February 17, 2016

Health Care Spending: The Story Is Not So Mixed After All

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I made a mistake a couple of days ago, and now all of you have to pay the price by listening to my explanation. Here’s what happened.

My intentions were honorable. The Robert Wood Johnson Foundation put up a chart showing the growth of health care spending over the past two years, but it wasn’t adjusted for inflation. You all know how I feel about that, don’t you? Spending over time should always be adjusted for inflation. So I did the adjustment and posted a revised chart.

But then I got persuaded that I had used the wrong inflation measure. Instead of overall CPI, I should use just the medical component of CPI. So I did that. Unfortunately, I somehow slipped a digit and did it all wrong, which produced a rather odd looking chart. Long story, short, I’ve spent bits and pieces of the past two days trying to decide how to do this right. The answer is: CPI rather than PCE; medical rather than overall inflation; and year-over-year rather than compounded inflation. The original RWJF chart and the newly-corrected inflation-adjusted chart are on the right.

Ironically, what this ends up showing is…nothing. The numbers in the second chart are all lower, but the general trend is the same in both: spending growth peaks at the beginning of 2015 as Obamacare draws more people into the system, and then steadily declines as the flow of new consumers ebbs. The inflation adjustment didn’t change anything.

This is because inflation has been low and pretty flat for the past two years. However, that’s not always guaranteed. Sometimes inflation changes substantially over multi-year periods, and that can make trends in nominal dollars badly misleading. So even though it doesn’t matter much sometimes, always adjust for inflation! The statistical gods will look favorably upon you.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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