Posted July 2, 2009
Health-Care Cuts Could Shift Costs
Private Sector May Face Greater Burden, Economists Say
President Obama’s plan to rein in federal spending on health care could end up shifting costs to the private sector, economists say.
Unless doctors and hospitals are able to respond to the government cuts by becoming more efficient, the result could be higher costs for insurers, employers, and people with private medical coverage, they say.
Historically, health-care spending has been a bit like a balloon: If it is squeezed in one place, it tends to bulge in another.
“I think there’s definitely risk that a portion of the reduction in hospital payments from Medicare will wind up as increased payments by private insurers,” said Paul B. Ginsburg, president of the Center for Studying Health System Change.
Depending on the circumstances, hospitals may have the motive and means to “transfer those charges to somebody else,” and “we’ll see costs increasing on the private side and not necessarily falling everywhere,” said Harold S. Luft, director of the Palo Alto Medical Foundation Research Institute.
The biggest health-care proposal that Obama announced last weekend is especially likely to move costs to the private sector, because it would cut Medicare payments without giving hospitals the tools to deliver care more cost-effectively, Luft said. The administration predicts that measure — adjusting Medicare payments to reflect productivity changes in the overall economy — would save the government $110 billion over 10 years.
Squeezing from the government’s end could make health care more efficient for everybody. “If you push on one side, you’re actually pushing on the whole thing,” said Kenneth Baer, a spokesman for the Office of Management and Budget.
But a report issued Tuesday by the Congressional Budget Office portrayed that outcome as speculative. There is no guarantee that the health-care system’s response to pressure would be greater quality or efficiency, according to the CBO analysis.
Throwing cold water on hopes for effective health-care reform, the CBO described a variety of problems that could make it hard to slow federal spending on care — and to do so without putting quality at risk.
“At this point, experts do not know exactly how to structure such reforms so as to reduce federal spending on health care significantly in the long run without harming people’s health,” the CBO said.
“Examples of efficient care certainly exist today. . . . Yet applying the methods of those efficient providers throughout the health-care system cannot be accomplished through fiat or good intentions,” it added.
The challenge is that the administration and Congress are trying to extend medical coverage to the uninsured without increasing the federal budget deficit over the next decade. As a result, they are bound by the budgetary scoring process — meaning they must come up with solutions that can predictably and measurably reduce federal outlays.
Some steps that might prove cost-effective over the long run do not necessarily mean savings for the federal budget.
Conversely, some steps that save the government money would not necessarily translate into overall reductions in national health-care spending.
If Medicare cuts payments to hospitals but the costs of treating patients stay the same, “then you have the potential for cost-shifting,” said Kenneth E. Thorpe, a professor of health policy at Emory University. But Obama is trying to implement policies “that would lead to hospitals reducing their expenditures,” he said.
One of the president’s signature proposals would reward hospitals for reducing readmission rates and penalize hospitals whose patients must return for another stay because they did not receive adequate treatment the first time. That proposal is unlikely to create a bulge in private medical costs, because it would lead hospitals to change the way they function, Thorpe said. The administration is counting on improved readmission rates to save the government $25 billion over 10 years.
Not all hospitals would have the ability to foist additional costs onto the private sector. Those most likely to make up elsewhere for cuts in government payments are major hospitals that are essential to local health networks and therefore able to wield more market clout, Ginsburg said.
The consolidation of hospitals in many communities limits private insurers’ ability to push back.
Cutting payments by Medicare, the federal program for the elderly, is a relatively blunt instrument of reform.
“Imposing slower growth in [Medicare] payments would create ongoing pressure on providers to identify and adopt efficiencies; it would also, however, create risks for providers and patients if the efficiency gains were not achieved,” the CBO said.
Part of the problem is what the CBO described as the difficulty in measuring the quality of care. If quality cannot be gauged, it is hard to reward doctors and hospitals for delivering it — and it is hard to penalize them for not doing so.
Various popular ideas about how to save money have limitations and downsides, the CBO reported.
Increasing access to preventive care, for example, is widely considered a powerful way to reduce spending, but “one study of health and economic effects of preventive services found that only 20 percent of the services that were assessed yielded net financial savings,” it said. In some instances, the cost of delivering preventive care to a large population would actually exceed the savings on the relatively few people who avoided illness as a result, CBO said.
Similarly, improving public health can reduce Medicare spending on particular problems. However, helping people live longer and healthier lives can increase the burden they put on the federal government, partly because they will spend more time collecting Medicare and Social Security benefits, the CBO reported.
Posted
Fifteen years ago, when Democratic Sen. Tom Daschle was running interference for the Clintons’ effort at health-care reform, his goal in life was to enlist Sen. Bob Dole, the hugely influential Republican leader, as a co-sponsor. Daschle never got him, and the enterprise crashed and burned.
When an interview was done with the two of them this week, Dole remarked that “we started out working together, and then it fell apart” — the victim of a massive lobbying campaign, a bunch of tactical errors by the president and first lady, and Dole’s presidential ambitions, which moved him into the camp of the Republican naysayers.
Now Daschle and Dole, along with another former Republican leader, Howard Baker, have come together with a report outlining the provisions of a possible bipartisan health bill and strong recommendations on how to pass it. (The fourth original member of this Bipartisan Policy Center board, former Senate Democratic leader George Mitchell, dropped out to become President Obama’s special envoy to the Middle East.)
In a phone conversation the day before their report was released, Daschle and Dole agreed that prospects for enactment of major reform are far better now than in 1994 — and better than they would have been even two years ago. “The situation is far more dire on costs and quality and access to care,” Daschle said. Added Dole: “You have business, labor and a whole cross section of people saying, ‘We have to have reform.’ ” But it will still be a heavy lift. Like Obama, Daschle and Dole estimate the cost of insuring the 46 million without health coverage to be $1.2 trillion over 10 years, and they say that at least half will have to come from new revenue, if the Obama goal of budget neutrality is to be met.
To raise it, they would assess large companies that do not offer employees health insurance a fee based on their payrolls — a mandate that Dole acknowledges would be hard for many Republicans to swallow. And they would impose taxes for the first time on the so-called Cadillac policies paid for by employers — a change opposed by many Democrats, by unions and by Obama when John McCain advocated it during last year’s election campaign.
But that is only the beginning of the bitter medicine Dole and Daschle are asking their fellow partisans to choke down.
Acknowledging that there is little chance for bipartisanship in the House, Dole urged Senate Republicans to give up any thought of filibustering the health bill. “We need a group of Republicans who will give an early demonstration that bipartisanship is possible,” he said.
Daschle, in turn, said he thinks the Democrats should not attempt to ram a health bill through the Senate by using the budget reconciliation device to pass it with 51 votes, rather than the 60 votes most legislation requires.
Daschle, who would have been Obama’s point man on health reform had his recent tax returns not caused him problems, made the point that a reform of this magnitude should not be forced through on a narrow majority. Australia, he said, “passed and repealed health reform several times before they got a strong enough vote to sustain it.”
