Thursday, October 29, 2009

Sutherland Institute's Prosperity Forum: Utah's Budget

I attended the Sutherland forum on the state budget this afternoon. The panelists were Representative Rob Bigelow, Salt Lake Chamber president Lane Beattie, Deputy State Superintendent Dr. Martell Menlove, and former Governor Norm Bangerter.

Lane Beattie spoke first, stating that this is "one of the most difficult years in the history of Utah". He said the state had revenues of $5.3 billion in 2007, and has dropped a billion dollars to only $4.3 billion. Budget cuts need to be the "right cuts, right time, in the right place".

He said the state funded for growth in public education, but not in higher education. A situation he thinks is a mistake since higher ed has seen large increase in demand specifically because of the economic downturn. This year the Chamber expects a 12,000 student increase in higher education, and the chamber wants more funding. They advocate reinstating the sales tax on food, indexing the tax on motor fuel, taxing coal, and rescinding other tax cuts and exemptions if even for a short period of time.

Next up was Dr. Martell Menlove, who said officially public education had a 2% budget reduction last year, but because of 15,000 enrollment growth the effective cut amounted to 7 1/2%. Without those cuts 500 additional teachers would have been hired. He proposed that public education received level funding this year.

Finally, Norm Bangerter spoke. He recognized that there are polls showing current support for higher taxes to fund education. He then told the story of when he was governor and had the same situation; polls in favor of higher taxes. So he raised taxes for education, and consequently saw his approval rating drop from 75% to 41% in just two weeks. I spoke with him about this for a few moments after the forum, and he again remarked that there is at times a disconnect with how Utahans answer polls and how they actually vote. I found this interesting coming on the heals of my recent education funding post. Governor Bangerter said he supports reinstating the sales tax on food, but also said, "I don't think we can take a general tax increase."

At the end of the panelist remarks there was a Q&A session. The most interesting part of which was when, on the heels of a questionor being told that every department should expect a lower budget, someone asked if government has a moral responsibility to needy or disabled citizens. Representative Bigelow answered that yes there is a responsibility, but the state only has a certain amount of money, and the budget must be balanced. This led to Dee Rowland, who I recognized from her time as a panelist for Sutherland's SB81 forum, to say that she saw the need for higher revenue (read: higher taxes) and thinks that Utahans would support this as well. She then asked what she and others could do to help the Legislature drum up support for raising taxes. Representative Bigelow's response was interesting. He said that he often hears people say they would be willing to pay more taxes to fund X program. The problem is that the support is not broad based. Everyone has certain things they would like to fund, but it's really an issue of balance, and balancing the needs of different groups. These budgeting issues are really about shifting the impact from one group to another. As for convincing the public to support higher taxes, Rep Bigelow didn't seem too optimistic. He said the public generally drives itself and that even the media with all its influence can't really drive it. At this point Governor Bangerter interjected and said that the polls may say there's support for higher taxes, but that he doesn't believe it was true.

Also of note is that after the forum was over, the lady who asked the question about government's moral responsibility to provide for people spoke with Gov Bangerter about that topic. Part of his response was that often those who talk about wanting the government to provide assistance don't provide that assistance themselves, despite being very well off. He said we currently have a president who made a million dollars last year and gave about 1% of it to charity.

Wednesday, October 28, 2009

Utah's Medicaid Doesn't Check for Fraud. On Unrelated Note, Medicare Losing $90 Billion A Year to Fraud

I recently discovered that our state Medicaid program is incredibly inept at catching fraud. Why is this important, you ask? Because 60 Minutes just did a piece about how Medicare is being defrauded out of $90 billion a year because they too are inept at catching it.

But yeah, a single payer system would be totally cool.

Watch CBS News Videos Online

Wednesday, October 21, 2009

Heather Graham Starring as Public Option - She Should Be Running By Herself

Because that's what the public option is all about.

More Absurd Lies in Health Care Discussion

I recently wrote about an interview NPR conducted with the author of a new book which shows that Lyndon Johnson lied to the American public in order to get Medicare passed. In the words of the author,
"One of the things he did was suppress the costs...if the true cost of Medicare had been known, if Johnson hadn't basically hidden them, the program would never have passed."
I tied this propensity for lying to the various lies and misrepresentations coming from Congress and the White House in the ongoing health care reform debate. This of course was dismissed as "full of logical absurdities".

