Follow the world of infectious disease in real time

If you're interested in keeping current on status of bird flu, or food safety, or drug resistant infections, the best souce is the University of Minnesota's Center for Infectious Disease Research and Policy (CIDRAP). Their home page contains a button that will let you subscribe to their daily news summary. It's a few days late on the reporting of bird flu status, but good enough for most of us.

New Rules for Medicare Advantage Plans next year

The government just announced new rules for Medicare Advantage Plans that could affect you (if you're a Medicare beneficiary and enroll in an MA plan). To read about it, go to the Kaiser Daily Health Policy Report for Tuesday 3/31. One change I don't agree with is that:

"CMS will prohibit a practice by Medicare prescription drug plans that charges both a higher copayment for brand-name medication and the difference between the cost of the brand-name drug and a generic version. Higher copays still will be permitted, but the extra cost for the difference between the drugs will no longer be charged to beneficiaries (Alonso-Zaldivar, AP/Boston Globe, 3/30)."

The current practice by some plans may be tantamount to double charging, but I'd rather see CMS require the plan to reimburse the consumer for his or her share of the generic drug (using whatever co-pay pertains to generics), and then make the consumer bear the full extra cost of the branded drug. (An appeals process could handle the few instances where the patient can't tolerate the generic drug.)

If we want a dynamic and innovative drug industry, but one that doesn't put us into the poor house (any faster than we're already going there), we should give new drugs a lot of pricing freedom when they are new and under patent, but cut 'em off at the knees once those rights expire with a policy that agressively promotes generic competition. That's why it's important to limit the games that drug companies play to extend their period of market exclusivity. There's some activity in Congress right now to try to close the latest loophole the drug companies are using -- where they pay a generic company a "Go-away" fee not to compete. (See the report on what's happening this week in the KFF newsletter.) Drug companies protect billions of dollars of revenue by fending off generic copies this way. Fixing the loophole is one of those little things that Congress could do to help keep health care costs under control, but I'm afraid the pharmaceutical lobby will be able to kill it unless we citizens let Congress know it's important.

We should send little email notes to our esteemed congressional legislators saying, "I support legislation to stop drug companies from keeping generics off the market by paying them to "Go-Away. I hope you won't let this issue die, because our health care costs depend on it." -- something like that. Here's how to contact your members of Congress:

• Senators: US Senate, and search in the upper right corner
• Congressman: Write your Congressman

Health reform needed to boost productivity.

Always knew I'd start posting about health reform at some point. Here's my first take (more to come) on how to think about health care reform. Why do we need it, and what kind of reform do we need?
Obama's people talk about the need for health care reform as a budget and cost issue. That may or may not be true, depending on the details of the reform itself. One thing they should be emphasizing, though, is that universal health care coverage, if it was no longer dependent on employer sponsored plans, would provide a tremendous boost to our national productivity. And, productivity increases are what we need if we are ever to work our way out of our deficit problems.
I bet that you know someone -- maybe yourself --who has been trapped in a job out of fear of losing health insurance. That "job-lock" is a major deterrent to new business starts. And, jumping ship from a large bureaucracy-bound corporation to a small business is often hard because many small businesses don't provide adequate health insurance. When workers' employment choices are so biased, they exact a cost in lost productivity (the difference in the value of what they could be producing if they weren't constrained and the value of what they actually are producing in their less-than-optimal job). The current employment-based system also is biased in favor of big companies and against small companies. (That's why many small businesses don't offer health insurance.) Big companies have the scale and resources to pool risks across a wide range of enrollees and drive a hard bargain with prospective health insurers for low premiums. And, they generally pay 35% marginal tax compared with, say, 28%, for small proprietors, so they get a bigger tax break from deducting health care premiums. So, it's less costly, per enrollee, for large companies to provide health coverage than for small ones. As a consequence, large companies can offer lower total compensation (wages + benefits) than small companies can for the same skill level.
So, the current system biases employees against smaller, more entrepreneurial ventures, and rewards larger firms at the expense of smaller ones. Both of those biases waste resources and lower our overall productivity as a country.
Bottom line: we need universal access to health care, unrelated to employment, as a boost to our economic productivity. To go deeper into this subject, see a very good summary by Elizabeth Jacobs, a Congressional Fellow.
Next post on this subject: what should the reform look like?

