it. Except for a handful of reporters and a few of us who faithfully follow the WisPolitics Budget Blog (which is excellent, by the way), no one's really paying much attention. The papers may touch on the big stuff, like school vouchers, but they're not going to cover all of the small (or petty) proposals that don't go anywhere.

I suppose you can get some good stuff to add to your campaign literature to demonstrate to contituents how you tried to get those stubborn [enter name of opposite party] to listen.

And don't get me wrong. I get a slight chuckle from seeing hopeless proposals like requiring 70 percent of school spending to go to instruction and dropping the school voucher cap back down to 15,000. I realize it's all just part of the dance.

But, seriously, can't we just save most of this for the conference committee?

I know the budget is the most important single piece of legislation coming up this session. It's not, however, the only important legislation. The more time that's spent spinning wheels on the budget, the less time that's left for the rest.

UPDATE: The Journal Sentinel has broke into the budget blogging business with a site called "Building the Budget." The entry of the JS will surely bring the merry-go-round described above to (roughly eight) more people than ever before. Wheee!

Fair Trade Isn't Just an Economic Policy

2007-05-11T07:24:00.000-05:00

As economist Dean Baker noted earlier this week on his blog, globalization creates winners and losers. The goal of our American policies should be to create as many winners as possible, but the task isn't only about policy.

Tomorrow is the official worldwide Fair Trade Day, which has been observed on the second Saturday in May for the past five years. This day is a call to consumers to be more mindful of the purchases they make on a daily basis, which is at least as important as the broader policy initiatives instituted by the government.

And buying fair trade products doesn't mean you need to go out of your way or even necessarily pay more. All it takes is being mindful.

Fair trade food is the easiest to spot because it comes with this label:

This label is overseen by a group called TransFair USA. The group's website even does some of the work for you by identifying retailers and distributors that offer fair trade certified products such as coffee, tea, chocolate, fruit, etc.

And while the cost of fair trade food can be higher in some instances, it's not always the case. Take coffee, for instance, which is perhaps the easiest of the fair trade products to find. The fair trade coffee I buy at Trader Joe's runs $4.99 per 14 oz. package, which is more than generic brand coffees like Folgers, but it's significantly less than other premium brands like Starbucks (which also offers a fair trade coffee, but for around $10 per pound).

Clothes tend to be a little more difficult to track because there isn't currently an independent third party agency like TransFair USA that certifies clothing products as fair trade. But that hasn't stopped some retailers from popping up that focus on quality fair trade clothing.

One that's worth highlighting is a Wisconsin start-up called Fair Indigo, which is based in Madison. The company was founded last year by former Lands End executives, and it currently has one store at Hilldale Mall in Madison, and it also sells its products online and through a mail order catalog.

Using the help of UW researchers, Fair Indigo has contracted with select family-owned and co-op factories that pay living wages as opposed to the minimum wages that often aren't enough to sustain a family. And, regarding price, the website notes:

If done carefully, fair trade does not have to cost more. While a bigger share of the clothing you buy from us goes directly to the worker, we can hold the other costs down in several ways. First, we use worker-owned cooperatives wherever we can. This eliminates layers of overhead since worker and owner are one and the same. Second, wherever possible we work directly with each of our non co-op factories, eliminating the need for middlemen. And finally, unlike most clothing brands, we do not spend huge sums on advertising, instead relying on you, our customers, to spread the word about Fair Indigo.

The prices for most Fair Inidgo products are about on par with what you'd find at a clothing store like Gap (which, to its credit, has started to combat sweatshop labor in its factories in recent years).

You can also find info about fair trade clothing and other products in the Milwaukee area from the Archdiocese of Milwaukee website, and at the website for the Milwaukee fair trade store called Four Corners of the World.

While economic globalization may be inevitable, the form it takes is not.

The growth and development of our consumer society over the course of the last century has created some cultural problems including overzealous materialism and transaction-oriented thinking. Aiming our dollars at fair trade products is at least one way to wield our country's enormous purchasing power in an attempt to create as many winners in the global marketplace as possible, while also strengthening our labor position at home.

