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Doctors for higher health-care costs!

Ezra Klein's Wonkbook

Aug. 15, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas’s morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

A crucial change in the health-care conversation over the last few years has been the shift in focus from “costs” to “prices.” Everyone knows American health care costs too much. But after the release of the International Federation of Health Plans’ data and Steven Brill’s epic Time article and the New York Times’ massive price series, it’s also becoming common knowledge that a major cause of those high overall costs is sky-high prices for every individual service, drug, and treatment.

Identifying the problem is easy. Doing anything about it is hard. But there’s one thing states can do that isn’t particularly hard: Allow more nurse practitioners — who charge much less than doctors — to treat patients directly, without a physician’s oversight.

Doctor’s groups oppose this strenuously. They say patient safety is at risk. What’s really at risk is their incomes. 17 states and the District of Columbia already allow nurse practitioners to treat patients directly and there’s been no resultant rash of patient deaths in Washington, Oregon, Maine, Colorado, Arizona, New Hampshire, Vermont, Rhode Island, Montana, Idaho, Nevada — I could go on. (Nor, by the way, has anyone heard of doctors going begging on the streets in those states, but I digress.)

The Wall Street Journal reports today that five other states are considering freeing nurse practitioners to practice with physician oversight, including California, where only 16 of the state’s 58 counties have enough primary-care doctors. These kinds of shortages are common, and they’re likely to get even worse as the population ages and the Affordable Care Act expands coverage to millions of Americans.

Doctors don’t have a good answer for how they can rapidly expand to meet all this new demand. But they know they don’t want nurse practitioners doing it. The powerful California Medical Association — also known as the doctor’s lobby — opposes the bill with the usual line: It will “ultimately harm patients and decrease quality of care.”

No, what will ultimately harm patients and decrease the quality of care are too few doctors who charge far too much. But right now, those doctors are the incumbents, and incumbents are politically powerful. They’ve persuaded the California state assembly to amend the bill so it “would allow NPs to operate independently only in a hospital, clinic or other group setting and eliminate a pathway to autonomous practice after 6,000 hours of supervised work.”

Bringing down national health-care costs will be hard. A lot of the calls will be wrenching, and the evidence on both sides will be close. Not this one. As the Institute of Medicine writes, “States with broader nursing scopes of practice have experienced no deterioration of patient care.”

This is a protection racket. Any state legislature that extends it is choosing higher health-care prices — and health-care costs — for no good reason.

Wonkbook’s Number of the Day: 78. As Jared Bernstein and Kathy Ruffing point out, yesterday was Social Security’s birthday.

Wonkbook’s Graph of the Day: Cool graphs from Brookings’s Audrey Singer and Nicole Prchal Svajlenka on deferred action for childhood arrivals.

Wonkbook’s Top 5 Stories: 1) gay rights, in the states and in federal administration; 2) in medicine, a prescription for change; 3) why you should care about deleveraging; 4) how dirty is our energy?; and 5) North Carolina’s voter laws.

1) Top story: The battle for marriage equality rumbles on

Pentagon extends benefits to same-sex military spouses. “The benefits will be available to all legally married spouses regardless of sexual orientation beginning no later than Sept. 3, according to a Defense Department announcement…The Pentagon also said it would allow leave for couples who are not stationed in jurisdictions that recognize same-sex marriage - including 13 states and the District of Columbia - so they can travel elsewhere to be married.” Josh Hicks in The Washington Post.

Gay-marriage states luring couples from no-gay-marriage states. “Following the Supreme Court's June 26 ruling, gay rights proponents and some economic development officials say states with gay-friendly laws can leverage them for financial gain, while those with prohibitive policies will miss out. The Supreme Court ruling will force some states to examine whether it's worth losing out on talent and businesses that are attracted to areas that allow same-sex marriages, said Richard Florida, a professor at the University of Toronto Rotman School of Management. Acceptance of gay communities signals cultural openness and attracts highly educated people and innovators, Florida wrote in his 2002 book.” Victoria Stilwell, Jeanna Smialek, and Meera Louis in Bloomberg.

@jmartNYT: the new New Dems “believe in such socially liberal causes as gay marriage but.. skeptical of unions& appalled at econ populism”

Last leg of court challenge falls out on California gay marriage. “The California Supreme Court refused Wednesday to halt gay marriages in the state, leaving opponents of same-sex weddings few -- if any -- legal options to stop the unions. The brief, unanimous ruling tossed out a legal challenge by ban supporters without addressing their legal arguments in support of Proposition 8, a ballot measure passed by voter in 2008 that banned gay marriage…Prop 8 supporters filed an emergency petition with the state Supreme Court arguing that the federal lawsuit at issue applied only to the two couple who filed it and to Alameda and Los Angeles counties, where they live. They claimed the marriage ban remained law in 56 counties since the federal lawsuit at issue wasn’t a class action lawsuit on behalf of all California gay couples wishing to marry.” Paul Elias in The Associated Press.

