by James C. Sherlock

Great Seal of Virginia

When offered a choice of reasons for failures of large scale government actions, your first choice should always be incompetence, not bad intentions.

Big government requires competent legislatures, competent management and  control of executive departments, apolitical oversight by attorneys general and objective studies of its failures if it has any hope of being efficient and effective.

Absolutely no one after seeing the Virginia government reaction to COVID would accuse it of any of that. We need to fix it.

Unintended consequences of legislation

Readers just had an extended discussion over my column on the unintended consequences of minimum wage hikes.

It should be not too much to ask that Virginia politicians demand a full study of the effects of legislation, including minimum wage legislation, that is guaranteed to have far-reaching effects on the state. But they do not do it in the case of minimum wage hikes.

A structural problem in the General Assembly

That is why the United States Congress, when operating under Regular Order (which hasn’t happened with Ms. Pelosi as Speaker), has a system of majority and minority staffs on every committee. Each presents a report that is considered by the committee as a whole to help craft legislation. Believe it or not, in regular order good ideas come from both sides and often result in better bills even when the minority does not get most of what it wants.

Every time I have written here about the structural deficiencies of the General Assembly I have brought up that it is critically understaffed, especially in support of its part-time legislators.

Some legislators may enjoy throwing bills in the hopper and having them passed into law without any review other than political. The General Assembly passed 2020 HB 395 Minimum Wage last year on party line votes in both houses with nothing that would qualify as a study of its effects. All Republican amendments were rejected, even though a package of those amendments got a 20-20 vote in the Senate with Sen. Joe Morrissey supporting. The Lieutenant Governor had to break the tie.

I am sure that similar things happened the Republicans were in control.

Certainly, some lobbyists like that system and don’t want to see it change. I find it impossible to blame lobbyists for the state of affairs. They are paid to draft and support legislation that favors their clients points of view and have it passed as quickly as possible. Most believe the legislation they support is as good as it needs to be. It is not their job to vet it with those who may disagree.

I blame the members for not setting up a committee staff system that emulates that of the Congress. Even if they continue to meet for very short periods each year, they should defer legislation that needs extended staff review, like minimum wage.

As I blame the members for lack of campaign donation limits.

As I blame the members for ignoring the reports of the Inspector General, like his report on VDH inspection staffing deficiencies, who they positioned to monitor and report on deficiencies in the Executive Department.

It is not too much to ask that our politicians demand a full study of the effects of legislation that is guaranteed to have far-reaching effects on the state.

Minimum wage is the kind of bill that should be introduced one year and voted on the next with the intervening months used to do a proper assessment, including a full vetting by noted economists on both sides of economic philosophy. Of course economists and other “experts” will disagree. That is the point of the Congressional staff system.

It is not a new idea in Virginia. Such a rule would emulate the current requirements for health insurance legislation that must be vetted between sessions by the Health Insurance Reform Commission.

All of us should demand that no important but non-emergency legislation be introduced for final vote with just a very hasty preliminary assessment of its costs to the government only.

Consumer protection and the Attorney General

The Attorney General fills a constitutional position for a reason. He is independent of the Governor and the General Assembly for a reason. He has the responsibilities, among others, to ensure that consumers are protected.

§ 2.2-517. Division of Consumer Counsel created; duties.
A. There is created in the Department of Law a Division of Consumer Counsel (the Division) that shall represent the interests of the people as consumers.

The rest of that statute gives the AG broad leadership and action responsibilities to protect consumers.

Virginians are consumers of multiple government services, including health care and education to name two. There is nothing in the law establishing the Attorney General’s Division of Consumer Counsel that prevents him from representing consumers who are victims of executive or legislative misfeasance.

From that point, his oath to “support the Constitution of the United States, and the Constitution of the Commonwealth of Virginia, and that I will faithfully and impartially discharge all the duties incumbent upon me according to the best of my ability” takes over.

I wrote earlier that the Attorney General was a constitutional officer for a reason — to give him independence from the executive and legislative branches. His responsibilities to consumers are an example of why that independence matters.

Competence in the Executive Branch

I worked under contract to the Clinton Administration in its push to “reinvent government” led by the Vice President.  They had really good intentions and very good ideas about how to implement change, but the management changes that were part of that initiative were broken on the rocks of bureaucratic resistance.

Virginia state bureaucracies are not nearly as vast or as powerful in defense of their own interests as those of the federal government.

The utter breakdown of the state’s management systems under the strains of COVID should be the subject of an unflinching study sponsored by the General Assembly.

Governor Northam’s successor, Democrat or Republican, deserves a chance to fix what is broken and in fact was broken long before he took office. I have a long list starting with VDH, but a competent study would identify them all.

We must demand that the General Assembly sponsor such a study immediately.

Given the stakes involved and the demonstrably deadly nature of the effects of government bureaucratic incompetence, we can hope that such legislation will be passed unanimously.

