Here’s the live stream of Secretary Kerry’s speech on Middle East Peace. His remarks start at the -43:00 mark.
Secretary of State Kerry’s Speech on Middle East PeacePost + Comments (144)
by Adam L Silverman| 144 Comments
This post is in: Domestic Politics, Foreign Affairs, Open Threads, Politics, Silverman on Security
Here’s the live stream of Secretary Kerry’s speech on Middle East Peace. His remarks start at the -43:00 mark.
Secretary of State Kerry’s Speech on Middle East PeacePost + Comments (144)
This post is in: Anderson On Health Insurance
Let’s talk risk adjustment and the problem with averages. The picture below is two hypothetical diseases with twenty patients where the average cost to treat is $1,000 per year for each condition. However the spread in the cost varies. Condition A is tightly clustered while Condition B has a very large spread between the low cost members and the very high cost members. What does this mean for risk adjustment and cherry picking?
These two diseases have the same average incremental cost to treat ($1,000) but applying similar risk adjustment to these diseases will produce very different insurer behaviors.
Let’s review risk adjustment before we figure out why insurers will respond to the same method depending on the disease profile. Risk adjustment counteracts the simplest way to make money as an insurer. Insurers can make a lot of money by charging high rates to low risk people while running far away from high risk people. That can be okay in insurance systems where we as a society do not care that everyone is covered. Travel insurance or auto insurance will be good examples of this. However for health insurance in a world of guarantee issue and community rating with multiple payers which is most government sponsored health insurance market groups (Medicare Advantage, CHIP, Medicaid managed care, Exchange) this is a major issue.
The optimal strategy for any individual insurer in a world without risk adjustment is to collect the average premium without taking on average medical risk. This logic produced the Gresham law race to the bottom for AIDS drug benefits where ugly plans drove out attractive plans from the market.
Risk adjustment is the counter to this individually rational but market destroying behavior. In the simplest form it is an attempt to give more money to the insurers that have higher medical risk. Ideally, it should move money around in a way that insurers are fundamentally indifferent to the medical risk that they bear so that insurers then compete on their provider costs, networks, benefit design, member services, and disease management capabilities. Risk adjustment can be bump payments with external funding (Medicare Advantage does this) or inter-insurer revenue neutral transfers where insurers with healthily coded risk pools send money to insurers with sicker than average coded risk pools (Exchange and at least some Medicaid managed care states).
The size of the payments can be either a proportion of average premium times a multiplier or a lump sum transfer. Medicare Advantage gives a lump sum payment to the insurer for each diagnostic category. Exchange will take a multiplier of the average premium in a state and use it to calculate the individual insurer’s relative risk.
So now that we covered the basics, how would insurers react to these two disease profiles? Disease A is tightly clustered. The spread is a little more than twice the mean and the median is almost the mean. The most expensive patients are not extreme outliers compared to their peers. An insurer would love to get all of the low cost members with Disease A and pocket the risk adjustment transfers. The insurer would profit as the transfer payments are more than the cost of actual treatment while their competitors would be holding the bag on the few above transfer payment cost to treat individuals. But the amount of money that could be gained by successfully skimming the risk pool is not substantial.
Disease B is a very different profile. It has the same average cost as Disease A but the distribution is very different. Eighteen of the twenty individuals have costs that are less than the average costs. Two individuals have costs substantially above the average ($5,000 and $10,000) so 10% of the pool is driving 75% of the costs. This is not atypical as health care is a Pareto industry.
A flat bump payment produces very bad incentives.
Insurers would compete vigorously to get the bottom 90% enrolled as these members are profit centers after risk adjustment. The problem is that every insurer is going to run like hell from the two high cost members. They are guaranteed money losers. This means networks will get cut, drugs will be placed on high cost sharing portions of the formulary and every other barrier to enrollment will be set up. If a carrier in the first year gets a large number of the very high cost individuals within a disease category they will change their offerings to make it ugly in the second year.
This incentive can be beaten if there is two part risk adustment. The first part would be a bump payment or a base score for relative risk calculation purposes that effectively covers the standard of care for the eighteen low cost individuals. The second part is a catastrophic reinsurance or bonus score for relative risk calculation that only applies to individuals with certain procedure codes and documentation. At that point, the incentive to run like hell from the sick and cherry pick the risk adjustment gold mine is minimized at the cost of higher administrative complexity.
