Executive Summary

Government information technology is subject to a variety of rules, regulations, and procurement policies.  Computing is treated differently depending on whether the platform is based on desktops, laptops, mobile devices, or remote file servers known as cloud computing.  There are differences between the executive, legislative, and judicial branches of government, as well as in the level of privacy and security expected for various applications.  

Some people perceive higher security on desktop or laptop computers and lower security with the cloud because the latter’s information is stored remotely through third-party commercial providers.  In reality, though, there are serious security threats to all electronic information regardless of platform, and cloud server providers often take security more seriously than mass consumers or government officials employing weak passwords on their local computers. 

In this paper, I review current federal IT policy and discuss rules, practices, and procedures that limit innovation.  There are a variety of obstacles that make it difficult for policymakers to take full advantage of the technological revolution that has unfolded in recent years.  After outlining these issues, I make recommendations on policy changes required to improve the efficiency and effectiveness of federal computing. 

My specific recommendations include:

1. Public officials should develop more consistent rules on computing across desktop, laptop, mobile, and cloud platforms.  
2. The use of video, collaboration, and social networking should be authorized for congressional offices.  This would make legislative branch policy consistent with that of the executive branch.
3. Judicial branch computing should be modernized, with greater emphasis on cloud computing. 
4. There should be a more uniform certification process for federal agencies.  Right now, each agency is responsible for certifying its own applications.  It makes sense to have a “joint authorization board” with the power to review management services and certify particular products for use across the government. 
5. Congress should update the Electronic Communications Privacy Act to change the process by which law enforcement agents obtain electronic information.  Instead of using a prosecutor’s subpoena, legislation should require a “probable cause” search warrant that is approved by a judge.  This would provide greater safeguards in terms of online content, pictures, geolocation data, and e-mails.
6. Privacy rights should be placed on the same footing regardless of whether a person is using desktop or cloud computing.  It makes little sense to have weaker standards on one platform than another.  Consumers and government decision-makers expect the same level of protection whether they are accessing information on a desktop, laptop, mobile, or cloud storage system. 
7. Congress should amend the Computer Fraud and Abuse Act to strengthen penalties for unwanted intrusion into computing systems.  The law has inconsistent penalties and prosecutors have found that it is hard to prosecute cyber-crimes. 
8. Apps.gov represents a big step forward and government use should be expanded because it makes procurement easier and speeds public sector innovation.  It is a model of how the government can reinvent itself through digital technology in ways that improve efficiency and effectiveness.
9. Countries need to harmonize their laws on cloud computing so as to reduce current inconsistencies in regard to privacy, data storage, security processes, and personnel training,  
10. There should be mechanisms for data exchange that encourage portability across platforms.  We should avoid vendor lock-in that precludes data exchange.
11. Data on uptime, downtime, recover time, archiving, and maintenance schedules would help build public trust by providing information on computing performance.

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The appointment of new federal chief information officer Steven VanRoekel comes at a challenging time for President Barack Obama. The national economy continues to be weak. Congress plans to cut trillions from the federal budget. And in the time leading up to the 2012 election, American voters remain cynical about the ability of the government to address important policy problems in an effective manner.

In an era of deficit reduction and public cynicism, the tasks facing federal officials are to determine how to do more with less and persuade voters the government can become smarter and more effective. There are going to be fewer dollars for virtually every federal program so it is important to figure how ways to innovate and perform more efficiently.

Former CIO Vivek Kundra sought to do this through encouraging agencies to move software applications to the cloud, consolidating federal data centers, improving transparency, and improving the information technology procurement process. It is important to continue this progress even as agencies are forced to downsize their operations.

As shown in the private sector, government administrators should use technology to cut costs, improve worker productivity, and streamline operations. This is not just a matter of using technology in more innovative ways, but changing the operations and culture of the public sector. Public officials must improve its data mining activities to identify fraud and abuse in Medicare, Medicaid, the Defense Department, and other domestic programs.