Conclusion

If we fail to recognize what it broken, we can never fix it. The recommendations here all have successful precedents. All are bipartisan.

We must insist on getting them done. As the great seal of the Commonwealth exhorts, persevere.


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Comments

69 responses to “Fix the Structurally Broken Virginia Government”

  1. LarrytheG Avatar

    so a quick question: ” It should be not too much to ask that Virginia politicians demand a full study of the effects of legislation, including minimum wage legislation, that is guaranteed to have far-reaching effects on the state. But they do not do it in the case of minimum wage hikes.”

    is this impact to the budget and state agencies, etc but not necessarily to the private sector?

    Perhaps Dick or Steve know something also?

    1. sherlockj Avatar

      My recommendation is for them to assess the effects on the state as a whole, not just the state government.

      1. Nancy_Naive Avatar
        Nancy_Naive

        Do you require such of DFAS for a COLA there, Cap’n?

    2. Nancy_Naive Avatar
      Nancy_Naive

      Makes ya wonder exactly how much they assessed the impact of requiring a woman to view a transvaginal ultrasound image of a fetus prior to receiving an abortion, now don’t it?

      1. sherlockj Avatar

        You really should take time to reflect how to get a life, “Nancy.” The Health Commissioner’s documented incompetence threatens the lives of you and your loved ones, and these are your responses? Pathetic. Entirely pathetic.

        1. Nancy_Naive Avatar
          Nancy_Naive

          What’s that got to do with the minimum wage? Focus Mate, focus.

          1. LarrytheG Avatar

            there’s a “need” for Sherlock and Steve to whack you from time to time, apparently. SOP in BR.

          2. Nancy_Naive Avatar
            Nancy_Naive

            Hey, I only parted the Red Sea. It was Moses’ job to write the Environmental Impact Statement.

            Think about what the Cap’n is asking for. He wants the State to provide an economic impact assessment for a change in the minimum wage. The feds *might* be able to do that, but the State? Plus, I wonder how he’d handle no COLA in that retirement check for 15 years?

          3. Nancy_Naive Avatar
            Nancy_Naive

            Actually, here’s the impact statement. The middle class has held even for 10 years, the top 1% saw an increase of 3.5% in 2020 while everyone else gets trashed, and the poor saw their meager wages effectively lose chunck.

          4. LarrytheG Avatar

            probably heresy but any increase in any costs including labor actually motivate efficiencies – both in the businesses but also in consumers if those increased costs bleed through to price increases.

            People don’t stop buying burgers because they went up a nickle or dime. They may well “cost-shift” – reducing spending on other things they may value less.

            And that’s the problem any would-be analyst would have in trying to figure out the “impact” of a increase in wages… it actually does not necessarily result in a price incease and reduced demand.

            All cost increases actually motivate efficiencies which may or may not result in shedding jobs or adding automation. Not more expensive burgers, smaller ones or cheaper beef, etc…

            it’s just not so simple.

          5. Nancy_Naive Avatar
            Nancy_Naive

            “Cheaper beef?! Why, Sir, I’ll have you know this meat is so fresh, you can still see the jockey’s whip marks!”

  2. LarrytheG Avatar

    so a quick question: ” It should be not too much to ask that Virginia politicians demand a full study of the effects of legislation, including minimum wage legislation, that is guaranteed to have far-reaching effects on the state. But they do not do it in the case of minimum wage hikes.”

    is this impact to the budget and state agencies, etc but not necessarily to the private sector?

    Perhaps Dick or Steve know something also?

    1. Nancy_Naive Avatar
      Nancy_Naive

      Makes ya wonder exactly how much they assessed the impact of requiring a woman to view a transvaginal ultrasound image of a fetus prior to receiving an abortion, now don’t it?

      1. sherlockj Avatar

        You really should take time to reflect how to get a life, “Nancy.” The Health Commissioner’s documented incompetence threatens the lives of you and your loved ones, and these are your responses? Pathetic. Entirely pathetic.

        1. Nancy_Naive Avatar
          Nancy_Naive

          What’s that got to do with the minimum wage? Focus Mate, focus.

          1. LarrytheG Avatar

            there’s a “need” for Sherlock and Steve to whack you from time to time, apparently. SOP in BR.

          2. Nancy_Naive Avatar
            Nancy_Naive

            Hey, I only parted the Red Sea. It was Moses’ job to write the Environmental Impact Statement.

            Think about what the Cap’n is asking for. He wants the State to provide an economic impact assessment for a change in the minimum wage. The feds *might* be able to do that, but the State? Plus, I wonder how he’d handle no COLA in that retirement check for 15 years?

          3. Nancy_Naive Avatar
            Nancy_Naive

            Actually, here’s the impact statement. The middle class has held even for 10 years, the top 1% saw an increase of 3.5% in 2020 while everyone else gets trashed, and the poor saw their meager wages effectively lose chunck.

