Monthly Archives: October 2015

Highland View Principal Pam Smith dispenses a hug.

by James A. Bacon

Highland View Elementary School educates children from one of the poorest districts in Bristol, a city where the poverty rate is nearly twice the state average. Poor families, mostly white, grapple with the same kinds of issues commonly associated with inner-city black families in Virginia’s urban crescent: broken families, high unemployment, alcohol and drug addiction, disorganized lives, abuse, neglect, hunger and a lack of interest in academic achievement.

Yet somehow, Highland View accomplished something that 556 other schools with large at-risk student bodies did not. Reports Jim Nolan with the Richmond Times-Dispatch: “For the first time since 2011, it earned full accreditation from the state Department of Education. More than 70 percent of its students passed the Standards of Learning exams in math, science and history, and 75 percent cleared the benchmark in English.”

How did Highland View achieve full accreditation despite a 11% cut in per-pupil spending over 10 years?

Much of the credit goes to Principal Pam Smith, who recognizes that it takes more than textbooks and teaching to help poor children. “The school is their counselor, their doctor, their nutritionist, their mother,”she said. “We’re their family.” As Nolan tells the story, Smith knows the story behind every child, whether he or she is homeless and couch surfing (sleeping on couches in different homes), is hearing disabled, is being raised by a grandparent or has a father with Post Traumatic Stress Disorder.

Credit goes, too, to the Bristol community, which has rallied behind the school. Home Depot has given Kindergarten cubbies. O’Reilly Auto Parts chipped in $800 to fund snacks for the after-school program. The local Kiwanis Club provides free vision screening and has contributed 100 pairs of shoes. Churches donate “snack packs” for kids to take home on weekends. Families contribute second-hand clothing so the school can maintain an inventory for when children appear at school in hopeless dirty, ragged or inappropriate clothing. A not-for-profit group, Communities in Schools, works closely with the Highland View to help families obtain counseling, housing, clothing, food, school supplies and transportation from local government agencies and not-for-profits.

By providing essential needs that parents have failed to provide their children, Highland View gives its pupils a fighting chance to earn an education and become productive citizens rather than fall into the quicksand of inter-generational poverty.

Bacon’s bottom line: Highland View is a success story. It is an example to be emulated. However, the nature of poverty in America today is such that, despite the existence of food stamps, temporary assistance for needy families, the earned income tax credit, Medicaid, nutritional programs for women with infants and young children, school lunch programs, housing assistance, child welfare services, and substance abuse & mental health programs, not to mention a host of private, not-for-profit enterprises filling gaps in the social safety net, the number of dysfunctional families appears to be increasing.

The problem is not simply that families are poor and have fallen on hard times, a predicament which some manage to work their way out of. The problem is that an increasing number of families are hopelessly irresponsible and disorganized. They lack the skills to function in contemporary society. They perform so badly as parents that society increasingly has to step in and fill their role. If children suffer from dysfunctional families in elementary school, does anything change when the children move onto middle school? How often are the gains achieved at Highland View lost in later years?

As a society, we are morally compelled to try to rescue these poor children. But I have to ask, do our good intentions aggravate the problems they are meant to solve? Do we make it easier for lousy parents to be even lousier parents? There has always been poverty in America. But I fear we are unintentionally creating a generation of poor people more lacking in basic life skills than at any time in American history.

by James A. Bacon

There is a sterile quality to the debate over universal childhood education. Liberals cite studies that say that it makes sense to invest in pre-school for poor children on the grounds that it increases the odds that kids will perform better academically, thus less likely to drop out of school, more likely to get a job, and less likely to get incarcerated, saving society billions of dollars in the long run. Noting that pre-school can’t overcome the affects of dysfunctional families and lousy schools, skeptics (usually conservatives) say the positive effects fade within a few years and question whether creating another massive entitlement program will do any good.

As a society, we’re desperate to find something that helps poor children overcome the debilitating consequences not only of material poverty but an upbringing so impoverished that many don’t know their colors, numbers or ABCs by the time they enter kindergarten.

