When it comes to rooting out wasteful spending in federal entitlement programs, attention has long focused on preventing beneficiaries from gaming the system.

A new Stanford study identifies a fresh cause for concern: the for-profit companies that the U.S. government increasingly tasks with providing benefits to Americans who are often poor, elderly or both.

In a new working paper, Maria Polyakova, an assistant professor of medicine, finds that outsourcing public assistance services to third parties can lead to unanticipated effects on prices as well as on which beneficiaries gain the most from public dollars.

That’s because companies are in the business of making money. And when they know which of their consumers are likely to get certain levels of public support, they will try to use this information to maximize their profits, according to the research published this week by the National Bureau of Economic Research.

Polyakova shows that when companies act in their self-interest, unforeseen inequities and inefficiencies can arise that may hurt some consumers while helping others. At a time when governments in the United States and around the world are increasingly turning to the private sector to provide public benefits — namely in health care and in education — Polyakova says policymakers need to better understand how these intermediaries are affecting welfare programs.

“Policymakers have to be more careful about introducing intermediaries into public services,” says Polyakova, who is a faculty fellow at the Stanford Institute for Economic Policy Research (SIEPR), and teaches at the Stanford School of Medicine. She is also a core faculty member of Stanford Health Policy. “They may want to revisit how they think about outsourcing when research is showing that there are unintended consequences that may be positive or negative.”

Health Insurance Pricing under the Microscope

Intermediaries are central to a number of public services where the U.S. government provides subsidies to consumers, often based on income, age or employment status. Prominent examples include privately-managed Medicare Advantage Plans, drug benefits under Medicare Plan D, and charter schools in secondary education.

According to Polyakova, most research into wasteful spending within government subsidies has focused on consumers and how they try to trick the system by, for example, hiding income to qualify for a tax credit or cash assistance. Governments, though imperfect, have long been seen as benign players.

The increasing involvement of for-profit companies, she says, shows there’s a need to closely examine what’s happening on the supply side of public welfare.

To do that, Polyakova found an ideal setting: the federal health insurance marketplace created by the Affordable Care Act of 2010. Most consumers who shop for coverage through www.healthcare.gov receive a subsidy in the form of a tax credit that covers all or part of their insurance premium. The amount of their tax credit is tied to their household income.

The dollars at stake are significant. The Congressional Budget Office estimates that in 2019 the federal government will pay $560 billion in subsidies for privately-provided health insurance, including the spending on the Affordable Care Act marketplaces as well as other similarly designed programs. That figure is expected to hit $1.2 trillion over the next decade.

The Neighborhood Effect

Polyakova and her co-author — Stephen Ryan of Washington University’s Olin Business School — analyzed data from 2017 covering more than 9 million enrollees across some 2,570 counties around the country. They find that the presence of an intermediary significantly impacts insurance prices and key measures economists use to calculate the effects of a policy beyond a given benefit’s face value.

Specifically, they show that health insurance companies will have an incentive to raise premiums in markets where more consumers receive the higher tax credit because their incomes are low and the government is required to subsidize them.

On the flip side, insurers will charge lower prices in places where such subsidized consumers are less willing to buy coverage if they think it costs too much.

To illustrate the unintended consequences of the insurers’ actions, the researchers point out that, in the first instance where prices increase, consumers with incomes that are slightly higher than other community members will end up paying more for the same coverage. Under the second scenario, consumers who don’t qualify for the tax credit because their incomes are too high benefit from the lower premiums aimed at nearby residents.

“The price you pay for insurance will depend on who your neighbors are,” says Polyakova. “If you live near people who are poorer than you, you will be affected differently than if you live near people who are richer than you.”

Change the subsidy, change the calculation

Like with financial aid, tax credits for insurance coverage are calculated based on consumer income. But there is another type of subsidy that policymakers could use — flat vouchers, in which all members of a market receive the same benefit regardless of income, age or some other characteristic. For their research, Polyakova and Ryan also analyze how flat vouchers that only vary by age, but not by income, would hypothetically alter private health insurance prices in the federal Affordable Care Act marketplace.

Here, too, the scholars find different impacts on different types of consumers whether the subsidy is based on income or delivered as a flat voucher.

