Wednesday, March 31, 2010

Good News on Student Loan and Health Insurance Reform

President Obama signed legislation that will dramatically change the federal student loan program.

The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students and use much of the nearly $68 billion in savings over 11 years to expand Pell grants and make it easier for students to repay outstanding loans after graduating. The law also invests $2 billion in community colleges over the next four years to provide education and career training programs to workers eligible for trade adjustment aid after dislocation in their industries.

The law will increase Pell grants along with inflation in the next few years, which should raise the maximum grant to $5,975 from $5,550 by 2017, according to the White House, and it will also provide 820,000 more grants by 2020.

Eliminating the middle man (the banks) means more help will be available, which will ease the financial burden of families who want to send their kids to college. It also means that repayment terms are a little kinder:

Students who borrow money starting in July 2014 will be allowed to cap repayments at 10 percent of income above a basic living allowance, instead of 15 percent. Moreover, if they keep up payments, their balances will be forgiven after 20 years instead of 25 years — or after 10 years if they are in public service, like teaching, nursing or serving in the military.

A disability rights activist sent me a link to Disability Scoop:

When health insurance reform was signed into law just last week, Democratic lawmakers said that coverage of children with pre-existing conditions would be one of the most immediate effects. But within days, insurers argued a detailed reading of the new legislation allowed them to continue cutting-off kids with conditions like Down syndrome and cerebral palsy in certain circumstances until 2014.

The good news is - that insurance companies quickly thought the better of that. From The NY Times (same day):

“Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition,” said Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group. Accordingly, she said, “we await and will fully comply with” the rules.

Ms. Ignagni made the commitment in a letter to Kathleen Sebelius, the secretary of health and human services, who had said she feared that some insurers might exploit a possible ambiguity in the new health care law to deny coverage to some sick children.

Apparently it didn't take any time at all for the insurance companies to realize that refusing to cover kids with Down Syndrome wasn't a good PR move.

cross posted at Main St/

Friday, March 26, 2010

Aid to Homeowners Coming?

In today's NY Times, unemployment claims "fell more than expected."

Except they really didn't. It's all part of the numbers guessing shell game:

The Labor Department said first-time claims dropped by 14,000 to a seasonally adjusted 442,000. That was below analysts’ estimate of 450,000, according to Thomson Reuters.

But most of the drop resulted from a change in the calculations the department makes to seasonally adjust the data, a Labor Department analyst said. Excluding the effect of the adjustments, claims would have fallen by 4,000.

Later in the article:

The number of people continuing to claim unemployment benefits, meanwhile, fell to 4.6 million.

But that does not include millions of people who are receiving extended benefits for up to 73 extra weeks, paid for by the federal government, on top of the 26 customarily provided by the states. Nearly 5.7 million people were on the extended benefit rolls for the week ended March 6, the latest data available. That is about 300,000 lower than the previous week. The extended benefit figures aren’t seasonally adjusted and are volatile from week to week.

All told, more than 11.1 million people are claiming unemployment benefits, the department said.

And as always, this doesn't include the numbers of those still unemployed who have used up their benefits and those who were never eligible.

However - it sounds as though good news is coming for troubled homeowners.
From the NY Times

The Obama administration on Friday will announce broad new initiatives to help troubled homeowners, potentially refinancing several million of them into fresh government-backed mortgages with lower payments.

Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.

The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.

This could be real help for those homeowners who are unemployed or underemployed and barely hanging on. Stay tuned.

cross posted at

Wednesday, March 24, 2010

Jobs: The Only Way to Fix the Economy

Last week the jobs bill passed the Senate. It had cleared the House earlier in the month. At a time when so many Americans are out of work, one would think that such a bill would be supported by nearly everyone. One would be wrong:

While the measure won support from some Republicans, others in the party were skeptical that it would help create jobs, or said they were distressed at its cost. “This isn’t so much a jobs bill as it is a debt bill,” said Senator Judd Gregg, a New Hampshire Republican.

This is the same Judd Gregg who didn't approve of the bill passed earlier in the month that gave tax cuts to businesses and extended COBRA and
unemployment benefits.

"Why do we keep doing this?" asked Sen. Judd Gregg (R-N.H.). "Why do we keep passing debt on to our children? Why do we keep running program after program out here that is shrouded in sweetness and light but not paid for?"

