Ted Cruz got Obamacare right—massive transfers from the healthy; His contempt shows Republicans’ health care bind

Last week’s CPAC conference’s discussion of health care was dominated by (yet more) calls for Obamacare’s repeal, along with preeminent mocker, Sarah Palin’s memorable I do not like this Uncle Sam. I do not like his health care scam.” More measured Republicans worried that CPAC offered no constructive health care suggestions and ignored the new Republican alternative to Obamacare.

No one seems to have noticed that Ted Cruz fairly accurately characterized Obamacare as “a massive wealth transfer from young healthy people to everyone else.”  That’s a pity. That sentence and Cruz’s contempt for such transfers are revealing. They show that Republican rhetoric conflicts with the economics of health insurance, in particular with the fact that only government interfering in the market can solve our health insurance problems. Republicans can only produce good health care policy when they build it on a base of reality.

Here is the economic reality that Cruz misses: health insurance consists of transfers from the healthy to the sick. It’s just like fire insurance. Everyone pays premiums. Those who have fires get massive transfers of wealth, paid for by those who don’t have fires. All insurance is about transfers from the lucky to the unlucky.

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Journalists Need More Than Free Access to Best-Selling Academic Papers

Ezra Klein thinks he understands the real reasons Nicholas Kristof is frustrated with academics. It’s not that we write badly. That’s actually good, at least for journalists’ livelihoods: Since academics “write in jargon but speak in English,” journalists can “arbitrage,” translating academics’ work for the public. So, Klein is not focused on helping academics reach the public themselves, as I was in my reaction to Kristof.

Klein believes journalists’ real problems with academics are that academic journals are “wildly expensive” and there is no “academic equivalent of a best-seller’s list,” making it hard to find interesting papers.

I am skeptical. I think Klein vastly under-estimates the distance that most academic writing and most academics would have to travel to be relevant and understandable to journalists. His suggestions, while laudable, won’t bridge much of that gap.

My skepticism comes from my own experiences in academia, particularly too many hours scrutinizing endless equations or convoluted writing trying to tell if an academic paper in my own field was convincing or useful. And I fear that many academics cannot extract from our work what matters to the public and explain it clearly. In fairness, much of what we academics do is intrinsically complex.

I suspect that Klein is optimistic about journalists and academics’ papers because he unconsciously envisions many academics like the ones he hangs out with.  They explain well and have their pulse on what matters for the public. And there is another problem with Klein’s optimism: quite frankly, most journalists are not going to “get” complex analytical material as well as he does. Continue reading

The Ferocious Winds Blowing Us Towards Inequality For All: Four Ways to Stop Over-promising about Higher Education

During the closing credits of Robert Reich’s documentary, Inequality for All, some of those profiled describe how, now inspired, they plan to take action against inequality. Erika Vaclav—Costco worker, mother, former owner of a foreclosed Condo and wife of laid-off Circuit City manager—plans to follow her husband into higher education. With the song 9-to-5 playing in the background, she says proudly, “I want to become a lawyer.”

My heart sinks. Erika doesn’t know that law school graduates now struggle to get jobs or that lawyers’ earnings and job security have plummeted. Erika envisions a law degree taking her permanently into the middle class. I envision it leaving her with much debt and few job prospects.

The jobs of the highly educated are not immune to the information revolution or globalization. Lawyers are hurting in part because software can do discovery (searching documents for relevant information) more cheaply than live lawyers. Other educated workers are also likely to be hit by the ferocious winds of the Information Revolution blowing towards inequality.

Professors, policy wonks and politicians—not just Reich but many of us—need to incorporate these forces into our policy pontifications. Let’s stop over-simplifying and stop over-promising what higher education can do. If we don’t, we’ll misdirect and mislead people like Erika. Continue reading

What Kristof and His Critics Missed: Journalism’s Obsession with Newness Helps Keep Academics Obscure—Or Why Ezra Klein is Even More Right

Nicholas Kristof ignited fierce protests—and enthusiastic support—by saying that most academics “don’t matter in today’s great debates,” because they (we!) write dreadfully and in obscure journals, rather than for broad audiences. Both Kristof and his critics got a lot right. But they focused on what academics and academia do wrong and right, missing what journalism does to make the problem worse.

Coincidentally, only weeks earlier Ezra Klein, a fantastic wonky journalist, articulated journalism’s problem, explaining why it drove him to start a new journalistic enterprise:

New information is not always — and perhaps not even usually — the most important information for understanding a topic… Today, we are better than ever at telling people what’s happening, but not nearly good enough at giving them the crucial contextual information necessary to understand what’s happened. We treat the emphasis on the newness of information as an important virtue rather than a painful compromise.

Journalistic outlets today provide news, not what Jay Rosen describes as helping “us grasp the stories we care deeply about.” Why does journalism’s obsession with newness hinder academics trying to reach broad audiences? Continue reading

Bridgegate: The Case of the Missing Ethical Research Review

When the mayor of Fort Lee asked why those—now infamous—toll lanes to the George Washington Bridge were closed, he was told, “a study.”  Yet when his desperate pleas to Port Authority officials were ignored, he did not turn to the independent official body in charge of making sure that studies are conducted ethically. Such a body must ensure studies don’t harm people—don’t, say, trap ambulances in traffic.

Why didn’t the Fort Lee mayor turn to that body? Don’t research studies that affect humans have to show that they don’t harm those humans? Or at least that benefits exceed harms? Decades ago, after scandals like the Tuskegee study which kept poor sharecroppers ignorant of their syphilis, and therefore untreated, we created rules and bureaucracies to protect human research subjects. Currently, regulation 45 CFR 46 ensures this, mandating the creation of Institutional Research Boards (IRBs) who are charged with ensuring that research on humans is ethical.

