Kevin Drum

Health Care Spending Growth Will Rise a Bit Over the Next Decade, But Only a Bit

| Wed Jul. 29, 2015 11:02 AM EDT

By coincidence, a new article in Health Affairs confirms an offhand guess I made a few days ago. I wrote, "I happen to think the slowdown in medical costs is real, and will continue for some time (though not at the extremely low rates of the past few years)." The Health Affairs researchers write: "Recent historically low growth rates in the use of medical goods and services, as well as medical prices, are expected to gradually increase. However, in part because of the impact of continued cost-sharing increases that are anticipated among health plans, the acceleration of these growth rates is expected to be modest."

As the Wall Street Journal notes, this is is similar to what Medicare actuaries have been saying for a while:

The actuaries again Tuesday pointed to the stronger economy and aging population as the main factors in shaping Medicare’s future spending.

Prescription-drug spending, long a target of warnings from the insurance industry, drew particular attention from the actuaries, who pointed to a big rise in spending growth there as costly new specialty drugs such as Sovaldi, for hepatitis C, came on the market in 2014. Spending growth on pharmaceutical products jumped by 12.6% in 2014, up from 2.5% in 2013....In all, health care will comprise about a fifth of the U.S. economy by 2024, and the growth rate will exceed the expected average growth in gross domestic product by 1.1 percentage points.

So: good news or bad news? The bad news is that health care spending keeps increasing steadily. It's currently about 17 percent of GDP and will increase to about 20 percent of GDP over the next decade. The good news is that this is slow growth: only about 1.1 percent higher than overall economic growth. Any other time in the past 30 years we would have killed for a growth rate that low.

There's probably no way to avoid health care costs growing at least a little faster than the rest of the economy. We keep making advances, and our revealed preferences are pretty clear on at least one point: we value health care highly and are willing to pay more for it even at the expense of other items. That probably won't be true forever, but it's true for now.

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Boehner Planning to Pick Up His Ball and Go Home

| Tue Jul. 28, 2015 2:55 PM EDT

Is it just me, or is this trick getting a little old?

Mr. Boehner said the three-month [highway] bill could come up for a House vote on Wednesday. If the bill passes, the House would adjourn for an August recess Wednesday, a day earlier than previously planned, a House GOP aide said. That would leave the Senate to accept one of the two House highway bills or to immediately cut off federal reimbursements to states for transportation projects. The Senate will have a hard time completing its highway bill before Thursday.

I need some scholarly help here. Has it been common in the past for one house to pass a bill and then immediately adjourn, leaving the other house with the option of either passing their bill or shutting down a chunk of government? Or is this something new that modern Republicans have discovered? Historians of Congress, please chime in.

Unlike Dad, Rand Paul Is More Interested in Winning Than in His Principles

| Tue Jul. 28, 2015 12:26 PM EDT

Harry Enten tells us that Rand Paul isn't doing too well:

Something is awry at the Rand Paul campaign. The main super PAC supporting his presidential bid raised just $3.1 million in the first half of 2015....On Sunday, a new NBC News/Marist poll showed support for the Kentucky Republican declining to just 4 percent in New Hampshire (compared with 14 percent in February).

....The more worrying problem for Paul is his favorability numbers: They’re also dropping....Over the first five weeks of 2015, Paul’s favorable rating averaged 62 percent among Republicans. Just 14 percent had an unfavorable view of him. Over the five most recent weeks, though, Paul’s favorable rating has averaged 52 percent, with an unfavorable rating of 27 percent. His net favorability rating (favorable minus unfavorable) has dropped by nearly half, from +48 percentage points to +25 percentage points.

Enten's question: "What’s Wrong With Rand Paul’s Campaign?" I think we all know the answer.

Rand's father, Ron Paul, always attracted a fair amount of money and a fair amount of steady support. Not huge amounts, but respectable. The reason was that he was never seriously running for president. He just liked having a stage for his ideas, and since he wasn't trying to win, he could stay as true to his libertarian beliefs as he wanted. He had no need to waffle.

