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What Lights the Political Spark

Somewhere in a shoebox holding the detritus of my youth there may still rest a signed, black-and-white photograph of Senator Frank Church, Democrat of Idaho, who lent his name to legislation related to military engagement in Vietnam and Roe v. Wade and who in 1975 led the committee investigating intelligence-gathering abuses by the CIA and FBI. But none of these had led to me ask for the portrait that would arrive in the mail, tucked snugly into an official-looking envelope emblazoned with an official-looking seal. I was only following instructions: For a middle-school social-studies class, I had to do a report on a U.S. senator, and I was randomly assigned Church. I can’t remember anything about what I might have turned in; what I can remember was that in the months and years to follow, when encountering references to Church amendments or the Church Committee, I had a clue of what was being talked about. And that, as I triumphantly remind my children, is why you do your schoolwork.

Classes in history and government may acquaint young people with history and government, but what sparks the romance with politics? My seventh-grade daughter has shown flickering signs of interest in the current presidential election, and last Wednesday attended with a friend and her parents the rally for Bernie Sanders in New York’s Washington Square Park. She came home tired and bleary-eyed, excited and talkative, with stickers and buttons and a Bernie (first name only, please) poster in the style of a Grateful Dead album cover—bought with the money she was supposed to use for food. She had gripes about the crowds and the clouds of marijuana smoke, but these were minor next to the views firmly expressed well before the event on why women shouldn’t be expected to vote for a presidential candidate just because the candidate is a woman.

From poorer soil plants can also grow. Around the time of my Church report, I remember watching (as apparently do others) an episode of the TV series Happy Days, set if you recall in an idealized version of the 1950s, in which main character Richie Cunningham defies his father to campaign for Adlai Stevenson. When Dwight Eisenhower wins, Richie and the kids—and by extension a generation—are distraught. Was it really like that? I asked my mother. The wistful solemnity with which she answered “yes” made a lasting impression. But so did watching with her, one year before, the resignation of Richard Nixon on a nine-inch black-and-white TV, and, one year after, listening to my father bemoan the failure of Republicans in Kansas City to nominate Ronald Reagan. It was up to me to make sense of it all.

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What Does the Sanders 'Invitation' Say About the Vatican, and Sanders?

The Vatican’s “invitation” to Bernie Sanders to speak at a conference of the Pontifical Academy for Social Sciences (PASS) on Friday has sparked a range of reactions. There are those who say it’s irresponsible for Sanders to travel right after his Thursday night debate with Hillary Clinton to give a ten-minute talk in Rome, just four days before the New York primary. There are those who see in it an attempt by the (male) Catholic establishment to block the election of a woman to the White House. Some see it as an endorsement of “the Jewish progressive agenda,” others as a direct attempt by Francis to advance a leftist agenda in U.S. politics.

None of this is true, so it’s not worth the time to dispute the accusations (except the one about Francis meddling in U.S. politics; we’ll get to that). But this comedy of errors does reveal something interesting about Francis’s Vatican and its politics.

It’s clear by now that the invitation, word of which emerged April 8, didn’t come from Pope Francis, or from the Secretariat of State, or from anyone who usually invites political leaders or accepts requests for audiences. It came instead from Bishop Marcelo Sanchez Sorondo (originally from Argentina), chancellor of PASS. He bypassed Margaret Archer, its president, who was not shy in making public her surprise, saying it was a “monumental discourtesy” for Sanders to ask for an invitation without going through her office. Bishop Sorondo responded that Archer was aware of the invitation, in effect accusing her of lying.  

At some point over the weekend of April 8, somebody in the Vatican who is close to Pope Francis was told of the potential negative consequences of letting an American presidential candidate speak at the conference–a candidate who by that time had claimed on MSNBC that the invitation had come “from the Vatican” and who on ABC’s “The View” confirmed that the invitation had come from Francis, and that he would be meeting with the pope. 

It is highly unlikely that the Vatican would have issued such an invitation just as Amoris Laetitia was being released; also unlikely is that it would risk a Sanders visit distracting from Francis’s meeting with refugees and the Patriarch of Constantinople in Lesbos, Greece, on April 16. But at this point it was too late for the Vatican to disinvite him; Sanders had announced his visit publicly.

What is not unimaginable is that the Vatican did its best to dissuade Sanders from coming by scheduling him to speak at 4 p.m. Rome time (10 a.m. Eastern) on Friday, which would be just hours after the end of his Thursday night debate in Brooklyn. If it was meant as a signal—“please don’t come”—it either wasn’t received by the Sanders team, or wasn’t interpreted as such. Next, the Vatican tried to ignore Sanders and downplayed the pending visit; over the course of several press conferences, Federico Lombardi, director of the Holy See Press Office, never once mentioned Sanders. Only today (April 14) did he do so, officially announcing that Francis would not be meeting with the candidate.

We will see what actually happens in Rome on Friday. But for now, it’s worth considering the following.

