Apr 03 2013

The Value of Work

Posted by Steve Ross in State Politics

In these hallowed halls, your rights are slowly slipping away via wikipedia

In these hallowed halls, your rights are slowly slipping away
via wikipedia

Over the past several days I’ve been writing about Gov. Haslam’s decision on Medicaid expansion. While this has been going on, a bill, supported by the Governor, has been steamrolling its way through the state legislature. A bill that would further shift power away from workers and workplace protections by creating new hurdles for people hurt in the workplace.

On Monday, the State Senate passed their version of HB 0194, a bill that would create a new mechanism for workers to receive compensation while hurt on the job, and reduce their rights even if the injury was through no fault of their own.

The bill is currently in the final stages of passage in the State House.

The proposed changes dramatically shifts the burden from employers, who have a duty to provide a safe work environment, to the government and employees.

What’s more, it creates a new special judicial system, administered by the State Dept. of Labor, which was recently reported to have grossly mismanaged the Unemployment Insurance program to the tune of $73m.

You may recall, the head of that department recently stepped down, just days before the announcement of this report, following a trend of Haslam appointees who have resigned due to poor management.

This trend of mismanagement follows another trend of “worker reforms” that began with the limiting of collective bargaining for teachers, among other efforts.

Through the Governor’s support of these bills, he has sought to do what so many other GOP leaders seek, to tilt the balance in favor of business under the rationale that it will be good for workers. This of course, couldn’t be further from the truth.

Work, an American Value

Workers built America

Workers built America

One of the values that Americans hold dear is the idea that hard work will be rewarded with a certain measure of success.

I think we all understand that not everyone will be Warren Buffett rich, but we have a national expectation that your work will not be in vain. An idea of “merit”, that hard work has value.

This is an idea that starts before our revolutionary beginnings, continued during our early westward expansion, carries its way through the the gilded age, the Great War, Great Depression, WWII and to this very day.

Its an idea expressed in the writings of Horatio Alger through books like Ragged Dick, the story of a poor worker who rose to the Middle Class. Something that was not very easy in the late 1800’s.

Over the years we have romanticized these rags to riches stories. They have become a part of the mythology of America. An oral history that, like most tall tales, has been exaggerated over time.

The stories of early industrialists, like Andrew Carnegie, who started working at age 12, and through the course of many years of hard work and helpful benefactors became a real life example of the mythology of merit.

While there’s no question about Carnegie’s humble beginnings, particularly in comparison to his ultimate wealth, the reality is, without the help of a great many people, who steered him to the right investments, helped him raise capital to build his empire…not to mention some of his more cut-throat practices against investors, labor, and anyone else that stood in his way, he would not have risen to the level of wealth he eventually acquired.

The forgotten reality is that hard work doesn’t necessarily make you rich. It can help make you “not poor”.

Birth of the Middle Class

Home Ownership was the hallmark of the growth of the Middle Class

Home Ownership was the hallmark of the growth of the Middle Class

In the post-WWII era, the combination of increased business regulation, government spending on infrastructure, and compulsory education that began during the Industrial Revolution led to the creation of a robust middle class in America.

I think we like to believe that a large Middle Class has always existed in this country. That couldn’t be further from the truth. If it were so, works like Upton Sinclair’s The Jungle wouldn’t have had the impact that they did.

The premise of the book was, at first, derided by the administration of Theodore Roosevelt, who called Sinclair a “hysterical crackpot”. Upon further inspection, Roosevelt’s view of the work evolved, culminating in the first real labor reforms of the 20th century.

In the wake of the Great Depression, which was brought on by wild speculation, among other things, more worker reforms were passed like the National Labor Relations Act (NLRA), which acknowledged that in wage negotiations, capital had the upper hand. Take it of leave it is not a negotiation. In order to level that playing field, NLRA allowed workers to band together and bargain as a group for the common good.

It is interesting that the rise of the middle class, and unions came hand in hand, though that shouldn’t be surprising. The Treaty of Detroit, one of the first large victories of labor, led the way to workplace reforms that became the standard both in the marketplace, and eventually Federal law.

