Category Archives: Economics

Want to Lower Health Care Costs? Stop Wasting Our Money.

This year ProPublica documented the many ways waste is baked into our health care system, from destroying perfectly good medication to junking brand new supplies. Eliminating the waste could insure millions of Americans.

By Marshall Allen. Published 12-28-2017 by ProPublica

Photo: PrEP

In Maine, there’s a warehouse the size of a middle school gymnasium, stuffed with brand-new medical supplies and gently used medical equipment. Several pallets are piled with boxes of surgical sutures, still in their shrink wrap, each box worth hundreds of dollars. Tubs overflow with diabetes supplies and surgical instruments that may run hundreds of dollars apiece. There are bins of bandages and gauze and saline and ostomy bags and every other medical supply you can imagine. These materials, unexpired, could easily stock any hospital or clinic. But each item has actually been thrown away by a local medical facility.

The cost of health care has been rising for decades, and Americans are paying the price. In a recent Gallup poll, people cited the high cost of care as their No. 1 financial concern. It’s an enormous problem, and trying to solve it all at once brings on panic and paralysis. But after reporting for a year on the ways the medical industry blows through our money, I have one idea: Let’s end the egregious waste that’s draining our health care system.

The National Academy of Medicine has estimated the health care system wastes around $765 billion a year — about a quarter of what we spend. Eliminating all the waste could allow us to insure 150 million Americans, the Academy of Medicine said, and saving half of it could provide groceries for every household in the country for a year. Eliminating the waste would also stop our rising health care costs from eating up our wage increases. My premiums go up 9 percent next year. Same thing happened last year. Odds are your costs are rising, too.

It’s hard to downplay what I found when I began investigating the issue. Hospitals throw out so many valuable supplies that a cottage industry of charities has sprung up to collect this stuff and ship it to the developing world — otherwise, all those goods in that Maine warehouse would be headed for a landfill.

Nobody tracks how much hospitals waste rather than donate, and I couldn’t track down where each item came from. But experts told me when hospitals change vendors for a type of supply, they often toss the old stuff. Or, if they take over a clinic or facility, they get rid of the items that come with it, even if they are unused and unexpired.

The operating room is a major source of wasted spending. One hospital tracked the value of unused items that went to waste during neurosurgery procedures in a single year. The total: $2.9 million — for one type of surgery at just one hospital. In that case, the surgeons hadn’t updated their system of telling the staff which supplies to prep for each operation. They were opening many items they didn’t need, which then had to be thrown away even though they were unused. The hospital updated its approach to make sure they aren’t setting up for operations with excess supplies.

I learned that nursing homes throw away hundreds of millions of dollars’ worth of valuable medication every year. They typically dispense drugs a month at a time for patients and often have them discontinued if the patient dies or transfers. The excess drugs get trashed, incinerated or even flushed down the toilets, contaminating our water supply. The chief executive of a pharmacy that serves nursing homes in Florida told me that his company alone throws away about $2.5 million a year in valuable medication.

In Iowa, the state government funded a program to recover these castoff nursing home meds and donate them to needy patients, for free. This year, they’re on pace to recover and redistribute $6 million in medication. My story led policymakers in Florida and New Hampshire to introduce legislation to try to replicate the Iowa program.

Drugs are a huge source of waste, partly because drug expiration dates don’t mean what we think they mean. The Food and Drug Administration makes pharmaceutical companies show their medication is safe and effective until its expiration date. It doesn’t make them find out how long they actually last.

Studies show it’s common for a drug to be safe after its expiration date. The FDA runs a program that tests and then extends expiration dates on drugs in the federal government’s stockpiles. Those same drugs get thrown away in pharmacies when they “expire,” even though many of them are in short supply. How much of our money does it waste? One midsize hospital in Boston throws away about $200,000 worth of drugs a year that hit their expiration date. If that’s true for other hospitals, the total would be about $800 million a year for hospital pharmacies alone.

Meanwhile, drug companies are making eyedrops two or three times larger than what the eye can even contain. We are paying for the wasted medicine running down our cheeks. I spoke to the former head of research for Alcon Laboratories, a global leader in the eye care industry now owned by Novartis. He told me that in the early 1990s his team created a “microdrop” that eliminated the waste. The microdrops were effective and reduced the burning caused by larger drops. But Alcon’s leaders killed the project because they were worried it could reduce sales.

