Macro Roundup

“…Data from the Centers for Disease Control and Prevention show thatoverdose deaths per capita rose twice as much on average between 2013 and 2015 in states that expanded Medicaid than those that didn’t—for example, 205% in North Dakota, which expanded Medicaid, vs. 18% in South Dakota, which didn’t. That’s particularly striking since the energy boom boosted North Dakota’s economy and employment…”

James Freeman, "Why Didn’t ObamaCare Work?,"Wall Street Journal, December 22, 2017, https://www.wsj.com/articles/why-didnt-obamacare-work-1513978521

Why Didn’t ObamaCare Work?

Washington continues to debate health policy as if the number of people covered by government insurance programs is the key measurement of success. This week brought more evidence that the ObamaCare experiment of signing up millions more people for subsidized coverage has not made Americans healthier.

“Life expectancy in the United States fell for the second year in a row in 2016,” NBC News reports this week. The network quotes the government’s National Center for Health Statistics:

“This was the first time life expectancy in the U.S. has declined two years in a row since declines in 1962 and 1963,” the NCHS, part of the Centers for Disease Control and Prevention, said in a statement.

This column is not ascribing all of this historically bad news to the former president’s signature accomplishment. Researchers have cited various factors, including trends that began well before Mr. Obama took office. But it’s striking that the implementation of a massive expansion in federal health benefits has coincided with the reversal of a long-term trend of increasing U.S. life expectancy. At a minimum, it should inspire politicians to stop equating rising health appropriations with better health.

Now federal officials are focused on one particular problem as they review the results from 2016. The Journal reports:

Deaths from drug overdoses surged 21% to more than 63,600 in 2016, spurred by widespread black-market availability of deadly synthetic opioids including fentanyl, according to the Centers for Disease Control and Prevention.

Those deaths were the main factor causing life expectancy for Americans born in 2016 to fall to 78.6 years, from 78.7 and 78.9 in the two previous years, CDC officials said.

Some scholars have ascribed the declining health of Americans—males in particular—and increasing opioid use on a lack of economic opportunity. Mr. Obama would certainly argue that his predecessors deserve a significant share of the blame on this score.

But lately even people in strong local economies are undergoing dramatic increases in suffering. The enactment of ObamaCare has coincided with a surge of misfortune in states that took the law’s option to expand their Medicaid programs. The Journal’s Allysia Finley noted in September that “government health-care programs are among the biggest suppliers of prescription painkillers.” She added:

Data from the Centers for Disease Control and Prevention show that overdose deaths per capita rose twice as much on average between 2013 and 2015 in states that expanded Medicaid than those that didn’t—for example, 205% in North Dakota, which expanded Medicaid, vs. 18% in South Dakota, which didn’t. That’s particularly striking since the energy boom boosted North Dakota’s economy and employment.

ObamaCare defenders note that the disparity in overdose fatalities appears to have begun around 2010—but due largely to sharp increases in a few expansion states, most notably West Virginia. What’s more, the disaggregated data show that the disparity between expansion and nonexpansion states with similar demographics and geography increased markedly after 2013. Between 2010 and 2013, overdose deaths rose by 28% in Ohio and 36% in Wisconsin. Between 2013 and 2015, they climbed 39% in Ohio, which expanded Medicaid, but only 2% in Wisconsin, which did not.

Why does Medicaid expansion correlate with more opioid tragedies? Wrote Ms. Finley:

For one, Medicaid patients may be more likely to be prescribed opioids—twice as likely, according to two studies, as privately insured individuals. A recent study by Express Scripts Holding found that about a quarter of Medicaid patients were prescribed an opioid in 2015.

State Medicaid programs also favor generics over more expensive branded painkillers with abuse-deterrent formulas. According to the Express Scripts study, generics accounted for 90% of Medicaid opioid medication claims. Large doses of oxycodone, methadone and fentanyl can be obtained cheaply with a Medicaid card and resold for a nice profit on the black market.

So maybe ObamaCare isn’t making us healthier, but is it at least making health care more affordable? The promise to restrain costs was so central to the marketing of ObamaCare that its formal title is the “Affordable Care Act.” But 2016 marked the third straight year in which U.S. health-care spending grew faster than the economy. That’s according to the American Enterprise Institute’s Joseph Antos and James Capretta, who write this week in the Journal:

Some defenders of the ACA claim the nation’s health-care spending has slowed since 2010. They compare the nominal growth rate before and after ObamaCare became law. Health spending grew at an average of 5.7% a year from 2003-10 and then slowed to 4.3% from 2010-16.

