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.