Pacific Progressive

How Health Reform Saves Consumers and Taxpayers Money: The Affordable Care Act Lowers Costs and Improves Quality

This article was published by the Center for American Progress.

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Health reform’s three major goals—insurance reform, affordable coverage, and slower cost growth—are all critical. But controlling costs is key to achieving the other two. Insurance that offers meaningful protection and is affordable to most, if not all, Americans, across the income scale, hinges on getting ever-rising health costs under control.

Fortunately, the Patient Protection and Affordable Care Act links the commitment to coverage with a commitment and a strategy to contain health care costs. The Affordable Care Act has multiple provisions to enhance efficiency and eliminate waste, which saves money for patients and taxpayers and improves the quality of the nation’s health care.

According to the Congressional Budget Office, the Affordable Care Act is fully funded, strengthens the Medicare trust fund, and reduces the federal deficit.

• Spending reductions and new revenues under the Affordable CareAct will fully pay for new benefits to help families afford coverage, and the CBO estimates they will reduce the deficit by $143 billion from 2010-2019 and by between 0.25 percent and 0.5 percent of GDP (about $1.2 trillion) from 2020-2029 (see Figure 1).
• Eliminating excessive payments to private insurers (Medicare Advantage plans) and adjusting prices and other measures to assure efficiency improvements in hospitals, nursing homes, and home health providers save about $400 billion over 10 years.
• CBO estimates that Medicare savings reduce the program’s annual growth rate from 6.8 percent to 5.5 percent—adding 12 years of life to the Medicare trust fund (see Figure 2).

Show Us the Money: Investors Deserve Clear and Comprehensible Pay Disclosures

by Sima J. Gandhi 

This article was published by the Center for American Progress.

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Yankees third baseman Alex Rodriguez signed the biggest contract in baseball history in 2007—a 10-year contract worth potentially more than $300 million. Rodriguez receives an average $27 million annual salary, plus a $6 million bonus every time he matches the career home run totals of Willie Mays (660), Babe Ruth (714), Hank Aaron (755), and Barry Bonds (762). He pockets another $6 million if he breaks Bonds’s record.

That same year, Goldman Sachs’s CEO Lloyd C. Blankfein earned a record-breaking $70 million. Like Rodriguez, he earned two types of compensation—a $600,000 fixed salary and performance-based bonuses. But there’s one key difference: We know precisely the standards and metrics that measure Rodriguez’s performance. We don’t know Blankfein’s.

Congress requires publicly traded companies like Goldman Sachs to disclose information—including total pay and performance targets—about their executive compensation contracts. The requirement assumes shareholders will use this information to hold companies accountable for executive performance. The government does not require the disclosures to be comprehensible, however. Mandatory filings with the Securities and Exchange Commission (SEC), the federal agency charged with protecting investor interests, are often hard to understand. They are long and dense, and filled with financial jargon that even experts can have difficulty deciphering. This is a problem for shareholders as well as the broader economy. Regulators, policymakers, and the public at large have a stake in knowing whether corporate pay practices create incentives that are conducive to real and sustainable economic growth.

Narrowly Dodged Bullets: John Roberts's Dissenting Opinions

By Ian Millhiser

This article was published by the Center for American Progress.

Chief Justice John Roberts once again presided over a banner Supreme Court term for wealthy corporate interests. In the term ending today, a 5-4 Roberts Court unleashed a flood of corporate money into American democracy in Citizens United v. FEC. And the same five conservative justices strengthened corporate America’s power to force consumers and workers into a secretive, privatized court system that overwhelming favors corporations in Rent-a-Center v. Jackson.

Yet Roberts’s 5-4 giveaways to corporate America only tell half the story. Indeed, Roberts has authored or joined numerous radical dissents that would give powerful corporate interests sweeping immunity from the law. This stands in stark contrast to his confirmation hearing promise to display “humility” and accept his own “modest role” as a justice.

