News of the Day

In round four of the RAND Hospital Price Transparency Study, we see the same message confirmed again from the last round: hospital prices remain high.  Prices paid to hospitals during 2020 by employers and private insurers for both inpatient and outpatient services averaged 224% of what Medicare would have paid, with Wisconsin averaging 307%. 

This point is especially important as premiums and deductibles have outpaced wages over the last decade.  One key driver of the price increases was demonstrated in the study to be market share and the impact of market consolidation which explains 7% of the variation in costs. And The Rand study shows that this provider consolidation does not lead to better quality. 

“High health care prices hurt us all, and this should be a call to action for employers and willing providers to work together to make health care more affordable. High health care prices are a drag on the economy, negatively impacting business growth and employee wages,” said Cheryl DeMars, President and CEO of The Alliance. “What’s more, we know that consumers avoid or delay needed care due to concerns about the cost. This has to change.”

 In addition to overall spend, the study included information on the price differences based on the site of service to better understand the importance of where an individual gets care. “We’ve long known the importance of the site of care and regularly utilize data to help our employers guide their employees to the best place of care at the best price.  We believe this study provides even more valuable data to help our employers with their benefit plan designs to be good fiduciary sponsors – and to help The Alliance better negotiate with willing providers to pay a fair price and make healthcare more affordable for everyone,” said Dr. Melina Kambitsi, Senior Vice President of Business Development and Strategic Marketing.

The RAND Hospital Price Transparency Study round four includes information from more than 4,000 hospitals in 49 states and Washington D.C. from 2018 to 2020.  It expands and refines earlier research by RAND on the topic. The analysis includes facility and professional claims for inpatient and outpatient services provided by Medicare-certified short-stay hospitals and other facility types. And for the first time, the analysis also includes more than 4,000 ambulatory surgical centers, which are free-standing facilities that perform outpatient surgical services.

The Supreme Court on Monday unanimously ruled against a fast-food franchise owner in a procedural dispute over whether a wage-theft lawsuit belongs in federal court or in arbitration. Justice Elena Kagan wrote the opinion in Morgan v. Sundance, Inc.

Plaintiff Robyn Morgan worked at a Taco Bell franchise owned by Sundance. When she came to believe that some of Sundance’s pay practices violated federal wage-and-hour law, she filed a class action lawsuit against the company.

However, the job application that Morgan completed before Sundance hired her contained a clause that committed her to resolve any future disputes with the company in individual arbitration. In previous cases, the court has held that such clauses are typically enforceable under the Federal Arbitration Act. The question in this case was whether that still holds true if the company waits to demand arbitration. The court held that defendants can lose their chance to arbitrate if they wait too long.

When a plaintiff who is subject to an arbitration agreement files a lawsuit in court, the defendant usually seeks to move the case to arbitration without delay. But this case was unusual: Sundance waited for eight months, during which time the parties began to litigate the case and also discussed settlement. The district court concluded that Sundance had waived its right to arbitrate because its actions had prejudiced Morgan, but the U.S. Court of Appeals for the 8th Circuit disagreed.

On Monday, the justices reversed the 8th Circuit. Kagan wrote that the FAA does not authorize “special, arbitration-preferring procedural rules” like the one the 8th Circuit created.

The central and upper Midwest, Texas and Southern California face an increased risk of power outages this summer from extreme heat, wildfires and extended drought, the nation’s grid monitor warned yesterday.

In a dire new assessment, the North American Electric Reliability Corp. (NERC) described regions of the country pushed closer than ever toward energy emergencies by a combination of climate change impacts and a transition from traditional fossil fuel generators to carbon-free renewable power.

NERC’s analysis examined the potential punch of extreme weather, which may wreak havoc on everything from reduced hydropower to transmission lines brought down by wildfires. Grid operators are dealing with an increasing reliance on intermittent resources like wind and solar as coal units retire and the reliability and emissions of gas resources comes under scrutiny. How the summer unfolds also may have political ramifications, as it could affect public support for President Joe Biden’s push to decarbonize the U.S. grid by 2035.

The NERC report also highlighted what it called an increased, urgent hazard to grid operations from the electronic controls that link wind and solar farms to high-voltage grid networks. The devices, called power inverters, must be programmed to “ride through” short-term disturbances, such as the loss of a large power plant or high-voltage line, but too often they are not, Moura said. Those that shut down compound stress on the grid, he added in a briefing yesterday.

