Medicare Reimbursement Cuts Affect You Too

With cuts in Medicare slated this year, physicians are once again being put between a rock and a hard place. Reimbursements continue to decrease for all medical services. Given that private insurance companies typically peg their reimbursement rates to those of Medicare, the current downtrend in physician reimbursement is making things difficult for physicians.

Some physicians are going out of their way to stop seeing Medicare patients. The reimbursement is so bad that, financially, the doctor is better off not seeing a Medicare patient because it takes so much time and there is so little financial reward. The concept of a “non-PAR” physician is starting to make its way into acceptance in the medical profession. Unfortunately this means that access to quality care will continue to decrease for patients.

Clearly, the system is broken. We as a country cannot afford the cost of taking care of our aging population. The government’s solution seems to be to continue cutting reimbursements. Most companies would try to grow revenue and manage their expenses. However, for the government, the only way to grow revenue is to raise taxes. In a non-election year, this is a difficult task. In an election year, it is impossible. Thus the government, in the form of its Medicare payer, continues to act in a recessionary mode – cut costs, slash expenses, and prepare for a downturn.

This is no way to run a business. This is no way to run the country. There are many proposals out there to increase revenues and meet the demand of the American consumer patient. One strong proposal asks patients to “buy in” to their own healthcare much like they buy into their retirement plan at work. They can contribute to a “health fund” that covers costs of their healthcare. In this manner physicians will get reimbursed at adequate rates and will have an incentive to treat Medicare patients.

Although this is only one proposal, it is one that increases the revenues of the government’s Medicare business. We cannot continue to keep cutting costs with no end in sight.

International Working Patterns, Part II: Working Outside the Box

The previous article in this series highlighted the variations in hours of work between different countries and the factors which influence these. This article examines international differences in the extent and composition of non-standard employment, such as part-time and temporary work and fixed-term contracts, and explores some of the reasons for these differences.

In the 1980s and 1990s, nearly all developed countries experienced significant increases in the proportion of total employment accounted for by non-standard jobs, with the main growth accounted for by part-time work and temporary work. For example, over half of all new jobs created in Europe between 1987 and 1997 were part-time, as were a substantial proportion of new jobs in countries such as the U.S., Canada and Japan. By the mid-1990s, just over a third of all employment in the UK and the U.S., more than 40% of employment in the Netherlands and nearly half of all employment in Australia and Japan consisted of non-standard work. Self-employment and shift-work are usually included in official definitions of non-standard working, but these categories have not contributed significantly to the recent expansion in non-standard work.

New Trends

Across OECD (Organisation for Economic Co-operation and Development) countries as a whole, part-time work continued to expand by 7% between 1993 and 2006 but with considerable variations between countries in the rate of growth and the extent of part-time working. In 2006 the OECD countries with the highest rates of part-time work, accounting for around a quarter or more of all jobs, were Australia, Japan, the UK, Israel, the Netherlands and Switzerland, while countries such as Turkey, Korea and most Eastern European countries had less than 10% of their workers in part-time jobs. Most western and southern European countries, as well as the U.S. and Canada, had fairly high rates of part-time working in 2006, generally 16% or more of total employment.

Temporary work also expanded in many OECD countries in the 1980s and 1990s, again with considerable variations between countries in both the growth rate and the proportion of the workforce consisting of temporary workers. By 2000, Spain had the highest proportion of temporary work, accounting for a third of all jobs in that country, while a number of other nations including the U.S. and the UK had only around a tenth of all workers in temporary jobs. This category of non-standard employment includes a very diverse range of workers including, for example, agency temps employed in industrial or office work, seasonal agricultural workers and professionals on fixed-term contracts.