But this comparison of unadjusted nominal figures is misleading for two reasons. First, inflation has been low the past several years in the wake of the Great Recession. After adjusting for inflation, national health spending grew on average 2.6% a year from 2003-10, compared with 2.7% from 2010-16. Second, the population is growing less rapidly than in the past. A fair comparison would use per capita figures. Real national health spending per person rose on average 1.7% a year from 2003-10, compared with 1.9% from 2010-16.

Why hasn’t ObamaCare worked? Given the law’s failure on its own terms, perhaps the better question is why much of it remains on the books almost a year after a change in government.

“…George Mason University criminologist David Weisburd said his research has shown that about 1% of city streets produce 25% of a city’s crime, and 5% of the streets produce half the crime. He calls it the “law of crime concentration.”….”

Max Rust, Scott Calvert and Shibani Mahtani, "Murder in America: What Makes Cities More Dangerous," Wall Street Journal, December 26, 2017,https://www.wsj.com/articles/murder-in-america-what-makes-cities-more-dangerous-1514293200

Murder in America: What Makes Cities More Dangerous

Murder in America is deeply local.

Homicides in the U.S. rose about 9% last year, according to the Federal Bureau of Investigation, and more than one-third of the increase was concentrated in neighborhoods where just one-third of Chicago residents live. Meanwhile, improvements in areas where 30% of Los Angeles residents live accounted for one quarter of the 13% drop in U.S. murders between 2002 and 2014.

The Wall Street Journal analyzed the locations of thousands of homicides in four cities: Chicago and Baltimore, where violence has risen to or near 1990s levels in the past two years; and Los Angeles and Washington, D.C., where meaningful declines in violence have been sustained since the 1990s.

Part II: Murder in America — What Makes Cities Safer

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in Chicago and Baltimore share worsening poverty, high numbers of vacant houses, and a lighter street presence by police following officers’ high-profile killings of young black men. In Washington and Los Angeles, gang interventions and community policing, which seeks closer contact with residents to gain trust and even information in to address crime, have helped produce long-term reductions in murders. Gentrification in the nation’s capital also has played an important role in keeping violence down.

George Mason University criminologist David Weisburd said his research has shown that about 1% of city streets produce 25% of a city’s crime, and 5% of the streets produce half the crime. He calls it the “law of crime concentration.”

WHERE GANGS AND DRUGS RULE

Amarley Coggins remembers the first time he dealt heroin, discreetly approaching a car coming off an interstate highway and into West Garfield Park, the neighborhood where he grew up on Chicago’s west side.

He was 12 years old and had just been recruited into a gang by his older brothers and cousin.

A decade later, he sits in Cook County jail, held without bail and awaiting trial on three cases, including felony drug charges and possession of a weapon.

“I have a lot of friends who didn’t make it to 22,” said Mr. Coggins, who hasn’t entered a plea. “I want to stay alive for my son and my family.”

Violence in Chicago erupted last year, with the city recording 771 murders—a 58% jump from 2015. The third largest city in the U.S. with 2.7 million people, Chicago had more murders than New York and Los Angeles combined.

Almost half of the increase in Chicago came from five neighborhoods, including West Garfield Park, meaning they were at least as violent as in the 1990s when drug wars fueled by the crack-cocaine epidemic were raging through black neighborhoods.

“People see these empty buildings standing there, over four years on, and it is just a reminder that the city has turned their back on them,” said Danton Floyd, a community activist in West Garfield Park.

Chicago city officials say that they are making strategic investments in ailing neighborhoods. They point to a $95 million police-training center in West Garfield Park, public-transit improvements on Chicago’s south side and efforts to get major corporations such as Whole Foods and Wal-Mart to invest.

But West Garfield Park is still awash with drugs, as demand in recent years has been driven up by white suburban and rural consumers of heroin and opioids, according to police, drug dealers and residents. And a lot of indiscriminate killing is attributed to small, fiercely competitive gangs that have devolved from more powerful street organizations of the 1990s but lack the earlier gangs’ discipline in the use of violence.

On a recent afternoon, a dispute between two families over their children playing too loudly in the yard escalated into a shooting with someone hit, said Kevin Johnson, commander of the police district that includes West Garfield Park. One of the families had gang ties, so police braced for retaliatory violence.

