Archive for 2013

Health care spending slowdown warrants sigh of relief

by | July 16th, 2013 | Posted in Blog, Healthcare | Comments (0)

This post was written by OK Policy volunteer Zoraya Hightower. Zoraya completed her undergraduate degree at the University of Tulsa and this fall will begin a Master of Environmental Management at Yale.

America spends more than any other nation on health care. In 2011, health care spending accounted for 18 percent of U.S. Gross Domestic Product. Yet, we have millions who lack health insurance and our health outcomes are barely average compared to other OCED countries: in short, we pay too much for too little.

As much as America spends now, future health care spending is of even greater concern. Health care costs historically grow far more quickly than the rest of the economy. Increasing health care costs tend to corrode our employer- sponsored insurance system, increase the number of uninsured, drain workers’ wages, reduce funding for other allocations, and strain federal and state budgets. Of particular concern is the effect of health care programs such as Medicare and Medicaid on the ever-growing federal deficit.

Graph 1 (HC Blog) - crop

Source: Kaiser Family Foundation

Yet, amidst all of these well-known and frightening figures there seems to be a breath of fresh air. The growth of health care costs and overall health care spending have slowed significantly in the last four years, continuing a trend that began in the early 2000s.  Health care spending growth over the last four years has been at its lowest since the federal government began tracking these statistics in 1960. From 2008 – 2012, spending growth rates have averaged 4.2 percent, a 4.6 percentage point decrease from the peak reached in 2001 – 2003 (see figure). Instead of outpacing the rest of the economy, health care has grown at the same rate.

The greatest dip in health care growth rates coincides with the Great Recession that began in 2008. The recession’s effects included a decrease in health care service utilization spurred by job loss and benefit changes. This downward pressure on demand decreased both overall health care spending as well as general health care costs.

Although the recession is a likely explanation to the growth slowdown, it does not appear to explain the entire phenomenon. Health care spending growth began decreasing in the early 2000s and has remained low through 2013, beginning before and lasting well beyond the official recession.  Therefore, other more fundamental factors, such as innovation, efficiency and the Affordable Care Act (ACA), may also be playing a significant role.

continue reading Health care spending slowdown warrants sigh of relief

What’s unaffordable?

by | February 26th, 2013 | Posted in Blog, Education, Healthcare | Comments (2)

In her 2013 State of the State address, Governor Mary Fallin reiterated her opposition to accepting federal dollars to provide coverage to uninsured Oklahomans through Medicaid, as provided under the Affordable Care Act. In states that extend Medicaid, the federal government will pay 100 percent of the cost for the newly-eligible population for three years (2014-16) and 90 percent from 2020 onwards. Yet the Governor claims that extending Medicaid would impose large and unaffordable costs on the state:

According to a report from the Kaiser Commission on Medicaid and the Uninsured, the proposed expansion of Medicaid would result in a $689 million increase in state Medicaid costs between 2013 and 2022. Expanding Medicaid as proposed by the president would mean that a huge sum of money would be diverted from other priorities, like education and public safety, as well as existing health care programs.

The Governor’s assertion that extending Medicaid is unaffordable to Oklahoma is unconvincing in at least two respects. First, the study on which she bases her cost estimates makes clear that extending Medicaid would have a very modest fiscal cost to the state and would bring in over twelve new federal dollars for every additional dollar of state spending. Secondly, the state cost of extending Medicaid would be less than half the cost of the Governor’s proposed 0.25 percentage point cut to the top income tax rate over the same period.

In November, the Kaiser Commission on Medicaid and the Uninsured released the report which estimated that Oklahoma would spend $689 million more from 2013-2022 by extending Medicaid under the ACA (1). This estimate is significantly higher than the one developed by the Oklahoma Health Care Authority (OHCA), which had previously formed the basis of discussions of the cost of Medicaid expansion. In part, this is because the Kaiser Commission’s projections run through 2022, adding two years when the state share would be 10 percent. In addition, unlike OHCA, the Kaiser Commission assumes that extending Medicaid eligibility to 138 percent of the federal poverty level for working age adults will lead some people who  currently have employer-sponsored coverage or individual coverage to drop that coverage and enroll in Medicaid instead. The Kaiser Commission projects 204,000 more Oklahomans will enroll in Medicaid, of whom 126,000 are currently uninsured.