It is significant that the Daschle-Dole plan sidesteps the raging controversy over whether there should be a government-sponsored plan to compete with private insurers. Obama and most other Democrats are demanding it; Republicans and conservative Democrats call it a deal-breaker.
Daschle reluctantly agreed that there would be no federal-government plan. Instead, states that want it could include such a plan on the menu for their residents, with technical help from the feds in setting it up. Five years from now, if a demand for such an option still exists, the president could recommend it, and Congress would have to vote on it.
It was damned hard for Dole and Daschle, neither of whom faces the voters or the lobbyists, to agree. It will be much harder to extract a bipartisan bill from Congress.
Posted
Where did we get the idea that the only good health-care bill is a bipartisan bill? Is bipartisanship more important than whether a proposal is practical and effective? And if bipartisanship is a legitimate goal, isn’t each party equally responsible for achieving it?
This week, the health-care debate moved from general principles to the agonizing specifics of how much reform will cost, who will pay and which groups get what.
If this were a perfect laboratory experiment, Democrats and Republicans would enter such discussions agreeing on core goals and then argue over how to tweak certain provisions and spread the costs equitably.
That’s what Howard Baker, Tom Daschle and Bob Dole, the bipartisan trio of former Senate leaders, suggested in a report yesterday. Good for them. And Max Baucus, the Democratic chairman of the Senate Finance Committee, still hopes to be health care’s Great Compromiser, this era’s Henry Clay, even if the messy particulars slowed his efforts this week.
But there should be no illusions: On health care, the two parties are far apart on the fundamentals.
Most Democrats believe that fixing the system will require increased government intervention to guarantee universal coverage and to contain costs. Most Republicans oppose an expansion of government’s role and believe an even more market-oriented system would pave the way to health-care nirvana.
Trying to achieve full bipartisanship by squaring those two views is a recipe for incoherence.
As it is, President Obama and the Democrats have already compromised a great deal. They are not proposing a government takeover of health-care financing, as single-payer advocates prefer. Instead, they are working within the confines of current arrangements.
That’s why White House Chief of Staff Rahm Emanuel can argue, as he told me recently, that any proposal Obama endorses will be “bipartisan” because “the policies in the bill will include Republican and Democratic ideas.” That’s another way of saying that any health-care bill that passes will expand government’s role but also build on the existing private health-care market.
This has not stopped Republicans from charging that Obama favors “socialized” health care run by “big government.” And even when the GOP is not using over-the-top rhetoric, the party’s own proposals make clear how far most Republicans are from Obama’s purposes.
Yesterday, House Republicans unveiled their own health-care principles, and Rep. Dave Camp of Michigan said in an interview that their willingness to do so belies the idea that he and his colleagues constitute “the party of ‘no.’ ”
Camp, a key architect of the Republican initiative, is the antithesis of the Rush Limbaugh-style shouters, a cheerful Midwesterner who has engaged in serious legislating, notably on adoption and foster care. And the Republicans’ wish list does include some less-than-sweeping but reasonable ideas (for example, making it easier for children to stay on their parents’ health plans up to the age of 25, and offering new incentives for doctors to go into primary care) that could well make it into a bipartisan bill.
But their core proposals — especially their call to expand health savings accounts and to overturn state regulations in favor of nationwide “association” health-care plans — push in exactly the wrong direction by further fragmenting the insurance market.
Doing so might cut insurance costs for those who are not ill, but at the expense of raising the already-prohibitive costs for the sick. The marketplace is good at providing options for the well-off and the healthy, but they are not the ones with problems. That’s why Obama wants the government to change the health-care market.
What this means is that most Republicans want to take themselves out of the health-care discussion altogether. For reasons of principle as well as politics, they want to rail against the costs of government action and assert — against what I would insist is overwhelming evidence — that somehow we can find a way for the market to solve our health-care problems.
Republicans have every right to do this. But they can’t refuse to play the game and then go on to condemn Obama and the Democrats for being insufficiently bipartisan.
It’s one thing to compromise to pick up votes, which, one hopes, is what Baucus is doing. It’s another to compromise in exchange for nothing at all. The first is bipartisanship with a purpose. The second is the bipartisanship of fools.
Posted
With the Introduction of President’s “Pay-As-You-Go” Legislation, Democrats Continue Commitment to Fiscal Discipline, Budget Reform
“The deficits that my Administration inherited reflect not only a severe economic downturn but also years of failing to pay for new policies… Enacting Statutory PAYGO would…represent and important step toward strengthening our budget process, cutting deficits, and reducing national debt.”
- President Barack Obama, 6/9/09
Today, House Democrats introduced President Obama’s “Statutory Pay-As-You-G- Act of 2009.” This legislation is necessary to help reverse years of recklessness by the Bush Administration, which left out Nation in an unprecedented fiscal hole, facing a deficit of $1.3 trillion. A primary focus of the Democratic Congress, restoring PAYGO will help restore fiscal discipline, allowing us to invest in America’s most important priorities while making the tough choices necessary to cut wasteful spending, address the deficit, and reduce the national debt.
PAYGO Proposal Reflects Lessons of the Past, Challenges of Today
Building on the successful efforts of the past that turned deficits into surpluses while understanding the unique challenges of today, this proposal continues to lay a vision fro fiscal reform.
* In the 1990’s, PAYGO helped turn massive deficits from the Reagan era into a record surplus under President Clinton.
* President Obama’s proposal is very similar to the original PAYGO law in the 1990’s. However, instead of requiring that legislation be deficit neutral in each year, the President’s proposal would look at the ten year cost of legislation. If the net effect of all legislation enacted during a session of Congress was paid for over then years, there would not be sequester, even if the costs were not offset in some years.
* This legislation serves as supplement to the existing House PAYGO rule. It provides an enforcement mechanism that will hold both chambers of Congress, as well as the Administration, accountable for paying for legislation.
* This legislation builds on the fiscally responsible budges put forward by the President and agreed to by Congress, in which Democrats paid for the priorities like health care, energy, and education.
* This legislation allows for Congress and the President to respond to an economic crisis by designating and exempting the costs of emergency legislation. During the recession in the early 1990s, Congress and the President enacted legislation extending unemployment benefits without offsets by designating it as emergency spending.
As the process moves forward, Democrats will work with the Administration to resolve the differences between the President’s proposal and existing House rules.
Posted June 16, 2009
Every so often, America embarks on a project so audacious that it hardly seems possible. Prime examples: the top-secret Manhattan Project that made the first operable atomic bomb, the construction of the country’s interstate highway system starting in the 1950s, and President John F. Kennedy’s challenge to land men on the moon.
These government-sponsored projects often arise during times of political or economic duress, and so it is today with the $4.5 billion of seed money for a nationwide “smart electricity grid” inserted in the economic recovery package that was approved by Congress shortly after President Barack Obama took the oath.
The leadership is pinning much of its hopes for America’s long-term economic renewal on a nationwide, interconnected system of smart electricity meters and sensors that would increase energy efficiency, reliability, and also encourage “green” technologies like wind and solar generation and hybrid cars.
