Saving Money on Cardiac Care

The federal government’s own actuaries are once again pessimistic that America’s health-care costs will continue their slow growth. Thankfully, their boss, Sylvia Burwell, the secretary of Health and Human Services, is working hard to prove them wrong. On Monday, she took another big step in the right direction.

Medicare costs this year are up only 4 percent, which means that on an inflation-adjusted basis, spending per beneficiary is declining. And that’s been the pattern of the past five years — despite the actuaries’ repeated predictions that cost growth is on the verge of picking up.

From Bloomberg View – Articles by Peter R. Orszag

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This Isn’t ‘Big Data.’ It’s Just Bad Data.

With response rates that have declined to under 10 percent, public opinion polls are increasingly unreliable. Perhaps even more concerning, though, is that the same phenomenon is hindering surveys used for official government statistics, including the Current Population Survey, the Survey of Income and Program Participation and the American Community Survey. Those data are used for a wide array of economic statistics — for example, the numbers you read in newspapers on unemployment, health insurance coverage, inflation and poverty.

From Bloomberg View – Articles by Peter R. Orszag

Let Veterans Get Civilian Medical Care

I disagree with pretty much everything Donald Trump has ever said. But in calling for veterans to have more options on their doctors and hospitals, he’s got a point. Imagine, for example, the outrage if military veterans were able to receive subsidized health care at the clinic or hospital of their choosing, but were then forced into a separate system of run-down, inconveniently located facilities. If the next administration rejects proposals to reform the Veterans Health Administration and instead perpetuates the current system, the effect will be the same.

from Bloomberg View – Articles by Peter R. Orszag

Clinton’s Shrewd Plan to Stop Inversions

Political campaigns are not generally known as ideal laboratories for devising sensible, innovative policies. Yet Hillary Clinton’s proposals to combat corporate inversions — in which U.S. companies move their tax homes abroad — are just that. They would largely eliminate the tax incentives to invert.

A U.S. company currently has many such incentives. It can lower its taxes by creating a home base in a low-tax country, even if it leaves its headquarters and other operations in the U.S., and even if the U.S. operations represent as much as 79.9 percent of the new combined company (though the rules are stricter if the share is 60 percent to 80 percent).

from Bloomberg View – Articles by Peter R. Orszag

A Better Way to Educate Doctors

Just when it seems as if citizens everywhere are revolting against government, a county in Texas provides a vivid counterexample. In 2012, voters in Travis County approved an increase in their property taxes to help fund a new medical school at the University of Texas at Austin. The school illustrates that taxpayers are willing to support a project they believe is justified.

And this project — the Dell Medical School (it also has funding from the Michael and Susan Dell Foundation) — is well justified, because its curriculum breaks from tradition to address the challenges doctors increasingly face in the effort to improve the value of medical care.

Health care is undergoing surprisingly rapid transformation.

from Bloomberg View – Articles by Peter R. Orszag

People Aren’t Unequal; Companies Are

Wage inequality, according to one popular view, arises from differences in the talent and determination of individuals: Some superstars win, and everyone else does not.

What if the winning superstars aren’t people, however, but companies? Then if you’re working at one of those companies, you’re doing great, and if not — well, good luck.

Consider this: Capital returns at companies are diverging sharply, and the share of them that reap annual returns of more than 25 percent or even 50 percent is growing. This is what Jason Furman, chairman of the President’s Council of Economic Advisers, and I found in a study whose results are being released Friday. It’s plausible that some of those big returns are shared with the companies’ employees. And that may well be playing an important role in growing wage inequality.

from Bloomberg View – Articles by Peter R. Orszag

Born in 1988? Sorry.

It’s bad luck to be born 20 years before a time of high unemployment. It affects your income when you enter the workforce, naturally, but that’s not all. It can keep your earnings relatively low — and chip away at your health and happiness, as well — for a lifetime.

Many studies have documented the income effect. A typical estimate, from a 2010 study, is that every percentage point increase in the unemployment rate during the year a person enters the workforce reduces his or her wages by 6 percent to 7 percent on average. And the reduction persists, though it diminishes somewhat over time. Even 15 years on, a person’s wages are 2.5 percent lower for every percentage point increase in the unemployment rate that happened when he or she graduated from college.

from Bloomberg View – Articles by Peter R. Orszag