Holy shit, Senator Elizabeth Warren apparently murdered a bankster in the Senate today:
I’m honest to goodness physically aroused.
I owe some commentor a hat tip for this rather-too-close-to-home rant. Laurie Penny, in the New Statesman:
… So, here’s the thing. This was never a referendum on the EU. It was a referendum on the modern world, and yesterday the frightened, parochial lizard-brain of Britain voted out, out, out, and today we’ve all woken up still strapped onto this ghost-train as it hurtles off the tracks. Leave voters are finding they care less about immigration now that their pension pots are under threat. Maybe one of the gurning pundits promising them pride and sovereignty should have mentioned that, but they were too busy lying about the NHS. The curtain has been torn away and now we all have to look at the men behind it. They are not good men.
Anyone feel like they’ve got their country back yet? No? That, after all, was the rallying cry of the Leave campaign – the transatlantic echo of “Make America Great Again”. There’s a precedent for what happens when svengalis with aggressively terrible haircuts are allowed to appeal to parochialism and fear in the teeth of a global recession, and it isn’t pretty…
There are huge areas of post-industrial decline and neglect where people are more furious than Cameron and his ilk could possibly understand, areas where any kind of antiestablishment rabble-rousing sounds like a clarion call. In depressed mountain villages and knackered seaside towns and burned-out former factory heartlands across the country, ordinary people were promised that for once, their vote would matter, that they could give the powers that be a poke in the eye. Westminster may have underestimated how very much it is hated by those to whom mainstream politics have not spoken in generations…
In the meantime, the cackling clown-car drivers rolling this catastrophe over the wreckage of civil society are already cheerfully admitting that they lied about their key campaign statements. No, there won’t be £350m more to spend on the NHS, whatever Farage wrote on his battle bus. It turns out that the reason you can’t get a GP appointment isn’t because of immigration, but because the Conservatives have spent six years systematically defunding the health service and cutting public spending to the bone. Brexit will mean more of that, not less…
This Britain is not my Britain. I want my country back. I want my scrappy, tolerant, forward-thinking, creative country, the country of David Bowie, not Paul Daniels; the country of Sadiq Khan, not Boris Johnson; the country of J K Rowling, not Enid Blyton; the country not of Nigel Farage, but Jo Cox. That country never existed, not on its own, no more than the country the Leave campaign promised to take us to in their tin-foil time machine. Britain, like everywhere else, has always had its cringing, fearful side, its cruel delusions, its racist fringe movements, its demagogues preying on the dispossessed. Those things are part of us as much as beef wellington and bad dentistry. But in happier times, those things do not overwhelm us. We do not let bad actors reading bad lines in bad faith walk us across the stage to the scaffold. We are better than this.
I believe we can still be better than this. I want my country back, and it’s a country I’ve never known, and getting there will take more strength, more kindness, more resilience than this divided nation has mustered in living memory…
First impressions: UK Leave vote dominated by people who themselves had been left out, hit by needless 'austerity' pic.twitter.com/Olp9a2u5tG
— Alex Cobham (@alexcobham) June 24, 2016
Never underestimate the willingness of people who feel left out of gains to burn the barn down with everyone inside. https://t.co/r6jJgqRb4a
— James Hupp (@jameshupp) June 24, 2016
England has decided to stop immigration by making their economy so damaged nobody wants to come there any more
— Dante Atkins (@DanteAtkins) June 25, 2016
Bottom line: this was a PR stunt that was never supposed to happen. There is no plan. https://t.co/D5x1LigoAJ
— Mike Duncan (@mikeduncan) June 25, 2016
England Prevails! Or not. The Invisible Hand is weighing in now.