          4. LarrytheG Avatar

            probably heresy but any increase in any costs including labor actually motivate efficiencies – both in the businesses but also in consumers if those increased costs bleed through to price increases.

            People don’t stop buying burgers because they went up a nickle or dime. They may well “cost-shift” – reducing spending on other things they may value less.

            And that’s the problem any would-be analyst would have in trying to figure out the “impact” of a increase in wages… it actually does not necessarily result in a price incease and reduced demand.

            All cost increases actually motivate efficiencies which may or may not result in shedding jobs or adding automation. Not more expensive burgers, smaller ones or cheaper beef, etc…

            it’s just not so simple.

          5. Nancy_Naive Avatar
            Nancy_Naive

            “Cheaper beef?! Why, Sir, I’ll have you know this meat is so fresh, you can still see the jockey’s whip marks!”

    2. sherlockj Avatar

      My recommendation is for them to assess the effects on the state as a whole, not just the state government.

      1. Nancy_Naive Avatar
        Nancy_Naive

        Do you require such of DFAS for a COLA there, Cap’n?

  3. Steve Haner Avatar
    Steve Haner

    The mind boggles…..I spent much of yesterday wrestling with him on and off the comment string, so if I reply it will be extended….Other than the one key point that Congress really sucks and not behaving like Congress has its appeal.

  4. Steve Haner Avatar
    Steve Haner

    The mind boggles…..I spent much of yesterday wrestling with him on and off the comment string, so if I reply it will be extended….Other than the one key point that Congress really sucks and not behaving like Congress has its appeal.

  5. […] seems good time to go back and re-read my essay from this morning on fixing Virginia […]

  6. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Many of the structural “fixes” you advocate are already in place, but are not used. For example, the rules of both houses of the legislature allow for a bill to be “carried over” from the long session to the short session. The original rationalization for this mechanism was to provide some time between sessions for committees to examine and consider complex bills in more depth than they had time for during the hurly-burly of a session. There have probably been a few instances in which bills were actually carried over for this reason and extended examination made, but, now, for the most part, bills being carried over is just a polite way of killing them. They are left to die in committee before the short session begins.

  7. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Many of the structural “fixes” you advocate are already in place, but are not used. For example, the rules of both houses of the legislature allow for a bill to be “carried over” from the long session to the short session. The original rationalization for this mechanism was to provide some time between sessions for committees to examine and consider complex bills in more depth than they had time for during the hurly-burly of a session. There have probably been a few instances in which bills were actually carried over for this reason and extended examination made, but, now, for the most part, bills being carried over is just a polite way of killing them. They are left to die in committee before the short session begins.

  8. As a former state employee who was required to “follow” bills in the GA from the Wilder Administration onward and who had to lobby members for six years after I retired, I applaud Mr. Sherlock’s aspirational recommendations. I am sure Mr. Sizemore and Mr. Haner will be happy to offer some comments from their perspective, so I won’t point out the “untended consequences” of them other than the creation of a very large bureaucracy.
    As one who oversaw the production of impact statements, while ideal, it is not as easy as it sounds. To name a few…First, there are many assumptions that underlie the statement, which, to be transparent, may take up several pages of major bills and the alteration to any one of them may completely produce a different result. Second, to be accurate and useful, the type of statement envisioned by Mr. Sherlock, would require a large staff of skilled people attracted to the job by the salary. Third, would be time needed to produce a meaningful statement. That may require a change in the legislative process, like introducing a bill in one session but not being acted upon until a subsequent session when a statement is ready. I am sure the members of the GA would agree to limit their prerogatives in this manner. Finally, would the statements deter members from voting on a bill that cut Medicaid payments to the needy or gave Dominion a boost in rates because they are good corporate citizens? To be cynical and from seeing it happen too many times, it would depend on their legislative district, not the statement. Bosun

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      I probably know Bosun. At any event, I can empathize with him. As someone who spent many years writing fiscal impact statements, I can wholeheartedly agree with his comments. I would add that it often seemed to me that a fiscal impact statement was only useful to one of two types of people: an opponent of the bill on principle who was looking for more ammunition to kill it or to a proponent who was looking for evidence that it would have no, or very little, cost. Most of the members seemed to ignore fiscal impact statements.

    2. sherlockj Avatar

      At least the new bureaucracy will be in the legislative branch, and, given the tendency of bureaucracies to protect their turf, create useful tension with the executive branch. Virginians cannot but benefit.

      As far as the GA members agreeing to limit their prerogatives, I concur. They will not like it.

      Both houses already have the prerogative to table bills and task a study of effects before considering them again, but given the political polarization of this particular time, do not do it. As you know better than I, the Speaker of the House and the Majority leader of the Senate control the rules committees, which is where such things are decided.

      So what I suggest is not revolutionary. It is already in place for health insurance bills. I hope, but do not expect, that the formal list of automatic tabling for intersession review can be expanded to include things like minimum wage increases and other clearly broadly impactful legislation.