But son Rand has bigger plans. He is seriously running for president, and that means he has to pay attention to the aspects of his political views that just aren't going to play well with important blocs of Republican voters. From the start he was never quite as pure a libertarian as dad, but now he's discovering that he can't even be as pure a libertarian as he's been in the past. So he waffles. He changes his views. He spends time looking at polls. He worries about saying things that will piss off the white evangelicals, or the elderly, or the pragmatic business set. The result is that the folks who admired him for his principled libertarianism are dropping him, while the rest of the Republican Party has yet to warm up to him. After all, he is the guy who said the ongoing chaos in Iraq was the fault of the Republican president who started the Iraq War, not Barack Obama. He's also the guy who wanted to eliminate aid to Israel. And he's the guy who wanted to gut Medicare for everyone—even the folks currently receiving it.

He's kinda sorta changed his mind on all these things, but that makes him look like a sellout to the libertarian crowd and a opportunistic panderer to the tea party crowd. Is it any wonder his poll numbers have tanked?

Fox's Poll Cutoff for the Republican Debate Works Better Than Rachel Maddow Suggested Last Night

| Tue Jul. 28, 2015 11:14 AM EDT

Last night Rachel Maddow invited Lee Miringoff, polling director for the Marist Institute for Public Opinion, to discuss the way Fox News is using polls to cut the Republican debate field down to ten candidates. Basically, both Maddow and Miringoff agreed that the whole thing was ridiculous because so many of the candidates on the right-hand tail were so close to each other. Is it really fair for a guy who polls at 3.2 percent to be on stage while a guy with 2.7 percent is kicked to the corner? After all, the margin of error is 3 percentage points. There might not really be any difference between the two.

For some reason, Miringoff didn't push back on this. But he should have. There are two key bits of arithmetic they left out:

  • A typical poll has a 3 percent margin of error. But Fox News is averaging five polls. I don't know precisely what the margin of error is in this case, but it's probably somewhere around 1.5 percent.
  • The margin of error goes down as you go farther out on the tails. If you have two candidates polling 51-49, you can use the standard margin of error. But for candidates polling at 2 or 3 percent? It's roughly half the midpoint margin of error.

Put these two together, and the true margin of error for all the also-rans is something like 0.7 percentage points. This doesn't entirely negate Maddow's point, since the difference between 10th and 11th place might still be less than that. But it does mean the results are a lot less random than she suggested. Assuming Fox does its poll averaging correctly, there's actually a pretty good chance that the top ten really are the top ten.

That said, I wouldn't do the debate this way either. I'd rank all the candidates using the polling average, and then have one debate with all the even-numbered candidates and a second debate with all the odd-numbered candidates. Make it a 3-hour show with 90 minutes given to each group. What's so hard about that?

Congress Just Can't Help But Fall In Love With a Nuclear Physicist

| Tue Jul. 28, 2015 10:23 AM EDT

Maybe you could call this the revenge of the nerds?

He’s blinding them with science.

Or intellectually charming them anyway. That’s how Energy Secretary Ernest Moniz seems to be winning fans in the difficult fight to sell the Iran deal on Capitol Hill....Moniz, a nuclear physicist with mad-scientist hair, has already been credited as the administration’s secret weapon in the lengthy negotiations to secure an Iran deal that will prevent the rogue country from securing a nuclear weapon.

....Moniz can certainly lapse into the technical talk with aplomb — and when he gets to talking about the half-lives of isotopes and the detection technologies that will be deployed to survey Iran’s suspected nuclear activities, he can leave his audience in the dust.

But in the two years since Moniz became Energy Secretary, lawmakers have far more often noted and applauded the former professor’s natural ability to translate complex scientific concepts into digestible terms.

It's funny, in a way. Plenty of highly-qualified scientists have testified before Congress, and mostly they get treated as if they were balky university freshmen. But nuclear physics! That still has cachet. Start talking about the half-lives of isotopes and legislators swoon with admiration.

Except for dumbest among them, of course, who can't tell the difference between an MIT-trained physics PhD and Dr. Phil. That, of course, would be Wisconsin's favorite son, Ron Johnson. He just wanted to talk about the danger of electromagnetic pulses. Nice work, Senator.