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From the Archives: A Review of Raymond Arroyo's Mother Angelica Biography

The death on Easter Sunday of Mother Angelica, founder of Eternal Word Television Network, has received coverage both in the United States and abroad, with obituaries both brief and lengthy, along with remembrances, accounts of her last days, and articles on everything from her legacy as a “female broadcasting titan” to her impact on tourism in Alabama, where EWTN is headquartered.

In 2005, Michael O. Garvey reviewed Raymond Arroyo's biography of Mother Angelica for Commonweal. Some excerpts follow.

The most conspicuous concern of Arroyo’s narrative is what he describes as Mother Angelica’s “public and private war for the future of the Catholic Church.” [His] reconnaissance of the battlefield is as predictable and prepackaged as anything else on big network news: on one side are Our Lord, Mother Angelica, and EWTN. On the other are “recreant bishops and theologians” and the “liberal church in America,” an amorphous conspiracy promoting eucharistic irreverence, gender-inclusive liturgical language, and altar girls. ... What readers make of the story will likely depend on which side they choose to take in this war, or whether they believe such a war is going on to begin with. ...

[Mother Angelica’s] relations with other sisters were, as her relations with so many of her coreligionists are now, tumultuous and overly susceptible to what she describes as “my Italian temper.” … [T]his shrewd woman with a sense of divine mission [had] an eye for the main chance. She had a quick wit, a gregarious manner, and an evangelical bent. Calling herself “a conservative liberal who happens to be charismatic,” she had become a popular speaker on prayer and the spiritual life. ...

The rags-to-riches growth of EWTN composes the background of the rest of the story, while the foreground concerns Mother Angelica’s ongoing battle against the encroachments of (American) ecclesial bureaucrats, her enlistment of more highly ranked (Vatican) bureaucrats, and her jeremiads against the dreaded “liberal church in America.” Nobody in these pages comes off very well. If Mother Angelica occasionally seems little more than a foul-tempered old harridan who confuses the promptings of her ego with the imperatives of the Holy Spirit, her opponents just as often seem little more than disingenuous defenders of their own institutional prestige.

You can read Garvey’s full review here. On Friday, Archbishop Charles J. Chaput will preside over the funeral Mass for Mother Angelica; it will be broadcast live from the Shrine of the Most Blessed Sacrament in Hanceville, Alabama, on EWTN.

Citizen Obama

A snarling and disproportionately vocal segment of the populace will exult when Barack Obama leaves the White House in January 2017. Whether they will be correspondingly welcoming toward the new inhabitant is not known. Columnist David Brooks pre-emptively declared his nostalgic fondness for the Obama presidency in a February column (“I’ll miss Barack Obama”), and I wonder if more such admissions will be forthcoming; can you see it in the anxious faces, hear it in the nervous comments, of some of the opposition—a creeping “we didn’t know what we had it until we saw what might rise in its place” sense of impending remorse (if not doom)? Starting around 1986 and through the end of his time in office, Ronald Reagan talked about lifting the restriction on presidential term limits, even countenancing an effort to repeal the Twenty-Second Amendment. Obama has offered no such proposal, though last summer some outlets misrepresented comments he made about his hypothetical re-electability to suggest that he had. Still, with relatively comfortable victories in consecutive popular and electoral college campaigns, he’d be in strong position to run and win—especially given, well, the competition. But the people have already twice had their say, and thus in accordance with the Constitution, he will leave, after eight years of petulant Republican obstructionism culminating in the refusal to let him fully exercise the Constitutionally accorded responsibility to appoint a Supreme Court nominee.

Where does he go next? Obama will be young for a former president, so those who’ve supported him anticipate a vigorous and presumably lengthy engagement with issues that have shaped his political philosophy over time. Or shaped their own: Save maybe for the dawn of a new presidency, there’s little that offers so enticing a slate on which to project hopes than a youthful post-presidency. Per custom, Obama will pen a post-presidential memoir, and being a natural and compelling writer—as anyone who read Dreams from My Father knows—he’ll probably do it better than most, even assuming he doesn’t dish on his opposition. He may find himself spoken of as a potential Supreme Court justice, though he’s hinted he doesn’t want that. What’s probably a safe bet is that he won’t go into a quiet retirement spent exploring heretofore unguessed-at artistic urges. What’s hoped is that neither will he single-mindedly devote his talents to growing a foundation in his and his family’s name.

Obama has said he’d like to get back in front of a classroom, and recently the New Yorker’s Cinque Henderson took this possibility to its logical extreme by imagining three touching-down points.

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An Heir to the Sanders 'Revolution'?

Supporters and pundits will in Bernie Sanders’s Michigan primary victory seek signs of new life in his bid for the Democratic nomination. But whether or not he bests Hillary Clinton in 2016, his campaign has given the nation a glimpse of what the future of the Democratic Party might look like – and who might be among its leaders.

