Monday, February 22, 2010

Barker's Newsbites: Monday, February 22, 2010


So... who's enjoying the Olympics?

Fairly busy weekend, but when the tube was on it was mainly the action from Vancouver.

Anyway... enjoy today's newsbites!
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9 comments:

William R. Barker said...

http://www.reuters.com/article/idUSTRE61J26V20100220

The already gloomy conditions of states' economies are set to worsen, according to preliminary survey findings from the National Governors Association released on Saturday.

"The situation is fairly poor for a lot of states around the country. In fact, most states," Vermont Governor Jim Douglas, who is chairman of the association, said at a press conference at its annual meeting.

"What we're finding out from a fiscal standpoint is that the worst is yet to come," Douglas said.

In a survey conducted last week of 45 of the 50 states, the group found that states have $18.8 billion of budget gaps yet to be closed in fiscal 2010. This comes after they have already imposed measures to eliminate budget imbalances totaling $87 billion in the fiscal year, which for most started last summer.

In the budgets they are drafting for fiscal 2011, states foresee shortfalls of $53.6 billion and for fiscal 2012 $61.6 billion.

The $787 billion stimulus plan the U.S. Congress passed a year ago included the largest transfer of money from the federal government to states in the nation's history. But for many states, most of its funding will run out by December.

New Jersey Governor Chris Christie, also at the press conference, said the stimulus had delayed problems but not solved them.

February 22, 2010 at 8:51 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703787304575075843971534082.html?mod=WSJ_Opinion_LEFTSecondBucket

The most commonly proposed explanations for increases in overall health care spending include:

Increasing prevalence of disease, whether due to an aging population, unhealthy lifestyle choices, or other factors; The inefficient structure of the health insurance system; Expensive new health care technologies, such as new drugs, medical devices, and other treatments; and Wasteful spending, such as over-treatment, "defensive medicine," excessive malpractice costs, and fraud.

Regrettably, neither the House nor the Senate health care reform bills that were passed in late 2009 would "bend the cost curve" downward. On the contrary, these bills would exacerbate the same inefficiencies and perverse incentives that have led to the current situation. [I]ndependent assessments by the Office of the Actuary in the Centers for Medicare and Medicaid Services have concluded that total national spending would increase even faster if either the Senate bill or the House bill become law.

One possible explanation for increased spending is increased prevalence of disease. Even if the cost of treating each disease is stable, increased prevalence of disease would increase total health care spending. [T]he U.S. population is aging. As Americans live longer and have fewer children, the rate of age-related diseases could increase simply because more people--both in absolute numbers and as a percentage of the total population--are in the upper age ranges. Another reason for increased disease prevalence could be an increase in unhealthy lifestyles. For example, obesity is...associated with many costly diseases and has been increasing over time.

[M]any analysts have concluded that free health care and insurance with lower cost sharing has little substantial effect on health, but contributes significantly to higher health care spending.

Medicare...a program fraught with systemic inefficiencies at best and vast amounts of waste at worst. Based on regional variation [it is] estimated that wasteful health services could account for 30 percent of Medicare expenditures.[I]ncluding operational waste in the Medicare program would raise the level of waste to 40 percent. Regardless of the actual number, the possibility that a large percentage of spending in the nation's largest health plan is wasted certainly cannot be ignored.

Today's health care system is fraught with perverse economic incentives that generate artificially high and rapidly increasing spending. A major source of these spending increases is a third-party payment system that often leaves the physician and patient insulated from and even unaware of the costs of the various treatment options. Often, the patient faces the same co-payment regardless of which treatment is chosen, and the extra costs are passed along to the insurance company, Medicare, or Medicaid. These payers may appear to have an incentive to encourage efficient use of resources, but ultimately they do not pay the price for inefficiency. Insurance companies offer "generous" benefits and pass on the increased spending to patients (and often their co-workers) through increased insurance premiums, and government programs pass on the spending increases to taxpayers.

