Saturday, December 29, 2012

I can do it in 30 seconds...

On the 24th, we drove from Fredonia to our daughter's home in Albany for a few days. During the 5-hour drive, we listened to satellite radio for awhile.

One talkshow host had a caller who asked why it was fair that people in his income bracket--above $250,000/year--were being "targeted" for a tax increase. The host--who I am sure makes much more than $250,000 each year--absolutely mangled the reply. It was totally incoherent, and I blew a gasket.

We're on the Thruway going around 70 and I'm yelling at the radio. "I can explain it in 30 seconds," I yelled. I don't have a radio show, but I do have a blog so here goes. Please start the timer:

Let's have a look at how those with your income have done over the last 30 years. Here's a nice little graph:

Whoa! Looks like you folks have made out pretty well while the rest of us have gone pretty much nowhere. In fact, the median middle-class household income has gone DOWN by several thousand dollars during the last ten years.

Is this a fair picture? What about after taxes?

Wow, you still made out like gangbusters! And that's why it's fair that your taxes go up before anyone else's.

Sure, when the economy gets back on its feet we will all need to kick in a bit more in taxes. But right now, you are the group who can afford to pay a little bit more. That's why it's fair.

OK, please stop the clock...

First of all, let's note that even though the graphs were published by Mother Jones Magazine, the data is from the non-partisan Congressional Budget Office.

You may hear from me another time or two before we head back to Florida next week. We're at the house we're getting ready to sell for a few days picking up and filling nailholes. It's like camping since most of our stuff has already moved to Florida.

Even the satellite TV service has been cancelled so we're reduced to watching "off the air" TV. This time of the year is particularly bad since most of the shows we would normally watch are on cable or off the air during the holidays. Last night I was reduced to watching an Anne Murray special on a Toronto station hyping her "Friends and Legends" album which was first released in 2007!

Thursday, December 13, 2012

Has democracy turned into a yacht race?

[NOTE: I'm headed north for the holidays, so this will be the last post until after the first of the year.]

Remember Wisconsin? They had an election a couple of years ago and the Republican promise of "jobs, jobs, jobs" carried the day giving that party total control of state government.

And once the election was over, do you remember what became the obsession of Wisconsin state government? Here's a hint: It wasn't "jobs, jobs, jobs." In fact it was something that nobody had bothered to mention during the election campaign: removing the collective bargaining rights of public employees--with the exception of police and firefighters, for a reason to be discussed later.

Remember Ohio? Pretty much the same story. But the citizens of Ohio made use of their ability to cancel legislation by means of a referendum. By a 2-to-1 margin, Ohioans told the Republicans in charge of state government that they were just fine with workers not needing to go by themselves to ask the CEO of a giant corporation for a raise. It seemed a much more balanced system when the union representing ALL of the workers could knock on the CEO's door.

Then there is Michigan. Last week--in a breathtaking show of raw political power--Michigan passed a "right to work" law.

What made it breathtaking was that Michigan governor Rick Snyder had said all along--including during the election--that he thought such a law was too divisive for his state. Then came the 2012 election in which Republicans lost several seats in the state house (the state senate was not up for election in 2012).

Apparently that made things less divisive because at 11 AM one day last week Snyder called a news conference and announced that he now supported a "right to work" law for Michigan. Amazingly, just such a law was introduced into the legislature early that same afternoon and was passed--without any hearings or time for public comment--by 8 PM that same evening. As you might expect, it was then signed by the governor.

Let's understand just what a "right to work" law means. New York is an example of a state that does not have such a law. So, if you take a job in a company whose employees have union representation does that mean you must join the union and pay union dues? No.

It does mean that you must pay an "agency fee" which is the portion of the union dues which actually goes toward negotiating and enforcing the contract under which everybody in that company works.

"Right to work" means that you get to say to the union, "Sure, go ahead and bargain with management on my behalf. I'll be happy to accept any benefits you negotiate, just don't ask me to pay anything to support those efforts on my behalf."

We fought a war over "taxation without representation." Right to work laws amount to representation without taxation.

It's easy to see how this benefits big corporations which make large campaign contributions, but how is this supposed to benefit the average Michigan worker?

In theory, eliminating those pesky unions makes Michigan a more attractive place for companies to build their plants, attracting more jobs to Michigan.

In theory, allowing corporations to dump anything they wanted anyplace they wanted for free should have the same effect. Let's all hold hands and race to the bottom. First one there "wins."

In practice, it doesn't seem to work this way. Research shows that the average wage in "right to work" states is $1500 less than in other states and that there is no "job flow" toward these states.

Even if there were a "job flow," how would that help the nation as a whole with one state stealing jobs from another?

Well, at least Michigan has a procedure allowing the public to overturn laws. Except, budget items. Would you believe that the Michigan legislature attached the "right to work" law to a budget bill? That's exactly what they did!

Which brings me to yacht races. I've been a sailor all my life. I spent summers teaching sailing at the Rochester YMCA camp on Keuka Lake.

There are 3 ways you can win a yacht race. The first is to have the fastest boat in the race. If your boat isn't the fastest, you can still win by having a skipper and crew with outstanding skills.

Failing the first two methods, many yacht races are won by using the rules against the other contestants. If you can force your opponent into a situation where they must violate a rule in order to avoid a collision you can win by having them disqualified.

It seems like government has become like a yacht race. The Constitution says not a word about the filibuster, yet the rules allow a minority to keep something from happening that a majority wants to happen.

And the people of Michigan must now live under a law they never asked for and never got to debate because the rules have been manipulated to keep them from having a say in the matter. How democratic.

Anybody with a brain can see that what happened in Michigan is all about politics not jobs. a lot of the money supporting Democratic candidates comes from union members and many of the people who man phone banks and pound the turf to get out the vote for Democratic candidates are union members.

Why were police and firefighters exempted from the anti-union bills in Wisconsin and Michigan? Simple. Members of these unions most often support Republican candidates.

Tuesday, December 11, 2012

Does this make sense?

There appears to be strong Republican pressure building in Washington to raise the Medicare eligibility age from 65 to 67. Some say that this will save the federal government $5.7 billion per year, and that's a good thing. Others see it as a needed "trophy" to keep the Republican base settled down when tax rates on income over $250,000 are raised.

But let's visit the Law of Unintended Consequences for a moment. An easy-to-understand explanation appears in a piece by Austin Frakt published in The Incidental Economist. Here are the numbers:

1) By excluding 66 and 67-year-olds from Medicare, the federal government will save $5.7 billion in 2014.

2) But, those people denied Medicare coverage don't just disappear. They will spend $3.7 billion of their own money to purchase coverage from other sources.

3) Employers will spend an additional $4.5 billion to cover workers who would have been on Medicare if the age remained at 65.

4) Premiums on the new healthcare exchanges will increase because folks at 66 or 67 tend to have higher medical costs than those who are younger.