While there’s no question that the overall economy during the post WWII era (1946-1965) had its ups and downs, overall, people benefitted from the collaboration of labor, capital, and government, as income became more evenly distributed throughout the workforce.

Devaluing Work

Pres. Reagan speaking on the Air Traffic Controller’s strike
via Wikipedia

One of the most stunning contradictions of the past 40 years is the way we have come to revere work while deriding labor. It is a mindset that says that some work is more important than other work.

I have a difficult time with this idea.

From my perspective, the most important work is that which I have no desire to do. Things like trash collection, construction and farming, public safety (police, fire, EMS) or teaching for that matter. These are jobs that are necessary for our society to function, grow, and thrive, but the reality is, no one is getting rich doing any of these things.

You wouldn’t know that to hear some tell it.

In recent years, the push to crush labor has taken many forms. From the first truly successful assault in 1981 with the firing of air traffic controllers to more recent efforts, like those in Wisconsin and Michigan to cripple labor through “right to work” laws.

Full Circle

Wage stagnation has become a feature of the new economy

Wage stagnation has become a feature of the new economy

While the value of work in the American psyche and ideas of merit have gone largely unchanged over the past 40 years, the reality for workers has gone through a massive transformation.

As the chart to the left shows, real wages have remained largely stagnant for workers in the United States since 1989. The reality is, its been going on longer than that.

All the while, the very people who have sought to shift the balance of labor from an equal playing field, to one that places greater importance on “job creators”, have, at the same time, used the rhetoric of bootstraps and hard work to fool voters into believing their ideas are somehow going to benefit them.

The reality couldn’t be further from the truth.

In every measurable way, the effort has resulted in a race to the bottom for average people while a very few benefitted the most.

This is not merit, as most Americans understand it, but a value judgement that puts a wealthy few above those who actually do the things that move our economy along.

It is an injustice, that hasn’t been committed by a few small acts, but a systemic and concerted effort over the years.

That injustice, and the fight against it will be the topic of tomorrow’s post.

Apr 02 2013

The Unbearable Partisanship of Expansion Denial

Posted by Steve Ross in State Politics

Peanuts, Popcorn, and a Whole Lot of Elephant Dung

Peanuts, Popcorn, and a Whole Lot of Elephant Dung

A couple of years ago, when I first published this image, I was lauded as a “chicken little” by some of my more conservative friends. They asserted that I was crying about the sky falling before a single drop had landed on my quickly balding head.

With a little time for reflection I say, “How do you like me now?”

Since last Wednesday’s decision to forego the expansion of Medicaid, and over $1b in Federal funding to do it, lots of people have sounded off on the issue. One of the best mashups of coverage came from Tennessee Values Authority over the weekend.

Pulling information from national and statewide sources, TVA shows in pretty stark terms the reality behind the rhetoric that the Governor used, to try and paint the Federal Government as inflexible and unwilling to compromise.

The Governor followed the lead of most other southern GOP lead states in effectively denouncing that favorite whipping boy of the Obama Administration…Obamacare. However, that wall isn’t as solid outside of the South. Maine is reconsidering, and seven other states with GOP Governors have accepted expansion.

This is one reason many thought Tennessee would be the next to break ranks.

Living in a dream world

In his address, the Governor invoked the “Arkansas Plan” as a model he hoped to pursue…with some tweaks.

The “Arkansas Plan” is an idea, still in the incubation stages, that would purchase private insurance through the state-run exchange for people, and include Medicaid “wrap-around” coverage.

But Gov. Haslam isn’t seeking to duplicate the idea of the “Arkansas Plan”. In fact, there are two stark differences between what Haslam proposes and what Arkansas proposes.

1. Arkansas will provide insurance to Medicaid expansion recipients with the same level of service as other Medicaid recipients. Gov. Haslam seeks to ask people to make co-pays above and beyond what Medicaid allows. This is likely in search of driving down premiums, but not actually serving more people.

2. Arkansas is running its own healthcare exchange, Tennessee is not. So Arkansas has more flexibility in terms of the market it will be seeking to provide services in. Tennessee locked itself into the Federal exchange back in December.

