Saturday, December 28, 2013

How We Do Harm

It's one thing to read a statistical assessment of overtreatment, and how some "cures" are either ineffective or worse.  It's quite another to read the personal stories of people who underwent such treatment. 

A woman suffered brutal side effects getting HDC-ABMT, only to discover that studies show the treatment doesn't prolong survival.  A few years later she finds the cancer has come back, and at almost the same time she loses her insurance for having blown the life time benefit max.

A 70 year old man gets free prostate cancer screening at the mall, finds an abnormality and gets "treated."  He spends his remaining years incontinent and with a colostomy bag before dying of a UTI.

Even as we spend vast sums on overtreatment we have people suffering from undertreatment, such as an uninsured woman who walked into an ER with a body part in a bag after suffering auto-mastectomy from advanced, untreated breast cancer.

Health care reform is going to have its ups and downs.  But if you ever need a reminder about why the pre-ACA system was unacceptable, why it was a gross moral failure, check out How We Do Harm by Otis Webb Brawley and Paul Goldberg.  In their words, incidents of failure weren't aberrations from the system, failure was the system. 

Saturday, December 7, 2013

Hollywood Micro Apartments- what exactly is the problem?

Micro-apartments continue to draw opposition, particularly the Hollywood location. Why?

Street-parking near the Hollywood location is already at capacity, it's extremely rare to see open spots.  And because of the configuration of the highway and Sandy Blvd there are no nearby neighborhoods that would absorb parking by new residents.  Given that, what difference could new residents make?  There's no such thing as negative parking spaces, street parking can't be more full than it is now.  I get the distinct impression neighborhood concerns are not about parking, but about other things.

A recent letter from the Hollywood Neighborhood Association Board printed in the Hollywood Star reinforces that impression, emphasis mine:

Imagine the effects on your neighborhood if small, single-family homes on standard 50-by-100-foot lots were replaced by 64-foot tall apartment buildings that housed 70 or more people stuffed into 56 dormitory-like units with no parking.  Imagine further that the buildings' tenants were temporary with no connection to each other despite its so-called "group living" designation.  Imagine no dorm proctor to keep things from getting out of hand.  It is easy to anticipate noise problems, even worse parking problems than we've already experienced from no-parking apartments…

Never mind the false insinuation that the block in question is for single family homes when in reality it is surrounded by commercial property and highway, and zoned CX intended for intense development.  And never mind the hand-wringing over the plight of people "stuffed" into dormitory like units since no one will be there except by choice, meaning without that choice they'll be somewhere worse. 

 Look instead at the concerns:  The residents will be noisy and temporary, they won't have a proctor.  Those concerns have nothing to do with parking, and everything to do with fears and preconceptions about potential new residents.

If residents of the new buildings create noise problems or "get out of hand," whatever that means, then it should be addressed via law enforcement just as it would be if they lived in a single family home.  And yeah, people in single family homes do get out of hand and we find a way to cope and the world goes on.  But do we prohibit construction of new single family homes because their residents might be criminals?  How is that any more rational with apartments?

People should be judged on what they do, not on where they live.  It is shameful when we do otherwise.

Saturday, November 30, 2013

Portland's problem with density

Portland has a problem with dense development.  The problem is that we are too willing to reject it, whether because we're enamored with what we have or afraid of what is new.  That mix of complacency and xenophobia will in my view doom efforts to build and sustain a livable city if it goes unchecked.

One problem is suburbs.  When we don't accommodate people living in the city, we force them into suburbs.  By their nature such areas are vastly more car-centric, and its citizens car-dependent.  Disproportionate population growth there will, through democracy, lead to a more car-centric public policy.  Highways instead of streetcars, more space devoted to parking instead of retail or other human use.  We can't force most of the metro population into an environment antithetical to livability without inviting blowback.

Another problem is economics.  What happens when you increase the desirability of something, but not its supply?  Prices go up.  And in Portland, housing prices go up a lot.  Despite the bubble, housing prices have increased more than 60% since 2000 as measured by the Case-Shiller index.  How many households have seen their income grow by 60% over this time?

Inflationary housing prices mean the city will be accessible only to an ever smaller, wealthier class.  That compounds the public policy problem (why should poorer suburbanites accept policy dictates that cater to urban elites?), and it reduces Portland's diversity.  Cities thrive on diversity and the interplay of different ideas that come from different backgrounds and experiences.  That dynamism creates jobs.  Restricting housing in the city will push out not only people, but creativity and job creation.  How livable is a city without those?

Here is a litmus test for Portlanders.  Take the number of years you've been living in your house and imagine someone born that many years after you.  Suppose this hypothetical person grew up in a similar environment as you and made similar choices about education, family, and career.  Would they now have the same ability to move into a city neighborhood, not necessarily the same neighborhood but one with comparable amenities, as you did years ago?  Extending the idea, I'd say a community which by design bars our children from doing and living as we do cannot be called sustainable. 

It isn't enough for livability to be a good idea, an affectation that we put on like a fancy hat.  To mean something in the real world it has to be able to grow.

Friday, November 29, 2013

Something to like about the Exchanges

There is a lot to dislike about exchanges and their rollout, but here is something to like.  Providers complaining about pay. 

The exchange is first and foremost a marketplace, it’s a means of communicating preferences between buyers and sellers of health care.  Buyers who choose low cost, limited networks are sending a message that the services of high cost providers are not worth the price.  What happens next?

One way providers could respond is to lower prices.  Another way is to make their case to the public justifying high prices and explaining why they are worth it.  Both of those are good things, as they'd force providers to think about costs and benefits.

Another way to respond is to lobby the government for preferential treatment as described by the WSJ.  To the extent providers are arguing for more money because that's what they're used to getting, the door should be slammed in their face.  But if a provider wants to argue that their service is so critical and so unique that a service area is being deprived of critical care if they're excluded from a network, than they've got a point. 