It won’t be an easy feat. There are parallels between the country’s attempt to build a new electricity network and astronaut Neil Armstrong’s first steps on the moon, said Jim Marston, Texas regional director of the Environmental Defense Fund.
“NASA knew where they were trying to get and they knew where they were, and so after the goal was announced, they spent a little while figuring out the path to get there. Shortly after that, they actually put the engineering on the ground,” Marston said.
Government’s Pivotal Role
The smart grid, Marston said, is still in the planning stage, but more smart grid test projects are under way at the local level, in places like Miami; Austin, Texas; Massachusetts; and Southern California. State and local governments have facilitated many of these projects in partnership with nonprofits or technology vendors.
In April, Miami launched a $200 million smart grid project called Energy Smart Miami, with the goal of connecting almost all homes and businesses in Miami-Dade County to a smart grid by 2011. The project is being driven by the Florida Power & Light utility company, supported by General Electric and Cisco Systems. Much of the project will be funded by Obama’s economic stimulus package.
Massachusetts is signing off on a few communities’ smart grid pilots, which are mandated by the state’s 2008 Green Communities Act. In one such test, 15,000 smart meters will be installed in homes in Worcester, Mass., by National Grid, a London-based electricity generator.
In Austin, Texas, the municipally owned utility company will finish deploying smart meters to the city’s homes later this year. And a public-private initiative that includes the City Council has been formed to study how to best use the smart meters to transform Austin’s energy infrastructure.
And Southern California Edison, one of the largest utility companies in the U.S., will install 5 million smart meters in its coverage area by 2012. Edison estimates that the smart meters will save peak power consumption that’s the equivalent of one big power plant. The move toward smart grid is being motivated by California’s renewable energy portfolio standard that requires electricity companies to get at least 20 percent of the power they distribute from renewable sources by 2010.
What’s a Smart Grid?
Though regulators, politicians, vendors and environmentalists haven’t come to a consensus on what exactly constitutes a smart grid, one of its core features will be “smart” electricity meters that integrate IT. Smart meters will be installed in homes, businesses and public buildings
- virtually anywhere there’s a wall socket. Known in the power industry as “advanced metering infrastructure,” a smart meter sends a constant stream of data back to the utility companies.
From the distribution side of the equation, a smart grid would give utilities much greater control, and the ability to minimize power outages and catastrophic failures. Many utility companies today don’t have the IT on their grid to automatically detect where power is knocked out. Th
ey still rely on phone calls from affected customers. In addition, the smart grid would eliminate manual meter reading, which means no more trips into residents’ backyards. In the future, an interconnected web of sensors could monitor the electricity grid and solve load-balancing issues and other problems before they cause an outage.
“They could actually do switching of the network remotely to first identify the outage, then switch around the outage, thereby lessening the number of people who are affected by the outage,” said Guerry Waters, vice president of marketing and strategies for Oracle’s Utilities Global Business Unit. “Understanding where that needs to occur and being able to do it quite rapidly would be advantageous to the electric industry.”
From the consumer side, homeowners would conceivably save on their bills via a new class of products that would rely on two-way communication. Today a refrigerator can’t “speak” to the electricity grid - communication, therefore, is only one way. But someday, powered by the grid’s intelligence, a washing machine or thermostat could be programmed to only turn on when citywide demand is lowest. This could be achieved by redesigning the appliance itself or installing “smart plugs” at electrical sockets.
To make this new consumption model profitable, utility companies might adopt what are called “demand response” pricing models that charge users more per kilowatt-hour during peak demand and less when the electrical grid isn’t burdened. Utility companies are already testing several prototypes of online, Web-based dashboards that give homeowners a near real-time look at how much electricity each appliance in their home is consuming, and the ability to turn appliances on and off based on that information.
A utility company itself could also turn off infrastructure in a home, and the possibilities extend beyond electricity, Waters said. “One that was very clear that [Oracle] talked about to the municipal water groups was leak detection. The other would be the ability to do automatic remote connects or disconnects, or restrictions on the water. … The last one is having prepaid metering.” Smart metering could also identify water abusers during droughts, he said.
In the long term, the smart grid is also expected to help electricity generators make better use of renewable energy, like wind power and solar panels. The world’s heightened awareness of global warming - and America’s political will to cut down on imported oil - is expected to open up the proverbial floodgates for renewable energy. The U.S. economic stimulus package, by itself, is expected to spur an installed national capacity of wind power that’s 67 percent greater than it would otherwise have been, according to the U.S. Department of Energy.
The issue at hand is that in the future, electricity generation is expected to be more decentralized and intermittent than it’s traditionally been, when the bulk of electricity came from huge coal-fired power plants and nuclear reactors. Wind farms and solar panel arrays will be sprinkled across the country, and the smart grid will efficiently manage an electricity supply that’s incoming from all directions, which isn’t possible today.
Also, since wind and solar are intermittent power sources - they can start and stop abruptly - the smart grid would give utilities much-needed data about where the sun and wind is, so they could make informed decisions about when to fire up a backup power plant to meet peak demand.
And if hybrid cars and electric vehicles ever hit the streets en masse, they could plug into the grid, too.
Finally the smart grid would be built on an IT backbone via hardware and software contained in sensors. Affixed to key junctures, like transformers and substations, these sensors would collect data and quickly correct potential problems. It remains to be seen if this information would be transmitted over power lines, proprietary-use networks, wireless technology or the Internet, Waters said.
“Today there is actually two-way communications going on in the electrical grid, but it’s usually over some very protected circuitry and communications that are guarded very closely,” he said. “So the idea now is that the utility industry will open up to have one common way to communicate with all the devices of the smart grid.”
So in its simplest form, the smart grid will be composed of smart electricity meters, sensors and a grid that draws power from a system of generators that’s more decentralized than it is today. The trick will be building that system atop today’s antiquated grid, which can’t be discarded outright because it can’t be turned off.
Old and Always On
If Thomas Edison, who’s credited with inventing centralized distribution of electricity, were to travel from his era in the early 1900s and arrive at present, he’d probably recognize many components of the modern-day U.S. electricity grid, writes author Nicholas Carr, in his newest book The Big Switch: Rewiring the World, from Edison to Google. On the other hand, Edison’s contemporary Alexander Graham Bell - who invented the telephone - would be baffled by modern-day telecommunications.
“The interesting thing is that, by and large, the electricity grid in the U.S. is kind of the last of the ancient industries that has not yet been completely revamped,” Tony Erickson, global utilities director for EDS, a subsidiary of Hewlett-Packard. “So this whole concept of smart grid is something that people have been talking about for 20 years, but we’re just now kind of getting there.”
In other words, the electricity grid is like a 100-year-old legacy system that’s been left in the dust by telecom and the Internet. But it’s not as cut-and-dry as replacing an old computer system, because turning off the electricity grid isn’t an option and large-scale power outages can’t be tolerated. When the Northeast Blackout of 2003 struck the Eastern seaboard and left 50 million people in the dark, the biggest power outage in North America’s history cost the economy at least $6 billion.