Need for Flexibility

The major expansion of non-standard employment in recent decades has been linked to the need for greater flexibility in human resource practices in order to improve the productivity and competitiveness of firms, particularly in conditions of economic recession, which has encouraged employers to create part-time, fixed-term or temporary jobs rather than traditional full-time permanent jobs. At the same time, there is a demand among many workers for non-standard forms of employment which enable them to combine paid employment with other commitments such as looking after a family or studying. Some workers are pushed into non-standard jobs because they are unable to obtain full-time permanent work, but OECD statistics indicate that the majority of part-time workers, at least, choose to work part-time. Overall, women account for the majority of non-standard workers in most countries, usually well over half of all part-time workers and at least half of all temporary employees.

Non-standard work in many countries has traditionally meant inferior terms and conditions of employment, with non-standard workers often being paid lower average hourly rates than their full-time, permanent counterparts and receiving fewer benefits such as pensions and health insurance. Ironically, those countries with strong employment protection legislation, such as Germany, France and Japan, have experienced expansions in non-standard forms of employment which are not covered by the legislation. On the other hand, the rapid expansion of Japan’s part-time work sector has been boosted by tax benefits offered to women whose earnings remain below a certain level. In Europe, the employment conditions of non-standard workers are now being addressed by EU initiatives such as the Framework Agreement on Part-Time Work as well as the proposed Agency Workers Directive still being discussed by the European Council. It remains to be seen whether improved employment protection for temporary and part-time workers will affect the supply of such jobs since the benefits to employers in terms of reduced costs and increased flexibility may be reduced. A counteracting factor may be the demographic changes that will increasingly reduce the available labor pool in many countries, putting pressure on employers to create high quality non-standard jobs to attract those workers looking for more flexibility in their own employment arrangements.

Congress Turns to Depression-Era Ruling to Save Present Economy

The Foreclosure Prevention Act of 2008 – or Bill HR 3221 – is Congress’ latest attempt to stymie the downward spiral of the current economy. The bill is lurching along, having passed the Senate as of July 10 but still awaiting possible changes or even a veto by the president. The foreclosure mess is a major headline every day, so it is not a surprise that politicians are scrambling to try to find a fix.

What does the act do? A huge variety of items are included in the bill, some related directly to the foreclosure disaster and others seemingly a bit removed. Provisions include items such as relief for businesses most directly affected by the crisis and tax credits to home buyers who buy homes in foreclosure. It also includes provisions to help ward off future similar events by changing the Truth in Lending Act so purchasers are clearer on what they are getting into before they sign on the dotted line.

The most important provisions, however, are the ones that offer direct assistance to homeowners facing imminent foreclosure. Two major sections include funding for pre-foreclosure counseling, in the hopes of helping debtors and their mortgage holders connect and work out the problems amongst themselves, and allowing housing agencies to issue bonds to generate additional income to refinance subprime loans.

One potentially questionable area, however, is Title IV of S. 2636, as it is called before being amended to HR 3221.This provision would alter the Bankruptcy Code, allowing a bankruptcy judge to actually modify the mortgage agreement by reducing interest rates. Whether or not this will pass remains to be seen, as the entire bill is sliced, diced, and put back together. If it stands as is, the question on this section, however, is whether or not this bill violates the Contracts Clause of the Constitution, which reads in part, “No state shall… pass any law impairing the obligation of contracts.”

An eerily similar situation arose during the Great Depression, in the famous 1934 case (which is still good law, incidentally) Home Building and Loan Association v Blaisdell, in which mortgage defaults were staved off by an extended period of default. The mortgage companies were not allowed to foreclose as soon, protecting homeowners. This occurred during the Great Depression, when homeowners were losing their houses at a rapid pace. The Supreme Court reasoned this was not a permanent impairment, only a temporary one, and was therefore allowable.

HR 3221, however, if passed as written, could permanently alter or impair private contracts by allowing a bankruptcy judge to modify mortgage agreements by reducing interest rates. Depending on the final wording, this could be imminently distinguishable from Home Building and Loan. The question for now is, will it pass constitutional muster? Since all laws are made with a presumption of constitutionality, it will have to be challenged in court before we may know for sure…. Of course, since these mortgages are already in bankruptcy, it can be argued that the contract has already been modified with such severity that these alterations in rates are simply a saving grace.

