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June 2008

June 27, 2008

The Billionaire Society

Niko Karvounis

This year Forbes magazine listed 1,125 billionaires in the world, compared to 946 in 2007--and a measly 140 billionaires in 1986, the first year of the publication's ranking. Clearly, the ranks of the billionaire class have swelled.

This week, The Century Foundation hosted a three-day conference on "Billionaires and Their Impact" as a session of the 2008 New York Times Journalism Institute, which seeks to inform and enlighten prominent journalists on important--and under-reported--issues.

You might think that the identities and exploits of America's billionaires are anything but underreported--and you'd probably be right. We hear a lot about Bill Gates, Warren Buffet, Rupert Murdoch, and all the rest; but what we don't hear all that often is what's going on around them. How does the rise of billionaires tie into inequality? To globalization? What is their influence on society and politics? In short, what does it mean to live in the 'Billionaire Society'?

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June 26, 2008

Five Myths About the New Wiretapping Law

Patrick Radden Keefe

Sometime today, the Senate is likely to approve the most comprehensive overhaul of American surveillance law since the Watergate era. Unless you're a government lawyer, a legal scholar, a masochist, or an insomniac, chances are you haven't read the 114-page bill. Don't beat yourself up: Neither have most of the 293 House members who voted for it last week. Ditto the mainstream press, who seem to have relied chiefly on summaries provided by the same lawmakers who hadn't read it.

To be fair, wiretapping is so classified, and the language of the bill so opaque, that no one without a "top secret" clearance can say with any authority just how much surveillance the proposal will authorize the government to do. (The best assessment yet comes from former Justice Department official David Kris, who deems the legislation "so intricate" that it risks confusing even "the government officials who must apply it.") Out of the echo chamber of ignorance and self-serving political cant, a number of myths have begun to emerge. We may never know for sure everything that this new legislation entails. But here are a few things that it most certainly doesn't.

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The Dutch Health Care System

Maggie Mahar

This post was written by Maggie Mahar and Niko Karvounis

In a recent issue of Healtyh Affairs, Wynand van de Ven and Frederik T. Schut, two professors at Erasmus University in Rotterdam, authored an excellent profile of the Dutch health care system, which includes some appealing features that might serve as a model for the United States. [Click these links for earlier  pieces on  Germany and China.]

Why should we care how they deliver health care in a tiny country most of us will never visit? Few European health care systems have garnered the kind of attention from Americans that the Dutch system has received.—especially from folks not known for their Euro-philia, including the Bush Administration. In the fall, the White House sent a delegation to the Netherlands to learn more about the Dutch system.  The Wall Street Journal also has praised the Dutch system for accomplishing “what many in the U.S. hunger to achieve: health insurance for everyone, coupled with a tighter lid on costs.”

What could make conservatives entertain the possibility that we might learn from Europeans? Under the Health Insurance Act of 2006, the Dutch have created a system of universal coverage delivered entirely through private insurers. In this, the Dutch plan is very much like the plan Dr. Ezekiel Emanuel proposes for the U.S.  in his new book Healthcare, Guaranteed. (We wrote about Emanuel’s plan here  and here), calling it a “fresh” proposal for reform.)

Consumers Have Choices

For those Americans uncomfortable with the idea of “Big Government” delivering their health care, the Dutch model is appealing. And Americans are bound to like the idea that consumers have many choices: according to the Commonwealth Fund, there are 14 private insurance companies in the Netherlands and several related subsidiaries. This means that individuals can shop for insurance—a process made all the easier by a Dutch government web site “where consumers can compare all insurers with respect to price, services, consumer satisfaction, and supplemental insurance, and compare hospitals on different sets of performance indicators.” Thus, much to the delight of consumer-minded health care reformers, the Netherlands has essentially institutionalized comparison shopping.

Individuals also have the option of paying extra to beef up their benefits package. Van de Ven and Schut note that the Dutch can buy “supplementary insurance for benefits that are not included in the mandatory basic insurance, such as dental care for adults, physiotherapy, eyeglasses, alternative medicine, and cosmetic surgery.” More than 90 percent of the Dutch population takes advantage of this option –which suggests that the supplementary insurance is not too expensive for the vast majority of the population.  Van de Ven and Schut tell us that “most people [purchase their supplementary insurance] from the same insurer that provides their basic coverage.”