The power industry and government regulators recognize that coming quickly to agreement on standards for the smart grid’s equipment and IT will speed its construction, Erickson said. But the country can’t wait for those standards to be written, Erickson said, because by the time they’re approved, the technology - the smart grid - would be outdated.
“Several communities and organizations - government, private and commercial - are forming [smart grid] standards boards, and just like the battle between the Blu-ray and [high-definition] DVD format war, we’ll see which ones win out,” Erickson said. “Eventually I’m confident we will have open standards, because those standards will be what spur entrepreneurial people to create the technology that’s going to help us drive this thing forward. So we’re kind of building it in-flight, and we have to keep the lights on while we do this.”
In the meantime, communities like Austin are launching their own smart grid projects.
In December, a coalition that included the Austin City Council; Austin Energy, the city-owned utility company; the University of Texas; the city’s chamber of commerce; and the Environmental Defense Fund announced the Pecan Street Project, an initiative to redesign every facet of Austin’s energy infrastructure. A main focus of the project will be to figure out how to take advantage of Austin’s smart meters.
The project will attempt to add more distributed renewable energy in Austin than currently exists elsewhere in the U.S., dramatically reduce the amount of energy that’s consumed, and shift the energy that’s consumed to be more coincident to the time that renewable energy is available. In addition, Marston said the stakeholders want to create a new business model that will allow electric companies to thrive - rather than just survive - in an environment in which less electricity is being sold, and distributors own less of the electricity that’s being used.
“A big part of the project is smart grid, but it’s not only smart grid. It’s smart appliances, smart plugs as well as smart meters,” Marston said. “The idea is we will use all of these technologies to dramatically reduce and shift load, and use consumer choice and even real-time rates to help that work.”
The government side is what makes the project possible, he said.
“The municipal utility company, Austin Energy, is fairly unique because the board of directors is the City Council, so it’s the same folks who also do land-use planning, zoning and building codes,” Marston said. “So I think many of the things we’ll be doing will not be directly at the utility, but putting a building code in, for example, that says all new homes, with a few exceptions, will have to have solar hot water heaters in them. For instance, we’ll probably say all new parking garages in them will have to have discharging for plug-in hybrids.”
Posted
Secretary of Transportation Rau LaHood recently made available $1.5 billion in TIGER (Transportation Investment Generating Economic Recovery) discretionary grants for capital investment in surface transportation projects. Grants will be awarded on a competitive basis to projects that have a significant impact on the nation, a region or metropolitan area and can create jobs and benefit economically distressed areas.
The grants can range from $20 million up to $300 million to support high impact transportation projects. Secretary LaHood can waive the minimum grant requirement for beneficial projects in smaller cities, regions or states.
The solicitation published in the Federal Register provides clear criteria for the department to make merit-based decisions on the new discretionary program.
Primary selection criteria include contributing to the medium - to long-term economic competitiveness of the nation, improving the condition of existing transportation facilities and systems, improving the quality of living and working environments through livable communities, improving energy efficiency and reducing greenhouse gas emissions and improving the safety of U.S. transportation facilities.
The Department will also give priority to projects that are expected to quickly create and preserve jobs and stimulate rapid increases in economic activity, especially projects that will benefit economically distressed areas.
Applications for TIGER discretionary grants must be submitted by September 15, 2009, from state and local governments, including U.S. territories, tribal governments, transit agencies, port authorities and others.
Posted
WASHINGTON, DC - House Majority Leader Steny H. Hoyer (MD) released the following statement on President Obama’s health care reform to a town-hall meeting in Green Bay, Wisconsin:
“President Obama brought a strong case for health care reform to a town-hall meeting in Green Bay, Wisconsin-the same case that has resonated with so many Americans all across the country. The President’s argument was persuasive; but even more convincing is the reality that Americans see around them every day with families and businesses struggling under the weight of rising costs, the denial of coverage based on pre-existing conditions, and the uncertainty of many who have health insurance, but stand just one diagnosis away from bankruptcy.
“Both the House and the Senate are working hard toward our goal of passing a reform bill this year that will increase choices for Americans among a variety of high-quality private and public health insurance options, and ensure that if you like the insurance you currently have, you can keep it. We believe it will also lower health care costs, expand access to high-quality care, and preservation of patient choice.
“President Obama also identified health care costs as the prime contributor to our nation’s poor fiscal health. I agree, and I will continue to advocate for a health care reform proposal that makes the hard choices necessary to bring costs down.”
Posted
A Dose of Reality: Myth vs. Fact on Health Reform
In an effort to obstruct the comprehensive health care reform that Americans want, Republicans have resorted to spreading false information about Democratic proposals to lower costs, preserve and expand patient choice, and assure access to quality, affordable care for all. Americans want solutions, not the same old partisan politics intended to preserve the status quo.
See below and CLICK HERE for Myth vs. Fact sheet on false Republican claims regarding Democratic proposals for reform.
GOP MYTH: Health reform means fewer choices for Americans.
FACT: The House proposal will increase choice among an array of high-quality private and public health insurance options. Most importantly, if you like what you have, you can keep it. More Americans will have access to greater choices in doctors and plans by taking away the insurance industry’s ability to deny coverage and care.
GOP MYTH: Health reform means bureaucrats will ration health care.
FACT: The House proposal will expand and improve the availability of quality health care for all Americans, not ration it. Under this proposal, doctors, nurses and patients will make medical decisions, not big insurance companies or the government. Republicans content with the status quo want to leave patients at the mercy of big insurance companies that make decisions to protect profits not patients.
GOP MYTH: Health reform means raising taxes, or making coverage more expensive.
FACT: Under the status quo, middle-class families pay an enormous “hidden tax” of nearly $1,100 per year to provide care for the uninsured and underinsured. The House proposal will end this tax by containing overall costs and expanding access to affordable care for all Americans. Additionally, the House proposal invests in reforms to contain the costs of health insurance overburdening businesses, families and the federal deficit. Republicans can either continue to be the “Party of No” and defend the status quo that is costing American families and businesses more every year, or they can be part of the solution.
GOP MYTH: Health reform means Americans will be forced out of their current plans.
FACT: The House proposal builds on what works - the employer-based system - while giving every American the peace of mind of knowing that their health needs will be covered by insurance. No one will have to worry about being denied insurance based on a pre-existing condition, or being without coverage if their employer drops coverage, they lose their job, or change employers. Republicans make this claim based on a study of a proposal that is nothing like the House proposal.
GOP MYTH: Health reform means individuals will be forced to buy insurance they can’t afford.
FACT: Millions of Americans cannot afford insurance today or are locked out of the system because of a pre-existing condition. The House proposal emphasizes shared responsibility among individuals, businesses and the government and helps make coverage affordable and available to all. Affordability credits will be available to help low- and moderate- income working families afford coverage, regardless of the plan they choose.
GOP MYTH: Health reform will force businesses to cut jobs and squeeze small businesses.
FACT: All businesses will benefit from insurance market reforms and a high performing health system that will reduce costs of healthcare. The status quo is unsustainable for businesses. Under the House proposal, employers will continue to offer their employees healthcare or contribute towards coverage. Certain very small businesses would be exempt from this requirement. With tax credits and a reformed market that ensures access to affordable coverage, small business owners and their employees will have new options to purchase affordable health insurance that are not available to them now.