As explained at Slate:
On Sunday night John Oliver staged what he described as “the largest one-time giveaway in television show history,” giving $14,922,261.76 to nearly 9,000 lucky Texans. Or maybe not-so-lucky Texans, at least until Sunday: The money came in the form of forgiveness for out-of-statute medical debts, debts so old they could no longer be recovered in court. It was part of a lengthy investigation into the shady ethics and questionable practices of debt buyers, companies that buy up debts for pennies on the dollar and go to great, sometimes illegal lengths to collect them…
The broader case Oliver is making is that the entire debt buying industry is corrupt and underregulated, not just the most laughably incompetent collectors. It’s difficult to argue after seeing his footage of the Debt Buyers Association’s annual conference, in which trade group members scoff at the idea of their debtor’s legal rights. But the strongest argument Oliver makes that the industry needs work is that they let him become a part of it. Without too much hassle, he was able to set up his own debt collection company and purchased a portfolio of nearly $15 million in Texas medical debts. (Total cost: less than $60,000.) Then, with the press of a giant red button, he forgave all $15 million. As best as the staff of Last Week Tonight could figure, this gives Oliver the record for largest giveaway (previously held by Oprah Winfrey for giving her audience cars). Given the misery debt buyers and collection agencies cause, it’s hard to imagine any late-night host doing more concrete good for such a small cash outlay—but here’s hoping they make a competition of it.
Oliver’s deft at turning jokes about what’s actually a horrific situation: America’s self-proclaimed Masters of the Universe have birthed an entire industry based on screwing every last penny out of the victims of medical catastrophes. I cannot believe this is the best and highest purpose for the richest, most advanced society on the planet.
Years ago, a NYC cabbie gave me this sage piece of advice: “The only way to get crosstown during rush hour is to be born there.”
Apparently this is truer than it seemed at the time. Economist Robert Frank has a piece in The Times detailing the strong link between luck and success:
One’s date of birth can matter enormously, for example. According to a 2008 study, most children born in the summer tend to be among the youngest members of their class at school, which appears to explain why they are significantly less likely to hold leadership positions during high school and thus, another study indicates, less likely to land premium jobs later in life. Similarly, according to research published in the journal Economics Letters in 2012, the number of American chief executives who were born in June and July is almost one-third lower than would be expected on the basis of chance alone.
Even the first letter of a person’s last name can explain significant achievement gaps. Assistant professors in the 10 top-ranked American economics departments, for instance, were more likely to be promoted to tenure the earlier the first letter of their last names fell in the alphabet, a 2006 study found. Researchers attributed this to the custom in economics of listing co-authors’ names alphabetically on papers, noting that no similar effect existed for professors in psychology, whose names are not listed alphabetically.
Particularly interesting that bit about econ departments, given that many economists no doubt consider themselves exemplary Rational Actors.
Much of this will be familiar to those who have read Malcom Gladwell’s Outliers. But it can never be said enough–especially as the people who most need to hear it are the ones most resistant to hearing it. Sadly, the problem isn’t just whiny billionaires; the article’s comments section is filled with a lot of, “Yes, but I work harder than all those other guys.”
*The bloody-but-wise Charlemagne, from the original cast album of Pippin.
Look who Ted Cruz has recruited as his economic advisor:
If it’s true that a man can be judged by the company he keeps, what are we to make of the appointment of former Sen. Phil Gramm as economic advisor to the Presidential campaign of Ted Cruz?
Cruz made the appointment Friday, when he collected Gramm’s endorsement of his quest for the Presidency.
As Micheal Hiltzik points out in his coverage of this — what’s the word?– curious appointment, Gramm is exactly whom you’d choose if one global financial meltdown just wasn’t delicious enough:
Gramm left a long record as a dedicated financial deregulator on Capitol Hill, with much of his effort aimed at freeing up trading in derivatives. That’s why he’s often identified as one of the godfathers of the 2008 financial crisis, which was spurred in part by banks’ imprudent trading and investing in these extremely complex financial instruments.
Gramm himself is undeterred by his own disastrous record, and clearly Cruz is equally unbothered. That would be why both men are ignoring Gramm’s last appearance as a campaign surrogate:
Gramm’s previous stint as a Presidential campaign advisor ended inauspiciously. That was in 2008, when he served as co-chairman of John McCain’s Presidential run.
Gramm’s most notable moment in that position came on July 10, 2008, when he dismissed the developing economic crisis as “a mental recession” in an interview–and video–released by the conservative Washington Times. “We’ve never been more dominant,” he said. “We’ve never had more natural advantages than we have today. We’ve sort of become a nation of whiners.” McCain immediately disavowed the remarks, and a few days later Gramm stepped down as his campaign co-chairman.
I’m assuming that Ted Cruz does actually hope to become president, and thus makes his choices in the belief that they will advance him to that end. So I can only see two possible interpretations for this exhuming of one of the most egregious poster children for GOP economic failure.
