Daily Archives: January 25, 2007

Thinking beyond the UH Medical School

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TMC-arial.gifBlogHouston.net’s Kevin Whited notes this Chronicle/Todd Ackerman article about the University of Houston floating a proposed new Texas Medical Center-based medical school in a collaborative project with The Methodist Hospital and Cornell University’s Weill Medical School.
Unfortunately for UH, the proposal has zilch chance of floating for much more than a few minutes amidst the shark-infested waters of Texas educational politics. Heck, the political forces in Texas cannot even agree to provide adequate funding of UH’s uncriticizable goal of becoming the state’s third tier I research university. The University of Texas, Texas A&M University, and Baylor College of Medicine — Methodist’s former longtime partner — are just a few of the powerful political forces that would almost certainly line up against the UH-Methodist proposal.
Yet, the UH-Methodist proposal has merit, so here’s a proposed modification. Rather than start another medical school from scratch, let’s merge the University of Houston system with the Texas A&M system and have A&M expand its fledgling medical school into the Texas Medical Center from its current central Texas outpost. From a broader standpoint, the merger makes sense because it gives the A&M system something that it desperately needs — a major urban presence — while also giving UH something that it has always lacked — that is, access to adequate endowed capital. Such a merger would also provide A&M with the law school that it has always coveted and would greatly facilitate UH’s elevation into a tier I research institution, which is something that would substantially benefit the Houston area.
While the University of Texas would almost certainly oppose such a merger, perhaps a deal could be struck at the same time to merge the Texas Tech University system into the UT system while organizing the remainder of Texas’ non-affiliated public universities into a third university system for funding and administrative purposes. Such a structure would give Texas a similar structure to that of the reasonably successful California model, which has generated far more first rate, tier I research universities (10) than the current dysfunctional Texas system (2). Indeed, almost anything would be a huge improvement over the current Texas system, which allocates a disproportionate amount of endowed capital to the UT and A&M systems while starving the remainder of Texas’ public universities.
Make sense? You bet. Chances of happening? Probably not much. But just as UCLA and Cal-Berkeley co-exist productively in the same university system in California, UH and A&M could do the same in Texas. And just as two major university systems work side-by-side together to educate Californians, a similar structure would be a substantial improvement in the educational system of Texas.

Bobby Maxwell rings the bell

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rig012306.jpgThis earlier post reported on the lawsuit by former Interior Department auditor-turned-whistleblower Bobby Maxwell against Kerr-McGee Corporation, a subsidiary of The Woodlands-based Anadarko Petroleum, for allegedly cheating the government out of millions of dollars in oil royalties on production that the company generated from leases on government-owned property. Kerr-McGee contended that no fraud was involved and that it simply computed royalties differently under the leases than Maxwell contended was correct.
Earlier this week, this NY Times article reports that the jury in Maxwellís case decided that Kerr-McGee had underpaid the government $7.5 million. Accordingly, under the False Claims Act, the law under which Maxwell is bringing his whistleblower lawsuit, Kerr-McGee could be forced to pay more than $30 million — double or triple the jury verdict, as well as penalties of up to $11,000 for each of over 1,000 false statements that the company is accused of making in its royalty reports to the government. Maxwell is entitled to as much as 30 percent of that amount.
The bottom line — skimping on payment of oil and gas royalties is risky business.

Gauging the health care finance litmus test

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health_insurance%20policy.gifIt’s looking as if the health care finance litmus test noted earlier this week is already quite revealing. The Washington Post’s Steve Pearlstein, who has never been particularly enthusiastic about the Bush Administration, reports:

But the most surprising and encouraging development is that a president who for six years has only nibbled around the edges of health-care issues has weighed in with some bold ideas to expand coverage, rein in costs and bring some fairness to the tax code. And get this: It actually involves raising taxes on the rich and lavishly insured and giving the money to the working poor and the uninsured.
Given that, you’d think Democrats would have welcomed a politically courageous proposal to put a cap on one of the biggest and most regressive features of the individual income-tax code. But instead, they’ve shifted reflexively into partisan attack mode, mischaracterizing the impacts of the proposal and shamelessly parroting the propaganda from the labor dinosaurs at the AFL-CIO.
“Dead on arrival,” declared Rep. Pete Stark (D-Calif.), chairman of a key health subcommittee in the House, hinting at a dark conspiracy to kill off employer-sponsored health insurance.
“A dangerous policy that ultimately shifts cost and risk from employers to employees,” said Charlie Rangel, chairman of the House Ways and Means Committee.
Sen. Harry Reid, the majority leader, called it nothing less than an “attack” on American workers.
Worst of all was the five-page memo distributed by Sen. Edward Kennedy to Democratic colleagues that ought to embarrass a man who considers himself the Senate’s leading health-care expert — a compendium of half-truths, unsupported assumptions and outright lies. Kennedy reverted to the hackneyed rhetoric of class warfare, asserting that the president’s proposals will do nothing for working families, give new tax breaks to the rich, increase the number of uninsured and encourage everyone to buy less insurance coverage than they should have.
In fact, all of these are almost precisely the opposite of the truth.
The president’s health plan would, in fact, put a cap on a $200 billion-a-year tax break that now goes disproportionately to those with the most generous and costly employer-provided health insurance plans. It would redirect a small portion of that break to those who have less generous coverage or those who have to buy their own insurance because their employer does not offer it. For a few million of the roughly 47 million Americans with no insurance, it may also make the difference between being able to afford basic insurance or not.
The fact that some of those who have these rich policies happen to be members of auto or postal unions doesn’t change that the president’s proposal would make the tax code more progressive, not less. They are the aristocrats of the working class who, like lawyers, investment bankers and journalists, earn more in tax-free benefits each year than uninsured janitors earn in taxable wages. And whatever modest tax increase they might face from the cap on tax-free health benefits, it is certainly less than the tax cuts they got from Bush that Democrats are so eager to rescind.
Almost every health economist agrees that the tax subsidy for employer-paid health insurance is not only unfair but that it also encourages people to buy too much insurance, consume too much health care and pay too much for both. Bush deserves praise for having the political courage to confront the issue.
Now is this the magic bullet that will solve the health-care crisis? Of course not.
Would any real solution also require finding billions of dollars more to subsidize the purchase of health insurance by low-income workers and getting states to reform dysfunctional markets for individual and small group insurance? No doubt about it.
But anyone seriously interested in health reform would welcome the president’s proposal as a basis for negotiations, raising public expectations and increasing pressure on the president to embrace more comprehensive reform. Unfortunately, that is not the approach of Messrs. Stark, Rangel, Reid and Kennedy, who apparently prefer demonizing the president and grandstanding on the issue until the next election.
Haven’t we had enough of this?

Read the entire piece. President Bush’s proposal — although not an all-encompassing solution to America’s dysfunctional health care finance system — addresses a fundamental problem of system — tax subsidies that have insulated many Americans from the true cost of health care through employer-based health insurance. The president’s plan identifies the problem and responds to it in a common sense way by proposing to negate the distorting subsidy. There are reasonable alternatives that should be examined — such as removing the tax subsidy of health insurance altogether — but to castigate the President’s proposal in favor of the insulation provided by the current system is the epitome of elevating political form over substance.