Obamacare Rates In California Will Rise Only 4% in 2016

| Mon Jul. 27, 2015 8:28 PM EDT

Obamacare's moment of truth is coming. By now we've heard all the scare stories about a few health insurers in a few states requesting gigantic rate hikes for next year. But over the next few weeks, states are going to start publishing the actual average rate increases that consumers will see in 2016. California released its report today. It's still marked preliminary, but you can expect that the final numbers will be very close to these:

I've highlighted two numbers. First, the overall average rate increase is 4.0 percent. That's way lower than you've seen in the scary headlines. And this is for a state that makes up more than a tenth of the country all by itself.

Second, the price of the second-lowest-price silver plan has gone up 1.8 percent. This is the figure used to calculate subsidy levels, so it's an important one. In fact, here's an interesting consequence of that number: because subsidies will be going up roughly 1.8 percent, and the cost of the lowest-price silver plan is going up only 1.5 percent, the net cost (including subsidies) of buying the cheapest silver plan is actually going down. As you can see in the bottom row, if you shop for the lowest-priced plan, your premiums are likely to decrease about 4.5 percent.

I have a feeling this number is not going to be widely reported on Fox News.

Now, California isn't necessarily a bellwether for all the other states. Because it's the biggest state in the union, it has lots of competition that helps drive down prices. A big population also means less variability from year to year. Also: California's program is pretty well run, and the California insurance market is fairly tightly regulated. All this adds up to a good deal for consumers.

In any case, the headline number here is a very reasonable 4 percent increase in overall premiums, and a 4.5 percent decrease for consumers shopping for the cheapest plans. These are real statewide numbers, not cherry-picked bits and pieces designed to encourage hysteria. Once again, it looks like Obamacare is working pretty well.

This all comes via Andrew Sprung, who has much more detail here.

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Sorry Donald, Most Republicans Don't Actually Care That Much About Illegal Immigration

| Mon Jul. 27, 2015 5:32 PM EDT

Greg Sargent has an item today noting that by a 63-34 percent margin in a new CNN poll, Republicans believe the main focus of immigration policy should be stopping the flow of illegal immigration and deporting the illegal immigrants who are already here. No big surprise there. But when I clicked over to the poll itself I found a couple of things related to immigration that were kind of interesting.

First, CNN asked "Just your best guess, do you think the number of immigrants coming to the United States illegally has increased or decreased in the last few years?" Among Republicans, 83 percent thought it had increased. Granted, asking about the "last few years" is a little ambiguous, but if you assume at a minimum that it means less than a decade, then 83 percent of Republicans are woefully misinformed. As you can see from the Pew data on the right, the illegal immigrant population dropped considerably in 2008 and 2009 and has been basically flat ever since.

(By the way, among Democrats 61 percent think immigration has increased. That's a little better, but still not exactly a proud moment in voter awareness. It isn't just Fox News that's keeping us all misinformed.)

The second interesting question was one that asked about which issues were most important. This kind of thing always has to be taken with a grain of salt, but even so it's a little surprising how little Republicans actually care about immigration. For all the attention it's gotten from Donald Trump, only 9 percent said it was their most important issue, the lowest showing of any of the issues CNN asked about. The economy and terrorism/foreign policy were far and away the biggest worries among Republicans. Also surprisingly, health care didn't register very high either. The tea party may be yelling endlessly about the need to repeal the worst law since the Fugitive Slave Act, but among all Republicans, only a few rate it as a critical issue.

So....immigration and Obamacare probably aren't going to be gigantic issues this year among Republicans—or in the general election. As usual, the economy will be #1, and #2 will probably be terrorism and foreign policy in general.

Added Sugar Is Your Enemy, Not Aspartame

| Mon Jul. 27, 2015 12:51 PM EDT
Viktorija Reuta/Shutterstock; M. Unal Ozmen / Shutterstock

Why does anyone still choose sugared sodas over artificially-sweetened sodas? One reason is taste. If you don't like the taste of aspartame or saccharin, then that's that. Another reason might be a rare medical condition that makes you allergic (or worse) to certain artificial sweeteners.

But that probably accounts for only a small fraction of the people who continue to drink sugared sodas. The rest are most likely convinced that artificial sweeteners are bad for you. But they're wrong. It's sugar that's bad for you. Aaron Carroll brings the research:

One of the oldest artificial sweeteners is saccharin. Starting in the 1980s, Congress mandated that any product containing it be accompanied by the following: “Use of this product may be hazardous to your health. This product contains saccharin, which has been determined to cause cancer in laboratory animals.”....There was a problem, though. This link has never been confirmed in humans....Based on these newer studies, saccharin was removed from the carcinogen list in 2000. But by that time, opinions were set. It did little to make anyone feel safe.

