Inflation Adjustment

Maryland's hospital rate-setting system is called an "all-payer" system because everyone who pays for hospital care -- HMOs, other insurers, Medicare and Medicaid -- pays the same rates.Those rates, different for each hospital, are set by the Health Services Cost Review Commission. The rates are based on units of service -- a day in a hospital room, an X-ray, and so on. They include an allowance for the cost of training residents and interns and for treating the uninsured, so these "social costs" are shared by all payers, including Medicare and Medicaid.

A citizens commission is recommending modest pay increases for the next Howard County executive and five-member council, despite falling revenues from the recession that forced officials this year to voluntarily cut their own pay via donations. The group, which is appointed once each term under a county charter requirement, voted to increase the next county executive's pay $2,500 per year, and County Council pay by a one-time $500 increment, all starting in December 2010, when the next crop of officials are to be sworn in. All six elected next year would also receive annual cost-of-living increases based on the consumer price index.

Three cheers for inflation, especially this summer. Believe it or not, there is a reason to say it: Older Americans have a floor under their income because Social Security retirement benefits are adjusted for inflation every year. Many say that last year's inflation adjustment was small, compared with this year's rate. Indeed, recipients received a 2.3 percent raise, which gave them each about $25 a month on average. Inflation, of late, has been much higher. No wonder seniors feel squeezed.

Three cheers for inflation, especially this summer. Believe it or not, there is a reason to say it: Older Americans have a floor under their income because Social Security retirement benefits are adjusted for inflation every year. Many say that last year's inflation adjustment was small, compared with this year's rate. Indeed, recipients received a 2.3 percent raise, which gave them each about $25 a month on average. Inflation, of late, has been much higher. No wonder seniors feel squeezed.

After several hours of technical debate, the Health Services Cost Review Commission unanimously approved a 6.07 percent rate increase for Johns Hopkins Hospital yesterday. That will add about $42 million a year to patients' bills at Hopkins. Under the commission's rate-setting formula, any extra increase granted to one hospital comes out of the statewide inflation adjustment applicable to all hospitals in the next fiscal year, which begins July 1. Saying they were worried about the affect of the rate increase on the state's 51 other hospitals, the commission agreed to appoint a work group to review the inflation formula.

WASHINGTON -- Just when it seemed Republican budget-cutting efforts couldn't get bolder comes word that GOP leaders are considering two of the riskiest political moves imaginable: raising taxes and stunting the growth of Social Security benefits.What's more, President Clinton and congressional Democrats may join them. And if they do it right, antitax lobbyists and senior citizen advocates might not complain too loudly.Doing it right is the tricky part.The changes would come through an adjustment in the Consumer Price Index, a monthly sampling of prices charged for 95,000 goods and services typically purchased by U.S. households.

NEW YORK -- On the tax-cut tote board, the cut with the highest odds of success is the one proposed for investment profits, otherwise known as "capital gains." The average tax on certain capital gains would descend almost to zero, under the GOP proposal. Holders of profits in stocks and real estate would cheer.As a practical matter, however, this bill is a neutron bomb. Its appalling complications would add volumes to the tax regulations and hours to your paperwork. The cuts -- far too deep to pay for themselves in revenue growth -- are projected to add $54 billion to $61 billion to the federal deficit over five years.

Under pressure from hospitals, the state's rate-setters yesterday suspended the use of a new rate-squeezing formula and voted to name a task force to study the issue.The task force will report in August, and the Health Services Cost Review Commission will act on the issue in September.Concerned, however, that suspending the new formula would result in rate increases "higher than would be reasonable," the commission also voted to hold off on normal hospital inflation adjustments until September.

A citizens commission is recommending modest pay increases for the next Howard County executive and five-member council, despite falling revenues from the recession that forced officials this year to voluntarily cut their own pay via donations. The group, which is appointed once each term under a county charter requirement, voted to increase the next county executive's pay $2,500 per year, and County Council pay by a one-time $500 increment, all starting in December 2010, when the next crop of officials are to be sworn in. All six elected next year would also receive annual cost-of-living increases based on the consumer price index.

