Kevin Drum

Healthcare Reform and Cost Control

| Wed Jan. 13, 2010 12:33 PM EST

Will healthcare reform help to cut the growth of Medicare costs? Skeptics are....skeptical, but Austin Frakt has a guest post by Randall Brown, Vice President and Director of Health Research at Mathematica Policy Research, that provides some real-world evidence about proven ways to make Medicare more efficient:

Mary Naylor and Eric Coleman provide clear, rigorous evidence on how to reduce the appallingly high readmission rate (20 percent within 30 days) for Medicare patients discharged from a hospital. Their “transitional care” programs reduce the need for re-admissions by providing much closer attention to patients and their families as patients move from hospital to home. Randomized trials, the most rigorous and credible type of evidence, showed these programs reduced readmission rates by 18 to 35 percent, resulting in reductions in costs that substantially exceed the intervention costs.

....Following the evidence also means establishing a care coordination benefit for a well-defined high risk population of beneficiaries....Randomized trial studies of programs serving beneficiaries with chronic illnesses have found that targeting is critical. For a subgroup of beneficiaries at high risk of near-term hospitalization — which comprises 18 percent of Medicare beneficiaries and 38 percent of Medicare expenditures (those with congestive heart failure, coronary artery disease, or chronic obstructive pulmonary disease and a hospitalization in the past year) — 4 of the programs in the Medicare Coordinated Care Demonstration had significant and sizable reductions in hospitalizations over the 6-year life of the study.

These two ideas are nowhere near enough to solve Medicare's funding problems on their own. However, unlike other "curve bending" proposals, which are admittedly speculative, these are proven to work. And in the end, that's why funding pilot programs and research studies is such an important part of healthcare reform. Not all of the ideas will pan out, but a billion dollars on research will identify which ones work and which ones don't. Sometimes this means hard choices, but like the programs Brown cites, sometimes it doesn't. Sometimes cutting costs actually means providing better care.

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Quote of the Day: Risk Management

| Wed Jan. 13, 2010 12:09 PM EST

From Jamie Dimon, chairman of JPMorgan Chase, on JPM's risk management practices before the housing crash:

"We didn't do a stress test where housing prices fell."

Wow. By 2006, housing prices were nearly double their trend growth levels and JPM never even considered a scenario in which they might fall. Just wow.

Question of the Day

| Tue Jan. 12, 2010 10:23 PM EST

Why is AIG stock still selling for a price greater than zero? Felix Salmon:

I understand that there's some tiny possibility that AIG will be able to pay the government back in full, and that therefore AIG stock has a small amount of option value.

Well, OK. But basically, it's worthless. And yet, AIG executives, who once fought the idea like rabid dogs, now want to be paid their bonuses in common stock. What do they know that the rest of us don't? Felix and Paul Smalera are perplexed. So am I.

Healthcare in the Abstract

| Tue Jan. 12, 2010 5:56 PM EST

Greg Sargent highlights a piece of a recent CBS poll which suggests that Americans are pretty happy with doing at least as much on the healthcare front as we're currently doing. That's good news.

Unfortunately, the numbers aren't as good as they look at first glance. 57% think we should cover as many or more Americans than the current bills, but how many of those people would you lose if you added "even if it meant paying higher taxes"? 60% want to control costs better, but how many would you lose if you added "even if that means your healthcare choices might be restricted"? Support for more stuff is usually pretty high in the abstract, but on healthcare these days it's not all that high even in the abstract. That's not such good news at all.

Stewart and Yoo

| Tue Jan. 12, 2010 5:20 PM EST

"There is an unexpected silence in the liberal blogosphere," says Adam Serwer, "after last night's highly anticipated Daily Show episode, in which Jon Stewart hosted John Yoo, the author of many of the Bush adminstration's torture memos and one of the people most responsible for giving legal sanction to the practice of torture. That's probably because Stewart found himself completely outmatched by a charming, tactful Yoo."

I think Stewart's problem was twofold. (Video here.) First, he was woefully unprepared. Yoo's argument was, plainly, about what counts as torture. Stewart didn't get that — or pretended not to get that, I'm not sure which — and that led him to continually act surprised by perfectly ordinary statements from Yoo. "You're saying we'd never before considered whether torture was OK?" Stewart would ask, and Yoo would respond, "No, we were trying to figure out for the first time which interrogation techniques were torture and which ones weren't." That's really not hard to understand, but Stewart continually misunderstood it and wasted the entire first segment of the interview.