      The minimum wage bill, which caused its sponsors to come back in the next session to cure unconsidered consequences, should be exhibit A.

  9. As a former state employee who was required to “follow” bills in the GA from the Wilder Administration onward and who had to lobby members for six years after I retired, I applaud Mr. Sherlock’s aspirational recommendations. I am sure Mr. Sizemore and Mr. Haner will be happy to offer some comments from their perspective, so I won’t point out the “untended consequences” of them other than the creation of a very large bureaucracy.
    As one who oversaw the production of impact statements, while ideal, it is not as easy as it sounds. To name a few…First, there are many assumptions that underlie the statement, which, to be transparent, may take up several pages of major bills and the alteration to any one of them may completely produce a different result. Second, to be accurate and useful, the type of statement envisioned by Mr. Sherlock, would require a large staff of skilled people attracted to the job by the salary. Third, would be time needed to produce a meaningful statement. That may require a change in the legislative process, like introducing a bill in one session but not being acted upon until a subsequent session when a statement is ready. I am sure the members of the GA would agree to limit their prerogatives in this manner. Finally, would the statements deter members from voting on a bill that cut Medicaid payments to the needy or gave Dominion a boost in rates because they are good corporate citizens? To be cynical and from seeing it happen too many times, it would depend on their legislative district, not the statement. Bosun

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      I probably know Bosun. At any event, I can empathize with him. As someone who spent many years writing fiscal impact statements, I can wholeheartedly agree with his comments. I would add that it often seemed to me that a fiscal impact statement was only useful to one of two types of people: an opponent of the bill on principle who was looking for more ammunition to kill it or to a proponent who was looking for evidence that it would have no, or very little, cost. Most of the members seemed to ignore fiscal impact statements.

    2. sherlockj Avatar

      At least the new bureaucracy will be in the legislative branch, and, given the tendency of bureaucracies to protect their turf, create useful tension with the executive branch. Virginians cannot but benefit.

      As far as the GA members agreeing to limit their prerogatives, I concur. They will not like it.

      Both houses already have the prerogative to table bills and task a study of effects before considering them again, but given the political polarization of this particular time, do not do it. As you know better than I, the Speaker of the House and the Majority leader of the Senate control the rules committees, which is where such things are decided.

      So what I suggest is not revolutionary. It is already in place for health insurance bills. I hope, but do not expect, that the formal list of automatic tabling for intersession review can be expanded to include things like minimum wage increases and other clearly broadly impactful legislation.

      The minimum wage bill, which caused its sponsors to come back in the next session to cure unconsidered consequences, should be exhibit A.

  10. LarrytheG Avatar

    Fiscal impact statements are a simple concept with a good intent but to do them to the level beyond direct effects in the economy could lead to complex analyses that not all experts might agree on.

    The minimum wage is one of those area where even when there might be agreement that this is an impact, actually quantifying it much harder.

    Even then, not all impacts would be negative. For instance, some folks who got it may no longer qualify for some government entitlements or lesser ones. Is better for consumers to pay for the impacts of minimum wage or taxpayers?

    There’s a concept called universal basic income that some advocate that it’s better to provide a minimun basic income to would-be entitlement recipients than have myriad and extensive beaucracy to provide entitlements like food, housing, and health care.

    ” What Is Universal Basic Income (UBI)?
    Universal basic income (UBI) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.

    The idea of universal basic income has gained momentum in the U.S. as automation increasingly replaces workers in manufacturing and other sectors of the economy.”

    https://www.investopedia.com/terms/b/basic-income.asp#:~:text=Universal%20basic%20income%20(UBI)%20is,potentially%20require%20greater%20bureaucratic%20involvement.

    If your goal is to cut beaucracy and administrative program costs , UBI may be a better answer and some Conservatives support it.

    Many cannot accept it , it very much walks and talks like socialism – BUT “cheaper” than “entitlements” that don’t fee as much like socialism! 😉

    We actually did do a version of this with Medicaid Expansion where it was claimed to be more cost effective than not having it.

    1. sherlockj Avatar

      Please know this.

      The only thing that truly mattered for the passage of Medicaid expansion was that it directly benefited the bottom lines of the hospital and nursing home interests that rule the General Assembly and administration on things they care about.

      If you doubt that, see the huge increase in Medicaid reimbursements that accompanied Medicaid expansion in Virginia.

      So the bad debt/charitable contributions of the hospitals dropped dramatically and their reimbursements increased dramatically. Not a hard call for a healthcare provider lobbyists or their checkbooks.

      Doesn’t mean it was or was not the right thing to do, but it means that the deal had to be sweetened to immensely benefit the hospitals to get their support. That would not be law in Virginia if they had opposed it. Few Democrats would have voted for it had they been pressed by the hospitals.

