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“Why I Still Support Obamacare”: A Health Care Safety Net Under The Majority Is Morally Right And In The Interest Of A Stable Society

At the recent New York Times forum in Singapore, Eleonora Sharef, a co-founder of HireArt, was explaining what new skills employers were seeking from job applicants, but she really got the audience’s attention when she mentioned that her search firm was recently told by one employer that it wouldn’t look at any applicant for a marketing job who didn’t have at least 2,000 Twitter followers — and the more the better. She didn’t disclose the name of the firm, but she told me that it wasn’t Twitter.

At a meeting with students at Fudan University in Shanghai a few days earlier, I was struck by how anxious some of the Chinese students were about the question: “Am I going to have a job?” If you’re a software engineer in China, you’ll do fine, also a factory worker — but a plain-old college grad? The Times reported earlier this year that in China today “among people in their early 20s, those with a college degree were four times as likely to be unemployed as those with only an elementary school education.”

Stories like these explain why I really hope that Obamacare succeeds. Say what?

Here’s the logic: The Cold War era I grew up in was a world of insulated walls, both geopolitical and economic, so the pace of change was slower — you could work for the same company for 30 years — and because bosses had fewer alternatives, unions had greater leverage. The result was a middle class built on something called a high-wage or a decent-wage medium-skilled job, and the benefits that went with it.

The proliferation of such jobs meant that many people could lead a middle-class lifestyle — with less education and more security — because they didn’t have to compete so directly with either a computer or a machine that could do their jobs faster and better (by far the biggest source of job churn) or against an Indian or Chinese who would do their jobs cheaper. And by a middle-class lifestyle, I don’t mean just scraping by. I mean having status: enough money to buy a house, enjoy some leisure and offer your kids the opportunity to do better than you.

But thanks to the merger of globalization and the I.T. revolution that has unfolded over the last two decades — which is rapidly and radically transforming how knowledge and information are generated, disseminated and collaborated on to create value — “the high-wage, medium-skilled job is over,” says Stefanie Sanford, the chief of global policy and advocacy for the College Board. The only high-wage jobs that will support the kind of middle-class lifestyle of old will be high-skilled ones, requiring a commitment to rigorous education, adaptability and innovation, she added.

But will even this prescription for creating enough jobs with decent middle-class incomes suffice, asks James Manyika, who leads research on economic and technology trends at the McKinsey Global Institute. While these prescriptions are certainly “correct,” notes Manyika, they “may not be enough to solve for the scale and nature of the problem.” The pace of technologically driven productivity growth, he said, suggests that we may not need as many workers to drive equivalent levels of output and G.D.P.

As the M.I.T. economists Erik Brynjolfsson and Andrew McAfee show in their book “Race Against the Machine,” for the last two centuries productivity, median income and employment all rose together. No longer. Now we have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising and high unemployment remains persistent.

To be sure, notes Manyika, a similar thing happened when we introduced technology to agriculture. We did not need as many people to produce food, so everybody shifted to manufacturing. As the same thing happened there, many people shifted to services.

But now, adds Manyika, “a growing share of high-paying services and knowledge work is also falling prey to technology.” And while new companies like Twitter are exciting, they do not employ people with high-paying jobs in large numbers. The economy and the service sector will still offer large numbers of jobs, but many simply may not sustain a true middle-class lifestyle.

As a result, argues Manyika, how we think about “employment” to sustain a middle-class lifestyle may need to expand “to include a broader set of possibilities for generating income” compared with the traditional job, with benefits and a well-grooved career path. To be in the middle class, you may need to consider not only high-skilled jobs, “but also more nontraditional forms of work,” explained Manyika. Work itself may have to be thought of as “a form of entrepreneurship” where you draw on all kinds of assets and skills to generate income.

This could mean leveraging your skills through Task Rabbit, or your car through Uber, or your spare bedroom through AirBnB to add up to a middle-class income.

In the end, this transition we’re going through could prove more exciting than people think, but right now asking large numbers of people to go from being an “employee” to a “work entrepreneur” feels scary and uncertain. Having a national health care safety net under the vast majority of Americans — to ease and enable people to make this transition — is both morally right and in the interest of everyone who wants a stable society.

 

By: Thomas L. Friedman, Op-Ed Columnist, The New york Times, November 10, 2013

November 11, 2013 Posted by | Affordable Care Act, Obamacare | , , , , , , , | Leave a comment

“A Major Obamacare Success Story”: It’s Increasingly Clear That The Affordable Care Act Is Significantly Bending The Cost Curve

The anger over the botched rollout of the Affordable Care Act’s federal health insurance exchange — and over the conflicting explanations about whether people can keep their coverage — has been bipartisan and well-deserved. The administration needs to make personnel and management changes to get enrollment back on track. But the focus on insurance coverage obscures other parts of the ACA that are working well, even better than expected. It is increasingly clear that the cost curve is bending, and the ACA is a significant part of the reason.