The last official unemployment report shows:

In February, the number of unemployed persons, at 14.9 million, was essen-
tially unchanged, and the unemployment rate remained at 9.7 percent.

These reports only cover those who have filed for, or are still collecting unemployment. They do not count those whose benefits have run out, or those who were never eligible for benefits at all. They do not count the underemployed. The real numbers are much higher, which makes Senator Gregg's statements even more offensive.

Sadly, there are those who believe that extending benefits for the jobless is a bad idea. The ultra conservative Heritage Foundation suggests that the jobs bill is a bad idea because it expands benefits for TANF (Temporary Assistance to Needy Families).

Today the U.S. House of Representatives will take up a new “jobs” bill, HR4849, that includes a $2.5 billion provision to expand the size of welfare rolls and pay states when they add people to their caseloads.


This anti-reform fund actually pays states ‘bonus” money for increasing the size of their welfare caseloads without any incentives to place people into jobs and move them off of the dole.

Ahem. It's a jobs bill. It's a jobs bill that makes some provision for the fact that there aren't any jobs right now, and needy families need to survive until there are. How can they give "incentives" to put people into non-existant jobs?

Thankfully, here's Ethan Pollack from the Economic Policy Institute to tell us what we already know - the only way to fix the economy, and reduce the deficit is by creating jobs.

cross posted at

Friday, March 19, 2010

Budgets, Priorities, and Cannon Fodder

By now, we’ve all been through the town meeting process. Difficult decisions about budgets have been thrashed out and voted on. New fire trucks, police cars, town garages – all have been dealt with, with a stern eye fixed upon our current economic situation.

The same kind of work is being done in every state. The bottom line is that tax revenues are down, all across the country. With a national unemployment rate somewhere in the 18-20% rate, one can see why. States are making difficult decisions. Indiana embraced a statewide tax cap. An increase in sales tax revenue was supposed to fill in the gap, but sales tax revenues have declined rather dramatically. That’s the thing about tax caps. They don’t cut costs, they just force cuts in spending, and those spending cuts almost always affect education and services for the most vulnerable amongst us. Muncie had to cut 32 firefighters, or 29% of their force.

This same work is being done in Concord. The DD waiting list is about to return. This is the list of people who have developmental disabilities or brain injuries, who need services. That we had a waiting list, ever, for these folks is mind boggling enough. The list was eliminated in 2007, but is likely to return. State Senator Lou “Slots” D’Allesandro would like to tie the DD waiting list to potential gaming revenues, but many families aren’t happy with the idea of gambling on their child ever getting services.

Also going under the ax are juvenile diversion programs, AIDS services, the state employee’s pension fund, and the court system. NH’s courts are already bogged down with backlog, and it’s about to get worse. No speedy trial for you in NH. The Dept. of Corrections is also going to take a hit. So are the state parks. Since some of our state parks are already in terrible shape, this isn’t good in a state that relies so heavily on tourist dollars.

States have been warned that there will be little help forthcoming from the federal government, which is facing the same problems. Tax revenues are down. The Bush tax cuts were supposed to create jobs, but that didn’t work out. Instead, they increased the deficit, and our revenue problems. Over 11 million jobs were lost during the last decade, and no one seems to have much of a plan for how to make them come back. Instead, more trade agreements are planned, meaning more jobs heading overseas. Tax cuts for the wealthy do not create jobs, no matter how many times the trickle-down Reaganistas tell us that it is so.

Our infrastructure is failing. Our health care system is a disaster. Our educational system is also failing. We’re lagging behind in technology and in access to the internet, which is still a huge problem in rural areas. The United States is a wealthy country – so where are our resources going? Simple. They’re going to war.

A look at our federal discretionary budget pie chart reveals what our national priority in spending is: defense. In 2009, 58% of the discretionary budget went to defense spending. According to the Pentagon, the US has 716 military bases overseas. This does not count the 400 bases we currently have in Afghanistan, or the 300 or so that we have in Iraq. There aren’t many countries that don’t have a US base or at least a US military presence. We are a global occupying force.

