Sheila Kennedy

Is This As Stupid And Worthless As It Looks?

December 29, 2018

There is a new federal rule requiring all hospitals to post a master list of prices online–enumerating the services they provide together with their prices, so that people can review them, and presumably “shop” for the best deal.

Think about that for a minute, then review the fine print on your health insurance, assuming you are fortunate enough to have health insurance. You will note that you have very little choice of what your insurer calls “provider networks.”

Think, too, about the last time you or someone in your family had a medical emergency. If you fell off a ladder, were in an auto accident, were having a heart attack or found yourself in any of a number of similar situations, your most urgent task was getting to the nearest hospital as soon as possible; I’m pretty confident you didn’t delay in order to review and compare hospitals’ charges.

There are other reasons to file this new requirement under “worthless.” Hospitals in America’s ridiculous healthcare industry don’t charge every patient the same price for the same service. Patients with insurance are actually charged less than those without, for one thing. For another, most hospitals don’t even have a good idea of what their services cost them to provide.

Some years ago, we had friends over for dinner; one of them was, at that time, vice-president of a local hospital, and I asked him to explain the infamous five-dollar aspirin. We’ve all seen those itemized bills after emergency room visits or hospital stays that include bizarre and frequently outrageous charges, including per pill pricing that vastly exceeds what the same pill would cost at the local drugstore.

Our friend’s response was honest, if not reassuring. Because hospitals must deal with multiple insurers as well as Medicare and Medicaid reimbursement rates and with uninsured patients, they engage in “innovative” and “creative” cost-accounting. In other words (although he didn’t put it quite this way), they play games with individual bills, depending upon the likely source and timing of payment.

The bottom line: unless things have changed rather dramatically since that dinner party, hospitals really don’t know what any given service actually costs them, and there is no “standard charge” for a given medical procedure.

As I have said many times, I am a believer in markets–in economic areas where markets can work. If I set out to buy a widget, I’ll shop around to see who makes the best widget for the best price. The market for widgets works, because it provides what is essential to a market transaction: a willing buyer and a willing seller, both of whom are in possession of all information relevant to the transaction.

I know what sort of widget I want, and pricing information–what widgets are going for–is easily available. The guy selling me that widget knows what his widget cost to manufacture, and how much he needs to get for it.

If I have a stomach ache, or measles, or a broken arm; if I am having a heart attack, all I know is that I need medical care. I don’t know what medical science has to say about appropriate medications and their dangers (I may not even know my diagnosis); I have no idea what my treatment options might be, which ones are least likely to manifest side effects, or what they should cost. I’m not even a “willing” buyer who can walk away if I think the price is too high. I lack the knowledge to evaluate the quality of the care I’m receiving, let alone the ability to walk away if I think that quality is substandard.

Markets simply don’t work in these situations, and knowing that a hospital has posted its “best guess” prices is irrelevant.

Every other advanced country has figured this out. I’m beginning to think that “American Exceptionalism” means “exceptionally dense.”

Comments

Forbes Is Not A Left-Wing Outlet

December 28, 2018

I’m sure the remaining members of the Trump cult dismiss every critical article about Mr. “He tells it like it is” (i.e., he’s willing to be publicly as racist and sexist as I’ve wanted to be) as leftwing propaganda.

And I’m equally sure that the fringiest left-wingers dismiss all pro-market businesspeople as apologists for the plutocracy.

They’re both wrong.

For example, Forbes Magazine (hardly a socialist outlet) recently ran an article disapproving of one of the President’s many greedy scams:

On the day Donald Trump became president of the United States, while inauguration festivities were still in full swing, he officially launched his 2020 reelection campaign. Donations poured in from more than 50,000 people across the country. But according to the latest federal filings, Trump still has not donated a penny of his own, while his businesses continued to charge the campaign for hotels, food, rent and legal consulting. That means the richest president in American history has turned $1.1 million from donors across the country into revenue for himself.

A number of articles in the mainstream press had reported on similar grifting during the 2016 campaign. But for the 2020 campaign, the game-playing has become far bolder.

