Archive for January, 2015

The Suburban Poor

The Atlantic this morning discussed the rise of suburban poverty.
The suburbs have offered more affordable housing options for low-income populations in recent years– largely due to higher income citizens moving back into rehabilitated downtowns and driving up housing prices.
The concentration of poverty in suburban areas brings a host of unique problems. The suburbs lack the infrastructure and transportation systems to help people access jobs.  Jobs available in the suburbs don’t keep up with the cost of living for low-income, low-educated residents.  And social services available in urban areas have not yet expanded into the suburbs.
The population shift, itself, is ironic and problematic.   After all, the suburbs were originally a destination for well-to-do white middle classes escaping the decay of urban life in the mid-twentieth century.  These new residents followed the migration of many  big manufacturing centers into the peripheries of northern cities. In the suburbs, jobs were plentiful, prosperity bloomed, etc.
In the urban city centers, however, jobs dried up.  And due to legally-sanctioned neighborhood segregation, recently-migrated poorer black communities became trapped in areas that afforded no real economic opportunity.
Now that we are seeing the reverse trend–high-income populations moving back into the city, while poorer populations are priced out– the labor market continues to not match up.  Sure, there are still big office parks in the suburbs, and with them accompanying jobs for lower-educated populations (service, cleaning, food, etc.), but, as The Atlantic article mentions, transportation to these employment opportunities is completely lacking and wages for these jobs often do not approach the cost of suburban life.
The practical concerns of this trend–transportation, access to social services, proper political representation– are immediate and scary.  But to take a step back, I want to raise some important questions about urban and regional planning.  Namely, how do we get ahead of demographic shifts that are the result of the housing market and cost-of-living?  How do we start planning for economic opportunity rather than responding to the lack of it?  How do we match the labor market to education to economic need?
Of course, this is all easier said than done.  But we can’t afford to keep reacting to population changes, instead of planning for how they will look.

Mo’ Treatment, Mo’ Problems

A recent UCLA study revealed that higher-earning doctors get paid more for ordering more procedures per patient.
In other words, doctors aren’t earning their keep by improving health outcomes for patients, but by ordering potentially expensive tests, services, and treatments.  Those costs eventually trickle down to the entire system, contributing to America’s current healthcare crisis.
To further explain:
The United States for years has had the most expensive, least effective healthcare in the developed world.  The crisis can be attributed to a lot of messy, intertwined problems–perverse incentive structures, insurance gaps, neighborhood conditions, current work structure for professionals, and lack of hospital funding.
But the main problem is healthcare costs.  Ironically, the Affordable Care Act, for the most part, defines the problem as insurance coverage.  But, although coverage is very important, it’s only a piece of the puzzle.  How much does having insurance matter if your premium is so expensive as to make it a burden, or if you’re forced to foot more of your bill privately because your insurance covers less?
At worst, the issue of “insurance coverage” is a red herring.  It is the costs of certain procedures, tests, medicines, etc. that cause insurance premiums to soar and place disproportionate burden on individuals, employers and the government.
This problem of healthcare costs is exacerbated by the funding conundrum faced by hospitals and medical professionals.  Without being able to properly cover costs of operation, professionals often “overtreat”– order medically unnecessary treatments, services, and procedures in order to receive reimbursement from insurance.  And guess who is the biggest payer in the system?  Medicare.  That means you, taxpayer.
And, to be clear, research shows that ordering extra procedures and “overtreating” has no impact on health outcomes.  That extra X-Ray, CT scan, lab test, stent, prescription?  On aggregate, it doesn’t make people better.  It is purely a matter of money.  In fact, overuse and unnecessary care has been found to account for one-third to one-half of all health care costs.  (For more on this, read Shannon Brownlee’s Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer.)
This is what the research points to: More procedures, more money.  To be fair, this is not a case of greedy doctors gaming the system, and then rolling around in their convertibles with the wind in their hair.  There is a genuine financial burden and pressure on medical establishments which leads to this behavior (especially on under-funded public hospitals).
But, as the UCLA researchers suggest, we need different payment reimbursement mechanisms, so that reward is not placed on more procedures, but on healthier patients.
For sure, this is easier said than done.  And any evaluative measure creates incentive to game the system (for example, doctors cherry-picking healthy patients and refusing to treat sicker people who might affect their stats).  But the current “fee-for-service” structure isn’t cutting it, and is actively damaging the nation’s healthcare system.

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