Posts Tagged ‘healthcare’

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One of the consequences of Bernie Sanders’s campaign for president is that economists and economic ideas that are often overlooked or marginalized are making the news.

Consider, for example, Gerald Friedman [ht: ja], a University of Massachusetts Amherst economics professor.* He’s front-page news on CNN, and that’s because he has provided “the first comprehensive look at the impact of all of Sanders’ spending and tax proposals”—including spending on infrastructure and youth employment, increasing Social Security benefits, making college free, expanding health care and family leave, raising the minimum wage, and shifting income from the rich to the working-class through tax hikes on the wealthy and corporations.

“Like the New Deal of the 1930s, Senator Sanders’ program is designed to do more than merely increase economic activity,” Friedman writes. It will “promote a more just prosperity, broadly-based with a narrowing of economy inequality.”

Emmanuel Saez, Professor of Economics at the University of California, Berkeley, is also in the news, because of his research on tax rates. In a 2011 paper he wrote with Peter Diamond, Saez argued that, in order to achieve a fair distribution of the tax burden in the midst of rising inequality, very high earners should be subject to high and rising marginal tax rates on earnings. While the top income marginal tax rate on earnings today is about 42.5 percent, they estimate the optimal top tax rate (which would maximize tax revenue from top-bracket taxpayers) to be 73 percent, even higher than Sanders is currently proposing.

“My feel is that the reasoning behind Sanders’s tax plan is not so much tax revenue generation from top earners but rather make top tax rates so high so as to discourage ‘greed,’ defined broadly as extracting income at the expense of the rest of the economy as opposed to real productive behavior,” Mr. Saez wrote in an email. “I think pretax top incomes would finally start to decline.”

Friedman and Saez are economists who are never cited in the mainstream media, and whose ideas are receiving a public airing precisely because of Sanders’s extraordinary success in the current campaign.

 

*Here’s the appropriate disclaimer: I did my doctoral work at the University of Massachusetts Amherst, although Friedman was not there at the time.

Whenever a commentator declares that “politics is the art of the possible”—and proceeds to make whatever arguments they deem necessary to delegitimize ideas that challenge the current common sense—I’m on my guard. What we’re being told is to accept present conditions as immutable facts of life, and to trim our goals accordingly. We’re being told not to entertain ideas that point in the direction of the not-yet possible.

So it is with Paul Krugman these days. Now that Bernie Sanders has to be taken seriously, Krugman has taken to invoking the art of the possible and, in the process, both rewriting history and declaring that Sanders’s plans represent deceitful fantasies.

In order to make a thinly veiled case for Hillary Clinton against Sanders, Krugman has decided that Too Big to Fail Banks—Bank of America, JPMorgan, Citigroup, Wells Fargo, and Goldman Sachs—which now long after the crash are all Too Bigger to Fail—played no significant role in 2008. Instead, the problem, as Krugman (citing Mike Konczal) sees it, was shadow banking. While breaking up the big banks might not solve all the problems of the financial sector, it’s simply disingenuous to try to whitewash the history of the crash of 2007-08 by arguing that the nation’s largest banks played only a marginal role in creating the conditions of the bubble that eventually burst and, when it did, in bringing the world economy to its knees.

If the art of the possible with respect to financial reform is one or another version of Dodd-Frank, it’s extending private health insurance to cover more people—and decidedly not proposing a single-payer (let along a single-provider) plan. Here, Krugman relies on Ezra Klein to assert that Sanders’s plan is a fantasy, since it relies on cost-savings associated with government setting health reimbursement fees (like the current Medicare system) and it would mean disrupting the existing, private insurance system. And, of course, we can’t have that.

The fact is, Krugman (along with Konczal, Klein, and many others in recent days) is determined to make the American electorate stick to existing policies and policy options, which don’t disrupt business as usual. That’s the art of the possible, as proposed and practiced by Clinton.

What Sanders and his growing number of supporters are relying on is our disenchantment with the existing possibilities, which put us in the Second Great Depression and left too many Americans without decent healthcare, and a desire to make strides that challenge the current common sense and help us imagine the next steps.

That’s politics as the art of the not-yet possible.

Or, alternatively, we can just let Juan Perón take over.