....Aspartame was introduced in the United States around the time that saccharin began taking a beating....But in 1996, a study was published in The Journal of Neuropathology and Experimental Neurology titled “Increasing Brain Tumor Rates: Is There a Link to Aspartame?” Most people ignored the question mark....There were any number of problems with this logic....Because aspartame was approved in 1981, blaming it for a rise in tumors in the 1970s seems impossible. Finally, much more comprehensive studies couldn’t find links....A safety review from 2007, published in Critical Reviews in Toxicology, found that aspartame had been studied extensively and that the evidence showed that it was safe.

....But what about sugar?....Epidemiologic studies have found that even after controlling for other factors, one’s intake of added sugars is associated with the development of type 2 diabetes, with a 1.1 percent increase in prevalence for each can of sugar-sweetened soda. A study following people for an average of more than 14 years published last year in JAMA Internal Medicine found that those in the highest quintile of added sugar consumption had more than twice the risk of dying from cardiovascular disease than those in the lowest quintile, even after controlling for many other factors.

Anyway, that's what science says. Unfortunately, science also says that presenting facts to people almost never changes their minds. In fact, it can do just the opposite as people respond defensively to the notion that they've been wrong for a long time. So I suppose no one reading this is actually going to switch to diet sodas. Instead they'll cherry-pick studies that support their previous point of view. Or claim that all the studies exonerating artificial sweeteners are funded by big business and not to be trusted. Or perhaps make an outré claim about how aspartame interacts with gluten and animal fat to produce....something or other.

That's life, I guess. However, I suggest that you swamp Professor Carroll's inbox with all these insights instead of bothering me with them. He's the expert after all. Or, just switch to water. Then you won't have to worry about it.

Wait? The Robots Aren't Coming After All?

| Mon Jul. 27, 2015 11:58 AM EDT

Over at Vox, Matt Yglesias laments that, contrary to scare stories in the media, robots aren't taking away our jobs. In fact, productivity has dropped steadily over the past few decades. That wouldn't be true if automation were taking away work while producing more goods and services.

True enough. But what about the future?

Of course, all this might change. The power of Moore's Law — which states that the power of computer chips doubles roughly every two years — is such that the next five years' worth of digital progress will involve bigger leaps in raw processor power than the previous five years. It's at least possible that we really will have a massive leap forward in productivity someday soon that starts substantially reducing the amount of human labor needed to drive the economy forward.

But robots are never going to take all the jobs.

I have one question: Why not?

There are a couple of possible answers to that question. The first is that we'll never manage to invent true AI, which will prevent robots from ever being able to perform a wide range of tasks that humans perform easily. The second is that we will invent AI, but....something something something. I don't really understand the second answer. I'll grant that humans might continue to be CEOs and legislators and a few other things just to make sure that we're still ultimately in charge of the world ourselves. And who knows? We might even decide that we prefer human art even if we can't tell the difference, the same way an original Rembrandt is worth a lot more than even a perfect copy.

But that would still mean robots taking over 99 percent of the jobs. If you don't believe AI is coming anytime soon, then I understand why you think this will never happen. But if you do accept that AI is coming in the medium-term future, then why won't robots take essentially all the jobs? What exactly is it that they won't be able to do?

China's Stock Market Back In Trouble

| Mon Jul. 27, 2015 11:07 AM EDT

Thanks to government support, the Shanghai stock index has rallied for the past few weeks after a month of losses. Today it plummeted again, apparently due to the government withdrawing its support. From the Wall Street Journal:

Authorities may want to “test whether the market has recovered its resilience,” said Fu Xuejun, a strategist at Huarong Securities. “The government wants to use state funds to stabilize the market, not to prop it back to 5000 points overnight.”

Well, I guess that test didn't work. According to the Journal, Monday's drop came as a big surprise. "I am positive that we will see state support emerging again in the next two days," said Jacky Zhang. Maybe so. But if the fundamentals aren't there, even the Chinese version of government support can't keep things propped up forever. It's only a matter of time until we see the market plummeting again.