U.S. Representative Tulsi Gabbard of Hawaii was probably little known outside her district or party circles until a few weeks ago. But then the thirty-four-year-old congresswoman resigned her position as Democratic National Committee vice chair to endorse Sanders. It was probably the highest profile endorsement of his campaign, and it came from a politician many consider to be a rising star.

Gabbard has an impressive resume: She was elected to the Hawaii House of Representatives at twenty-one, served two tours of duty in Iraq, and won her current House seat in 2013. While conventional wisdom suggests her DNC resignation appears to be a needless sacrifice of present prominence, her endorsement might instead be read as an initial effort to spearhead and lead the Democratic coalition of tomorrow.

Sanders’s campaign has been defined by a particular calling card: his absolute control of the millennial vote. Voters aged eighteen to thirty-four prefer Sanders over Clinton by an eleven-point margin and enthusiastically support the public spending programs he espouses. The tally from Iowa was especially stark:

In the Iowa entrance poll… Sanders amassed astounding margins among young people. He crushed Clinton by an almost unimaginable six to one—84 percent to 14 percent—among voters younger than 30. For those tempted to dismiss that as just a campus craze, he also routed her by 58 percent to 37 percent among those aged 30 to 44.

One state does not a nation make, of course. But the evidence strongly suggests that the future Democratic voter base is interested in policies farther to left than what the current party leadership is offering.

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'Prophecy Without Contempt': Watch Cathleen Kaveny, Peter Steinfels & Bishop Robert McElroy in Conversation

On Monday night in New York, Commonweal hosted “Prophecy Without Contempt,” a panel on religious discourse in the public square. Commonweal columnist Cathleen Kaveny, San Diego Bishop Robert McElroy, and former Commonweal editor and longtime contributor Peter Steinfels took up the question: Can religious speech bring dialogue and reconciliation, instead of division and resentment? Many people joined us in person for the lively and informative discussion that unfolded, and many more streamed the event live. If you weren’t able to be with us, or if you want to watch the discussion again, you can do so here. And feel free to keep the conversation going in comments.

What Do You Want in a Health Care System?

I am find a lot of articles about people wanting "single payer" or a continuation/improvement of Obamacare or the destruction of Obamacare and its replacement by something else.  Most of these talk about financing, with some lip service about improved quality.  But I am not finding any description from anyone about exactly what a post Obama health care system needs to have.

When we do corporate strategic planning in the private sector, this is the first question we ask. What do people want?  Without answering that question, we have no idea where to get to, much less how much it should cost.

Judging from people's complaints and working backwards (which is not the same as starting with a model and working forwards), people want access to all available providers (which is to say that all providers are in-network), they want zero out of pocket expense, and they want some sort of quantitive clarity about how good a provider really is before they receive services.  This pretty much covers everything.  Is there anything else?  And more importantly, for any system, if you had to settle for less than this, what would you tolerate?

Our Current Politics

Proposed.

Our current politics are all about fear, both on the left and the right. It is perfectly reasonable for people to be afraid now. But the problem with fear is that the solution always seems to be to make the thing that one fears, fear one in return. This is why fear is deeply corrupting. And deeply addictive.

'What the Pope Is Doing Is a Miracle'

My favorite quote  in the coverage of Pope Francis' dramatic final day in Mexico was in a Los Angeles Times story. It came from Claudia Diaz, a forty-four-year-old New Mexico woman who lacks legal status in the U.S. With the pope celebrating Mass across the Rio Grande in Mexico, she was among the five hundred people permitted onto a levee that was the closest point in the U.S. To get there, she walked "past Border Patrol agents and a highly fortified U.S.-Mexico border fence." She observed:

"This right here, what the pope is doing, is a miracle because he has permitted for people like us to be at this place — in these lands that are so guarded, so militarized, where so many have died trying to cross this river,” she said, pointing to the Rio Grande, which was mostly parched.

“For us to be here at this moment is very big.”

It was indeed a big moment, as the pope celebrated a Mass that mystically transcended a dividing line that is the focus of so much hatred in American politics. It is the sacrifice of Christ enacted in a place of so many other sacrificial deaths that, in their way, are also the result of political decisions. As always, Francis sought to put a human face on the immigration crisis (via Zenit):

The human tragedy that is forced migration is a global phenomenon today.  This crisis which can be measured in numbers and statistics, we want instead to measure with names, stories, families.  They are the brothers and sisters of those expelled by poverty and violence, by drug trafficking and criminal organizations.  Being faced with so many legal vacuums, they get caught up in a web that ensnares and always destroys the poorest.  Not only do they suffer poverty but they must also endure these forms of violence.  Injustice is radicalized in the young; they are “cannon fodder”, persecuted and threatened when they try to flee the spiral of violence and the hell of drugs, and what about the many women whose lives have been unjustly torn apart?

Let us together ask our God for the gift of conversion, the gift of tears, let us ask him to give us open hearts like the Ninevites, open to his call heard in the suffering faces of countless men and women.  No more death!  No more exploitation!  There is still time to change, there is still a way out and a chance, time to implore the mercy of God.