A careful look at the full Kaiser Commission report shows, however, that the actual cost to Oklahoma of extending Medicaid are modest and would yield tremendous benefits:

  • Kaiser_federal&stateFrom 2013-2022, the federal government would spend an additional $8.561 billion on the newly-eligible Medicaid population, or more than $12 for every dollar in state spending. The federal government would assume 92.5 percent of the total cost from 2013-2022.
  • The $689 million state cost of Medicaid expansion would be offset by $205 million in savings in reduced uncompensated care costs, reducing the net cost to $485 million (Table ES-4). This does not take into account savings from shifting services currently paid for with state-only dollars to Medicaid; Oklahoma currently spends an estimated $48 million annually on health services for low-income adults who could become Medicaid-eligible. Nor does it include revenue gains from the boost to state economic activity resulting from increased federal dollars.
  • The state costs would be especially modest in the early years. The state cost is projected to be just $11 million in 2016, which is less than the $23 million the state would save that year in uncompensated care costs (Table 15).
  • Extending Medicaid eligibility would increase state spending on Medicaid by just 2.7 percent from 2014 – 2022 (Table 6).
  • Medicaid payments to Oklahoma hospitals alone would increase by $3.6 billion from 2013-2022, an 18.5 percent increase  (Table 13).
  • Medicaid expansion would reduce the number of uninsured Oklahomans by 126,000 (Table 12). Currently nearly one in two working age Oklahomans with income below 133 percent of the federal poverty level are without insurance.

cost-tax-cut-MedicaidAccepting the Kaiser Commission’s cost estimates, Oklahoma can expect to spend an additional $485  million between now and 2022, net of reduced uncompensated care costs. The Governor contends that this spending would detract significantly from Oklahoma’s ability to make necessary investments in education, public safety, and other health care programs. Yet the Governor proposes cutting Oklahoma’s top income tax rate from 5.25 to 5.0 percent. This tax cut would cost about $125 million in 2014 and $1.48 billion from 2013-2022 (see Table), which is double or triple the state cost of extending Medicaid over the same period. More than two in five Oklahoma households would get no benefit at all from the tax cut, and the median benefit would be just $39 per household in 2014, as we discussed in this blog post. By contrast, extending Medicaid would provide health coverage for 125,000 uninsured Oklahomans. The economic benefits of an infusion of $8.56 billion in federal funds for health care over nine years would dwarf those of a $1.48 billion tax cut.

If we want to make the best decision for our state’s health and prosperity, turning down federal dollars to extend Medicaid to low-income Oklahomans is the truly unaffordable choice.

For a fact sheet version of this blog post, click here. For more analysis and information on expanding Medicaid, click here

(1) This number does not include  the “woodwork” population of those currently eligible but not enrolled in Medicaid. This population is expected to enroll in Medicaid whether or note the state extends Medicaid eligibility.

Home visiting programs work for young children, their parents and Oklahoma (Guest Blog: Paul Shinn)

by | February 25th, 2013 | Posted in Blog, Poverty | Comments (2)

sad-baby-150x150Paul Shinn is Public Policy Analyst for CAP Tulsa, which helps families succeed through early childhood education and other support programs. He can be reached at pshinn@captc.org

Earlier this month a House committee passed HB 1063, which would suspend most of Oklahoma’s home visiting programs for pregnant women and young children. The bill’s author, Rep. Mark McCullough (R-Sapulpa), reported that after extensive research, he had determined that these programs do not work. However, evidence is overwhelming that home visiting programs do work and that the state needs to protect this important investment in our youngest and most vulnerable Oklahomans.

continue reading Home visiting programs work for young children, their parents and Oklahoma (Guest Blog: Paul Shinn)

Guest Blog (Dr. John Schumann): Helmet heads and common sense

by | February 21st, 2013 | Posted in Blog, Healthcare | Comments (2)

jschumann-AAAS-photo1John Henning Schumann, a writer and doctor in Tulsa, runs the Internal Medicine residency at the University of Oklahoma School of Community Medicine. An earlier version of this post ran on his Glass Hospital blog. He is on Twitter @GlassHospital

Like a lot of preventive health ideas, we have beaten the importance of bike helmets into (onto?) everyone’s head. Overall, this is probably a good thing.

I was lucky in my previous job (in Chicago) to be able to walk or ride my bike to work. Let me repeat that, fellow Oklahomans: WALK. OR RIDE MY BIKE. TO WORK. [What will it take for us to do that here, in a land of little to no snow and moderate winter and spring temperatures? As for summer, that raises other issues. But I digress...]