5) If you are already on Medicare, get ready to kick in! Why? Because--by law--Medicare recipients pay 25% of the cost of the program through their premiums. Excluding the 66 and 67-year-olds from Medicare makes the average age of Medicare recipients increase, and a higher average age means a higher average expense per recipient. Plus, Medicare loses the premiums that these people would have paid. The best estimate of this is a 3% increase in premiums. The monthly Medicare premium is about $100 so a 3% increase would be almost $75/year for a typical retired couple.

6) The combination of 4 & 5 above add up to about $2.5 billion, with the states spending some additional money on 66 and 67-year-olds eligible for Medicaid.

Add everything up and it costs $11.4 billion to save the federal government $5.4 billion. If this sounds like a good deal to you, let's talk about a bridge I own in Brooklyn.

It would be much more effective to talk about allowing Medicare to use its huge weight to bargain with drug manufacturers on price--as the Veterans' Administration is already allowed to do.

Don't hold your breath on that one. Here are some additional interesting numbers:

1) We just went through the most expensive election ever. About $2 billion was spent on TV ads, etc.

2) When Obamacare was being proposed, the insurance and drug companies made it clear that they were willing to spend $10 billion to defeat the bill if it was not to their liking. Just imagine how many 30-second TV ads this would buy, and there would still be plenty of money left over to bribe--excuse me, make campaign contributions to--every politician in Washington.

If you agree with me that this is on the dumb side of stupid, make a call or send an email to your representatives in Washington.

Monday, December 3, 2012

Social Security: Little "tweaks" matter.

It's important for retirees to pay close attention to the current deficit negotiations in Washington because the "big 3" programs of most interest to retirees are chips on the table. These are Social Security, Medicare and Medicaid.

Don't think Medicaid applies to you? If you eventually need longterm care, how will you or your family handle the almost $100,000/year cost? Medicare pays for only 100 days of this type of care. Even if you have longterm care insurance, most policies cover only a set number of years at a set monthly maximum. Almost one of every two Medicaid dollars goes to pay for longterm care for the elderly or disabled, and it's quite possible it will be a program to which you or your family will turn.

Paul Krugman's column, The Big Budget Mumble, in this morning's NY Times provides some information on negotiating positions.

" As his opening bid in negotiations, Mr. Obama has proposed raising about $1.6 trillion in additional revenue over the next decade, with the majority coming from letting the high-end Bush tax cuts expire and the rest from measures to limit tax deductions. He would also cut spending by about $400 billion, through such measures as giving Medicare the ability to bargain for lower drug prices."

"So what are Republicans offering as an alternative? They say they want to rely mainly on spending cuts instead. Which spending cuts? Ah, that’s a mystery. In fact, until late last week, as far as I can tell, no leading Republican had been willing to say anything specific at all about how spending should be cut." [NOTE: I've promised to stay away from politics in these blog posts, except where politics collides with areas of fundamental interest to retirees. If this isn't such an area, I don't know what is!]

"The veil lifted a bit when Senator Mitch McConnell, in an interview with The Wall Street Journal, finally mentioned a few things — raising the Medicare eligibility age, increasing Medicare premiums for high-income beneficiaries and changing the inflation adjustment for Social Security. But it’s not clear whether these represent an official negotiating position — and in any case, the arithmetic just doesn’t work."

Krugman goes on to point out that raising the Medicare eligibility age has been looked at by the nonpartisan Congressional Budget Office which found that raising the age from 65 to 67 would save about $113 billion over the next decade. Primarily because people entering Medicare have far lower health costs than the average Medicare participant.

According to the CBO, increasing Medicare premiums for the affluent raises only $20 billion over the next 10 years, and note that they already pay higher premiums than you or I. 

And then there's the matter of Social Security. The great "fix" being floated is to reduce Social Security costs by switching from the Consumer Price Index (cpi) to the "Chained Consumer Price Index" (chained cpi) in figuring the annual cost-of-living adjustment for Social Security recipients. This would "save" about $185 billion over the next decade.

Remember, however, that no general tax revenue goes into Social Security. It is totally paid for by the FICA tax on workers and their employers. It is not responsible for a single penny of the deficit. In fact, it runs a surplus!

So why are we even talking about Social Security in terms of reducing the deficit? Welcome to the wonderful world of smoke and mirrors!

But wait, it gets better! The "chained cpi" is supposed to be a more accurate picture of the cost of living since it corrects for consumer responses to price fluctuations. When the price of beef increases, consumers buy more chicken and the chained cpi accounts for this producing a slightly lower cost-of-living figure. It's not a big difference, but here's the thing: over the course of years these small differences act like compound interest and build up. Use the chained cpi for 30 years and your monthly Social Security check will be less by almost 10% compared with using the traditional cpi.

Oh, and there's more! For several years the Bureau of Labor Statistics has been calculating a third cpi specifically designed to reflect the cost of living for those 62 and older. People of this age have greater-than-average healthcare costs which are reflected in the "CPI-E"--the "E" standing for "experimental."
Use of this measure would produce larger cost-of-living adjustments than the current CPI.

It appears, for now, that the White House understands that Social Security is not part of the problem. USA Today reports that " Treasury Secretary Timothy Geithner echoed another White House message to Republicans during a string of Sunday show interviews: no Social Security talks as part of the fiscal cliff negotiations."

"We're prepared to, in a separate process, look at how to strengthen Social Security," Geithner said on ABC'sThis Week. "But not as part of a process to reduce the other deficits the country faces."

This is an area worthy of your attention. Let your representatives in both houses of Congress know your feelings.

Monday, November 26, 2012

It's lightbulb time!

Quick note to blog readers: It has been a couple of months since my last post. Making a move of 1100 miles will do that! Well, the boxes are finally unpacked, the Thanksgiving guests have departed and I can finally get back to blogging!

Now that Congress is back in town, the next few weeks should be interesting as we approach the "fiscal cliff." We could certainly use an adult conversation about what levels of taxation and spending are appropriate. Sadly, we're more likely to get the same heaping portions of spin and baloney we suffered through during the--seemingly endless--campaign.

One of the biggest pieces of baloney is the idea that Social Security has anything remotely to do with the deficit. Let's get this straight right now: Social Security is 100% paid for by the FICA taxes paid by currently working employees and their employers. Not a penny of any other tax revenue goes to paying Social Security benefits!

In fact, the FICA tax structure was adjusted in the 1980's so that Social Security would run a surplus in the period leading up to the retirement of the babyboomers. Imagine! We actually got our national act together and planned ahead.

But, somehow, Social Security has become part of the deficit talks. Some "very serious people" in Washington say that we must reduce benefits, raise the retirement age or both to help address the deficit.

Here's an idea: No matter how many millions of dollars someone makes, they only pay FICA taxes on the first $110,000 of wages. Raise that limit to $250,000 and the entire Social Security "problem" is solved for a period of time longer than anyone alive today will see.

Unfortunately, the Medicare problem is not that easy to solve. Many of us retirees believe--wrongly--that Medicare is a program that we paid for through our Medicare taxes while we were working. Unfortunately, those Medicare taxes--by law--only pay 25% of the cost of Medicare. The rest comes from other taxes.