Despite the rampant inefficiencies and extremely high costs of health care in the United States, it is still possible to make the American health care system even more inefficient and more costly. Regrettably, the health care bills passed by the House and Senate would do precisely that by saddling an already burdened system with more mandates, higher taxes, and less flexibility.

* LISTEN. THIS IS A LONG ARTICLE. I STRONGLY SUGGEST VIEWING THIS "DIGEST" AS SIMPLY A "TEASER" AND CLICKING UPON THE LINK ABOVE TO READ THE ARTICLE IN IT'S ENTIRETY.

February 22, 2010 at 11:18 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704804204575069502242529826.html?mod=WSJ_Opinion_AboveLEFTTop

School reformers generally agree that the most important education resource is the teacher. But one of the biggest obstacles to putting a good instructor in every classroom is a tenure system that forces principals to hire and retain teachers based on seniority instead of performance.

California grants tenure to teachers after merely two years in the classroom. New York, like most other states, makes teachers wait a grand total of three years before giving them a job for life. In most cases tenure is granted automatically unless administrators object, which is rare.

A recent report in the Los Angeles Times revealed that the LA school district, the nation's second-largest after New York City's, "routinely grants tenure to new teachers after cursory reviews—and sometimes none at all." According to the Times, "the district's evaluation of teachers does not take into account whether students are learning.

Principals are not required to consider testing data, student work or grades."

This means that large numbers of ineffective teachers wind up with ironclad job protection. When low-performing teachers can't be fired, it's the students who suffer. A New Teacher Project study last year looked at tenure evaluations in multiple states and found that "less than 1% of teachers receive unsatisfactory ratings, even in schools where students fail to meet basic academic standards, year after year." Less than 2% of teachers are denied tenure in LA, where the high school dropout rate is 35% and growing.

In New York, a union-supported law that bans the use of student data in making tenure decisions helped disqualify the state for hundreds of millions of dollars in federal Race to the Top grants.

In New York City, Schools Chancellor Joel Klein has managed to change the rules that forced principals to hire teachers from shuttered schools based strictly on seniority. But even if no school will hire these teachers, they cannot be fired and they continue to receive full salary and benefits. Mr. Klein says that maintaining this "absent teacher reserve" costs $100 million a year.

February 22, 2010 at 11:19 AM
William R. Barker said...

http://apnews.myway.com/article/20100222/D9E13JSG1.html

Oil prices rose above $80 a barrel Monday in Asia...

Oil has jumped from $69.59 a barrel on Feb. 5.

February 22, 2010 at 2:47 PM
William R. Barker said...

http://cboblog.cbo.gov/?p=473

This morning the Obama Administration released a description of its health care proposal, and CBO has already received several requests to provide a cost estimate for that proposal. We had not previously received the proposal, and we have just begun the process of reviewing it—a process that will take some time, given the complexity of the issues involved. Although the proposal reflects many elements that were included in the health care bills passed by the House and the Senate last year, it modifies many of those elements and also includes new ones. Moreover, preparing a cost estimate requires very detailed specifications of numerous provisions, and the materials that were released this morning do not provide sufficient detail on all of the provisions. Therefore, CBO cannot provide a cost estimate for the proposal without additional detail, and, even if such detail were provided, analyzing the proposal would be a time-consuming process that could not be completed this week.

February 22, 2010 at 3:50 PM
Rodak said...

Haven't seen 10 seconds of the Olympics, other than last night's U.S.-Canada hockey game. Great game. Enjoyed the hell out of it. I kinda wish Canada had won though. It would've been nice for the home crowd, and hockey is their national sport.

February 22, 2010 at 4:15 PM
Rodak said...

But ads, Bill? Really?

February 22, 2010 at 4:16 PM
William R. Barker said...

Ads? What are you talking about, Rob?

BILL

February 22, 2010 at 10:04 PM
Rodak said...

I don't see an ad on this thread this morning. But there is an ad on the thread above this one, for the "Arizona Grand".

February 23, 2010 at 4:56 AM

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