      I understand they agreed to be “taxed” for the 10% of Medicaid expansion costs that the feds did not pay for, but the GA estimates of the net to hospital bottom lines was an extra $1 – $2 billion a year.

      Fish gotta swim, birds gotta fly. Virginia hospitals gotta get what they want. No exceptions.

      1. LarrytheG Avatar

        the benefit to people’s health care?

        The expansion has happened in a bunch of states ..surely we think it’s a benefit to people as well as hospitals and providers, no?

        1. Nancy_Naive Avatar
          Nancy_Naive

          Sick poor people getting medical treatment don’t count, just the ledger sheet. But now ask ’em how the non-expansion states like SC did in comparison with their plans… chirp, chirp… and then when pressed, it’s “that’s not Virginia,” like SC is the Congo or something.

          1. sherlockj Avatar

            I favored Medicaid expansion. It was the hostage negotiations that disturbed me.

        2. Steve Haner Avatar
          Steve Haner

          Health care is easy. Health, harder….sometimes not even really a consideration….

      2. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        The deal had to be sweetened to get the hospitals’ support? That is not how I understood it at all. The hospitals wanted it all along precisely because (1) it would decrease their bad debt and (ii) people would come to the hospital who had not come before due to not being able to afford it. The hospitals were the ones who sweetened the deal by offering to pay for the required state match. That undercut the opposition’s argument about the cost to the state.

        Another factor to consider: Expansion of Medicaid not only helped folks with hospital bills, it also enabled them to go to doctors when they have otherwise not done so due to the cost. Those doctor visits may have resulted in fewer hospital visits later.

        The factor that led to passage of expansion was not the hospitals’ offer (that had been on the table all along), but the sudden increase in the number of Democrats in the House and some Republicans seeing the handwriting on the wall.

        Bottom line: Regular folks have benefited as shown by the increase in Medicaid payments after the expansion.

        1. Steve Haner Avatar
          Steve Haner

          The factor that led to passage in Virginia was 1) failure of the effort in Congress to repeal the ACA, sending the signal it was here for good so live with it and 2) the provisions made in that effort to protect the reimbursement rates of those states which had already expanded Medicaid. Plenty of Virginia R’s in a financial leadership position saw that Virginia was then going to pay a huge price for having refused. It remains a third rail politically within the GOP, as we will begin to see….

          1. LarrytheG Avatar

            well.. when the GOP “root and branch” blather turned out to be……… blather….

        2. LarrytheG Avatar

          Exactly. It seemed to me that conservatives were not satisfied with 90% of the cost covered by the Feds.. They focused on the 10% as the reason for not supporting it even though it would help offset existing State health care cost like prisoners and other state medical facilities. I recall studies showing that the Medicaid Expansion would completely pay for itself even without the hospital fees.

          To be sure, the Medicaid Expansion IS paid for with taxes – mostly Federal taxes that everyone pays whether their state has expanded or not:

          interesting read;

          Taxes and the Affordable Care Act
          Which of the law’s original taxes remain on the books?

          https://www.investopedia.com/articles/personal-finance/020714/new-taxes-under-affordable-care-act.asp

        3. Nancy_Naive Avatar
          Nancy_Naive

          Correct me if I am wrong, but hospitals used to received “block grants” to cover indigent care, which they always claimed to be inadequate, and the emergency rooms were the primary care manager for the uninsured.

          Hospitals saw the expansion releaving them from 1) uncovered care, and 2) issuing aspirin for sniffles allowing ERs to handle the seriously wounded.

          That this is true is evident from the loss rural hospitals in non-expansion states, like Georgia.

          1. LarrytheG Avatar

            The fascinating thing is that the Maryland enterprize zones that Sherlock touts – ended up with HIGHER ER visits but somehow LESS hospital admissions… go figure.

            ” Maryland Health Enterprise Zones Linked to Reduced Hospitalizations and Costs
            NET SAVINGS MUCH GREATER THAN COST OF HEALTH ENTERPRISE ZONE INITIATIVE, DESPITE JUMP IN ER VISITS”

            https://www.jhsph.edu/news/news-releases/2018/maryland-health-enterprise-zones-linked-to-reduced-hospitalizations-and-costs.html

          2. Nancy_Naive Avatar
            Nancy_Naive

            The uninsured will be … no… SHALL be paid for. Either through increases in premiums for the insured, or by taxes. Aetna sucks upto 20% of that premium to pay bonuses. The gub’ment around 3%. No brainer.

          3. LarrytheG Avatar

            Well… EVEN the INSURED are helped in paying for health insurance! People with employer-provided receive a 40% subsidy (not taxed) for their purchased insurance and Obamacare receive sliding subsidies for premiums but their share out of their pockets is already-taxed money.

            Medicare receives a 75% premium subsidy from the govt.

            A very small number of folks, mostly the rich pay for their own healthcare without subsidies.

        4. sherlockj Avatar

          Dick, as you rightly point out, the deal did not have to be sweetened to get the hospitals support, but it was sweetened because the headline – Medicaid expansion – provided cover for doing something the hospitals had wanted for some time.