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June 24, 2008

Comparative vs. Cost-Effectiveness

Maggie Mahar

The idea of “comparative-effectiveness” research has become a hot topic in health care circles. Conservatives are adamantly opposed to it—as are drug-makers, device-makers and even some physicians who have become involved in designing and profiting from new tests and procedures. They don’t want to see their products and services subjected to head-to-head comparisons with the less expensive rivals that they hope to replace. After all, they know that they might lose. As medical research shows, often, what is “newest" isn’t best.  And with billions of dollars at stake, who wants to be a loser?

But if you think that any mention of comparative-effectiveness research pushes buttons, try talking about appraising the “cost-effectiveness” of medical products and procedures—i.e. asking whether the benefit justifies the price tag. For example, is it really worth paying $100,000 for a drug that will give the patient an extra six months of life?

Often, the two ideas are confused. Indeed, those who oppose health care reform argue that any attempt to set up a Comparative-Effectiveness Institute (as presidential candidate Barack Obama, among others, has suggested) inevitably puts us on a slippery slope headed straight toward making medical decisions based on “cost-effectiveness.”   Before long, the conservatives say, Medicare will be denying treatments simply because they are too pricey. 

Yet, is it such a terrible idea to take cost into consideration?  In a recent issue of the Annals of Internal Medicine, the American College of Physicians (ACP) argues that the United States needs to invest in a national entity that would generate information on both clinical comparative-effectiveness and cost-effectiveness. According to ACP, by failing to make such information available, we undermine efforts by payers, physicians, and patients to make effective, informed choices that optimize the value they receive for their health care dollars.

In the same issue of the Annals, health care economist Gail R. Wilensky, a senior fellow at Project Hope, disagrees, arguing that it is “vitally important to keep comparative clinical effectiveness analysis and cost-effectiveness analysis separate from each other.”  If you talk about “comparative-effectiveness” and “cost-effectiveness” in one sentence, you could doom both ideas.

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June 23, 2008

Obama and McCain: Who Would Pay Taxes?

Bernard Wasow

Since 1980, economic growth has concentrated income at the very top of the income distribution.  After 2000, that tendency became especially intense, with 75% of all income growth accruing to the top one percent of households.  Tax policy could have mitigated this trend but it did not. The tax cuts of 2001 and 2003 provided the bulk of their boosts to the after-tax income of the same households that enjoyed the most rapid growth of pre-tax income, those with the very highest incomes.


Presidential contenders Barack Obama and John McCain are laying out careful tax policy proposals that allow one to answer the following questions:

  • What will happen to total tax collections under the candidates’ tax proposals?

  • How will taxes and after-tax income change for households at various points in the income distribution under the proposals?


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June 20, 2008

Who Does the Public Blame for Energy Problems?

Ruy Teixeira

There’s a lot of debate in Congress these days over how to solve our energy problems. Whether that will result in real progress in this area remains to be seen. The public, for its part, is looking for action and is strongly convinced that too little is currently being done.

An early June Gallup poll found that just 17 percent of respondents said that President Bush is doing enough to solve the country’s energy problems, compared to an overwhelming 78 percent who said he is not doing enough.

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June 19, 2008

Do We Need to Ration End-of-Life Care?

Maggie Mahar

In the days and weeks before they die, fifteen to twenty percent of terminally ill cancer patients receive “palliative chemotherapy.” Their doctors do not expect chemo to cure them. Why then, do they receive it?

In “The Role of Chemotherapy at the End of Life: When Is Enough, Enough?", Drs. Sarah Elizabeth Harrington and Thomas J. Smith explain: “Chemotherapy for metastatic solid tumors such as lung, breast, colon, or prostate cancer rarely if ever cures patients. The indication for such chemotherapy is to improve disease-free or overall survival, relieve symptoms, and improve quality of life.”

