The Mid-Term Elections and Healthcare Reform

Posted by Mark Brousseau


Even if Republicans win majorities in Congress this fall, it's unlikely that they will be able to repeal the recently passed healthcare reform legislation, Dennis G. Smith, managing director of the Medicaid practice at Leavitt Partners, said during a keynote presentation this morning at IAPP-IARP-TAWPI’s Healthcare Payments Automation Summit (HPAS) at the Boston Sheraton.

“Nobody is talking about the Republicans winning veto-proof majorities,” Smith said, adding that even if the Republicans did win big, repealing the legislation would only put the country “right back where we started, with the same problems. And when I travel around the country, employers are telling me that they are fed up with the current healthcare environment.”

Against this backdrop, significant changes in the healthcare reform law “really depends on whether Obama pivots, and does what Clinton did in the 1990s,” Smith said. “But Obama is far more ideological than Clinton was.”

So what changes can Republicans push through Congress if they were to win majorities as a result of the mid-term elections? One tool available to them is the Congressional Review Act, which allows Congress to veto regulations. They also can cut appropriations for certain mandates. “Even entitlements are subject to appropriations,” Smith notes. Congress can also demand a budget summit, which has occurred about every 12 years, Smith said.

But healthcare industry stakeholders shouldn't wait on Congress. “If you expect to be on the winging team when healthcare reform goes into effect, now is the time to prepare,” Smith concluded.

Improving Access to Government Data on the Web

Posted by Mark Brousseau

Diane Mueller passes along her thoughts on the holes in source data on the Web and how the government can help:

On September 4th, the President took another important step toward a more open and transparent government by announcing a new policy to voluntarily disclose White House visitor access records. Aside from a small group of appointments that cannot be disclosed because of their necessarily confidential nature, the record of every visitor who comes to the White House for an appointment, a tour or to conduct business will be released. As historic as the President’s announcement is, it is also a good illustration of what is missing from the administration’s technology infrastructure plan — a coordinated approach to providing data standards.

On the surface, this new disclosure of visitor data looks perfectly fine. The data made available in a simple Comma Separated Values (.csv) file is easily downloaded and opened into a spreadsheet for viewing purposes.

Take a step beyond simple viewing, and try to mash up this content to see where the visitor’s list collides with other interest groups and data sources — you begin to get an idea of the complex nature of data mapping. For example, think of mashing up this visitor information with the U.S. SEC filings that include the names and remuneration of executives of publicly traded companies tagged in XBRL.

Better yet, simply try to blog about someone’s visit to the White House and reference a snippet from the .csv content. Then go to Twitter and post a tweet with a link to your blog so you can have bragging rights about being the first to notice some VIP’s visit. If I then repost the information on my blog and one of my readers wants to get back to the source file to verify the facts without some form of metadata and URI associated with the content, there is no path back to the original source. Therefore, there is no validation that the information is accurate. When I repost your information on my blog, I am simply trusting your cutting and pasting skills and trusting that you accurately interpreted the information. This can be a potentially dangerous situation that often leads to a lot of misinformed “noise.”

So far, in the marriage of social networks and open government, there has been a lot of “noise” coming in, but there has been very little done in the way of creating constructive solutions for accurate and trusted citizen participation.

Without the metadata about the newly disclosed visitor content or any other government information, the accuracy with which data is interpreted is jeopardized with each reuse. Without a link back to the source, the authenticity of the content is no longer discoverable. Without this information, it’s all just more “noise” on the web.

Where Does XML Fit in?
XML industry standards bring metadata to the content. Even a simple XML schema and an instance document would have gone a long way to ensure that, regardless of what tool consumed the visitor data (including spreadsheets), the information would always be interpreted in the same manner. Furthermore, the use of an XML industry standard for identity would enable one to leverage existing tools to mash up the content with other data sources. The key benefit of XML is that consuming applications no longer requires someone to reinvent clever ways of mapping and representing complex data, so developers can expend their energies on solving higher level problems that have a greater return.

There are plenty of other examples across federal, state and municipal government agencies that build the case for leveraging XML industry standards to aid in creating greater transparency and to create efficiencies for the agencies themselves.

Where Do We Go from Here?
Recovery.gov and multiple other individual government agency projects have taken strides forward to granting the public access to government data. However, cross-agency conversations are still taking place to get some agreement on common data models for comparing and mashing up information from multiple data sources accurately.

Efforts such as the NIEM XBRL harmonization discussions should be applauded as this combined effort should aid in the accurate mapping of government financial data across agencies. There is still a long way to go before we can start to leverage the really interesting technologies like Resource Description Framework (RDF) and the Semantic Web.