But I'm not sure it mattered much anyway. The real problem with interviewing Yoo is this: once you start arguing about the legal basis of the president's wartime powers you've pretty much lost the game. That's a subject that's genuinely complex, and a guy like Stewart will never win an argument about that with a guy like Yoo. He'll just toss out yet another precedent and plow on.

The debate really needed to be about the fundamentals: Stewart needed to graphically describe all the things that were done — multiple waterboardings, sleep deprivation, head slamming, stress positions, etc. — and get Yoo to defend those as permissible. And when he retreated into legalisms, he should have asked Yoo whether he, personally, agreed with his own legal position. That's a fair question for an author on a book tour.

That likely wouldn't have worked either, but at least it would have pushed Yoo a little bit harder than Stewart's tactic of relying on spluttering and facial tics. He needed his A game, not just a weak brushback pitch.

Midterm Money

| Tue Jan. 12, 2010 2:31 PM EST

I don't want to underplay the political problems Democrats are facing in the upcoming midterm elections, but it's worth remembering that Republicans have a few problems of their own. National Journal reports that money is a big one:

The national GOP party committees continue to trail their Democratic counterparts, in receipts and/or in cash on hand. The grassroots "tea party" movement, which has channeled public anger over the economy and Democratic health care plans, has failed to translate into campaign dollars, and intraparty primary fights may drain GOP coffers for the general election.

Party donations from both incumbent GOP lawmakers and individual donors are sharply down. Profligate spending at the Republican National Committee has prompted grumbling in the GOP rank and file, and fueled simmering complaints over the RNC's sometimes-controversial chairman, Michael Steele.

...."It doesn't seem that the anger you're seeing nationally and in the polling is resulting in more dollars," said Carl Forti, a campaign and media strategist with the Black Rock Group, who previously held senior posts at the National Republican Congressional Committee and with Mitt Romney's presidential bid.

Forti added: "Some of the people in that tea party movement are frustrated with the party. They want to see a more conservative party and more conservative candidates supported."

The tea party movement has generated a lot of heat, but it's also generated a lot of intraparty rancor and quarreling. Steve Benen runs down the problems here. And conservative Ramesh Ponnuru points out in Time that the economy could revive, the Republican Party is still unpopular, Republicans are disorganized, they have no agenda, and the tea parties aren't enough anyway.

I continue to think that Democrats have the chance to make their own bed this year. Some losses are almost inevitable, but big losses aren't. If healthcare gets passed, the economy starts to pick up a bit, and Obama does something to help energize the liberal base, Dems could still do pretty well in November. As my sister frequently says to me in frustration, "Why should I vote for either of these parties?" Obama needs to give her an answer.

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TV Can Kill You

| Tue Jan. 12, 2010 12:35 PM EST

Bad news, Mad Men fans:

Researchers found that each hour a day spent watching TV was linked with an 18% greater risk of dying from cardiovascular disease, an 11% greater risk of all causes of death, and a 9% increased risk of death from cancer.

....People who watched more than four hours a day showed an 80% greater risk of death from cardiovascular disease and a 46% higher risk of all causes of death compared with those who watched fewer than two hours a day, suggesting that being sedentary could have general deleterious effects. The numbers were the same after the researchers controlled for smoking, high blood pressure, high cholesterol, an unhealthy diet and leisure-time exercise.

OK, I guess this is really no surprise or anything. Still: get off the couch and do something useful instead! Like blogging.

Banks are the Taxpayer's Best Friend

| Tue Jan. 12, 2010 12:24 PM EST

The award for worst lobbying effort of the day comes from a banking industry flack who's opposed to Barack Obama's plan to levy a tax of some kind on the financial sector:

Wayne Abernathy, executive vice president of the American Bankers Association, said in a telephone interview that an industry-specific fee would create a “real fairness issue,” forcing banks to pay for parts of the bailout that “didn’t work.” In addition, Abernathy said, banks are paying an “excellent” return to the Treasury.

That's right: out of the trillions of dollars of help provided to the industry, there was probably a billion here or there that didn't have any effect. And that whole economic collapse thing is really turning out to be a windfall for taxpayers anyway! It would be really unfair to hold bankers accountable for any of this.