Vials of cancer drugs are also made too large, which one study said wastes about $1.8 billion a year in the valuable medication. Earlier this year, one drug company switched from a multiuse vial, which could be shared by patients, to a single-use vial that could not be shared, thereby increasing the amount of wasted cancer medication. The change would make the supply chain more reliable worldwide, the company said. But one cancer center calculated that the change would cost each patient an average of $1,000 in waste per infusion. Imagine: You’re fighting cancer and then get billed an extra thousand dollars for medication they toss in the trash. Two U.S. senators responded to my story by introducing legislation to solve the problem of oversized eyedrops and cancer drug vials.

These are not isolated examples or small sums being squandered. Let’s say my reporting identified about $10 billion in wasted spending. That’s a rough estimate because no one is actually tracking how much we’re wasting. What else could we be doing with that money? The Kaiser Family Foundation says it costs an average of $6,690 to pay one person’s insurance premium in 2017. At that rate, the $10 billion saved could insure about 1.5 million people for a year. Tell those people it isn’t important to reduce our wasted health care spending.

The Academy of Medicine did something smart when it reframed our health care overspending as waste. We may be a wasteful country, but we still teach our kids to eat everything on their plates. “Waste not, want not,” is baked into our cultural DNA. It’s a powerful concept because it’s a moral one. It’s wrong to squander the hard-earned dollars Americans are paying into the health care system and then demand they pay more.

We can’t be naive and think it will be easy to fix this problem. Our wasted spending represents revenue and profit for the medical industry. But our health care spending should not be an entitlement program for the medical industrial complex. I put together a prescription for reducing the wasted spending I identified. Our policymakers should stand up to the medical industry and stamp out the waste.

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In Bid to Save Big Oil $900M, Trump Moves to Scrap Offshore Drilling Safety Rules

The BSEE proposes eliminating regulations that were put in place in response to the deadliest offshore drilling disaster in U.S. history

By Julia Conley, staff writer for CommonDreams. Published 12-26-2017

The Deepwater Horizon oil spill, found to be partially caused by lax safety regulations, killed 11 people and injured 16. (Photo: Florida Sea Grant/Flickr/cc)

The oil and gas industry is poised to save hundreds of millions of dollars over the next decade thanks to a rollback of offshore drilling safety regulations that have been proposed by the Trump administration—including the elimination of the word “safe” from one rule.

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Dozens of Companies Are Using Facebook to Exclude Older Workers From Job Ads

Among the companies we found doing it: Amazon, Verizon, UPS and Facebook itself. “It’s blatantly unlawful,” said one employment law expert.

Written by Julia Angwin, ProPublica, Noam ScheiberThe New York Times, and Ariana Tobin, ProPublica and published 

This story was co-published with The New York Times.

Mark Edelstein, a social media marketing strategist who is also legally blind, says he never had serious trouble finding a job until he turned 50. (Whitney Curtis for The New York Times)

A few weeks ago, Verizon placed an ad on Facebook to recruit applicants for a unit focused on financial planning and analysis. The ad showed a smiling, millennial-aged woman seated at a computer and promised that new hires could look forward to a rewarding career in which they would be “more than just a number.”

Some relevant numbers were not immediately evident. The promotion was set to run on the Facebook feeds of users 25 to 36 years old who lived in the nation’s capital, or had recently visited there, and had demonstrated an interest in finance. For a vast majority of the hundreds of millions of people who check Facebook every day, the ad did not exist.

Verizon is among dozens of the nation’s leading employers — including AmazonGoldman SachsTarget and Facebook itself — that placed recruitment ads limited to particular age groups, an investigation by ProPublica and The New York Times has found.

The ability of advertisers to deliver their message to the precise audience most likely to respond is the cornerstone of Facebook’s business model. But using the system to expose job opportunities only to certain age groups has raised concerns about fairness to older workers.

Several experts questioned whether the practice is in keeping with the federal Age Discrimination in Employment Act of 1967, which prohibits bias against people 40 or older in hiring or employment. Many jurisdictions make it a crime to “aid” or “abet” age discrimination, a provision that could apply to companies like Facebook that distribute job ads.

“It’s blatantly unlawful,” said Debra Katz, a Washington employment lawyer who represents victims of discrimination.

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Oil Giants Invest $180B in Plastics, Propelling Oceans Toward ‘Near-Permanent’ Pollution

“We could be locking in decades of expanded plastics production at precisely the time the world is realizing we should use far less of it.”

By Julia Conley, staff writer for CommonDreams. Published 12-26-2017

A seal trapped in plastic pollution. Environmental advocates are concerned that a rise in plastics production will bring the world’s oceans to a state of “near-permanent” pollution. (Photo: Nels Israelson/Flickr/cc)

Scientists and environmental protection advocates are warning that a coming plastics boom could lead to a permanent state of pollution on the planet—and denouncing the fossil fuel industry for driving an increase in plastics production amid all that’s known about the material polluting the world’s oceans.