There are two kinds of facilities that might claim that:  those with high cost/low utilization services such as a burn unit, which serve only a tiny fraction of the population but are critical for them, or rural providers where they may be the only show in town.  Those cases are unique and may indeed warrant special treatment.  But that treatment can't be a simple mandate in their favor, it has to include obligations acknowledging that such providers are in effect monopolies. 

That's another conversation that has to happen, a recognition that there are areas of health care where because of monopolies, competition makes no sense.  In those areas the only answer is public oversight, as intensive and invasive as is applied to other utility providers.  And we should accept the possibility that for some services, the community really doesn't need a local provider and prefers the burden of having to travel further to receive such care.

All of these conversations about costs and benefits, monopolies and oversight are way overdue, ignoring them has turned health care into a runaway train.  Whatever the rollout problems, if the ACA makes those conversations happen I'd mark it a success.

Thursday, November 21, 2013

Messing up Cover Oregon is not an argument for single payer

Tim Nesbitt writing in the Oregonian suggests the state's problems with the exchange give reason to support single payer.  I don't think so.

Imagine going into a new restaurant in which you are a part owner and ordering  a meal.  Every few minutes the manager comes over and says it will be ready in another few minutes, but the meal doesn't come.  Finally, he apologizes and says that they hired a third party vendor to run their kitchen, and while they've tried their best to ensure that the vendor fulfilled the contract it just isn't getting done.  In order to be served the manager suggests you,
  1. Go to a food fair where there will be other chefs to prepare a meal
  2. Hire your own chef
  1. Do your own cooking and buy direct from grocers.

There are a lot of ways people might respond to that.  One might swear never to eat there again.  One might tolerate the problems in the short term, hoping for eventual improvement.  One might want to fire the manager, telling him and his cowboy boots to take a walk.  And one might try to shut down the whole restaurant, though that is a bad idea for reasons that don't fit into the analogy. 

But what I don't think people would do, what appears to me highly counter-intuitive, is to conclude that we should shut down every alternative kind of food distribution and trust this manager whose incompetence is proven to oversee delivery of all food to everyone for every meal. 

I'm glad the Medicaid rollout and CCO's are going strong, but lets be honest.  It's relatively easy to get buy-in from people whose only option is nothing.  More than three quarters of Oregonians not already on Medicaid and Medicare had insurance in 2011.  They have options, and the state's handling of Cover Oregon provides little reason to give them up.

Tuesday, November 5, 2013

Sutter Hospitals Settlement

A large non-profit hospital chain settled a lawsuit alleging fraud in their pricing of anesthesia services.  It's interesting because

1)  It's another example of someone going after providers for what the medical world considers business as usual, but which the rest of the world considers fraud.  Oregon's justice department did this when they went after a pair of doctors for not disclosing they were paid by device manufacturers.

2)  It shows the importance of pricing.  Getting providers to disclose pricing isn't just about empowering patients to shop, it's about exposing hospital charges to scrutiny.  Nasty things breed in the dark, like $5,000 "anesthesia" charges for materials and service that cost the hospital $250.

3)  It's worth reading the allegations to get a sense of how messy the billing for a surgical procedure is, and how abusive Sutter's pricing was.  They are contained in a filing by the CA Department of Insurance which supported the suit, it starts on page 18 of the pdf.

4)  It's also worth thinking about the limitations of using lawsuits to control hospitals.  This suit caught one service out of many the hospital bills.  There is nothing stopping hospitals from simply shuffling costs to a different service code.  Or they might not even do that, the basis of the fraud claim was that the hospital was charging a time-based fee for a one-time service that had no time component.  The suit alleged the hospital was either trying to trick people into thinking it was the anesthesiologist's bill (that is billed separately by the anesthesiologist, see what I mean about messy billing) or they were charging for services they didn't deliver.  Hospitals could fix that by just charging a fixed cost that wasn't time based but was no less inflated, and that's essentially what they're saying they will do.

Lawsuits are better than nothing, but they are no substitute for regulation.

Sunday, October 13, 2013

Special Sessions comment

I was irked by today's op-ed lauding Oregon's recent special session as a model for the future. Below is a comment on the story, with the intended formatting. The O's commenting system has a grudge against paragraphs. 

Special sessions are a poor way to run a government.

The recent special session was the embodiment of "quick and dirty" solutions.  It valued short term results- a short term boost and in revenue, a short term boost in school funding- in return for long term, unknown liabilities.  How much of the PERS reform will survive court challenge?  What impact will the tax cut on S corporations have if businesses reorganize so as to take maximum advantage of it?  And in the mix of that short term thinking was pure pork:  a GMO bill that had nothing to do with taxes, nothing to do with education, and that in no way was an emergency requiring immediate intervention.

Oregon may well face an extended period of relative scarcity, where tough decisions that cross traditional interests become routine.  But that makes it more urgent to make such decisions carefully, with full consideration of costs and benefits and long term outcomes.  There are times when leaping before you look may be a good thing.  The management of long term contingent liabilities is not one of them.

Deliberation not only allows for better decisions, it allows the public through its legislative representatives to take ownership of those decisions.  That matters if one believes in democracy and self-government.  What good is a compromise reached only because legislators didn't vote their conscience?  Plus it improves the chances of continuity, and that efforts at reform will be sustained until the underlying problem is solved.  The governor now says PERS reform is off the table.  Is PERS no longer a problem?  Is school funding no longer a problem?

Instead of careful deliberation backed by citizen support what we got in the special session was a plate of spaghetti thrown at the wall.  We can and should do better.

Sunday, September 29, 2013

An open letter to Governor Kitzhaber

Governor Kitzhaber,

I'm writing to express disappointment with your use of the power to call the legislature into special session.  Twice now you have called for sessions based not on emergencies but based on political advantage.  I believe the outcome of these sessions is poor legislation with inadequate consideration of long term goals and consequences.