New software gives managers better tools to evaluate how money is being spent and whether it is fulfilling intended goals. If it is not, programs need to be modified or eliminated. The most important weapon in Mr. VanRoekel’s arsenal may be the scalpel as he goes through the federal government’s $80 billion IT budget.

       

As of today, the federal government will require that all cloud service providers have Federal Risk and Authorization Program (FedRAMP) approval. FedRAMP is a program meant to standardize the security of cloud services, thus reducing the time and effort that independent cloud providers would need to spend ensuring cloud security. According to a 2013 annual report by the General Services Administration, agencies that use FedRAMP could save 50 percent on staffing and $200,000 in costs overall. FedRAMP will operate under similar rules as the Federal Information Security Management Act (FISMA), which helps maintain security of federal IT systems, applications and databases. Both FISMA and FedRAMP will provide enhanced protection and scrutiny for federal and independent agencies.

To learn more about cloud computing, read Darrell West’s papers Saving Money Through Cloud Computing and Steps to Improve Cloud Computing in the Public Sector. Visit the FedRAMP website here.

MaryCate Most contributed to this post.

       

Much public focus is being given to a broader role for hospitals in improving the health of their communities. This focus parallels a growing interest in addressing the social determinants of health as well as health care policy reforms designed to increase the efficiency and quality of care while improving health outcomes.

This interest in the community role of hospitals has drawn attention to the federal legal standards and requirements for nonprofit hospitals seeking federal tax exemption. Tax-exempt hospitals are required to provide community benefits. And while financial assistance to patients unable to pay for care is a basic requirement of tax-exemption, IRS guidelines define the concept of community benefit to include a range of community health improvement efforts.

At the same time, the IRS draws a distinction between community health improvement spending–which it automatically considers a community benefit–and certain “community-building” activities where additional information is required in order to be compliant with IRS rules. In addition, community benefit obligations are included in the Affordable Care Act (ACA).

Specifically, the ACA requires nonprofit hospitals periodically to complete a community health needs assessment (CHNA), which means the hospital must conduct a review of health conditions in its community and develop a plan to address concerns. While these requirements are causing hospitals to look more closely at their role in the community, challenges remain. For instance, complex language in the rules can mean hospitals are unclear what activities and expenditures count as a “community benefit.” Hospitals must take additional steps in order to report community building as community health improvement.

These policies can discourage creative approaches. Moreover, transparency rules and competing hospital priorities can also weaken hospital-community partnerships. To encourage more effective partnerships in community investments by nonprofit hospitals:

• The IRS needs to clarify the relationship between community spending and the requirements of the CHNA. 
• There needs to be greater transparency in the implementation strategy phase of the CHNA. 
• The IRS needs to broaden the definition of community health improvement to encourage innovation and upstream investment by hospitals.

Download "Hospitals as Community Hubs: Integrating Community Benefit Spending, Community Health Needs Assessment, and Community Health Improvement" »

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According to an August 2015 survey, 72 percent of Americans find drug costs unreasonable, with 83 percent believing that the federal government should be able to negotiate prices for Medicare. Recently, Acting Administrator of the Centers for Medicare and Medicaid Services (CMS) Andy Slavitt commented that spending on medicines increased 13 percent in 2014 while health care spending growth overall was only 5 percent, the highest rate of drug spending growth since 2001.

Some of the most expensive drugs are covered under Medicare’s medical benefit, Part B, because they are administered by a physician. They are often administered in hospital outpatient departments and physician offices, and most commonly used to treat conditions like cancer, rheumatoid arthritis, and macular degeneration. Between 2005 and 2014, spending on Part B drugs has increased annually by 7.7 percent, with the top 20 drugs by total amount of Medicare payments accounting for 57 percent of total Part B drug costs. While overall Part B drug spending is a small portion of Medicare drug spending, the high growth rate is a concern, especially as new expensive breakthrough cancer drugs enter the market and have a negative effect on consumers’ pockets.

