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Consider a business with two customers

The first customer pays in about two months after getting bill, questions or rejects a quarter of the charges, and, depending on who you ask, pays substantially less than your other customer. The second customer pays within a month, questions about 5% or 6% of the charges, and pays a premium. That’s the dynamic in Massachusetts between the state Medicaid program (the first customer) and private payers (Blue Cross, Harvard, Tufts, Fallon). The contrast gives one pause as we debate the merits of ‘public plan’ competing against private plans under some form of national healthcare.

Unfunded Pension Liabilities Might Be Bigger Than You Think

I’m not done with the latest 2008 Investment Report on pension returns across the state. If you look through it, almost every communities’ 5 and 10 year returns (and for a few their lifetime returns) are below, way below, their expected rate of return on their pensions. Why does this matter? Well, the expected rate of return on pension assets is a key determinant of the unfunded liability. A high rate of return lowers the unfunded liability. Let’s pick a town at random and see what that means. How about…say…Swampscott? The 2007 Annual Report of the Swampscott pension fund reveals an assumed rate of return of 8%. Yet, in the past 5 years, they have had returns of 3.04% and, […]

2008 Was A Bad Year In The Markets

PERAC has released the 2008 results for the state and local pension funds. And the results are ugly — losses of close to 30% in many cases. It is only fair to note that PRIM (the state pension fund) lost 29.5% in 2008, while the 55 systems that invested on their own lost significantly less, with a median loss of 26.3%. Pioneer (and the Patrick Administration) have advocated for some time that smaller local pension funds should be incorporated into the state fund. See Pioneer’s white paper on local pension funds This position, using only 2008 data, would have cost money for those local funds. It is largely a function of asset allocation — PRIM has much greater exposure to […]

Duncan Rex – he means it on charters

In a press release entitled “States Open to Charters Start Fast in ‘Race to Top’: Education Secretary Seeking Autonomy with Real Accountability for School Innovators,” Arne Duncan made it very clear what he wants. As the press release states: U.S. Secretary of Education Arne Duncan told reporters during a conference call this afternoon that states must be open to charter schools. Too much is at stake for states financially and for students academically to restrict choice and innovation. And more to follow: “States that do not have public charter laws or put artificial caps on the growth of charter schools will jeopardize their applications under the Race to the Top Fund,” Secretary Duncan said. “To be clear, this administration is […]

EOT and MBTA Do Good with BRT

Enough acronyms for you? BRT stands for Bus Rapid Transit. The state’s transportation planners (yes, you, Jim Aloisi!) are doing a very good thing with their latest plan to implement aspects of Bus Rapid Transit on the existing Route 28 Bus Route. They are marketing it as “28X” and they will be implementing (as feasible) dedicated lanes, stand-alone stations (as opposed to stops) and off-board ticketing. See details here, here, and here. This last item is of particular importance. On-board fare collection on buses has proven to be the Achilles Heel of automated fare collection (which this space has long supported). The continued use of paper tickets (versus CharlieCards) results in serious dwell time delays. Moving that delay off the […]