Participate in the transportation conversation long enough and you hear a familiar refrain: Why can’t we be more like Europe? Europe being shorthand for an enlightened land of high-speed rail, pervasive bike use, and public transit everywhere. (There’s notable less interest in the widespread use of private concessionaires for roadways, but that’s another post.)
During a period where US transit systems expanded their coverage area faster than ridership, German systems reduced their coverage area while seeking to increase ridership on higher volume routes. They reduced costs by increasing the productivity of their workforce, cutting employee benefits and instituting a competitive system of outsourcing.
During a period where the MBTA needs all the help it can get, perhaps we need to be more European in our thinking.
By Taylor Armerding January 10th, 2012 Add comment
Lieut. Gov. Tim Murray has forfeited the benefit of the doubt.
Murray, in a recent letter to political supporters, complained that he has been subjected to “false rumors and wild speculation” in connection with the crash of a state-owned car last Nov. 2 on Interstate 190 in Sterling.
Perhaps he would have had a legitimate complaint if he had been completely transparent from the start. But his account of the crash is contradicted in almost every detail by what was more recently revealed from the vehicle’s black box. If anybody is causing problems by saying things that are false, it is Murray.
The lieutenant governor claimed he had been obeying the 65 mph speed limit. He wasn’t. The black box data showed that he been traveling in excess of 75 mph, and shortly before the crash his speed increase to 108 mph.
He claimed that he had slid on black ice. Not according to the black box, which showed he had never applied the brakes. He claimed he had been wearing his seatbelt. False again.
To call all of these contradictions “mistakes” is laughable. They call into question the rest of his account. Murray said he had gone for a drive to check out storm damage – at around 5 a.m. in the pitch dark. Now he says that he went out for a drive because he couldn’t sleep. And, he now says the reason for the accident is that he fell asleep the wheel.
So for Murray to complain about the press demanding his cell phone records is both unseemly and suspicious. He contends that he was not talking or texting on his phone any time during the drive. But, he does not want to release the phone records.
If Murray wants to end rumors and speculation, he will stop stonewalling. That is only feeding them. If his phone records back up what he has been saying, he has nothing to worry about. But he can’t complain that people don’t trust him. In this case he doesn’t deserve it.
The stories might seem only vaguely related but, at root, they highlight the Mass Lottery’s ongoing challenge — sustaining revenue levels and trying to grow in a stagnant market. And that market is going to get more crowded once casinos start operating, with expert opinions forecasting a 5 – 10% drop in lottery revenues initially.
At some base level, a business entity’s revenues are bound by a simple equation — revenues = (# of customers) x (price) x (quantity) x (purchase frequency).
The Lottery’s worked hard within these confines to make more money — offering sports-branded instant games to attract casual players, developing higher cost instant games to raise average spend, and continuing to cycle through a portfolio of instant games to keep players interested.
Trying to increase the purchase frequency is the area where the Lottery has done particularly interesting work. The proposal to allow debit card spending has the potential to increase that measure. The lottery has also worked to increase the number of outlets for ticket purchase, not just through the traditional convenience store outlets but with vending machines, automatic Keno ticket readers, and broader access to Keno machines.
For my money, the most fascinating change was the tweak to Keno game frequency by reducing it from a game every 5 minutes to every 4 minutes, thereby increasing the number of games played every hour from 12 to 15.
Even with all these tweaks, Lottery sales only rose .7% per year from 2000 to 2007. And casinos will eat into its sales. Massachusetts has a very successful lottery, but barring some wild scheme (keno on the MBTA?) it’s a mature product with minimal growth prospects.
On December 20th, Governor Deval Patrick, and the entire Massachusetts Congressional delegation, congratulated themselves on the resolution of a six month delayed renewal of the Massachusetts Medicaid waiver. The waiver will run for the next 3 years. I blogged on Pioneer Institute’s website about the recent waiver delay here, here, here, and here. But for those that may not be as familiar, in essence the waiver serves as the foundation for the Massachusetts health care reform.