Medicare's going to be a tough problem to solve because almost no one is willing to address the real problems. First, Medicare is likely to spend more money on you during your last year of life than in all the years leading up to that time. It's hard for those of us who will go on living to recognize that there comes a point at which additional expensive treatment only prolongs suffering.

Second, we're trying to figure out how to pay for the world's most expensive--but not most effective--healthcare system. If every other wealthy nation has figured out how to provide healthcare with better outcomes than ours at half the cost, maybe it's time for the lightbulb to come on over our heads!

Wednesday, September 26, 2012

A word about the locked-out NFL officials.

It turns out that workers have something in common with the locked-out NFL officials. All across America, corporations are seeing record profits yet asking their workers to take cuts in pay and benefits. Usually, this includes substituting a defined-contribution (401k) retirement plan for the defined-benefit traditional pension.

The NFL is no exception. According to Timothy Egan's column, Zebra-nomics,  in today's NY Times: "... an incredibly prosperous cartel wants its longtime workers to take a cut in pension benefits — this at a time when the cartel is earning more money than at any time in its history, and has the greatest audience in American television."

Let's put the dispute into dollar terms. "The National Football League, which took in more than $9 billion in revenue last year and owned 23 of the 25 most watched telecasts last year, wants to cut the pension contribution by about 60 percent, moving the refs from a defined benefit into something closer to a 401(k)."

"What’s $3 million to the N.F.L.? It’s the price of a 30-second commercial during the Super Bowl. So, to be clear, the most popular entertainment commodity in the land is willing to seriously tarnish its name, its reputation and the validity of its games for the price of a single half-minute ad."

But hey, why not? Every business seems to be doing it. They're feeling the power of the tide of the national mood. There's almost nobody left to stand up for labor. Any mention of unions in a newspaper will result in dozens of comments claiming that unions are the cause of the decline of western civilization.

The depressing thing about those comments is that they very often come from middle class workers whose 8-hour days and weekends off are the result of unions. Think about what it will be like if unions are eliminated. Or, read a history book about the rise of organized labor in America and the conditions that brought it on.

Maybe employers--released from the bonds of dealing with their organized workers--will be reasonable and ethical. And maybe pigs will fly.

Monday, September 24, 2012

Teachers: Do not travel in herds!

That's according to the Washington Post's Harold Meyerson. The first paragraph of Lessons from the teachers' strike reads as follows:

"Here’s a bit of advice to America’s teachers: If you want the nation’s opinion leaders and CEOs to like you, don’t congregate in groups. Everyone, it seems, loves teachers individually. But when they get together, they become a menace to civilization."

Chicago teachers were pilloried in editorials across the nation for "... refusing to bow down to standardized tests. In the eyes of our elites, such tests have emerged as the linchpin of pedagogy and the best way to measure teacher, not just student, performance."

Meyerson points out that "The presumably numbers-driven educational reformers are highly selective when it comes to which numbers they take seriously. For years, many have touted charter schools (which usually are not unionized) as the preferred alternative to (unionized) public schools. But the most extensive survey of student performance at charter schools, from Stanford University’sCenter for Research on Education Outcomes, found that, of the 2,403 charter schools tracked from 2006 to 2008, only 17 percent had better math test results than the public schools in their area, while 37 percent had results that were “significantly below” those of the public schools and 46 percent had results that were “statistically indistinguishable” from their public-school counterparts."

"There’s also a good amount of data — including a study of high-performing public schools from the National Center for Educational Achievement — showing that ongoing teacher collaboration and mentoring and using tests for diagnostic, rather than evaluative, purposes produce better outcomes than the reformers’ brand of measuring teacher and student performance. The Cincinnati school district, which measures teacher performance chiefly through repeated peer evaluation, has the best student performance of any big Ohio city."

"There are other data that “educational reformers” would do well to study. Last week, the Illinois political newsletter Capitol Fax commissioned a poll of Chicago voters that showed that fully 66 percent of parents with children in the city’s public schools supported the strike, as did 56 percent of voters citywide. The only groups that disapproved of the strike (narrowly) were parents of children in private schools and whites. (Blacks and Latinos supported it.)....I suspect that a number of parents with kids in the city schools may have a more direct understanding of the challenges, both in school and out, that their children confront, as well as a clearer perception of the lack of resources that bedevil the schools."

Meyerson concludes: "As both policy and politics, the demonization of teachers unions is a dead end for improving American education. Working with, not against, teachers is the more sensible way to better our schools."

Wednesday, September 19, 2012

It's time to stop demonizing teachers.

Some people, finally, are beginning to get it. Within the last 48 hours, two nationally-recognized columnists at two of the nation's largest papers have come to the defense of teachers.

Pulitzer-prize winner Eugene Robinson begins his column, Standing up for teachers, in the Washington Post this way: "It has become fashionable to blame all of society’s manifold sins and wickedness on “teachers unions,” as if it were possible to separate these supposedly evil organizations from the dedicated public servants who belong to them. News flash: Collective bargaining is not the problem, and taking that right away from teachers will not fix the schools."

Robinson says that the Chicago teachers have dug in their heels, but "I’d dig in, too, if I were constantly being lectured by self-righteous crusaders whose knowledge of the inner-city schools crisis comes from a Hollywood movie."

"The fact is that teachers are being saddled with absurdly high expectations. Some studies have shown a correlation between student performance and teacher “effectiveness,” depending how this elusive quality is measured. But there is a whole body of academic literature proving the stronger correlation between student performance and a much more important variable: family income."

"Yes, I’m talking about poverty. Sorry to be so gauche, but when teachers point out the relationship between income and achievement, they’re not shirking responsibility. They’re just stating an inconvenient truth."

Robinson continues: "The brie-and-chablis “reform” movement would have us believe that most of the teachers in low-income, low-performing schools are incompetent — and, by extension, that most of the teachers in upper-crust schools, where students perform well, are paragons of pedagogical virtue."

"It is reasonable to hold teachers accountable for their performance. But it is not reasonable — or, in the end, productive — to hold them accountable for factors that lie far beyond their control....portraying teachers as villains doesn’t help a single child. Ignoring the reasons for the education gap in this country is no way to close it. And there’s a better way to learn about the crisis than going to the movies. Visit a school instead."

Joe Nocera used to cover the financial beat for the NY Times and is the author of a book about the recent financial crisis. He is now a regular columnist for the NYT, whose column yesterday was titled How to fix the schools. Nocera quotes Marc Tucker: "It is not possible to make progress with your students if you are at war with your teachers."

"Tucker, 72, a former senior education official in Washington, is the president of the National Center on Education and the Economy, which he founded in 1988. Since then he has focused much of his research on comparing public education in the United States with that of places that have far better results than we do — places like Finland, Japan, Shanghai and Ontario, Canada. His essential conclusion is that the best education systems share common traits — almost none of which are embodied in either the current American system or in the reform ideas that have gained sway over the last decade or so."