Last year, a few weeks before Christmas you called the legislature into special session to provide a tax perk to Nike.  Reporting in the Oregonian shows that you were in active discussions with Nike several months prior to December.  You had ample time to advise the legislature of Nike's request and to allow a more deliberate and public discussion of the costs and benefits of Nike's proposal.  You chose to call a special session not out of need but out of convenience.  After being called, the legislature faced a fait accompli.  There was no time to consider alternative mechanisms that could accommodate Nike and other businesses, the legislature's choice was to accept the demand or risk driving the underlying investment out of state.  

The resulting legislation had immediate negative consequences as other large employers wondered why they hadn't received similar consideration.  And the long term consequences of the Nike deal- a 30 year dispensation from state tax law backed by an insurance contract underwritten by the state- are utterly unknowable.  No one knows what state tax law will look like 30 years from now or what liability this created for Oregon.  Fortunately, the legislature was wise enough to include a sunset provision that voided this power without additional legislation.  In the 2013 session there was not even a proposal from either party to renew this power unaltered.  That strongly suggests that when the legislature had time to think about it they found the "Nike Bill" to be a bad idea.

The current special session, called for September 30th, is only marginally better grounded.  The "grand bargain" of PERS reform and tax changes was actively considered in the 2013 regular session.  But that just shows that the use of an emergency session is even less justified.  Neither PERS nor taxes are new.  Neither PERS nor taxes is going away.  So why can't a grand bargain wait until next year?  

The nominal reason, to provide immediate funds for the current school year, is poorly considered.  It is well known that public employee unions will challenge any changes to PERS in court, including those already passed in 2013.  What happens when the court, as is quite possible based on past experience, overturns some portion of the reforms?  What happens to schools which spend money this year that they don't actually have?  It has been a longstanding complaint of districts that their budgets are unstable, leading to constant cycles of hiring and firing teachers.  Your use of the special session here ensures that problem will continue.

The short term education dollars bought with a special session may prove more costly in the long term.  In my school district, it is estimated that the grand bargain would provide an additional 40 teachers this year.  That's nice, but there are 78 schools.  Given ludicrously high class sizes, an extra half-teacher per school isn't an adequate remedy.  Getting class sizes down to something reasonable will require a larger conversation with teachers about the connections between compensation, class sizes, work environment, and ultimately their work output.  Even great teachers become bad teachers when classes are too big.  Having that conversation requires a great deal of trust and respect, it requires that the public and teachers speak and hear each other.  Rushing PERS changes through the legislature and depriving unions of input makes that conversation less likely.

Emergency legislation should address what is truly an emergency and nothing more.  That is not how you've used your power to call special sessions, and in my view your use of that power has hurt the state more than it helped.  I urge you to use greater discretion, and have more respect for the legislative process.

Tuesday, September 24, 2013

The new Medical Underwriting?

There are some interesting ideas in this NY Times piece.  One is that if you want cheap health insurance you have to accept seeing cheap doctors.  No matter how thrifty the administration an insurer can't keep overall costs down by just working on admin, they have to hit the 80%+ of premium that goes to medical care.  That means playing hardball with providers and telling those who can't keep costs down to take a hike.

But you would think insurers would welcome those providers who could keep costs down with arms wide open.  So I was surprised to read this:
Daniel R. Hawkins Jr., a senior vice president of the National Association of Community Health Centers, which represents 9,000 clinics around the country, said: “We serve the very population that will gain coverage — low-income, working class uninsured people. But insurers have shown little interest in including us in their provider networks.”
Dr. Bruce Siegel, the president of America’s Essential Hospitals, formerly known as the National Association of Public Hospitals and Health Systems, said insurers were telling his members: “We don’t want you in our network. We are worried about having your patients, who are sick and have complicated conditions.”
Now maybe that's just jawboning, seeking political pressure to force insurers to pay more, but maybe it isn't.  Insurers are very good at underwriting, at classifying things and figuring out what they cost.  They can't underwrite patients based on their medical profile, but what's to say they aren't underwriting providers based not on cost but on the expected profile of their patients?  Helping people who want cheap insurance find cheap providers is a good thing, helping people who want cheap insurance find providers with cheap patients is not. 

It strikes me that the competitive nature of exchanges might change the market a lot more than people bargained for.  We've been so worried that rates would go up that we may have overlooked what might happen if they go down, and in particular that they might go down for reasons at cross purposes to reform efforts (such as finding new ways to exclude the sick).  

Whether it's jawboning or something else, it will be interesting to see how states react.

Monday, September 23, 2013

Oregon's State Body Tort Cap

Generally speaking, I don't like lawsuits. I think they are to civil justice what personal firearms are to criminal justice. They can serve individual needs, but they make no allowance for community interest and not infrequently the two work at cross purposes. Medical malpractice is a good example.

Lawsuits allow select individuals to recover some damages, but they also encourage providers to take a pre-emptive "defensive" stance when adverse events occur. Instead of analyzing errors and broadly distributing lessons learned providers have incentive to clam up and hope no one notices. The consequences are visible in statistics. The IOM estimated at least 44,000 deaths per year are caused by preventable medical errors but fewer than 5,000 payments per year for fatalities are logged in the National Practitioner Data Bank, a registry of medical malpractice payments. I think the community would be better served by encouraging processes that reduce errors, even if that alters the way individuals seek recovery. Oregon's new malpractice reform is a modest step towards that goal.

Having said that, there are times when individual interests do trump community interests. The constitution enshrines the principal that people cannot be arbitrarily punished or have property seized without due process. Even if the community overwhelmingly supports such an action and even if the community would overwhelmingly benefit from it, in the absence of due process such a taking violates the core individual rights that we grant ourselves. 

I don't see how those rights can be honored by the current tort cap which limits recoveries even for specific economic damages. It imposes arbitrary and unlimited costs on individuals without process or appeal. I say it with a grimace, but I think Mr. Pope is right.