At first glance at the new waiver, it does appear that the state squeezed substantial sums out of the federal government, but where that money ends up is the critical question. The media largely reprinted the press release, and completely ignored the historical context of the waiver, as well as the most basic breakdown of funding distribution. Below are a few takeaways from the waiver, and an outline for why ongoing issues with safety net hospitals in Massachusetts will potentially explode under the federal Affordable Care Act (ACA). [Sidebar: In my opinion, many elements of the Massachusetts reform do not translate to predictions of behavior at the national scale, but the discussion here highlights one element that will have a direct application.]
The real story of the waiver is the continued funding of safety net hospitals at unsustainable levels, and the lack of reform at these institutions. I came to this conclusion by comparing funding data from the 2011 and 2008 waivers, and by pulling state hospital data from 2010 for the following service and payer categories:
Service Category
Payer
Inpatient Discharges
Outpatient Visits
Emergency Visits
Medicaid
Medicaid Managed Care
Self-paying
Health Safety Net
Commonwealth Care
The waiver and service numbers lead with the following takeaways:
The Waiver Provides a Huge Increase in Funding to Acute Hospitals, with a Majority of Funds Going to Two: Boston Medical Center (BMC) & Cambridge Health Alliance (CHA)
2008 Waiver
2011 Waiver
Acute Hospital Funding
$1,090,700,000
$2,177,100,000
Funding for Acute Hospitals as % of all Hospital $s
24%
49%
BMC and CHA % of Acute Hospital Funds, Not including their HSN funds
63%
66%
When you include health safety net (HSN) money, CHA and BMC end up receiving roughly 76% ($1,663,588,000) of the money available to acute hospitals in the 2011 waiver.
It should be noted that the total waiver money available to ALL hospitals did decrease by $200 million from the 2008 to 2011 waiver. However, the cuts were not evenly distributed. While seven acute hospitals were selected in the waiver to receive “Delivery System Transformation Initiative”(DST) funds to the tune of $628 million over 3 years to move away from fee-for-service payment methods, other safety net hospitals and non-acute hospitals will see a much lower percentage of funds as a result, and some see outright cuts. For example, state-owned non-acute hospitals operated by the Department of Mental Health and Department of Public Health will see a $41 million decrease in the aggregate.
If the goal was to help vulnerable hospitals move to a new payment methodology, this waiver failed. The waiver left flexibility to account for new payment reform legislation that may be passed in the next few months on Beacon Hill, and therefore the waiver section on DST methods was left blank. However, one is left to ask how other community and safety net hospitals not named in the waiver will make the transition towards reform if the waiver is built on the assumption that hundreds of millions of additional dollars is required to do so?
2011 Waiver
BMC, without HSN $
$466,700,000
CHA, without HSN $
$974,600,000*
All Other Acute Funding (with all HSN $, BMC & CHA receive ~ 48%)
$735,800,000
Total Acute Hospital Funding
$2,177,100,000
* $125.5 million was authorized through a demonstration amendment approved on Aug 17, 2011.
BMC and CHA have a disproportionate number of visits and discharges being paid for by the Health Safety Net (HSN), especially for outpatient services. (Note:The percentages for visits and discharges below are in reference to my payer breakdown outlined at the beginning, unless otherwise noted.)
The HSN was formed as part of the 2006 reform, to reimburse hospitals for the care given to the remaining uninsured (currently at ~1.9%). There is no question that BMC and CHA serve a high volume of traditionally challenging populations. These two institutions see 24% of all outpatient & emergency room visits, and inpatient discharges.
Yet, according to the Division of Health Care Finance and Policy, BMC and CHA are not seeing the sickest patient mix. While they see a high volume of patients, the percent of visits for the 5 major payer categories in my analysis look very similar to other hospitals such as Mass General Hospital, or other safety net hospitals such as Quincy Medical Center. However there is one big exception that should worry policymakers—HSN outpatient visits.
BMC
CHA
% of 2010 Visits and Discharges Paid for by HSN
18%
20%
While the proportion of HSN funded services may not strike some as unusual at first when talking about BMC and CHA, since both do not hide the fact that they serve many HSN patients. However, a further breakdown of the numbers reveals a surprising fact; BMC and CHA are significant outliers in HSN outpatient services.