On the few occasions I failed to wear a helmet, I was castigated by my children, my wife, and even passers-by on the street. When you’re a doctor, there’s higher pressure to practice what you preach. [Hey, nobody ever said role modeling is easy.]

Like seat belts before them, helmets have become so routine that riding a bike without one makes me feel naked.

But what is the cost?

We can calculate real and theoretical costs of head injuries due to bike accidents. There are sobering stats: 91 percent of those killed while biking in 2009 were not wearing helmets. So the danger is real. But what about people choosing not to ride a bike because of mandatory helmet laws?

A recent New York Times article compares cities that have bike sharing programs, where people pay very little (or nothing) to borrow city-maintained bicycles and use them as a healthy, non-polluting transportation source. (Tulsa provides free bike rentals at four locations along the Riverparks Trails System, while Oklahoma City has a downtown bike share program, Spokies, for which you pay a daily, monthly or annual charge.)

Author Elizabeth Rosenthal, anticipating New York City’s inauguration of a bike sharing program, compared cities that required helmets with those that didn’t. Perhaps unsurprisingly, cities requiring helmets had much less ‘uptake’ of bikes than cities that don’t. Example:

  • Melbourne: Climate: Temperate—–Helmets: Required——Uptake: 150 rides per day
  • Dublin: Climate:  Rainy—–Helmets: NOT required—–Uptake: 5000 rides per day
  • [editor's conclusion]:  Happiness: Dublin

An expert that Rosenthal interviewed summed up the thinking this way (with some U.S. counterpoint):

“Pushing helmets really kills cycling and bike-sharing in particular because it promotes a sense of danger that just isn’t justified — in fact, cycling has many health benefits,” says Piet de Jong, a professor in the department of applied finance and actuarial studies at Macquarie University in Sydney. He studied the issue with mathematical modeling, and concludes that the benefits may outweigh the risks by 20 to 1. [emphasis added]

He adds: “Statistically, if we wear helmets for cycling, maybe we should wear helmets when we climb ladders or get into a bath, because there are lots more injuries during those activities.” The European Cyclists’ Federation says that bicyclists in its domain have the same risk of serious injury as pedestrians per mile traveled.

Yet the United States National Highway Traffic Safety Administration recommends that “all cyclists wear helmets, no matter where they ride,” said…an agency official.

Here in Oklahoma, there’s a small but vibrant group of urban cyclists (unequivocally helmeted) who ride  during the longer daylight months. They hew toward the more serious fitness buffs, who enjoy long rides and competition. What I’d love to see is collaboration amongst them, public health folks, and civic planners to create more bike lanes on our city streets. We have a culture of drivers and rising obesity–we can turn the tides by pushing for more bike lanes and bike sharing. They are low cost, ‘low hanging-fruit’ public health interventions.

Footnote: there’s an ironic (but happy-ending) twist to this story: Three days after the article ran, former Boston Red Sox manager Bobby Valentine was riding his bike in New York’s Central Park. He made the unwise choice of reading a text while biking, then flipped over his handlebars, injuring his knees and hips.

Said Valentine (per the LA Times story): “I shouldn’t have been reading a text while I was riding. That’s the wrong thing to do. But at least I was wearing my helmet.”

Two days after that, Red Sox management fired Valentine for leading the team to their worst record in 47 years. Unclear if helmets were involved.

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

Upcoming Event: New Director to give Policy & Practice Series lecture on future of DHS

by | January 31st, 2013 | Posted in Blog, Upcoming Events | Comments (0)

EdLakeThe new director of the Oklahoma Department of Human Services (OKDHS), Ed Lake, will speak at the next installment of the Practice and Policy Lecture Series on Monday, February 11th, from noon to 1 pm, at the Oklahoma History Center. Director Lake will share with listeners his plan for the state’s largest agency and discuss the new transformations to be made, such as the new Pinnacle Plan.

On November 1, 2011, Ed Lake became OKDHS’s new executive director. Director Lake has a master’s degree in Social Work from the University of North Carolina and over 35 years of experience working for the Tennessee Department of Human Services. During his employment, he oversaw extensive agency restructuring, managed over 5,000 employees, and improved agency services.  Last year, Director Lake retired from the Tennessee department as deputy commissioner.