Unlike Part D, the prescription drug benefit, there are fewer incentives built in to Part B for providers to consider lower cost treatments for patients even if the lower cost drug may be clinically equivalent to the more expensive drug, because prior to budget sequestration, providers received 6 percent on top of the Average Sales Price (ASP) of the drug. Larger providers and hospitals often receive discounts on these drugs as well, increasing the amount they receive directly on top of the out-of-pocket cost of the drug.

This leads to more out-of-pocket costs for the consumer, as patients usually pay 20 percent of Part B services. The Government Accountability Office (GAO) estimated that in 2013, among new drugs covered under Part B, nearly two-thirds had per beneficiary costs of over $9,000 per year, leading to out-of-pocket costs for consumers of amounts between $1,900 and $107,000 over the year. On top of these high costs, this can lead to problems with medication adherence, even for serious conditions such as cancer.

A New Payment Model

To help change these incentives and control costs, CMS has proposed a new demonstration program, which offers a few different reimbursement methods for Part B drugs. The program includes a geographically stratified design methodology to test and evaluate the different methods. One of the methods garnering a lot of attention is a proposal to lower the administration add-on payment to providers, from current 6 percent of ASP, to 2.5 percent plus a flat fee of $16.80 per administration day.

Policymakers, physician organizations, and patient advocacy organizations have voiced major concerns raising the alarm that this initiative will negatively affect patient access to vital drugs and therefore produce poorer patient outcomes. The sequester will also have a significant impact on the percentage add on, reducing it to closer to an estimated .86 percent plus the flat fee. But we believe the goals of the program and its potential to reduce costs represent an important step in the right direction. We hope the details can be further shaped by the important communities of providers and patients who will deliver and receive medical care.

Geographic Variation

Last year, we wrote a Health Affairs Blog that highlighted some of the uses and limitations of publicly available Part B physician payment data. One major use was to show the geographic variation in practice patterns and drug administration, and we particularly looked at the difference across states in Lucentis v. Avastin usage. As seen in Exhibit 1, variation in administration is wide among states, even though both are drugs used to treat the same condition, age-related macular degeneration, and were proven to have clinically similar outcomes, but the cost of Lucentis was $2,000 per dose, while Avastin was only $50 per dose.

Using the same price estimates from our previous research, which are from 2012, we found that physician reimbursement under the proposed demonstration would potentially change from $120 to $66.80 for Lucentis, and increase from $3 to $18.05 for Avastin. Under the first payment model, providers were receiving 40 times as much to administer Lucentis instead of Avastin, while under the new proposed payment model, they would only receive 3.7 times as much.

While still a formidable gap, this new policy would have decreased financial reimbursement for providers to administer Lucentis, a costly, clinically similar drug to the much cheaper Avastin. As seen in Exhibit 1, a majority of physicians prescribe Avastin, thus this policy will allow for increased reimbursement in those cases, but in states where Lucentis is prescribed in higher proportions, prescribing patterns might start to change as a result of the proposed demonstration.

Source: Author’s estimates using 2012 CMS Cost Data and Sequestration Estimates from DrugAbacus.org

The proposed demonstration program includes much more than the ASP modifications in its second phase, including:

• discounting or eliminating beneficiary copays,
• indication-based pricing that would vary payments based on the clinical effectiveness,
• reference pricing for similar drugs,
• risk-sharing agreements with drug manufacturers based on clinical outcomes of the drug, and
• creating clinical decision tools for providers to help develop best practices.

This is all at the same time that a new model in oncology care (OCM) is being launched, which could help to draw attention to total cost of care. It is important that CMS try to address rising drug costs, but also be sure to consider all relevant considerations during the comment period to fine-tune the proposal to avoid negative effects on beneficiaries’ care.

We believe CMS should consider offering a waiver for organizations already participating in Center for Medicare & Medicaid Innovation (CMMI) models like the OCM, because financial benchmarks are based on past performance and any savings recognized in the future could be artificial, attributable to this demonstration rather than to better care coordination and some of the other practice requirements that are part of the proposed OCM. Furthermore, because this demonstration sets a new research precedent and because it is mandatory in the selected study areas rather than voluntary, CMS must try to anticipate and avoid unintended consequences related to geographic stratification.