One is that this is what epistemic closure looks like when it’s at home. It takes a hermetic seal between you and reality to think the “nation of whiners” trope is a winner this year (or ever, really, but especially now).
The other is that this is just trolling, or rather yet one more instance of believing an action is simply good in itself, transcendently so, if it pisses liberals off. Which lands Cruz — and the GOP — in exactly the same place as option one: doubling down on the crazy for reasons extremely clear only to those with the correct implants in their upper left second molar.
All of which is to say that I remain firm in my belief that the entity identifying itself as Senator Cruz is in fact one of these guys.
“Where are we going?”
Image: J. W. M. Turner, Sunrise With Sea Monsters, 1845
…comes from Thomas Edsall at The New York Times
He answers his question “Why Trump Now?” by looking at the material reasons for working-class white disaffection, not just with the post-civil-rights Democratic Party, but with the cabal to whom that group turned in increasing numbers from 1968 forward. He writes:
The share of the gross national product going to labor as opposed to the share going to capital fell from 68.8 percent in 1970 to 60.7 percent by 2013, according to Loukas Karabarbounis, an economics professor at the University of Chicago’s Booth School of Business.
Even more devastating, the number of manufacturing jobs dropped by 36 percent, from 19.3 million in 1979 to 12.3 million in 2015, while the population increased by 43 percent, from 225 million to 321 million.
The postwar boom, when measured by the purchasing power of the average paycheck, continued into the early 1970s and then abruptly stopped (see the accompanying chart).
In other words, the economic basis for voter anger has been building over forty years. Starting in 2000, two related developments added to worsening conditions for the middle and working classes…
If you’re too busy the TL:DR of those two developments are the interrelated facts that from the year 2ooo, upward mobility reversed itself, with more people falling into the middle class and poverty and fewer making it up the ladder — and the impact of China and its increasing integration into a world-wide free-trade regimen. Edsall’s reporting on the China development — with its accompanying misreading by free-trade elites — is particularly sharp.
Add to that, as Edsall does, the TARP bailout after the elite-engineered collapse of 2007-8 and the Citizens United decision and you have specific and plausible reasons for Republican working class voters (and everyone else, of course) to see their chosen political leaders as shills and swindlers:
By opening the door to the creation of SuperPACs and giving Wall Street and other major financial sectors new ways to buy political outcomes, the courts gave the impression, to say the least, that they favored establishment interests over those of the less well off.
The tragedy of the 2016 campaign is that Trump has mobilized a constituency with legitimate grievances on a fool’s errand.
The crux for this year is exactly that: Lots of Americans have been screwed — systematically, with comprehensive effect — for decades. The material losses they – we — have suffered are real. The responses Trump offers, such as they are, may be hopelessly at odds with any actual redress of those wrongs. But any campaign (are you listening, Hillary?) that ignores the fact that two generations of Americans now have seen the basic expectations of life reversed is going to have hard time winning, just by pointing out that Trump’s bloviating won’t help either.
Image: David Vinckbooms, Distribution of Loaves to the Poor, first half of the 17th century.
First there was the “voter report card” fraud in Iowa, then the fake fund-raising checks. The Cruz campaign is obviously, publicly comfortable with skating as close to the ethical line as they can get away with. Now the AP is casting some light on Cruz’s data-collecting app… and its beneficiaries:
Protecting the privacy of law-abiding citizens from the government is a pillar of Ted Cruz’s Republican presidential candidacy, but his campaign is testing the limits of siphoning personal data from supporters.
His “Cruz Crew” mobile app is designed to gather detailed information from its users’ phones — tracking their physical movements and mining the names and contact information for friends who might want nothing to do with his campaign.
That information and more is then fed into a vast database containing details about nearly every adult in the United States to build psychological profiles that target individual voters with uncanny accuracy.
Cruz’s sophisticated analytics operation was heralded as key to his victory in Iowa earlier this month — the first proof, his campaign said, that the system has the potential to power him to the nomination…
Data-mining to help candidates win elections has been increasing among both Republicans and Democrats. Mobile apps by other presidential campaigns also collect some information about users. But The Associated Press found the Cruz campaign’s app — downloaded to more than 61,000 devices so far — goes furthest to glean personal data.