" [Tucker's] starting point is not the public schools themselves but the universities that educate teachers. Teacher education in America is vastly inferior to many other countries; we neither emphasize pedagogy — i.e., how to teach — nor demand mastery of the subject matter. Both are a given in the top-performing countries. (Indeed, it is striking how many nonprofit education programs in the U.S. are aimed at helping working teachers do a better job — because they’ve never learned the right techniques.)"

"What is also a given in other countries is that teaching has a status equal to other white-collar professionals. That was once true in America, but Tucker believes that a quarter-century of income inequality saw teachers lose out at the expense of lawyers and other well-paid professionals. That is a large part of the reason that teachers’ unions have become so obstreperous: It is not just that they feel underpaid, but they feel undervalued. "

"Second, he believes that it makes no sense to demonize unions. “If you look at the countries with the highest performance, many of them have very strong unions. There is no correlation between the strength of the unions and student achievement,” he says."

"High-performing countries don’t abandon teacher standards. On the contrary. Teachers who feel part of a collaborative effort are far more willing to be evaluated for their job performance — just like any other professional. It should also be noted that none of the best-performing countries rely as heavily as the U.S. does on the blunt instrument of standardized tests. That is yet another lesson we have failed to learn."

That word "collaborative" is part of the key. In the 70's and 80's the Japanese were producing manufactured goods (cars in particular) which were much higher in quality than anything produced in America. Eventually, American manufacturers caught on to what made Japanese manufacturing superior: When problems developed, the Japanese knew that the people closest to the problem almost always knew more about how to solve it than the bosses and engineers in their offices.

Between Sept. 21 and 28, NBC is holding its yearly "Education Nation" conference. There will be reports each evening on the NBC Nightly News. If you see reports about assembling a collection of America's best teachers to work on a solution to our education problems you will know that we are on our way. If it's a collection of billionaires and business leaders leading the discussion, we'll still have a long way to go to solve our problems.

Wednesday, September 12, 2012

Does the USA have a learning disability?

When I heard that the teachers in Chicago were going on strike, I was worried. "They damn well better have the moral high ground." I said. The mood abroad in the country is growing more anti-teacher and anti-union. "If they're striking for better pay, " I said, "they're idiots!"

So I watched the NBC Evening News that night and discovered only two facts: Teachers in Chicago average about $76,000/year and parents are upset that their kids have no place to go during the day while the parents are working. Not much detail about the causes of the strike were given.

Now, to someone who lives in Chautauqua County, $76,000 sounds like real fine pay. Certainly nothing to strike about. But, Chicago is probably a lot like New York City. Rents in NYC average north of $3,000/month. At that rate, $76,000 (before taxes) doesn't seem so magnificent.

Still, I figured, there must be more to it than money. So I started digging. Here's what I have found:

1) When Rahm Emanuel became Chicago's mayor, he hired Jean-Claude Brizard to run the Chicago schools. Brizard came from the superintendent's job in Rochester, NY where his teaching staff gave him an overwhelming (95%) vote of "no confidence."

2) Upon taking office, Emanuel unilaterally cancelled the 4% pay raise scheduled for teachers and, again with no consultation with teachers or their union, increased the length of the school day by 20% with no additional compensation for teachers.

3) Not wanting to be left out of the "stick it to teachers" derby, the Illinois state legislature passed a law requiring that a teacher strike must be approved by 75% of the union membership. Note that this law applies ONLY to teachers. Strike authorization for any other group still requires a simple majority. (The Taylor law is a NY law. While teacher strikes are illegal in NY, they are not in Illinois.)

As Harold Meyerson points out in the Washington Post: "Disrespect and derision generally engender a backlash, and Chicago was no exception to that rule: The local elected more militant leadership, and when it came time for a strike vote, more than 90 percent of the city’s teachers voted to walk."

Now Emanuel is a strong advocate for the current "school reform" movement, as is Education Secretary Arne Duncan who used to run the Chicago school system. You may recall this is the movement--created by the great minds of the business world--which would like to weed out the lousy teachers via standardized tests for students and eventually privatize the whole system through charter and online schools, making a nice profit along the way.

Matt Farmer, at the Huffington Post, gives an example of the kind of thing happening in Chicago:

"February was an interesting month for sixth-grade math teacher Octavia Sansing-Rhodes. On February 28, WGN-TV and St. Xavier University named Sansing-Rhodes their "Teacher of the Month" and awarded her a $1000 check for her fine work at Chicago's Herzl Elementary School."

"That honor, however, was bittersweet because it came just six days after Chicago Public Schools CEO Jean-Claude Brizard effectively fired Sansing-Rhodes, along with everybody else who works at Herzl.The purge was announced at the February 22 meeting of the Chicago Board of Education. Late that afternoon, the mayor's hand-picked board voted (unanimously, of course) to "turnaround" Herzl in 2012-13 by handing the school over to the mayor's friends at the Academy for Urban School Leadership."

"Bottom line -- everyone in the building gets fired, and AUSL gets to hire its own teachers, principals, custodians and cafeteria workers.Oh, yeah -- and as an added bonus, the Board of Ed (headed by former AUSL chairman David Vitale) will provide the new AUSL management with roughly $9 million for upgrades to the building."

"After all, what would have been the point in wasting a fresh coat of paint, a new elevator, or a roof that didn't leak on Sansing-Rhodes and her colleagues?"

"Funny how those dollars always seem to follow the connected folks at AUSL."

Meyerson points out the fallacy in the reformers' reasoning: "If there were a strong case for the kind of school reforms that Emanuel and his many allies are promoting, then this move to roll over the teacher unions might have some heft to it. To be sure, there are some unimprovably crummy teachers who shouldn’t be kept in their jobs by virtue of a contract. But there is no evidence that teaching and educational outcomes in nonunion charter schools or in states where teachers can’t bargain collectively are any better than they are in bastions of union strength. In California, charter middle and high schools have a mind-boggling 50 percent teacher turnover rate — a crude indicator, admittedly, but one that suggests all is not well in the very schools that so many educational reformers insist are the solutions to our problems."

If you are a maker of widgets and your competitors are making widgets of higher quality at lower cost, you'd be well advised to take a good hard look at just how those competitors are doing it.

The widget analogy fits the USA in both health care and education. Yet we refuse to look around the world to see just what are the characteristics of our successful competitors. Teachers and their unions are not the problem. All the nations with high-performing educational systems have unionized teachers.

Maybe, just maybe, the problem is not with the basic cog in our educational system (teachers). Could it be that denigrating, humiliating and evaluating them is much easier than taking a long hard look at the entire educational system?

Oh, and if we ever do get around to that long hard look, let's start by bringing together the best teachers from across the country to rework the system, not business people who have never spent a day in front of a classroom.

Friday, September 7, 2012

Listen now, this is important!

Hey there retiree, are you feeling safe because even if Romney wins they're promising no changes to Medicare for those currently over 55? As Bill Clinton said often in his speech to the Democratic National Convention "Listen now, this is important!"