That’s been our choice, since the Cold War. Our defense spending is as much as the rest of the world combined. Other countries have enacted wonderful education and health care programs for their people. They have high-speed railways; they have Internet access for nearly everyone who wants it. These countries made their people their priority. The US has made killing people a priority.

From 1940 to 1996, the US spent $5 .5 trillion on nuclear weapons, and nuclear weapons programs. That’s a stack of dollar bills that would reach all the way to the moon, and partway back again. That’s a stack of money that did nothing for the people of this country. To justify it, fears were created. The Russians! The Communists! There’s always a reason found to keep on expanding US defense spending. Terrorism is the new Communism.

Terrorists are created most easily in places where there are no educational or job opportunities, where the quality of life is marginal at best. Terrorism is also created in places where there is a strong perceived sense of injustice. These are not conditions that we will rectify at gunpoint. We cannot ever kill “the terrorists” since the very act of our killing serves to create more of them. Still, we’re spending trillions on killing in Iraq and Afghanistan. Seven new bases are planned in Colombia.

At a time when things are so grim here at home, in February, Obama asked for an increase in defense spending. In 2009, the DoD base budget was $513 billion. In 2010 it leaped to $534 billion. For 2011, the DoD has requested $708 billion. That does not include the appropriations for the wars in Afghanistan and Iraq. Presumably it covers the rest of the countries we are currently bombing: Pakistan, Yemen, and Somalia.

It’s difficult to imagine how we will be able to continue to afford this level of military spending, but cutting military spending is not up for discussion. Anyone who mentions it is automatically accused of being weak and unpatriotic. That’s what the culture of military imperialism has done for us – along with the 24-hour cable news cycle, and the shrieking idiots found therein.

As parents sit around the kitchen table wondering how to pay for college: fear not. There aren’t any jobs anyhow. The US military is our jobs program. There’s plenty of opportunity in the growing field of cannon fodder.

“The world cannot continue to wage war like physical giants and to seek peace like intellectual pygmies.”
~ Basil O’Connor

© sbruce 2010 published as an op-ed in the Conway NH Daily Sun 3-19-10

Wednesday, March 17, 2010

State Owned Banks

Given the slow pace of financial service reforms, some states are looking for ways to avoid the "too big to fail" syndrome. One approach being looked at is is state owned banking.

That's a question that a growing number of candidates and legislators across the country are answering with proposals to create state-owned banks. Though these initiatives borrow from an old model--North Dakota has run a successful state bank since 1919--they are a response to a new reality: the hundreds of billions of public dollars plowed into big banks by the federal bailout have done little to free credit for job creation or economic development in recession-ravaged communities. So, taking a cue from Nobel Prize-winning economist Joseph Stiglitz and other critics of private-bank bailouts, latter-day populists are proposing to put public money to work for the public good.

From the Bank of North Dakota history:

During the early 1900's, North Dakota's economy was based on agriculture. Serious in-state problems prevented cohesive efforts in buying and selling crops and financing farm operations. Grain dealers outside the state suppressed grain prices; farm suppliers increased their prices; and interest rates on farm loans climbed.

By 1919, popular consensus wanted state ownership and control of marketing and credit agencies. Thus, the state legislature established Bank of North Dakota and the North Dakota Mill and Elevator Association.

Bank of North Dakota (BND) was charged with the mission of "promoting agriculture, commerce and industry" in North Dakota. It was never intended for BND to compete with or replace existing banks. Instead, Bank of North Dakota was created to partner with other financial institutions and assist them in meeting the needs of the citizens of North Dakota.

Meeting the needs of the citizens used to be what banks did. As small, locally owned banks were bought out by larger banks, that were bought by too-big-to-fail conglomerates, the quaint concept of meeting the needs of the citizens fell by the wayside.

Back to John Nichols and how some states are thinking about going back to meeting the needs of their citizens:

Oregon Democratic gubernatorial candidate Bill Bradbury is calling for the creation of a Bank of Oregon, which would keep money in the state and invest in sustainable development. "It is time to declare economic sovereignty from the multinational banks that are responsible for much of our current economic crisis," says the former State Senate president and secretary of state. "Every year we ship over a billion dollars in Oregon taxpayer dollars to out-of-state and multinational banks in the form of deposits, only to see that money invested elsewhere. It's time to put our money to work for Oregonians."