The Cruz app prompts supporters to register using their Facebook logins, giving the campaign access to personal information such as name, age range, gender, location and photograph, plus lists of friends and relatives. Those without a Facebook account must either provide an email address or phone number to use the app…
Cruz’s app also transmits to the campaign each user’s physical location whenever the app is active, unless a user declines to allow it. The campaign said it does this “so that we can connect you to other Cruz Crew users based on your particular geographic location.”
The campaign tells users it can share all the personal information it collects with its consultants or other organizations, groups, causes, campaigns or political organizations with similar viewpoints or goals.
It also shares the material with analytics companies. Cruz’s campaign combines the information with data from a group called Cambridge Analytica, which has been involved in his efforts since fall 2014. A Cambridge investor, Robert Mercer, has given more money than anyone else to outside groups supporting Cruz.
Cambridge has a massive 10 terabyte database — enough to fill more than 2,100 DVDs — that contains as many as 5,000 biographical details about the 240 million Americans of voting age. Cambridge considers its methodology highly secretive, but it may include such details as household income, employment status, credit history, party affiliation, church membership and spending habits. Cambridge uses powerful computers and proprietary algorithms to predict Americans’ personality traits…
Cruz, the junior senator from Texas, has been outspoken about protecting Americans’ personal information from the government, including the National Security Agency. “Instead of a government that seizes your emails and your cellphones, imagine a federal government that protected the privacy rights of every American,” he said when announcing his campaign.
Cruz campaign officials say it’s different for the government versus a campaign to collect data. Sickle said Cruz is building on the use of big data pioneered by the successful Democratic campaigns of Barack Obama in 2008 and 2012.
“It’s not like we’re giving it to the NSA,” Sickle said.
A campaign spokeswoman, Alice Stewart, added: “Why wouldn’t we want to use every tool available to us to win?”…
I’m assuming, apart from disingenuous campaign disclaimers, data mining at this granularity would also be very, very valuable to any corporation large enough to pay either Cruz or Cambridge Analytica. But as long as it’s not the nasty, low-minded gubmint getting all up in your psychographics, it’s all good — right, Freedumb luvvers?
Half of the population is below average, so it’s hardly surprising that there’s a market for fart jokes/racism/misogyny from a reliable delivery agent like Adam Sandler. Kevin Lincoln, at NYMag, explains why the outsized success of Netflix’s least loveable product shouldn’t be a shock, either:
[Wednesday] Netflix announced that The Ridiculous 6, Adam Sandler’s abysmal Western movie-thing, has been watched more in its first 30 days on the service than any other film during its 30 days. The. Ridiculous. Six.
Now, the instinct here—and it’s an understandable one, because, again, The. Ridiculous. Six.—is to say that Netflix is lying, or, more specifically, putting dizzying spin on their data. “Of course they’re saying it’s their most-watched movie,” you think. “Netflix made it! It’s a Netflix original! They’ve got a stake in this!” You’d be making a legitimate point. We have no glimpse into the metrics behind this claim; for all we know, Netflix has been auto-playing the movie on your Apple TV while you sleep. For all we know, nobody has watched The Ridiculous 6. Have you?
But far more likely is that they’re telling the truth. The most important thing is to consider what Netflix is. Then, once we come to terms with that, we have to consider what this means. Because it means something significant, both about filmmaking in general and what Netflix is as a company in particular.
Since Netflix started streaming movies and not just sending them by mail, it’s had an eclectic selection. Netflix licenses movies to stream; they don’t own any of this content. At any given time, a movie can disappear or appear on the service based on the unforeseen jockeying of its distributor and Netflix…
..[One] case in particular stands out. Back in 2012, the Duplass brothers executive-produced a movie called Safety Not Guaranteed. They made it for just $750,000, and Mark acted in it, along with Aubrey Plaza and Jake Johnson. It was directed by a first-timer named Colin Trevorrow. During a limited theatrical run that never reached 200 theaters, it made $4 million — good money for such a cheap film, but nothing that’ll buy anyone an estate in Malibu.
Safety Not Guaranteed then landed on Netflix some time in early 2013, where it stayed until August 2014. I’ve spoken with multiple filmmakers who stressed that the exposure Safety Not Guaranteed obtained on Netflix transformed their ideas about distribution. For whatever reason — likely a mix of positive response from audiences and its surprisingly wide-ranging appeal — Safety Not Guaranteed seemed to basically live on the Netflix front-page the entire time it was on the service, showing up as a recommendation and in the various category scrolls. Now its director, who had never overseen a movie that cost more than a million dollars prior to 2015, directed Jurassic World, which was briefly the highest-grossing opener of all time. Next up, he will direct a Star Wars movie…
Pecunia non olet: Money has no stink.