GOP MYTH: Health reform that builds on Medicare and Medicaid will only hurt the programs’ long-term sustainability, and cost state and federal governments more.
FACT: Health reform is a critical first step toward containing healthcare costs for business, individuals, and the federal government in Medicare and Medicaid. By eliminating wasteful overpayments to private plans under Medicare, reforming how doctors are reimbursed, and creating new incentives for coordinated, high quality care we will extend Trust Fund solvency and improve Medicare for generations to come.
Posted June 1, 2009
The state of California has been granted $1.1 billion by the Department of Energy (DOE) through the American Recovery and Reinvestment Act of 2009 and many California cities are hoping to capitalize on an opportunity to boost their energy efficiency because of it.
Of that $1.1 billion, $351.6 million will go to local governments for energy efficiency efforts through the new federal Energy Efficiency and Conservation Block Grant Program. Local governments with a population of more that 30,000 are currently in the application process for their piece of the pie.
Those with less than 30,000 are awaiting information on the competitive grant process. Applications are due on June 25 and the DOE is looking for projects that create jobs, meet the objectives of the program and are using the money for eligible activities, said DOE spokeswoman Jen Stutsman.
“If an application doesn’t do one of those things, we will go back and forth with these local governments until we can get a plan that we can approve” Stutsman said. “Our goal, absolutely, is to get these funds to the states and city governments.”
Posted
For many city councils, the price of democracy is that moment of peak fatigue, after deliberations have gone on too deliberately. A rule of thumb, when the meeting goes late, the quality of discussion is not great.
For that reason, many city councils have rules that put a fence around how late a meeting can go. Tempers were short and angry words were exchanged when a recent Berkeley meeting went past midnight and more members of the public wanted to be heard on the topic of a draft of a city’s Climate Action Plan. At the end of the meeting, bleary council members were unsure if they were voting on a resolution to extend the voting on amendments to the Climate Action Plan.
Most California cities wrestle at one time or another with the proper way to close discussion and vote on issues before council members become punchy. Often this is expressed by putting a time limit on speakers. Most cities have a three- or five-minute limit on speakers. In Berkeley, this limit is two minutes.
At one time Berkeley council meetings started with a “lottery” in which five people’s names were drawn out of a drum, out of all who wished to speak on non-public hearing matters. After some people objected, the city received a legal opinion that the method was illegal. If less than 10 residents have signed up to speak, they get two minutes each. If it’s more than 10, they get one minute.
The Berkeley council policy guide has this rule:
No council meeting shall continue past 11:00 pm unless a two-thirds majority of the Council votes to extend the meeting to discuss specified any motion to extend the meeting beyond 11:00 pm shall include a list of specific agenda items to be covered and shall specify in which order items shall be handled.
Sometimes it’s enough just to raise awareness.
Posted
After three years of drought that has left the state’s biggest reservoirs well below capacity, water agencies up and down the state are using methods to cajole customers into conserving California’s most precious commodity. The Association of California Water Agencies reports that 62 agencies statewide have implemented voluntary conservation measures and 32 have imposed mandatory water restrictions. The Sierra Nevada snowpack, which accounts for a third of the state’s water supply, stands at 66 percent of normal.
The two biggest reservoirs in the state, Shasta and Oroville, are well below their average storage at 76 and 71 percent, respectively. Water purveyors around the state are spending millions of dollars convincing their customers that they need to conserve water. Some are issuing for blatant water wasting and many are imposing drought rates that discourage high usage. In most cases, consumers are getting the message.
In Los Angeles, water conservation teams in clearly marked cars patrol the streets on the lookout for water wasters, the thoughtless few who and when they aren’t supposed to or flooding the gutter by overspraying. Violators get a warning the first time - but after that could be hit with a ticket. Repeat offenders could be dinged up to $600 for ignoring previous warning.
So far, the Los Angeles Department of Water and Power’s 3.8 million customers have cut back by 5 percent of their water use, still short of the percent goal. Starting June 1, outdoor irrigation will be limited to Mondays and Thursdays with no watering allowed between 9 a.m. and 4 p.m.. The rate system will reward customers who conserve and penalize those who don’t. “We have no choice but to make conserving water the law,” says Nahai, the CEO and general manager of the LADWP. “Cutting back on water use is now our civic duty.”
In the Northern California city of Novato, customers served by the North Marin Water District who are caught washing down the sidewalk, no automatic shutoff on their hoses or overwatering, are issued a warning. If the violation isn’t corrected in a reasonable amount of time, their service is disconnected and it will cost them $100 to have it reconnected. A second violation results in a $200 reconnection charge and a flow restrictor on their service.
Among the areas hardest hit by a third of drought is the San Joaquin Valley, where many farmers rely on the state and federal water projects for deliveries. The Westlands Water District, which serves 600,000 acres of farmland in Fresno and Kings counties, will receive just 10 percent of what it normally gets from the Bureau of Reclamation, which operates the Central Valley Water Project.
What that means for the district’s farmers is more expensive water, fields and more pressure on an already over-drawn groundwater system. Westlands spokesperson Sarah Woolf said even if the bureau increases water allocations in the coming weeks, it wouldn’t help farmers this year.
The drastic reduction in water deliveries from the Central Valley Project has forced farmers to greatly increase groundwater pumping, which has set off environmental impacts. The district has yet to take criminal action against any of its customers.
In L.A., the DWP has issued 3,600 citations in the past year for water wasters. A second citation results in a monetary fine. One district used a combination of higher rates and a vigorous public outreach campaign to coax its customers into conserving water. The East Bay Municipal Utilities District cut their water use by 13 percent after the district’s 1.3 million customers opted out of the drought emergency.
All those conservation efforts won’t prevent water rates from increasing for the district’s customers, however. Because of the great job of conserving water, EBMUD’s customers will face a 7.5 percent rate increase later this summer. As water sales drop, so do revenues for water districts, which rely on water sales for a lot of their budgets. But, the agencies have a high percentage of fixed costs for overhead and labor, and the sales deficit must be made up somewhere.
Posted
In California’s latest doom-and-gloom announcement, Governor Schwarzenegger’s Department of Finance on Tuesday proposed closing the state’s main welfare program, releasing nonviolent prisoners one year early and shuttering up to 80 percent of state parks to shrink the state’s $24.3 billion budget deficit.
Schwarzenegger wants $5.6 billion in new cuts to replace a like amount of borrowing he proposed in his budget plan earlier this month. The Republican governor previously asked for more than $15 billion in other savings by slashing schools and Medi-Cal, laying off 5,000 state workers and borrowing money from local governments.
Several of the latest cuts were eye-openers, but the largest was the wholesale elimination of the California Work Opportunity and Responsibility to Kids Program, which provides grants to parents that people commonly refer to as “welfare.”
Nearly 1.3 million Californians received CalWORKs payments in February, almost 1 million of whom were children. The state would save $1.3 billion next year by eliminating CalWORKs but lose three times as much in federal funds.