The analyses, says Polyakova, drive home the point that policymakers need to understand that there are trade-offs to relying on for-profit companies to provide government services and that the type of subsidy offered can alter how they calculate prices in disparate ways.

“There’s nothing wrong with companies trying to maximize their profits,” says Polyakova. “But sophisticated policymakers need to understand what happens when private markets get involved.”

Global warming and more days of extreme heat are exacerbating the health risks of pregnancy, particularly among African-American women, according to new Stanford-led research.

The maternal mortality rate among all women in the United States is already the worst of any industrialized nation. And black women are three to four times more likely to die from pregnancy-related problems than white women.

“It is truly a crisis that in America, one of the wealthiest countries in the world, more women are dying from pregnancy or childbirth complications than in any other developed country,” said Maya Rossin-Slater, a core faculty member at Stanford Health Policy and a faculty fellow at the Stanford Institute for Economic Policy Research.

In a new working paper published by the National Bureau of Economic Research, Rossin-Slater and two other health economists underscore how little research is out there about the impact of rising temperatures on the health of mothers and their newborns.

Pregnant women, for example, are not able to regulate body temperature as efficiently as non-pregnant individuals due to the physiological changes they undergo during gestation. Heat exposure can alter blood flow in the placenta, which can weaken the placenta and lead to complications. And high heat can lead to other pregnancy complications, such as hypertension, preeclampsia and prolonged premature rupture of membranes.

“All of these issues can translate into women needing to be hospitalized during pregnancy and experiencing complications during childbirth,” wrote Rossin-Slater, an assistant professor of health research and policy at Stanford Medicine. Her co-authors are Jiyoon Kim, assistant professor of economics at Elon University, and Ajin Lee, an assistant professor of economics at Michigan State University.

The researchers said most of the discussion about maternal health focuses on the health-care system, but that other determinants of poor maternal health and racial disparities are much less understood, particularly when it comes to how the environment is impacting pregnancy.

So they launched what they believe is the first study to identify the causal effects of prenatal exposures to extreme temperatures on the health of the mothers themselves.

As the Earth Warms, So Does Exposure to Extreme Heat

Their paper focuses on an environmental factor that is becoming increasingly relevant due to the growing consensus that climate change is contributing to a gradual warming of the earth: exposure to extreme heat.

The researchers studied the effects of exposure to extreme temperatures during pregnancy on maternal and child hospitalizations, using inpatient discharge records from three U.S. states with different climates: Arizona, New York and Washington. Their data comes from the State Inpatient Databases from the Healthcare Cost and Utilization Project, including 2.7 million inpatient records of 2.7 million infants and 2.2 million mothers in those three states.

And to measure temperature exposure, the researchers obtained data from the National Oceanic and Atmospheric Administration (NOAA).

For every county in their data, the researchers calculated the average temperature for every month. Then for every given day in a specific month in that county, they looked at the historic average for how high or low that day’s temperature was relative to the overall temperature in that month in that county.

For example, a 90-degree day in Arizona in September would not be classified as extreme heat since it’s relatively common. But a 90-degree day in New York would be, since temperatures that high are much less common. They classified “extreme heat” as a given day when the temperature is more than three standard deviations (3SD) above that historic county mean.

Then, they compared the outcomes of women who are of the same race giving birth in the same county and calendar month, but in different years. These women are likely similar in terms of their demographics and socioeconomic status, but may be exposed to different temperatures during pregnancy. For example, consider a black woman giving birth in November 2011 in Queens County, New York, and a black woman giving birth in November 2012 in the same county. If there were a heat wave in Queens in the August 2012, then the latter woman is exposed to more extreme heat during pregnancy than the former. 

The economists found that each additional day with heat that is at least 3SDs — or substantially higher than the historic county-month average — during the second trimester of pregnancy increases the likelihood that a newborn is diagnosed with dehydration by .008 percentage points.

“Our results provide new estimates of the health costs of climate change and identify environmental drivers of the black-white maternal health gap,” they wrote. “Understanding the health consequences of this increase in extreme heat is critical information for discussions about the costs of climate change and the possible benefits of mitigating policies.”

The researchers found that each additional day of extreme heat exposure during pregnancy increases black women’s likelihood of hospitalization during pregnancy. Since black women on average are exposed to more extreme heat than white women — due to different residence patterns and access to mitigating technologies like air conditioning — extreme heat may contribute to exacerbating the already large gap in maternal health between black and white women.