Speaking of crappy movies, what overrated / underrated films have you perused with discernment recently?
I think that this has already been discussed in a comment thread or two, but today (a) The New York Times reminded us that it can do essential, truly top-notch journalism and (b) exposed truly grotesque practices within a “justice” system that offers scant justice to anyone that doesn’t sport “Inc.” as a last name:
Encore and rival debt buyers are using the courts to sue consumers and collect debt, then preventing those same consumers from using the courts to challenge the companies’ tactics. Consumer lawyers said this strategy was the legal equivalent of debt collectors having their cake and eating it, too.
The use of arbitration by the companies is the latest frontier in a legal strategy orchestrated by corporations in recent years. By insertingarbitration clauses into the fine print of consumer contracts, they have found a way to block access to the courts and ban class-action lawsuits, the only realistic way to bring a case against a deep-pocketed corporation.
Their strategy traces to a pair of Supreme Court decisions in 2011 and 2013 that enshrined the use of class-action bans in arbitration clauses.
The result, The New York Times found in an investigation last month, is that banks, car dealers, online retailers, cellphone service providers and scores of other companies have insulated themselves from challenges to illegal or deceptive business practices. Once a class action was dismantled, court and arbitration records showed, few if any of the individual plaintiffs pursued arbitration.
Bottom feeders buy old debt. They sue to collect. Doesn’t matter if the debt is too old legally to collect. Doesn’t matter if the sharks don’t have proper documentation. Doesn’t matter if they string up little old ladies by their big toes. (Hyperbole alert).
Crappy judges at the trial court level, insulated — guided — by crappy justices with robes, lifetime appointments, and no moral compasses whatsoever, make sure the Man gets his cash:
In the cases that The Times examined, judges routinely sided with debt collectors on forcing the disputes into arbitration.
In Mr. Cain’s case, Midland Funding, the unit of Encore Capital, persevered despite originally lacking a copy of a Citibank arbitration agreement they said he signed in 2003. Instead, the debt collector presented as evidence a Citibank contract that one of Encore’s lawyers signed when he opened an account.
In Mississippi, Midland Funding won a court judgment to compel Wanda Thompson to pay more than $4,700 on a debt that was too old to be collected under state law, court records show.
When Ms. Thompson filed a class-action suit on behalf of other state residents, Encore invoked an arbitration clause to have the lawsuit dismissed. Ms. Thompson’s lawyers argued that the company had clearly chosen court over arbitration when it sued her to collect the debt. By going to court, the lawyers said, Encore waived its right to compel arbitration.
Unpersuaded, the judge ruled that Encore’s lawsuit to collect the debt was separate from Ms. Thompson’s case accusing the company of violating the law.
I can’t put into words my revulsion for the people who steal from the weakest in our system, except to note that my loathing of those who enable these pen-armed robbers is far greater. The GOP hopes most people will be too scared of Syrians, gun-grabbers, and the Kenyan in the White House to notice who’s doing what to whom. There’s an opening here for our side — and an obligation to take it.
Image: Rembrandt van Rijn, Christ driving the money changers from the temple, 1626.
After dropping $2 million on a Wu-Tang Clan album, the pharmaceutical executive Martin Shkreli has found a new project: making an essential treatment unaffordable for poor immigrants from Latin America.
Shkreli, otherwise known as “pharma bro,” gained notoriety earlier this year when his company, Turing Pharmaceuticals, increased the price of a drug used to treat AIDS patients from around $13.50 to $750. He’s now the CEO of KaloBios Pharmaceuticals, which recently announced its plans to submit benznidazole, a treatment for Chagas disease purchased earlier this month, for Food and Drug Administration approval next year. The Centers for Disease Control and Prevention estimates that about 300,000 people in the United States have the deadly disease. Most of them are immigrants from Latin America, where as many as 8 million people are infected.