More PR like this, please. We'll have pitchforks and torches in the streets yet.

The Point of Education

| Tue Jan. 12, 2010 11:49 AM EST

Matt Yglesias notes a new paper which suggests that a free market in charter schools really can improve education, but only as long as the charters take all comers and don't cherry pick students based on ability:

This is why a reasonably regulated charter school system holds a lot of [promise] but things like vouchers and the new fad for “education tax credits” do not. Once upon a time people on the right could be found to say good things about charter schools, since teacher’s unions often don’t like them. But crucially charter schools don’t do anything to entrench the privileges of the wealthy, so the main right-wing advocacy organizations have moved past them to more inequality-boosting alternatives.

Fair? Or a partisan cheap shot? I vote for fair. How about you?

Revisiting the Intelligence Failure

| Mon Jan. 11, 2010 9:41 PM EST

Was the underwear bomber plot an egregious breakdown of U.S. intelligence?  Bruce McQuain at QandO summarizes the case for a massive failure to connect the dots:

  1. His dad, a former minister in Nigeria, informed the US embassy there that his son had been radicalized (the dad obviously had a reason for concern).
  2. US intelligence had been following him for a while, dubbing him “the Nigerian” (one assumes there was a reason).
  3. He was on a watch list (one assumes there was a reason).
  4. He had been banned from Britain (yup, one assumes there was a reason).
  5. The British intelligence service had identified him to our intelligence agencies in 2008 as a potential threat (sigh, uh, yeah, reason).
  6. He’d just visited Yemen, an al Qaeda hotbed (given the first 5, one can reasonably guess at the reason).
  7. He bought a one-way ticket to the United States in Africa through Europe (red flag 1).
  8. He paid cash (red flag 2).
  9. He checked no luggage (red flag 3).

You can find a pretty similar outline almost anywhere. But the more we learn, the less this seems to be holding water. Let's go through the list one by one:

  1. Jim Arkedis, a former intelligence analyst: "For the record, 99 percent of the time, walk-in sources to U.S. Embassies are of poor-to-unknown quality. That includes friends and family members who walk into the embassy and claim their relatives are potential dangers. Why? Family relations are tangled webs, and who really knows if your uncle just might want you arrested in revenge for that unsettled family land dispute."
  2. This is true. But we didn't have a name, only a tip that "a Nigerian" might be planning an attack.
  3. Yes. But as the LA Times puts it, he was on a list of half a million people with "suspected extremist links but who are not considered threats."
  4. Yes, but not because of any suspected terrorist ties. From the New York Times: "[Home Secretary Alan] Johnson said Mr. Abdulmutallab’s application to renew his student visa was rejected in May after officials had determined that the academic course he gave as his reason for returning to Britain was fake....The rejection of the visa renewal appeared to have been part of a wider process initiated by British authorities this year when they began to crack down on so-called fake colleges that officials said had been established in large numbers across Britain in an attempt to elude tightened immigration controls."
  5. No, they didn't. From the Telegraph: "Diplomatic sources said that the Prime Minister’s spokesman had intended to refer to information gleaned by MI5 after the Christmas Day incident following an exhaustive examination of records going back through Abdulmutallab’s time in Britain up to October 2008."
  6. True.
  7. No, it was a roundtrip ticket.
  8. Nigeria and Ghana (where Abdulmutallab bought his ticket) are largely cash economies. Andrew Sprung tells us that Abdulmutallab "would certainly raise no alarms by paying cash."
  9. This is apparently true.

The Christmas bombing attempt might well turn out to be a serious intelligence failure. But the evidence so far suggests that the only red flags known to U.S. intelligence were (a) a walk-in warning of dubious value from Abdulmutallab's father, (b) warnings that "a Nigerian" was planning an attack, (c) Abdulmutallab's recent trip to Yemen, and (d) his lack of checked luggage. That's not very much.

We should all keep an open mind on this. But the more facts that come out, the less it seems as if the intelligence failure was really that serious. There were only a few vague warnings in the system, not the panoply of blinking red alarms that we've been hearing about. If the current information turns out to be true, it's hard to imagine that any real-life intelligence system would ever have been likely to pick up on a guy like Abdulmutallab. Before December 25th, he just didn't seem that dangerous.