• Immunity for drug companies: A dangerous drug was injected into the arm of a woman named Diana Levine in 2000, eventually costing her half her right arm and her career as a professional musician. A Vermont jury ordered the drug’s manufacturer to compensate Levine, but Roberts joined a dissent in Wyeth v. Levine that would have held drug companies largely immune from state law. Had this dissent prevailed, states would be powerless to protect women like Levine from drug defects or defective drug labels discovered after the Food and Drug Administration approves a drug for use.
• Protecting rogue banks: Roberts joined a dissent in a similar case, Cuomo v. Clearinghouse, arguing that federal regulators properly gave the banking industry broad immunity from state law—despite no legal basis for doing so. Had Roberts’s views carried just one more vote, state fair-lending laws and many other consumer banking protections would have effectively ceased to exist.
• Justice for sale: After A.T. Massey Coal Company—the same company whose negligent safety record led to the death of 29 miners in a recent explosion—lost a $50 million verdict, its CEO paid $3 million to elect a sympathetic justice to a state supreme court. This justice then cast the deciding vote overturning the verdict against Massey—a 1,667 percent return on the CEO’s investment. Roberts’s dissent in Caperton v. Masseysaid this bought-and-paid-for judge was under no obligation to recuse himself from Massey’s case.
• Deceptive marketing: Finally, Roberts voted to cut off deceptive advertising claims in Altria v. Good. In his eyes the tobacco industry should have extensive immunity from state laws preventing fraudulent marketing.

Roberts rarely finds himself in dissent since he leads a bloc of conservatives committed to protecting corporate interests. Nevertheless, his few dissenting opinions in corporate immunity cases reveal a willingness to aggrandize corporate power even more so than he already has in cases like Citizens United or Rent-a-Center.

Such zealous advocacy would be entirely appropriate were Roberts still an attorney for corporate interests. He gave up that role, however, when he became a judge. It’s time for him to live up to his promise to be modest and humble in his decision making.

Ian Millhiser is a Policy Analyst at American Progress.

Halting IT Boondoggles: White House Puts the Breaks on Troubled IT Spending and Begins Long-Overdue Review

By Ian Millhiser

This article was published by the Center for American Progress.

It’s easier to get a progressive bill past a Senate filibuster than it is to kill a failed government IT project. At least, that’s the lesson of the last several years. The only time failed information technology projects are killed, according to federal Chief Information Officer Vivek Kundra, is “when there are headlines” that embarrass the government.

That could change today. The Obama administration has announced the second phase of its multi-year effort to combat this problem, immediately halting $20 billion worth of federal IT projects and commencing detailed reviews of $15 billion worth of additional struggling projects. If these reviews succeed, they could eventually trim billions from the federal government’s $80 billion a year IT budget.

Monday’s announcement is the logical next step after last year’s launch of a federal website known as the “IT Dashboard,” which allows anyone with a web browser to track each federal IT project and identify those that are past-due, over-budget, or otherwise underperforming.

Government IT officials have begun using this diagnostic tool to target projects that need to be eliminated. The Department of Veterans Affairs, for example, used the dashboard to identify $200 million in delinquent projects, many of which will be cut entirely. The dashboard also rates each project’s performance on a scale from 1-10, which enables reporters and lay-users to quickly identify failing projects and generates the headlines that have motivated action in the past.

Arizona: Rushing Toward the Wrong Side of History

by Roberto Cintli Rodriguez, Truthout Op-Ed

This article was published by Truthout.

Before the Dream students made their historic stance in Tucson, Arizona last week - to stage a sit-in in Sen. John McCain's office, and thereby subjecting themselves to deportation proceedings - this sun city had already been in the eye of the storm. The perfect storm.

And yet, they were not the only ones to take a powerful stance that week; several hundred Indigenous peoples from throughout the world rallied at the Tucson Immigration Department Headquarters, protesting Arizona's new racial profiling law; it was followed by the dramatic takeover of a Border Patrol station in Tucson by more than a dozen members of the statewide O'Odham Solidarity Across Borders Collective. They were protesting the state's draconian and nation's anti-Indigenous immigration policies. Six were arrested.

That law confirmed that Arizona is governed by extremist politicians. On the day it passed in April, nine human rights activists chained themselves to the capitol building. The anti-ethnic studies law, which was signed in May - resulting in 15 arrests as a result of the takeover of the state building - proved that the state has returned to the Dark Ages as this law sets up a mechanism to censor books and curriculums (it was preceded by a siege of the Tucson Unified School District Headquarters by middle and high school students).

Two days before the racial profiling law passed, 800 military-clad federal agents swooped into South Tucson looking for human smugglers. This unprecedented action, along with the two laws, had precipitated protests, walkouts, marches, community forums, boycotts, vigils and runs in both Tucson and Phoenix.

Low-Income Fathers Need to Get Connected: Helping Children and Families by Addressing Low-Income Fathers' Disconnections from Employment, Society, and Housing

By Joy Moses

This article was published by the Center for American Progress.

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Many poverty programs serve families by trying to improve children’s lives, and helping children often translates into “family” policy. After all, children don’t stand on their own—families provide for their needs including housing, food, and clothing. But far too often, the notion of “family” translates into a focus on mothers and children. This needs to change.

