Tuesday, March 10, 2015

Tuesday, March 10, 2015

Health care house of cards; The great American opportunity divide; LABI on the offense; and Deepwater Horizon to receive taxpayer subsidies


Health care house of cards

It took a couple years, but the unintended consequences of sticking with an outdated, segregated charity hospital model of care, instead of embracing health coverage and patient choice, are starting to be felt across Louisiana. First, there was the battle of the closure of a Mid-City Baton Rouge emergency room that saw a big uptick in uninsured patients–and corresponding financial losses–after the old Earl K Long Medical Center in north Baton Rouge closed and Our Lady of the Lake in the south part of town got a sweetheart deal. The Advocate’s editorial board lays out the situation:


In other cities, the difficulties may be different, but the sudden decisions to make particular hospitals in each region of the state into partners with LSU and the Department of Health and Hospitals may have created a set of winners and losers in medical care. The partners, such as the General’s competitor in Baton Rouge, Our Lady of the Lake, have received handsomely preferential financial deals for treatment of the uninsured…DHH officials, slammed by budget cuts, are sent into the breach without money to fix the problem; the cash is soaked up by the winners, the LSU-selected partners. And Jindal appears to have little interest in these matters until they end up on the front pages…Where is the mechanism that will assess in each region whether these LSU partnership contracts are working for the benefit of the community as a whole?


This situation would have been largely avoided if Louisiana had expanded Medicaid. The uninsured would have been covered and dollars would have followed the patients, without the state picking winners and losers in the hospital market. And things are set to get worse before they get better: the Jindal administration’s executive budget includes $142 million less than the private hospital operators have requested, and the opening of the new teaching hospital in New Orleans has been delayed until late summer, Nola.com reports. As a final blow to New Orleans, a network of clinics set up after Hurricane Katrina that provide primary care to 57,000 people in the four-parish metro area could be de-funded. The clinics were supposed to be a “bridge to Medicaid expansion.” But they may end up being a bridge to nowhere.


The great American opportunity divide

Robert Putnam–famous for his book “Bowling Alone” about the decline of social capital and community in America–is on a mission. The Washington Post writes that the 74-year old professor has a new book out today, “Our Kids: The American Dream in Crisis,” about the growing divides between children born to college-education, affluent parents and those born to high school educated, working-class parents. After an exhaustive study of his own home town of Port Clinton, Ohio and the diverging opportunities of its youth over generations based on the lottery of birth, getting people to do something about child poverty has become personal.


“If we can begin to think of these poor kids as our kids,” he says, “we would not sleep for a second before we figured out how to help them.”…Putnam has been nursing an outlandish ambition. He wants inequality of opportunity for kids to be the central issue in the 2016 presidential election…The gaps he identifies have been widening on both ends: Better-off families are spending ever-more money on their children. They’re volunteering even more at their schools. Their children are pulling away as Mary Sue falls further behind, and her original mistake was simply, as Putnam puts it, that she chose her parents badly.


LABI on the offense
Stephen Waguespack, former chief of staff to Gov. Bobby Jindal and current head of the powerful Louisiana Association of Business and Industry (LABI), continue the fight against the governor’s proposal to pare back business tax credits, specifically $377 million in inventory tax credits in an op-ed for Nola.com. Waguespack sets up a potential fight between “two states” in Louisiana, the private sector and the government:


In the past, we have typically viewed state budget challenges as an excuse to burden an ever-evolving private sector in order to fund the rarely evolving form of state government. Let’s try a different approach this time.


Waguespack suggest “reforming” pensions, giving colleges more autonomy (read: even higher tuition) and repealing the inventory tax altogether (read: higher residential property taxes) as possible solutions. But is the public sector really living large? Tell it to the people who depend on services that have endured years of painful cuts. Make this argument to the 30,000 state workers who’ve been laid off, or the colleges that have been forced to cope with a $700 million loss in state support while corporate tax exemptions and “incentive” programs grew every year. While the inventory credit may be the wrong way to balance the budget, there is no doubt legislators will have to find new revenues if they want to avoid as much as $500 million in cuts. The reality is that the public and private sectors need each other and work together to create a strong economy.


Deepwater Horizon to receive taxpayer subsidies

The movie, that is. The Advocate reports that a blockbuster based on the tragic 2010 drilling rig explosion in which 11 men lost their lives is set to film later this year.


Realistic oil-rig sets already are under construction in Chalmette, and a casting call is out across south Louisiana for real-life oil workers as extras in the filming of “Deepwater Horizon,” an estimated $156 million production that will star Mark Wahlberg.


Considering that movie producers get subsidized for 30 percent of their costs in Louisiana and 5 percent of their payroll, taxpayers could be on the hook for tens of millions in subsidies. How a movie depicting one of the darkest days in Louisiana’s recent history will increase tourism–as industry boosters have recently alleged film subsidies do–is unclear.


Number of the Day

$495 million
Amount Louisiana taxpayers spent on movie subsidies last year, making the film program the state’s third most expensive tax exemption (Source: Tax Exemption Budget)