Standardized tests, technology and teaching

Here's a new episode for our teaching stories series. This one, called "Aftermath: Testing, Technology and Teaching, " is a follow-up to Episode 1, "The Missing Test Booklet" . No wonder teachers hate no-child-left-behind so much. Standardized testing invites technology; technology invites human error. Who has to fix it? And on whose time? The teacher, of course.

Thanks to our journaling teacher...we'll call her Ynonymous, for letting us peek into the craziness of her world.

To win, you needed an RSS Feed!

What is that, you ask? I wanted to know how the first-prize winner of the surpise gift offered in my March 24 post did it. It took only about an hour for him to respond and win the really fantastic prize of a $15 on-line gift certificate to Amazon. com. He did it with an RSS feed. Those three little letters have always been a mystery to me, so I'm doing some research to explain it first to myself and then to you. (Will write a post in a few days that will hopefully be in human language enough to let you decide whether it's worth it.) Right now I'm going to tell you about the winners.
First prize went to Ben, in Texas of all places. I've never met Ben, but I do know his father, who must have sent him a blog post early on. Ben is very tech saavy, having started more companies in his first thirty years than I will ever do in my lifetime. Right now, he's head of XOXCO.com, a "Clickable Research and Development Company." Their site is geared for people with web sites and blogs, I think, so I should like it, if I ever get up to speed. Getting back to Ben, he did ask me if the the "fun prize" was getting to punch Larry Summers. The answer is ONLY in a virtual sense! That is, Ben could develop a little "clickable" application for me that would allow anyone reading one of my Summers posts to click on the "Give a sock to Larry" button as a way of expressing our disdain. On the other hand, I wouldn't pay him to do this, so my sense of outrage at Larry S's failure to apologize for his role in creating our current debacle is obviously limited by my own pecuniary concerns.
Second prize ($10 Amazon gift card) followed a few hours later, with a response from Julie O, from Minnesota (no, not Rochester!). Now, Julie is someone I know, who is doing important work on our country's behalf (that's all I'll say about that!), so I'm happy she won. Not sure how she did it, but I assure you I gave her no hints! And, she's not a relative.
There were a number of other entries in the 24 hours following the post, more than 5 but less than ten (that's all I'll say about that!). I feel bad about not having enough money to give everyone who answered a prize, but them's the rules. So, I'll save my pennies and run another contest in about 6 months.

Giving Summers enough rope...

Frank Rich of The NY Times has called Larry Summers' performance on last week's Sunday talk shows a disaster, so his column is of course music to my ears. Tone deaf, is the term Rich used. Find the article at NY Times Rich. Here's one quote from Rich that resonates with my earliest anti-Summers blogs:

"The “dirty little secret,” Obama told Leno on Thursday, is that “most of the stuff that got us into trouble was perfectly legal.” An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. His mentor Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how the risk of derivatives might multiply “under extraordinary circumstances.”
Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard’s presidency at the bubble’s height, you have to wonder how he can now sell the administration’s plan for buying up toxic assets with the help of hedge funds."

So, Frank Rich agrees with me, Janet, Lupi, Bob, and some others, too, who've been emailing and blogging our disgust with Summers. Hopefully, our president will catch on too. I can conjure up a Summers apology speech that would turn me around, though. "I would like to apologise to the American people for my positions taken in the period 1998-2000 regarding regulation (i.e., none is better than any) of the financial markets. In formulating the policy of the Clinton administration, I was most concerned about ....xxxxxx..., which turns out to have been an utterly stupid reason to let the bubble grow. I have decided to give up the practice of economics and become a documentary film maker, focusing on the life of academic economists and their families."
I would forgive old Larry and not mention him again in this blog or in any side emails.

Fun Prize for first two respondents to this post.

Here's my promised offering of a non-trivial prize for the first two people who email me at jwagner@bethesda20817.net to claim it. I'm doing this to find out how many people read my posts without getting my broadcast emails. (I'm not broadcasting this.0 In your email response, tell me what the subject of the previous post was, and if you're 1 or 2, you'll get it. If you give me permission, I'll announce winners by first names, but if not, I'll just say your name is Ynonomous. Good luck.