What will it take?

Capitalism Without Tears

Here is a tiny but very interesting article, especially considering its source.

With capitalism,

...profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode; conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn't continue, something strange is taking place.  

We can discuss this. Regarding the articles I recently wrote about the Obamacare Co-Ops, one of the problems here may be that there has now been so much monopolization in capitalism that new players can simply not afford the costs of entering the market to compete. And what this would mean, of course, is that the "free market" is both disappearing and incapable of being recovered by anything other than political (as opposed to economic) activity.

On a related note, the head of Goldman Sachs has been watching Bernie Sanders and he doesn't like what he sees.

For many, this will count as a ringing endorsement.

On the subject of a President Hillary Clinton, Mr. Blankfein is coy.

In the Borough of Former Churches

Walk down almost any block in the part of Brooklyn where I live and it’s possible to see a building that once had a religious connection now being used for something else. Arches and spires are obvious indications of former houses of worship, but sometimes a Latin inscription above the lintel or a stone cross on the roof are the only evidence of original purpose. One statistic says twenty Brooklyn churches have been converted into condominiums over the past twenty years, but the scope and pace of redevelopment makes that count seem conservative, or outdated. In the few square blocks around me there are at least five such conversions, of varying degrees of luxury. Some years ago an acquaintance of mine, much bolder than I, confronted a resident leaving one of these buildings. “So how does it feel living in a deconsecrated church?” she demanded. No response was forthcoming—an exhibit of self-restraint, I think now.

I’ve officially lived just over half my life in what is still called the borough of churches, and, full disclosure, my wife and I even once looked at an apartment cantilevered into the sanctuary of a stately stone structure on what realtors still call “a lovely tree-lined street.” We’d just had our first child; we liked the neighborhood; we didn’t want to move to New Jersey. If the place was overpriced then, there’s no way to describe it now. And anyway, how would it have felt to live in a deconsecrated church?

Conversion and reuse is nothing new, obviously, and it’s not just churches—the structure too expensive to maintain, the lot too valuable to hold onto—that have come to function as something else. Parish schools and rectories, convents and hospitals: these also succumb to prevailing demographic and economic pressures, or, depending on your outlook, are made monetizable. People with ties to the community once defined by such places will naturally feel different about this than those who are seeking a home in a coveted neighborhood with good schools; both see it differently from the developer who’s swooped in to tap the financial exponentialities.

Novelist Colm Tóibín has said it was the very sense of the Irish having disappeared from these streets that helped him render so indelibly the environs of 2009’s Brooklyn (the film version of which was released last year)—that and having made himself a regular at a nearby church's 9 a.m. Sunday Mass. Just over a century ago the immediate neighborhood held the largest single concentration of Italians in the country, but by 1998, in the phrasing of the official history of the local parish, “many had left the railroad apartments of South Brooklyn for the lawns and pitched roofs in Long Island, Staten Island, [and] New Jersey.”

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Obamacare in Flames - Part Three - The Plague on All Our Houses

The Attacks on both Obamacare in particular and our healthcare system in general are fragmented and hard to talk about in a very systematic manner. People have specific things that they think are great and that they think are terrible. They focus on these to criticize or glorify the whole. I find this infuriating. To fix things, we have to know exactly how things work, and what and what doesn't work well. My response, then, will be broken into parts which I hope will make sense when you put them all together.

The questions are whether Obamacare has been worth it, can it survive, should it be replaced, and what should replace it.  To answer these questions, I think we have to go back to some basic concepts. Hold on. It's going to get ugly.

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Obamacare in Flames - Part Two - Mama Don't Want No Market Playing 'Round Here

"We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself" —Stephen Hemsley, CEO, United Healthcare

It's a commonplace in American business that the difference between a brilliant statement and a stupid one usually depends on who is saying it. When Steve Hemsley asked his C-Suite crew why it looked like United Healthcare would be losing half a billion dollars on Obamacare in two years, I doubt anybody said "Gee, boss. I guess the marketplace must not be sustaining itself." Or if someone did, they're certainly not working there anymore.

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Obamacare in Flames - Part One - The Strange Life and Sudden Death of the Co-Ops

"As the camel falls to its knees, more knives are drawn" —Bedouin Proverb.

Despite the fact that the Affordable Care Act (Obamacare) has significantly reduced the number of uninsured in the United States, it has also failed to live up to its promises and has seen a great number of failures. The number of uninsured is still high, premiums are growing, networks are narrowing, insurers are losing money, and the Co-Ops, set up as a significant innovation of the program, are failing and will continue to fail everywhere.

In this hot election season, this has brought out enemies on the Left and the Right. The Left wants Obamacare dumped and replaced with a single payer system. The Right just wants it dumped.  Both sides attack the program with cherry picked examples that are nonsense and half truths. It's like watching a mud wrestling match where you know you hate one of the wrestlers, but you can't tell them apart anymore.