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Apparently, physicians are not going gently into that good night.

Doctors are being increasingly treated like assembly-line workers—forced to see more patients, in order to boost nonprofit hospitals’ profits, or replaced by contractor doctors or outsourced as “hospitalists,” who are employed by multistate management companies.

As recently as the mid-1990s, there was no one called a hospitalist. Most doctors would simply scramble from their offices to the hospital when they had to tend to patients there. But the discipline grew rapidly thereafter — to roughly 50,000 hospitalists nationwide in 2015 from about 11,000 in 2003, according to industry estimates. . .

Hospitalists could also increase hospital profits. They were on hand to discharge people throughout the day, emptying beds that could generate revenue again. And while paying the doctors was a new cost, hospitals at first found the efficiencies so advantageous that hospitalists were afforded the rare privilege of spending more time with patients. The doctors spent the time diagnosing and treating what were often highly complicated conditions — chronic health problems stacked on top of one another, or multiple organ failures.

This reprieve from the economic forces bearing down on the medical profession didn’t last long, however. “A consequence of how much the health care market has changed is that everybody has to be more efficient,” said Adam Higman, who specializes in hospital operations at Soyring Consulting in St. Petersburg, Fla. He noted that the increasing focus on metrics like readmission rates and hospital-acquired infections had created more work for hospitalists, who are responsible for a lot of documentation. “In some sense that comes to the detriment of the patient, there’s not as much quality time,” he said. “In some sense, that’s to their benefit — there’s a system to manage them.”

But now, some of the doctors are fighting back, by forming unions and then affiliating with larger union confederations, which in some cases already represent the nurses at those hospitals.

That’s a start—but probably not enough.

We’ve spent a lot of time in recent years debating health insurance. Clearly, it’s time to take up the debate about how healthcare itself is provided, and how nurses, doctors, and other healthcare providers participate in making the decisions about how their patients are cared for.

And we need to do this while we can still see with blinding sight.

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How could you design a fundamentally unhealthy healthcare system? On one hand, have healthcare and health insurance provided by private, for-profit companies; on the other hand, make sure the rest of the private economy keeps workers’ wages and salaries from increasing.

The result of such a system would be that healthcare costs and insurance premiums continue to increase and workers can’t pay their medical bills.

And, of course, as a new study by the Kaiser Family Foundation and the New York Times confirms, that’s exactly what has happened in the U.S. healthcare system.

Overall, about a quarter (26 percent) of U.S. adults ages 18-64 say they or someone in their household had problems paying or were unable to pay medical bills in the past 12 months.

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Not surprisingly, problems paying medical bills are more common among people with lower or moderate incomes, with high deductibles, and with some kind of disability.

Insurance status also has a strong association with medical bill difficulties, with over half (53 percent) of the uninsured saying they had problems paying household medical bills in the past year. However, as previous surveys have shown, insurance is not a panacea against these problems. Roughly one in five of those with health insurance through an employer (19 percent), Medicaid (18 percent), or purchased on their own (22 percent) also report problems paying medical bills. In fact, overall among all people with household medical bill problems, more than six in ten (62 percent) say the person who incurred the bills was covered by health insurance, while a third (34 percent) say that person was uninsured.

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In fact, many of those with medical bill problems report struggling with bills less than $5000, including 24 percent of the insured and 22 percent of the uninsured who say their bills amounted to less than $1,000. While these lower amounts may seem small, even a bill of $500 or less can present a major problem for someone who is living paycheck to paycheck. In fact, when asked to describe their financial situation, about six in ten (61 percent) of those who’ve had problems paying medical bills say they either just meet their basic expenses (43 percent) or don’t have enough to meet basic expenses (18 percent).

The survey also shows that medical bill problems can have real and lasting impacts on individuals and families in terms of their standard of living, their financial stability, and their ability to access needed health care. While insurance provides some protection against incurring medical bill problems in the first place, once these problems occur, the effects on individuals and families are often as serious for the insured as they are for the uninsured.

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The problem of affordability stems from the combination of rapidly rising healthcare and insurance costs and slowly rising incomes, both of them a product of the way our economy is currently organized.

Clearly, we need a much better prescription for our unhealthy healthcare system.