The law has two overarching goals: Cover almost everyone, and slow the growth of medical care costs. The goals are equally important. Too little coverage, and premiums in the exchanges will be unaffordable; too rapid a cost increase, and the federal government will not be able to afford the subsidies.

Even as coverage efforts are sputtering, success on the cost front is becoming more noticeable. Since 2010, the average rate of health-care cost increases has been less than half the average in the prior 40 years. The first wave of the cost slowdown emerged just after the recession and was attributed to the economic hangover. Three years later, the economy is growing, and costs show no sign of rising. Something deeper is at work.

The Affordable Care Act is a key to the underlying change. Starting in 2010, the ACA lowered the annual increases that Medicare pays to hospitals, home health agencies and private insurance plans. Together, these account for 5 percent of the post-2010 cost slowdown. Medicare payment changes always provoke fears — in this case, that private plans would flee the program and that the quality of care in hospitals would suffer. Neither of these fears has materialized, however. Enrollment in private plans is up since the ACA changes.

The law also emphasized that payments should be based on the value, not the volume, of medical care. In a value-based system, compensation is made for the patient as a whole, not for specific services provided. As a result, eliminating services that are not needed is financially rewarded. The reaction to this change has been rapid: Hospital readmissions, which used to bring in substantial dollars, are now penalized.

Unsurprisingly, the readmission rate in Medicare is down 10 percent since 2011. Similarly, hospital-acquired infections used to bring in additional dollars, but now they do not. One program to cut infections, encompassing only 333 hospitals, saved more than $9 billion. Both of these changes improve patient health even as they reduce spending.

The accountable-care movement — which aims to make providers more accountable for the cost and quality of care — has blossomed far beyond expectations. There are nearly 500 Accountable Care Organizations (ACOs) nationwide, half in Medicare. Ten percent of Medicare beneficiaries are in ACOs, and many others are in payment systems that put together all reimbursements for a procedure, such as a hip replacement or cardiac stent insertion. Leaders of medical systems routinely report that they expect, and are preparing for, a move to value-based payments.

Evaluations of recent ACO programs show quality improvements among all participating organizations and financial savings for many. This is not a surprise. The Institute of Medicine has been reporting for more than a decade that a third or more of medical spending could be eliminated while increasing patient health. The only surprise is how fast the system has moved in this direction.

The ACA does not account for all of the recent cost slowdown. New medical technologies are coming online more slowly than they used to; none of the 10 best-selling drugs on the market today were developed in the past decade. Similarly, patients with high deductibles are deferring elective procedures. Many insured families today owe more from a hospital visit than they have in the bank. Each of these factors is contributing to the reduction in health-care spending. But noting that factors beyond the ACA are important does not deny the importance of the law.

Cost savings induced by the ACA are particularly beneficial because they could increase quality while they lower spending. The reduction in technology development means lower costs but also fewer ways to treat sick people. People with high deductibles use fewer valuable services as well as fewer less-valuable ones. Only by eliminating unnecessary care can we ensure that everyone benefits from saving money in health care.

Governors and legislators in red states are almost universally opposed to the ACA. But these states are still seeing cost savings from the law — and they are participating in other ways.

Six states, including places as diverse as Arkansas, Massachusetts and Oregon, are using ACA-appropriated funds to help shift medical care to a higher-quality, lower-cost system . Nineteen other states are planning similar changes. And many of these states are solidly red.

States’ successes can feed back to federal policy. A recent Senate proposal, for example, calls for replacing the broken payment system that Medicare uses to compensate physicians with a system of payments based on value.

Before he was criticized for his statements about insurance continuity, President Obama was lambasted for his forecasts of cost savings. In 2007, Obama asserted that his health-care reform plan would save $2,500 per family relative to the trends at the time. The criticism was harsh; I know because I helped the then-senator make this forecast. Yet events have shown him to be right. Between early 2009 and now, the Office of the Actuaries at the Centers for Medicare & Medicaid Services has lowered its forecast of medical spending in 2016 by 1 percentage point of GDP. In dollar terms, this is $2,500 for a family of four.

