Month: June 2012

The Massachusetts health care reform reduced emergency room visits

I just spotted a new paper by Sarah Miller (a fellow Messiaen fan), who seems to be on the job market this year from U. Illinois:

Abstract:This paper analyzes the impact of a major health reform in Massachusetts on emergency room (ER) visits. I exploit the variation in pre-reform uninsurance rate across counties to identify the causal effect of the reform on ER visits. My estimates imply that the reform reduced ER usage by about 8 percent, nearly all of which is accounted for by a reduction in non-urgent visits that could be treated in alternative settings. In contrast, I find no effect for non-preventable emergencies such as heart attacks. These estimates are consistent with a large causal effect of insurance on ER usage and imply that expanding insurance coverage could have a substantial impact on the efficiency of health services.

Don’t worry, I’ll get back to Stuxnet and related topics by Thursday.

Today is probably a funny blogging day

If the Supreme Court strikes down ACA in part or as a whole, and you did not like the law in the first place, do not assume you should be happy.  It is far from obvious that we will end up with something better.  I do hope that today (or later this week) is not simply a big exchange of anger and recrimination.  No matter what happens, America still needs health care reform and this will require cooperation across the ideological spectrum.

By the way, didn’t it just come out in The Washington Post that the United States helped attack Iran with Flame, Stuxnet and related programs?  If they did this to us, wouldn’t we consider it an act of war?  Didn’t we just take a major step toward militarizing the internet?  Doesn’t it seem plausible to you that the cyber-assault is not yet over and thus we face immediate questions looking forward?  Won’t somebody fairly soon try to do it to us?  Won’t it encourage substitution into more dangerous biological weapons?

I do understand that these are fairly superficial questions and that I do not have the expertise to write a detailed and insightful blog post on these topics.  Still, it seems odd not to mention them at all.  While I read in limited circles, I do not see many writers devoting much attention to the matter.  Shouldn’t this have set off a large-scale national debate?

*Prometheus* (some economic notes)

The years to 2090 show remarkable technological progress in transportation and health care delivery and artificial intelligence.  Labor-saving innovation eliminates even the job of Peter O’Toole.  Before departing on an interstellar mission, have each crew member read Richard Epstein’s Simple Rules for a Complex World.  Do not bring anyone who was brought up in a barn.  Not all animals are cute.  It is possible to signal that you have a really important message to be heeded.  When making a project shutdown decision, it is long-run marginal variable cost which matters.  Rates of capital depreciation are sometimes lower than you think.

The Stiglitz hypothesis

Today, persistent low interest rates encourage firms that do invest to use capital-intensive technologies, such as replacing low-skilled checkout clerks with machines. In this way, the Fed may still be contributing to a jobless recovery, when we finally do recover.

If you read these two sentences with sufficient brute literality, they may well be true.  And more generally I would admit, and indeed stress, that we are in an age of labor-saving innovation.  Still:

1. Fed policy is a minor factor behind that trend, and would be recognized as such by all empirical researchers in the area,

2. Never reason from an interest rate change (erect statue to Scott Sumner), and

3. A tighter monetary policy would be far worse for the labor market.  Furthermore weaker incentives for investment also would be worse for the labor market, although Stiglitz’s passage can be read as implying the opposite.

If you think Sumner-Avent-Yglesias-Soltas thought has taken over the world, Stiglitz shows a blindness to monetary options:

If we want recovery, there is no choice but to rely on fiscal policy.

Not “fiscal policy is better,” but rather “there is no choice.”  There is also no explanation.

The link is here.

China and Russia billionaire facts of the day

…two men who in the last decade held the title of richest man in China are now in jail on corruption charges of one kind or another.  That is not to say that the charges were baseless, only that in China’s freewheeling business culture, the authorities seem to pay particularly close attention when the deal-making generates fortunes approaching $10 billion. Deng Xiaoping declared that “it’s glorious to be rich,” but the message now is, not too rich. The government appears intent on generating competitive churn at the top, in part to contain social resentments.

Now look at Russia, where one hundred billionaires control fortunes worth an astonishing 20 percent of national GDP. Russia has nearly as many billionaires as China but they control twice as much total wealth in an economy one-fourth the size. Just as striking, Russia is missing not only a middle class but also a millionaire class; according to Boston Consulting Group, China ranks third in the world for number of millionaires, while Russia is not even in the top 15 for millionaires.

The growing business influence of the state is reflected in the fact that 69 of those billionaires live in Moscow, the largest concentration for any city in the world. Protected by their patrons, the richest face little competition. Eight of the top 10 are holdovers from 2006. More than 80 percent of the wealth of Russian billionaires comes from non-productive industries like real estate, construction and especially commodities, namely oil and gas, in which political ties can sustain fortunes indefinitely. In no other developing nation is this share greater than 35 percent. Even in Brazil, a commodity economy at the same income level as Russia, the non-productive share of billionaires’ wealth is just 12 percent.

The entire post, by Ruchir Sharma, is fascinating, and with some superb visuals, do read it.