Michigan's Virg Bernero, a leading candidate for the Democratic nomination for governor in that hard-hit state, is another public-banking proponent. "We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs," says the populist mayor of Lansing. In Illinois, Green Party gubernatorial nominee Rich Whitney, who won 10 percent of the statewide vote in 2006, proposes depositing all state tax revenues and pension contributions in a state bank. "Instead of using state funds as a means to further enrich private banks, a state-owned bank could earn additional revenue for the state while at the same time help spur economic development in Illinois," he argues.

This is a populist solution whose time may well have arrived - especially if we want to avoid what the Austin Lounge Lizards foretell:

cross posted at

Tuesday, March 16, 2010


A reminder about Tapped, the movie

Tapped is going to be shown on Monday, March 22, 6 pm, at the Conway Public Library. This film takes a look at the social, economic, and environmental realities behind the bottled water industry, as well as how Poland Spring/Nestle has all but destroyed the town of Fryeburg, ME. Nestle worked awfully hard to make sure this film wouldn't be shown in Maine - so see it in New Hampshire! After the screening, there will be discussion and drinks at Cafe Noche. The film is free and open to the public. The drinks are on you!

A note to my regular readers - this has generated a lot of traffic to my blog. Nestle, and their PR firm have been regular visitors.

Friday, March 12, 2010

More Foreclosures Ahead

The Washington Post reports on what is expected to be a new round of home foreclosures:

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can't obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.

This affects a whole different group of homeowners/borrowers:

The borrowers in trouble now are, for the most part, people who have better credit and safer loans and have become delinquent because they've lost their jobs or are dealing with other economic setbacks, economists said. More than 75 percent of the borrowers who are now seriously delinquent -- meaning they have missed at least three monthly payments -- have traditional prime loans, according to First American CoreLogic. Most of these borrowers have not made a mortgage payment in six months.

These borrowers are among the most difficult to help. Homeowners with economic troubles such as extended unemployment often cannot make even reduced mortgage payments. And the longer borrowers stay delinquent, the more difficult it is to fashion a mortgage relief plan for them.

From CBS Moneywatch some rare media honesty about the real unemployment rate:

The real question is what happens to foreclosure projections if unemployment stays high. Right now, true unemployment is running close to 17 percent, but another 20 to 30 percent of Americans have experienced a decline in pay. Half the country has less income to spend, and Americans are still losing jobs.

This serves to underscore the need for the One Million Local Jobs bill.

cross posted at

Thursday, March 11, 2010

States Facing Deeper Budget Cuts in 2011

The Center on Budget and Policy Priorities recently released a report on state budget cuts caused by decreasing tax revenues. Over 45 states have already made deep cuts, and in 2011, another round of cuts is expected:

With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have made spending cuts that hurt families and reduce necessary services. These cuts, in turn, have deepened states’ economic problems because families and businesses have less to spend. Federal recovery act dollars and funds raised from tax increases are greatly reducing the extent, severity, and economic impact of these cuts, but only to a point.

The cuts enacted in at least 45 states plus the District of Columbia in 2008 and 2009 occurred in all major areas of state services, including health care (29 states), services to the elderly and disabled (24 states and the District of Columbia), K-12 education (29 states and the District of Columbia), higher education (39 states), and other areas. States made these cuts because revenues from income taxes, sales taxes, and other revenue sources used to pay for these services declined due to the recession. At the same time, the need for these services did not decline and, in fact, rose as the number of families facing economic difficulties increased.

These budget pressures have not abated and, in fact, are increasing. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This is likely to cause a new round of cuts. Based on new, gloomy revenue projections, governors have begun issuing their budget proposals for the 2011 fiscal year (which begins on July 1, 2010 in most states), and the proposed cuts go even further than those that states have enacted to date.

So, as the need for services increases, the budgets for programs that help those who are most vulnerable are cut.

This slideshow gives a brief and helpful overview of the situation, and an idea of how long its likely to take to dig out of this.

This website has a lot of useful information, including a look at the ABC's of State Budgets, an intro to the Federal Budget Process and some all round helpful information and definitions of terms that we hear all the time, (like Pay as You Go, Budget Reconciliation, or Earned Income Tax Credit) but may not fully understand unless we are budget geeks.