Clinton opined that the Republican candidates were decent men who intended to keep their commitments. It was important, he said, to know the specifics of those commitments. Let's spend a moment talking about one of those commitments: turning Medicaid into a block grant program and shrinking it by 1/3 over the next 10 years.

Many Americans think of Medicaid as free health care for the poor. We see stories on the local TV news about someone who calls for an ambulance for a ride to the hospital whenever he needs to fill a prescription and our minds fill with stereotypes of the undeserving/ungrateful/too lazy to work welfare queens portrayed by Ronald Reagan.

"Too bad for them," we think. They should be grateful for anything they get. In reality, medical care for the poor amounts to about less than half of Medicaid spending. The majority pays for nursing home care for the elderly and help for individuals and families with disabilities, Many of the elderly and disabled are solidly middle class, but the cost of nursing home care or needed services for children with problems such as Down's syndrome or autism are beyond the means of most middle class families.

Today's NY Times carries an article titled With Medicaid, long-term care of elderly looms as a rising cost. It begins: "Medicaid has long conjured up images of inner-city clinics jammed with poor families. Its far less-visible role is as the only safety net for millions of middle-class people whose needs for long-term care, at home or in a nursing home, outlast their resources."

"With baby boomers and their parents living longer than ever, few families can count on their own money to go the distance. So while Medicare has drawn more attention in the election campaign, seniors and their families may have even more at stake in the future of Medicaid changes — those proposed, and others already under way."

"Seniors...will face uncharted territory if Republicans carry out their plan to replace Medicaid with block grants that cut spending by a third over a decade."

"The move would let states change minimum eligibility, standards of care, and federal rules that now protect adult children from being billed for their parents’ Medicaid care." [The blog post that has received the most views is the one titled I'll bet you didn't know this about nursing home care. It details how, in some states, adult children can be billed for nursing home care of their parents, even if they had no say in choosing that care.]

The article points out that a vast majority of the nation's 1.8 million nursing home residents rely on Medicaid to pay for their care.

"Many people assume that Medicare will cover long-term care, but at most it covers 100 days of rehabilitation, not so-called custodial care — the help with activities of daily life, like eating and bathing, that the aged can need for years." Nursing home care can easily cost $70,000 to $80,000 per year.

"To be eligible for Medicaid, however, a person typically can have no more than $14,800 in assets, and though some lawyers specialize in setting up trusts that shelter certain assets, the federal government has periodically closed loopholes that allowed it." 

Medicaid planning is always the most popular workshop topic at our annual retired teachers' conference. People are desperate to find out how they can avoid the tragedy of needing to "spend down" to the poverty level if one spouse needs nursing home care provided by Medicaid.

"No state has a more ambitious plan to overhaul Medicaid than New York, which has the biggest Medicaid budget in the country — $54 billion — and spends about 41 percent of it for long-term care, almost half on nursing homes."

"Under the block grant vision of Medicaid, that federal role in oversight would end. Richard J. Herrick, president of the New York State Health Facilities Association, a trade group, says that since Medicaid rates have been cut well below cost, he would welcome a change in rules that would let nursing homes bill families for their elders’ care, in addition to what Medicaid pays."

Listen now, this is important! It's hard to imagine that any of us who are over 55--or our families-- will be better off in a situation such as this.

Wednesday, September 5, 2012

When did experience become a bad thing?

Back when I was teaching--before the turn of the century--I used to fly quite a bit to make presentations about computers and technologies in the classroom. My level of angst was inversely proportional to the age of the pilot.

When I boarded the 16-seater flying from Buffalo to Plattsburg, both pilots looked like seniors from my high school physics class who were working at their weekend job. And the plane didn't even have armrests that I could dig my fingernails into!

I felt much better when I boarded a "grown up" jet and was greeted by a pilot whose grey hair was neatly trimmed. I figured this guy probably flew military jets before beginning to work his way up with a major airline.

Sure, the younger pilot may have had a couple of hundred hours in a simulator, but simulators don't have an essential bit of training: the knowledge that you may well die if you don't make the right decision. No pilot has ever had a fatal simulator crash. I figured my grey-haired guy may just have had to handle a few non-simulator dicey situations. When I fly, the level of experience in the cockpit matters!

Same with medicine. When being wheeled in surgery, it's much better to have the surgeon say "Don't worry, I've done this surgery 500 times."

Look at the ads in newspapers. Everyone touts their years of experience. Then we come to teaching.

Experienced teachers, we are told, are the deadwood. They're just "mailing it in" until they reach retirement age. Golly gee willikers, it would be so neat to have enthusiastic fresh faces at the front of our classrooms! What's that you say? They cost less? Balderdash! Pay no attention to that man behind the curtain! That never entered my mind!

Well, the folks who voted for inexperience are getting their wish. Today's USA Today carries an article titled More teachers green in the classroom. Here are some interesting tidbits from the article:

  • "With three years of teaching under her belt, Allison Frieze nearly qualifies as a grizzled veteran. The 28-year-old special education teacher at E.L. Haynes Public Charter School here already has more experience than the typical U.S.teacher."
  • "Between 40% to 50% of those entering the profession now leave within five years."
  • "In the 1987-88 school year...there were about 65,000 first-year teachers; by 2007-08, the number had grown to more than 200,000. In the 1987-88 school year, he found, the biggest group of teachers had 15 years of experience. By the 2007-08 school year, the most recent data available, the biggest group of teachers had one year experience."
  • "...many new teachers are career-changers who have experienced functional workplaces. These teachers will expect adequate materials, for one thing, and the chance to collaborate with co-workers." [Well, won't they be surprised!]
  • "...parents shouldn't be surprised if young teachers soon leave the classroom for better paying jobs."
Well, we certainly are enroute to making the USA #1 in education again.

Monday, September 3, 2012

Where's Henry Ford when you need him?

"...we have forgotten the wisdom of Henry Ford. In 1914, not long after the Ford Motor Company came out with the Model T, Ford made the startling announcement that he would pay his workers the unheard-of wage of $5 a day."

"Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers. They can afford to buy Model Ts."

That's how Hedrick Smith, former Washington bureau chief of the NY Times, began his op-ed column, When capitalists cared, in today's NYT.

Hedrick explains that Ford was " of the first business leaders to articulate what economists call “the virtuous circle of growth”: well-paid workers generating consumer demand that in turn promotes business expansion and hiring. Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits..."

"Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today. The chief executives of the long postwar boom believed that business success and workers’ well-being ran in tandem."

"From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation. But things changed dramatically starting in the late 1970s. Although productivity increased by 80.1 percent from 1973 to 2011, average wages rose only 4.2 percent and hourly compensation (wages plus benefits) rose only 10 percent over that time..."

"At the same time, corporate profits were booming. In 2006, the year before the Great Recession began, corporate profits garnered the largest share of national income since 1942, while the share going to wages and salaries sank to the lowest level since 1929. In the recession’s aftermath, corporate profits have bounced back while middle-class incomes have stagnated."

"Today the prevailing cut-to-the-bone business ethos means that a company like Caterpillar demands a wage freeze and lower health benefits from its workers, while posting record profits."