“We could be locking in decades of expanded plastics production at precisely the time the world is realizing we should use far less of it,” Carroll Muffett, president of the Center for International Environmental Law (CEIL), told the Guardian. The CEIL has compiled several reports about the plastics industry since September. Continue reading

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Trump’s Christmas Gift to Himself: Study Details How President Will Profit Off GOP Tax Bill

Americans for Tax Fairness found that Trump could save “at least $11 million a year and perhaps as much as $22 million” from GOP tax plan he just signed

By Jake Johnson, staff writer for CommonDreams. Published 12-25-2017

Photo: YouTube

President Donald Trump has repeatedly described the Republican tax bill he signed into law on Friday as “an incredible Christmas gift” to low-income and middle class Americans—despite the numerous analyses showing that the legislation will ultimately raise taxes on millions in the middle class.

The president hasn’t, however, called the tax bill a massive “check to himself.” But a new study (pdf) published on Friday by Americans for Tax Fairness (ATF) demonstrates that this would, in numerous ways, be a more accurate description of the $1.5 trillion plan. Continue reading

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‘Horrifying Step Backwards’ as Sessions Retracts Guidance Designed to End Abuse of Poor by Courts

Attorney General abandons directive to protect the poor from needless fines

By Julia Conley, staff writer for Common Dreams. Published 12-22-2017

Civil rights advocates accused Attorney General Jeff Sessions of “turning back the clock” on criminal justice reforms after the Department of Justice rescinded Obama-era guidance that protected low-income defendants from being forced to pay gratuitous fees to local courts.

“Profit-minded court policies targeting the most economically vulnerable Americans have resulted in a resurgence of unconstitutional but widespread practices penalizing the poor and people of color,” said Kristen Clarke, president of the Lawyers’ Committee for Civil Rights Under the Law. “Attorney General Jeff Session’s decision to retract guidance from the Justice Department rooting out practices resulting in a perpetual cycle of fines, debt and jail of America’s poor is a horrifying step backwards in ongoing efforts to reform the criminal justice system.” Continue reading

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Why Americans will never agree on oil drilling in the Arctic National Wildlife Refuge

The Arctic National Wildlife Refuge is home to a great diversity of wildlife – one reason environmentalists oppose oil and gas drilling. US Fish and Wildlife Service, CC BY-SA

Scott L. Montgomery, University of Washington

After decades of bitter struggle, the Arctic National Wildlife Refuge seems on the verge of being opened to the oil industry. The consensus tax bill Republicans are trying to pass retains this measure, which was added to gain the key vote of Alaska Sen. Lisa Murkowski.

This bill, however, stands no chance of being the final word. ANWR has been called America’s Serengeti and the last petroleum frontier, terms I’ve seen used over more than a decade studying this area and the politics around it. But even these titles merely hint at the multifold conflict ANWR represents – spanning politics, economics, culture and philosophy.

Differing views from the start

Little of this debate, which stretches back decades, makes sense without some background. Let’s begin with wildlife, the core of why the refuge exists.

With 45 species of land and marine mammals and over 200 species of birds from six continents, ANWR is more biodiverse than almost any area in the Arctic. This is especially true of the coastal plain portion, or 1002 Area, the area now being opened up to exploration and drilling. This has the largest number of polar bear dens in Alaska and supports muskoxen, Arctic wolves, foxes, hares and dozens of fish species. It also serves as temporary home for millions of migrating waterfowl and the Porcupine Caribou herd which has its calving ground there.

All of which merely suggests the unique concentration of life in ANWR and the opportunity it offers to scientific study. One part of the debate is therefore over how drilling might impact this diversity.

Map of northern Alaska showing locations of the Arctic National Wildlife Refuge, including. the 1002 Area, which is slated to be opened for oil and gas drilling, and the National Petroleum Reserve–Alaska (NPRA). U.S. Geological Survey

At the same time, debate over this area’s mineral resources has existed since even before Alaska’s founding. An effort by the U.S. Fish and Wildlife Service to withdraw part of northeast Alaska from mining (later drilling) was eventually passed by the House in 1960 but then killed in the Senate, on the urging of both Alaska senators. It was resurrected by President Eisenhower through an executive order establishing a wildlife range (not refuge, which requires government protection and study).