          The rise in the Medicare reimbursement rate that was part of the package was then and is today seldom remarked upon, but it provided a big boost to hospital profitability net of the hospitals’ agreement to pay the state’s 10% share of the expansion bill.

          I favored Medicaid expansion.

          As for the Medicaid payments increase, I would have greatly favored it had it been targeted to increase significantly the payments to primary care physicians. But those remain well below the physicians’ costs. Because the hospitals want poor people at the hospital, not at a physician’s office.

          What blew up with the Medicaid reimbursement increase were payments for hospital inpatient and outpatient procedures, which were already profitable at the previous rates. As I showed https://www.baconsrebellion.com/anyone-think-they-understand-hospital-pricing/, Medicaid payments now significantly exceed Medicare payments for the same procedure.

          I have shown many times here that Virginia’s regional hospital monopolies have profit margins well above the national averages. Those margins were far higher than the national averages before Medicaid expansion, and ballooned even higher in 2019 after the coverage and reimbursement changes kicked in.

          The hospital and nursing home industries own the Governor and the General Assembly. Absolutely no bill that they oppose could be signed into law.

          Using Medicaid expansion to further sweeten Virginia’s sweetest deal in the nation for its hospitals makes me sick.

  11. LarrytheG Avatar

    Fiscal impact statements are a simple concept with a good intent but to do them to the level beyond direct effects in the economy could lead to complex analyses that not all experts might agree on.

    The minimum wage is one of those area where even when there might be agreement that this is an impact, actually quantifying it much harder.

    Even then, not all impacts would be negative. For instance, some folks who got it may no longer qualify for some government entitlements or lesser ones. Is better for consumers to pay for the impacts of minimum wage or taxpayers?

    There’s a concept called universal basic income that some advocate that it’s better to provide a minimun basic income to would-be entitlement recipients than have myriad and extensive beaucracy to provide entitlements like food, housing, and health care.

    ” What Is Universal Basic Income (UBI)?
    Universal basic income (UBI) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.

    The idea of universal basic income has gained momentum in the U.S. as automation increasingly replaces workers in manufacturing and other sectors of the economy.”

    https://www.investopedia.com/terms/b/basic-income.asp#:~:text=Universal%20basic%20income%20(UBI)%20is,potentially%20require%20greater%20bureaucratic%20involvement.

    If your goal is to cut beaucracy and administrative program costs , UBI may be a better answer and some Conservatives support it.

    Many cannot accept it , it very much walks and talks like socialism – BUT “cheaper” than “entitlements” that don’t fee as much like socialism! 😉

    We actually did do a version of this with Medicaid Expansion where it was claimed to be more cost effective than not having it.

    1. sherlockj Avatar

      Please know this.

      The only thing that truly mattered for the passage of Medicaid expansion was that it directly benefited the bottom lines of the hospital and nursing home interests that rule the General Assembly and administration on things they care about.

      If you doubt that, see the huge increase in Medicaid reimbursements that accompanied Medicaid expansion in Virginia.

      So the bad debt/charitable contributions of the hospitals dropped dramatically and their reimbursements increased dramatically. Not a hard call for a healthcare provider lobbyists or their checkbooks.

      Doesn’t mean it was or was not the right thing to do, but it means that the deal had to be sweetened to immensely benefit the hospitals to get their support. That would not be law in Virginia if they had opposed it. Few Democrats would have voted for it had they been pressed by the hospitals.

      I understand they agreed to be “taxed” for the 10% of Medicaid expansion costs that the feds did not pay for, but the GA estimates of the net to hospital bottom lines was an extra $1 – $2 billion a year.

      Fish gotta swim, birds gotta fly. Virginia hospitals gotta get what they want. No exceptions.

      1. LarrytheG Avatar

        the benefit to people’s health care?

        The expansion has happened in a bunch of states ..surely we think it’s a benefit to people as well as hospitals and providers, no?

        1. Nancy_Naive Avatar
          Nancy_Naive

          Sick poor people getting medical treatment don’t count, just the ledger sheet. But now ask ’em how the non-expansion states like SC did in comparison with their plans… chirp, chirp… and then when pressed, it’s “that’s not Virginia,” like SC is the Congo or something.

          1. sherlockj Avatar

            I favored Medicaid expansion. It was the hostage negotiations that disturbed me.

        2. Steve Haner Avatar
          Steve Haner

          Health care is easy. Health, harder….sometimes not even really a consideration….

      2. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        The deal had to be sweetened to get the hospitals’ support? That is not how I understood it at all. The hospitals wanted it all along precisely because (1) it would decrease their bad debt and (ii) people would come to the hospital who had not come before due to not being able to afford it. The hospitals were the ones who sweetened the deal by offering to pay for the required state match. That undercut the opposition’s argument about the cost to the state.