Hospital
% of Biz from HSN Outpatient Care, 5 Payer Analysis
HSN Outpatient Visits
HSN Outpatient Visits as a % of All Outpatient Visits at Hospital
BMC
16%
139,285
9.98%
CHA
16%
67,442
10.75%
Signature Healthcare Brockton Hospital
11%
8,731
9.65%
Mass General Hospital
8%
21,224
2.27%
Beth Israel Deaconess Medical Center
7%
11,176
1.59%
Steward Carney
6%
2,496
2.98%
Quincy Hospital
4%
1686
2.72%
Lowell General Hospital
2%
939
.95%
As an example of the difference in scope for services given to HSN patients at BMC: 1,632 inpatients, 17,501 in the ED, and 139,285 outpatients. BMC accounts for 60% of outpatient HSN visits for the seven hospitals named in the waiver.
Why does this difference in the type of service matter? Outpatient services are often by nature premeditated. This is in direct opposition to the goal of reform in 2006 and is costing taxpayers hundreds of millions of dollars in the process. These major hospitals were going to move away from relying on reimbursement for the uninsured coverage they provided, and see more and more individuals with Medicaid and Commonwealth Care as time passed. Instead, as state lawmakers did not keep their promise to increase Medicaid reimbursement levels over time, it appears CHA and BMC (along with a few others at a much smaller scale) have set up a system that caters to significant numbers of patients that these institutions seek out in order to receive the slightly higher reimbursement from the HSN. Not surprisingly, HSN demand ballooned up to $470 million last year, no doubt due to a down economy, but also because these hospitals have targeted HSN outpatient services. This brings us to the national story–
Massachusetts’ inability to successfully transition safety net hospitals into a more sustainable financing model, should major raise questions about the financing of the national law.
The ACA, is funded, in part, with future cuts in Medicare Disproportionate Share Hospital (DSH) payments. In Massachusetts, a good portion of the money set aside in the now defunct uncompensated care pool was transferred to individuals in the form of subsidies to purchase insurance. The new system promised to be more transparent and economically efficient.
However, BMC and CHA have flexed their political muscle time and time again, receiving temporary “transitional” assistance on multiple occasions. The original reform included special carve outs for these providers, and subsequent waiver renewals have only enforced the status quo. In effect, the federal government is propping up these institutions with state complicity.
The Medicaid waiver struggle has played out three times in Massachusetts, each time proving to be a big lift despite the same party occupying the corner office of the White House each time (Romney and Bush, and Patrick and Obama the last two times). One is left to wonder, if it is such a challenge to move these institutions away from dependence on supplemental transitional government money, how will the process play out with hundreds of billions on the line, a national spotlight, Congressional interest, and seniors impacted by Medicare cuts in the ACA?
On a final note, the waiver highlights the Major Surgery that is Scheduled for Commonwealth Care. The Commonwealth will receive $1.3 billion less for the program over the next three years compared to the 2008 waiver.
2008 Waiver
2011 Waiver
CommCare Funding
$2,333,500,000
$1,007,900,000
Pioneer has been writing about the coming tidal wave for the Commonwealth Care program for almost a year now, and the waiver flushes this out starkly. A majority of current Commonwealth Care members will be transferred to the Medicaid program, and as a result the Connector currently faces many policy decisions on how best to proceed.
I would welcome your feedback on this blog both in the comment section below or at josh[at]pioneerinstitute.org or on Twitter at @josharchambault
The MBTA released two scenarios to deal with a projected FY13 budget deficit of $161 million. Scenario 1 fills the gap with close to 80% fare increases and 20% service cuts. Scenario 2 roughly splits the difference between service cuts and fare increases.
A quick review of the impact study tells me that Scenario 1 is the one that the MBTA wants. And that the ire of the public will quickly be focused on Scenario 2.
Scenario 2 proposes a radically trimming of bus operations, eliminating 23.6% of bus trips and reducing ridership by about the same amount. The T’s bus system could use some consolidation and a greater focus on increasing throughput, but that’s a pretty big pill to swallow in one shot.
Plus, the concentrated impact of Scenario 2 on bus service — reducing ridership by 24%, while subway service sees a modest reduction of 2% of ridership due to service cuts — will also attract attention. As bus riders are more concentrated in Boston (full disclosure: I’m one of those riders.), urban politicians are sure to react strongly to this plan.
