Face the facts: competition and profit don"t work in health, education or prisons | John Quiggin

Following a long series of unsuccessful attempts at developing a workable lightbulb, Thomas Edison is supposed to have said, “I’ve not failed. I’ve just found 10,000 ways that won’t work.” This quote comes irresistibly to mind when thinking about Tony Blair’s famous commitment to “what works”, as opposed to ideology, in public policy.

In retrospect, it seems that Blair, and like-minded reformers throughout the English-speaking world, have delivered an Edison in reverse. Edison experimented with many things that didn’t work, but ended up with a light bulb. Market-oriented reforms, particularly in the provision of human services like health, education and public safety, have begun with a working system and replaced it with a string of failed experiments.

Here are a few examples from recent news stories around the English-speaking world

These examples could be multiplied endlessly, and not as the result of a selective choice of reports. A Google search on terms like “PFI hospital” or “private vocational training” will produce dozens more reports, nearly all describing financial and human disasters.

Yet despite this string of disasters, the push for market-oriented reform goes on. In the US, the Obama administration continues to promote the failed idea of charter schools, and Obama allies like Rahm Emanuel have carried on the war against teacher unions. The conservatives in Britain have backed away from the worst failures of the PFI. However, they are still enamoured of other Blair ideas like converting local authority schools into “academies” despite the absence of any evidence of improved performance.

Even by comparison with these examples, the Baird government in NSW stands out. It is pushing ahead with the privatisation agenda in Tafe, despite the obviously disastrous nature of the results. It has outsourced teaching in prisons to companies whose staff lack teaching degrees.

Not content with that, the Baird government is outsourcing the provision of public housing. The likely winner, despite its failures here and abroad, is Serco, a firm prominent as both a beneficiary of, and advocate for, outsourcing of human services.

The Australian policy elite seem immune to evidence on the failures of markets in human services. The recent Harper review of competition policy in Australia suggested that, “Consumer choice should be placed at the heart of government service delivery, through policies to encourage diverse and competitive markets populated with innovative and responsive providers.”

But it is precisely the firms lauded as “innovative” and “responsive”, from the University of Phoenix to the shonky builders of PFI schools and hospitals, that have done most to hurt government service programs.

Sooner or later the advocates of reform will have to answer the Edison-Blair question: “What works?” And what works is traditional public provision. Through all of these failed experiments, the public sector, much-maligned and chronically underfunded, has carried on with the hard work of educating young people, treating the sick and providing the vast range of services needed in a modern society, on a the basis of an ethic of service to the entire community, and not merely those who can pay for premium service.

The only other model with comparable success is not-for-profit provision by organisations with a charitable or service mission. Church-run schools and hospitals, and activist-run services like women’s shelters and services for the unemployed and homeless, have complemented the public sector, meeting needs that have been unrecognised or underserved.

The issue is not, in the end, one of public versus private. Rather it is the fact that market competition and the profit motive inevitably associated with it is antithetical to the professional and service orientation that is central to human services of all kinds.

No matter how cleverly market reformers design incentive schemes, competition for profits will always find a way to subvert them. It is time we as a society recognised this, and returned to what actually works.

Face the facts: competition and profit don"t work in health, education or prisons | John Quiggin

With An Obamacare Increase, Cigna Latest To Increase Profit Outlook

Cigna Cigna (CI) became the most recent in a parade of health insurance firms to report they are going to make even much more income than they thought they would in 2014 thanks to new organization strategies and a surge of younger consumers signing up for coverage under the Reasonably priced Care Act.

Cigna this morning stated it now expects revenue from operations in the variety of $ one.93 billion and $ two billion or between $ seven.05 and $ seven.35 a share for 2014. That’s an enhance of twenty cents per share from previous guidance, the company mentioned for the duration of its first quarter earnings report.

Cigna chief executive officer David Cordani explained the organization is executing well across all of its markets and is also moving to new approaches that motivate accountable care, having to pay “health coaches” and nurse care managers to support traditional health care care companies deal with sufferers much more properly, trying to keep them effectively and in much less expensive care setting like hospitals. Employers and the health law motivate such “population health” approaches to delivering healthcare care, moving away from traditional fee-for-service medicine to so-referred to as “value-based mostly care.”

And although Cigna executives sustain the insurer will lose money this yr on people who signed up for coverage via public exchanges under the well being law, executives mentioned a surge of younger people signing up in the waning weeks of open enrollment is very good information.

Cordani stated throughout a 70-minute conference get in touch with with Wall Street analysts sand investors that the early buyer group was “older than our expectations. . . and bought a bit richer benefit strategy.” In addition, the early buyer group in the six-month open enrollment period that started final October also had a greater usage of health care care companies in the very first two months of this yr.

But the 2nd wave of people who signed up for Cigna programs was younger, Cordani mentioned. “They purchased leaner rewards,” Cordani mentioned.