Looking ahead, there is every reason to believe that costs will continue to grow slowly, maybe even more slowly. A study in Massachusetts showed that ACO savings increase over time as organizations move into more areas that can slow cost growth. An analysis of exchange premiums estimated that insurance costs in the exchanges are 16 percent below what was forecast two years ago; the lower costs were attributed to competition from new entrants in the market.

If cost growth continues at its low pace, the cumulative savings to the federal government would be more than $750 billion over the next decade. Such savings are likely to dwarf anything that comes out of Congress this year.

Many Americans are rightly upset with the Obama administration’s rocky rollout of the insurance exchange. Failing at such a major project is inexcusable. But if the early indications are any guide, we should be pleased with how the new health law is affecting what we pay for care. If the Web site is fixed and enrollment can catch up to expectations, the ACA could yet become a major policy success.

By: David Cutler, The Washington Post, Opinions, November 8, 2013

November 11, 2013 Posted by | Affordable Care Act, Health Care Costs | , , , , , , | Leave a comment

“Fruits Of Republican Folly”: It Falls To Democrats To Find A Way To Take Advantage Of The Moment

The Republicans badly damaged themselves with their contrived government shutdown and debt crisis, but it remains for the Democrats to drive home their advantage. Will they?

Based on the cost to the Republican brand and the pressure from corporate elites not to harm the economy, the days of shutdowns and games with the debt are probably over for the foreseeable future. If the Tea Party faction tries to repeat these maneuvers, House Speaker John Boehner would likely permit a free vote again, and enough Republicans would vote with Democrats to keep the government open.

The Republicans seem hopelessly split between a Tea Party faction that relishes governing crises and a more mannered corporate faction that kills government softly. But the GOP is still one party when it comes to destroying government as a constructive force in the economy and society.

Since Barack Obama took office, the two Republican factions have complemented each other in a successful “good cop, bad cop” effort to ratchet down public spending. Wall Street creates one sort of crisis; the Tea Party creates another; government takes the hit. Except for the short-lived stimulus of the American Recovery and Reinvestment Act in 2009, this is the first prolonged slump of the postwar era in which government cut rather than expanded public spending.

President Obama’s pivot to deficit reduction in late 2009 was in response to the pressures of the corporate elite, while his several capitulations in the budget cuts since 2010 have been driven by the Tea Party. In effect, the Tea Party and corporate Republicans have executed a pincer movement. Domestic discretionary spending relative to gross domestic product is now below that of the Eisenhower era.

With everything else having been cut, the pressure has shifted to the big social-insurance programs—so-called entitlements—that have thus far been protected. Once again, the corporate right and Tea Party right have called for a grand bargain targeting Social Security and Medicare.

A bargain connotes giving something and getting something. Republicans are disinclined to give anything in exchange for cuts in social insurance, least of all tax increases. Their opening gambit was an improbable offer to shrink Social Security and Medicare in exchange for increases in defense spending.

The Democratic caucuses in both the House and Senate are resolute defenders of Social Security. Polls show that more than 80 percent of Republicans and Democrats alike don’t want Social Security reduced. With Republicans pressing for cuts, defense of Social Security is a clear, bright line that benefits Democrats.

Unless, that is, President Obama chooses to blur it. He has already proposed in his 2014 budget a change in the annual cost-of-living adjustment to Social Security (the chained Consumer Price Index). Although a grand bargain is unlikely, Republicans are pushing a mini-bargain of sequester relief in exchange for cuts in other domestic spending or in Social Security. The chained CPI would yield about $34 billion of deficit reduction per year. This disguised benefit cut would split the Democrats as badly as the government shutdown split the Republicans.

A better mini-bargain would be relief from the depressive impact of the sequester without any offsetting cuts. The Democrats have some leverage here, because the sequester mandates at least $23 billion of defense cuts to take effect in January, requiring cancellation of multiyear weapons contracts dear to key Republican legislators. In exchange for restored military spending, Democrats could demand, and get, $23 billion in social spending. That $46 billion would help stimulate a stagnant economy.

Looking forward to the 2014 midterm, pollsters discern a paradox. Support for the Republican Party is down sharply. In October, Gallup found that 28 percent of those polled approve of the Republicans, down from 38 percent in September and the lowest since Gallup began asking the question in 1992. Yet message testing also shows that large majorities of voters are still inclined to fault “partisan bickering”—blaming both parties—rather than Republican obstruction for the government’s failure to make substantive progress in improving a feeble recovery.

So the shutdown debacle helps the Democrats but only marginally, unless they maximize their moment. Midterm elections are notorious for low turnout. Democrats have a prayer of taking back the House only if they energize their core voters. If President Obama goes into the midterm bragging about how much progress has been made, that won’t resonate with Americans suffering from flat or declining incomes and job insecurity. The Democrats need to stand for restored, broadly shared prosperity, not tinkering, and brand Republicans as the party that would cut your benefits.