All lectures are free and open to the public. For more information contact the Office of Planning, Research and Statistics at 405-521-3552. View the complete lecture series lineup here

 

Could we run out of water?

by | January 29th, 2013 | Posted in Blog, Economy | Comments (1)

This post is by OK Policy intern Amanda Marcott Thottunkal. Amanda is pursuing a Masters in Public Administration at the University of Oklahoma.

OWRB ExecutiveReportOklahoma City drinking water supplies are at record lows, and NewsOK recently reported that water rights could be the biggest issue for the city in 2013. Could Oklahoma run out of water? Possibly, in certain locations, according to the 2012 Water Plan Update by the Oklahoma Water Resources Board (OWRB).

The Water Plan Update warns that several factors will strain Oklahoma’s water resources by the year 2060 if current use and supply trends are maintained. Some of these factors include: population growth; overall demand increases of 33 percent; climate change; potential depletion of underground aquifers, and pollution concerns.

The 2012 Water Plan Update was the result of four years of research and consultation. The process led to specific policy recommendations, including a state/tribal water rights resolution and the formation of 13 regional groups to identify water issues for their area.

HB 3055, the Water for 2060 Act, is the first legislative response to the 2012 Water Plan Update. It was signed into law in May 2012. The act:

  1. Sets a new, ambitious, and unprecedented water policy for the state. The new policy sets a goal of “consuming no more fresh water in the year 2060 than is consumed statewide in the year 2012.” J.D. Strong, Executive Director of the Oklahoma Water Resources Board, said Oklahoma is the first state in the nation to make that commitment.  It is a direct response to the Water Plan’s data that overall demand increases will strain the state’s water availability. In order to accomplish this goal, the new legislation asks state policy makers to focus on drinkable water conservation and reuse of other types of water, such as waste water.
  2.  Creates a new Water Conservation Grant Program.  In 2009, HB 3135 authorized the state’s first Water Conservation Grant Program to encourage pilot conservation and reuse programs. Grants totaling $35,000 were awarded through the OWRB’s Water Plan appropriations.  However, funds for the program dried up with the Great Recession. The Water for 2060 grant program is modeled after the  2009 program. A maximum of $50,000 annually will be appropriated by the OWRB for water conservation and reuse projects around the state. The goals of the new grant program are to increase public awareness regarding our state’s water resources; to provide financial assistance for community projects focused on conservation, and to assist in the development of new policies to encourage water conservation.
  3.  Forms the Water for 2060 Advisory Council.  It will consist of 15 appointed members from different sectors of the community. The stated purpose of the Council is to recommend incentives for water conservation, make recommendations regarding water education and develop new financial assistance programs.  By November 2015, the Council will submit a written report with their policy recommendations to the Governor. While the Water Act was  effective as of November 1, 2012, appointments have not yet been made to the Council. 

Experts in Oklahoma water policy are encouraged by the passage of the Water for 2060 Act, with some reservations about its utility.  Shawna Turner is current president of Sustainable Shawnee, board member of the Oklahoma Sustainability Network, and a member of the Water Research Advisory Board at the Oklahoma Water Resources Research Institute. Turner worked with former House Speaker Kris Steele to draft the original 2009 grant legislation. She also participated in the two year water planning meetings that provided input on policy recommendations for the 2012 Water Plan Update.  While she is encouraged by the 2060 Act’s water conservation message, she finds it lacking in concrete policy solutions. She is concerned that the bill states OWRB will “make grants” without identifying a funding source. Finally, Shawna believes the Act overlooks the important topics of water rights and permits to use water. Yet she remains hopeful that the legislation will be a catalyst for “more substantial changes to policy that are meaningful and remain true to science.” 

Sara Hill, Sr. Assistant Attorney General for the Cherokee Nation, also has concerns about the Water Act. She said that any strategy for the future of Oklahoma’s water will be incomplete as long as Oklahoma lawmakers “continue to ignore tribal water interests and the role of tribal governments in the protection and management of water resources.”

While the Water Act does little to address specific policy recommendations made by the OWRB’s Water Plan, the legislation is a good starting point.  It frames a new conversation about water resources for the state. It is likely that more concrete policy solutions will be presented by the Advisory Board in 2015. 

As drought in Oklahoma continues to be rated “extreme” or “exceptional” by the National Weather Service, and our state’s population continues to grow, it is important to not take our water resources for granted.

Revenue forecast confirms need for continued caution

by | January 3rd, 2013 | Posted in Blog, Budget | Comments (1)

In late December, the Board of Equalization certified a preliminary estimate of the revenues available for next year’s budget. The numbers confirm that while the worst of the fiscal crisis is now far behind us, the state remains in the midst of a slow and incomplete recovery and will continue to struggle to restore services to adequate levels.