Later on this week, we’ll talk about concurrent and adjusted period risk adjustment and the challenges both try to solve.
by Betty Cracker| 159 Comments
This post is in: Open Threads, Politics, Our Failed Media Experiment
There’s an interesting op-ed in the Washington Post today by Hungarian author and human rights advocate Miklos Haraszti. It’s entitled, “I watched a populist leader rise in my country. That’s why I’m genuinely worried for America.” In the piece, Haraszti discusses the parallels between Trump and Viktor Orbán, president of Hungary and pal of Putin. This part struck me as true:
Call me a typical Hungarian pessimist, but I think hope can be damaging when dealing with populists. For instance, hoping that unprincipled populism is unable to govern. Hoping that Trumpism is self-deceiving, or self-revealing, or self-defeating. Hoping to find out if the president-elect will have a line or a core, or if he is driven by beliefs or by interests. Or there’s the Kremlinology-type hope that Trump’s party, swept to out-and-out power by his charms, could turn against him. Or hope extracted, oddly, from the very fact that he often disavows his previous commitments.
Those of us who watched Trump roll over every institutional barrier like a monster truck over speed bumps made of packing peanuts might well wonder what can stop the bastard. But Haraszti points out that would-be autocrats can be undone by their own greed:
I have plenty of gloomy don’t-dos, but few proven trump cards. There is perhaps one mighty exception, the issue of corruption, which the polite American media like to describe as “conflicts of interest.”
It is the public’s moral indignation over nepotism that has proved to be the nemesis of illiberal regimes. Personal and family greed, cronyism, thievery combined with hypocrisy are in the genes of illiberal autocracy; and in many countries betrayed expectations of a selfless strongman have led to a civic awakening.
Of course, that requires media outlets to investigate and publicize the massive grift in which Trump, Inc. is now gearing up to engage. In the morning thread comments, Kay isn’t optimistic about that. And she’s right to note the general lack of MSM coverage of Trump’s unprecedented and poorly understood conflicts of interests — it’s worrying as hell to see so many media outlets treat this absurdity as the new normal.
But the WaPo was a bright spot during the campaign and may be again during the coming grift-binge. Just this morning, the paper published an editorial lauding Trump for shuttering his “foundation” (while recounting its dodgy nature) but pointing out that it is small potatoes in the scheme of things:
Mr. Trump now must tackle even bigger decisions. He has yet to detail how he will sever his ties with the business he built, but he should strive for a clean break, not only for propriety but also for his own credibility. If he hopes to be a productive leader, he will need all the political strength he can muster, and his capital could be badly sapped by questions about whether outsiders tried to buy influence through his family business. Mr. Trump long ago promised to make public his tax returns, as have other presidential candidates for years, but he has never done so.
It is hard to read Mr. Trump’s compass on these issues. On one hand, he has been outspoken in demanding a break from business as usual, including close ties between policymaking, lobbying and federal contracting. He promises to “drain the swamp” in Washington. However, he seems less eager to act when it involves his own business and family. Before the inauguration, Mr. Trump should declare a zero-tolerance policy toward conflicts of interest and impropriety — especially his own.
The Post is allegedly hiring “dozens of reporters,” perhaps sensing that they’ll need reinforcements to cover the world-historical scam operation that will be the Trump administration. If all the new hires are in the mold of David Fahrenthold, Trump may, ironically, have a hand in making journalism great again. Here’s hoping.
[Illustration is a photo I took in Budapest in the 1990s.]
This post is in: Don't Mourn, Organize, Open Threads, Blogospheric Navel-Gazing, Daydream Believers
To-do list for 2017, in honor of Carrie Fischer: take down a fascist regime, revel in what makes us different, bring back the double bun.
— Margaret Wappler (@MargaretWappler) December 27, 2016
it's a bummer that so many bright, outspoken freaks died this year right when the culture needs them most
— c ty (@NOTCHRISTYLER) December 27, 2016
If we loved them like we say we did, we need to make this world safer for the next generation of brilliant weirdos https://t.co/rCSfbUWkTR
— Charlotte Shane (@CharoShane) December 27, 2016
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Generous blogger Batocchio has posted the Jon Swift Roundup 2016, including Cole’s choice for Balloon Juice post of the year, and entries from half a dozen bloggers who also comment here. Highly recommended, especially if you’re looking for fresh voices for the new year.
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What’s on the agenda, as we start another day?
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Maybe 2016 is the year a lot of heroes were born and we don't know yet.