While everyone wants to jump on the Web 2.0 bandwagon, designing the technology infrastructure to ensure that it is done in an open, transparent and accurate manner requires a lot of cross-agency collaboration. The administration’s goal should be to ensure that the public can collaborate on the analysis and dissemination of public information across the web in a manner that can be trusted, authenticated and redistributed without imposing a cost burden on the consumers or the producers of that information. That is no small task.

This all leaves me wondering if I am guessing correctly about what was being talked about in the White House on 7/14/2009 at 3:00:00PM and about who was in the room. If my assumptions are right — loosely based on about 22,200 Google hits for Stephen J. Hemsley, who was listed as visiting Aneesh Chopra, for whom there are about 1,170,000 Google hits — I’m guessing a lot of these same data topics were addressed with a slight healthcare twist. But then again, I’m doing the interpretations here and making the free associations, so you’ll just have to trust me.

Where's the Beef?!?!

Posted by Mark Brousseau

On Friday, April 24, US regulators revealed the methods and criteria used for stress testing the nation's largest banks to determine their financial health. TowerGroup, a leading financial services research and advisory services firm, believes that current stress-testing methodology is "a bun without the beef," observing that the current process only touches the surface and lacks the substance needed to accurately measure the depth of banks' resiliency.

From an international perspective, TowerGroup believes the latest revelations from the US will do little to reengender confidence in the international banking system. Instead, stress testing will confirm suspicions about the underlying differences among various nations' regulatory approaches to addressing bank stability and recapitalization.

"The stress testing of banking institutions is a major undertaking that turns traditional testing by means of "what if" scenarios on its head with its far-reaching assumptions. However, the assumptions made in the documentation of the stress testing methodology still fall short of capturing the dynamics of the industry going forward," said Rodney Nelsestuen, Senior Research Director in the TowerGroup Financial Strategies and IT Investments Cross Industry research service. "The US government is trying to get an accurate reading of an institution's ability to survive more bad economic news. The approach being used can answer only the questions it asks, leaving many potential outcomes unknown and untested."

TowerGroup notes several misguided views the public may infer from the documents released by the Fed last Friday and explains the reality that is counter to each view:

Myth 1: The option to convert TARP to common stock should provide comfort to stakeholders.Reality: One of the most worrisome motives behind stress testing is the intended conversion of Troubled Asset Relief Program (TARP) funds into common stock. Given the continuing deterioration in credit portfolios and faltering business performance, it is irrational to think that financial service institutions (FSIs) are safe because their capital is adequate due to government assistance when the assistance also increases government control and hampers the performance of independent banks.

Myth 2: Common stock is mainly a cushion to absorb losses. Reality: Investors buy common stock hoping to earn dividends and benefit from share appreciation over time. The government document on stress testing ignores the fact that millions of people in the United States are also shareholders through mutual funds and 401(k) programs. Thus, to say that common stock exists to absorb losses mischaracterizes the overall role of common equity in any publicly held company.

Myth 3: The regulatory actions are not shortsighted. Reality: The current stress test is a single exercise tied to a specific point in time, which is then applied to forward-looking economic criteria such as unemployment, growth of the US gross domestic product (GDP), delinquencies, and counterparty risk. TowerGroup observes that a major risk exists if people come to see the current stress-testing exercise as the final word on bank safety. Banks will need to assume the responsibility for their own stress tests and be accountable to stakeholders, of which the government is but one. Consistent internal testing will alert banks to potential systemic risks, allowing them to react before such events reach crisis proportions.

Myth 4: The absence of reverse stress testing is immaterial.Reality: Nowhere in the current stress-testing methodology document is reference made to reverse stress testing. Under the current approach, assumptions are changed to see what impact they have on bank viability. Reverse stress testing encourages more creative thinking to determine what events could have occurred to bring about the current economic downfall. Reverse stress testing would force the government and institutional leaders to think more broadly about cause and effect.

Myth 5: Stress testing is the final arbiter of financial strength.Reality: Verbiage in the stress-testing methodology document calls into question the stress-testing process used and any results to be derived from it. The cautionary statement is needed. Public anticipation of the stress-test results to be released on May 7 continues to be heightened, and the government is not doing enough to reduce that overreliance on the pending results. In addition, regulators have left themselves an out and can either justify or discount the outcome. The current testing is not a means to an end, but merely the beginning of efforts to rebuild the banking industry. The pending May 7 news should not be considered gospel in determining a bank's future success or demise. It is an attempt at identifying means for greater transparency and modernization.