James V. Koch, professor emeritus of Old Dominion University, puts a different spin on the pre-K issue in the “State of the Region: Hampton Roads 2015.” He sides with those who believe that high-quality early childhood education has a large positive benefit but proposes a funding source for pre-K that makes the idea more palatable to conservatives.

Drawing upon the work of Nobel Laureate James Heckman, Koch argues that social investment in human capital accomplishes more in a child’s early, formative development than later in life when his or her cognitive abilities have been largely set. As seen in the conceptual graph above, investing in enriching a child’s development at ages 0-3 yields a higher return than in preschool, which in turn provides a higher return than school, which in turns pays back more than job training.

Koch cites the famous Perry Preschool Project which began in Ypsilanti, Mich., in the 1960s. A $21,000 per pupil investment (in today’s dollars) yielded cumulative savings of $240,000 by age 40. Whether those results could be replicated is the subject of debate. But an even bigger problem is political. Someone is going to have to pay for universal pre-K. Middle-class parents are not likely to be thrilled about paying more in taxes so poor children can attend programs that cost two to three times what they can afford for their own children.

That political calculus could change if the funding comes from elsewhere. Writes Koch: “There is now a strong argument for shifting resources away from later-in-life job training programs and re-directing them to early childhood programs.” But that creates a political problem of its own, he concedes: Benefits from early-childhood programs take years to become manifest; the pain of training cutbacks is immediate.

Koch advances another novel argument: Early childhood education is good economic development.

One must compare these salutary results with the much less impressive outcomes that are generated by conventional businesses subsidies (usually tax incentives) that government units at all levels habitually utilize in hopes of improving their economic situations. … In general, tax incentives yield low returns for cities and counties that rely upon them, and typically yield negative returns for regions and states.

Bacon’s bottom line: I’m skeptical of the whole ball of wax — early childhood intervention, government-administered job training programs, business subsidies, tax incentives, you name it. But if government has got to “do something” to reverse the pathologies and dysfunctions created by previous efforts to “do something,” then voluntary universal pre-K arguably would make a better long-run investment than jinky tax breaks and duplicative and ineffectual job training programs. Make universal pre-K spending neutral by cutting less effective programs, and I just might buy into it.

Inflated numbers?

Bart Hinkle, an editorial writer at the Richmond Times-Dispatch, has long crusaded against “baroque and opaque” pricing in the hospital industry, a fundamental flaw in the health care system that makes it difficult for patients to exercise consumer choice.

Now Hinkle is taking aim at the accounting conventions by which hospitals calculate how much charity care they provide. In a Sunday column, he notes that there is no common standard for determining a number. When hospitals report how much they cover in uncompensated care for indigent patients, Peter Boswell, who oversees hospital licensing in Virginia, told Hinkle, “Nobody is checking behind them. We take their word for it.”

And as William Hazel, Virginia’s Secretary of Health and Human Resources said, how hospitals arrive at charity care figures is “mystical to me.”

Some hospitals tally up the cost they incur in treating indigent patients, writes Hinkle. Others report “gross revenue foregone,” a number that reflects not how much a procedure cost but how much the hospital would have charged — an inflated number before insurance discounts. In other words, it’s a fictitious figure.

Why does this matter? Because Virginia hospitals cite the large burden of uncompensated care as reason for expanding the Medicaid system in Virginia under the provisions of the Affordable Care Act. Before the act, the federal government provided a partial offset — some $163 million in 2015 — to Virginia hospitals that treated a disproportionate number of charity cases. The feds are cutting back that payment now on the assumption that state health insurance exchanges and expanded Medicaid coverage would provide coverage for formerly indigent patients. Virginia has a health insurance exchange, but not the expanded Medicaid.

Bacon’s bottom line: With the exception of a few rural hospitals, Virginia hospitals are highly profitable — adn that includes the not-for-profits. Before we can take industry claims seriously about the debilitating impact of charity care, we should have some faith in their numbers. At a minimum citizens should demand (a) a common definition that applies to all hospitals, (b) a number that reflects actual costs, not inflated gross revenues, and (c) a transparent reporting of those numbers. Only then we can start to have an intelligent discussion.

— JAB