Another problematic aspect of Scenario 2 is its reliance on headcount reduction for cost savings. It forecasts a reduction of 564 MBTA jobs. Given past history, such as the launch of automated fare collection, which resulted in no immediate reduction in headcount, and the strength of the Carmen’s Union, I’m skeptical that the will exists to implement this.
I encourage you to take a read through the study and draw your own conclusions. Despite my misgivings about portions of it, there’s a lot of good thinking here — raising fares (and considering them in the context of other urban systems), eliminating certain low ridership/high subsidy bus routes, increasing fees and decreasing or eliminating subsidies for other services.
What’s not in here, but needs to be discussed at some point, is a way forward. Is the MBTA in perpetual ‘$160 million yearly structural deficit” mode? If so, these short-term fire drills don’t address the long-term problem.
And am I the only person who sees the contradiction between spending on long-term expansion (Green Line extension, South Coast Rail) when we can’t fund the operations of the current system and cold (not inclement) weather seems to be an increasing challenge operationally?
No one, myself included, likes to pay more in fares. But I’d be willing to pay more if it meant an improvement in reliability and service quality. I’m hopeful someone makes that case in an accountable and public way.
By Joshua Archambault January 3rd, 2012 Add comment
Dave deBronkart gave an interesting talk at a TED conference site last year that highlights the potential of patients having access to their own health data.
Under the Americans with Disabilities Act, an employer’s requirement that applicants have a high school diploma must be job-related and consistent with business necessity, the Equal Employment Opportunity Commission stated in an “informal discussion letter” posted on its website Dec. 2.
I don’t know of many employers who think twice about requiring a high school diploma. The EEOC letter “does not constitute an official opinion of the commission,” but rather is an indication that at a date not too far in to the future the EEOC will take up this question and make a ruling on whether requiring all job applicants to have graduated from high school is a violation of the ADA.
The letter goes on to note that
if a high school diploma requirement is job-related and consistent with business necessity, but effectively screens out a disabled applicant, the employer still may have to determine whether an individual applicant can perform the essential functions of the job with or without reasonable accommodation.
The EEOC further suggests that the onus will be on the employer to show that job applicants
cannot perform the job’s essential functions with or without a reasonable accommodation, even if he or she does not meet a standard that is job-related and consistent with business necessity, the commission added.
We will have to see how the federal commission will move ahead, but the ramifications of prohibiting such “milestone” job requirements will be many:
Perhaps the inclusion in the workplace of disabled individuals who may either sense a barrier or who are excluded because of the requirement;
An unhelpful signal to those who are struggling in high school that the effort may not be necessary; and
An entirely new industry for lawyers to expand into.
A number of readers of recent posts on virtual (or digital) learning have asked for some definitions around jargon used by proponents and experts. I wanted to share a brief video on “blended learning,” a term that you hear increasingly, especially in states where charter public schools and district schools are attempting to integrate online tools into the classroom.
Blended learning is, if you will, that broad area between the traditional classroom, where you have a teacher lecturing and teaching a class of kids, and exclusive use by a student of online resources to drive their learning. The video embedded below was written by Anthony Kim and Michael Thompson of Education Elements. It is a bit dry and a tad jargony itself (e.g., “unleashing learning velocity”), but it does a nice job of laying out the four principal models emerging in the blended learning area.
Understanding the quality of the choices in the marketplace will have to be informed by more than giddy passion about the promise of virtual learning. A cursory look at the research done on virtual learning suggests that there has been to date more energy than light on the impact of VL on sustained student achievement. …
We are just at the start of the virtual learning movement, and there is so much promise in the short term regarding access to high-quality content, targeted instruction, peer tutoring and resulting stronger socialization around academics (rather than who’s cool and who’s not). …
The fault lines around how best to teach kids how to read, conceptual understanding, and what should be in the standards and curriculum are all important topics well into a virtual future.