“It boggles the mind that California would be the only state in the Union without a CalWORKs-type program,” said Frank Mecca, executive director of the County Welfare Directors Association. “In fact, we’d be, to our knowledge, the only state in a country in the entire First World not to have subsistence benefits for children.”
Department of Finance Chief Deputy Director Ana Matosantos laid out the governor’s plan during a conference committee hearing, going through each proposal line by line, prompting questions - and expressions of shock. Democratic committee members took issue with many ideas but pledged to consider them in hearings.
Besides the CalWORKs elimination, more than 900,000 low-income children would lose medical coverage under a proposal to eliminate the state’s Healthy Families program, saving $250 million.
“I would hate to see us eliminate the safety net at a time of rising unemployment, people losing their homes and increasing homelessness,” said Assembly Speaker Karen Bass, D-Los Angeles, in a telephone interview. “Having said that, I do completely recognize the revenue situation is serious.”
Schwarzenegger envisions phasing out Cal Grants for low-income college students. He would save $10 million by giving only $7,000 to the University of California’s Hastings College of Law, the bare minimum so as not to upset the state’s 19th-century contract with the Hastings family. And he wants to defend state parks, forcing them to rely on user fees.
“It could be upwards of 80 percent of parks not having sufficient fee revenues to continue to operate,” Matosantos said.
A Schwarzenegger proposal to close parks last year didn’t go anywhere, but the state’s fiscal condition has worsened considerably since then.
The Governor’s plan would release a year early, about 19,000 nonviolent, non-serious prisoners not convicted of sex offenses, saving $120 million. He also would seek $790 million in savings by reducing inmate services such as substance abuse counseling and vocational education.
The Governor proposes saving $150 million by retaining a two-day furlough for state workers.
Schwarzenegger would cut Medi-Cal services such as dialysis, breast cancer treatment for women over 65 and non-emergency care for undocumented immigrants.
Assemblywoman Noreen Evans, D-Santa Rosa, Chairwoman of the Assembly Budget Committee, said it would be more responsible to seek additional taxes.
“With this proposal, the Governor’s made it very clear he’d rather throw women and children out of the lifeboat before he raises taxes,” she said.
But Assemblyman Roger Niello, R-Fair Oaks,said the state’s economy cannot sustain further tax increases, so there are no other options.
“I think everybody here would agree, Republicans and Democrats alike, that we would not want to make these drastic reductions that we’re going to be making if we didn’t have to,” Niello said. “But the unfortunate fact is, we have to.”
In a speech to California small-business leaders in Sacramento, Schwarzenegger lamented the various cuts he had proposed this month, saying, “Behind every one of those dollars that we cut there are real faces.”
But he warned that “if we don’t make those cuts, I think that we will face catastrophic consequences.”
And Schwarzenegger isn’t done yet. The governor’s aides are expected to outline an additional $3 billion in cuts by Friday, responding to new projections showing that the deficit is larger than he originally anticipated.
During Tuesday’s hearing, nonpartisan Legislative Analyst Mac Taylor suggested there were better ways to eliminate the shortfall that would allow the state to leverage federal dollars.
“You rightly were concerned about the draconian nature of some of those (cuts), because I think it’s a whole difference from the kind of options you saw in the May revision or, frankly, the kind of options that we put on the table,” Taylor told Evans.
Lawmakers and Schwarzenegger agreed in February to close $36 billion of a $42 billion budget deficit with a mix of higher taxes and spending cuts. But they used outdated data and underestimated the extent to which the economy would stall. Voters last week rejected $6 billion in other solutions.
State leaders face pressure to resolve the deficit quickly. California must borrow between $10 billion and $23 billion starting in July to pay its bills. To do so, the state needs to show investors that it has a balanced budget in place. Meanwhile, the state will lose the opportunity to cut money from the 2008-09 budget year that ends June 30 if leaders wait until July.
Schwarzenegger has ruled out tax increases, saying that voters who rejected last week’s special election measures said they wanted no more taxes.
Posted May 18, 2009
Bring on the autopsy. If the polling is any indication, California voters will defeat the five budget balancing measures, Propositions 1A through 1E, today. Not only do both the Field and PPIC polls show the measures losing, but opinion seems to be hardening against them. According PPIC, those voters following the measures closest are the most vigorously opposed. Fifty two percent of likely voters oppose Proposition 1A, the spending cap/tax measure. But among those following the measure most closely, 65 percent are opposed and only 29 percent are in favor.
If the measures go down, two factors will be at play. The voters do not seem to believe the legislature is capable of reforming itself, thus they are unimpressed with the “rainy day” spending cap Governor Schwarzenegger and proponents have pushed so hard for.
And they are opposed to the additional burden of higher sales taxes, a higher car tax and increased income taxes, all of which fall on the state’s voters. As part of the budget compromise, the legislature declined to impose any industry specific taxes (no doubt to not arouse industry opposition) and instead raised broad based taxes. But the voters have already turned down higher taxes on rich people, oil companies and tobacco companies - so why did the legislature think voters would support higher taxes on themselves.
So who are the winners and losers if the measures fail? That’s easy. Everyone is a loser. Republicans said they were for a spending cap, but they are not supporting Proposition 1A, that has a spending cap. GOP anti-tax activists say it won’t hold down spending, but how do they know if it is not tried.
Legislative Republicans ousted their leadership over the tax increases and are recalling members who voted for the tax package. But in the process, they alienated themselves from business, which wants the ballot measures, and the governor, who is the only one who can raise any money for the state GOP (not that he cares about that anymore.) Will the new GOP legislative leaders be players in what happens next? Probably not.
Democrats are losers in the short run; they must still govern and make the draconian cuts that will be necessary if the measures fail. But they can be winners in the long run. The tax increases will now expire in 2011, but if Democrats under new party boss John Burton put their minds to it they can win two thirds control in both houses, and in 2011 they can make the tax cuts permanent, and do so without worrying about a spending cap. That’s having your cake and eating it too.
Given plummeting GOP registration throughout the state, all the Democrats need to do is spend $5 to $10 million in a half dozen Assembly and Senate seats in 2010 - dollars they can easily raise — and they will take full control of both houses of the legislature. In 1975, when Jerry Brown first became governor, Democrats had effective two thirds margins in both houses; funny if Jerry Brown becomes governor in 2010 and this is all repeated 36 years later.
Finally, Governor Schwarzenegger is certainly a loser too, but he also has a window of opportunity. His numbers have plummeted largely because the public no longer believes him. He said he would not raise taxes and he did so. There is no chance of passing another tax bill, but liberal Democrats will concoct 41-vote fee bills that do the same thing. They passed one in January to impose an oil severance tax and a gas tax fee that Schwarzenegger vetoed.
Once the people have spoken, Schwarzenegger should say no to any new taxes, especially those disguised as fees. If the voters on May 19 vote for draconian budget cuts, the governor should see that they get them.
Posted
The Governor issues two budget proposals today, one suggesting how he plans to fill the budget hole if the special election ballot measures pass, the other showing how he’ll fill the bigger hole if they fail.
