Sep 152010
Heath care for America Now! @barackobama rally...
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Article first published as Affordable Healthcare in America — Fighting Fiction and Facing Facts on Technorati.

Healthcare insurers are at it again, only this time they’re blaming their rate increases on the Affordable Care Act passed earlier this year. Late last week, Aetna Inc., certain BlueCross BlueShield plans and other smaller carriers asked for rate increases from 1% to 9%, allegedly to cover costs stemming from the new law.

Republicans were quick to jump on the news and leverage it for political gain by posting the news on the Republican Senate’s website. But this is nothing new. The Republicans have railed against the legislation since day-one, most often with gross distortions, like Sarah Palin’s “Death Panels.” Most recently, during his August 24 speech at the City Club of Cleveland, House Minority Leader, John Boehner attacked the law, illegitimately labeling it “a government takeover of healthcare.” Of course it’s actually nothing of the sort, as it continues to rely upon the existing system of private insurers and providers, but Boehner would never let the truth get in the way of a good talking point.

Not to miss an opportunity to ding the Democrats, Rand Paul released a new campaign ad attacking what he calls, “the Obama-Pelosi healthcare scheme,” claiming that it “puts Washington bureaucrats in charge, destroying the doctor-patient relationship.” And according to Sen. Charles Grassley (R-IA), the top Republican on the Senate Finance Committee, “People are finding out what’s in [the law], they don’t like it, and I think it’s going to play a big factor in this election.” Such serious assertions make a person wonder what changes within the new law could possibly be responsible.

The issues cited by the insurers looking for rate hikes were: allowing children to stay on their parents’ insurance policies until age 26, eliminating co-payments for preventive care, barring insurers from denying coverage for children with pre-existing conditions, and changes to annual and lifetime coverage caps. Just how these regulations will “destroy doctor-patient relationships” or why Grassley’s “people” would raise an objection to them is hard to fathom. But fact-free Republican spin is a constant in 21st Century America, so Democrats are left with a vigilant effort to combat fiction with actual facts.

The fact is that the Obama administration was expecting small premium increases in the short term, between 1% and 2%, stemming from the new regulations. But they are also counting on the state managed insurance exchanges to provide much needed competition and rate reductions as time moves forward. Another fact is that rate increases vary amongst carriers. The high mark is currently Celtic Insurance Co., in Wisconsin and North Carolina, who claim that half of their 18% increase is the result of the new federal regulations. BlueCross BlueShield of Oregon sets their hit at 3.4% of an overall 17.1% increase, and HMO Colorado actually filed for a 1.8% rate reduction associated with the new laws.

Regardless of what the costs resulting from new regulations are in reality, they are but a small part of the overall thrust toward ever escalating healthcare costs. Few can forget the 39% increase requested by Anthem BlueCross earlier this year, a request that turned out to be based on erroneous calculations. But erroneous or not, costs are on a steep upward trajectory and so are insurance company profits.

Real costs continue to rise for multiple reasons. With Baby Boomers aging, there is a steady increase of elderly patients, and at the same time, the population is increasing and people are living longer. New and expensive medical technology is another contributor of rising costs, as is increasing obesity, currently estimated to affect 34% of American adults. Inadequate medical records and a lack of preventative care also contribute, both of which are now being addressed through Obama administration initiatives — preventative medicine through the healthcare bill and medical records through $20 billion in Stimulus funding.

But none of these issues should be viewed as the main culprit, though each one does have more impact than the Republican’s favorite diversion — malpractice insurance, which only accounts for around 2% of overall costs. Fortunately, the main culprit is completely controllable, but it will require structural change: that factor is our reliance upon a fee-for-service based insurance system. Inherent in the design of fee-for-service systems are incentives that promote the consumption of unneeded and marginally effective services, and disincentives for leveraging preventative care. This dynamic is the driving force behind the fact that, while we trail most other Organization for Economic Cooperation and Development (OECD) nations in almost all healthcare metrics, we also spend twice as much on healthcare — currently 17% of GDP.

Ironically, the main people really benefitting from continuously escalating healthcare costs are the very same people now asking for rate increases — the medical insurers. While the nation is struggling under the weight of average insurance rates that have climbed 131% since 1999, the insurers have enjoyed a ridiculous 250% increase in profits. Even in the current economic times, the nation’s five biggest for-profit health insurance companies posted record profits, booking $3.2 billion in the first three months of this year, a 31% increase over the same period in 2009. They’re doing so well that the top 10 firms have been able to raise CEO pay to an average $23 million each, a 167% increase in 2009 alone.

