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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Monday, March 22, 2010

The New Health Care Bill

So late last night, we got the long-debated Health Care Reform from Congress. Perhaps by the time you are reading this commentary, the President will have signed the main bill into law. A second bill, the "reconciliation", includes modifications the House is making to the Senate bill it just passed; this second bill must return to the Senate for its approval in turn.

This dual structure for the legislation is only one piece of the complexity in this $940 billion, 2700-page bill. We have been scouring the Web – not just browsing – to find comprehensible descriptions of what it contains and what it might mean. We think what we can do best for you is point you to some sources for descriptions that we found to be "pretty good".

1. For a plain, vanilla summary of the bill's basic provisions and a timetable through which they will take effect, see Reuters news service "Factboxes": and . These were both available as of 3:20PM EDT March 22, 2010. [Note though that in the first item, there is a reference to "Medicare" that should actually read "Medicare Advantage". As we said, these are pretty good sources, not perfect. This was otherwise the clearest listing we found, especially that didn't concentrate more on politics than information.]

2. We'll now have "health insurance exchanges" and subsidies for health insurance. There will be new payroll taxes and new excise taxes. Some of the bill goes into effect very soon, some not until 2018. How to understand the sense of these issues? Try The Christian Science Monitor series "Health Care Reform Bill 101". The first one is here: . Other of the brief articles discuss "How Long Will Reform Take?" "Who Will Pay for Reform" and so on. These, too, are very clear explanations.

3. For some actions you might seriously consider as you plan for health care in your own budget, see The Wall Street Journal "Steps You Can Take Ahead of Changes in Coverage, Taxes", . The most notable of these, in our view, is that you should make sure you have a relationship with a doctor. In coming years, as millions of people are added to insurance rolls, there will almost surely be a supply squeeze on the availability of doctors. If you don't have a primary care physician now, get acquainted with one. The writer here has other helpful pieces of advice and links to other online sources.

Two other comments of our own. First, when you read or hear that the bill "saves" $138 billion on the deficit, that's because it hikes taxes and fees and it cuts other spending and subsidies to counterbalance the new outlays it makes. There's nothing "cost-saving" inherent in the bill. Instead, it greatly expands the role of government in the economy, raising both spending and taxes. Some – perhaps many – will say that the size of government in the economy is beside the point, and that may be true with health care. But we also often associate "deficit reduction" with a reduced or constrained role for government, and that is not the case here at all. As an example, there are cuts in Medicare. Those most likely would be needed anyway in the next few years to balance this program, which is already strung out financially. But the purpose of these particular cuts is to pay for expansion elsewhere, not get Medicare the rationalization it will still need as Baby-Boomers age into it.

At the same time, there is one kind of help here for an otherwise dysfunctional feature of the current system. We recently had a conversation with a friend who is a senior-level nurse in a sizable hospital in this city. She is distressed over the turmoil and enormous costs that result when the uninsured become ill and need to visit a hospital. In an emergency room, the hospital must treat the people until they are stabilized and able to leave; this might involve elaborate tests, such as a cardiac catheterization, and even surgery. In the moment, the hospital has no inkling of how it will be paid, but it must pay its staff and other expenses. In a place like New York City, with substantial numbers of uninsured, this can put real financial pressure on the hospitals. Mechanisms in the new law will work on this by getting broader insurance coverage. As Joyce explains, that coverage will benefit not just the affected patients, but the facilities that treat them. We subsequently learned that the states with the greatest uninsured problem are California, Texas and Florida. In 2008, California had the largest number, 6.8 million, which is 18.6% of its population; Texas, though, has the largest proportion, 25.1%, coming to 6.1 million people. Florida's rate is 20.0% or 3.6 million people. New York is "only" fourth in the country by number, at 2.7 million, but this is actually a smaller fraction, 14.1%, than the national average 15.4%.[1]

Generally, though, cost-saving through more efficient operation gets short shrift in this legislation. As we argued in two articles here last summer[2], genuine progress on health-care costs can only come when delivery organizations and their operations are structured effectively, both as units and as a whole. Apart from some pilot projects on fee calculation through bundling treatments instead of charging on a fee-for-service basis, there seems to be little in the bill that begins to address the whole supply side of medicine. So there would seem to be a long way to go in health care "reform".

[1]U.S. Census Bureau Current Population Survey, "Annual Social and Economic Supplement", Table H.106, Health Insurance Coverage Status by State for All People, 2008.

[2] July 29, 2009, and August 24, 2009

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Monday, March 01, 2010

The 2010 Census

The 2010 Census begins today, March 1. People in remote rural locations are receiving their forms today. Next Monday, March 8, all of us will receive a letter heralding the arrival of the forms in our mailboxes on March 15. These forms will all have just 10 – count 'em, 10 – questions, which the Census Bureau believes we can answer in 10 minutes. No one will receive the old, dreaded "long form"; all the information on that one is now covered in a new, separate annual American Communities Survey.

As an economist, I can talk about how important the Census is. Hopefully, though, you already know this. You know that the 435 seats in the House of Representatives are divided among states according to the results of each Census. The Constitution orders the count expressly for this purpose. It's right up front, in Article 1 Section 2. You know that numerous kinds of federal aid to states and localities are divided according to Census results. Local government officials put the data you generate to numerous uses. You might not have thought consciously about it, but it's also the case that planners and managers in the private sector, such as real estate agents, marketing directors and locations experts, also depend on these numbers.

If you look at the form, you'll see how simple it is: how many people are staying at your residence on April 1, and for each one, what is their name, age, sex, Hispanic origin, race and birth-date. Do you own your residence, rent, or have some other living arrangement? What is your phone number, in case Census Bureau personnel need to clarify some response. Two questions cross-check: are there others staying with you who don't usually live there and are there people normally in your household who often live somewhere else. That's all of it. You can see the form for yourself, here: [although you can't fill it out online. They're experimenting with that still – maybe they'll do it that way in 2020.]

Should you not mail the form back, Census workers will call on you to obtain the information. We've seen a memo from the Better Business Bureau advising you to check the credentials of anyone claiming they are a Census-taker. That would be true. At the same time, these people are working for you, so hopefully you can welcome them and help them get all the responses down right. You'll benefit and so will the rest of us. One more cautionary note. As we mentioned, this project isn't done on the internet yet. So if you get email asking you to fill out some attachment to cover your Census input, don't do it – that will be spam. The form to fill out comes by "snail mail" and takes hand-entering!

The information is kept absolutely confidential. Names and relationships will be made available in 72 years for people who might want to study ancestry or other relationships, but until then, no one will see your personal data. That's right: the latest such information that's public comes out of the 1930 Census.

We write all this with some feeling, as you might sense. At the Episcopal Church's General Convention back in July, I was startled to find the U.S. Census Bureau there with a booth in the exhibit hall. What on earth are you guys doing here at a church convention? I asked them. The Census is so important, they explained, that they were reaching out to community leaders through whatever venues they could find. We took their sentiment to heart, so we're writing to you now.

Thanks for your help! Tell your family and friends too!

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