Who should have a retrospective 90% windfall tax?

What really gripes me is not the robbers on Wall Street -- that's their job, (to rob legally) and we all knew it. And we loved it when our kids or their friends got big bucks with hedge funds or whatever. Wall Street is what it is.
BUT, the CONGRESS! It is what it says it isn't! What it isn't is the representative of the people's interest. What it is is an institution rife with craven, cowardly, corrupt and even lazy thespians, who created the very institutional framework that has brought us down. Imagine an institution that votes on December 15, at the very end of a President's term (2000), on a bill to prohibit all regulation of CDS's (credit default swaps) or CDOs (collateralized debt obligations), which has neither been reported out of a committee or subjected to ANY debate on the floor -- throws that bill into a 12th hour appropriations bill to keep the government running -- and approves it overwhelmingly (292 to 60 in the House--see how your congressman voted) and by "unanimous consent" in the Senate. (See the awful story in Wikipedia.)
If those yea'ers and consenters and no-show-ers argue that they didn't know because the bill was slipped into a vote at the last minute, couldn't shut down government by denying appropriations, or depended on their leadership to have done the homework, we should figuratively string 'em up by turning them out of office. But, if even one were to issue the following statement:

"I want to apologise to my consitutiuents; I let this happen because I was ignorant, [acceptable alternatives: asleep at the wheel, overly dependent on hedge fund PACs for campaign contributions, completely uncurious about how the financial system works, happy that I could get my own bills slipped into law in the dead of pre-Christmas recess night, unwilling to challenge a system that works so well for my own longevity in Congress, thought that the pros in the Clinton Admin (Rubin/Summers) were taking care of things]. All I really cared about at the time was staying in office and getting home early for Christmas. I let you, my constituents down, and to make up for it I will work diligently to force my party and institution to change its rules regarding last minute piggy-backing of bills onto appropriations bills. I will never again vote for an appropriations bill that contains anything but appropriations. I will also introduce legislation to impose a retrospective 90% windfall tax on my salary of 2000-2008 to pay back the taxpayer for my misdeeds."
I would stand up and vote for such a congressman. (And maybe even send him/her $10 donation!)

"Satyam is Sanskrit for Enron"

Prof Bob Paretta is back again with another lesson on reading financial statements. He shows that it's possible to spot corporate fraud using publicly available records before the market finds it or the company implodes. Remember Satyam? That Indian outsourcing company found with massive accounting fraud only 2 months ago? (See NYTimes article.) Here's Bob's Excel spreadsheet analysis of the cash flows and income statements that Satyam posted over the past 5 (count 'em, 5) years. (you'll need MS Excel to open it.) Paretta's Cash flow analysis for Satyam.

The gospel according to Paretta: "The spreadsheet shows an important accounting indicator -- the QofE (quality-of-earnings) ratio. It's the ratio of cash flow from operations to net income. Because net income includes non-cash expenses, cash flow from opns (CFO) should typically be higher than net income because to arrive at CFO you add back large expenses like depreciation and accrued expenses or expenses you did not pay for yet (Accts payable) and subtract smaller revenues that did not produce cash, like increases in Accts receivables. When CFO/NI is not greater than 1, it brings into question whether net income includes revenues that are being recorded before the're actually earned. (or even fictitious revenues!) So when QofE is less than one for even one period, it's a red flag and when it remains so over nearly a 5 year period, as in the case of Satyam, it is a big red flag! If you fictictiously inflate revenue then you also have to inflate accounts receivable; otherwise the accounts don't balance. Satyam's receivables rose steadily over the five year period and also as a percentage of net income. That relationship can jump around for a period or two (also a red flag) but when it grows steadily then you have to ask, why are they increasingly not collecting the revenues they are recording in A/R (big red flag). If you're a Satyam kind of company, if you want CFO to rise so that it exceeds or approaches net income you have to either stop paying your A/P or you have to make up fictitious A/P, because A/P reduces net income but does not affect CFO. Notice how on the second page of the spreadsheet A/R and A/P and related accruals are increasing and are an increasing percentage of net income? Again if it happens just one period, it is a blip on the radar...a pink flag. If it keeps happening, it is another big red flag. It means you are increasingly not collecting your A/R and you are not paying your debts. The conclusion is you are either a crook or you don't know how to run your business. So three big red flags and it is time to sell, call the cash flow police, or both. The mystifying thing is that Raju admits that 94%, or $1 billion, of the company's cash balance was fictitious. That should have been caught by the auditors (PwC) unless the banking system in India is so corrupt that banks sent PwC false confirmations. In any case Raju could not have done this alone. There had to be collusion on a massive scale to the extent we have never seen before. The international fallout from this is going to be huge. Stay tuned."
Yes we Can! (stay tuned, that is.)
Thanks again, Doctor Bob.