The third most common parasite disease in the world, Chagas, also known as the “kissing bug disease,” is transmitted via the painless bites of Triatomine insects. Untreated, it can lead to heart failure and death. Last year, researchers at the Baylor College of Medicine identified Chagas in several patients who hadn’t traveled outside of the country, positing that they may have come into contact with the bugs through camping and hunting. That said, the risk of contracting the parasite in the U.S. remains small; most people who have the disease in the United States already had it when they arrived.
“Chagas is a disease of the poor. It’s not a disease where people have access if prices are high.”
Right now, doctors in the U.S. obtain benznidazole free of charge through the CDC. According to Rachel Cohen, the regional executive director of the Drugs for Neglected Disease Initiative in North America, the drug sells in Latin America for somewhere between $60 and $100 for each course of treatment. Both of these would change the moment the FDA approved benznidazole from any company—and Shkreli, in particular, seems determined to price this drug out of reach of the people who need it. In filings with the Securities and Exchange Commission, KaloBios wrote that it expects to price the Chagas drug similarly to antivirals for Hepatitis C, which can cost almost $100,000 for a single course of treatment in the United States.
“You’re talking about a 100,000 percent or 150,000 percent price increase” from the current cost in Latin America, Cohen said.
This is one reason among many why people hate glibertarians and free market fetishists. The irony, of course, is this is anything but the free market with the patent involvement. And you are going to have higher insurance costs because this guy needs his cut.
Meanwhile, in Post-Racial America(tm)…
Black borrowers in Richmond are less likely to be approved for home loans and refinancing than white applicants regardless of their income levels, according to a study by fair-housing advocates.
The effect is a continuation of the “redlining” that explicitly denied loans to minorities in the 20th century, according to Housing Opportunities Made Equal of Virginia.
“Certainly lenders and banks tell you money is all the same color and they’re an equal opportunity lender, but when you get down to it, you have individuals who are underwriting loans who have biases,” said Brian Koziol, the nonprofit organization’s director of research and the report’s author.
The group’s study found that between 2010 and 2013, the most recent year for which mortgage data is available, 13.7 percent of white borrowers had loan applications denied while black applicants experienced a 34.6 percent denial rate.
The report found that Hispanic residents also faced higher denial rates than white residents, but overall were granted loans more frequently than black borrowers.
Koziol said that a lenders’ willingness to finance home purchases directly corresponded to a neighborhood’s racial makeup.
The study found that for each percentage point increase in the minority population of a census tract, 12.5 fewer mortgages would be made.
The neighborhoods impacted are the same ones historically excluded for lending through redlining, and more recently, targeted for subprime loans, Koziol said.
While those neighborhoods have disproportionately high poverty rates, a borrower’s income doesn’t account for the difference: The report found a 9.9 point disparity in loan approval rates among black and white low-income applicants and a 27.5 point disparity among black and white upper-income borrowers.
That’s the best part, really. The higher your income as a black potential mortgage borrower, the larger the disparity in actually being approved for a mortgage. Because a black family making good money is automatically more suspect, you see. They could afford the house in the nicer white neighborhood, but why would the bank want to lower the property value of the houses of their other mortgage clients? Mortgage loan decisions aren’t made by banks, they’re made by people.
Redlining has been going on for decades, folks. It’s been going on not just in the South but all over the country, in red states and blue states and liberal enclaves and conservative strongholds.
And if you don’t think this isn’t happening in just about every decently sized US city in America right now, with the rush to segregate schools and neighborhoods through gentrification and exurban gated communities where “we don’t think it’s a good idea that you move in to this neighborhood, you see”, well I have some property for sale for you that you mysteriously can’t get a mortgage on.
Very little has changed in the last few decades, social media and instant news just makes it more visible.
— Martin Shkreli (@MartinShkreli) August 12, 2015
This jackass is getting 15 minutes of fame he probably shouldn’t want, but seems to like anyway:
Martin Shkreli (above) is a former hedge fund manager and the current CEO of Turing Pharmaceuticals. In August Shkreli bought a drug called Daraprim. It’s been around for 62 years and is used to treat toxoplasmosis, a life-threatening parasitic infection. “Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars,” reports the New York Times.
It’s fun to single out Shkreli for his questionable ethics, but plenty of other pharmaceutical companies also jack up the the price of formerly cheap drugs to levels that will bankrupt people who need them. The antibiotic Doxycycline was $20 a bottle in 2013. Today, the same bottle costs $1,849. Cycloserine, a tuberculosis treatment, used to cost $500 for a 30 pill bottle, until Rodelis Therapeutics acquired the drug and increased the price to $10,800.