Bottom line - the news isn't good, and the only way out is to create jobs, as quickly as possible.

cross posted at

Tuesday, March 09, 2010

Goodbye Granny D

NH citizen activist Doris Haddock, known to all as Granny D, died this afternoon. Doris turned 100 in January.

She was a remarkable woman, who had a long and interesting life. She was no passive citizen - Doris took active citizenry to new heights at an advanced age. I want to be just like her.

The big news stories and accolades will be coming in tomorrow - but for now, this story from the Nashua Telegraph will do:

“I have nothing to leave behind for my … grandchildren and great-grandchildren but I can give them a legacy and a lesson they can carry through their own lives,” Haddock said in a recent interview.

The lesson is what Haddock calls the “power of one” and she most humbly thanks Bonnie Riley, a former teacher. During a 1996 meeting of women activists who got together weekly in Francestown, Riley dared Haddock to act on her outrage over a $50 billion congressional earmark for a tobacco company.

“She wouldn’t just let me complain about it. She changed my life,” Haddock declared

h/t to The Austin Chronicle for the great picture.

Thursday, March 04, 2010

Our State is Broken

John Stephen, former Congressional candidate, is now running for governor of NH. Stephen ran for Congress in 2002, and again in 2008. He lost both times, in the primaries, to Jeb Bradley, who lost the Congressional seat in 2006. Bradley will co chair Stephen’s campaign.

It’s long been rumored that Bradley was going to run for governor, but apparently he’s decided to help throw his old foe to the wolves. The GOP hasn’t had much success in fielding candidates against the popular Governor John Lynch. The last human sacrifice was former District 3 state senator Joe Kenney. The best that can be said about that matchup is that in other parts of the state people are still asking, “Joe who?

The toughest gubernatorial race faced by John Lynch was his first. He ran against incumbent Craig Benson, a man who was almost universally hated. It’s interesting to note that his name is never fondly invoked by the NH GOP, nor are his accomplishments ever touted. Governor Hummer was indeed a real bummer. The GOP doesn’t want to brag about Benson’s Chief Information Officer (CIO) who was paid $150,000 a year to oversee and update the state’s information systems.

Robert Anderson was one of Benson’s Cabletron cronies, and was appointed in 2003. After doing nothing but picking up a paycheck, he quietly resigned in 2004. There were a lot of problems with Benson appointees. Another Cabletron crony, Linda Pepin was the focus of corruption charges. Pepin was one of Benson’s “volunteers” who were allegedly donating their time to the state of NH, to save us all money. Pepin was acting as an insurance broker for the state, negotiating health and dental contracts, even though she wasn’t licensed to do so. She did collect $187,000 for her “volunteer” efforts. Why am I bringing up Benson? Simple - John Stephen was a Benson appointee. There seems to be a common thread amongst all Benson appointees – dishonesty and/or incompetence.

Stephen is continually praised in the mainstream conservative press for being a “fiscal conservative.” Apparently, in order to be labeled a fiscal conservative, all one has to do is repeat the NH GOP mantra, “cut spending, no new taxes.” One doesn’t have to actually DO any such thing, only say it. Over and over. Earlier this week, Stephen announced his candidacy at a press conference in the Legislative Office Building in Concord. He told his supporters “our state is broken. “ I was surprised to hear this, given how often our state has been voted the best state to live in. Why would John Stephen willingly live in a broken state? Why aren’t we all moving out in droves? At this same press conference, Stephen cited a report by the Independent Tax Foundation. He claimed that the foundation ranked NH as coming in last in terms of the business tax climate. Oddly, on the foundation’s own website, there is a report ranking NH as seventh best in the nation. John Stephen showing, once again, why he was a Benson appointee.

It’s typical GOP rhetoric, and dates back to the golden years of St. Ronnie Reagan, who told us that “government is the problem,” a sentiment echoed by GOP candidates for the last 30 years or so. Government is bad they tell us, yet they keep running for bad, spending buckets of money to get into the bad, to become part of the problem. This is no different. New Hampshire isn’t broken. There are states having some serious problems – like California, where the Governor is having yard sales to scrape up cash for the government.