The Default Vegetarian: Thoughts on the Economics of Food

Lately, every time I go to the grocery store, all of the most basic items I routinely purchase seem to have increased in price anywhere from a nickel or two to a dollar or more each. Milk, eggs, cereal products, rice, and fresh vegetables all cost more now than they did just a few weeks ago, and as of this writing no relief is in sight. In the middle of summer, green peppers are $4 a pound. Milk is up to $4.59 for half a gallon. A 12-ounce box of Rice Crispies is $3.99 and will probably cost more by the time you read this.

Meat has become especially expensive; no doubt a result of the increased cost of the grain needed to feed the animals and the now insanely expensive diesel fuel needed to transport the animals, butcher them, and bring their meat to market. A recent trip to my favorite grocer found me staring forlornly at a package of five bratwursts marked ‘on sale’ for $7.98.

$7.98 for five sausages? On sale? My son can eat five sausages as a snack!

I didn’t buy them. It wasn’t just the price. The truth is I’ve been put off by meat and the way it is grown and processed for quite some time now. Not too long ago we all witnessed (over and over again) nightly news footage of a downed cow being shoved around by a couple of guys driving forklifts. Cows that cannot stand because they are sick or injured are not supposed to be processed into meat for human consumption, and they certainly aren’t supposed to be shoved around with forklift prongs.

But there it was, in living color, right on the evening news.

Before that, the news flash was all about packing plants that pumped carbon dioxide into cellophane trays to give the hermetically sealed meat a bright-red, fresh appearance even if it was spoiled and no longer safe to eat. Before that, it was corporate hog farms causing e. coli contamination of nearby vegetable fields, city water tables, lakes, and rivers. And before that (and still, today, as the Korean protests over American meat imports show) it was another case of BCE or ‘mad cow disease’ turning up in the U.S., with the beef industry out in front of the cameras assuring everyone that it was a truly isolated incident, so move along folks, nothing to look at here.

Too many isolated incidents and, like the South Koreans, I get nervous.

And I haven’t even gotten to the part yet about the unsafe hormones and chemicals that are fed or injected into the meat and dairy animals or the fact that the grain the animals eat is badly needed in other parts of the world right this minute for food. Corporate meat production is one of those issues that, once you start to dig into it even just a little bit, can make you pretty sick to your stomach.

So usually I handle this issue the way most Americans do: I try not to think about it.

However, as food becomes less and less affordable, all that is starting to change for me. It’s one thing to buy dirty, mistreated mystery-meat when it’s a dollar or two a pound and my family is clamoring for it. It’s something else again to part with a ten-spot for a little package of bleeding poison that is barely going to make one meal for us. That’s two whole gallons of gasoline or twenty pounds of potatoes.

I’m finding that, at least in my own case, empty pockets make for loftier principles.

I don’t believe it is intrinsically wrong to eat meat. My own perspective is that everything eats everything in this world, and you don’t have to look very far or think very hard to realize this. Life by definition is a carnivorous game. Right this minute some microbe in my very own gut is devouring some other microbe. Even the virtuous plants embraced by vegans eat decomposed matter (which gardeners call “compost,” but let’s be honest, we’re talking about dead stuff here.) Some day, each of us will become worm food, and when the worms are done with us then whatever is left will make some hungry tree very happy. It never ends. So if you want to get worked up about the morality of digestion at any given point on the food chain, that is your prerogative, but I don’t generally go there.

However, I do believe that we are responsible for our actions, and that our actions should at minimum aspire to be humane and intelligent. The way that meat is grown, processed, and marketed in the U.S. today has become selfish, inhumane, profit-driven, and dangerous. The meat is no longer predictably safe to eat, and enormous resources are wasted to produce a single pound of the stuff. While much of the world goes hungry, we use our grain and disappearing fossil fuels to fatten cattle and hogs that are not safe to eat when we get done with them, not even here.