ANWR thus began as a battleground over state versus federal control of resources. Change came with the oil crises of the 1970s. After much debate, Congress passed and President Carter signed the Alaska National Interest Lands Conservation Act in 1980, increasing the size of the area to 19.4 million acres and changing it to a “refuge.” ANILCA also mandated an evaluation of wildlife, oil and natural gas resources, and impacts if drilling occurred.

Map shows the 1002 Area, which will be opened up to oil and gas exploration, along with existing drilling sites in the region. US Geological SurveyMap shows the 1002 Area, which will be opened up to oil and gas exploration, along with existing drilling sites in the region. US Geological Survey

Such evaluation was delivered to Congress in 1987, with three principal conclusions. First, the 1.5 million-acre 1002 Area, had “outstanding wilderness values.” Second, it also had large hydrocarbon resources, likely tens of billions of barrels. Third, oil development would bring widespread changes in habit, but adequate protection for wildlife was achievable and leasing should proceed.

Made public, these results ignited major opposition from environmental groups. However, low oil prices meant that no companies would be interested in drilling so no action toward leasing was taken. Over the next 20 years, Congress and the President traded blows over drilling, with Republicans passing or proposing legislation in favor and Democrats voting down or vetoing or the relevant bills.

Matters of wilderness

These struggles added support to a larger view: that wilderness is incompatible with any level of development. The stance is often referenced to the 1964 Wilderness Act, a venerable law protecting wildlands but one whose definition of “wilderness” is ambiguous: “an area of undeveloped Federal land retaining its primeval character…[that] generally appears to have been affected primarily by the forces of nature, with the imprint of man’s work substantially unnoticeable.” The vagueness here allows for ANILCA’s position that drilling could happen so long as protection of wildlife and reclamation of land occurred.

Caribou grazing on the Arctic National Wildlife Refuge. The area is more diverse than any area on the Arctic. US Fish and Wildlife Service, CC BY

Today, however, no such allowance is accepted by pro-wilderness organizations and the FWS. “You can have the oil. Or you can have this pristine place. You can’t have both. No compromise,” as put by Robert Mrazek, ex-chair of the Alaska Wilderness League.

Saving ANWR has thus become an effort to save the very idea of wilderness, culturally and philosophically.

How much oil?

The most recent comprehensive assessment of oil and gas in the 1002 Area was by the U.S. Geological Survey in 1998. This work shows a mean estimate of 10.4 billion barrels of oil and 35 trillion cubic feet of natural gas, which at today’s prices ($57/bbl oil, $3/kcf) equals a total value of about $600 billion before drilling.

If well costs were $50 a barrel (low for onshore Arctic drilling today but possible with cost reductions spurred by 1002 development), the value after extraction would be $100 billion, from which a federal royalty of 12.5 percent must be subtracted, yielding $87.5 billion – a significant sum. Obviously if well costs are higher, this figure would be lower. Note that Alaska gets 90 percent of that federal royalty and pays a yearly dividend to every state resident – one reason many Alaskans favor drilling and reject the uncompromising wilderness position.

ConocoPhillips in October 2015 became the first to drill for oil in the National Petroleum Reserve-Alaska, which is adjacent to the area that Congress intends to open up for more drilling. AP Photo/Mark Thiessen

When considering how oil and gas is available, the USGS estimates should be considered low, even minimal. This is because they were made well before the current era of shale oil and gas and tight oil and gas development. New discoveries and use of fracking to the west of ANWR suggest there is more accessible petroleum. How much more? It’s impossible to say, given the many uncertainties.

Though only one well has ever been drilled in the 1002 Area, dozens have been sited in surrounding onshore and offshore areas. These have resulted in a number of limited discoveries and one substantial field, Point Thomson, which is estimated to have recoverable reserves of up to 6 trillion cubic feet of gas and 850 million barrels of oil plus condensate. It began producing in 2016, yet its reservoir is geologically complex, challenging and insufficiently understood, causing difficulties and raising costs.

But Point Thomson’s larger significance could stem from its location: Close to the northwestern margin of 1002, it has brought a pipeline connection to the Trans-Alaska Pipeline right to ANWR’s doorstep.

But will they come?

Given the substantial possible reserves and at least some pipeline access, how interested might energy companies actually be in ANWR? The answer for now seems to be: not very. This comes from my own discussions with industry personnel and from the results of a recent lease sale in NPR-A, the National Petroleum Reserve in Alaska to the west of ANWR: Out of 900 tracts offered, only seven received bids (0.008 percent). A December 7, 2017 lease sale on state lands did only somewhat better (0.04 percent), with a single company bidding on tracts near the 1002 Area, adjacent to the Point Thomson field, and in the immediate area of two small, undeveloped discoveries (Sourdough and Yukon Gold) made by BP in 1994.