The preliminary FY 2014 estimates, developed by the Oklahoma Tax Commission and Office of State Finance, will form the basis for the Governor’s Executive Budget to be delivered in early February. As we see in the chart below, collections to the General Revenue (GR) fund are expected to continue to recover from their collapse during the recession of 2008-09. Next year’s GR is estimated at $5,938 million, which is 29 percent higher than in the depths of the recession in FY 2010.  Yet next year’s revenues are expected to remain slightly below their levels of six years ago (FY 2008), even as the cost of providing services rises due to inflation, population growth, and increased caseloads and school enrollment.

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Graph of the Day: Off Medicaid and ‘back to work’?

by | December 27th, 2012 | Posted in Blog, Healthcare | Comments (0)

Incoming House Speaker T.W. Shannon recently suggested that SoonerCare/Medicaid enrollees in Oklahoma should get “off of Medicaid and back to work.”  The idea that the Medicaid program is providing health care to adults who are choosing not to work is simply mistaken: the vast majority of those enrolled are children and low-income women during pregnancy (74 percent), and seniors and people with disabilities (19 percent).  Only 7 percent of Medicaid enrollees in Oklahoma are able bodied working-aged adults; such adults are only eligible if they have dependent children and earn less than $7,063/yr for a family of three.  

This analysis excludes SoonerPlan enrollees, who receive only a limited family planning benefit and are not enrolled in comprehensive Medicaid coverage.  A small number of enrollees categorized as disabled and/or chronically ill were also excluded because of discrepancies reconciling with total enrollment.

The Governor, with the support of legislative leadership, recently announced that she would not be participating in a Medicaid expansion to cover more uninsured low-income adults, leaving roughly 150,000 uninsured adults in Oklahoma with no options for health coverage.  Over 600,000 Oklahomans are without health insurance coverage; one out of two adults with income below the poverty level are uninsured.

Guest Blog (Jonathan Willner): Public school grades – what’s really being graded?

by | December 20th, 2012 | Posted in Blog, Education | Comments (8)

Dr. Jonathan Willner

Dr. Jonathan Willner is Professor and Chair of the Department of Economics and Finance at Oklahoma City University.

After considerable controversy and delay, the State Department of Education released its A-F report cards for all Oklahoma public schools in late October. According to the Department, “Oklahoma’s A-F School Grading System is based on the concept that parents and community members should be able to quickly and easily determine how schools are performing .”

Now that the grades are out, we need to ask: what it is that is being graded?  Teachers? Administrators? Not really. Careful analysis of the report cards reveals that a good part of what is being graded is the parents. It’s convenient to blame the schools, but a significant part of the grade of each school is driven by the socio-economic condition of the parents of the children in the school.

continue reading Guest Blog (Jonathan Willner): Public school grades – what’s really being graded?

What Governor Fallin’s healthcare decisions mean for Oklahomans

by | December 18th, 2012 | Posted in Blog, Healthcare | Comments (0)

Just before Thanksgiving, Governor Mary Fallin announced a pair of important decisions related to the Affordable Care Act. She said that Oklahoma would not participate in the expansion of Medicaid for low-income adults and would not create its own state-based health insurance exchange. Where do these decisions leave Oklahomans?

The Affordable Care Act provides two primary mechanisms to extend health insurance coverage to most of the 48 million Americans, and 694,000 Oklahomans, who are currently uninsured. The first is to extend Medicaid coverage to working-age adults with incomes below 133 percent of the federal poverty level, roughly $30,000 per year for a family of four. Medicaid is a joint federal-state program; to encourage state participation in the expansion of coverage, the federal government committed to paying 100 percent of the cost of newly eligible Medicaid participants for three years (2014-16) and ultimately to pay 90 percent of the cost from 2020 forward.

Unfortunately, refusing to expand Medicaid slams the door on roughly 130,000 uninsured Oklahomans with incomes below the poverty level. This population will be stuck in a huge ‘coverage crater‘, without access to private coverage or public support. This decision is also a major blow to Oklahoma’s health care providers,  who will remain stuck with absorbing and trying to pass along the crippling costs of uncompensated care, which total $600 million annually for hospitals alone, according to the Oklahoma Hospital Association.

continue reading What Governor Fallin’s healthcare decisions mean for Oklahomans