Either way, whether the budget is 15 billion dollars out-of-whack or 21 billion, cuts will happen.
Arguing that many of the suggested cuts are scare tactics, some have referred to similar tactics employed in the past, especially during the famous California tax revolt of 1978. Few of the threatened cuts at that time came to pass. One big difference from then to now is that in 1978 the state was sitting on a 40% state budget surplus. Now there is a about a 40% state budget deficit.
So there will be cuts. The focus now is how they will be employed. Many cuts should be made and have been needed for a long time. Agency consolidation, unnecessary commissions and sale of excess property have been argued over for years and will be the first on the agenda. But that will not be enough, and cuts will come to local governments and schools and other mainline services.
With the schools, will the initial cuts fall on the teachers, who are always mentioned first, or administrators, who are rarely mentioned at all?
Los Angeles mayor Antonio Villaraigosa gave a hint yesterday where any government will have to look for cuts. At a news conference, he explained that he would call a fiscal emergency for the city allowing him to lay off some city employees and furlough others. State personnel will also feel the sting of reduced revenue.
The fight for more revenue will not go away if the ballot measures are rejected. While taxes will be nearly impossible to pass in the legislature, there will be calls for targeted taxes, and there certainly will be efforts to pass fees with a simple majority vote. However, if the voters reject taxes they will view fees as the same thing and will not be interested.
The one certainty with the ballooning deficit is that cuts are coming.
Posted
With the World Health Organizations raising the pandemic alert level to Phase 5 last week - which means human-to-human spread of the virus into at least two countries in one WHO region, a strong signal that a pandemic is imminent and that the time to finalize the organization, communication, and implementation of the planned mitigation measures is short - preparations for a possible international pandemic take on even more urgency.
The head of the World Health Organization, Margaret Chan told Britain’s Financial Times on Monday that the apparent decline in mortality rates did not mean the pandemic was coming to an end. It is quite possible that a second wave may strike “with a vengeance.”
“If it’s going to happen it would be the biggest of all outbreaks the world has faced in the 21st century,” the business daily quoted her as saying. “We hope the virus fizzles out, because if it doesn’t we are heading for a big outbreak. I’m not predicting the pandemic will blow up, but if I miss it and we don’t prepare, I fail. I’d rather over-prepare than not prepare.” She added the end of the flu season in the northern hemisphere meant any initial outbreak could be fairly mild, but a second wave reemerging in the fall could be more lethal.
Much of the preparedness from a local government perspective involves adequate steps to contain the contagion as it emerges. But what about prisons - places where people are locked up together in a closed environment?
With more than 9 million people incarcerated across the globe and 2.25 million in U.S. jails and prisons alone, it is vital that correctional officials and health professionals be prepared for a worst-case scenario that involves pandemic influenza reaching inmates and staff.
With collaborative planning and training, prison and public health officials can help control influenza outbreaks behind bars, according to an article in the April issue of the Journal of Correctional Health Care.
For a model of prison preparedness, the article cites a two-day conference on prison pandemic preparedness that was held in Georgia in 2007. Administrators, medical doctors, registered nurses, physician assistants, and pharmacists were among the participants, as well as state and local public health officials.This conference, suggest the authors, could serve as a model for such training.
The objectives of the conference were to educate participants about pandemic flu issues in prison settings, provide impetus for initial planning in Georgia’s prisons, and elicit ideas about how the prisons could best prepare for and respond to pandemic flu.
Effective training about pandemic influenza requires more than just classroom lectures or checklists, the authors write. The conference employed interactive methods and educational games that proved effective in training participants.
Posted
The Governor and The Legislature are right on the budget challenges. The deficit is growing and despite what the outcome is with the ballot measures, the State will continue to impose more mandates on local government without providing funding. This is a practice that has gone on for decades even though it is a violation of State governance.
The National Alliance for Health Communities has been successful over the years in assisting communities in protecting their financial resources and in most cased improving funds from the State and federal government. The first step is always to protect what you already have.
Key elements in protecting what you have are demonstrated through programs that we have developed that establish the needs for liveable communities and regional assets. The key is always in the documentation or the “facts”.
Please note, statements and opinions expressed are solely those of their respective authors and may not represent the views of The National Alliance for Healthy Communities or its employees thereof. The National Alliance for Healthy Communities is not responsible for the accuracy of any of the information.
Posted May 7, 2009
On Tuesday May 5, Robert M. Levy was invited to join the League of California Cities and other local government stakeholders in a conference call with the Governor’s Office during which the Governor’s staff discussed options they are considering for the 2009-10 May Revision to address an $8 to $14 billion budget hole. Under consideration is a proposal to borrow an estimated $2 billion from local government under Proposition 1A (2004).
The Governor’s staff was immediately reminded that this plan is completely irresponsible and does nothing to solve the state’s long-term budget issues. It is a short-term maneuver that will have long-lasting consequences. Suspension of Proposition 1A undermines any effort to restore the state to fiscal stability and will devastate counties and the people we serve.
Irrespective of what happens in the May 19 special election, it appears that all options will be on the table as the state grapples with its growing deficit. Tuesday’s call is just the start of the budget debate and what will likely be another long summer at the Capitol.
Other key points about the suspension proposal:
· Counties are struggling with day-to-day operations, while dealing with an unprecedented demand for human services due to the economic downturn. Services will be significantly disrupted under this borrowing plan and many counties simply will not be able to provide the levels of services our constituents depend on. Counties have made drastic cuts to health and human services programs, public safety, and other vital services due to declines in local revenues and funding cuts by the state. Those cuts and disruption of services will only become more severe under this plan.
· The state has a constitutional obligation to repay this “loan” within three years with interest. That deadline will hit at the same time taxes and fees approved under the state budget in February will expire, if the May ballot measures fail - making it even more difficult for the state to meet its obligation to repay local governments.
· Local governments will have difficulty borrowing against the state’s obligated repayment due to the poor condition of the credit markets. In these unprecedented economic times, counties do not have the ability to simply borrow our way out of this problem.
We will keep you apprised of any developments that materialize. In considering this particular series of events, though, one must take into account the timing of these discussions, the May 19 Special Election and the May Revision, expected to be released on May 28.
For more information please contact us at (310)440-8606.
Posted May 4, 2009
Vice President Joe Biden today announced $300 million in funding from the American Recovery and Reinvestment Act for state and local governments and transit authorities to expand fleets of clean vehicles and the fueling infrastructure necessary to support them.
Biden acknowledged the commitments state and local governments have made to reducing green house gases and carbon emissions. “From advanced battery cars to hybrid-electric city buses, we’re going put Recovery Act dollars to work deploying cleaner, greener vehicles in cities and towns across the nation that will cut costs, reduce pollution and create the jobs that will drive our economic recovery,” he said.