I am going to post three articles where I try to get to the bottom of what is really happening. I find the sniping on the Right and the Left mostly useless, but also infuriating. The system is broken and Obamacare has revealed all of the cracks. In the first article, I will talk about the Co-Ops and why they had to fail given the structure of the current insurance system. In the second, I will discuss what's going on with market risk and how the big insurance players, despite their massive resources and sophistication, also found themselves sucked into the whirlpool. In the third article I will talk about what we can and can't do about it.

***

The Affordable Care Act contained a provision to establish and fund the creation of 50 statewide non-profit insurance Co-Ops. There were several reasons for this. First, there was the concern that the current commercial insurers would not enter the ACA marketplace in large enough numbers to support millions of newly insured. Second, it was rightly believed that insurance markets in the United States tend to be dominated by one main insurer and the Co-Ops would add badly needed competition. Third, the Co-Ops were a compromise meant to forestall a government run "Medicare" option that might have a potential to move the entire country towards single payer insurance. And last, many people unclear of the concept of not-for-profit and citizen boards of directors in the United States thought that the Co-Ops would be less greedy and more consumer friendly.

Because the funding for this program was prematurely and summarily cut during one of our GOP manufactured budget crises coupled with Red State resistance to the idea itself, only 23 Co-Ops were eventually established. Of these, half have failed outright. Most of the rest are very weak and a significant number of these have been quietly put under some form of direct regulatory control. With the sole exception of the Maine Co-Op, the Co-Op program will fail unless radical measures are taken (which I will outline in article three).

The provision of all that sweet, sweet government money ($1.6 billion) drew into it two kinds of speculators. The first were the normal kind who wanted a crack at The Big Federal Pie. The second consisted of people who wanted the program to succeed for various political and occupational reasons. Most, but not all, were blinded by the fact that the mass establishment of these Co-Ops was probably the riskiest start- up venture in American history. While the insurance risk factors played a part in this (and the risk factors are what people focused on) I will argue that structural factors played a bigger role in creating risk here and I will try to outline these as briefly as I can.

A. Creating a Network

One of the main things that insurance companies do in the United States is obtain discounted rates from providers. These rates and their terms are set by individual private contracts. Insurance companies and providers are always recontracting with each other, hoping to gain an advantage. Any insurance company's contracting staff will be large and well funded with the latest complex modeling software and contract language software. And this will be true of any insurance company that already has a well developed network.

The insurance company will try to get the best terms and steepest discounts and then will aggregate these discounts to find an average discount so that it can begin to design its different benefit packages and price them. (It is also necessary to know in what way its member population uses the providers, but I will discuss this later).

The Co-Ops started out with no networks at all, no contracting staff or infrastructure, and a mandate as THE state Co-Op to be prepared to cover any member in the entire state.

What most Co-Ops did was to create "instant networks" by using what is called a "rental network." A rental network is a broad, usually multi-state network that has a very shallow discount with a large number of providers. They are usually used in cases where a business (typically a hospital) will want to create a quasi-network for its own employees, where these workers will get a steep discount for using their own hospital and hospital owned doctors, but will also get some sort of small discount should they go somewhere else. Rental networks are not meant to be used as full networks by insurance companies, because their discounts are so small that they can't compete with regular insurance companies with their own sets of contracts.

The Co-Ops plan was to start with the rental network in order to establish an "adequate" network per the state regulatory rules of wherever they were located, and then as quickly as possible, recontract the providers within it with their own more deeply discounted contracts on their own terms. If they did this quickly enough, they would have a network that would cover everyone, but they would also be able to eliminate the main rental contracts with their own competitive ones.

In practice, given the magnitude of the task and the fact that they were literally starting with nothing, they had no idea how long it would really take or what Co-Op contracts would actually be in place when the Co-Ops "went live" and actually started taking on new members. So in their business planning, they worked backwards from what they knew to be the average discount in the state to the average discount of the rental network. From this they created a fairy tale business plan and sent this to the regulators for approval. No one at either end of this chain believed the plan, which is why the Co-Ops were expected to lose money for the first one to three years of their existence until they could get a real network together. The vast majority of Co-Ops lost money in the first two years, even those that did not fail, because (in part) they simply could not build the network they needed. They had no market clout and their contracting infrastructure was mostly immature.  

B. Building an Infrastructure

Modern health insurance companies have massive expensive IT infrastructures. It is commonly said in the insurance business that insurance companies are now basically IT companies with insurance companies attached to them.

The core of the infrastructure is the claims payment system. This system has to be able to adjudicate electronically all claims per all the various separate provider contracts that an insurance company has. The claims system also has to be integrated with the member enrollment system, the billing and payment system, the banking system, the accounting system, the hospital contracting system, and the member services system. All of these are separate things. The work of the large insurance companies is to have all of these systems "in house" and seamlessly integrated with each other. For the Co-Ops, all of these separate systems had to be rented from separate vendors. It was the integration of these systems, which were generally not designed to be integrated, that was usually done in house. For many of the Co-Ops, some of the systems weren't even designed to do what the Co-Ops needed them to do, either in their basic functioning or in the volume of transactions that were required. And in some cases, multiple versions of a system were needed. For example, there were cases where a Co-Op needed one enrollment system for individual members and another for employer group members.  Both needed to be integrated with the rest of the system. Against this, the Co-Ops generally had inadequate staffs and had to rely on consultants who themselves were often inadequate, although terribly expensive.