The report cited incidents in May and June of last year when the Texas system was hit with widespread solar farm shutdowns, followed by similar outages in California between June and August. The unexpected events disrupted traditional power plants, interfered with grid recovery operations and caused some outages of customer-owned power units, NERC said.

U.S. existing home sales dropped to the lowest level in nearly two years in April as house prices jumped to a record high amid a persistent lack of inventory.

Existing home sales fell 2.4% to a seasonally adjusted annual rate of 5.61 million units last month, the lowest level since June 2020 when sales were rebounding from the COVID-19 lockdown slump. It was the third straight monthly sales decline.

Home resales, which account for the bulk of U.S. home sales, declined 5.9% on a year-on-year basis.

The bulk of April’s sales were likely closings on contracts signed one to two months ago before mortgage rates started their rapid ascent. A further decline in sales is likely as contracts decreased for the fifth straight month in March.

The median existing house price shot up 14.8% from a year earlier to an all-time $391,200 in April. The median house price surged 22% in the South, which had seen a rapid rise in sales as Americans moved from other regions.

Sales remained concentrated in the upper-price end of the market amid a paucity of entry-level houses.

There were 1.03 million previously owned homes on the market, down 10.4% from a year ago.

Supply is likely to remain tight. The government reported on Wednesday that building permits for single-family housing, the largest segment of the housing market, tumbled to a six-month low in April.

At April’s sales pace, it would take 2.2 months to exhaust the current inventory of existing homes, down from 2.3 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

Properties typically remained on the market for 17 days, unchanged from the prior month and a year ago. Eighty-eight percent of homes sold in April were on the market for less than a month. First-time buyers accounted for 28% of sales. All-cash sales made up 26% of transactions.

Retail sales rose 0.9 percent in April as a rebound in automobile sales and a pickup in dining powered another monthly increase in consumer spending, according to data released Tuesday by the Census Bureau.

Sales by retailers, restaurants and bars totaled $677.7 billion in April, according to the Census Bureau, up from a revised March total of $671.6 billion. Retail sales are adjusted for seasonal spending pattern changes, but not for inflation.

Economists expected retail sales to rise 1 percent last month after auto dealers reported a sharp pickup in sales and restaurant activity rose in April. Both were key drivers of the April increase in retail sales, which has steamed ahead despite inflation hitting an annual rate of 8.3 percent last month, according to Labor Department data.

Sales by restaurants and bars rose 2 percent in April, in line with a 1.9 percent monthly increase in March. Retail sales minus auto dealers and auto parts shops rose by 0.6 percent in April, and retail sales without the food and beverage industry rose 0.7 percent.

“These broad increases reflect the continued strength of consumer demand in the US, despite rising economic risks. Retail sales have shown steady growth in recent months, despite the worsening outlook in consumer confidence,” wrote Cailin Birch, global economist at Economist Intelligence Unit, in a Tuesday analysis.

Yesterday, the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ) each released a technical assistance document about disability discrimination when employers use artificial intelligence (AI) and other software tools to make employment decisions.

Employers increasingly use AI and other software tools to help them select new employees, monitor performance, and determine pay or promotions. Employers may give computer-based tests to applicants or use computer software to score applicants’ resumes. Many of these tools use algorithms or AI. These tools may result in unlawful discrimination against people with disabilities in violation of the Americans with Disabilities Act (ADA).

The EEOC released a technical assistance document, “The Americans with Disabilities Act and the Use of Software, Algorithms, and Artificial Intelligence to Assess Job Applicants and Employees,” focused on preventing discrimination against job seekers and employees with disabilities. Based on the ADA, regulations, and existing policy guidance, this document outlines issues that employers should consider to ensure that the use of software tools in employment does not disadvantage workers or applicants with disabilities in ways that violate the ADA. The document highlights promising practices to reduce the likelihood of disability discrimination. The EEOC technical assistance focuses on three primary concerns under the ADA:

• Employers should have a process in place to provide reasonable accommodations when using algorithmic decision-making tools;
• Without proper safeguards, workers with disabilities may be “screened out” from consideration in a job or promotion even if they can do the job with or without a reasonable accommodation; and
• If the use of AI or algorithms results in applicants or employees having to provide information about disabilities or medical conditions, it may result in prohibited disability-related inquiries or medical exams.