Friday, September 20, 2013

Oregon Med Mal Reform

A followup to my critique of Public Citizen's complaint about Oregon's Medical Malpractice reform.  I said that the world outside the National Practitioner Data Bank is much larger than the world inside it.  For a vivid illustration of how much bigger it is, see this post from Adrianna McIntyre at Incidental Economist.  Around 3%-4% of hospitalizations result in injuries due to medical care, and 1% result in injuries due to substandard care.  Of the Injuries due to substandard care only 2% result in medical malpractice claims.

Reversing that, for every medical malpractice prompted by an injury caused by substandard care during a hospitalization, there are 50 injuries caused by substandard care that didn't prompt a claim plus another 100 - 150 injuries caused by standard care.

Public Citizen worries about the information lost by decreasing the number of claims entering the little green slice that represents the medical malpractice system.  In a world where that reporting could be maintained cost-free, sure we'd be better off with it.  But is maintaining current reporting so important that it's worth discouraging reforms that would increase reporting and scrutiny of the vast world now outside the medical malpractice system?

Wednesday, September 11, 2013

A response to a question...

posed by Nick Budnick in comments on Oregon's new medical mediation law helps bad doctors, national group says

The story is about how Public Citizen is critical of a Disclose and Compensate tort reform program Oregon enacted earlier this year.  The question asked how to weigh the potential loss of reporting of some incidents to the National Practitioner Data Bank(NPDB) state medical board as a result of them being settled through mediation. [alas, I misunderstood the question!]  My response:

Public access to the NPDB doesn't include names of physicians.  Access to that information is generally restricted to hospitals  and credentialing organizations.  Given that, I wouldn't call those reports "public information."  Weighing their value requires knowing how those reports get used in real life, and I don't know that (maybe a future story?)

But I'll speculate that how those reports get used is on second hand decisions:  Should we renew so and so's credentials?  Should we revoke them?  Should we hire or grant privileges?  Except for the case where a facility is reviewing an incident which happened on their premises (and in that case they shouldn't need an NPDB report to tell them what happened)  none of those decisions can influence the process that lead to error, assuming there was one.  They are go / no-go decisions about a specific person and they only effect errors to the extent those individuals are personally responsible for them.

There are really bad doctors and having a process that can get rid of them is a good thing.  But most doctors aren't really bad and most adverse events aren't attributable to a single individual.  Keying off Merwin's comment below most doctors are neither superheroes nor super villains, they're regular people typically working in complicated, interdependent systems.  A malpractice monitoring system that only catches super villains isn't that helpful.

Consider some statistics.  Over the last 10 years there were on average 14,787 medical malpractice payments reported to the NPDB each year.  For the sake of argument let's suppose each and every one of those involved a death.  Well, the IOM estimates there are 44,000 preventable deaths caused by medical errors each year, just in hospitals.  So even using charitable assumptions there are two preventable deaths outside the NPDB system for every one that makes it in.  And when you use less favorable assumptions- fewer than a third of NPBD med mal payments involve a fatality and estimates of preventable deaths due to error go much higher- it's clear that the world outside the NPBD system is  a lot bigger and no less consequential than the world inside it.

Oregon's reform is an acknowledgment of that reality, and intended to encourage institutions to dig deeper into adverse events to better understand why they happened and prevent their recurrence.  It's meant to impact the broad middle ground where most practice is, not the narrow extreme.  And where a provider is at the extreme you have to consider the chance they wouldn't resolve in mediation and they'd get reported to the NPDB anyway.

Opinions will vary, but to me the NPDB issue looks like a small cost for a potentially large gain in patient safety.  I'm surprised and disappointed Public Citizen objects to that.

Sunday, September 1, 2013

Thoughts on Why Leaders Lie

I just finished reading John Mearsheimer's Why Leaders Lie: The Truth About Lying in International Politics.  It's a short easy read providing a taxonomy of the kinds of lies leaders tell and their possible consequences.  Two things struck me.

First, nothing encourages lying like war.  Since war is a matter of survival, successful prosecution of war is a moral imperative that overrules prohibitions against lying.  Plus, the government takes risks and has consequential screwups in war more often than in any other venture.  There are fewer penalties for lying in war and much more to lie about.

Second, lying has bad consequences for democracies.

  • It impairs the ability of voters to act on their interests at the ballot box.  Informed choices are impossible without good information.
  • It impairs the ability of government itself to function as agencies learn to distrust each other.  Everyone has to devote extra resources to verification and they won't always get it right, either missing a lie or assuming something true is false.  As with voters informed decisions requires good information.
  • Lying undermines the rule of law.  When it becomes commonplace it's hard to hold anyone accountable, the excuse that "so-and-so got away with it so why shouldn't I" looms larger and larger.  Plus, frictional costs weigh down the system.  IL governor George Ryan banned the death penalty not because it was wrong but because lying was so prevalent in prosecutions that it could not be fairly applied.
  • Finally, it breeds cynicism in the public and dissolves respect for democracy.  A nation with a cultural of lying is vulnerable to authoritarianism.

Putting those two ideas together you have to wonder, what happens to a democracy that embraces permanent war?

Saturday, August 10, 2013

WSJ on Oregon Health Plan

The Wall Street Journal ran an op-ed this week critical of Oregon's Health Evidence Review Commission (HERC).
Some parts of it were misleading and some outright false*, but on a fundamental level the concern it expresses is correct. To the extent we turn over health insurance to government we have to live with what government gives us.

What government gives us isn't arbitrary, it's a product of a public process which because we're a democracy is ours to control. But it's for all of us to control, and what we collectively decide may not coincide with what some of us individually might prefer. That's the case with education, the law, and everything else achieved through a political process. Health care is no exception.