Clinton commented on this first class douchebag’s practices and said she was developing a plan to deal with bullshit like this, and Biotech stocks crashed.
I have a solution but I probably shouldn’t say it in public.
Economy added 173,000 jobs in August, a bit of a miss, but upward revisions in June and July added 44,000 jobs to make up for it. Unemployment rate down to 5.1% from 5.3%. Not stellar, but very solid.
Hours worked and hourly wages up 0.3%, up 2.2% for the year. Labor force participation rate unchanged.
Open thread otherwise.
Yesterday we briefly talked about Medicare Part A and Part B. Part A covers in-patient/overnight stays at the hospital while Part B covers most other services that involve interacting with other people. When Medicare started, prescription drugs weren’t a big cost driver. Basic drugs were available, they treated most common cases to some degree of effectiveness and unsusual cases were out of luck. And then drugs got expensive as they got more complex and the US patent regime encouraged non-market pricing of drugs. Additionally, the US Congress also discouraged non-market pricing of drugs as the federal Medicare program is not allowed to use the simple fact that it is the biggest buyer of medical supplies in the world to get a good price. Drug costs for old people became a massive political issue.
And thus an opportunity for Republicans in 2003 to do two things. The first was to offer a solution that emphasized “compassionate conservatism” for old people to help them get their drugs. Secondly, it was an opportunity to shovel a massive amount of money at drug companies without asking for a whole lot in terms of policy concessions. Thus Medicare Part D was born.
The initial design of Medicare Part D was a kludge of managed market competition. Private insurers offer plans that cover a variety of different drugs according to a basic benefit design. Companies could offer limited lists of covered drugs (formularies) or expansive (and expensive) lists of covered drugs. They could create two tiers (generic and brand) or seventee tiers of coverage with different co-pays and cost sharing. They could decide to require that all beneficiaries try Drug X before they would authorize Drug Y. The rules and plan requirements for Mayhew Insurance would be diametrically opposed to the rules for Big Blue Drug Value Super Duper Plus.
There are common benefit design elements for the individual beneficiary responsibility of costs. The individual would be responsible for a medium sized deductible of roughly $250. After that, the insurer would pay 75% of the contracted costs until the donut hole started at $2,250. From $2,250 to $3,600, the individual was responsible for all of the cost. After $3,600 in total drug costs, the insurer would pay roughly 97% of the remaining drug costs.
Compared to the previous Medicare drug benefit of almost nothing, Medicare Part D as originally designed was significantly better than nothing. It does provide some significant benefits to seniors while being confusing, complex and a massive give-away to drug makers as Medicare was expressly forbidden from getting good deals.
The Affordable Care Act made several signifcant technical changes to Medicare Part D. It still maintains the managed competition design but changes the payment structure. Over the long run, the goal is to get rid of the donut hole completely while in the short run, the goal is to minimize the out of pocket expenses for seniors who are still stuck in the donut hole.
The Center for Medicare Advocacy has a good chart that describes how the benefit design is changing over the course of time.
For 2015, there is a $320 deductible. After that there is a 25% co-insurance until a total of $2,960 is spent (including deductible). The donut hole is for the next $3,720 in contracted rate spending. In reality, the ACA applies a roughly 50% discount to that $3720, so the individual will spend about $1,900 in the donut hole. After that catastrophic coverage kicks in and the insurer pays 95% of the costs.
There is no out of pocket limit. A retired hemophiliac with a million dollar a year drug claim will still be on the hook for $50,000 in drug costs under a Medicare Part D plan. That is an extreme outlier but it is a real case. A more realistic scenario would be someone on an anti-inflamatory drug plus an arthritis medication plus one of the new cholestral pills could easily see out of pocket costs of $4,000 to $6,000 per year even with their Medicare Part D policy.
Over the long run, the donut hole will disappear in 2020 due to PPACA, so out of pocket expenses for all seniors will stay the same or decrease but the drug coverage is not great for people who have very high cost prescriptions due to the lack of out of pocket maximums. A PPACA Exchange plan caps out of pocket expenses at a combined medical/pharmacy/surgery maximum of $6,500 per year. Medicare does not provide that type of protection.