        Another factor to consider: Expansion of Medicaid not only helped folks with hospital bills, it also enabled them to go to doctors when they have otherwise not done so due to the cost. Those doctor visits may have resulted in fewer hospital visits later.

        The factor that led to passage of expansion was not the hospitals’ offer (that had been on the table all along), but the sudden increase in the number of Democrats in the House and some Republicans seeing the handwriting on the wall.

        Bottom line: Regular folks have benefited as shown by the increase in Medicaid payments after the expansion.

        1. Steve Haner Avatar
          Steve Haner

          The factor that led to passage in Virginia was 1) failure of the effort in Congress to repeal the ACA, sending the signal it was here for good so live with it and 2) the provisions made in that effort to protect the reimbursement rates of those states which had already expanded Medicaid. Plenty of Virginia R’s in a financial leadership position saw that Virginia was then going to pay a huge price for having refused. It remains a third rail politically within the GOP, as we will begin to see….

          1. LarrytheG Avatar

            well.. when the GOP “root and branch” blather turned out to be……… blather….

        2. LarrytheG Avatar

          Exactly. It seemed to me that conservatives were not satisfied with 90% of the cost covered by the Feds.. They focused on the 10% as the reason for not supporting it even though it would help offset existing State health care cost like prisoners and other state medical facilities. I recall studies showing that the Medicaid Expansion would completely pay for itself even without the hospital fees.

          To be sure, the Medicaid Expansion IS paid for with taxes – mostly Federal taxes that everyone pays whether their state has expanded or not:

          interesting read;

          Taxes and the Affordable Care Act
          Which of the law’s original taxes remain on the books?

          https://www.investopedia.com/articles/personal-finance/020714/new-taxes-under-affordable-care-act.asp

        3. Nancy_Naive Avatar
          Nancy_Naive

          Correct me if I am wrong, but hospitals used to received “block grants” to cover indigent care, which they always claimed to be inadequate, and the emergency rooms were the primary care manager for the uninsured.

          Hospitals saw the expansion releaving them from 1) uncovered care, and 2) issuing aspirin for sniffles allowing ERs to handle the seriously wounded.

          That this is true is evident from the loss rural hospitals in non-expansion states, like Georgia.

          1. LarrytheG Avatar

            The fascinating thing is that the Maryland enterprize zones that Sherlock touts – ended up with HIGHER ER visits but somehow LESS hospital admissions… go figure.

            ” Maryland Health Enterprise Zones Linked to Reduced Hospitalizations and Costs
            NET SAVINGS MUCH GREATER THAN COST OF HEALTH ENTERPRISE ZONE INITIATIVE, DESPITE JUMP IN ER VISITS”

            https://www.jhsph.edu/news/news-releases/2018/maryland-health-enterprise-zones-linked-to-reduced-hospitalizations-and-costs.html

          2. Nancy_Naive Avatar
            Nancy_Naive

            The uninsured will be … no… SHALL be paid for. Either through increases in premiums for the insured, or by taxes. Aetna sucks upto 20% of that premium to pay bonuses. The gub’ment around 3%. No brainer.

          3. LarrytheG Avatar

            Well… EVEN the INSURED are helped in paying for health insurance! People with employer-provided receive a 40% subsidy (not taxed) for their purchased insurance and Obamacare receive sliding subsidies for premiums but their share out of their pockets is already-taxed money.

            Medicare receives a 75% premium subsidy from the govt.

            A very small number of folks, mostly the rich pay for their own healthcare without subsidies.

        4. sherlockj Avatar

          Dick, as you rightly point out, the deal did not have to be sweetened to get the hospitals support, but it was sweetened because the headline – Medicaid expansion – provided cover for doing something the hospitals had wanted for some time.

          The rise in the Medicare reimbursement rate that was part of the package was then and is today seldom remarked upon, but it provided a big boost to hospital profitability net of the hospitals’ agreement to pay the state’s 10% share of the expansion bill.

          I favored Medicaid expansion.

          As for the Medicaid payments increase, I would have greatly favored it had it been targeted to increase significantly the payments to primary care physicians. But those remain well below the physicians’ costs. Because the hospitals want poor people at the hospital, not at a physician’s office.

          What blew up with the Medicaid reimbursement increase were payments for hospital inpatient and outpatient procedures, which were already profitable at the previous rates. As I showed https://www.baconsrebellion.com/anyone-think-they-understand-hospital-pricing/, Medicaid payments now significantly exceed Medicare payments for the same procedure.

          I have shown many times here that Virginia’s regional hospital monopolies have profit margins well above the national averages. Those margins were far higher than the national averages before Medicaid expansion, and ballooned even higher in 2019 after the coverage and reimbursement changes kicked in.

          The hospital and nursing home industries own the Governor and the General Assembly. Absolutely no bill that they oppose could be signed into law.

          Using Medicaid expansion to further sweeten Virginia’s sweetest deal in the nation for its hospitals makes me sick.