@brianbeutler: Overheard on CSPAN: “God’s not gay.” #smarttake

Next up, Utah, which just claimed a 'sovereign right' to bar same-sex marriages. “Utah has a “sovereign right” to define and regulate marriage and a constitutional amendment that bars recognition of same-sex marriage enshrines that right, state attorneys say in a brief filed in U.S. District Court…While it is true that “unmarried couples or groups of any kind -- heterosexual, homosexual, polygamous, etc.” are denied certain rights available to married couples, their access to those rights is not protected under the U.S. Constitution, the state says.” Brooke Adams and Ray Parker in The Salt Lake Tribune.

Music recommendations interlude: Bonobo, “Cirrus.”

Top opinion

CROOK: US criminal justice is a disgrace. “The combination of plea bargains and mandatory minimum sentences — not to mention the U.S. practice of stacking charge upon charge, with sentences to run consecutively — gives prosecutors awesome powers of intimidation. One dreads to think how many innocent people are in U.S. prisons, and will be felons for life, because they were offered the choice of a relatively light sentence if they pleaded guilty to a lesser charge, or the risk of decades of incarceration if they preferred to take their chances with a maxed-out indictment at trial.” Clive Crook in Bloomberg.

HENNINGER: Welcome back, soft-on-crime liberals. “[A] liberal president and a liberal federal judge will have brought back to life one of modern liberalism’s worst nightmares: the belief that Democrats can’t be trusted with national security or the control of violent crime. They’re soft on security…[V]iolent crime and terror always return. Judge Scheindlin and President Obama have answered the liberal siren song of a world without violence. Come 2016, the last thing voters may be looking for is a Democrat, no matter who she is.” Daniel Henninger in The Wall Street Journal.

WESSEL: Budget deficits need prudent attention. “The notion that there’s some debt level at which the U.S. economy will run into a wall has been discredited. But debt at this level gives the U.S. a lot less fiscal maneuvering room should it run into another financial crisis or severe recession or devastating terrorist attack. Basically, the U.S. cannot count on increasing its debt by another 30 percentage points of GDP and still enjoy very low interest rates…Prudent politicians would be aiming to gradually reduce the debt burden, both by money-saving changes to benefit programs and money-raising tax policies and by doing what’s necessary to quicken the long-run pace of economic growth.” David Wessel in The Wall Street Journal.

BERNSTEIN: Social Security at 78. “Moreover, absent Social Security benefits, 44 percent of the elderly would be poor. But when you factor in the program, their poverty rate falls to 9 percent…If anything, I agree with the economist Brad DeLong, who wrote recently that in the face of increasingly insufficient private pensions and savings, along with the wage and income trends that have left large swaths of aging people less economically prepared for retirement, we should be considering expanding the program, not shrinking it.” Jared Bernstein in The New York Times.

ZAKARIA: The threat of social immobility. “A recent report by the Organization for Economic Cooperation and Development points out that the United States is one of only three rich countries that spends less on disadvantaged students than on other students -- largely because education funding for elementary and secondary schools in the United States is tied to local property taxes. By definition, poor neighborhoods end up with badly funded schools. In general, the United States spends lots of money on education, but most of it is on college education or is otherwise directed toward those already advantaged in various ways.” Fareed Zakaria in The Washington Post.

Growth industries interlude: Only 18 percent of Americans have bought hummus. The other 82 percent are missing out.

2) A prescription for change

A healthcare revolution? Nurse practitioners issue their own Declaration of Independence. “Nurse practitioners in five states are fighting for the right to treat patients without oversight from doctors, as they can in many parts of the country. The battle is particularly pitched in California, where a bill that would let some nurse practitioners do their work independently passed a key legislative committee this week. California doctors strenuously oppose the idea, arguing that it could jeopardize patient safety…[A] survey of 2,053 Americans, published in June in the journal Health Affairs, found that about half would rather have a physician as their primary-care provider, but nearly 60% said they would prefer to see a nurse practitioner or physician assistant today than wait a day to see a doctor.” Melinda Beck in The Wall Street Journal.

America’s doctors, like Wall Street, need a cultural shift. “[T]he absolute pay level is not the key issue at stake. What really needs to be debated is the system of incentives…It can create an incentive for doctors to make potentially unnecessary, duplicate treatments. It reduces incentives for collaboration or cost-sharing. In a sense, it can create cultural patterns not dissimilar from those seen on parts of Wall Street.” Gillian Tett in The Financial Times.

Here’s an example of fee-for-service’s distortions: Medicare changes, not FDA warning, seem to have curtailed use of dialysis drugs, study finds. “In 2011, however, Medicare eliminated the financial incentive for higher doses, setting a fee for a bundle of dialysis services and drugs. This way, hospitals and clinics make more money if they use the drugs more frugally…Without the incentive to use more, the use of ESAs fell about 30 percent from projected levels in 2011.” Peter Whoriskey in The Washington Post.