Senate Republican leader Mitch McConnell, of all people, has set a fine example. In the deal that opened the government, McConnell sneaked in the only earmark: $3 billion for a dam in Kentucky. If we ramped that up to the whole country based on Kentucky’s share of the economy, the outlay would translate to about $200 billion. Call it the Mitch McConnell Memorial Infrastructure Program—a nice down payment on the public investment America needs.

 

By: Robert Kuttner, Co-Founder and Co-Editor, The American Prsopect, November 7, 2013

November 11, 2013 Posted by | Medicare, Republicans, Social Security | , , , , , , | Leave a comment

“The Mutilated Economy”: Anyone Who Talks About How We’re Borrowing From Our Children Just Hasn’t Done The Math

Five years and eleven months have now passed since the U.S. economy entered recession. Officially, that recession ended in the middle of 2009, but nobody would argue that we’ve had anything like a full recovery. Official unemployment remains high, and it would be much higher if so many people hadn’t dropped out of the labor force. Long-term unemployment — the number of people who have been out of work for six months or more — is four times what it was before the recession.

These dry numbers translate into millions of human tragedies — homes lost, careers destroyed, young people who can’t get their lives started. And many people have pleaded all along for policies that put job creation front and center. Their pleas have, however, been drowned out by the voices of conventional prudence. We can’t spend more money on jobs, say these voices, because that would mean more debt. We can’t even hire unemployed workers and put idle savings to work building roads, tunnels, schools. Never mind the short run, we have to think about the future!

The bitter irony, then, is that it turns out that by failing to address unemployment, we have, in fact, been sacrificing the future, too. What passes these days for sound policy is in fact a form of economic self-mutilation, which will cripple America for many years to come. Or so say researchers from the Federal Reserve, and I’m sorry to say that I believe them.

I’m actually writing this from the big research conference held each year by the International Monetary Fund. The theme of this year’s shindig is the causes and consequences of economic crises, and the presentations range in subject from the good (Latin America’s surprising stability in recent years) to the bad (the ongoing crisis in Europe). It’s pretty clear, however, that the blockbuster paper of the conference will be one that focuses on the truly ugly: the evidence that by tolerating high unemployment we have inflicted huge damage on our long-run prospects.

How so? According to the paper (with the unassuming title “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”), our seemingly endless slump has done long-term damage through multiple channels. The long-term unemployed eventually come to be seen as unemployable; business investment lags thanks to weak sales; new businesses don’t get started; and existing businesses skimp on research and development.

What’s more, the authors — one of whom is the Federal Reserve Board’s director of research and statistics, so we’re not talking about obscure academics — put a number to these effects, and it’s terrifying. They suggest that economic weakness has already reduced America’s economic potential by around 7 percent, which means that it makes us poorer to the tune of more than $1 trillion a year. And we’re not talking about just one year’s losses, we’re talking about long-term damage: $1 trillion a year for multiple years.

That estimate is the end product of some complex data-crunching, and you can quibble with the details. Hey, maybe we’re only losing $800 billion a year. But the evidence is overwhelming that by failing to respond effectively to mass unemployment — by not even making unemployment a major policy priority — we’ve done ourselves immense long-term damage.

And it is, as I said, a bitter irony, because one main reason we’ve done so little about unemployment is the preaching of deficit scolds, who have wrapped themselves in the mantle of long-run responsibility — which they have managed to get identified in the public mind almost entirely with holding down government debt.

This never made sense even in its own terms. As some of us have tried to explain, debt, while it can pose problems, doesn’t make the nation poorer, because it’s money we owe to ourselves. Anyone who talks about how we’re borrowing from our children just hasn’t done the math.

True, debt can indirectly make us poorer if deficits drive up interest rates and thereby discourage productive investment. But that hasn’t been happening. Instead, investment is low because of the economy’s weakness. And one of the main things keeping the economy weak is the depressing effect of cutbacks in public spending — especially, by the way, cuts in public investment — all justified in the name of protecting the future from the wildly exaggerated threat of excessive debt.

Is there any chance of reversing this damage? The Fed researchers are pessimistic, and, once again, I fear that they’re probably right. America will probably spend decades paying for the mistaken priorities of the past few years.