The mayor of Fort Lee couldn’t turn to an IRB because there wasn’t one. IRBs don’t apply to a government agency—or school or business—trying to improve operations. Studies that are for “internal management” purposes, don’t count as research, which is defined as producing “generalizable knowledge.” (Generalizable means providing information beyond just the specific setting, place and time of the study.)

Generalizability, however, is an arbitrary, potentially dangerous and just plain stupid way to decide which studies are subject to ethical review. Continue reading

All-You-Can-Learn—For One Flat Fee—U: But To Go Slower, Not Faster

On November 18, admissions opened for the University of Wisconsin system’s new “Flexible Option.” The beautifully crafted web site tells prospective students that they will be able to, “earn credit for what you know,” “advance at your own pace,” and “start when you want, at the beginning of any month and that they can choose the “All-You-Can-Learn Option …[which] allows you to master as many competency (skill) sets and pass as many assessments as you can within a three-month period for a flat tuition rate of $2,250.” Welcome to the brave new world of Competency Based Education (CBE).

Quick Rorschach test: Are you rolling your eyes with snark? Groaning with dread? Or is your heart beating faster and your face flushing with wide-eyed wonder? Continue reading

Single Payer Wouldn’t Be Simple Either: A Fractal Story

A two-page bill could have extended Medicare and provided universal coverage,” writes Franklin Foer in The New Republic, contrasting Progressives’ preferred single-payer system with modern liberals’ 20,202 page Obamacare legislation. Unfortunately, it’s not true.

Here is one of a zillion reasons why. Say that Grandma Mildred goes to the hospital with pneumonia. Medicare will pay the hospital based on her Diagnostic Related Group (DRG): one fixed payment for Grandma’s stay based on her diagnosis of pneumonia, no matter how long or short her stay, no matter how many tests she gets. This is so the hospital won’t give Grandma an extra X-ray to collect more taxpayer money.

Okay. So why not just extend that payment system to the under-65s? The problem is figuring out how much the DRG payment should be for them. Right now, MedPAC figures out how much to pay for each DRG, using cost and care data for Medicare (over-65 or disabled) patients they have been collecting for years. They would need the same data (and much analysis) for the under-65s for the expansion. And we would need to decide whether DRG payments vary by age and if so, how.  Continue reading

Netflix-like data to shape political reporting—Should we worry?

Pierre Omidyar, the billionaire eBay founder concerned about NSA surveillance and threats to press freedom, is creating a new news venture, to the tune of (at least) $250 million. His plan to fund investigative journalism will help bridge the gap between what a vigorous democracy needs and what current media markets can support financially.

But one feature has gotten no attention: the plan to be a “general news” venture, including sports and entertainment.   Why do that? Sports and entertainment news are doing just fine, thank you, and don’t need a billionaire ’s charity. Plus the old-fashioned full-service approach doesn’t jibe with Omidyar’s “entirely new,” legacy-free rhetoric.

In fact, the brief explanation for the full-service route, communicated in an interview Omidyar gave to Jay Rosen, raises important questions. First, Omidyar is saying, implicitly, that others’ solutions for journalism, funding the unfunded content with the likes of Pro Publica and Kaiser Health News, is seriously incomplete. Is he right? Second, Omidyar may be planning a potentially creepy use of Netflix-like personally data to shape the public interest journalism. That would be ironic, since one of his first hires is Glenn Greenwald, famous for his NSA spying scoop. Should we worry? Continue reading

Talking about the Emperor’s Clothes: Causes and Consequences of Healthcare.gov’s Problems

Healthcare.gov’s disastrous launch has left me, as an Obamacare supporter, feeling dismayed and even betrayed. Sure I expected problems at the start. What new IT system doesn’t have problems? And the task involved—coordinating data from the IRS, a slew of private insurers, state Medicaid programs, and so on—was known to be no small feat, much more than private e-exchanges have to do.

But after last Thursday’s Congressional testimony, we know that it’s much worse. The main contractor for the back-end said, “our portion of the contract worked as designed.” All the contractors said their job started and finished with contract specs. Whether it works with the other parts was someone else’s problem. The government, the Center for Medicare and Medicaid Services, ostensibly in charge of putting the whole thing together, did not test the whole system until two weeks before the Oct. 1 launch. Anyone (or at least anyone who ever tried to get their iTunes purchases onto a non-Apple device or vice versa) could have seen the need for that test much earlier. Such seemingly willful incompetence shocked me, because it was so unlike my own knowledge and experience of the competence of the legislation and its implementation. As I taught about the legislation last Spring, I kept being impressed that various fixes and features dealt with potential problems.

What explains the chasm between the IT and the reform design? Much alludes me, but it is clear that Obamacare’s IT had nothing like the time or talent that that the reform design had. That is bad news for the website—long term as well as short term. But it is good news for the consequences of the disastrous web site launch. As Adriana McIntyre explained, various features will protect us from death spirals and other potential disasters.

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Republicans for Government Subsidized Insurance

Congressman Steven Palazzo, Republican of Mississippi, has proposed an amendment supporting Federal government subsidies to insurance: “We have one common goal—to make sure that insurance remains available and affordable to everyone.

No, the ardent Obamacare opponent has not been bewitched by a Democratic spell. I left out of his statement one key word: “flood.” It is flood insurance that Palazzo considers essential and worthy of government subsidies, not health insurance. In fact, he finds it so essential that neither likely-to-balloon expenditures nor damaging distortions to insurance and real estate markets dissuade him.

Flood insurance subsidies are now being reduced—sharp premium increases began on Oct. 1. Palazzo’s and other Republicans’ opposition shows that they are not the anti-government ideologues they claim—and perhaps aspire—to be. And if they only cared to look, their support for flood insurance could provide a window of understanding into the reasons for Obamacare. Continue reading