Privatization in Sandy Springs, Georgia

Cities have dabbled for years with privatization, but few have taken the idea as far as Sandy Springs. Since the day it incorporated, Dec. 1, 2005, it has handed off to private enterprise just about every service that can be evaluated through metrics and inked into a contract.

To grasp how unusual this is, consider what Sandy Springs does not have. It does not have a fleet of vehicles for road repair, or a yard where the fleet is parked. It does not have long-term debt. It has no pension obligations. It does not have a city hall, for that matter, if your idea of a city hall is a building owned by the city. Sandy Springs rents.

The town does have a conventional police force and fire department, in part because the insurance premiums for a private company providing those services were deemed prohibitively high. But its 911 dispatch center is operated by a private company, iXP, with headquarters in Cranbury, N.J.


Applying for a business license? Speak to a woman with Severn Trent, a multinational company based in Coventry, England. Want to build a new deck on your house? Chat with an employee of Collaborative Consulting, based in Burlington, Mass. Need a word with people who oversee trash collection? That would be the URS Corporation, based in San Francisco.

Even the city’s court, which is in session on this May afternoon, next to the revenue division, is handled by a private company, the Jacobs Engineering Group of Pasadena, Calif. The company’s staff is in charge of all administrative work, though the judge, Lawrence Young, is essentially a legal temp, paid a flat rate of $100 an hour.

The full story is here.  The article has many interesting points, such as this:

Town leaders say race had nothing to do with it. Mayor Galambos said, “A 94 percent vote in favor of incorporation speaks to the broad community support for self-government and a desire to have local dollars remain local.”

And this:

To dissuade companies from raising prices or reducing the quality of service, the town awarded contracts to a couple of losing bidders for every winner it hired. The contracts do not come with any pay or any work — unless the winning bidder that prevailed fails to deliver. It’s a bit like the Miss America pageant anointing the runner-up as the one who will fulfill the winner’s duties if, for some reason, Miss America cannot.

In a stand-alone sense, the town seems to be working quite well.

Moneyball 2.0

Or should that be 3.0?:

The technology was originally developed to track missiles. Now, SportVU systems hang from the catwalks of 10 NBA arenas, tiny webcams that silently track each player as they shoot, pass, and run across the court, recording each and every move 25 times a second. SportVU can tell you not just Kevin Durant’s shooting average, but his shooting average after dribbling one vs. two times, or his shooting average with a defender three feet away vs. five feet away. SportVU can actually consider both factors at once, plus take into account who passed him the ball, how many minutes he’d been on the court, and how many miles he’d run that game already.

It’s big data in a relatively small pool, and it has the potential to impact everything about basketball, from how it’s coached, to how it’s recruited–even to how we calculate a player’s worth. Sportvision, another sports data collection system based on the same underlying big data idea, has already massively impacted baseball since it came into play in 2006. Now SportVU is generating more basketball data than anyone ever has. And its potential has only begun to be tapped–health care researcher Kirk Goldsberry, who recently wowed the stats geeks at MIT Sloan Sports Analytics Conference with his spatial analysis to determine the best shooters, has begun mining SportVU’s data for new insights. But only 10 teams in the NBA are currently using SportVU. Four of them made the playoffs. One even made it to the finals: The Oklahoma City Thunder.

Here is more, and for the pointer I thank Jim Olds.

Posner throws out Apple-Motorola Case

As suggested by earlier rulings, Posner has thrown out the entire Apple-Motorola case. As I argued in Launching the Innovation Renaissance our patent system has became a weapon wielded by large corporations against competitor innovations. Posner’s ruling is complex but one point is clear he thinks that the courts should not act as a second in these corporate battles:

…The danger that Apple’s goal in obtaining an injunction is harassment of its bitter rival, requiring particularly watchful supervision by the court should it issue the injunction, is suggested by the fact that while a delayed injunction would in principle render no benefit to Apple besides harming its competitor by forcing it to waste time and money finding a new way of performing the functions now performed in an allegedly infringing manner, an ongoing royalty would yield significant income to Apple—yet which it wants to forgo in favor of imposing costs and litigation burdens on its adversary.

The notion that these minor-seeming infringements have cost Apple market share and consumer goodwill is implausible, has virtually no support in the record, and so fails to indicate that the benefits to Apple from an injunction would exceed the costs to Motorola. An injunction that imposes greater costs on the defendant than it confers benefits on the plaintiff reduces net social welfare. That is the insight behind the “balance of hard-ships” component of the eBay standard for injunctive relief in patent cases.

Hat tip: @postlibertarian.

Markets in everything

If you, like me, sometimes wander around Sephora and find that all the perfumes seem to smell the same, I bring you the odor of change.

It’s called Money. It’s the nosechild of Microsoft VP of Sales Patrick McCarthy. And it gives off a fragrance of brand new bills.

His Money Cologne and Her Money Eau de Parfum are, quite clearly, what the material world has needed for a long time.

Here is more, and for the pointer I thank Chris F. Masse.