And politics will come. It is unavoidable. The NY Times was to run an expose by Stephanie Saul, the Pulitzer Prize-winning journalist who has spent much of her career at the Times on the pharmaceutical industry and fertility treatments, on the well-known digital learning company K12. Many in the school choice movement see the article as a likely hatchet job…
All I can say to school reformers who support digital learning is: Such articles and such scrutiny are going to come. It is inevitable and ultimately it is good.
Ms. Saul’s piece on online learning – or really on one company involved in the online space, K12 Inc. – came out five days after my blog. The title of her piece was provocative — Profits and Questions at Online Charter Schools – though not nearly as provocative as the url of the article (which may suggest that it was the original title): “Online Schools Score Better on Wall Street Than in Classrooms.”
It’s important simply because it’s an long investigative piece in the New York Times. And while I am going to stick with my take that criticism is a good thing because it helps you improve, the article has been roundly criticized with good reason.
to interview, for example, the student with disabilities who can work at his own pace or the student in a rural state who would never have had access to AP physics or Mandarin Chinese if it weren’t for online options. Instead, Saul dismisses the benefits that virtual education holds for so many students.
The article does interview Ronald Packard, the CEO of K12 Inc., but the rest of the quotes are from opponents of the school. I get that you need to interview unions folks and superintendents for a full picture, but when the scholar you approach for a comment compares the company and digital learning to “what the banks did with home mortgages” and when Saul herself suggests that the company is acting like “military contractors [that] have capitalized on Pentagon spending,” well, it’s just not credible. Consider just how un-journalistic the tone is in these sentences:
With K12 estimating the market for its schools as high as $15 billion, the company’s manifest destiny is to expand across the United States. Its newest conquest is Tennessee, where the company got legislative approval last May… [my italics]
Other problems with the piece are:
1) The article draws conclusions from an investigation of one company and applies them broadly to digital learning. As Burke notes:
Rocketship Academy, a blended learning school that leverages online learning in combination with the traditional classroom. Out of 3,000 low-income schools in California, Rocketship is the fifth-highest-performing.
Rocketship’s performance is consistent with findings released in 2010 by the U.S. Department of Education. In a meta-analysis of more than 1,000 empirical studies on virtual learning, it found that “online learning has been modestly more effective, on average, than the traditional face-to-face instruction with which it has been compared.”
There are also public virtual schools, including the rightly much-applauded Florida’s Virtual School, which have demonstrated records of success and also provide lessons for the kind of accountability that states like Pennsylvania, which Saul’s focuses on, should insist upon.
2) Saul is clearly unfamiliar with the field she is writing about. After citing upcoming research from Western Michigan University and the National Education Policy Center to the effect that
only a third of K12’s schools achieved adequate yearly progress, the measurement mandated by federal No Child Left Behind legislation
Saul quotes a school official from Memphis Public Schools to support her point that children need academic and social skills. The problem is that
According to Superintendent Kriner Cash, only about 16% of Memphis City Schools made its ‘Adequate Yearly Progress,’ or AYP. He said about 50 schools made improvements but it wasn’t enough.
Then there is the section of the article where Saul seeks to taint K12 Inc., and the entire digital learning space, with the scarlet letter of lobbying. Taking the Pennsylvania state auditor’s criticism of K12’s use of funds on advertising and lobbying without questioning, Saul shows either naivete or a lack of curiosity surprising because of her profession when she writes that charter schools and digital learning entities
have formed a lobbying juggernaut in state capitals. In Pennsylvania, the company has spent $681,000 on lobbying since 2007.
Juggernaut? It’s not my intention to defend lobbyists, but can Saul really be unaware that taxpayer funds go to teachers’ union lobbying and also that of the superintendents—and that these funds flow through private organizations? If K12’s spending $170,000 a year on lobbying is offensive, then what about these numbers for the Pennsylvania State Education Association, which she quotes throughout her article:
The Pennsylvania State Education Association (PSEA), an affiliate of the NEA, siphoned over $55 million out of its 191,000 members’ and 5,600 agency-fee payers’ wallets in 2010, with help from school districts who deduct the payments.
A number of members and fee-payers would gladly keep their money, if given the choice. National Education Association (NEA) general counsel Robert Chanin acknowledged that fact: “It is well recognized that if you take away the mechanism of payroll deduction, you won’t collect a penny from these people.”