AMERICANS WANT to have it all when they buy a car - performance and luxury. In the pure sense, it's an unreachable goal. Ever look into the cockpit of a dragster? You won't find any cup holders. Automakers spend millions to finesse the contradiction. Sellers of fixed-income investments face a similar quandary this year, as inflation fears stir. By definition, fixed-income investments lose value when inflation erodes the purchasing power of interest payments. Investors worried about inflation need focus, not finesse.

WASHINGTON -- In the name of fiscal prudence, Congress has huffed and puffed over the last few months to reduce federal spending by $40 billion over five years while simultaneously planning to erase these savings with additional tax cuts slated to be at least twice as big. Taken together, these two actions will increase the federal budget deficit, already hovering around $300 billion a year. There is widespread agreement that federal budget deficits - projected to explode as the baby boomers retire and health care-driven entitlement costs soar - pose grave risks to the U.S. economy.

There will be no pay raise for Howard County Council members for at least two years, but County Executive James N. Robey's salary is to rise 2.2 percent Wednesday - his second increase this term. Robey's pay will be $131,966, nearly $7,000 a year more than the $125,000 starting executive salary the council approved before the last local election, thanks to an automatic inflation adjustment the members included. "What they did for the executive is very fair. It allows you to keep pace with inflation," Robey said, adding that in his view, council pay was left too low. In his last term, Robey's executive pay was $98,500 - lower than his salary as police chief in 1997.

AMERICANS WANT to have it all when they buy a car - performance and luxury. In the pure sense, it's an unreachable goal. Ever look into the cockpit of a dragster? You won't find any cup holders. Automakers spend millions to finesse the contradiction. Sellers of fixed-income investments face a similar quandary this year, as inflation fears stir. By definition, fixed-income investments lose value when inflation erodes the purchasing power of interest payments. Investors worried about inflation need focus, not finesse.

After several hours of technical debate, the Health Services Cost Review Commission unanimously approved a 6.07 percent rate increase for Johns Hopkins Hospital yesterday. That will add about $42 million a year to patients' bills at Hopkins. Under the commission's rate-setting formula, any extra increase granted to one hospital comes out of the statewide inflation adjustment applicable to all hospitals in the next fiscal year, which begins July 1. Saying they were worried about the affect of the rate increase on the state's 51 other hospitals, the commission agreed to appoint a work group to review the inflation formula.

Maryland's hospital rate-setting system is called an "all-payer" system because everyone who pays for hospital care -- HMOs, other insurers, Medicare and Medicaid -- pays the same rates.Those rates, different for each hospital, are set by the Health Services Cost Review Commission. The rates are based on units of service -- a day in a hospital room, an X-ray, and so on. They include an allowance for the cost of training residents and interns and for treating the uninsured, so these "social costs" are shared by all payers, including Medicare and Medicaid.

In its latest move to rein in rising hospital costs, the state Health Services Cost Review Commission yesterday voted to make it tougher for hospitals to receive automatic inflation adjustments.Hospitals did not oppose the change, but asked that it be phased in more slowly. Commissioners, however, complained that costs in Maryland are outstripping those in other states, and voted to act more quickly."When your house is on fire, you have to take strong and quick measures," said commission member C. James Lowthers.

WASHINGTON -- In the name of fiscal prudence, Congress has huffed and puffed over the last few months to reduce federal spending by $40 billion over five years while simultaneously planning to erase these savings with additional tax cuts slated to be at least twice as big. Taken together, these two actions will increase the federal budget deficit, already hovering around $300 billion a year. There is widespread agreement that federal budget deficits - projected to explode as the baby boomers retire and health care-driven entitlement costs soar - pose grave risks to the U.S. economy.

Under pressure from hospitals, the state's rate-setters yesterday suspended the use of a new rate-squeezing formula and voted to name a task force to study the issue.The task force will report in August, and the Health Services Cost Review Commission will act on the issue in September.Concerned, however, that suspending the new formula would result in rate increases "higher than would be reasonable," the commission also voted to hold off on normal hospital inflation adjustments until September.