If this be any indication, another multiyear period of high oil prices – in a range, say, over $80 per barrel – needs to arrive before 1002 looks attractive. Leasing and drilling in an area with extreme weather, little detailed data on the subsurface geology, no discoveries or production, and no existing infrastructure is considered high risk, all the more so in an uncertain price environment like today’s.

My own guess is that the estimated $1.1 billion revenue from an ANWR leasing program has roughly the same probability of coming true as the discovery that climate change is indeed a Chinese hoax. Similarly, we should probably view with a dash of skepticism Sen. Murkowski’s statements that opening ANWR will “create thousands of good jobs … keep energy affordable for families and businesses … reduce the federal deficit, and strengthen our national security” by reducing foreign oil. Regardless of what claims are being made now, one can say the measure would undoubtedly deliver on a long-standing promise to Alaskan voters.

Meanwhile, from an environmental perspective, climate change continues to alter and damage the Arctic, even if no development happens. As such, it is hard not to hope that we will never need the oil that lies beneath the refuge.

In the end, whichever way we turn, no stable compromise exists in this conflict. Opening the area to leasing now will not prevent a closing or ban later on. Even native voices are divided on the issue: The Inupiat who live in Kaktovik, who depend on sea life for sustenance, would welcome the work that drilling could bring, while the Gwich’in to the south, who rely on the caribou, see development as jeopardizing their culture.

Legal challenges to any level of leasing are certain, including those intended to slow the process until drilling opponents will win later elections, if they can.

The ConversationThe one truth all can agree on is that ANWR has never been a “refuge” in the landscape of American society.

Scott L. Montgomery, Lecturer, Jackson School of International Studies, University of Washington

This article was originally published on The Conversation. Read the original article.

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Ignoring Public Opinion and Pentagon, Trump Denies Climate Change Is Threat to National Security

“If we want to keep our country safe, Trump should take military advice from the military, not fossil fuel executives who are pushing to deny climate science and boost their profits at any cost.”

By Julia Conley, staff writer for CommonDreams. Published 12-18-2017

Months after Hurricane Harvey caused an estimated $180 billion in damage in Houston, Texas, President Trump declined to include any mention of climate change in his strategy for national security. (Photo: Texoma Classics/Flickr/cc)

While 56 percent of Americans and the Pentagon hold that the deepening climate crisis is a serious threat to the country’s safety, President Donald Trump left the issue out of his speech on his national security strategy on Monday—angering critics and green groups.

“Trump is not just ignoring science and public opinion about the dangers of the climate crisis, he’s ignoring American generals and the Pentagon about what it takes to keep our military and our country safe,” said Michael Brune, the executive director of Sierra Club, in a statement released after the president’s speech. Continue reading

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#CorkerKickback Trends After Last-Minute Tax Giveaway Benefiting GOP Lawmakers Exposed

“He promised he wouldn’t vote for a deficit increase… Then traded his leverage for cold hard cash.”

By Jon Queally, staff writer for CommonDreams. Published 12-17-2017

Senator Bob Corker. Photo: US Senate (Public domain)

Though many initially shrugged it off as just the last domino to fall in terms of ending the myth that any Republican Party lawmaker actually ever gave a whiff about the deficit, increasing evidence on Sunday reveals that Sen. Bob Corker (R-Tenn.) dropped his opposition to the GOP tax proposal after the last-minute inclusion of a provision that would directly enrich him, President Trump, and other members of Congress who hold substantial financial interests in the real estate market.

As David Sirota and Josh Keefe first reported for the International Business Times on Friday night: Continue reading

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Mercury from industrialized nations is polluting the Arctic – here’s how it gets there

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Gates of the Arctic National Park, Alaska. Plants on the Arctic tundra absorb mercury from the air, then transfer it to soil when they die. Paxson Woelber, CC BY

Daniel Obrist, University of Massachusetts Lowell

Scientists have long understood that the Arctic is affected by mercury pollution, but know less about how it happens. Remote, cold and seemingly pristine, why is such an idyllic landscape so contaminated with this highly toxic metal?

I recently returned from a two-year research project in Alaska, where I led field research into this issue alongside fellow scientists from the University of Colorado; the University of Nevada’s Desert Research Institute; the University of Toulouse and the Sorbonne University in France; and the Gas Technology Institute in Illinois. Continue reading

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