If that sounds scary, chew on the alternative. How effectively could we act on our preferences in the pre-ACA system?
 *Factual issues:
WSJOn Thursday a state board could change Oregon's Medicaid program to deny costly care to poor patients who need it most...    
 That's why HERC, for example, proposed in May that Medicaid should not cover "treatment with intent to prolong survival" for cancer patients who likely have fewer than two years left to live.
Reality:  The current guideline, adopted in 2009, restricts coverage of certain treatments for cancer patients expected to live 24 months or less.  The policy WSJ claims was proposed in May was four years old, and was preceded by even tighter restrictions.  Whatever changes HERC adopts, these kinds of coverage restrictions aren't new.
As for "costly care to poor patients who need it most," HERC is considering changing the guideline so that restrictions aren't based on expected life but instead on clinical circumstances (such as multi-system organ failure).  Such restrictions are sought precisely because those treatments are unlikely to help anyone in those circumstances.  The guideline isn't about denying care to patients who need it most, it's about avoiding care that isn't needed.  Ignoring the probability of benefit as the WSJ does is like claiming buying a lottery ticket is the same thing as getting rich.

Sunday, July 28, 2013

Housing Supply vs. Prices

I've been looking for a simple chart demonstrating the connection between housing supply and prices, and how different cities have experienced different rates of growth.  Not finding one I made my own.

This calculates annualized growth in housing units based on the change between the 2000 and 2010 census, and compares that to the price change from Jan 2000 to Jan 2010 based on the S&P/Case-Shiller Index.
This shows 18 of the 20 cities in the S&P Index, excluding Cleveland and Detroit which had negative population growth.  Changes in housing supply don't explain all the variation in price, but they explain a lot of it.

How many households in Portland were earning 47% more in 2010 than they were in 2000?  That's what they'd need to have the same home-buying power over that time. 

It begs the question of what's a bigger driver of gentrification:  A housing policy that encourages construction, pushing the city down and to the right along that curve, or a policy that discourages new construction which leaves housing unchanged but ensures that only an ever wealthier class of people can afford it?

Monday, May 27, 2013

With respect to taxes, Oregonians are laying in a bed we made

Does Mr. deLespinasse really mean to suggest Portlanders didn't know what they were voting for in the Arts Tax because it was too complex?  In the form approved by voters, I could tell you what any Portland resident's tax burden would be down to the penny just by asking three yes or no questions.  Try doing that with property, income, or sales taxes.  One can claim the arts tax is regressive, one can claim it is unconstitutional, but it surely is not complicated.

To the broader point of whether we have too many taxes, levies and fees, we're laying in the bed that we made.  Property taxes are the primary means of funding local services.  The limitations enacted by measures 5 and 50 arbitrarily restrict what we can collect in property taxes, ensuring a growing inability to fund service.  Every year we face the same choice of either finding new revenue through levies or fees, or cutting things that we used to take for granted.  Will it be gym class on the chopping block this year or the police mounted unit?  Will it be a fire station or another cut to road maintenance?  When confronted with the intolerable we turn to alternative funding.  If we can't fund services we want with regular property taxes then we fund them with fees, levies, and yes regressive and possibly unconstitutional income taxes. 

Oregonians are inventive, resourceful, and empowered by democracy to act on our interests.  If a service cut is unacceptable we will find a way to pay for it.  Adding more arbitrary restrictions as Mr. deLespinasse calls for would only encourage more bizarre assessment schemes and more hoops to jump through.  It would ensure our system of funding local service got more complicated, not less.

If we want a less complicated system the solution is obvious:  Reform property taxes, and allow them to pay for the things we want them to pay for.  What purpose has been served by doing otherwise?

Saturday, May 25, 2013

Is the commission form of government responsible for problems with the Arts Tax?

Do the problems with implementing the city arts tax reflect a problem with Portland's commission form of city government?  I think not.

On taking office Mayor Hales took control of all city bureaus.  In effect Portland has not had a commission form of government in that time, it's had a strong mayor system.

The problems with implementing the arts tax can't be put on the commission form of government, they belong solely to Hales.  By changing deadlines, monkeying with the definition of who was subject to the tax and generally badmouthing it he's given Portlanders every indication they should ignore the tax.  That so many have paid anyway is a testament to how popular the idea of putting art teachers in schools is.

The "kinks" in the arts tax demonstrate the weakness of a strong mayor system, wherein a city's priorities can be totally re-written by the election of a single office.  It encourages short term thinking and a focus on what one person can do in a four year term, rather than thinking about what a city should do in the long term.  And it's impossible to adequately vet candidates.  The arts tax drew more votes than did Charlie Hales, is it likely that people supported him knowing he'd undermine the tax?

Portland's problem isn't with the commission form of government, the problem is that we've abandoned it.

Saturday, May 18, 2013

Pearl District and Housing

The Oregonian published a modest story highlighting the economic diversity of the Pearl District, a well known urban renewal project.  I was surprised at how many negative comments the story drew.  Apparently it tweaked some people's noses to learn that poor people can live in the Pearl.

There are a lot of reasons to like or dislike urban renewal, but let's look at the most basic consequence.  Urban renewal added housing.  Between 2000 and 2010 the two census tracts which most match the Pearl added more than 5,000 units of housing.  And it didn't add it willy-nilly, it was concentrated within an area of 0.72 square miles, most of it reclaimed from industrial and commercial use. 

Now consider what would happen without such concentrated development.  5,000 units equals 50 100-unit apartment buildings.  Given the problems the east side has shown accepting multi-unit housing, how would nimby leaders feel about 50 additional big buildings heading their way?  Or you could suppose that demand would have been met with suburban housing.  Assuming the same housing density as Beaverton that would require developing over 1,500 acres of land.

There are only so many ways of dealing with a rising population and a corresponding demand for housing.  Urban renewal has its flaws, but if you don't allow multi-family housing in existing neighborhoods and you don't want sprawl then reclaiming land from other uses (and the subsidies that go with it) is what is left. 