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Side-Note: If you're looking for American-made clothing, American Apparel -- which manufactures all of its own modestly-priced clothing in Los Angeles -- is probably the biggest retailer out there. There aren't any American Apparel stores in Wisconsin, but there are a number around Chicago and one in Minneapolis, and clothes can be purchased online.

The Wisconsin AFL-CIO website also offers detailed info on where to go to find union-made clothing and other products.

Getting Domestic Partner Benefits Back in the Budget

2007-05-10T07:40:00.000-05:00

There's some talk that domestic partner benefits for UW employees may make a reappearance in the state budget.

The JFC plans to take up the topic as an item separate from the budget with a majority vote needed to re-insert it. That means at least one Republican on the committee would need to flip since an 8-8 split won't cut it. (Side-Note: Could that lucky JFC member be Alberta Darling, who is going to face a tough race next year in an increasingly blue district?)

According to Rep. Scott Suder (R-Abbotsford), the GOP members on the Joint Finance Committee won't let that happen because allowing domestic partner benefits for UW employees is a policy issue that needs to be worked out separate from the budget. As he put it:

They can’t win this debate in the public arena, so they are trying everything they can by hiding it. The fact is that most taxpayers and voters don’t agree with the policy, and not giving the public an adequate chance to talk about it is just bad policy.

I wonder if Suder feels the same way about the Milwaukee school voucher program, which was also established through a budget bill?

Anyway, more to the point, polls suggest Suder's just wrong about the "most taxpayers and voters don't agree with this policy" line. In fact, according to a Badger Poll conducted last summer, nearly 60 percent of the state approved of civil unions for same-sex couples, which is undoubtedly a step (or, more accurately, a few steps) beyond domestic partner benefits for UW System employees.

Some conservatives will surely cling to the vote on the marriage ban as evidence that this isn't a popular provision -- as Rep. Nass did a few months ago -- but domestic partner benefits for UW employees simply isn't what the referendum was about last fall.

The issue of domestic partner benefits boils down to two points: fairness and competition.

If gay and lesbian employees are not able to marry or engage in a civil union in order to participate in spousal benefits, it is only fair to allow them another avenue to partake in this aspect of their compensation package.

And there are simple ways to regulate domestic partner benefits to ensure they aren't abused. Rick Esenberg has offered up a reasonable structure that would require the couple to share living expenses and not be allowed to legally marry.

The details could be hashed out later, but, again, the point is that there are ways to make sure the benefits aren't simply used "for the boyfriends and girlfriends of state employees," as Assembly Speaker Mike Huebsch (R-West Salem) lamented back in February.

On the issue of competition, the UW System is behind the curve on domestic partner benefits. UW-Madison is the only university in the Big Ten that doesn't offer benefits to domestic partners, and that has an unquestionable impact on faculty recruitment and retention.

Just last year, for instance, an engineering researcher left UW-Madison and took his grant potential with him because the UW doesn't offer domestic partner benefits and the University of Pennsylvania, where he went, does. That professor alone amassed $3.4 million in grants over the past six years, which amounts to about $550,000 per year -- the same amount it would cost the state to offer domestic partner benefits to every UW employee.

And it's not just recruitment and retention of high profile faculty that's impacted by the lack of domestic partner benefits. The UW System is also in competition for qualified staff.

While most staff don't tend to leave geographic regions for employment in the same way as faculty, they can be lured away to one of the over 150 private employers in Wisconsin that offer domestic partner benefits, including Cardinal Stritch University, the Medical College of Wisconsin, Beloit College, Lawrence University, among a number of other non-college employers like US Bank, Aurora Health Care, General Electric, 3M, etc.

It's time to accept the fact that they're here, they're queer, and they deserve access to the same employment benefits as the rest of us.

Scott Walker Wants Four More Years

2007-05-09T06:40:00.000-05:00

Or at least two more -- the next gubernatorial race is in 2010.

It's officially unofficial, but it seems pretty clear Scott Walker is getting set to run for Milwaukee County executive again next year.

I don't want to harp on the fact that Walker suggested on a number of occasions that he wouldn't run for another term as county executive beyond this current one. After all, minds can change. Heck, he probably thought he'd be governor by now.

But what did peak my interest in the Journal Sentinel article on his teaser announcement this morning was the response he gave to why he ended his doom-and-gloom tour last year on the county's fiscal situation. According to the article, the fiscal outlook got a lot brighter, in Walker's view, because of "a new labor agreement that included health care concessions."