The Clean Cities program offers $300 million to support at least 30 alternative fuels or advanced vehicles projects and requires a 50 percent participant cost share. Technologies eligible to be funded include a number of different light and heavy-duty vehicles, including hybrid, plug-in electric hybrid, hydraulic hybrid, electric, fuel cell, and compressed natural gas vehicles. In addition, projects can support refueling infrastructure for alternative fuels, including biofuels and natural gas. Other efforts eligible for funds include public awareness campaigns and training programs on alternative fuel and advanced technology vehicles and infrastructure.
The Clean Cities program is a government-industry partnership led by the Department of Energy’s Office of Energy Efficiency and Renewable Energy that promotes the growth of alternative fuels and showcases the potential of advanced fuels and vehicles. The existing program has helped put more than half a million alternative fuel vehicles on the road and played a role in the construction of thousands of alternative refueling stations.
Applicants to the program must be state governments, local governments, or metropolitan transit authorities, that partner with a designated Clean Cities coalition. Once awarded, these funds will help local and state government agencies make investments in clean transportation vehicles and fuels that they may not have the resources to do otherwise.
Please note, statements and opinions expressed are solely those of their respective authors and may not represent the views of The National Alliance for Healthy Communities or its employees thereof. The National Alliance for Healthy Communities is not responsible for the accuracy of any of the information.
Posted
The budget that just passed both houses of Congress has given the prospects for health-care reform this year a big boost. With the inclusion of procedural language that would make it impossible for opponents to filibuster, it will now take a simple majority to pass the Senate, rather than 60 votes, simplifying the political arithmetic considerably.
But that is only the beginning. As hard as it will be for lawmakers to navigate the political and philosophical minefields to get to 51 votes for health-care reform, the most difficult challenge of all may be the number on the bottom line. Under the budget rules, any reform scheme will have to pay for itself within six years.
Trying to meet that ambitious goal in such a short time frame may make it hard for lawmakers to make the wisest policy choices. Though advocates say that fixing the health system promises big savings over the long haul, it will take some big, up-front investments - in technology and preventive care, for instance - whose benefits will not begin to take effect for years. And most of the savings will accrue not to the Federal Government - whose direct costs for health care are felt largely through the Medicare and Medicaid programs - but to the economy writ large, where health care now accounts for about 17% of all spending, more than double its percentage in 1970. “Ironically, the things that may wind up being the most important are the things that we will get little or no credit for” under the budget rules, says White House Office of Management and Budget Director Peter Orszag.
So daunting is the prospect of passing a bill that fits the confines of a pay-as-you-go budget that a coalition of 30 organizations pushing for health-care reform - including the U.S. Chamber of Commerce, organized labor, the drug lobby, AARP and organizations representing hospitals, doctors and patients - wrote a letter in March asking lawmakers to suspend the rule with respect to health-care reform. But officials at both ends of Pennsylvania Avenue say that would be political suicide at a time of record deficits - and a guarantee that Republicans and fiscally conservative Democrats would not support the plan.
So where will lawmakers find the money? President Obama proposed a $634 billion “reserve fund,” paid for by higher taxes on the wealthy, but even if that passes, experts say it won’t be enough to cover even half the cost of comprehensive health-care reform over the next 10 years. Hospitals and doctors are also bracing for what they expect will be efforts to cut the reimbursements they get for treating patients under Medicare and Medicaid.
One of the biggest ways to raise money to pay for health-care reform is also the most politically delicate: taxing employer-provided health benefits. It’s an idea that Obama criticized when his opponent John McCain proposed it during last year’s presidential campaign, but one that his top White House advisers now say should remain on the table. And it is an approach that Senate Finance Committee chairman Max Baucus says he is considering.
It’s easy to see the appeal, if you look at the numbers. The Congressional Budget Office has estimated that fully counting employer-provided health benefits as taxable income could bring as much as $246 billion a year into federal coffers. But the politics of taxing something that workers now believe they get for free would be treacherous. More likely than a total elimination of the favorable tax treatment is the prospect of putting some kind of limit on that deduction - forcing workers to pay taxes, for instance, if their employer offers a particularly lavish plan. Or lawmakers may come at it another way, curbing the tax deduction that companies can take for offering those benefits.
Such choices get to the real truth behind the cold hard numbers of health-care reform. Every one of them is a political calculation, one that pits one constituency against another. Can lawmakers really balance the books on health-care reform? “You can do it,” says former Senate majority leader Tom Daschle, a leading voice in the health-care-reform effort. “It’s just a matter of how much pain you want to endure.”
Please note, statements and opinions expressed are solely those of their respective authors and may not represent the views of The National Alliance for Healthy Communities or its employees thereof. The National Alliance for Healthy Communities is not responsible for the accuracy of any of the information.
Posted
Two groups targeting California politics for extreme makeovers have made enhancing revenue streams for local government a focal point of the argument for supporting drastic change.
California Forward and the Bay Area Council both think the state has fallen into a rut, dressing the same tired budgeting tricks in tacky clothes and parading it around like a new solution.
They want a transformation starting at the city and county level, but they are selling different paths to slimming down big government-style budgeting.
“We need to move government closer to the people,” said Robert Hertzberg, former Democratic speaker of the state Assembly and now California Forward co-chair, at a Sacramento Press Club lunch while on a multi-media promotional tour.
California Forward (www.caforward.org), a bipartisan group funded largely by foundations, wants to change the way budgeting works in California.
The group started with a legislative study group to improve state spending plans and hopes to convince the legislature to put proposals for tax reform on the 2010 or 2012 ballot.
“We want to restore flexibility for local governments by giving them more control over their budgets,” explained Jim Mayer, California Forward executive director.
How much flexibility?
“They should have authority over raising and lowering taxes and managing programs. The state’s role is to set minimum standards and then let cities and counties - counties in particular - decide how to provide services.”
Allowing councils and boards of supervisors to decide whether to move some law enforcement funds into social services or the other way around based on the city’s individual situation and administrator preferences can be a compelling argument.
The Bay Area Council (www.bayareacouncil.org), another bi-partisan group, funded mainly by business, has called for a Constitutional Convention to overhaul the budget process and wants to put the idea to a statewide vote as early as 2010.
Last year, the group hired Oakland-based Fairbank, Maslin, Maullin & Associates to conduct a poll on public attitudes toward the idea.
Of the 800 people interviewed, 82 percent said the state is headed in the wrong direction.
Almost that many (80 percent) were extremely, very seriously or somewhat seriously concerned with how the state collects and distributes funds to local governments and schools.
Of the specific reforms polled for possible inclusion in the ballot initiative, the one that received the most support was the local control question.
Pollsters asked if the respondents would support “permitting local governments to keep locally collected taxes instead of sending them to Sacramento and having them redistributed back to local governments.” A total of 68 percent responded positively.
“More locally-collected funds should stay local,” concluded John Grubb, Bay Area Council senior vice president of external affairs.
How either of these groups will specifically make that happen will have to wait until the big reveal, probably after the May special election results show just how bad the state is in need of a new ‘do.
Please note, statements and opinions expressed are solely those of their respective authors and may not represent the views of The National Alliance for Healthy Communities or its employees thereof. The National Alliance for Healthy Communities is not responsible for the accuracy of any of the information.