In the article, which appeared in the most recent issue of JAMA, Harrington and Smith tell the story of Mr.L., a 56-year old businessman who is determined to fight the lung cancer that has spread to his spine and brain. Even when his oncologist recommends that it is time for Mr. L. to shift over to hospice care, Mr. L. refuses.   

“You know my husband was extremely determined to remain positive, and he never was going to give in [to the fact] that this could eventually kill him,” his wife reports proudly. “It didn't really dawn on my husband that he was going to die until he was in the hospital with pneumonia, which was two weeks before he passed away.”

Near the very end of Mr. L’s life, the hospital staff called in a palliative care specialist to help Mr. L. face the fact that he was dying and to consider his options.

Chemotherapy had helped him during the first eight months after he was diagnosed, but during the last six months of his life, as his condition deteriorated, the medical staff felt that because the cancer had spread to his brain, “he was not making informed choices and had lost opportunities to do other  important things with his remaining time while pursuing further  chemotherapies and clinical trials.”

The palliative care specialist believed that he should have been called in sooner. Arguably, Mr. L. needed an oncologist like Dr. Peter Eisenberg, who I quote in part 1 of this post: “Most oncologists don’t talk about the important stuff. They just say, ‘In six to eight months, if this doesn’t work, we’ll try Plan B…”

By contrast, Eisenberg levels with his patients: “I ask them: ‘How do you want to spend the rest of your foreshortened life? Do you want to spend it hanging out with me and my staff [going through another round of chemo]—or do you have something else that you want to do?’”

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June 18, 2008

Ten Comments on the Gaza Cease-Fire and What Next:

Daniel Levy

Reports are emerging from the region that the long awaited truce effort mediated by Egypt between Israel
and Hamas (representing all the Palestinian factions in Gaza) is reaching closure. According to reports, the arrangement will come into effect at 0600 on Thursday, barring any negative developments. It is still unclear whether this will be a formal ceasefire or a set of informal arrangements—though you can certainly forget any theatrical hand shaking ceremony with accompanying pyrotechnics (well not those kinds of fireworks, anyway). Negotiations have been taking place for several weeks and if there is a cease-fire, or tahadiyeh, then it will be fragile, have implications for Israeli and Palestinian politics, for the peace process, for the region, and for the US. So here are 10 quick and initial thoughts on where we are, what to expect, and what to look out for:

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June 17, 2008

How Much Do We Spend on Nursing Homes?

Maggie Mahar

We know that as a nation, we invest well over $2 trillion each year in healthcare. But where exactly do our health care dollars go?  Where are they well-spent and where are they wasted?

In recent months I’ve been trying to answer those questions by looking at healthcare spending sector by sector, analyzing how much we spend on physicians’ services (here  and here);  on hospitals (here and here) ; and what share our health care dollars is eaten up by insurers’ “administrative costs and overhead.”

This post will take a hard look at spending on nursing homes.  As the chart below reveals, the nursing home sector accounts for roughly 6 percent, or $124.9 billion of the more than $2 trillion that we invest annually in healthcare. As always, the question is “Are we getting good value for our money?”  Given how vulnerable nursing home patients are, questions about quality deserve special attention.


Quality of Care

The news is almost as depressing as The Savages. (A powerful film, starring Philip Seymour Hoffman, Laura Linney, and Philip Bosco about a brother and sister who are faced with putting their father in a nursing home.)

Begin with a recent GAO report.  Last month the Government Accountability Office reported that when Congressional investigators double-checked nursing home reports from state inspectors, they found widespread “understatement of deficiencies,” including malnutrition, severe bedsores, overuse of prescription medications and abuse of nursing home residents.”

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Americans Hit New Record on Economic Pessimism

Ruy Teixeira

Just how sour are Americans getting on the economy? Well, the last time the public was asked whether we are currently in a recession, the public’s verdict was that we are, by an extraordinary 5-to-1 margin (78 to 17 percent). Not much ambiguity there.

And a recent Gallup poll finds that, for the first time in 32 years of asking the same question, a majority (55 percent) of the public now says that they are financially worse off now than they were one year ago. In other words, most Americans believe their economic situation is moving backward, not forward. A mere one-quarter (26 percent) of Americans think their financial situation has improved in the last year.

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