Does Stephen really have street cred as a fiscal conservative? In 2005, there was a $70 million shortfall in the state budget because DHHS Commissioner John Stephen double counted that amount in the DHHS budget. In 2006, Stephen was called to testify before the legislature, as to why he discounted the state’s share of nursing home costs for a few years. Stephen claimed that his practice of “budget neutrality” was the reason that nursing homes were underpaid by about $20 million. The term “budget neutrality” as used by Commissioner Stephen could be replaced correctly by the term “cost shifting.”

The NH Supreme Court ruled that Stephen’s budget neutrality was invalid, because it was unauthorized by law or by department rules. Commissioner Stephen appealed that finding. He lost.

Commissioner Stephen then filed for an emergency rule to continue budget neutrality. In response, the NH legislature passed HB 721, which blocked his ability to engage in cost shifting hijinks. They ordered him to repay the nursing homes approximately $9 million in shifted costs. He never did. When he resigned from DHHS to run for Congress in 2007, that bill was unpaid.

John Stephen’s record shows he lacks any credibility as a fiscal conservative. He just knows how to repeat the mantra, which is, apparently all that is needed to win that coveted title from the NH GOP. He proposes nothing new – it’s the same old “cut spending, no new taxes” that we’ve heard from every Republican candidate to run for office in our state. Lather, rinse, and repeat.

“As long as the governor stays at 50 percent or above, it's clear that voters aren't in the mood to fire him, at least the majority ... And that's the key thing for John Stephen. He's got to make this race all about John Lynch. Every day that it's a story about John Lynch, about taxes and so forth, is a good day for John Stephen. Every day the story is about John Stephen is a bad day for John Stephen.” ~ Dante Scala

© 2010 sbruce published as an op-ed in the March 5, 2010 edition of the Conway Daily Sun

Worried About Jobs Being Outsourced?

Well, here's one way to solve the problem of the depressing numbers of US jobs that are lost to overseas competitors.

Close down the office that tracks the statistics:

President Obama's budget would eliminate the International Labor Comparisons office and transfer its 16 economists to expand the bureau's work tracking inflation and occupational trends. The White House says the cut, estimated to save $2 million, is one of many difficult decisions the president was forced to make to control spending.

It sure is hard not to be cynical about this. In fact, it's impossible not to be. Obama has called for NAFTA style trade agreements expanding into Panama, Columbia, and South Korea. These sorts of trade agreements have proven deadly for US workers. But, hey, if they close down the office that tracks the data - we'll never know just how deadly.

In related news, a small group of legislators have filed a bill that would cause the US to withdraw from NAFTA.

The bill spearheaded by Rep. Gene Taylor, a Mississippi Democrat, would require President Barack Obama to give Mexico and Canada six months notice that the United States will no longer be part of the 16-year-old trade pact.

"At a time when 10 to 12 percent of the American people are unemployed, I think Congress has an obligation to put people back to work," Taylor said.

He argued NAFTA has cost the United States millions of manufacturing jobs and hurt national security by encouraging companies to move production to Mexico.

The high unemployment rate makes it the "perfect" time to push for repeal even though past efforts have failed, he said.

It will be interesting to see if this goes anywhere.

cross posted at

Wednesday, March 03, 2010

Not Enough Primary Care Doctors

A piece of the health care reform issue we don't hear much about is the very serious shortage of primary care physicians

The annual number of American medical students who go into primary care has dropped by more than half since 1997. It's hard to get an appointment with the doctors who remain. In some surveys, as many as half of primary-care providers have stopped taking new patients. The other half are increasingly overworked and harried. Clearly we need to find a way to increase their ranks, and both the congressional health-care bills and President Obama's reform proposal make moves in that direction. But those efforts are somewhat limited, and a more comprehensive solution could be thwarted by the same thing that's stalled the rest of health-care reform so far: politics.

The reason behind America's doctor gap is a matter of money. The average income in primary care is somewhere in the mid-$100,000s, which sounds like a lot but is less than half what specialists such as radiologists and dermatologists make. Given that doctors may graduate with as much as $200,000 in med-school debt, it's easy to see why primary care started hemorrhaging recruits more than a decade ago and why radiology and other well-paid, high-tech specialties took off in popularity.