Leading up to the 2016 election, the president’s campaign paid an average of $2,700 in monthly Trump Tower rent for every person listed in campaign filings as receiving a “payroll” payment. The 2020 operation, by contrast, is shelling out an average of $6,300 in monthly rent for every such person.

Then there are the payments flowing into Trump Plaza LLC, a Trump-owned entity that has taken in $42,000 of campaign money since November 2017. Although federal filings list the purpose of those payments as “rent,” it is difficult to tell what the campaign is actually renting. Trump Plaza LLC controls a retail space, garage and two brownstones near Third Avenue in New York City. The retail space at Trump Plaza shows no signs of campaign activity, and a non-Trump company seems to sub-lease the garage from Trump Plaza LLC—leaving just the two brownstones. But they are not open to the public, making it difficult to see who the tenants are, and whether they include the president’s campaign.

Curious, Forbes staked out the buildings. Their reporter arrived at 7:15 a.m. on a November morning, and stayed for the next 14 hours. During that time, seven people went in and out. One refused to talk to the reporter, and the other six said they had seen no sign of the campaign in the buildings. (Neither had the man behind the front desk at Trump Plaza. “I’ve been here since the beginning,” he said. “If there was any kind of office rented out for campaigning or whatever, I would know about it.”)

From November 2017 to August 2018, the Trump campaign paid Trump Plaza LLC an average of $4,200 per month. The real estate website StreetEasy lists recent rentals in the building for $3,700 to $3,850 per month. Candidates are permitted to do business with their own companies only if they pay fair-market prices.

There are other campaign payments that raise suspicions. One month after Robert Mueller was appointed special counsel to investigate Russian interference in the 2016 election, the campaign paid the Trump Corporation, another one of the president’s companies, $90,000 in “legal consulting” expenses, according to federal records. It is not clear what legal services Trump’s company provided the campaign, or what rate it charged for the work. A spokesperson for the Trump Organization did not respond to requests for comment.

Expenditures benefitting the candidate personally rather than the campaign are, of course, illegal. The President brags that he knows everything, but he is painfully and all-too-obviously ignorant of campaign law. Or for that matter, any law.

I would like to remind those on the political far Right who still support Trump that Forbes is hardly a “liberal” outlet.

I would like to remind those on the political far left who lump all businesses and supporters of market economics together that Forbes is not alone; there are plenty of millionaires and billionaires who are appalled by Donald Trump.

Left and Right, we’re all just waiting for Congressional Republicans to remember that they were elected to serve the country, not their party.

Comments

It Isn’t About Moderates and Progressives

December 27, 2018

Democrats are constantly arguing about whether the party should support moderate or progressive politicians. It’s an argument that illustrates Americans’ tendency to prefer nice, neat labels to the messiness of reality: most people hold a variety of positions that can’t all be neatly shoved in a drawer marked “liberal” “conservative” “socialist” and so forth.

Thinking people are hard to pigeonhole.

A paragraph from a column written for the Indianapolis Recorder by my SPEA colleague Marshawn Wolley illuminates the real issue. It’s leadership.

Voters deserve officeholders who are willing to lead–mayors and governors and Presidents who are willing to stake out reasoned positions on issues (most of which are actually ideologically neutral), willing to explain their reasoning to the public, and willing to go to bat for them.

The context of Marshawn’s column was the upcoming mayoral election in Indianapolis, where a reasonably popular Democratic incumbent will run for re-election in a city that is reliably blue. Here’s the paragraph that caught my attention.

Personally, I think the mayor’s popularity is deceptive, and perhaps even soft in the Black community, and our times do not favor political moderates. The mayor didn’t show up on mass transit, the IPS referendum and was late on living wages for city workers. Mass transit was the biggest policy issue that could impact social mobility in a generation. He didn’t lead here. IPS is not called Center Township Public Schools — it’s called “Indianapolis” Public Schools. When the mayor’s Office of Education Innovation is approving charter schools they are happening in the IPS district. He was wrong to not weigh in on the referendum. While he eventually got around to supporting living wages, Black Democrats, who really need to speak out more, argued that a balanced budget couldn’t happen on the backs of workers. Each of these issues were rallying cries within the community and he missed them — bipartisanship and a balanced budget don’t drive people to polls.