In light of that discussion I was interested to read this editorial reprimanding the White House for using legislative tricks, in other words lying, to suppress the true cost of the latest health care reform bill being bandied about. It seems that in order to get under their self-imposed cost threshold, Congress has simply moved $247 billion in costs to a different bill which wouldn't go into effect for a year. It's the very definition of a shell game. This one designed to trick deficit conscious people into supporting this reform bill.

Friday, October 16, 2009

Utah's Medicaid Has Major Issues

In August Utah's Legislative Auditor General released the findings of its audit of the state's Medicaid program. What it found was a program which spends $1.7 billion a year, but has almost no oversight of where it's going.

Reading through the 100 page report, I was struck by the systemic failure exhibited by Medicaid. There is an appalling lack of oversight in basically every area the auditors looked at. From prior authorizations, to provider screening and enrollment, to fraud recovery, and internal policing - it all failed miserably. Each of these areas are critical points in keeping costs down and avoiding fraud and waste, yet the guidelines are either non-existent or so lazily enforced as to be worth less than the paper they're printed on.

For clarification, Medicaid is health insurance for low income people administered by the state of Utah, but funded with both state and federal money. Utah kicks in about $500 million of the total $1.7 billion spent.

There were a couple of things in the audit that stuck out at me. First is that 95% of that $1.7 billion is not reviewed for fraud at all. Organizationally, Medicaid is set up to ignore whether those payments to dentists, doctors, and hospitals are legit or not. There could be double billing, useless tests or exams, or out and out fraud, an no one will ever find out. Which in itself is concerning, but then it's coupled with the fact that Medicaid doesn't review its providers (the doctors, dentists, and hospitals) either. Anyone who wants to be a part of the Medicaid program is accepted, even if they have a history of fraud. So we accept any possible fraudster out there, and then we don't monitor their billings at all. Sounds like a recipe for disaster to me.

And disaster might be what we're getting. The auditors cite a national study which says that on average the low end of fraudulent cases is 3% of total billings. The auditors stress this is a conservative estimate. Well, Utah Medicaid finds and gets money back on about 1.7% of its total spending. But even that low number is misleading because most of that returned money comes not through our efforts, but because private insurance companies find out that Medicaid had paid for a service that was actually the private company's responsibility, and instead of pocketing the savings they fix the problem and pay for it themselves. So Medicaid on its own actually only finds and recovers a fraction of 1% of fraud. Again, this speaks to the total lack of oversight and due diligence by the program.

The most glaring deficiency in the audit is that, again because of poor guidelines and organization, Medicaid itself is never audited. There are no independent internal audits being conducted to ensure everything is on the up and up. So not only does Medicaid not audit providers or look for fraud, but no one is auditing Medicaid either.

The reason all of this is important really comes into focus through a specific, real life example written of in the audit. A provider bills medicaid for $370,000. Medicaid has to determine if the services were actually necessary before they pay for them, so they request medical history documentation. The requested documents never come, so Medicaid doesn't pay. The provider starts an appeal process so they can get their money, but even then they file the appeal late and still don't send the medical documents. Finally, they drop the appeal and go straight to the Medicaid director. Up to this point everything has been handled ok, despite the persistent lateness of the provider. Even going to the director is somewhat supported by written guidelines. At this point the director should have gotten the medical documents, reviewed them, and then made a decision. Instead, he unilaterally gave the provider $370,000 without even reviewing the case. Only after the auditors found this example two years later did Medicaid finally get the appropriate documentation. Medicaid's director's reason for handing over $370,000 without even reviewing the case? He said sometimes that's necessary in order to "maintain relationships with providers."

I can imagine the stress this audit must have created for everyone in the Medicaid office. As a controller of a large company, I get audited every year, and it's a stressful time. I have to justify every decision I've made over the course of the year, and provide documentation as part of the justification. If you're organized and prepared, audits can be relatively simple. If not, they can be a major source of heartburn.

This report is possibly the worst conceivable outcome of the audit. The only way it could have been worse is if the auditors caught Medicaid management stealing funds. The audit shows medicaid fits the stereotype of an inefficient, poorly managed, wasteful government program.

Thursday, October 15, 2009

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Tuesday, October 13, 2009

Another Call For Reducing Class Sizes

The Deseret News ran another editorial advocating reducing Utah's class sizes. They reiterated the statistics showing Utah as last in per pupil spending, as well as polls showing most Utahans believe class sizes are too large and education spending is too small. Quoting Benjamin Franklin, the News writes,
"The only thing more expensive than education is ignorance."
What the Deseret News seems to have forgotten though is that the state spent over $700 million over a decade for the sole purpose of reducing class sizes, and netted a whole two teachers for the effort.