Unfortunately, the Affordable Care Act didn’t address most of the issues responsible for driving up healthcare costs, and at present, there is no movement in Washington to do so. Until these issues are given the focus they need and fee-for-service is replaced with some sort of managed care system, more emphasis is placed on preventative medicine, and a system is created to provide real competition amongst both insurers and providers, costs will continue to skyrocket and insurers will keep smiling all the way to the bank.

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Sep 142010
American Recovery and Reinvestment Act constru...
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Everybody you talk to has an opinion about the American Recovery and Reinvestment Act (ARRA) of 2009, better known as the Stimulus. Enacted in February of 2009, the program was intended to shore up short term consumer spending, provide aid to states and invest in projects to create jobs. With a total price tag originally estimated to be $787 billion, the Stimulus was originally supported by 51% of Americans, but a year and a half later, only 29% believed that it had actually helped the economy.

A Rasmussen Reports poll taken in July showed that not only did so few Americans believe the Stimulus had helped, but that 43% believed that it hurt the economy. That same poll revealed that 69% of those surveyed believed tax cuts were a better way to create jobs than more government spending. Without doubt, these attitudes are reason for concern, but they fall far short of telling the whole story.

Things actually get much more confusing when the results of a Gallup poll taken in June are also considered. The survey asked people if they would be in favor of Congress passing legislation to “Approve additional government spending to create jobs and stimulate the economy,” and 60% of those polled answered in the affirmative with only 38% in opposition.

So, 60% of Americans support more stimulus spending, but 43% believe that what was spent through July had actually hurt the economy, and 69% believe tax cuts would create more jobs. What can explain this incongruence?

The answer is likely found in the American proclivity to swallow political talking points without any verification of facts. A revealing example of this dynamic concerns the Obama tax cuts offered through the Stimulus. A CBS News/New York Times poll conducted in February of this year showed that 24% of respondents believed that Obama had increased taxes, while only 13% believed they had been reduced. Amongst Tea Partiers, only 2% believed taxes had decreased under Obama, and a whopping 44% believed they had increased. The opinions evinced in these polls have nothing to do with the reality that the Stimulus included 25 different tax cuts that benefitted 95% of all Americans.

Sadly, voter opinion seems to track much more closely to political rhetoric than anything substantive or factual. Republicans have consistently spread the message that Obama will raise people’s taxes, therefore people believe that he has. They’ve also espoused the position that tax cuts best stimulate the economy, and although the vast majority of economists believe tax cuts to be the worst form of economic stimulus, a majority of Americans adhere to the conservative falsehood.

This dynamic seems also to be at the root of public opinion regarding the Stimulus. Arguably the Obama administration’s most successful program to date, it has been credited by the Congressional Budget Office (CBO) with adding as much as 4.5% to the GDP and increasing the number of people employed by between 1.4 and 3.3 million. According to Mark Zandi, former economic advisor to John McCain, unemployment would be 11.5% instead of 9.5% without the Stimulus. But still 43% of Americans believe the Stimulus has hurt the economy.

The stimulus has paid out 77% of the $288 billion in tax relief, but only 64% of the $224 billion in entitlement funds, with direct investment funds trailing still further. Thus far, barely 54% of the $275 billion slated for contracts and grants has been paid, mostly because of the long lead times resulting from a shortage of “shovel-ready” projects. But as the projects ramp up, the real promise for future jobs, new industries, lower healthcare costs, more efficient government and improved energy independence will all begin to materialize.

More than $23 billion in contracts, grants and loans has come to California, funding over 18,000 awards. One major project right here in Contra Costa County is the fourth bore on the Caldecott Tunnel. Nearly $200 million was allocated to Caltrans for the project that would not have proceeded without the ARRA. In addition, direct local funding within Contra Costa County has funded 46 contracts and 252 grants totaling nearly $300 million. Investments include $43 million for transportation, $22 million for public safety, $14 million for energy, $126 million for education and more funding to assist with health and human services, housing, labor, technology and water/environment. Together, these projects have created nearly 500 new jobs, saved many times that amount and promise to create more as projects move forward.

Unfortunately, the Stimulus success stories are not what most people are fed through the media. Unless an individual happens to be working on a Stimulus funded project, their opinion is likely shaped by the spurious claims levied by its political opponents. People like House Minority Leader, John Boehner and half-term Alaska Governor, Sarah Palin have made it a practice to disparage the Stimulus without any facts to back their claims.  Republican Senators John McCain (R-AZ) and Tom Coburn (R-OK) even went so far as to create a list of “wasteful” Stimulus projects that was more a waste of time to create or read than anything else.