When socialist Upton Sinclair wrote his famous novel The Jungle in 1906, he wasn’t thinking of the fate of the unfortunate food animals themselves so much as he was protesting the horrifying conditions under which the packing plant employees eked out their meager livings. The novel vividly drove home the packing plant as a metaphor for unfettered capitalism: the bodies of the workers were no more valued or cared for by their corporate overlords than the bodies of the animals they slaughtered. The filthy, dangerous conditions in the plant mirrored the violence and utter squalor in which the workers themselves were forced to live.

So, apart from the price, that’s what I was actually thinking about, looking at those five $7.98 sausages last week. I was wondering: how many people lost arms so I can clog up my arteries with this crap I can’t even afford? How many people will not eat at all today because pounds and pounds of grain that could have been shipped to them went into this expensive, unhealthy snack instead? What kind of life, if you can call it a life, did the pig that got ground up for this sausage lead anyway? Did it ever see the sun? Or did it live out its days cramped into a big tin building with a pig poop lake under it, getting fat as fast as possible, aided by hormone shots, force-feeding, and God knows what else?

You are what you eat, or so they say. I bought a 10-pound bag of Jasmine rice instead.

It’s pretty good.

Barack Obama: Eloquent but Unrealistic

The Audacity of Hope: Thoughts on Reclaiming the American Dream. By Barack Obama. Crown Publishers, 2006 (Hardcover) and Random House Audio, 2006 (CD). 384 pages. $25.00 (Hardcover) and $29.95 (CD).

In 2006, Democratic presidential candidate Barack Obama published The Audacity of Hope. I first encountered The Audacity of Hope as an audiobook read by Obama himself. I listened to it as I drove back and forth on errands, and, to be frank, I loved the experience. I also enjoyed many aspects of the book itself, which blends personal memoir with an account of Obama’s political development. It is at once a statement of who Obama is and how he became the political figure he is.

In retrospect, it is the personal details that stand out. Obama’s discussion of his courtship of his wife Michelle is rich with affection and respect. Even though they were second-hand and filtered through her husband, her will and independent judgment come through clearly. Should Obama be elected, this will be a First Lady to be reckoned with. The descriptions of his wife’s father (in Chapter 9, “Family”) are heartbreaking in their respectful precision. Michelle Obama’s father was diagnosed with multiple sclerosis when he was just 30 but fought the disease for decades. Obama’s discussion of his father-in-law show a great deal about both men’s character. His father-in-law embodies domestic duty; Obama clearly understands just how precious such duty is.

When Obama discusses politics, it is, again, the personal and interpersonal that sounds out. He manages to sound savvy, political and still genuine, whether he’s describing meeting George Bush or discussing his travels through Illinois as he campaigned. I can imagine the union workers or inhabitants of Cairo, Illinois, feeling like someone really listened to them after they’ve met with Obama, for there’s a definite sense of heightened attention to the book. Obama is listening to the people he meets. Likewise, whether you’re listening to the audio version or reading the book, a sense of broad compassion comes through. To be blunt, I found myself liking Obama the man as I listened to the book.

However, when I read the book, I found a curious thing happened. Policies that had been enhanced by his delivery in the audio format fell more than a little flat on the page. I found myself flipping from chapter to chapter, wondering if I had remembered the policy discussions as occurring different places in the text than they had. I had not. I had allowed myself to be lulled by my affection for Obama and by his skill as a speaker.

I like the man. I trust the man, at least his intentions. I recognize that the symbolic value he carries due to his race is immense and should not be discounted. However, his vision of America is…well, let me be kind. His character is superior to his vision.

