Deschutes County Democratic Party.............
From: the New Economic Perspective
Professor William Black helps us understand:
The infected, odiferous, and bad tasting pink slime (aka, the “higher standard”) secretly added to our burgers for over a decade would be embarrassing to any system that pretends to the label “free enterprise,” but it has special resonance amongst economists. Adam Smith’s most famous saying, which captures his central vision of markets, is a seemingly paradoxical tale about butchers. He wrote that we could rely on the butcher providing us with wholesome meat not because of his altruism, but because of his far more reliable devotion to self-interest. Our butcher may not care about us, but he cares about whether he gets our business. This causes him to act reliably as if he cared for our well-being. He knows that if he sells us unfit meat we will cease buying meat from him and his business will fail. Pink slime is inconceivable in Adam Smith’s ode to the self-interested butcher.
Relying on corporate butchers’ self-interest (greed) has been proven to be unreliable by the pink slime deception. Greedy corporate butchers taught that they should not really care about the customer’s well-being realized that they could maximize their self-interest by selling us pink slime as long as they could do so secretly.
Modern finance theory extended Smith’s paradoxical tale about the butcher to the financial world. Theorists assured us that financial markets were, absent regulation, reliably “efficient” because they were “self-correcting.” Any pricing error created a profit opportunity for trades and those trades removed the pricing error. “Accounting control fraud” is impossible because it would create a consistent pricing bias by overstating the value of the securities issued by the frauds. The markets exclude fraud so effectively that “a rule against fraud is not an essential or … an important ingredient of securities markets” (Easterbrook & Fischel 1991).
Go over to the New Economic Perspective and read the whole article
What Justice Kennedy should read
The reporting from today’s oral arguments was predictably focused on Justice Kennedy. (Best Kennedy post – Brad’s Reading the Kennedy Tea Leaves) Justice Kennedy asked:
Is the government’s argument this–and maybe I won’t state it accurately. It is true that the noninsured young adult is, in fact, an actuarial reality insofar as our allocation of health services, insofar as the way health insurance companies figure risks. That person who is sitting at home in his or her living room doing nothing is an actuarial reality that can and must be measured for health service purposes; is that their argument? (p.56 of the Tuesday transcript)
If a healthy person doesn’t buy insurance, the average cost of the risk pool goes up.* This is unique to insurance markets. If a healthy person doesn’t buy broccoli, the average price goes down.
The Prescription Policy Choices brief from our BU health law class makes two important supporting arguments:
- The individual mandate closes a national marketplace, namely the market for self-insurance in health care. Congress clearly has the power to block markets (think: foreign prescription drugs, unpasteurized milk).
- This decision is rational, since the individual market for self-insurance is inefficient due to behavioral biases such as optimism bias and hyperbolic discounting.
This brief is a must-read for Justice Kennedy and his clerks. Professor Abigail Moncrieff of BU is the primary author; I’m the counsel of record.
* This is quite distinct from the free rider argument when uninsured people seek uncompensated care (see the Health Care For All brief); the health insurance impact is automatic and actuarial, whether or not the uninsured person ever seeks care.
From the Washington Post
Health reform at 2: Why American health care will never be the same
In February 2009, Michael Zucker told a group of high-paid surgeons something they did not want to hear: The way they earned a salary was about to change.
Zucker is the chief development officer at Baptist Health System, a five-hospital network in San Antonio. For 37 common surgeries, such as hip replacements and pacemaker implants, it would soon collect “bundled” Medicare payments. Traditionally, hospitals and doctors had collected separate fees for each step of such procedures; now they would get a lump sum for treating everything related to the patient’s condition.
Four surgeons quit in protest.
“I’d describe the reception as lukewarm at best,” Zucker says. “There was a lot of: ‘How could you do this?’ and ‘I’m not going to participate.’ ”
The program launched in June 2009 with a checklist of quality metrics. To earn a bonus, surgeons would, among other things, need to ensure that antibiotics were administered an hour before surgery and halted 24 hours after, reducing the chances of costly complications.
Only three doctors hit the metrics that first month, but their bonuses caught the attention of others. “There was a lot of, ‘Why are those doctors getting more, and I’m not?” Zucker says. Eight doctors got bonus payments in July; two dozen got them in August. Compliance with certain quality metrics steadily climbed from 89 percent to 98 percent in three months.
Two-and-a-half years later, Baptists’ surgeons have earned more than $950,000 in bonuses. Medicare, meanwhile, has netted savings: Its bundled rate is about 5 percent lower than all the fees it used to pay out for the same services. “It wasn’t a home-run,” says Zucker, noting the start-up costs in administering the program — not to mention a handful of lost employees. “But I’d call it a solid triple.”
Go over to the Washington Post and read the whole article.
From: The Daily Beast
Rush Limbaugh Scandal Proves Contagious for Talk-Radio Advertisers
Ninety-eight major advertisers—including Ford and Geico—will no longer air spots on Premiere Networks’ ‘offensive’ programs. Insiders say the loss will rock right-wing talk radio.
Rush Limbaugh made the right-wing talk-radio industry, and he just might break it.
Because now the fallout from the “slut” slurs against Sandra Fluke is extending to the entire political shock-jock genre.