Wednesday, May 15, 2013

Market structure matters

This story shows how the exchange may succeed, but it also points to a problem.  If insurers are allowed to arbitrarily adjust their rates after filing (and after they've seen competing filed rates) there can be de facto collusion.  Insurers could initially file high and then go only as low as necessary to be competitive.  If they all play that strategy everyone files high and there's no need to go lower.  That's not what we want the exchange to do.

On the other hand it isn't plausible or desirable to say that insurers who want to lower their rates and who can bear the risk should be prevented from doing so.

I think the solution is to make such changes expensive.  If a company fudges filed rates the "error" should be widely publicized so as to create reputational damage.  Who wants to pay higher rates just because?  There should also be a financial hit, perhaps by the state contracting out for third party review at the filing company's expense.  Not only does it create a penalty to discourage such behavior, it's prudent since where there's one "error" there may be more.

And I have to add, I'm shocked... shocked that Providence had fat rates.

Thursday, May 2, 2013

Great quote from Stephen Flynn

A few years ago I heard a really interesting podcast discussion with Stephen Flynn about the need to strengthen our infrastructure.  I finally got around to getting his book, and was immediately rewarded with this great passage.  From the introduction to The Edge of Disaster: Rebuilding a Resilient Nation,
Coming to grips with perils that can lead to catastrophic consequences is not about living in a perpetual state of fear.  We become fearful only when a sense of imminent danger is coupled with a feeling of powerlessness.  But there is no reason to doubt our ability to confront and manage these risks.  Every American generation has had to confront serious dangers, and they have always passed the test.  While we must be prepared to acknowledge that there are dark clouds on the horizon, it is vital that we not lose sight of our most important and endearing trait:  our sense of optimism about the future and our conviction that we can change it for the better.
Flynn wrote this back when George W Bush was still in office and troops were still dying in Iraq, but it is no less meaningful.  It might be even more meaningful now, looking at the dual tragedies of the Boston Marathon and the Texas fertilizer explosion, or the destruction wrought by Hurricane Sandy.  

We can quantize information of all types as never before.  With that data we can project risk.  It isn't something to be afraid of, nor is it something to ignore.  I think incorporating knowledge of risk, and deciding what warrants action and what does not, is a critical challenge for self government.

Book Review: The Activist

I picked up The Activist: John Marshall, Marbury V. Madison, and the Myth of Judicial Review as part of an informal study of American politics in the Adams/Jefferson years.  It was a much better read than I expected.  Ostensibly about the road to Marbury vs. Madison, Goldstone details the critical role of partisan machinations in early American politics. 

The Constitutional Convention was not expected to produce anything of significance and most participants attended meetings sporadically.  That the convention produced a new constitution reflected the skill and determination of a core of Federalists, particularly James Madison.  They had a specific agenda to strengthen the federal government at the expense of the states, there was nothing "bipartisan" about them.

Once the Constitution was passed it faced pitched ratification battles in the states, particularly in Virginia and New York.  Again those debates were anything but bipartisan, with anti-federalists striving desperately to derail the constitution or to approve it subject to amendment, which since it would require every other state to agree amounted to the same thing.

Nothing shows the role of partisan considerations better than the career of James Madison.  He bested Patrick Henry in debate and got Virginia to ratify the constitution.  In retaliation Henry blocked him from a Senate appointment and recruited Monroe to run against Madison for a house seat.  Monroe drew popular support with his call for amendments to the constitution, enough to pose a serious threat to Madison.  Madison had spent all of the Constitutional Convention and the ratification debate in Virginia fighting off such amendments, but now in order to earn a seat he flip flopped and embraced amendments himself.  He switched from being among the most ardent Federalists, writing with Hamilton and Jay the seminal Federalist Papers, to being an anti-Federalist and ultimately Jefferson's right hand man. 

Madison was truly brilliant, understanding first that popular disdain for the Articles of Confederation created leeway for an aggressively Federalist constitution, and then in betting correctly that the political center was shifting south and west and that expansion territories would not be Federalist.

Goldstone shows how narrow partisan interests were attached to broader conflicts over the role and strength of the federal government.  The Judiciary Act of 1801 for instance served a narrow purpose by allowing Adams to pack the courts with Federalist judges, but it also expressed a political view that the Federal courts should have broad authority and required a broad presence.  Jefferson attacked the courts both because they were federalist and because he wanted to disable federal courts so that state courts would take more responsibility.

This was the context in which the Federalist John Marshall confronted Marbury vs. Madison.  Had he ruled for Marbury he almost certainly would have been impeached.  He struck a balance by ruling against Marbury using a selective reading of the constitution as pretext, and using the opinion to excoriate Jefferson for not delivering the commission.  This was the high art of politics, incorporating partisan calculations and the broader principle of constitutional review.

Ruling the Judiciary Act of 1789 unconstitutional was certainly a means to an end.  But how strongly did Marshall believe in the concept of judicial superiority, and the idea that the court stood above Congress?  He never again struck down an act of Congress and it wasn't until Dred Scott that another court would do so.  A question for further reading.

Sunday, March 24, 2013

A letter to City Council on Parking Minimums

A letter to Portland CIty Council on proposed parking minimums:

City Council Members,

I'm writing to urge you to reject the proposed increases in parking minimums, or if enacted to allow neighborhoods to waive the requirements in return for alternative design considerations.

Parking minimums are terrible social policy.  They encourage the supply of premium, high-end housing both because larger units will push unit counts down and because more expensive units will more easily absorb the cost of parking.  That has consequences for economic and ethnic diversity.  The market for low-cost housing does not look like the market for high-end housing.  The minimums will in effect further segregate our city.

Parking minimums are terrible environmental policy.  They encourage the use of automobiles, both for apartment residents and for homeowners whose street parking is effectively subsidized.  Because our roads aren't getting any wider they will increase traffic and congestion, making our air more polluted.  Parking minimums discourage people from using alternate transit, rendering our sidewalks less active and less safe.  And because more buildings will have ground floor parking rather than retail they render our streetscapes uglier.