What's interesting about this is that the structure of those health care concessions was actually the idea of Dave Riemer, who was Walker's opponent in the county executive race in 2004. Riemer was also the major consultant behind the changes in the state health plan that has saved the state tens of millions of dollars in recent years.

GOP state Senator Alberta Darling even called the new state health plan designed by Riemer "a shining example" and "the best in the country." It seems based on Walker's comments yesterday that Milwaukee county is now noticing similar benefits of the plan.

But what's even more interesting is that Riemer has acknowledged as recently as last September that he's considering another run at the county executive post in 2008.

I imagine Walker's campaign team will find a better way to explain the transition from doom-and-gloom to sunshine (or at least overcast) if that match-up materializes.

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Side-Note: It's also worth noting that AFSCME District Council 48 has been pushing for Riemer's plan since September 2004, but the county always rejected it until the latest negotiations this past December. Perhaps the support the Greater Milwaukee Committee gave the plan in September 2006 finally changed some minds...including, quite likely, Walker's.

Scrap the JFC's Role in the Budget Process?

2007-05-07T07:44:00.000-05:00

Rep. Steve Nass (R-Whitewater) has created some waves with a letter recommending Assembly Republicans pull out of the Joint Finance Committee talks on the budget.

The complaint stems from the fact that split decisions result in no action. So whenever Republicans object to a portion of the governor's budget proposal, all Dems need to do is raise their eight hands to shoot it down.

This, of course, isn't exactly how it's playing out in all instances. The Dems tried to negotiate on the real estate transfer fee increase last week -- the first big ticket item on the docket -- by proposing a sliding scale for the fee depending on the sale price of the house, but Republicans rejected that by simply raising their eight hands in opposition.

Nass also ignores that the JFC has come to some agreements on the budget. Before the committee even started its official sessions, a number of budget provisions were tossed for being policy (read: controversial) issues such as repealing the QEO, domestic partner benefits for UW employees, collective bargaining rights for UW employees, etc.

And since starting negotiations, the JFC has managed to agree on some other changes, such as cutting half the proposed budget for a tech college job training initiative and restoring the independent status of the Judicial Council (side note: evidently that's a different kind of policy move than those that were tossed before the official voting began).

But the agreements have been fairly minor in relation to the votes that have split 8-8 on bigger ticket items like the real estate transfer fee and those that lay ahead such as the hospital assessment, the oil company assessment, the cigarette tax, etc. And while these big ticket items may make it through the JFC on split votes, they're simply not going to make it through -- at least in one piece -- the GOP-controlled Assembly.

So eventually it'll come to the point that Nass recommends going to now, which is hashing out the budget differences in a conference committee. With the current JFC process, only the smaller items will be resolved in advance, anyway. And if the two sides aren't going to take the time to negotiate a middle ground, such as on the real estate transfer fee, why spend all of the time that it'll take to simply split the vote on the bigger items?

But the big advantage, in my view, of skipping the JFC and letting the two houses craft their own budgets that would then get worked out in a conference committee is that it would force Republicans to put the rubber on the road by explicitly documenting what they plan to cut to account for their revenue proposals.

As it stands now, Republicans get to make proposals like phasing out state revenue from the real estate transfer fee without doing the heavy lifting of explaining what's going to be cut to make up for the funding hole that would be created.

The transfer fee is dedicated for state aid to counties to help pay for the Circuit Courts and services for at-risk youth through the Community Youth and Family Aids Program. Are those the services that should be cut to account for the fee rollback, or are the funds going to be directed from somewhere else to cover the hole?

Governor Doyle is justifiably getting some heat for not putting a clear price tag on the Wisconsin Covenant program to give legislators and the public a chance to weigh the cost effectiveness of the otherwise agreeable proposal.

The Republican lead on the JFC, Rep. Kitty Rhoades (R-Hudson), called the Wisconsin Covenant plan "bumper sticker politics" since it didn't include a fiscal estimate. How is the same not true for proposals to cut revenue without explicitly identifying the services that would be impacted as a result?

Whether proposing new services or cutting revenue, openness and accountability for budget proposals needs to work both ways.