"Globalization, including the rise of Asia, and technological innovation can’t explain all or even most of today’s gaping inequality; if they did, we would see in other advanced economies the same hyperconcentration of wealth and the same stagnation of middle-class wages as in the United States. But we don’t."

"In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is 'the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.'"

What a novel idea! Where's Henry Ford when you need him?

Friday, August 31, 2012

Shame, apparently, is overrated.

Let me say this for the bazillionth time: Facts matter! It is not possible to find a solution to a problem unless you take time to assemble the facts about the problem. American politics has apparently gone down the rabbit hole with Alice. Here's what Michael Cooper said in his NY Times column Facts take a beating in acceptance speeches:

"The two speeches — peppered with statements that were incorrect or incomplete — seemed to signal the arrival of a new kind of presidential campaign, one in which concerns about fact-checking have been largely set aside."

"The growing number of misrepresentations appear to reflect a calculation in both parties that shame is overrated, and that no independent arbiters command the stature or the platform to hold the campaigns to account in the increasingly polarized and balkanized media firmament. Any unmasking of the lies or distortions, the thinking goes, rarely seeps into the public consciousness."

"Representative Paul D. Ryan used his convention speech on Wednesday to fault President Obama for failing to act on a deficit-reduction plan that he himself had helped kill. He chided Democrats for seeking $716 billion in Medicare cuts that he too had sought. And he lamented the nation’s credit rating — which was downgraded after a debt-ceiling standoff that he and other House Republicans helped instigate."

"And Mitt Romney, in his acceptance speech on Thursday night, asserted that President Obama’s policies had “not helped create jobs” and that Mr. Obama had gone on an “apology tour” for America. He also warned that the president’s Medicare cuts would “hurt today’s seniors,” claims that have already been labeled false or misleading."

Cooper points out that both sides are doing it: "In recent weeks, the Romney campaign has broadcast television advertisements leveling the widely debunked assertion that Mr. Obama had gutted the work requirements for welfare recipients. The Obama campaign, for its part, ran a deceptive ad saying that Mitt Romney had “backed a bill that outlaws all abortion, even in case of rape and incest,” although he currently supports exceptions in cases of rape, incest or when the life of the mother is at risk.?"

The amazing part is that they apparently do not care if they are caught. The Washington Post reported earlier this week that "Yesterday, at an ABC News panel, Mitt Romney pollster Neil Newhouse said, “We’re not going to let our campaign be dictated by fact-checkers.” Apparently the campaigns are going with their alternate views of reality thinking that their base will believe what they're told because the base WANTS to believe these kinds of things and the folks who don't believe it won't vote for them anyway. 

You know things are out of hand when Sally Kohn of Fox News calls Ryan's speech "an apparent attempt to set the world record for the greatest number of blatant lies and misrepresentations slipped into a single political speech."

Here's a summary of the fact-checking for Paul Ryan's speech:

  • Ryan said Obama broke a promise by not saving a GM plant in Janesville, Wis. But PolitiFact could find no evidence that Obama explicitly made such a promise and, more importantly, the plant closed before Obama was even sworn in.
  • Ryan chastised Obama for creating a bipartisan debt commission and doing nothing with its findings. But asTalking Points Memo points out, Ryan was on that commission—and voted against it, as did the panel's other Republicans.
  • Ryan attacked Obama for the S&P's downgrade of America's sovereign credit rating. Which is rich, writes Brett LoGiurato of Business Insider, because the S&P specifically said that it downgraded the rating "because the majority of Republicans in Congress continue to resist any measure that would raise revenues."
  • He repeated the Romney campaign's frequent assertion that Obama "funneled" $716 billion out of Medicare to pay for ObamaCare. Actually, the Affordable Care Act reduces payments to health care providers, not Medicare's budget.
  • In another oft-repeated distortion, Ryan said Obama wanted to credit the government with the private sector's successes. "That isn't what the president said. Period," Kohn writes.
  • The speech also gave Mitt Romney credit for bringing up household income as governor of Massachusetts. That's only half-true, PolitiFact rules: Adjust for inflation, and income actually decreased.
  • Near the end, Ryan described protecting the poor as the "greatest of all responsibilities." According to TPM, two-thirds of the cuts in his budget proposal come from programs that help the poor.

How did Mitt Romney do? Here's a link to the Washington Post fact check of his speech:

Although the "fairness doctrine" no longer applies on radio and TV, we will fact check the Democratic convention a week from now.

Wednesday, August 29, 2012

Today's post could save you thousands of dollars!

The single most common reason that people are hospitalized is falling. After a fall, particularly for those of us of the Medicare age group, the patient often needs to spend some time in a rehab facility. We all know that Medicare will pay for the first 20 days of rehab or nursing home care after a 3-day hospital stay. Not so fast! Failing to read beyond this point may cost you several thousand dollars!

Laraine Sickels, 71,  is a retired teacher who lives in the state of Washington. She fell last summer, broke her pelvis in 3 places and was rushed to the hospital on Thursday morning. By the next Monday, she was ready to leave the hospital for a stay at a rehab facility. That's when her bank account began to bleed.

Let's pick up the story as told in a post on the Money magazine/CNN website titled The painful new trend in Medicare.

"For four nights and five days, she had slept in a hospital bed and donned a hospital bracelet while doctors ran tests and prescribed medications. Yet she'd been held under observation, a designation intended for patients who aren't ready to go home but don't need as intensive care as a fully admitted patient does. And with Medicare, observation services don't count toward rehab coverage."

So her 10-day rehab stay cost Sickels $7,027 out of her own pocket. Medicare wouldn't pay a penny toward rehab. Also, since Medicare wasn't paying anything, neither would Medicare supplemental insurance.

"While not commenting on Sickels' case, Joanne Roberts, the hospital's chief medical officer, says it's common for an otherwise healthy pelvis-fracture patient who doesn't have surgery to stay on observation."

"Sickels' story is an increasingly familiar one. Medicare pays hospitals far less for observation than for inpatient stays. As Medicare seeks to cut costs, a growing army of auditors use an automated screening system to second-guess admissions. A hospital that gets dinged commonly loses all its revenue for a stay."

"Spend a night in the hospital for chest pain, and Medicare might pay the hospital $4,100 if you're an inpatient, $1,800 if you're on observation, says Sandra Routhier, a consultant for Panacea Healthcare Solutions. When an auditor rules that an inpatient stay should have been observation, the hospital typically loses the entire Medicare payment."

You really need to read the full story yourself, Click here to get a better understanding of what happened to Sickels and why.

Then, learn how to protect yourself in a similar situation by reading Medicare: Avoid big rehab bills.

Thursday, August 23, 2012

5 myths about Canadian health care - part 2

In part 1 of this post we let peer-reviewed research explode two of the common myths about Canadian health care. In spite of what "everybody knows," Canadians are not flocking to the USA for health care and there are currently more doctors coming into Canada than leaving Canada. Now let's look at the remaining myths:

Myth no. 3: Canada rations health care; that’s why hip replacements and cataract surgeries happen faster in the United States.