To add to this, the Federal government was building its own enrollment and claims system from scratch (the latter not to pay claims but to do member level claims risk calculations) and required the Co-Ops and anyone else participating in Obamacare to able to integrate with their systems.

As you can imagine, there were massive, expensive, service affecting integration problems within the Co-Ops, within the government (which hit the news), and between the Co-Ops and the government. The Co-Ops did not figure these costs in their start up planning, and why should they have? No one had ever done this before.

C. Building a Staff

The Co-Ops had several staffing problems right from the beginning. The first was the acquisition of qualified management.  Co-Ops were, by definition, start up companies and risky ones at that. The best executives and managers in the insurance industry could tell how risky they were, if only by listening to their own senior managers panicking about Obamacare. Not many people were willing to leave safe well developed jobs late in their careers to join a Co-Op at any price. This was not only true of the executives but also the middle managers. And even those seasoned executives and managers who did come over had little experience starting an insurance company from scratch. Nor did they have the "turnaround" experience they would need to fix the inevitable mistakes. And there was another problem with capital. While the Co-Ops were relatively well funded, with a Federal capital development fund that was separate from the claims guarantee fund, the manager found problems with how to spend the money. Aside from the fact that at the beginning there did not exist such things as purchasing departments, which meant that that the Co-Ops (having to build up quickly) were screwed by almost everyone they did business with, they had trouble figuring out how to staff up. They couldn't take their time, which caused hiring standards to slip. But they also didn't know if they should staff up quickly against the possibility of small enrollments (and therefore risk spending to much right off the bat) or staff up slowly against the possibility of high enrollments and therefore risk being understaffed and having basic service issues). What usually happened was the worst of all worlds. They didn't anticipate the integration problems, so they didn't staff for them. They tried to forestall permanent staffing, so they outsourced a lot of things they should have taken in-house right away. In some cases, especially in the second year of Obamacare, their membership increased dramatically over the course of a month or two and they found themselves very understaffed against the volume of membership. The IT integration problems, the staffing quality and quantity problems, the in-sourcing of activities and the inevitable initial mistakes all had to be addressed in "real time" as the Co-Ops were providing health services to actual people. And they had to do this while painting rosy pictures to the Boards of Directors (who being appointed from the membership often had no idea how insurance companies worked to begin with) and regulators who were often hostile towards them.

The impossibility (there, I've said it) of constructing an adequate and competitive provider network in the face of major insurance companies, creating a fully integrated claims, enrollment, and financial structure, and a well trained, well organized experienced staff made working conditions at the Co-Ops stressful as they lurched from one catastrophe into another. The level headed leaders who actually thrive in this kind of environment turned out to be rare. So the lights began to go out to a chorus of "I told you so" from politically motivated groups who had their own reasons to want the Co-Ops to fail.

But what about the major established insurance companies with solid networks, infrastructures, and stable well trained staffs? When they entered the Obamacare market, what happened to them?

Here the question of risk enters the picture. With the Co-Ops' basic structural problems, we can look at the questions of pure insurance risk as the coup de grace. But how did the sophisticated risk experts at places like Blue Cross and United Healthcare manage to also shoot themselves in the face?

 

 

Is Bernie Sanders Anti-Immigrant?

When Bernie Sanders released the details of his “Medicare for All” single-payer healthcare proposal ahead of the Democratic debate last week, the plan was widely panned by journalists and pundits as an unserious, pie-in-the-sky idea that could never possibly see the light of day. But it was perhaps even more audacious than many of its critics realized: in contrast to the Affordable Care Act, whose drafters deliberately excluded undocumented immigrants from being eligible for coverage in order to avoid stepping into an even bigger political minefield than the one they were already in, Sanders’ policy advisor Warren Gunnels confirmed to reporters that the senator envisions an expanded Medicare being open to at least some of those living in the country illegally.

This is almost certainly one of the boldest pro-immigrant positions espoused by a major party candidate in recent history. A casual observer might reasonably infer from his willingness to take such a stand that Sanders must be the clear favorite of those who lobby on behalf of immigrant rights. Yet throughout the campaign, he has been dogged by criticism of his immigration recordfrom the left.

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The State of the Union's Anxiety

On the night of September 11, 2001, I got a phone call from a relative who’d seen IRA bombings in London, which she recounted in talking to me about what had happened in New York and Washington earlier that day. Not that these were comparable, she said, but terrorism was an unfortunate reality and that people in places likely to be targeted should be watchful, not scared. I agreed in principle but, with smoke hanging over my neighborhood and rumors still rampant, fear was tough to put aside.