Two years ago the state conducted an audit of their class size reduction (CSR) program. It was this audit that revealed the two net teacher gain despite hundreds of millions of dollars. I wrote about this audit here, here, and here.

The reason for such a poor return on investment is that the number of children entering school increased by far more than was expected. The problem with the Deseret News's argument about cost is that the child increase is expected to continue - so much so that the state will be fortunate just to keep the unacceptable class sizes we have now, let alone reduce them. In fact, the Utah Taxpayers Association put numbers to the traditional class size goal of 15 students, and found it would cost almost $5 billion to reach it.

Reducing class sizes is a worthy goal, but it's important to understand the reality behind the numbers. Editorial boards like the News would do well to remember the lessons learned from audits like the one conducted just two years ago, and use those lessons to shape their policy proclamations.

Friday, October 02, 2009

Civility in Politics

I attended the Sutherland Institute's blogger briefing on civility this past Tuesday. Rob Miller and Dave Hansen formed the panel, and a small group of bloggers were present to ask questions. Most of those who attended have written about the event, including Connor, Frank, David, and Trenton (?) from the blog Victory in Progress.

My notes closely resemble theirs; things can tend to the uncivil, this has been going on for a long time in politics, and it's really up to the individual to decide to remain civil. There is some interesting discussion of the value of being nice/civil vs. being direct and honest despite the risk to decorum. My two cents in that discussion is that I think it's possible to be honest and civil at the same time. But even then, you cannot control what others may take offense.

However, there is one point that has been bouncing around my head since the briefing. It's an idea that first came to mind when I read CS Lewis's The Screwtape Letters two years ago. A particular chapter so resonated with me that I wanted to save the idea; so I blogged about it. More accurately, I typed a paragraph from the book which I felt summed up the thesis of the chapter quite well. I reproduce it here:
But flippancy is the best of all. In the first place it is very economical. Only a clever human can make a real Joke about virtue, or indeed about anything else; any of them can be trained to talk as if virtue were funny. Among flippant people the Joke is always assumed to have been made. No one actually makes it; but every serious subject is discussed in a manner which implies that they have already found a ridiculous side to it. If prolonged, the habit of Flippancy builds up around a man the finest armour plating against the Enemy that I know, and it is quite free from the dangers inherent in the other sources of laughter. It is a thousand miles away from joy; it deadens, instead of sharpening, the intellect; and it excites no affection between those who practise it.
How this short paragraph sums up what often passes for dialogue - both in mass media as well as in the blogosphere! It may not be the best way, but I don't mind so much a fervent, even angry exchange of ideas - so long as ideas are exchanged. However, what seems to happen more often than not is what CS Lewis describes as flippancy. People have been "trained to talk as if (fill in the blank) is funny." There's no actual joke being told, it's just assumed to have already been made. The more a person uses this tactic, the more immune they become to anything resembling a dialogue, the more every other opposing viewpoint appears ridiculous to them.

For instance, when then Vice President Al Gore was running for president, a joke arose that to this day continues to dog him. In an interview with CNN before he had even secured the Democratic Party's nomination VP Gore was asked,
Why should Democrats, looking at the Democratic nomination process, support you instead of Bill Bradley? What do you have to bring to this that he doesn't necessarily bring to this process?
Al Gore's answer, taken as a whole, was pretty generic. A sort of, 'look at my record, I've pushed for important things before, and I'll do the same as president' type of answer that went on for a couple of paragraphs. But there was one short phrase in his answer that demonstrates the power of flippancy,
I took the initiative in creating the Internet.
We all know how that phrase turned out. A politician describing his view that he had been at the forefront of legislation which allowed the internet to completely change the world we live in somehow got twisted into a decade-long (and counting) running joke. To many, the "Al Gore thinks he invented the internet" is a knee jerk response to anything the former VP says - even if that has nothing to do with current events. It's a slam inserted into any discussion of what Gore is doing or saying. Those that do so have safely armored themselves against actual dialogue.

This is one example of many. The characterization of the TEA parties and Town Hall goers as mobs is another. It is generally how political viewpoints are dismissed, and how political campaigns are waged. Making your opponent an object of ridicule is far easier, and unfortunately more successful, than debating ideas. In my opinion, this is what truly infects our political culture, and what leads to incivility. It is an easy game to get caught up in, and it is up to each individual to see past the flippancy to the real dialogue begging to be held.