"When people want to demonize Canada’s health care system — and other single-payer systems, for that matter — they always end up going after rationing, and often hip replacements in particular."

"Take Republican Rep. Todd Akin of Missouri, for example. A couple of years ago he took to the House floor to tell his colleagues:"

[Readers may recognize the now-familiar Missouri congressman who is now running for the Senate. That's right, he's the "you can't get pregnant if you're 'legitimately raped'" guy. I swear, I did not even know he was quoted in this article until I began writing this post earlier today, but his scientific wisdom sure does seem to get around. Here's what he had to say:]

“I just hit 62, and I was just reading that in Canada [if] I got a bad hip I wouldn’t be able to get that hip replacement that [Rep. Dan Lungren] got, because I’m too old! I’m an old geezer now and it’s not worth a government bureaucrat to pay me to get my hip fixed.”

"This has been debunked so often, it’s tiring. The St. Louis Post-Dispatch, for example, concluded: “At least 63 percent of hip replacements performed in Canada last year [2008] ... were on patients age 65 or older.” And more than 1,500 of those, it turned out, were on patients over 85."

Myth #4: Canada has long wait times because it has a single-payer system.

"The wait times that Canada might experience are not caused by its being a single-payer system."

"Wait times aren’t like cancer. We know what causes wait times; we know how to fix them. Spend more money."

"In 1966, Canada implemented a single-payer health care system, which is also known as Medicare. Since then, as a country, Canadians have made a conscious decision to hold down costs. One of the ways they do that is by limiting supply, mostly for elective things, which can create wait times. Their outcomes are otherwise comparable to ours."

"Please understand, the wait times could be overcome. Canadians could spend more. They don’t want to. We can choose to dislike wait times in principle, but they are a byproduct of Canada’s choice to be fiscally conservative."

"Yes, they chose this. In a rational world, those who are concerned about health care costs and what they mean to the economy might respect that course of action. But instead, they attack the system."

Myth #5: Canada rations health care; the United States doesn’t.

"This one’s a little bit tricky. The truth is, Canada may “ration” by making people wait for some things, but here in the United States we also “ration” — by cost."

"An 11-country survey carried out in 2010 by the Commonwealth Fund, a Washington-based health policy foundation, found that adults in the United States are by far the most likely to go without care because of cost. In fact, 42 percent of the Americans surveyed did not express confidence that they would be able to afford health care if seriously ill."

"Further, about a third of the Americans surveyed reported that, in the preceding year, they didn’t go to the doctor when sick, didn’t get recommended care when needed, didn’t fill a prescription or skipped doses of medications because of cost."

"Finally, about one in five of the Americans surveyed had struggled to pay or were unable to pay their medical bills in the preceding year....And remember: We’re spending way more on health care than any other country, and for all that money we’re getting at best middling results."

So, why is this all important? It's important because we have something to learn from all the other advanced nations, including Canada, who manage to get better health care outcomes at half the per capita cost of the USA.

We're fighting tooth and nail over how to best pay for our health care system. The truth is that our system itself is the problem. No matter how we attempt to pay for it, it's too expensive and doesn't produce good results.

The rest of the developed world is running lab experiments for us. We could emulate the Taiwanese who in 1995 decided to look at all these other systems and design one for themselves based on the best parts of everyone else's systems. For crying out loud, if the Taiwanese could do it why can't we?

Sunday, August 19, 2012

"When did Norma Rae get to be the bad guy?"

If you loved the bashing of teachers and their unions in the documentary "Waiting for Superman," you will be ecstatic over the new feature film "Won't Back Down."

While "Waiting for Superman" caused a stir, it didn't do well at the box office and its expected Oscar nomination never happened. "Won't Back Down" is a star-studded (Maggie Gyllenhaal, Viola Davis, Holly Hunter, Ving Rhames, Rosie Perez) big budget feature designed to tug on the emotions. It is being produced by Walden Media, the same folks who brought you "Waiting for Superman."

The story is about a fictional law in Pennsylvania which allows parents and teachers to take over a school which is performing poorly. While these "parent trigger" laws exist in some states, they do not involve teacher participation. To get a feel for how teachers are viewed, have alook at the movie's trailer.

Frank Bruni wrote a column titled "Teachers on the Defensive" in this morning's NY TImes in which he points out that "... the main financing for the movie came from a school-privatization advocate who is no fan of teachers’ unions." [Emphasis mine.]

"And it actually takes pains to portray many teachers as impassioned do-gooders who are as exasperated as parents are by the education system’s failures — and by uncaring colleagues in their midst. But I understand [AFT president] Weingarten’s upset. The union that represents one of those do-gooders (Viola Davis) has lost its way, resisting change, resorting to smear tactics and alienating the idealists in its ranks. What’s more, some of the people who are assertively promoting “Won’t Back Down” are those who cast teachers’ unions as a titanic impediment to the improvement of public education. So “Won’t Back Down” is emerging as the latest front in the continuing war between those unions and their legions of critics, and it has become yet another example of how negatively those unions are viewed." [Emphasis mine.]

"“When did Norma Rae get to be the bad guy?” asks a union leader (Holly Hunter) in the movie. I don’t know, but that’s indeed the state of play when it comes to teachers’ unions, and it’s a dangerous one."

Bruni goes on to say "Perhaps most striking are the rifts that have opened between teachers’ unions and Democrats, who had long been their allies. In Chicago, Philadelphia, Los Angeles and other cities, Democratic mayors have feuded bitterly with teachers’ unions and at times come to see them as enemies. And at a meeting of the United States Conference of Mayors in June, Democratic mayors joined Republican ones in a unanimous endorsement of so-called parent trigger legislation, about which unions have serious reservations. These laws, recently passed in only a few states but being considered in more, abet parent takeovers of underperforming schools, which may then be replaced with charter schools run by private entities." [Emphasis mine.]

"The unions have also run afoul of the grim economic times. “In the private sector, nobody’s got any security about anything,” said Charles Taylor Kerchner, a professor of education at Claremont Graduate University. So the unions’ fights over pay raises and pensions, he said, made previously routine negotiations “look like pigs at the trough.” [Emphasis mine.]

"Kerchner was being sympathetic and said that teachers were hardly overpaid. But they have unwittingly assisted efforts by Republicans in particular to turn them into caricatures of entitlement in an era when there are many Americans poised to see them that way." [Emphasis mine.]

As of this writing, Bruni's column has received nearly 100 comments from readers. I would categoize many of them as "I wish I had written that." I will pass along some of the better comments in a future post. Until then, watch your back because there are millions of dollars of publicity behind this movie.

Friday, August 17, 2012

5 myths about Canadian health care. - Part 1

As promised earlier, here are 5 myths about Canadian health care (spread out over two posts). This is based on a column on the AARP website by Aaron E. Carrol, M.D. who is the director of the Center for Health Policy and Professionalism Research:

Myth #1: Canadians are flocking to the USA for medical care. "How many times have you heard that Canadians, frustrated by long wait times and rationing where they live, come to the United States for medical care? "

"I don’t deny that some well-off people might come to the United States for medical care. If I needed a heart or lung transplant, there’s no place I’d rather have it done. But for the vast, vast majority of people, that’s not happening."