Low-income fathers should definitely be a part of the family policy equation. Men are able to financially contribute to their children’s well-being and help lift them out of poverty in the short term. They also provide care and emotional supports that can improve children’s life outcomes and help break the cycle of poverty in the long term.

Low-income fathers should definitely be a part of the family policy equation.

Unfortunately, far too many low-income men, and especially men of color, face barriers to playing these roles in their children’s lives. They are disproportionately disconnected from some extremely vital domains, and that harms them, their children, and families more generally.

These domains are examined in this paper and include:

• Employment. Shifts in the economy have decreased low-skilled workers’ job opportunities and wages over the last couple of decades. This impairs some men’s ability to financially support their children and families. The related financial stress drives wedges between family members.

Banksters, Corrupt Politicians Face Prosecution - in Iceland

by Sam Knight, Truthout Report

This article was published by Truthout.

Calls for constitutional reform follow investigation into financial collapse; bankers, former government ministers face possibility of jail time.

Last month, the publication of an Icelandic Parliamentary report commissioned "to investigate and analyze the processes leading to the collapse of the three main banks in Iceland" shook the old guard on the island, leaving many of the country's rich and powerful facing the possibility of incarceration.

The long anticipated Black Report, as it is known, is seen by many Icelanders as crucial step toward recovering from its calamitous financial collapse of October 2008. The harsh critique of the old regime has presented Icelanders with an opportunity for reform not seen since the collapse itself and the Kitchenware Revolution of January 2009 that followed it, when thousands of angry demonstrators banging on pots and pans forced the government responsible for Iceland's boom and bust to resign.

Icelanders, he added, had been waiting for the report since December 2008, when the Special Investigative Commission (SIC) was first formed. The country has had to endure numerous painstaking delays, the last of which was intended to give those accused of criminal activity time to prepare their defense.

And while the delays may have been frustrating to a public desperate for answers, the end result - all 2,400 pages of it - was unexpectedly satisfying.

"Everyone was pleasantly surprised," said Haukur Magnússon, editor of The Reykjavik Grapevine, an English language magazine based out of Iceland's capital. "First, because no one believed it would come out. And secondly, no one expected it be well done. But they did a top notch job."

"Free-Market Fundamentalism" Is an Invention of Progressives

by Dean Baker, Truthout Op-Ed

This article was published by Truthout.

The right showed once again that they have no allegiance whatsoever to the free market when House Republicans pushed through a bill that would prohibit the Federal Housing Authority (FHA) from insuring the mortgage of anyone who had "strategically defaulted" on an earlier mortgage. The intention was to punish people who had taken advantage of this option and, therefore, make it less likely that others would go this route in the future.

A strategic default is when a person stops paying a mortgage even when they can still afford it, and, instead, turns the house back to the lender. This can be a desirable move for borrowers if the price of the house has fallen below the value of the home due to the collapse of the housing bubble.

In many states, a mortgage is a nonrecourse loan. This means that, under the terms of the contract, the return of the home ends any commitment to the lender. Even in states where the loan is a recourse loan, it is unusual for lenders to pursue actions against borrowers after a foreclosure, even if they have not recovered the full amount of the mortgage by reselling the house.

For these reasons, a strategic default can often be a good option for homeowners. In fact, strategic default is a standard business practice. Businesses often default on a mortgage and turn the property back to the lender when they decide that this is the more profitable route to follow. For example, Morgan Stanley recently went this route with five office buildings in San Francisco, the value of which was considerably less than the outstanding mortgage.

The Medicare 'Doc Fix': How to Make Political Lemonade

Austin Frakt, Assistant Professor of Health Policy and Management, Boston University’s School of Public Health

This article was published by Kaiser Health News.

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The mechanism that governs the growth rate of Medicare spending on physician services isn’t working. The Sustainable Growth Rate put in place in 1997 is supposed to keep total Medicare physician costs from growing faster than the overall economy. When costs do grow too quickly–and they always do–the law demands that prices be cut commensurately.

But it doesn’t work. The SGR target is too low. Medical inflation is perennially above the growth rate of the economy. So Congress always overrides those mandated cuts, and the gap between spending dictated by the SGR and actual spending grows. Most recently it stood at 21 percent.

This is no way to run a health care system. The SGR may make 10-year budget projections look good, but that’s only because it’s based on an unrealistic assumption that the mandated low growth rate can be sustained. By now we know that it can’t.

The solution is not to let the 21 percent cut go into effect. That’s too deep a cut and would devastate physician practices and severely restrict beneficiary access to care. Nor is the solution to keep patching the problem with interim over-rides. That’s what it did last week. It’s a stop-gap and doesn’t address deeper problems.  Instead, a systemic “doc fix” is required.