It should be noted, the “Arkansas Plan” has only been approved in concept, not practice. Arkansas will have to gain final approval from the Feds before they can head down this path.

In essence, Gov. Haslam has sought to make a modification to a plan that has only been tenatively approved, by adding things his administration knows full well would not be approved, and then saying “all or nothing”.

Haslam reported today that HHS head Kathleen Sebelius said “We want to work with you”. Of course, that doesn’t mean, “we’ll give away the farm”, which is what Haslam actually wants. So, nothing has changed.

In the end, this is not a good strategy if you want to get something done. Great strategy if you’re playing to a base that doesn’t like the idea in the first place.

Electoral Strategery and governance

Truth be told, Gov. Haslam is politically stuck between a rock and a hard place. On the one hand, he has his moderate image that helped bring him widespread support across the state. On the other hand, he cannot exert the same Executive authority as 44 other Governors, whose states require a 2/3 majority to override a veto.

His decision on Medicaid Expansion is part of a strategy that would allow the Governor to “save face” with Conservatives, while looking reasonable to his moderate base. What’s more, it plays into electoral politics and is hoped to hold back a primary challenge from the right. Something the Governor might not survive if the ultra-conservative wing of the GOP has a single standard-bearer to rally behind (Haslam received 47.4% of the votes in the 2010 August Primary, not a majority).

Another reality is there is little possibility the legislature would approve expansion anyway, so why risk the political capital? A bill sponsored by Sen. Brian Kelsey (R-Germantown) to prohibit the state from participating in Medicaid Expansion, has sailed through committee and currently stands in final stages of approval. The bill was opposed by the Haslam administration, but still likely had a hand in the final decision on Medicaid.

The legislature must do something to approve expansion, as it requires accepting and spending Federal dollars. Considering all these variables, from a political perspective, there wasn’t much the Governor could do, despite the support of the Tennessee Chamber of Commerce, the Tennessee Hospital Assn., the fears of Hospital CEO’s, whose patients Lt. Gov. Ron Ramsey is willing to sacrifice as victims of the free market even in rural areas which the majority of his caucus represents.

Despite those apparent challenges, the Governor could have shown some leadership instead of trying to deflect blame and come out in support of the idea, even if the nuts and bolts weren’t worked out. In doing so, perhaps some members of the GOP caucus would have given him the latitude to still uphold the Hastert Rule and Reagan’s 11th commandment, the only two rules that seem to matter in GOP politics.

I know, its asking way too much.

Yet Another Slow-Motion Apocalypse

Over the course of the past several days, I’ve sought to chronicle what will likely happen to rural communities as a result of this decision. The posts will be linked below, but in simple terms, this will be economically devastating.

Over 9000 rural jobs hang in the balance, with a direct economic impact of over $400m in actual wages lost in those areas…not to mention other jobs that will be lost in the area due to decreased demand and spending.

But the impact isn’t limited to rural counties…though it will have a far deeper and wider impact there. Hospitals in the state’s largest counties, Shelby, Davidson, Knox, and Hamilton all are impacted, bringing the total employment impact to 21,000 jobs lost.

This, after several economists predicted an increase of around 8000 jobs by 2019. Not a huge number, but better than potentially losing 21,000.

And so we find ourselves stuck between policy and politics once again. Its become a common thread in recent years. The end result, hard working people lose.

God knows, if ever there was time for a candidate that actually gave a damn about the folks who do the work that actually gets things done, that time is now. But they must get out there and start doing, rather than just talking. Talking and not doing is what got us into this mess in the first place…and it started well before Democrats started losing seats en masse in 2006.

Nationally Lampooned

Finally, I would just like to leave you with this video, that you’ve probably already seen, from the Colbert Show. Honestly, no one could have said it any better.

Previous Posts on Medicaid Expansion

Medicaid Expansion: Is there a downside?
Bill Haslam’s Death Panel
More on the Haslam Death Panel
The Economic Impact of Hospital Deserts
Distant Care – Existing Hospital Deserts
What does Medicaid expansion actually do?

Apr 01 2013

What does Medicaid Expansion actually do?