The field has since entered a vicious cycle. As fewer people have entered primary care, the doctors who are left have been forced by tight schedules to shortchange some patients, forgoing the long, meandering chats that used to be a big part of checkups in favor of 15-minute, checklist-style appointments. The close relationships that general practitioners once had with patients drew many idealistic students into the field. Now recruiters face an extra-tough sell: they have to convince bright young would-be docs to pursue a career that won't pay very well and won't be as emotionally fulfilling as it once was.

Some medical schools around the country now have programs that pay a portion of the med student's tuition, in exchange for them doing their training in rural areas. There is also the National Health Service Corps where scholarships and loan repayment are available to medical professionals who go to work in an underserved area. Programs like this are especially important in rural areas. From their website:

About the National Health Service Corps
Since 1972, more than 30,000 clinicians have served in the Corps, bringing high quality health care to places and people without access to even basic services.

Nearly 80 percent stay in the underserved area after fulfilling the NHSC service commitment; more than half make a career of caring for underserved people.

Last year, about 3,500 NHSC providers cared for 4 million people — changing their own and their patients' lives.

According to the Journal of the American Medical Association doctors are working fewer hours than they used to:

Average hours dropped from about 55 to 51 hours per week from 1996 to 2008, according to the analysis, appearing in Wednesday's Journal of the American Medical Association.

That's the equivalent of losing 36,000 doctors in a decade, according to the researchers. And it raises policy questions amid a looming primary care doctor shortage and Congress considering an expansion of health insurance coverage that would mean more patients.

One can certainly suppose (correctly) that overwork and burnout may be reasons why doctors are working fewer hours, but money also seems to be a big motivator:

Payment issues may have played more of a role. The overall decrease in hours coincided with a 25% decline in pay for doctors' services, adjusted for inflation. And when the researchers looked closely at U.S. cities with the lowest and highest doctor fees, they found doctors working shorter hours in the low-fee cities and longer hours in the high-fee cities.

One way to address the problem of doctor shortages is to have patients see nurses, physician's assistants, and nurse practitioners for routine care - all of whom can detect a serious problem and pass it on to a doctor. In some rural areas this is already happening, out of necessity.

The American Medical Association and doctors groups don't like this. Even though there is a serious shortage of primary care docs, the AMA is opposed to letting nurse practioners have a greater role in primary care.

The American Medical Association sparked harsh criticism from nursing groups when it released a report in October bluntly questioning whether nurse practitioners "are adequately trained to provide appropriate care." To back up its claims, the report cites recent studies that question the prescription methods of some nurse practitioners, as well as a survey that reported only 10 percent of nurse practitioners questioned felt well prepared to practice primary care.

The nurses are fighting back:
Responding to the AMA in December, the American Nurses Association and more than two dozen other nurses' organizations termed the report "misleading," saying it "contains numerous factual misrepresentations." Their letter rebuked the AMA for its "attempt to change the perceptions of NP practice as anything other than fully qualified professionals working within a legally established scope of practice."

In addition to the common sense aspect, using nurse practitioners also saves money:
In September, the nonpartisan Brookings Institution's Engelberg Center for Health Care Reform issued a report by 10 experts that said one way to curb health care spending is to encourage states to permit "greater use of nurse practitioners, pharmacists, physician assistants, and community health workers." Meanwhile, a blue-ribbon committee working under the aegis of the Institute of Medicine and Robert Wood Johnson Foundation is planning to make extensive recommendations later this year on the future of nursing.

Instead of big, howling egos, it would be nice to see more creative solutions. A small town in northern NH was fortunate enough to have one solution given to them. A wealthy summer resident of Tamworth, NH started the Tamworth Community Nurses Association. Mrs. Elizabeth Whittemore left behind an endowment, so that all residents of Tamworth could have access to health care. That was over 80 years ago. The town of Tamworth still has a nurse that sees patients in her office or makes house calls. Free.

In the interest of full disclosure, I know JoAnn Rainville, the Tamworth Community Nurse. I live in a nearby town. The kind of care she provides, saves money. In rural areas, duplicating this kind of service makes sense, especially as we face a shortage of primary care doctors and the possibility of millions of Americans becoming insured.

Cross posted at