  12. LarrytheG Avatar

    re: ” The rise in the Medicare reimbursement rate that was part of the package was then and is today seldom remarked upon, but it provided a big boost to hospital profitability net of the hospitals’ agreement to pay the state’s 10% share of the expansion bill.

    As for the Medicaid payments increase, I would have greatly favored it had it been targeted to increase significantly the payments to primary care physicians. But those remain well below the physicians’ costs. Because the hospitals want poor people at the hospital, not at a physician’s office.”

    Do doctors have to accept medicaid?

    The narrative that Medicaid AND Medicare are below doctors costs is questionable if they can refuse to accept them.

    If we accept that claim, what it means is that doctors are cost-shifting to people who have better insurance? And if that is true, then why would a doctor, anymore or less than a hospital accept a lower profit margin?

    All of this stuff walks and talks like some kind of conspiracy among hospitals to defraud the government and patients…

    In the private sector, if they control costs and increase profits they are held in high regard. If hospitals do it, they’re said to be evil instead of efficient.

    What’s not really addressed in these discussions about hospitals is Medicare Advantage and Medicaid managed care – which reduce costs by coordinating care, limiting referrals, and reducing ER visits by regular primary care. In other words, they reduce use of hospitals.

    1. sherlockj Avatar

      Depends upon which private sector you mean.

      In the government controlled private healthcare sector in Virginia, hospitals increase profits courtesy of the state, not their management skills.

      Virginia’s regional monopoly hospitals have their monopolies courtesy of the state, are able to use them to crush competitors courtesy of the Attorney General’s gaze being permanently averted, and Medicaid expansion and Medicaid reimbursement increases courtesy of the state. The nation-leading profit margins of our not-for-profit hospitals are courtesy of the state. The biggest Medicaid managed care contractor to DMAS, with half of the state’s supported patients, is Sentara. If you think Medicaid managed care reduces hospital visits in the poorest communities that are deserts of primary care, I have a bridge to sell you.

      Is that the private sector to which you refer?

      1. LarrytheG Avatar

        there are some seemingly conflicting narratives though. A LOT of the hospitals business IS Medicare and yet one narrative says that medicare does not pay the actual cost of care so hospitals still have to make that up elsewhere?

        re: ” If you think Medicaid managed care reduces hospital visits in the poorest communities that are deserts of primary care, I have a bridge to sell you.”

        well, some data would be more convincing…

        are we saying there is an equity issue?

  13. LarrytheG Avatar

    re: ” The rise in the Medicare reimbursement rate that was part of the package was then and is today seldom remarked upon, but it provided a big boost to hospital profitability net of the hospitals’ agreement to pay the state’s 10% share of the expansion bill.

    As for the Medicaid payments increase, I would have greatly favored it had it been targeted to increase significantly the payments to primary care physicians. But those remain well below the physicians’ costs. Because the hospitals want poor people at the hospital, not at a physician’s office.”

    Do doctors have to accept medicaid?

    The narrative that Medicaid AND Medicare are below doctors costs is questionable if they can refuse to accept them.

    If we accept that claim, what it means is that doctors are cost-shifting to people who have better insurance? And if that is true, then why would a doctor, anymore or less than a hospital accept a lower profit margin?

    All of this stuff walks and talks like some kind of conspiracy among hospitals to defraud the government and patients…

    In the private sector, if they control costs and increase profits they are held in high regard. If hospitals do it, they’re said to be evil instead of efficient.

    What’s not really addressed in these discussions about hospitals is Medicare Advantage and Medicaid managed care – which reduce costs by coordinating care, limiting referrals, and reducing ER visits by regular primary care. In other words, they reduce use of hospitals.

    1. sherlockj Avatar

      Depends upon which private sector you mean.

      In the government controlled private healthcare sector in Virginia, hospitals increase profits courtesy of the state, not their management skills.

      Virginia’s regional monopoly hospitals have their monopolies courtesy of the state, are able to use them to crush competitors courtesy of the Attorney General’s gaze being permanently averted, and Medicaid expansion and Medicaid reimbursement increases courtesy of the state. The nation-leading profit margins of our not-for-profit hospitals are courtesy of the state. The biggest Medicaid managed care contractor to DMAS, with half of the state’s supported patients, is Sentara. If you think Medicaid managed care reduces hospital visits in the poorest communities that are deserts of primary care, I have a bridge to sell you.

      Is that the private sector to which you refer?

      1. LarrytheG Avatar

        there are some seemingly conflicting narratives though. A LOT of the hospitals business IS Medicare and yet one narrative says that medicare does not pay the actual cost of care so hospitals still have to make that up elsewhere?

        re: ” If you think Medicaid managed care reduces hospital visits in the poorest communities that are deserts of primary care, I have a bridge to sell you.”

        well, some data would be more convincing…

        are we saying there is an equity issue?

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