— Maureen Johnson (@maureenjohnson) December 25, 2016
This post is in: Hail to the Hairpiece, Open Threads
President Obama campaigned hard (and personally) in the very important swing states, and lost.The voters wanted to MAKE AMERICA GREAT AGAIN!
— Donald J. Trump (@realDonaldTrump) December 27, 2016
Trump is obsessed with Barack for two days now, mainly because he knows he'd lose to him. LMAO.
— ObamaOutAndMeToo (@theonlyadult) December 27, 2016
@theonlyadult he already lost to a girl pic.twitter.com/oGTLy6H0PE
— Della Cooper (@DellaCooper3) December 27, 2016
@AlGiordano @LorieCavin @theonlyadult There is already a wing of the Obama Presidential Library inside Donald Trump's head.
— Robert Holzer (@RobertHolzer) December 28, 2016
@theonlyadult he's going to live rent free in Trump's head for the next 4 years
— ltmcdies (@ltmcdies) December 27, 2016
If you think he's pissed now, just wait until there's a young ex-president running around with approval ratings that are double Trump's. https://t.co/lYegYeUgRW
— Jon Favreau (@jonfavs) December 27, 2016
Citizen Obama, coming to a country near you on the afternoon of January 20, will be an even bigger problem for Trump than President Obama. https://t.co/dh92FTJBnC
— Al Giordano (@AlGiordano) December 27, 2016
This post is in: Open Threads, Women's Rights Are Human Rights
Now that I've watched most of the Democrat men (and Bernie Sanders) bash Hillary post-election, I'm convinced the left has a sexism problem.
— Kara Calavera (@KaraCalavera) December 26, 2016
The left has had a sexism problem as long as I can remember. Going back to the sixties. https://t.co/GY3KdiOgmy
— Howard Dean (@GovHowardDean) December 26, 2016
This post is in: Post-racial America, Just Shut the Fuck Up, Our Failed Media Experiment
This is depressing as all hell:
This city exemplifies the economic recovery the country has experienced since the Great Recession ended. Elkhart’s unemployment rate, which had reached a high of 22 percent in March of 2009, is now at 3.9 percent. Hiring signs dot the doors of the Wal-Mart, the McDonald’s, and the Long John Silver’s. The RV industry makes 65 percent of its vehicles in Elkhart, and the industry is producing a record number of vehicles, which is creating a lot of jobs in this frosty town in northern Indiana.
“America’s economy is not just better than it was eight years ago–it is the strongest, most durable economy in the world,” President Obama said during a visit to Elkhart in June, in which he touted the economic recovery. (Elkhart was also the first place outside Washington he visited as president, in 2009.) “Elkhart would not have come this far–if we hadn’t made a series of smart decisions, my administration, a cooperative Congress–decisions we made together early on.”
But despite the decisions that the Obama administration made that might have helped Elkhart, many people here have a strong dislike of Obama, who presided over an economic recovery in which the unemployment rate fell nationally to 4.6 percent from a high of 10 percent in October 2009. They say it’s not Obama who is responsible for the city or the country’s economic progress, and furthermore, that the economy won’t truly start to improve until President-elect Donald Trump takes office.
“He didn’t help us here, but he took credit for what happened,” Chris Corbin, 47, who works for a dispatch company in Elkhart, told me. Corbin thinks it will be Trump who improves the economy. “It’s going to take two terms, but he’ll fix things,” he said.
This is priceless:
Andi Ermes, 39, offered a number of reasons for disliking Obama. She said Obama didn’t attend the Army-Navy football game, even though other presidents had. Obama has actually attended more Army-Navy games than George H.W. Bush. She said that he had taken too many vacations. He has taken fewer vacation days that George W. Bush. She also said that he refused to wear a flag pin on his lapel. While it is true that Obama did not wear a flag on his lapel at points during the 2007 campaign, it was back on his suit by 2008. Ermes told me the news sources she consumes most are Fox News, Rush Limbaugh, and a local conservative radio show hosted by Casey Hendrickson.
Perhaps unsurprisingly, Ermes sees the biggest signs for hope in the economy in Carrier deal struck by Donald Trump, which will keep 1,000 jobs in the U.S. “He’s not even president yet and already he’s helping the economy,” she said.
I’m sure it was because he didn’t attend enough Army/Navy games and not because he’s BLACK.
How long do we have to keep pretending this is about economic anxiety?