By the end of 2014, Cigna expects 290,000 customers buying individual policies and 40 % of them are acquiring “ACA policies,” or policies subsidized underneath the Reasonably priced Care Act.

In the company’s 1st quarter, Cigna reported net cash flow from operations of $ 501 million, or $ one.83 per share compared to $ 387 million, or $ 497 million, or $ 1.72 per share in the first quarter of 2013. Revenues enhanced four % to $ 8.five billion.

Cigna is the most current insurance organization telling a concerned Wall Street that they going to be able to deal with the first 12 months of chance from newly insured consumers getting subsidized personal wellness plans by means of government-run exchanges. Underneath the law, millions of Americans can get subsidies to acquire an array of wellness program options.

The improved forecast is the most recent in a parade of rosy monetary projections from health insurance coverage firms benefitting from the health law. Other insurers doing effectively include Aetna Aetna (AET) UnitedHealth Group UnitedHealth Group (UNH), Humana Humana (HUM) and Wellpoint (WLP), a main operator of Blue Cross and Blue Shield programs beneath the Anthem brand that also raised its revenue outlook this week.

Obama Speaks in Boston (Photograph credit: BU Interactive News)

With An Obamacare Increase, Cigna Latest To Increase Profit Outlook

Wellpoint Boosts Profit Forecast On Younger, Greater ACA Enrollment

Wellpoint (WLP), one particular of the nation’s greatest overall health insurance coverage businesses, extra 1.3 million more subscribers across its government and industrial firms thanks in massive part to the Reasonably priced Care Act.

Wellpoint now explained it expects its healthcare enrollment to increase for the full year by 1.three million to one.4 million members, like more than 400,000 that came from government-run exchanges in the very first quarter, in accordance to the company’s earning report today. Wellpoint also raised its earnings per share forecast to “greater than $ 8.forty per share.”

“Our membership is developing across our platforms and we are pleased with the progress we have seen in the exchanges,” Wellpoint chief executive officer Joe Swedish said.

Wellpoint’s revenue outlook is enhanced in portion since the combine of company is monitoring how the firm projected from the exchanges.Wellpoint is a significant operator of Blue Cross and Blue Shield strategies, which includes these operated beneath the Anthem brand.

Even though some observers of enrollment anxious that the population signing up for coverage would be older and sicker and value health programs far more income, Wellpoint executives mentioned subscribers trended younger every day of the signup period in the last weeks as more and much more Americans took to the exchanges in the waning days of the open enrollment time period, which ended last month.

Insurance coverage businesses for significantly of this quarter possessing been telling Wall Street that they are going to be able to deal with the 1st year of chance from newly insured buyers acquiring subsidized personal wellness plans by way of government-run exchanges. Beneath the law, hundreds of thousands of Americans can get subsidies to buy an array of overall health prepare alternatives.

In the first quarter, Wellpoint said net income was $ 701 million or $ two.forty per share. Revenues rose 1.two percent to $ 17.six billion.

The enhanced forecast is the most recent in a parade of rosy monetary projections from health insurance businesses benefitting from the overall health law. Other insurers performing well consist of UnitedHealth Group UnitedHealth Group (UNH), Humana Humana (HUM), Cigna Cigna (CI) and Aetna Aetna (AET).

Just final month, Swedish raised the company’s earnings outlook from “greater than $ eight.00 per share to higher than $ eight.20 per share” and noticed growth of “1 to one.three million net new health-related members.”

When a company raises its earnings forecast, that implies it will make more cash than it originally believed.

In addition to promoting overall health benefits to employers and people, Wellpoint is a significant contractor to states and the federal government by supplying coverage underneath Medicaid packages for the bad and the Medicare overall health insurance coverage system for the elderly. In the initial quarter, Wellpoint said it additional 75,000 new enrollees in its government organizations and that was largely Medicaid.

Wellpoint Boosts Profit Forecast On Younger, Greater ACA Enrollment

Another Signal ObamaCare Performs: Wellpoint Boosts Profit Forecast

Wellpoint Wellpoint Inc. (WLP), 1 of the nation’s greatest well being insurance companies, raised its full-yr earnings forecast, citing a lot more than 1 million new well being prepare members related in component to new enterprise from the Reasonably priced Care Act.

When a business raises its earnings forecast, that implies it will make far more funds than it initially thought. In Wellpoint’s situation, the organization raised its 2014 “earnings outlook from better than $ eight.00 per share to higher than $ 8.20 per share,” organization chief executive officer Joseph Swedish explained this morning. Swedish cited “growth of one to one.three million net new health care members and mid-single digit percent increases in the two working revenue and working achieve.”