Finally, parking minimums have consequences for regional policy.  Encouraging high density elsewhere, such as urban growth boundary expansion areas, is untenable if we reject density in inner-city Portland.  One way or another housing demand will be met.  If it isn't met by urban housing it will be met by sprawl.

All this, for what purpose?  To protect who?  How many homes lack off-steet parking?  Where are they concentrated?  Virtually every home in my neighborhood has off-street parking, what purpose do minimums serve here?  That's not an idle question, I live [near an arterial street] and apartment development is not unlikely.  Why should those apartments be required to have parking?

Where homes do lack off-street parking why should their occupants be entitled to preferential treatment?  Why should such residents be protected from the consequences of their decision to live in a home without off-street parking?  If they should be protected why should that cost be born exclusively by renters in other buildings?  Why should the resident of a 500 square foot apartment pay for parking so that the resident of a three bedroom single family home doesn't have to?

As a matter of equity, as a matter of sustainability, and as a matter of basic common sense parking minimums should be rejected. 

But what should happen and what does happen aren't always the same.  With that in mind, if parking minimums are adopted I urge the council to include an amendment that would act as a breath of fresh air.  Allow a waiver of parking requirements if the presiding neighborhood association consents to one as part of a broader agreement  with developers on project design.  This flexibility would allow neighborhoods to determine their own best interest on a case by case basis, and it allows the possibility of creating particular amenities or features to meet a particular location's needs. 

If a location needs more parking lots, the neighborhood can sit on their hands and get that by default.  But for neighborhoods with different aspirations, such as a public plaza or seating area, or a lower building height, or a stoplight to improve pedestrian safety, the ability to grant a waiver on parking requirements creates a powerful incentive for developers to take those aspirations seriously.  Maybe a meeting of the minds will happen and maybe it won't.  But if a bargain is there to be struck why shouldn't the city bless it?

If this measure is passed make it one that strengthens the hand of neighborhoods in pursuing their own interest, not one that binds them.

Tuesday, March 5, 2013

Liberal Portland?

I came across a comment on Portland Transit that got me thinking.  Written by a self-described opponent of density in the city, the author claimed that such opposition did not imply they were right-wingers.  As evidence, they pointed to the overwhelming popularity of the Democratic Party in neighborhoods which had also taken strong stands against density.  I think the answer to that is a well-worn disclaimer:  Past experience may not be indicative of future results.

Corey Robin described conservatism as,
… a deliberate, conscious effort to preserve or recall "those forms of experience which can no longer be had in an authentic way."  Conservatism "becomes conscious and reflective when  other ways of life and thought appear on the scene, against which it is compelled to take up arms in the ideological struggle."  Where the traditionalist can take objects of desire for granted- he can enjoy them as if they are at hand because they are at hand- the conservative cannot.  He seeks to enjoy them precisely as they are being- or have been- taken away.  If he hopes to enjoy them again, he must contest their divestment in the public realm…  As soon as those objects enter the medium of political speech, they cease to be items of lived experience and become incidents of an ideology.  They get wrapped in a narrative of loss- in which the revolutionary or reformist plays a necessary part- and presented in a program of recovery.  What was tacit becomes articulate, what was fluid becomes formal, what was practice becomes polemic.
Movements to erect barriers to ethnic and economic diversity in Portland (parking requirements), and to make living in and maintaining the past a condition of residency (neighborhood preservation districts), embody the essence of conservatism.  They are fear of the new, fear of strangers, and fear of change writ large.  If Portlanders embrace such causes I think a political shift to reflect conservative values is inevitable.   

To pick on the most vivid example, Amanda Fritz cannot continue demanding a housing density of 20 units per acre in urban growth boundary expansion areas where infrastructure and amenities are by definition non-existent, while at the same time fighting to preserve a density of less than 7 units per acre across most of inner east Portland.  Either she changes her tune or she destroys her credibility so much that functionally she says nothing at all.  Likewise if you think it is impossible to live without a car and therefore parking is necessary for a basic quality of life, why fund public transit at all?  A more effective use of public resources would be to ensure that everyone simply had a car.

One way or another, our political actions will align with our political values.  Our "talk" and our "walk" can't go in different directions indefinitely.

Thursday, February 28, 2013

Arkansas Medicaid Expansion: An experiment in anti-coordination

I've seen a lot of talk about the decision to let Arkansas expand Medicaid by having people buy private insurance policies on the Exchange.  Much of the discussion focuses on cost, in that private policies cost much more per person than does Medicaid coverage.  That's a problem if you think we spend too much on health care.  But it may not be the worst one.

The Medicaid expansion population is people with incomes below 133% of the federal poverty level.  Per a KFF Brief this population has a household income distribution as follows (2013 FPL level for a single adult in parenthesis):

Less than half of FPL ($5,745)  - 49%
Between half and 100% of FPL ($11,490) - 30%
Between 100% and 133% of FPL ($15,282) - 21%

So Arkansas is telling a population, roughly half of whom make less than $6,000 a year, to go shop for insurance policies on the exchange.  Gee, I wonder what could go wrong.
  • Are these people literate?  It's awful hard to shop for a policy when you can't read.
  • Do they have homes?  How will they manage all the paperwork that goes with private insurance when they don't have a permanent mailing address?
  •  Most important, will they understand their policies?  Understanding the basic terms and conditions, such as when emergency room use will be covered or which providers are in network or what kind of pre-authorization is required is critical to effectively using an insurance policy.  Mess that up and you are functionally uninsured. 
Using the exchanges to provide insurance for people in poverty strikes me as the worst of all worlds.  It inflates premiums in the exchange as community rating forces everyone else to pay for a sicker population, it soaks the nation with paying their full premiums since they have no money to pay it themselves, it hurts the Medicaid population as they'll put off care once they get a "shock" bill because they didn't understand their insurance, and it will soak hospitals when that population defaults to the local ER for safety net care which may or may not be reimbursed by insurance.