Study: ObamaCare benefit mandates pose few problems for states, insurers. “Adopting new benefit mandates under ObamaCare will not require major changes or cost increases, according to a study released Wednesday. Researchers at The Urban Institute and the Robert Wood Johnson Foundation said the states they surveyed are generally on track to enforce new requirements that insurers cover certain services…"Overall the states in our review are managing the shift to essential health benefits well," said Andy Hyman of the Robert Wood Johnson Foundation. "In these states, health plans offered through exchanges will offer coverage options that are comprehensive and high-quality, and will be offered at an affordable price."” Sam Baker in The Hill.

Study: ObamaCare tax credits to average $2,700. “Families who buy their own insurance rather that obtaining it through an employer will receive an average tax credit of about $2,700 to buy coverage starting next year, according to a new study…People will be eligible if they have incomes between $11,500 and $46,000 as a single person or between $24,000 and $94,000 as a four-person family.” Elise Viebeck in The Hill.

Check out this Nevada health plan. “[T]he Access to Healthcare Network, a medical discount plan that helps uninsured residents with low and moderate incomes get care from 2,000 providers around the state offering a wide variety of medical services. In addition to the provider charges, members also pay $35 a month to support Access to Healthcare’s coordinators who help them understand their options and what they are responsible for…Her creation now has dozens of staff members and a central office in Reno. Rice calls Access to Healthcare a shared-responsibility model because the patient and the provider each contributes and neither is overburdened.” Pauline Bartolone in Capital Public Radio.

All the News that’s Fit to Not Load interlude: Two links (here, here) to give you all of the best Twitter jokes on The New York Times website blackout of 2013.

3) Why you should care about deleveraging

Why America needs to get used to slower growth. “[T]he future doesn't look too bright, according to a new report from economists at JPMorgan Chase. The future isn't what it used to be, write Michael Feroli and Robert E. Mellman; they see long-term growth potential for the United States falling to 1.75 percent for the coming years, the lowest of the post-World War II era. That compares with an average of 3.1 percent from 1995 to 2005 and 2 percent from 2005 to 2012.” Neil Irwin in The Washington Post.

Student-loan loan kills startup dreams. “Some academic experts say leftover loans are the biggest impediment to upstart entrepreneurship by those who recently received college or graduate degrees. “I mentor students all the time,” says Vivek Wadhwa, a fellow at Stanford University Law School. “The single largest inhibitor to entrepreneurship is the student loans.” Recent graduates and college dropouts account for a disproportionate share of the founders of technology startups that have transformed the economy over the past decade, says Shikhar Ghosh, a senior lecturer at Harvard Business School. Many freshly-minted M.B.A.s “are willing to sleep on a couch for a year or two, but they can’t do it with the burden of student loans,” he adds.” Ruth Simon in The Wall Street Journal.

Consumer debt falls. “Total consumer debt stood at $11.15 trillion in the second quarter, down 0.7 percent from the previous quarter, the New York Fed said in its quarterly household debt and credit report. While student debt and auto loans rose, the country's postrecession deleveraging cycle appeared intact as household delinquency rates dropped to 7.6 percent in the three months to June, from 8.1 percent in the first quarter of the year. Americans have consistently deleveraged in the years since the housing collapse and financial crisis, and credit is now well below the peak of $12.68 trillion in the third quarter of 2008.” Reuters.

Flat US producer prices point to little inflation pressure. “The Labor Department said on Wednesday a drop in natural gas and gasoline costs held back its seasonally adjusted producer price index. Analysts polled by Reuters had expected a 0.3 percent increase…These so-called “core” prices, which are seen as indicators of trends in inflation, rose 0.1 percent during the month, below the 0.2 percent gain expected by analysts in a Reuters poll…Wednesday’s data showed the core index was up 1.2 percent in the 12 months through July, the lowest reading since November 2010. Analysts had expected that reading to fall to 1.4 percent from 1.7 percent in June.” Reuters.

Explainer: Just how different are high-tech jobs from regular ones? Lydia DePillis in The Washington Post.

Larry Bartels confuses Washington and the economy. “The shame here is I'd really be interested to read Larry Bartels, political scientist, rather than Larry Bartels, scold, on this era in governance. The question of how the rich ended up with almost a trillion dollars in new taxes (including the Obamacare tax increases) and the poor ended up seeing trillions of dollars in new transfer payments is a fascinating moment in our political economy. Hopefully there will come a day when Bartels thinks it proper to talk about.” Ezra Klein in The Washington Post.

“Real Housewives of Tax Wonks” interlude: The true-life story of a baby born early to dodge taxes.