Premiere Networks, which distributes Limbaugh as well as a host of other right-wing talkers, sent an email out to its affiliates early Friday listing 98 large corporations that have requested their ads appear only on “programs free of content that you know are deemed to be offensive or controversial (for example, Mark Levin, Rush Limbaugh, Tom Leykis, Michael Savage, Glenn Beck, Sean Hannity).”
This is big. According to the radio-industry website Radio-Info.com, which first posted excerpts of the Premiere memo, among the 98 companies that have decided to no longer sponsor these programs are “carmakers (Ford, GM, Toyota), insurance companies (Allstate, Geico, Prudential, State Farm), and restaurants (McDonald’s, Subway).” Together, these talk-radio advertising staples represent millions of dollars in revenue.
Go over to The Daily Beast and read the whole article.
Could Oregon have the first public option?
Health policy wonks should keep an eye on Oregon, where Gov. John Kitzhaber (D) has just signed legislation that could lay the foundation for a state-level public option.
The legislation is Senate Bill 1580. Right now, it focuses on delivery reform, changing the way that doctors who serve Oregon Medicaid patients get paid. It pushes them to establish new provider groups -- called “coordinated care organizations” -- to serve some of the state’s most most costly patients. The idea is that by focusing on prevention, reducing emergency room use and paying doctors for the quality of the care they provide, Oregon can curtail rising Medicaid costs.
But that’s only phase one. The hope is, if this does succeed in bringing down health care costs, other Oregonians can also start enrolling in the newly reformed Medicaid program. As Kitzhaber told me late last year, the next step would be to allow public employees into the Medicaid program. That would create something that looks a lot like a public option -- one that might be up and running right around the same time that the health reform law’s insurance exchanges launch in 2014.
Before any of that, however, Oregon needs the federal government’s blessing to move forward with a non-traditional approach to delivering care, in the form of a Medicaid waiver. The Obama administration has generally been supportive of the state’s health care reforms, and that has Kitzhaber confident he’ll be granted the flexibility to move forward.
From: the Daily Kos
By Jud Lewison
Sandra Fluke testifies before a hearing organized by Democrats
Sandra Fluke, the Georgetown Law Student savagely attacked by Rush Limbaugh for defending the right of all women to have access to birth control, just revealed on MSNBC that President Obama had telephoned her to offer his thanks and support.
"He encouraged me and supported me and thanked me for speaking out about the concerns of American women," Fluke said. "What was really personal to me was he said to tell my parents that should be proud, and that meant a lot because Rush Limbaugh questioned whether or not my family would be proud of me, so I just appreciated that very much."
As Andrea Mitchell noted, President Obama's call raises the stakes. On one side you have Rush Limbaugh calling Fluke unspeakably ugly things. On the other side you have President Obama supporting and embracing her, and holding Fluke up as a role model. Republicans are going to need to take a side. Defend Rush's disgusting diatribe ... or support Fluke.
Fluke said President Obama called her while she was in the green room at MSNBC. "He did express his concern for me, and wanted to make sure I was okay," Fluke said. "I am. I'm okay."
What a brave woman.
From: Blue Oregon
Unreal. It seems that Rep. Gene Whisnant (R-Sunriver) is the guy standing in the way of meaningful reform on foreclosures.
As the O's Elliott Njus reports, Whisnant wants to water down a bill that passed through the Senate with broad bipartisan support.
Changes proposed by Republican leaders to Senate Bill 1552 would do away with the requirement that banks meet with borrowers in mediation if the borrower requests it.
The amendment would make mediation voluntary, and it would ease some legal hurdles for foreclosing. It would allocate money for the mediation services, as well as counseling and other assistance for homeowners.
The Bend Source tells us why Whisnant is opposed to these common-sense reforms:
The Sunriver Republican, in his role as co-chairman of the House General Government and Consumer Protection Committee, killed four of the bills last week by refusing to schedule them for a hearing. ...
Asked why he’s not supporting the foreclosure prevention bills, Whisnant parrots the usual tired Republican rhetoric about the evils of big government and regulation. “We have enough regulations now,” he said, referring to temporary rules recently enacted by Attorney General John Kroger.
But the rules Kroger issued, while laudable, aren’t nearly enough. For one thing, they’ll expire in 180 days. For another, they’re aimed only at preventing blatant deception by lenders; they don’t make banks come to the table to try to work out solutions with borrowers.
As the O's Njus notes, Whisnant does have one idea that he's pushing (which is probably why he's not killing the bills outright, and instead proposing amendments). Whisnant wants to retroactively legalize a practice in which the companies that hold home loans register changes to the ownership of those loans in a private database - instead of with county property recording offices.
It would also retroactively validate the Mortgage Electronic Registration Systems Inc., a company the mortgage industry uses to avoid recording requirements each time a securitized loan changed hands. Some courts in Oregon have said foreclosures involving MERS were improper and violate state law while others have upheld the system.
Frankly, that's outrageous. You should be able to find out who owns your home loan - and the place to find that out is the county recorder of deeds. The ad hoc privatization of that system is flat out wrong.
And no, "R-Sunriver" isn't a typo. That's for real. I love vacationing at Sunriver as much as the next guy, but it's hardly the real world -- so it's no surprise that a legislator from Sunriver would be so wildly out of touch with what's actually happening out here. (Or even just down the road in Bend.)
It's time to move forward on foreclosure reform.