Posted by Steve Ross in State Politics

Medicaid, TN style

One of the things I’ve seen over and over is a misunderstanding of what Medicaid expansion is, and in turn, how it would impact both people and providers, including hospitals, if enacted.

To get there, we have to first understand what Tennessee’s system does now, how efficient it is, what changes would come under expansion, and finally, what changes are coming no matter what happens.

To that end, you might ask…

What is TennCare?

Here’s a description from the State website:

TennCare is the State of Tennessee’s Medicaid program that provides health care for 1.2 million Tennesseans and operates with an annual budget of approximately 8 billion dollars.

TennCare is one of the oldest Medicaid managed care programs in the country, having begun on January 1, 1994. It is the only program in the nation to enroll the entire state Medicaid population in managed care.

Most of us are familiar with HMO’s, in essence, that’s how TennCare works, though the premium is funded via the Federal and State government.

You can see just how much of TennCare is funded by the State and Federal governments by clicking here and navigating to page B-154, which lists state and federal appropriations for the past three years. Here’s the distribution for those years:

Federal Government matches 2:1 for current enrollees

You’ll notice that in 2010-11 the federal government’s portion of funding was 3 times that of the state.

In the years since, including next year’s projected budget, that ratio drops to 2:1.

This is due to the American Recovery Reinvestment Act (ARRA), which increased the Federal government’s contribution to help save TennCare from huge budget cuts.

You’ll also note that in the coming year, TennCare appropriations increase by nearly $900m.

This is likely, to help cover normal increases in healthcare costs as well as the nearly 100,000 people in Tennessee that qualify for TennCare , but are not on the rolls due to enrollment caps, or simply not knowing they’re eligible. This is required by ACA to receive Medicaid matching funds.

As the individual mandate comes on line in 2014, these people will finally gain access to something they should have been able to use for years.

A Case Study in Government Efficiency

TennCare is more efficient than any other insurance delivery method

TennCare is more efficient than any other insurance delivery method

There are lots of people out there that are convinced Government cannot provide services more efficiently than business.

Some of this is due to the nature of government, which provides services, like road construction, for the common good, knowing that the initial cost may eventually be covered by increased efficiency, but the ongoing maintenance costs may not.

Imagine where we would be as a nation without our network of Interstates and Highways. There’s no way private business would invest the capital necessary to accomplish this with the efficiency of government. Our highways would be a patchwork of spaghetti serving the interests of those private businesses rather than the common good.

TennCare is very similar to this example. It is more efficient than any other insurance delivery method. Last Wednesday, after Gov. Haslam announced his intention to not expand Medicaid in Tennessee, lots of people found lots of reasons that was a bad idea. One of the better arguments is the efficiency with which TennCare currently provides insurance to those in need.

According to the state government’s TennCare budget report, not only is the government more efficient, costing half of what private insurance costs per person, but it also manages inflation better, holding it to half of National Medicaid inflation, and more than half of commercial insurance.

This is one reason Gov. Haslam’s insistence on using expansion dollars to purchase private care for individuals doesn’t make much sense, but we’ll cover that in the next post.

Understanding Uncompensated Care

Feds bear the burden, but it is somehow burdensome?

Feds bear the financial burden, but expansion is somehow burdensome?

Medicaid was created to cover people who don’t have the money to purchase health insurance. The expansion of Medicaid helps cover those who couldn’t even purchase health insurance with financial help from the government. Currently, Medicaid only covers people in poverty, and children, depending on age, up to 133% of poverty.

In the past this meant many families earning between the poverty level and as much as 250% of poverty ($59,000/yr for a family of 4) couldn’t afford coverage if it isn’t offered by one of their employers, or if the employee contribution is too high.

It creates is a huge hole in coverage of people. While folks nearing the middle income area may be able to pay out of pocket costs for doctor visits, folks down at the lower end of the scale can’t.

Full time minimum wage is 138% of poverty. I don’t know of too many places offering minimum wage that also offer insurance that’s worth the plastic the card’s made of. And at $15,000 a year, I’m not sure someone could even afford the employee contribution, or the co-pays.