“Before, it was unheard of that there were female victims, children shot; it was unheard of that there were retaliatory shootings at churches,” he said.

The neighborhood’s proximity to Interstate 290, long known as the “heroin highway,” has fueled the drug wars, said Cmdr. Johnson.

Police say at least 30 gangs operate within a roughly four-mile radius of West Garfield Park. They all compete for prime turf in the drug trade, including at gas stations and liquor stores, where a seller can make more than $800 a day.

Wearing a loosefitting jumpsuit at the Cook County jail, Mr. Coggins said gas stations are valuable territory to gangs because they are easily accessible for the mostly white customers rolling off I-290 into West Garfield Park.

“They know they stick out like a sore thumb here, some even come in the Mercedes and BMWs,” he said. “They want to get in and out quick.”

Of his involvement in drugs, he says: “I felt like I had to do it. And the money came so quick, you feel me?”

He can’t shake the memory of his partner on the streets, 20-year old Mario Cousins—“Little Rio”—who was killed last year after a rival gang member shot him in the head as he was sitting on a porch and left his body there for the block to see.

Mr. Coggins said he planned to move to the suburbs when he is released from jail. “The only way I could get out of that life is if I moved out of my area,” he said.

WHERE POLICE TRUST IS ERODING

As he drove through a series of West Baltimore neighborhoods, former deputy police commissioner Tony Barksdale took note of an open-air drug market, a heroin hawker on the sidewalk and a group of young men loitering at North and Pennsylvania avenues.

But he didn’t see many police officers.

“Baltimore City has a lot of people walking around that have committed homicides and shootings, and they’re emboldened now,” said Mr. Barksdale, who served on the police force for two decades before his 2013 retirement.

This city of 615,000 is enduring its third year of near-record violence, as police struggle to rein in one of the highest murder rates in the U.S.

Until a few years ago, violence had been edging lower citywide and in a collection of West Baltimore neighborhoods. But in 2015, violence rose, and it has stayed historically high. In the area to the west of North and Pennsylvania, homicides soared 89% during 2015 and 2016 from the two prior years, far outpacing the 49% citywide jump in that span.

A police department spokesman said foot patrols have increased because now officers are mandated to walk through neighborhoods in the first months of field training, which wasn’t the case a few years ago.

Baltimore Police Commissioner Kevin Davis, in charge since July 2015, also said violent criminals feel emboldened. He said judges too often give offenders who use guns suspended prison sentences.

Ericka Alston-Buck, who runs a youth center blocks from where Mr. Gray was arrested in 2015, says the violence is tied to poverty that hasn’t eased since the riots. “You have to be here to feel the blight, the vacant houses, the cat-sized rodents that run through the streets, the open-air drug markets, prostitution, no grocery store,” she said.

Jacqueline Caldwell, a local resident who leads a nonprofit umbrella group that includes several west-side community associations, said the police have become nonexistent over the past two years. “I don’t think it takes a rocket scientist to figure out we need more police on the street, more community involvement with the police,” Ms. Caldwell said.

John Skinner, a former deputy police commissioner who retired in 2014, said after the riots, police feared “another triggering effect.” He said while he thinks the retreat from proactive policing was brief, its effects were lasting.

“Violence can escalate really, really rapidly. When it occurs it’s tough to get that stabilization back,” he said.

“You look at Baltimore’s crime numbers, that’s criminals taking advantage of weakness,” Mr. Barksdale said. He added: “I am against mass arrests, but you still need arrests.”

The police-union president said in July that some officers remained hesitant on duty, because the six officers involved in Mr. Gray’s case faced criminal prosecution, even though none was convicted.

Murders are often retaliatory strikes driven by “guns, gangs and drugs,” the department spokesman said, adding that Baltimore homicide victims have 12 arrests on average. In a positive sign, he said, citizen tips about homicides are up, and police are clearing more homicides.

Early this year Baltimore officials agreed to a sweeping overhaul of the police department. That followed a 2016 U.S. Justice Department report alleging unconstitutional policing disproportionately targeted African-Americans. Mr. Davis says the result will be an improved police force that will earn back public trust.

Sources: Chicago Police Department, Baltimore Police Department, Metropolitan Police Department of the District of Columbia, Los Angeles Police Department (homicide locations); FBI Uniform Crime Reporting (annual homicide rates); Brown University Longitudinal Tract Database, Census Bureau (demographics)