To be specific, when he’s discussing economic history, his summation of the free market and the American economy are pretty standard. He positions himself smartly, indicating that neither the Republican version of the free market nor the Democratic defense of pre-Bush social programs is sufficient. However, when he calls for a pragmatic solution, saying, “We should be guided by what works” (159), it is not yet clear that he (or, to be fair, anyone else) knows what that is. Obama calls for fairly predictable solutions: for government and parents to improve education and for public money and personal responsibility to be used there. He calls for more basic scientific research, a lowered dependence on foreign oil and so on. All good, yes, but the visions come without much foundation.

When Obama moves on to addressing policies specific to the U.S. economy, he’s specific about the flaws with existing plans, like privatizing Social Security, and strong about the values and emotions that lead him to oppose it and accent the flaws in such a plan. However, simply labeling Social Security’s problems as “real but manageable” (182) does not make them so, and no concrete solutions to the funding crises that take America’s demographic bulge into account are provided. If I had to sum up the picture of the world that’s painted in this book, I’d say it is fairly realistic. Obama knows that globalization is sweeping through the economy, realigning every economy relationship. His discussions of American founding documents, the media and special interests show he knows that American politics are a mash of glorious ideals, distortion and positional obligations. However, his solutions are less practical than he (or I) might wish. They show a man whose heart and character are worthy but whose policies are comparatively mundane. There are worse things in a president, but it does take a certain audacity to hope for better results without providing a solid foundation for them.

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Exploitation of Farmers: We Are All at Fault

Economics sometimes leads to great injustice and cruel realities. However, sometimes the way man is by his very nature leads to even greater ones. Our economy is growing at a tremendous rate. In India, the growth rate is 9%. Intuitively, this means that the output of the country is increasing by 9% every year.

But what is the quality of this output? The necessity to measure everything in currency has led us to believe that all output is equal. Is there such a thing as healthy and unhealthy output? Can a country have a lower economic growth rate and still be fundamentally stronger than a country that has a higher growth rate simply because of the type of growth it is having?

I say, yes it can. Let me take the example of India, where the difference is clearly visible. Being one of the most populated countries in the world, India’s need for food grains is tremendous. Because of it’s still rural nature, the large amount of open land, and its culture, 70% of India’s economy is agrarian. This is natural and healthy.

FarmerHowever, in recent years, the share of agriculture has been going down significantly. There was a time when the economy was 90% agrarian. This decrease is due to the rise of services, which are taking over a huge chunk of the produce of India.

Image Credit: Escape_to_Christel

I have no problem with this per se. What I do have a problem with is that the services are very much more profitable than agriculture. With far less work, a person like me (a writer), can earn literally 10 times more than a farmer – by working with 1/5th of the effort. Economics is such that because of the scarcity of writers like me, I earn more due to demand and supply, not because what I’m producing is 10 times more valuable than that of the farmer.

How is this justified? Likely, the farmers don’t even know that I’m living such an easy life while they break their backs to essentially feed me. The condition of farmers in India is pathetic. Large numbers of farmers commit suicide daily due to poverty and inability to pay off debts. They are killing themselves to feed people like me who don’t produce anything essential like food.

Cities in general produce very little of any real value. People are extremely busy working in the stock market, or sitting at a computer somewhere adding a minuscule amount of value to a probably useless value chain. They get paid far more than a farmer who toils day in and day out to produce something of value, which is bought from him at a pittance and used to fuel the people in cities.

FoodImage Credit: Stephanie Booth

For how long can this continue? Market economics dictates that sooner or later, the farmers will realize that a better living can be made in the cities and migrate to them. Then there will be a food shortage, and prices will rise until it is profitable to be a farmer once more.

Unfortunately, it doesn’t quite work that way. The prices of farm produce are not dictated solely by market forces. Instead of paying through my nose for the food that I eat, I’m paying much less than that. Prices are controlled by middlemen who force the desperate farmers to sell at lower prices.

The bottom line is that it’s just too unfair. The farmers are feeding the huge glutted cities, which hum and buzz and produce nothing of value, while they themselves are being exploited. How will this end? One can only hope that some day, we will begin to realize just how precarious our position is, and how grateful we must be to those who feed us.