Detrimental Consequences of Rising Temperatures

Scientists predict global average temperatures will continue to rise over the next 50 to 100 years as greenhouse gases continue to trap more heat in the Earth’s atmosphere. The U.N. Intergovernmental Panel on Climate Change last year warned that nations worldwide must quickly reduce fossil fuel use to keep the rise in global temperatures below 1.5°C by 2050. 

The panel also said the number of days with mean temperatures above 32°C in the average American county is forecasted to increase from about 1 to 43 days per year by 2070-2099.

That could have detrimental consequences for babies and mothers alike.

“Overall, our findings on infant health suggest that exposure to extreme heat during the second trimester increases the likelihood of the baby being dehydrated at the time of birth,” the researchers wrote. “This, in turn, appears to increase the likelihood of subsequent readmission to the hospital many months later for causes linked to dehydration.”

And these impacts are typically missed when researchers only measure infant health using more standard variables, such as birth weight.

The authors note dehydration is one of the leading causes of morbidity and mortality in children. Studies show that children under 5 years old who have an average of two episodes of gastroenteritis associated with dehydration per year leads to 2 to 3 million pediatric office visits and accounts for 10% of all pediatric hospital admissions in the United States. 

Experts believe black women are three- to four-times more likely to die from pregnancy-related causes due to lack of access to and the poor quality of health care, as well as clinicians not monitoring black women as closely — or actually dismissing their symptoms altogether.

“The fact that the adverse impacts on health during pregnancy are larger for black than for white mothers suggests that climate change may exacerbate the already large racial gap in maternal health,” the researchers said.

Stanford Medicine has announced a merger of its Division of Health Services Research from the Department of Health Research and Policy with the Center for Health Policy and the Center for Primary Care and Outcomes Research — joining together the School of Medicine’s leading researchers in the field of health policy.

The three centers have all been under the Stanford Health Policy umbrella for several years — CHP is a part of the Freeman Spogli Institute for International Studies and PCOR is a division in the Department of Medicine. The faculty will now all sit under one roof at Stanford Health Policy’s newly renovated offices in Encina Commons.

“On behalf of CHP/PCOR, I want to say how delighted we are to be coming together as one health policy unit,” said Douglas K. Owens, the director of both centers. “We very much look forward to further strengthening our ongoing collaborations in research and training, and the merger will provide great opportunities for synergy.”

Loren Baker, who worked with Kate Bundorf to lead the efforts at the Division of Health Services Research, called the melding of the faculty “a real opportunity to build on the strengths Stanford has in health policy,” and said it would position Stanford Health Policy faculty for further success in their research and education programs.

“We’ve had a long history of working together and we hope that this will lead to more and better opportunities to do that going forward,” Baker said.

Owens said he wanted to thank Loren and Kate “for their terrific leadership as we have worked out how to bring our groups together,” as well as the Dean’s Office, the Department of Medicine, and FSI for their support and guidance.

In its 46-year history, SPICE, Freeman Spogli Institute for International Studies (FSI), has collaborated with numerous Stanford-affiliated organizations on educational programs. One of the most meaningful and significant collaborations has been with TeachAids, an award-winning global leader in designing, producing, and distributing research-based health education. With programs used in 82 countries, TeachAids released its newest product, CrashCourse, seeking to decrease the stigma surrounding concussion reporting and empower youth athletes with much needed knowledge. All TeachAids education content is available for free.

The SPICE staff highly encourages teachers in SPICE’s network to access the CrashCourse Concussion Education content and share it with their colleagues in their school’s science-, health-, and sports-related programs. The following is noted on CrashCourse’s main webpage:

One in five high school athletes will get a concussion. With proper care, most concussions can heal within 10 days, but the overwhelming majority of students, parents, and coaches are unaware of the latest science about prevention and treatment of concussions. If not treated properly, a concussion may have lasting physical, emotional, and cognitive effects.

Since many schools are now in the midst of football season, this is an ideal time to raise awareness of the prevention and treatment of concussions. In particular, the content will be especially helpful if it can be shared with the school’s athletic or health leadership. In less than a year, CrashCourse has gained great momentum and recognition throughout the country with leading organizations such as Pop Warner, USA Synchro, and USA Football (which offers free Certification for CrashCourse content) using the content to educate their young athletes and larger sports communities (ABC, Fox, CBS).