It’s really a terrible story: a tale of self-inflicted harm, made all the worse because it was done in the name of responsibility. And the damage continues as we speak.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, November 7, 2013

November 11, 2013 Posted by | Economic Recovery, Economy, Unemployment | , , , , , , | 1 Comment

“End Times For Obama?”: Just Another Round Of The Media’s Trumped-Up Crises That Turn Out To Be Wrong And Overheated

It’s damn near end times for Barack Obama, to hear some tell it.

There’s a new Pew poll that has him at 41 percent approval, 53 disapproval, which Pew notes ominously is only five percentage points better than George W. Bush’s at this point in his term. (Hurricane Katrina had happened in August of Bush’s fifth year.) Conservative columnists are chuckling and clucking and tweeting to beat the band. Centrist journalist Mark Halperin, on MSNBC yesterday, declared that Obama had lost the media, which was now cheering against the success of the Affordable Care Act and just wants to see… well, people go without insurance, I guess. If everything—everything!—isn’t fixed by Nov. 30, we’re looking at a presidency that is going to collapse into utter disaster.

It’s obvious enough why conservatives would be saying this. They’ve wanted Obama to fail from the start, and they’ve certainly wanted the health-care bill to fail from the moment of its passage. Journalists like Halperin say these things not for ideological reasons, but temperamental ones: In this Halperinesque/Politico-esque world view, politics is less about people’s lives than it is about who is displaying mastery of the game and who is being mastered at any given moment (of course, seeing politics so insistently through that lens is a kind of ideology of its own, but we’ll let that pass). To that group of mainstream journalists, how Obama handles the current crisis will determine whether the administration will survive or whether he might as well just resign now.

I don’t deny that the current situation is a crisis, and one of the administration’s own making. Obama misled people. It’s a small percentage of people. They’re at the mercy of the most horrible end of the private-insurance market, and the vast majority of them are going to be better off after everything shakes out and they see that their new plans are largely better than their old ones were. But even so, they’re people, and they’re getting termination notices, and he misled them. Combine it with the website chaos, and it’s bad, there’s no sense in denying it.

What I do deny, vigorously, is that this is a make-or-break moment. Yes, I know that Obamacare is his signature initiative and all that. And I know that if problems persist after Nov. 30, pressure will mount on Harry Reid to let some kind of tinkering legislation be debated. This is a very important three weeks for the administration, and the 30th is an extremely important deadline.

But there’s a certain type of political journalism that so exists in the moment that numerous such moments have been declared to be disasters for Obama, going back to Jeremiah Wright. This kind of hyperventilating approach always turns out to be wrong and overheated. It turned out that all those things were pretty bad, but it also turned out that Obama survived them. And he’ll survive this, too.

What will happen in all likelihood is what usually happens in life and politics—that is, nothing all that dramatic. Nov. 30 will come, and the website will be more or less (though not entirely) fixed up, and life, and Obamacare, will go on. There will be more horror stories, natch, but there will be more success stories too, and sometime between now and next March 31, when the enrollment period ends, the media are going to get a little bored with the whole thing, and it will just go on irresolutely for a while, but eventually it will start becoming clear to the American people that the reform is working pretty well in the states that tried and pretty poorly in the states that didn’t, and people will start to get the point about Republican sabotage.

And then, provided health care survives that initial stage without being altered for the worse by Congress, it’s going to start to work. Well. Resistant insurance companies and even some resistant governors and state legislatures are going to see that it appears to be here to stay, and they will accommodate themselves to that reality.

Obamacare will never be a raging success. This is another error much of journalism is prone to make—looking for it to be an overwhelming success. That won’t happen because at the end of the day we’re still talking about private health insurance, and private health insurance was a pain in the tuchus before Obamacare and will remain one after it. People will always complain about their coverage. But by early 2016, I have little doubt, there will be millions more Americans who’ll be doing the complaining, and they’ll be happy to have the opportunity to do so.

Conservatives are desperate for health care to be Obama’s Katrina. Certain centrist journalists want to see it just for entertainment’s sake or as a test of Obama’s presidential “character.”  I won’t say there’s zero chance of it happening. If Nov. 30 comes and the website is an unmitigated disaster, then maybe that’ll be the case. But I will say that I think the chances of it are very slim indeed. The unfortunate thing is the Republicans have just enough power to gum up the works so that even if the administration does fix up everything on its end, the GOP can keep hauling Kathleen Sebelius up to the Hill and taking other steps to make sure things look worse than they are. But Obama will survive, and more importantly, Obamacare will too.

 

By: Michael Tomasky, The Daily Beast, November 8, 2013

November 11, 2013 Posted by | Affordable Care Act, Journalists, Media | , , , , , , | Leave a comment

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