4) How dirty is our energy?

Court: Government must continue review of Yucca Mtn. “A federal appeals court ruled on Tuesday that the Nuclear Regulatory Commission was "flouting the law" when it stopped work on a review of the proposed nuclear waste dump at Yucca Mountain, despite the Obama administration's insistence that the site be shut down. The 2-to-1 decision by the United States Court of Appeals for the District of Columbia Circuit allows an increment of progress that could help push the project forward and was embraced by supporters of the Yucca site, the focus of a quarter-century-old fight.” Matthew L. Wald in The New York Times.

Are fracking proponents wrestling enough with the environmental risks? ”In our Wonkblog Crowdsourced discussion of the likely economic and business consequences of an era of more plentiful natural gas, a recurring theme among commenters is that the damage to water supplies could be more severe than enthusiasts of fracking technologies let on.” Neil Irwin in The Washington Post.

Energy secretary heading to Brazil for climate talks. “Energy Secretary Ernest Moniz is heading to Brazil this week for bilateral discussions on climate and energy, according to the Energy Department…The Thursday-to-Saturday trip follows Obama administration efforts to deepen ties with Brazil on the topics.” Ben German in The Hill.

EPA's McCarthy: 'Responsible' gas production key to climate strategy. “Environmental Protection Agency chief Gina McCarthy said natural-gas production -- with the right safeguards -- is a major piece of Obama administration efforts to combat global warming. "Responsible development of natural gas is an important part of our work to curb climate change and support a robust clean energy market at home," she said Wednesday at a speech in Colorado, according to prepared remarks. The comments are part of a wider administration effort to cast the U.S. gas production boom as a way to help slow global warming.” Ben Geman in The Hill.

Interior names new offshore drilling safety chief. “The Interior Department has tapped Brian Salerno, a former U.S. Coast Guard official who helped lead the response to the 2010 BP oil spill, as the next director of its offshore drilling safety branch. The former vice admiral will begin leading Interior's Bureau of Safety and Environmental Enforcement (BSEE) in late August and will replace outgoing director James Watson, who is also a former Coast Guard official. Salerno retired from the Coast Guard last year as deputy commandant for operations.” Ben Geman in The Hill.

RIP interlude: Jack Germond: 'I'm not saying another word until they bring me a martini.'

5) North Carolina, now it’s just obvious you’re shutting out Democratic voters

Elections boards in NC follow up on state crackdown. “Within hours of Gov. Pat McCrory signing a Republican-backed bill this week making sweeping changes to the state’s voting laws, local elections boards in two college towns made moves that could make it harder for students to vote. The Watauga County Board of Elections voted Monday to eliminate an early voting site and election-day polling precinct on the campus of Appalachian State University…Voting rights advocates worry the decisions could signal a statewide effort by GOP-controlled elections boards to discourage turnout among young voters considered more likely to support Democrats.” Michael Biesecker in The Associated Press.

The next battle over voting rights has begun. ”Civil rights groups filed a lawsuit Monday challenging a new North Carolina voter ID law in one of the first tests of the legality of new voting restrictions being implemented after the Supreme Court struck down parts of the 1965 Civil Rights Act in June. The Advancement Project and North Carolina NAACP, who filed the suit, charge that the law's voter requirements will make it harder to vote and that racial minorities will be disproportionately impacted because they are less likely to possess required forms of identification. The lawsuit also argues voter fraud is not a significant problem in North Carolina.” Scott Clement in The Washington Post.

A new study says tweets can predict election outcomes. ”Specifically, the study found a correlation between the number of times a candidate for the House of Representatives was mentioned on Twitter in the months before an election and his or her performance in that election. The more a candidate is mentioned on Twitter, the better…The study specifically controlled for the conditions surrounding an election. If a candidate is an incumbent, they would be mentioned on Twitter more, so the study discounted their position. Likewise, the study also discounted candidates who the press covered more, using the number of times a candidate’s name was mentioned on CNN as an imprecise measurement of mainstream media hype.” Robinson Meyer in The Atlantic.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Jack Germond: 'I'm not saying another word until they bring me a martini.' Ezra Klein.

Ignore Anthony Weiner. Here's what matters in the NYC mayor's race. Dylan Matthews.

There's a big gender gap in CEO pay. Bad negotiating isn't the reason. Jia Lynn Yang.

Who're you going to believe on immigration? Mark Krikorian or your lying eyes? Ezra Klein.

How the big U.S. airlines try to avoid competing with each other. Brad Plumer.

Why America needs to get used to slower growth. Neil Irwin.

Just how different are high-tech jobs from regular ones? Lydia DePillis.

Are fracking proponents wrestling enough with the environmental risks? Neil Irwin.

A terrifying look into John Boehner's awful job. Ezra Klein.

Larry Bartels confuses Washington and the economy. Ezra Klein.