The DOJ’s guidance document, “Algorithms, Artificial Intelligence, and Disability Discrimination in Hiring,” provides a broad overview of rights and responsibilities in plain language, making it easily accessible to people without a legal or technical background. This document:

• Provides examples of the types of technological tools that employers are using;
• Clarifies that, when designing or choosing technological tools, employers must consider how their tools could impact different disabilities;
• Explains employers’ obligations under the ADA when using algorithmic decision-making tools, including when an employer must provide a reasonable accommodation; and
• Provides information for employees on what to do if they believe they have experienced discrimination.

Inflation cooled off slightly in April as the pace of both yearly and monthly price growth dropped, according to data released Wednesday by the Labor Department. The consumer price index (CPI), the Labor Department’s closely watched gauge of inflation, rose 8.3 percent over the past 12 months and 0.3 percent in April alone.

Gasoline prices dropped 6.7 percent in April and energy prices on the whole dropped 2.7 percent last month after double-digit gains in March. Gas prices are still up 44.7 percent over the past 12 months, and energy prices remain 30.3 percent higher than they were in April 2021.

While a dip in gas prices brought some relief for consumers, inflation in other crucial goods and services continued to rise.

Food prices rose 0.9 percent in April and are up 9.4 percent on the year — the steepest annual increase since April 1981 — with groceries alone costing 10.8 percent more over the past 12 months. Prices for transportation services rose 3.1 percent on the month, and prices for medical care services rose 0.5 percent in April.

Inflation for goods other than food and energy, which economists call “core inflation,” also rose 0.6 percent in April after a 0.3 monthly increase in March. Core inflation is significant to economists because it strips out more-volatile food and energy prices, giving a clearer view into broader trends beyond those two markets.

The leader of Wisconsin’s Department of Workforce Development said Monday there’s been “fantastic progress” in its efforts to modernize the state’s unemployment insurance system.

Secretary-designee Amy Pechacek, in an appearance on Wisconsin Public Radio’s “The Morning Show,” said the department is paying 84 percent of unemployment claims within one to three days.

DWD struggled in the early months of the COVID-19 pandemic. The economic shutdown of March 2020 and the influx of claims that resulted placed a strain on the unemployment system, creating a backlog of hundreds of thousands of claims. Some potential applicants weren’t able to connect to the department’s call center to complete the process.

As of June 2020, unemployment applicants waited 19 days on average for their claims to be paid, according to DWD data. Some applicants reported much longer waits, however.

We have inherited a system that is over 50 years old,” Pechacek said. “When I walked in the door, I was surprised to learn that when folks had to send in documentation to support their unemployment claim, they had to either fax it or mail it.”

Since then, the department has made changes so applicants can upload those documents online.

“We’ve got artificial intelligence on the backend that pulls that data right off, so it’s very efficient,” Pechacek said.

According to the most recent department statistics, 91 percent of initial applications for unemployment benefits have been filed online. That number jumps to 95 percent for weekly claims.

Pechacek said the department increased project appointment and contractor hiring during the pandemic, especially in adding judges to address claim appeals. According to department data, more than 700 appeals were waiting to be scheduled as of the end of April. That’s down from almost 13,000 appeals a year ago.

Tourism spending in Wisconsin has outperformed the national average for the past two years in comparison to 2019 numbers, state officials announced.

A release from Gov. Tony Evers spotlighted figures from the Travel Recovery Insights report released by the U.S. Travel Association and Tourism Economics. It shows travel spending in the state in February was 1 percent lower than in 2019, while the national average was 6 percent lower.

The release also notes Wisconsin in February “fared better than tourism powerhouses” such as Texas, Michigan, North Carolina, Hawaii, California, Minnesota, Illinois and New York, each of which were down between 4 and 18 percent compared to the same month in 2019.

A graph included in the release shows tourism spending in the state has largely followed the national trend, with a sharp dip in early 2020 coinciding with the start of the pandemic. Travel spending in the state has remained below 2019 numbers for much of 2020 and 2021, and exceeded 2019 for the first time in September of last year.

Over the six-month period ending in February, travel spending in the state exceeded 2019 levels four times, the release shows. It was up 1 percent in September, down 4 percent in October, up 1 percent in November, up 4 percent in December, up 1 percent in January and down 1 percent in February.

Overall economic impact data for 2021 won’t be available until June, the release shows, but the state’s tourism industry in 2020 saw $17.3 billion in business sales and supported more than 157,000 jobs. In 2019, those numbers were $22.2 billion and 202,000 jobs, according to figures provided by Travel Wisconsin.