Highlights of the important and the interesting from the world of health care:
Biotech backlash in Florida? Maybe not yet, but it could be coming. Since 2003, the state has invested some serious cash, $759 million, in eight biotechnology campuses in the hopes of starting biotech “clusters” of high-paying jobs, the Orlando Sentinel reports. For those efforts, the money has helped create a total of 1,100 jobs, or about $700,00 in taxpayer money per job created. That’s an ugly number, and one that could create a bit of taxpayer revolt against investing in the biotech industry, assuming anyone is paying attention. (Moreover, the actual spending per job is probably even uglier. The Sentinel notes that the state has spent a total of about $1.55 billion on biotech, a figure that includes “private and local funding.” Since we don’t receive a figure that encompasses all public funding minus the private funding, we don’t know the ultimate taxpayer spending.)
Now, before we go on, biotech proponents will note that the desired clusters can take decades to form, as the state agency that performed the analysis correctly points out. That’s fine if you buy into the notion of a rational-thinking population when it comes to economic matters. And if you do, ask yourself the last time you heard someone, even an expert, advocate cutting the federal deficit while doing nothing that would significantly control health costs (more on that below). In any case, the agency that conducted the analysis now recommends that Florida “shift … its focus from attracting research institutes to providing early stage money for startup biotechnology companies.”
Democrats backing down on health care? After Republican Scott Brown won a special election for a Massachusetts Senate seat, are Democrats backing down on health care? “President Obama warned Democrats not to ‘jam’ a health care reform bill through now that they’ve lost their commanding majority in the Senate, and said they must wait for Brown to be sworn into office,” ABC News reports. So that option is off the table, but House Democrats still have the option of simply swallowing the bill the Senate already voted on and passing it. Democrats absolutely must understand that Brown’s victory, and Martha Coakley’s embarrassing defeat, is “hardly a repudiation of health reform.” As Timothy Egan of the New York Times writes:
Critics will say: listen to the people, the voters don’t want health care. But in fact, when you break out the major points on reform — getting rid of policies that deny coverage for preexisting conditions, expanding care and choice, forcing insurers to put more money into treatment and less in their pockets – there is strong support.
But the question remains: Will Democrats back down? Would Republicans back down if the roles were reversed? The Democrats huge 59-41 Senate majority still “is far more than George W. Bush ever had, and he used it to do whatever he wanted to with the country,” Egan says.
It’s IPO time: The 2010 IPO market looks to kick off this week, led by a company from the world of health care (kind of) — a Washington-based life insurance firm that’s connected to super-investor Warren Buffet’s Berkshire Hathaway, the Associated Press reports. Symetra Financial Corp., which sells life insurance, medical insurance underwriting services, and retirement products such as annuities and IRAs, hopes to raise about $351 million in its initial public offering that’s expected to happen on Friday. The company originally scheduled its IPO long, long ago in November 2007 when it hoped to raise $750 million, but canceled the offering due to market turmoil just prior to the recession’s start.
Other IPOs expected to start trading this week include a $125 million offering from tissue maker Cellu Tissue Holdings Inc., two real estate investment trusts and two Chinese companies, the AP reports.
Bring on the deficit commission (on second thought, don’t): In a complete coincidence (ahem) on the same day the Democrats lost a Senate seat, President Obama and Congressional Democrats announced a plan to create an independent commission to study ways to restore fiscal solvency to the federal government. The plan calls for Obama to “issue an executive order to create an 18-member panel that would be granted broad authority to propose changes in the tax code and in the massive federal entitlement programs — including Medicare, Medicaid and Social Security — that threaten to drive the nation’s debt to levels not seen since World War II,” the Washington Post reports.
For all you need to know about the cause of the federal debt, check this 2008 Congressional Budget Office chart from the excellent blog the Baseline Scenario. For those too lazy to click, the takeaway is this: Nearly all the growth in the federal debt over the next 70 years will come from soaring, and I mean soaring, health costs. To that, Baseline Scenario’s James Kwak says, “If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate. And pigs would fly.”
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