More than $2.5 million of that paid for political fundraising, a gubernatorial debate video, political calling, lobbying, and other political activity…
While dues cannot be used to directly fund candidates’ campaigns, unions also have PACs. Union war chests contributed more than $23 million to campaigns in 2009-2010 — much more than the often vilified natural gas industry. PACE, the PSEA’s political action committee, contributed $2.3 million to state election campaigns in 2009-2010, including $310,000 to Dan Onorato for Governor.
Another example of Saul’s lack of understanding of the field is her broad and unfortunately uninformed assumptions about the kinds of students that may benefit from digital opportunities—suggesting that they are simply those kids with “strong parental commitment and self-motivated students.”
Then there is her lack of understanding of homeschoolers. Citing critics who “argue that states are essentially subsidizing home schooling,” Saul is oblivious to the counter-argument made for decades by homeschoolers that they are the ones who have long subsidized public schools by paying for their kids’ education out of pocket even as they pay taxes for traditional public schools that their kids do not attend.
All that said, there is no reason to go overboard criticizing Saul’s intentions or lack of detailed knowledge with the subject matter. That’s hardly rare in journalism these days, though it is equally clear that the Times‘ Sam Dillon is a far more experienced hand in the education space. Saul’s piece is helpful when it underscores an issue that states interested in expanding digital learning have to get their arms around: How payments and incentives are structured to online vendors is crucial to ensuring accountability for recruitment and retention, as well as student achievement.
For example, Saul writes that
The constant cycle of enrollment and withdrawal, called the churn rate, appears to be a problem at many schools. Records Agora filed with Pennsylvania reveal that 2,688 students withdrew during the 2009-10 school year. At the same time, K12 continued to sign up new students. Enrollment at the end of the year — 4,890 — was 170 students more than at the beginning, obscuring the high number of withdrawals.
A 50 percent “churn” rate is unacceptable, and that Pennsylvania is not insisting on answers suggests that they need to improve their public policy. And while Saul’s wrong on the kinds of students who may benefit from digital learning, we would be wise to listen to disgruntled K12 Inc. staff members when they
say problems begin with intense recruitment efforts that fail to filter out students who are not suited for the program[.]
As the Massachusetts legislature thinks through this issue, it has to pay special attention to the fee structure and timing. Here the public model in Florida may provide important lessons in as much as there is no payment made to the Florida Virtual School until the student completes the course with a satisfactory grade.
Such a payment system would alleviate the pressures of some teachers at K12 who
questioned why some students who did no class work were allowed to remain on school rosters, potentially allowing the company to continue receiving public money for them.
Which still leaves the issue of accountability for performance. Saul describes the experiences of two Tennessee families to underscore the observation that
[S]ome teachers said they were under pressure to pass students with marginal performance and attendance.
She also uses their experiences to ask if K12 Inc. is doing enough to ensure that the student is really doing the work.
Some teachers have complained that it can be difficult to determine whether students are actually doing the work, or getting help from their parents or others. “Virtual schools offer much greater opportunity for students to obtain credit for work they did not do themselves,” said a report in October from the National Education Policy Center, which receives financing from the National Education Association.
There are a number of options here, including more frequent online visual contact, periodic meetings, and requirements for testing to occur in public spaces with sign-ins. These are precisely the topics of discussion that Massachusetts has to take on seriously as it decides how to exploit technology in a way that advances access to AP courses, specialized courses, customized individual learning, and full schooling online.
The Salvation Army is struggling to raise money this year through its traditional red kettle/bell-ringing campaign, with donations down 22%. It might be due to a down economy. I know that my dependence on electronic transactions frequently leaves me without bills or coins to donate.
But new economic research suggests strategies to increase donations. A team of economists conducted a four day experiment at a Boston-area supermarket using two different approaches to the red kettle campaign.
The first approach was passive — just bell-ringing, no speaking, no eye contact. The second was active — bell-ringing plus a direct ask for a donation.
The result?
People avoid being asked verbally (as opposed to the implicit, passive ask that the presence of kettle suggests). About a third of the shoppers actively switched entrances to avoid the verbal ask.
By Steve Poftak
By Joshua Archambault
By Jim Stergios