President Obama’s response to Americans’ worry over terrorism—which by some reports is higher now than it has been since the weeks following 9/11—is portrayed on the right as singularly out of touch and insensitive, and even among some supporters as something less than adequate. The issue is getting specific attention in the run-up to his State of the Union address tonight (the last SOTU of his presidency), with some wondering whether he will use the occasion to challenge notions of his perceived indifference to anxieties and concerns over terrorism. But if he does, how should he do it?

The New York Times today explains the difficulty a president faces in appealing to reason, noting what Obama most likely won’t say: that “Americans are more likely to die in a car crash, drown in a bathtub or be struck by lightning than be killed by a terrorist” and that the “Islamic State does not pose an existential threat to the United States.” And there is no way he could say that “a certain number of relatively low-level terrorist attacks may be inevitable” and that Americans may have to adapt to it, as Israelis have, or as my relative said that night in 2001, Londoners had.

It would be good, though, if the president was able to say these things, and more.

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When 'Aggression' is Police Protocol

Imagine you’re a woman in your late twenties with a job at a multinational software company. You play soccer as a hobby and come home after a game one night to find you’ve locked yourself out of your apartment. It’s around 11:15 by the time the locksmith has let you in, and you’re taking off your shoes when you hear a voice and a barking dog near your front porch. You go to the window, pull back the blinds, and see a man pointing a gun at you. You step back from the window and hear the man say, “Come outside with your hands up!” What do you do next?

Correctly assuming it was the police who ordered her outside, Fay Wells of Santa Monica, California, obeyed. Writing in the Washington Post about the September 6 incident, Wells describes how officers commanded her down from her porch at gunpoint without answering her repeatedly asked question: “What’s going on?” Only after they searched her apartment did officers explain why they were there. But none of them could give Wells, who is African American, a satisfactory explanation as to why there were nineteen of them, and they assured her it had nothing to do with race. “The fact is,” she later told NPR’s Ari Shapiro “the first time that they interacted with me, they had guns drawn, which just felt incredibly aggressive and not like they were trying to assess the situation.”

Shortly after Wells's piece appeared in the Post, Santa Monica police chief Jacqueline Seabrooks released a statement on the incident, affirming the claims Wells made—yes, the department sent nineteen police officers and a K-9  to investigate a 9-1-1 caller’s claim that a Latino man and two girls, “possibly Hispanic” were attempting a break-in “using tools”—and defending that protocol. “In smaller communities, like Santa Monica,” Seabrooks explained “a response of this type is not uncommon.”

Unfortunately, in incidents involving women of color, such responses by law enforcement seem to have become common in recent months, with police acting aggressively in non-criminal, non-confrontational encounters and escalating them into violent ones. 

Last July, twenty-eight-year-old Sandra Bland, who after refusing to put out her cigarette in the course of a Texas traffic stop was pulled from her car, threatened with a Taser ("I'm going to light you up," Trooper Brian Encina was recorded on dashboard-camera telling her), arrested without being told why, and pushed face-first into the grass. She was found hanging in a jail cell three days after the stop; her death, officially ruled a suicide, is currently being considered by a grand jury. The month before that, McKinney, Texas, officer Eric Casebolt, responding to reports of an unruly pool party, was videotaped grabbing fifteen-year-old Dajerria Becton by the hair, throwing her to the ground, sticking his knee into her back, and shoving her into the grass, yelling “on your face!” —then pulling his gun on other teens. And in October, video captured Richland County, South Carolina, deputy Ben Fields flipping a slumped high school student out of her desk, wrestling her to the ground, then dragging her across the floor of the classroom.

As a white woman it’s nearly impossible for me to imagine an interaction with police officers like these, or the one that Fay Wells describes. I’m more likely to be assumed as a victim of a burglary than a burglar. It’s hard to believe that an officer who hadn’t identified himself would continue to point a gun at me after I’d put my hands up and obediently followed his order. In fact, if I'm honest, I reflexively hesitate to attribute aggressive response and escalation by police offices to race at all—because it's easy for me to deny. And I’m not alone. A survey by McClatchy-Marist from December 2014 showed 50 percent of whites have “a great deal of confidence in the police to gain the trust of those they serve” compared with only 22 percent of African Americans.

Having been on the receiving end of an aggressive and unnecessarily escalated response has permanently changed how Fay Wells feels about the criminal justice system despite assurances from the Santa Monica police that they only intended to keep her safe.

The Santa Monica police department is currently reviewing what happened at Wells's home. Chief Seabrook says the incident is “reminiscent of those Rorschach-style images where it depends on your perspective whether you see a blob of ink.” Others might see it as indicative of a different pattern, in which disproportionate response by police—operating with wide discretion and little accountability—is actually putting certain women at much greater risk.