So what happens is, folks in this situation go to the Hospital when things get really bad. Hospitals treat them because, unlike other areas of the economy, life is valued more than getting paid.

When the person can’t pay their bill, and proves to the hospital they are too poor to pay, the hospital calls it “uncompensated care” and gets reimbursed a portion of it from the state, through federal dollars.

Folks outside of Memphis may not remember back in 2010 when we were faced with the real possibility that our public hospital, The MED, might close due to unusually high rates of uncompensated care.

Commissioner Mike Ritz (R? – Germantown) led the charge, alleging the state had not been giving The MED its fair share of uncompensated care funding. Metro Nashville General had the same problem a few years before.

Honestly, I don’t remember what came of it. But such battles could be moot under ACA where everyone is covered.

Ending Uncompensated Care with Compensated Care

Under ACA, everyone must have some kind of insurance or pay a penalty. Under the law, everyone making between 101% and 400% of poverty ($23550 – $94,000yr for a family of 4) will receive some kind of subsidy to help pay for the cost of healthcare.

That subsidy effectively replaces the amount spent on “uncompensated care”. The idea being, its better to use that money to get people in care earlier so they don’t end up using the Emergency Room as their primary care facility.

Currently, Medicaid in Tennessee provides healthcare for adults earning poverty level wages or less. What Medicaid expansion would do is cover people up to 138% of poverty or $32,500 for a family of 4.

What this expansion addresses is the reality that folks under a certain income threshold just won’t be able to shoulder the burden of the individual mandate, and, in order to make the policy work, must be extended care benefits.

By choosing not to accept the expansion dollars, at a time when uncompensated care dollars will be disappearing, the Haslam administration has put the fiscal viability of hospitals that serve poor people in serious danger. In effect, this decision punishes hospitals for their circumstances…not being in a wealthy enough community.

The Working Poor Suffer Most…As Usual

As I’ve shown in previous posts, most of the facilities in the 30 counties that could lose their hospitals have relatively high rates of poverty. In reality, every hospital that helps care for poorer people is at risk, including four hospitals in Memphis (The MED isn’t one of them), Metro Nashville, Mercy Medical Center West in Knoxville, and Erlanger in Chattanooga.

In short, in addition to endangering hospitals all over the state, this policy will hurt hospitals all over that serve poorer populations because these individuals will not be able to purchase care, due to their income, yet still need it, by virtue of being human.

The gap in compensation will no longer be covered, causing huge economic problems for these hospitals and making travel to hospitals longer for people who already have so many things stacked against them.

Based on Household income data from the Census Bureau, nearly 30% of households in Tennessee make 138% of poverty or less. But everyone in those areas stand to lose, regardless of income, as their hospitals struggle to survive under the weight of non-expansion.

And while the 15 counties without hospitals may not seem like a huge issue, it is for the folks that live there. I have it on good authority there are more who are in danger, or have already closed.

The 30 that stand to lose their hospitals, and the economic/health crisis that creates may not be compelling, until you consider the cascading effect it would have on hospitals across the state, forcing people who cannot afford care into hospitals that were once financially healthy, but due to largely political considerations, are now in danger.

That’s all thanks to the unrealistic demands of the “Tennessee Plan”, as Gov. Haslam has dubbed it. Which is the subject of my next post.

Apr 17 2012

Whose Rights Are Being Violated? #TNLeg #GunsInParkingLots

Posted by Steve Ross in State Politics

Lt. Gov. Ron Ramsey - via his state website

Being Lt. Gov. of Tennessee must be a pretty confusing gig.

On the one hand, you’re the second in command, even though you have been elected by a tiny minority of Tennesseans, which would seem to call your “mandate” into question. But thanks to the easy compliance of a Governor who just won’t stand up to the legislature under any circumstances, you have free reign to do darn well anything you please.

On the other hand, you’ve got aspirations, and have made those aspirations pretty clear. Fulfilling those aspirations on a statewide level requires you to not be seen as too much of a wild eyed radical, despite your deeply held radical right-wing leanings.

So it must be even more difficult to get a handle on things when you simultaneously support and oppose a bill that allows individuals to store their guns in their cars on employers parking lots.