The Stimulus could have been more effective. There’s little doubt that money could have been better directed to achieve maximum job creation, but to say that the entire program “has gotten us nowhere,” as John Boehner stated recently, is nothing short of a bald-faced lie. The Republican obstructionists have succeeded in using deception and distortion to convince American citizens that stimulus spending is ineffective and that tax cuts are a preferred option. Both economic theory and American history say otherwise.

The Stimulus has raised the number of full-time-equivalent (FTE) jobs by as many as 4.8 million. It is also creating new export industries, moving our nation forward with alternative energy and laying the foundation for lower healthcare costs and more efficient government. The most significant issue with the Stimulus is that it was too small, and the national conversation should now be focused on a second wave. But instead we toil with Republican subterfuge and self-serving delay.

Wake up America! Those who criticize the Stimulus, raise concerns about the deficit and at the same time fight for tax cuts for the super-rich, don’t give a care about your wellbeing. Open your eyes and see them for what they are — Republicans.

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Sep 102010
Meg Whitman at eBay Live 2005-01-13 (2)
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If you live in California and watch television at all, you’ve likely seen Meg Whitman’s current campaign ad. The 33 second video is entitled, “The Facts: Oakland Mayor Jerry Brown.” In this day and age of so much hyperbole and distortion, a political candidate putting together an ad based on facts would be something truly rare. So, does Meg Whitman deserve some accolades? The answer really depends on her “facts?”

Whitman’s “Fact” number one: “Brown promised to improve schools, but the dropout rate increased 50% and the State had to take over the schools.”

The numbers behind this “fact” aren’t given, but according to the California Department of Education’s Ed-Data website, the number of dropouts in Oakland Unified School District for the year Brown took office (98-99) was 846. During his last full year as mayor (05-06) the number had climbed by 11% to 941. But the following year (06-07), one in which Brown left office halfway through, dropouts did shoot up to 1384 — a whopping 64% jump. That’s a staggering leap for a single year. Well . . . as it turns out, it was also the first year that districts throughout the State were required to use Statewide Student Identifiers (SSID) for their reports. The Ed-Data site states that prior to 2007, dropout numbers were mere estimates, and that “trend data is not meaningful.”

Could Whitman’s campaign have just overlooked the warning about dropout data? That’s possible, but when you also consider that the Academic Performance Index (API) scores for the district climbed every year from inception through the end of Brown’s term: 2003: 596; 2004: 605; 2005: 634; 2006: 653; 2007: 658, you might conclude that the distortion is intentional. If you also evaluate the second part of Whitman’s claim, taking into consideration that the State take-over was in response to the $82 million debt incurred by the independent government body that presided over the district, completely outside of Brown’s control, you would likely remove all doubt.

Whitman’s “Fact” number two: “The city controller found employees paid for 22,000 hours they never worked.”

This time, at least the source of the figure is known. It comes from a wrongful termination lawsuit filed by Larae Brown, the former Oakland city controller, in 2008. There is a trial pending. But according to City Auditor Courtney Ruby, an independent audit performed in 2007 showed no such finding. Likewise, officials in the city administrator’s office said, “We have no data to support that claim.”

Obviously, in the Whitman world an unsubstantiated accusation foisted by a former employee with a grudge sufficiently constitutes a “fact.” This is actually valuable information for anyone interested in evaluating the facts regarding Meg Whitman’s character.

Whitman’s “Fact” number three: “Brown promised to cut crime, but murders doubled making Oakland the fourth most dangerous city in America.”

Oddly enough, this is Whitman’s most veracious claim — and it’s a half-truth. The number of murders did escalate during Brown’s tenure, from 72 in 1998 to 145 in 2006. But the murder rate is only one factor to be considered in determining the relative danger or safety associated with a city. The rest of the story, the part Meg Whitman doesn’t want to mention about Oakland, is that overall crime dropped by 13% while Brown was in office. There were nearly 5,000 fewer crimes reported in 2006 than in 1998, and amongst those that dropped were several other of the violent variety, like rape and assault.

So, what about those accolades? The Whitman ad isn’t completely devoid of factual data, but to present it as an assemblage of facts is a distortion of the highest degree. The ad is a patent perversion of the truth that mostly twists questionable “facts” into outrageously false assertions. In the end, the only fact about Whitman’s ad that rings true is that it can safely be considered 99% fact-free.

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