Drawing Boundaries around 'Arms'

In an article some forty years ago on abortion, John Noonan calls line-drawing “the ordinary business of moralists and lawmakers.” In the wake of the San Bernardino massacre, line-drawing has seemed to me all the more urgent, though I’m tempted to despair, even in this season of Advent (of waiting, waiting, waiting), over the capacities of our democratic representatives in this regard.

That said, today brings what strikes me as some good news: the Supreme Court’s 7-2 refusal to hear a Second Amendment challenge to an Illinois ordinance banning semiautomatic assault weapons and large capacity magazines.

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Follow the (Really Big) Money

Something I’ve never quite been able to figure out about the powerful individual financial interests behind charter schools is just why those backers are so keen on charters and, correspondingly, so supportive of massive cuts in the funding of public education. One theory is that they stand to profit from the adoption, purchase, and licensing by charter schools of various educational products and services in which they have a stake. And yet that doesn’t seem to fully explain the fervor they exhibit for their cause; something is missing from the equation, no matter the stated desire to address (contestable) claims about an educational system in “crisis.”

Evidently, it’s also a mystery to Michael Massing. Why, the former executive editor of the Columbia Journalism Review asks in The New York Review of Books, “have so many billionaires concluded that charter schools are the best way to fix the system?” And, just as importantly: “What are the implications of having such a small group with so little expertise in the field of education exercising such influence in it?” Because he doesn’t have the answer, he proposes a way to work toward one: harness digital technology for a new form of journalism that would  “lift the veil off the super-rich and lay bare their power.”

Billionaires, as Massing doesn't need to remind us, are “shaping policy, influencing opinion, promoting favorite causes,” and not just when it comes to education. More than ever before the super-rich are pouring their money into national and state political races, and funding targeted campaigns on discrete issues like regulatory and tax “reform,” climate science, and even foreign diplomacy—all as they manage to shield themselves from scrutiny. Yet journalists, Massing states, “have largely let them get away with it.” His proposal: “[B]roadly based [websites] dedicated to covering the power elite,” at which data on spending by billionaires is collected, collated, and tracked, the information presented in regularly updated tables and charts, and linked to the latest news about which member of the 1 percent is contributing money (and how much) to which cause or politician.

Massing distinguishes his envisioned operation from social-media-enabled grassroots reporting and well-intentioned but undersized watchdogs like Muckety and SourceWatch. He calls for sufficiently funded, nonpartisan organizations with dedicated staff committed not just to breaking the story but also to pursuing it, so that the nexus of wealth and policy is fully exposed as the danger it is to American democracy. There necessarily remain questions about implementation and effectiveness, but for now it represents as good a plan as there is for publicizing information that urgently needs to be publicized.

How urgent is illustrated by one recent example: a New York Times article this week on the influence of billionaires in the 2014 election of Illinois governor Bruce Rauner and the policies he’s pursued since.

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Black Millennials & the Racial Wealth Gap

Mel Jones writes in the Washington Monthly about an issue I and many of my peers are familiar with: how to pay off student debt and other bills in a not-so-great economy, yet somehow build a financial foundation for the future. Her experience, however, is fundamentally different from mine, in that as a person of color she must also contend with what’s come to be known as the “second” racial wealth gap—the second phase in a “financial disparity that stems from continuous shortfalls in parents’ net worth and low homeownership rates among blacks,” which, Jones explains, “works to create an unlevel playing field.”

Since owning a home accounts for over 50 percent of wealth for blacks (compared with 39 percent for whites) and since black Americans are five times less likely to inherit wealth than white Americans generally (7 percent to 36 percent), low homeownership rates among black Americans, which often are the result of discriminatory lending practices, are a large contributing factor to the racial wealth gap. In addition, Jones points out, “[T]he most recent housing bust is estimated to have wiped out half of the collective wealth of black families—a setback of two generations,” resulting in essentially an exponential setback for millennials of color.

Jones cites a recent study published in the Journal of Economic Perspectives on the dynamics of wealth accumulation that found an estimated 20 percent of personal wealth can be attributed to formal and informal gifts from family members, especially parents. But blacks and Hispanics starting their careers are not likely to get such a boost. Moreover, they’re already starting at a disadvantage, given that they take on higher levels of student debt than their white peers, “often to pay for routine expenses, like textbooks, that their parents are less likely to subsidize,” Jones writes. They also often have to work while in college, thus missing out on opportunities to connect with classmates and forge the professional ties that might help them later.

I know I wouldn’t be where I am without “formal and informal gifts from family members,” before, during, and after college. I wouldn't have been able to make decisions toward furthering my professional career if I couldn't, for example, stay on my family’s cell phone plan or receive help covering the cost of an apartment security deposit. Understanding that there are inherent long-term benefits in being able to choose career development over routine expenses is one part of understanding what in current discourse is calledprivilege.” As Jones puts it simply: “If you have to decide between paying for a professional networking event or a cell phone bill, the latter is likely to win out”:

When this happens once or twice on a small scale, it’s not a big deal. It’s the collective impact of a series of decisions that matters, the result of which is displayed among ethnic and class lines and grounded in historical privilege.

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