Wellpoint exclusively cited its potential to successfully deal with new company coming from Americans signing up for coverage by means of the state and federal marketplaces acknowledged as exchanges. President Obama last week mentioned that enough Americans have signed up to private wellness ideas beneath the overall health law that it will perform even although there could be up to two million fewer Americans covered than the White Property had hoped.

Wellpoint is a key operator of Blue Cross and Blue Shield plans, such as people operated beneath the Anthem brand. In addition to promoting health rewards to employers and people, Wellpoint is a key contractor to states and the federal government by delivering coverage beneath Medicaid applications for the bad and the Medicare overall health insurance coverage plan for the elderly.

“While it is early in 2014, we are encouraged by final results thus far across our organizations and we feel exchanges are monitoring our standard expectations,” Swedish stated in a statement launched this morning prior to addressing analysts and traders at a conference in New York. “We are constructing on the optimistic operating momentum we’ve achieved across the organization above last yr.”

Wellpoint’s rhetoric is a continuation of constructive monetary projections that were issued in January and February for the duration of fourth-quarter earnings from insurers such as Aetna Aetna (AET), Cigna Cigna (CI), Humana Humana (HUM) and UnitedHealth Group UnitedHealth Group (UNH).

Insurance coverage companies for considerably of this quarter having been telling Wall Street that they are going to be capable to handle the very first year of chance from newly insured consumers buying subsidized private wellness strategies via government-run exchanges. Under the law, hundreds of thousands of Americans can get subsidies to acquire an array of wellness plan choices.

Swedish also indicated the company outlook for the insurance coverage firm wouldn’t be quick-lived.

“Our outlook also remains prudent in light of the dynamic nature of the marketplace, and we believe this is a stage from which we will grow in the long term,” Swedish said. “We have entered a time period of tremendous modify across the well being care system and are confident that WellPoint has the leadership, assets and method to drive profitable growth above the subsequent a number of many years.”

Another Signal ObamaCare Performs: Wellpoint Boosts Profit Forecast

CVS retailers will no longer promote cigarettes. It truly is the well being in excess of profit revolution | Nicholas Freudenberg

The CVS decision announced nowadays to stop marketing tobacco merchandise at its 7,600 pharmacies around the United States by 1 October is an critical step forward for public health – and for tobacco manage activists.

In accordance to Forbes, CVS CEO Larry Merlo believes that

continuing to promote cigarettes, which the Surgeon Common blames for 480,000 deaths every single year from heart ailment, lung cancer, and stroke, was anathema to CVS’ prolonged-phrase program to turn out to be a central player in the US healthcare program.

The CVS choice demonstrates that in excess of time, well being activists and public opinion can adjust corporate managers’ revenue-loss calculus. CVS predicts it will drop $ 2bn of $ 125bn in yearly revenues.

Possibly ironically, a huge chunk of CVS revenue come from medicines and supplies essential to deal with continual problems brought on by tobacco, alcohol and unhealthy food consumption. The World Health Organization has identified these three goods as principal triggers of the growing epidemics of diabetes, heart ailment and cancer. By 2030, specialists predict, these illnesses, which previously trigger more than 60% of all deaths throughout the world, will cost the worldwide economy an estimated $ 47tn.

From a public wellness viewpoint, the CVS determination is very good news since study demonstrates that the ubiquity of unhealthy merchandise contributes to their overuse. The more locations individuals can buy and eat alcohol, tobacco, sugary drinks, salty snacks and quickly foods, the more they ingest. Alcohol, tobacco and processed meals companies know that straightforward entry triggers the cravings or addictions their items are made to elicit. Generally, they vociferously oppose any limits on their right to place their wares within arm’s reach. The choice by the nation’s 2nd largest pharmacy chain to decide on a distinct path exhibits that public mobilization, modifying social norms and regulation can combine to persuade at least some organizations to decide on the higher street.

So maybe the next stage for CVS and equivalent chains is to get rid of the candy, soda and snacks that contribute so significantly to diabetes. Perhaps cities and states that want to safeguard younger individuals from agonizing illnesses and premature death can use their zoning laws to limit the quantity of retailers selling unhealthy items. Alcohol, food and tobacco companies will, of course, increase the bogeyman of the nanny state, suggesting that any hard work to limit accessibility to sickening goods interferes with our freedom and absolves men and women of their obligation to protect their overall health.

But that argument is silly no a single is suggesting prohibition. Isn’t enticing children and youthful people to consume products that put them at chance of premature death and preventable sickness the height of irresponsibility? Wouldn’t most societies charge a nanny with youngster abuse if he or she tried to bypass parents to motivate children to begin risky habits? By hunting for extra techniques to persuade organizations that the public will not tolerate profiting from promoting condition, we inspire a lot more corporate leaders to do the proper point.

CVS retailers will no longer promote cigarettes. It truly is the well being in excess of profit revolution | Nicholas Freudenberg