Oregon is investing a lot of resources into Coordinated Care, ensuring that the Medicaid population gets the most medically-effective and cost-effective care possible.  Arkansas, and states that follow them are embarking on a bold experiment in Anti-Coordination.  Instead of the hard work of aligning incentives, resources, and purpose they are closing their eyes and throwing money at the problem.  You don't need to be an actuary to guess how that will work out.

Sunday, February 24, 2013

HB 2800 (CRC): A letter to my State Representative

Representative [ ],

I'm writing to express my great disappointment with the news that you will support HB 2800, endorsing construction of the Columbia River Crossing.  That highway project will have long term adverse consequences for the district, for the city of Portland and the state of Oregon.  The project benefits you cited are of marginal value:

- Light rail to Vancouver benefits Vancouver, not us.

- As a tool for managing demand tolling is inferior to existing capacity constraints.  Do you really mean to say you support building a new bridge because it will lead to fewer vehicle trips than occur now?  We should embark on the most expensive capital project in Oregon history so that it can provide less than existing service?  Can you look at yourself in the mirror and say the CRC will be a disincentive to suburban sprawl?

- The construction industry will indeed benefit from spending 450 million dollars.  But what does that have to do with the CRC?  $450M would benefit the construction industry just as much if it were spent on seismic upgrades to our schools.  Or on building a better tsunami evacuation system.  Or on rewiring our electrical system to better integrate renewable energy.  Or any number of pressing infrastructure needs that you know better than me.  Why not spend that kind of money on something that brightens our future rather than darkens it?

The supposed conditions you cited for your support are small comfort.  You claim your support was conditional on tolling I-205, and two paragraphs later admit there will be no tolling on I-205.  What stock can we put in those conditions when they don't even last through your email?  Why should we believe you will react tomorrow to what is plainly obvious today?

Supporting HB 2800 while hiding behind conditions you won't or can't enforce is passing the buck.  It puts us in the position of waiting for someone else to do the right thing and pull the plug on this project.  That is not what I sent you to Salem to do.

Friday, February 22, 2013

Red tape spawns before our eyes...

The Oregon Land Use Board of Appeals released its decision on a much maligned housing project on Division Street.

Of the three claims made by the Richmond Neighbors for Responsible Growth, LUBA rejected two and a half.  In particular LUBA rejected the contention that the city did not consider transportation impacts associated with the lack of parking. 

The only part of RNRG's brief supported by LUBA was the contention that mixed use developments must put the entrance to residential sections on the main street, the same as if they were a commercial use.  Is that really a win for the neighborhood? 

Is Division Street better off if part of the frontage is reserved as an entrance to apartments rather than retail?  Are side streets better off if they're effectively required to be useless blank walls?  If a building includes parking does this mean the parking entrance must be on the main street too?  The code doesn't say that, but it didn't say anything about apartment entrances either.  LUBA read the requirement on residential entrances out of thin air, in spite of the fact (which they acknowledge) that the requirement wouldn't exist if it was only a residential building and not mixed use.

The LUBA ruling resolves nothing about residential parking requirements.  It merely establishes that the State has an actionable interest in whether apartments in mixed use developments put their entrance on the main drag or a side street.  What purpose that interest serves is not obvious. 

If such a claim had gone before the city or any other body that gave a damn it would have been rejected out of hand.  Instead we get a ruling that only an apparatchik could love, and the promise that every project in the city will face an additional layer of red tape.  Thanks Richmond!

Sunday, January 13, 2013

Social Insurance

I recently finished reading The Great Risk Shift, by Jacob Hacker.  It's an interesting discussion of our shifting understanding of risk.  It contrasts efforts from the 1930's to the 1960's to spread and mitigate risks such as  sickness, unemployment, and disability through social insurance policies, and efforts since then to dismantle them forcing individuals back into baring their full cost in the name of personal responsibility.

Hacker writes one of the best explanations I've seen of what insurance in general, and social insurance and particular can do (emphasis mine):

The breakthrough of 1935 was momentous all the same, for Social Security embodied a bold new imperative of government action: insurance.  The word rings familiar today, but it once had a radical air.  Insurance was an affirmation of free will over fate.  If not an effort to stay the hand of God, it was an attempt to soften his blow…

The intelligence of insurance became genius when insurance principles were coupled with the power of the state to require participation and ensure adequate and affordable coverage.  "Social Insurance," as it was called, transformed individual misfortunes into common problems.  It made the inevitable dislocations of capitalist society risks that could be managed and redistributed, rather than blows of fate that could only be feared and suffered.  The "insurance" in social insurance came from the power of aggregation:  Risks that could devastate an individual or community could be managed if they were spread across many individuals and many communities.  The "social" in social insurance came from the principles of shared fate, the reassurance that "we're all in this together."  All insurance pools risks.  Only social insurance pools risks on terms that enable the poor as well as the rich, aged as well as the young, the ill as well as the healthy to afford protection.  The crafters of the Economic Security Act believed that insurance had to be available and within the means of those who needed insurance most.

At the heart of this belief was a simple conviction:  broadly distributed threats to economic well-being - sickness, injury, disability, unemployment, penurious old age- were not the responsibility of individuals alone.  They were a widespread and often unavoidable feature of an interdependent industrial society.  And because they were, the cost of these risks should be distributed widely across the citizenry, not concentrated on those unlucky enough to experience them- a goal made possible by the unique power of government to compel participation and require contributions.  Government could pool the risks of millions of citizens.  It could guarantee that even workers of limited means were able to afford basic protection.  And it could require that everyone contributed to this common pool throughout their lives, rather than waiting until they fell on hard times or disaster struck, when- for all but the richest- it would be too late.

I don't like all of the policy prescriptions, but this is a great book for understanding the underlying tensions in battles over programs like Social Security and national healthcare reform, and it offers a powerful argument about where our interests lie.