Ever think about chucking it all for teaching?

News accounts suggest that lots of us have and still are. A friend of mine is a public high school science teacher in a highly regarded suburban Washington school district, who's kept a journal of her experience since she joined teaching after a successful career elsewhere. If you're a parent, if you're a teacher, if you're even THINKING of someday becoming a public school teacher, these stories are riveting and detailed. They'll make you feel as if you're in the school with her, real time! Click on Episode 1- The Missing Test Booklet to get a reality check on how public school systems work.

Do Fannie or Freddie own your mortgage?

Today's Washington Post has a great article in Real Estate Section on Fannie and Freddy's policies re: refinancing of your mortgage. (You'll have to register with Washington Post to see it, but hey, it's STILL free!) Article's bottom line-- if they own your mortgage, bad credit rating or underwater mortgage will not stop them from allowing you to refinance. Even if you don't want to refinance, you may be curious about who owns your mortgage-- Fannie or Freddy, or the moguls of the CDO and CDO-squared universe?. Here are the Fannie and Freddy websites that will tell you: Fannie Mae Freddie Mac

Worried yet about antibiotic-resistant bugs?

You should be. Here's an interesting blog site, Extending the Cure, that looks at various aspects of the problem. Especially the March 12 post on pig farms and Multiple Drug Resistent Staph Aureus (MRSA) infections in pigs. Makes you want to skip your bacon, but you'll learn that even that won't protect you. Big question, of course, is how to turn the aircraft carrier that is the medical-industrial-agricultural complex to get results in time to save lots of us from misery or even...well I won't go there.

Do Medicare patients have too much choice?

A recent study by Kaiser Family Foundation found that Medicare patients enrolled in the Rx drug benefit have lots of plans to pick from, but in hindsight seem not to pick the one that would have minimized their annual drug bill. Much is made of how horrible this is, and how Medicare patients have "too much choice." My view is this: "Medicare patients, GET YOUR ACT TOGETHER, or face the consequences of paying too much." There are plenty of aids on the web, and if you can't do it, then be nice to your kids or nieces & nephews, or friends, and they'll help. Start with Medicare.gov.

Best argument for higher Fed taxes on gasoline

Today's Wall Street Journal (3/9/09) has a special section on the environment (Section R). Can only see it online if you subscribe to WSJ online, so fuggedabout it. In a nutshell, Mike Jackson of AutoNation (car retailer) made the case for why we need a gas tax that will bring price of gasoline to $4.00 at the pump. At current gas prices, says he, the demand for high gas mileage cars is nada, zilch. When gas hit $4.00, all that the consumer cared about was getting high gas mileage. Politicos say that it's a no-go with Americans, but what if it was REVENUE NEUTRAL? That is, what if it was given back dollar for dollar to taxpayers (either through payroll tax holiday or tax credits)? Or, maybe, relief could go to taxpayers based on state's population density or miles driven per capita (that's my idea). Point is, no high gas price, no energy efficiency!

How to un-do the meltdown thru re-regulation

Much as I hate to advertise a Huffington Post blog, this one by Robert Weissman on the 12 anti-regulatory steps to the meltdown chronicles every single mutually reinforcing action throughout the last 15 or so years of both dem and repub control of congress and/or white house. We should watch what our glorious Congress does to un-do ALL of these! I'll try to post when I see relevant stuff.