I’m sure its even more confusing when you and your House colleague have both declared the bill dead for the year as it moves its way through the committee process.

Dang. Can’t a confused Lt. Gov. get a break.

Add to that, the opposition of several industry groups and two of the state’s largest employers, FedEx and Volkswagen and you’ve got a both a political and policy conundrum. Do you stick with your NRA buddies and see this bill through, or do you focus on your reservations and make sure it never makes it out of the calendar committee?

It’s hard out there for a Lt. Gov.

Ron Ramsey Auctions - Via Google Maps

But here’s something else to consider. Ron Ramsey is a business owner. His business includes land, and even a parking lot. Now, assuming that Ramsey owns that parking lot, he can choose whether or not he will allow his employees to bring firearms of whatever sort on to the property. It is his property after all, right?

But if this law passes, Ron Ramsey, property owner and businessman, suddenly loses the right to set certain rules as they pertain to gun possession on his property for his employees. While several people have touted the safety concerns and other issues, for Ron Ramsey, what this creates is essentially an additional restriction on his liberty to own his property in the way he sees fit.

Now, there are other property owners here too, of course. The employees, presumably, own their cars and the guns concealed in their cars. But cars move, land doesn’t (or at least it isn’t supposed to). It is a generally accepted idea that the land, which is immovable, takes a certain level of precedence over modes of transit in terms of who controls what. This is, after all, the idea behind the Guns in Bars law allowing establishments to choose if they will allow guns in their businesses.

This bill doesn’t allow such a choice, and as onerous as the Guns in Bars bill was, the lack of choice makes this bill even more onerous because it mandates what property owners and employers MUST do in regard to firearms on their property and in relation to their employees.

Sounds like that the kind of “Big Government” that Lt. Gov. Ramsey is always railing about.

There are also other concerns, like liability and insurance.

Insurers are in the business of managing risk to make a profit. When risks, real or perceived increase, so do premiums. While there may or may not be any real increase in risk to this law, don’t think for a minute that insurers are going to miss this opportunity to increase premiums. Its not just the employees they’ll be concerned about either, its the attractive nuisance that can come from a potentially not-so concealed weapon in a public space, in view of people who may not have the best interests of the public in the forefront of their minds, who then acquire that weapon for their personal interests…which may include the business the weapon was stolen from.

Then there’s the liability issue. Nothing in this bill says that the State of Tennessee, in passing this mandate, will assume liability for injuries and or deaths that may come from the passage of this law. As any property owner knows, when someone gets hurt on your property, your insurance may have to pay. If you don’t have adequate insurance, you may also get sued despite the Tort reforms of last year.

Is Lt. Gov. Ramsey worried about these issues? Maybe. He’s not really a details person, he’s more into hyperbole, but when he says he “has concerns”, well, this is where I’d start with those concerns.

If these are the concerns of the Lt. Gov., this is one of those rare times when I agree with him. Its concerning on many levels, but most importantly, on the level of slowly eroding the rights of property owners to determine what is or isn’t permissible on their property.

The idea of personal control of property goes all the way back to British Common Law that our nation’s laws are based on. It strikes at the very foundation of our ideas of property.

Remember, it was John Locke who penned “Life, Liberty, and Property”, long before Thomas Jefferson moderated it to “Pursuit of Happiness”, which is a nice euphemism for property as well as other things, in the 1776 Declaration of Independence.

Considering this precedent, does the TN Legislature, and by extension Ron Ramsey, want to put a largely Conservative US Supreme Court in the position of either overturning a law backed by a conservative group, or overturning a precedent that is at the foundation of our nation’s identity?

I don’t think so, but I also don’t think the folks that have been pushing this bill have thought too deeply about the irony of their position.

We’ll just have to see how strong the Lt. Gov.’s resolve is. If it gets scheduled on the floor, then I guess we’ll all know he caved, which will put he and Governor Haslam in the same boat…in terms of caving to bad ideas on some level. If it doesn’t make it to the floor there are other, less obvious considerations. But I’ll leave that to the Lt. Gov. to add to his already full “thinking cap” load.