I think Marshawn has confused a fear of staking out a leadership position (and thus becoming a target for criticism) with philosophical “moderation,” but the rest of his indictment is spot on.

Reluctance to exercise leadership is a liability, and not just within the Black community.

Another excellent example of this mayor’s allergy to getting “out front” of important issues involves the State DOT announcement earlier this year of its plans to “repair” the interstates that carve up Indianapolis’ downtown. The state’s plan would double down on ungainly remnants of a fifty-year-old bad decision that impacts walkability and intrudes on five historic neighborhoods. A significant number of residents and businesses have come together to make the case for rethinking those highways; I’ve previously posted about the details of the “rethink” arguments.

Favoring a particular configuration for downtown interstates is not politically conservative, liberal, progressive or moderate.

The Mayor was finally persuaded to write a letter to the state’s DOT, supporting the ReThink plan, but has otherwise been invisible on the subject–just as he was invisible on mass transit and the IPS referendum.

It’s highly likely that political calculation drives this reluctance to engage; after all, when you take a stand, someone will disagree. Why take a chance of pissing people off when the political landscape looks advantageous–when the odds of re-election are in your favor?

On the other hand, that impulse to win office by “laying low” raises a question: why do politicians run for offices like mayor and governor if they don’t have a vision for improving their city or state? Why do they seek office if they aren’t interested in leading their communities in a particular direction? Do they view these offices merely as stepping-stones to something else?

Timidity isn’t the same thing as bipartisanship. It isn’t the same thing as moderation, either. Inaccurate labels just confuse the situation.

Comments

Who Decides?

December 26, 2018

I’m a big fan of “connecting the dots.” Too often, We The People and the lawmakers we elect fail to recognize important connections; we treat issues in isolation, and often don’t understand why our “fixes” to those problems don’t work.

In all fairness, the connections are often obscure.

Recently, the Executive Director of In the Public Interest pointed out a connection that I had totally missed, even though I study both privatization and democratic processes. He warned that privatization is part of the ongoing assault on democracy.

“It couldn’t be clearer that the fundamental democratic right to have our voices — and votes — heard is under attack. Just this week, Wisconsin’s Republican-dominated legislature slashed early voting…in the middle of the night…during a lame duck session. Bottom line: there are politicians, conservative think tanks, and corporate funders who don’t want people to be able to vote. But we’ve learned through our work that there’s another — and perhaps deeper — threat to democracy spreading nationwide, and that is privatization. When corporations take control of public goods like water, transit, and schools, we give them the ability to make decisions that should be made democratically by us, the public.”

I often tell my students that the Bill of Rights, properly understood, is America’s answer to a foundational governance question: who gets to decide? Who decides what political opinion you hold, what prayer you say (or whether you pray at all), what book you read, how many children you have, who you are permitted to publicly love?

The Bill of Rights answers those and other questions by affirming the individual’s right to make those decisions for him/herself, by guaranteeing that we each have a significant measure of personal autonomy (otherwise known as self-government). Liberty, to the Founders, meant limiting the power of government to dictate what the Supreme Court has called the “intimate” decisions of its citizens.

Democratic theory is less prescriptive than the Bill of Rights, but it rests on the assumption that citizens’ assent to important aspects of their governance is a necessary element. Politicians and political scientists can and do disagree on just what those decisions are, about what decisions must be made by the citizens in order for a system to be considered democratic, but there is unanimity on the principle that “the people” must have the final say on the issues that are properly before them.

When government contracts out, it is authorizing a private entity to make decisions relevant to the contracted function. In many cases, that’s not a problem. (Leaving the decision about how much asphalt should be put in a pothole is hardly an assault on democracy.) When government turns over control of public goods like water, transit, and especially schools, that’s a different matter, and much more troubling.

Most of the considerable criticism of privatization has revolved around management issues, cost accounting, and occasionally corruption and “pay to play.” I’ve raised constitutional concerns as well.

I think we need to add the effect on democracy to the list. Have we turned over to private enterprise an area of decision-making that ought rightfully be democratically decided? What are those areas? And what are the dangers of contracting them away?

The answers will vary, but we need to ask the questions.

Comments