"The most comprehensive study I’ve seen on this topic — it employed three different methodologies, all with solid rationales behind them — was published in the peer-reviewed journal Health Affairs."

"The authors of the study started by surveying 136 ambulatory care facilities near the U.S.-Canada border in Michigan, New York and Washington. It makes sense that Canadians crossing the border for care would favor places close by, right? It turns out, however, that about 80 percent of such facilities saw, on average, fewer than one Canadian per month; about 40 percent had seen none in the preceding year."

"Then, the researchers looked at how many Canadians were discharged over a five-year period from acute-care hospitals in the same three states. They found that more than 80 percent of these hospital visits were for emergency or urgent care (that is, tourists who had to go to the emergency room). Only about 20 percent of the visits were for elective procedures or care."

"Next, the authors of the study surveyed America’s 20 “best” hospitals — as identified by U.S. News & World Report — on the assumption that if Canadians were going to travel for health care, they would be more likely to go to the best-known and highest-quality facilities. Only one of the 11 hospitals that responded saw more than 60 Canadians in a year. And, again, that included both emergencies and elective care."

"Finally, the study’s authors examined data from the 18,000 Canadians who participated in the National Population Health Survey. In the previous year, 90 of those 18,000 Canadians had received care in the United States; only 20 of them, however, reported going to the United States expressively for the purpose of obtaining care."

Myth #2: Doctors in Canada are flocking to the United States to practice. "Every time I talk about health care policy with physicians, one inevitably tells me of the doctor he or she knows who ran away from Canada to practice in the United States. Evidently, there’s a general perception that practicing medicine in the United States is much more satisfying than in Canada. Problem is, it’s just not so. Consider this chart:"

"The Canadian Institute for Health Information has been tracking doctors’ destinations since 1992. Since then, 60 percent to 70 percent of the physicians who emigrate have headed south of the border. In the mid-1990s, the number of Canadian doctors leaving for the United States spiked at about 400 to 500 a year. But in recent years this number has declined, with only 169 physicians leaving for the States in 2003, 138 in 2004 and 122 both in 2005 and 2006. These numbers represent less than 0.5 percent of all doctors working in Canada."

"So when emigration “spiked,” 400 to 500 doctors were leaving Canada for the United States. There are more than 800,000 physicians in the United States right now, so I’m skeptical that every doctor knows one of those émigrés. But look closely at the tan line in the following chart, which represents the net loss of doctors to Canada."

In 2004, net emigration became net immigration. Let me say that again. More doctors were moving into Canada than were moving out.

Tuesday, August 14, 2012

The spin machine is out of control.

I know, I promised in my last post that I would expose some myths about Canadian health care in this post. But the last few days have put the Medicare spin machine into hyperdrive.

The Romney/Ryan campaign is all over the airwaves claiming that Obama is going to cut Medicare by $700 billion. They, however, vow to "preserve and protect Medicare." What's the real story?

Ezra Klein does a good job of clarifying the story in a couple of Washington Post blog posts today. In the first post Klein asks three questions:

"1. Mitt Romney says that “unlike the current president who has cut Medicare funding by $700 billion. We will preserve and protect Medicare.” What happens to those cuts in the Ryan budget?"

"2. What is the growth rate of Medicare under the Ryan budget?"

"3. What is the growth rate of Medicare under the Obama budget?"

"The answers to these questions are, in order, “it keeps them,” “GDP+0.5%,” and “GDP+0.5%.”

That's right. The Ryan budget--already passed by the House--contains exactly the same cuts to Medicare as those found in the Affordable Care Act (Obamacare). In addition, both the ACA and the Ryan budget limit the growth of Medicare to exactly the same amount. So where's the controversy? 

First of all, let's understand that these "cuts" to Medicare are NOT cuts in benefits. Instead they are cuts to the rate of growth of items in the Medicare budget such as Medicare Advantage plans run by private insurance companies at a cost 15-20% more per participant that traditional Medicare. (See Medicare meets Obamacare). In fact, the ACA specifically prohibits cuts to Medicare benefits.

In his second post, Klein explains the underlying differences. I'm going to quote a significant portion of his post since I couldn't explain it better:

"Since the Romney campaign wants to run against President Obama’s cuts to Medicare, it’s something of a problem for them that Paul Ryan’s budget includes those very same cuts to Medicare. And so they’ve come up with a somewhat confused and confusing argument to distinguish the two plans."

"Obama’s cuts to Medicare are different because Ryan “keeps that money for Medicare to extend its solvency” while Obama uses it “to pay for a new risky program of his own that we call Obamacare.”

"This is basically a misunderstanding of how budgeting works. Or, at the least, it’s predicated on the listener misunderstanding how budgeting works."

"What they’re doing is switching between two questions very quickly. The first question is: “How much money are you cutting from Medicare?” The second question is: “How much overall deficit reduction is contained in your plan?” And the second question isn’t getting answered."

"Here’s what everyone agrees on: Ryan and Obama include the same cuts to the Medicare program itself. So if you’re an insurance company participating in the Medicare Advantage program, you’re getting the same cut no matter who wins the election. So the answer to the first question is, “the same amount as the Obama administration.”

"What Romney/Ryan are saying is that they then take the money saved from their cuts to Medicare and put it toward deficit reduction while Obama takes that money and spends it on health care for poor people [and other things like eliminating the "doughnut hole" in Medicare prescription drug plans]. The argument here is that by using the money to cut the deficit, Romney/Ryan make future cuts to Medicare less likely."

"But Romney/Ryan also add a trillion dollars to the defense budget. And they have trillions of dollars in tax cuts they haven’t explained how they’re going to pay for. So those decisions make future cuts to Medicare more likely. Meanwhile, Obama cuts defense spending by hundreds of billions of dollars, raises about $1.5 trillion in new taxes, and puts all that money into deficit reduction. So that makes future Medicare cuts less likely."

"So if the argument is that Romney/Ryan protect Medicare by putting the $770 billion in cuts towards deficit reduction, Obama protects Medicare by twice as much by putting the $1.5 trillion in new tax revenues towards deficit reduction. So far as the deficit is concerned, there’s no difference between a dollar from Medicare and a dollar from taxes."

"Which just leaves us where we began: Romney/Ryan want to do more of their deficit reduction by cutting social services while Obama wants to do more of his deficit reduction through raising taxes. Deciding whose plan makes more sense requires making judgments about whether Romney/Ryan will ultimately pay for their tax cuts. But deciding who is cutting Medicare by $700 billion just requires looking at who is cutting Medicare by $700 billion. And at the moment, that’s both Obama and the Republican budget."

You probably needed to read this twice, didn't you? Now imagine trying to explain it to Joe Sixpack in a 30-second TV ad. When the spin machine starts up, the low-information voter doesn't stand a chance!