Through our special partnership, SPICE will be distributing all CrashCourse products for free to our network of more than 10,000 schools reaching all major school districts in the United States.

The CrashCourse initiative was developed under the leadership of TeachAids Founder and Adjunct Affiliate at FSI’s Center for Health Policy Dr. Piya Sorcar. Several other Stanford faculty members affiliated with FSI—including Dr. Douglas Owens, Director of Stanford Health Policy, Dr. Lee Sanders, Chief of General Pediatrics, and Dr. Paul Wise, Richard E. Behrman Professor of Child Health and Society—have served as close advisors for TeachAids so teachers can feel extremely confident in its products. CrashCourse is an excellent example of “engagement beyond our university,” which is one of Stanford’s four long-range planning key areas.

SPICE looks forward to continuing its partnership with TeachAids as both organizations strive to continue to make Stanford scholarship accessible to students not only in the United States but also in many other countries around the world.

Smoking guns are the stuff of spy movies. In real-life intelligence-gathering, they are exceptionally rare. That’s why the business of intelligence typically requires collecting and analyzing fragments of information—putting together secret nuggets with unclassified information—to try to make sense of complex reality. If nothing else, the whistle-blower who filed a complaint against President Donald Trump clearly followed his or her training. SECOND PARAGRAPH I’ve spent 20 years reading intelligence reports and researching the U.S. intelligence community. And I’m not automatically inclined to believe the worst allegations about any administration; everyone has agendas and incentives to reveal information, some more noble than others. Trump and his allies have dismissed the complaint as hearsay and accused the whistle-blower of acting on political motives. But a close reading of the whistle-blower’s lengthy complaint, which accuses Trump of “using the power of his office to solicit interference from a foreign country in the 2020 U.S. election,” yields a lot of concrete leads for investigators to follow.

Here are three things I learned:

Read the rest at The Atlantic

This summer, SPICE Director Dr. Gary Mukai was interviewed at Stanford by The Education Newspaper of Japan about his long experience working with American and Japanese students. In particular, the two-part feature highlighted his impactful work in education and U.S.–Japan relations over his 40-year career.

In Part 1 of the “close-up” interview, Mukai shares his educational philosophy derived from 40 years working with students in Japan and the United States. In Part 2 of the interview, he talks about Stanford e-Japan, the Reischauer Scholars Program, and SPICE’s other Japan-focused projects and online learning courses for high school students.

“I feel honored to be interviewed by The Education Newspaper,” reflected Mukai. “And I’m grateful for the opportunity to share about some of the cross-cultural work we do at Stanford University to promote mutual understanding between students in the United States and Japan.”

Read the two articles here:

• Part 1: 米スタンフォード大学 ゲイリー・ムカイ博士に聞く（上） (in Japanese; full article behind paywall)
• Part 2: 米スタンフォード大学 ゲイリー・ムカイ博士に聞く（下） (in Japanese; full article behind paywall)

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From August 14 to 16, 2019, Stanford Global Studies (SGS) welcomed ten new Education Partnership for Internationalizing Curriculum (EPIC) Fellowship Program community college instructors as members of its class of 2019–20. SPICE along with Lacuna are SGS’s EPIC partners. Jonas Edman will be working with five of the community college fellows during the upcoming academic year as they seek to increase the international, intercultural, and global dimensions in their curriculum.

Edman commented, “The three-day intensive workshop seemed to help cultivate a strong professional learning community amongst the fellows. This should bode well for the upcoming online discussions. Since I began working with community college instructors about eight years ago, I have learned so much not only about the challenges that community college instructors face but also about many of the rewarding aspects of their teaching.”

The five instructors are:
Lauren Arenson, Pasadena City College
Dana Grisby, Laney College
Humberto Merino-Hernandez, Cerritos College
Soraya Renteria, Las Positas College
Citlali Sosa-Riddell, Pierce College

Read the full article.

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Related articles:

• Symposium Focuses on Incorporating Global Themes into the Curriculum at Community Colleges
• The Stanford EPIC fellowship for community college instructors
• “From Cold War to Hot Peace: An Ambassador in Putin’s Russia,” a book talk for educators by Ambassador Michael McFaul