For example, it is possible to imagine organizations with multiple locations directing patients to optimal sites for their business. Also, without a control group, some findings may be unreliable. The proposed rule currently lacks much detail, and there does not seem to be enough time for organizations to evaluate the impact of the proposed rule on their operations. Having said that, it will be important for stakeholders of all types to submit comments to the proposed rule in an effort to improve the final rule prior to implementation.

The critical question for the policymakers and stakeholders is whether this model can align with the multitude of other payment model reforms — unintended consequences could mitigate all the positive outcomes that a CMMI model offers to beneficiaries. Helping beneficiaries is and should be CMS’ ultimate obligation.

      

Editor’s Note: This analysis is part of The Leonard D. Schaeffer Initiative for Innovation in Health Policy, which is a partnership between the Center for Health Policy at Brookings and the USC Schaeffer Center for Health Policy and Economics. The Initiative aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.

The passage of the Medicare Access and CHIP Reauthorization Act (MACRA) just over a year ago signaled a strong and unique bipartisan agreement to move towards value-based care, but until recently, many of the details surrounding how it would be implemented remained unknown. But last week, the Centers for Medicare and Medicaid Studies (CMS) released roughly 1,000 pages that shed more light on how physician payment will hopefully dramatically change for the better.

Some Historical Context

Prior to MACRA, how doctors were paid for providing care to Medicare patients was subject to a reimbursement formula known as the Sustainable Growth Rate (SGR). Established in 1997 to control the rate of increase in spending on physician services, the SGR pegged total spending among all Medicare-participating physicians to an overall budget target. Yet in this “tragedy of the commons,” no one physician benefitted from her good stewardship of health care resources. Total physician spending often exceeded the overall budget target, triggering reimbursement rate cuts. However, lawmakers chose to push them off into the future through what were called “doc fixes,” deferring the rate cuts temporarily. The pending cut rose to over 21 percent before MACRA’s passage as a result of compounding doc fixes.

Moving Forward with MACRA

When it was signed into law on April 16, 2015, MACRA ended the SGR, its cuts, and many previous payment incentive programs. In their place, MACRA established two overarching payment incentive schemes for providers to choose from:

1. the Merit-Based Incentive Payment System (MIPS) program, which supplants three previous payment incentives and makes positive or negative adjustments to a physician’s payment based on her performance; or


2. the Alternative Payment Model (APM) program, which awards a 5 percent bonus through 2024—with higher annual payment updates thereafter—for having a minimum percentage of Medicare and/or all-payer revenue through eligible APMs. Base physician fee rates for all Medicare providers would be updated 0.5 percent for each of the first four years, followed by no increases until 2026, when base fees would increase at different rates depending on the payment incentive program in which a physician participates.

MIPS addresses providers’ longstanding complaints that reporting that reporting under the existing programs—the Physician Quality Reporting System, the Value-Based Modifier, and Meaningful Use — is duplicative and cumbersome. Under the new MIPS program, physicians report to the government payer directly (CMS) and receive a bonus or penalty based on performance on measures of quality, resource use, meaningful use of electronic health records, and clinical practice improvement activities. The bonus or penalty physicians may see starts at 4 percent of the fee schedule in 2019 (based on their performance two years prior—in this case 2017) and increases successively to 5 percent in 2020, 7 percent in 2021, and 9 percent from 2022 onward. From 2026 onward, MIPS providers would receive an annual increase of 0.25 percent on their base fee schedules rates.

In contrast, the APM incentive program awards qualifying physicians a fixed, annual bonus of 5 percent of their reimbursement from 2019- – 2024, and provides that their fee schedule rates grow 0.5 percentage points faster than those of MIPS in 2026 and beyond, in recognition of the risk they assume in these contracts.

Yet, according to MACRA, not all APMs are created equal. APMs eligible for this track must use quality measures similar to those of MIPS, ensure electronic health records are used, and either be an approved patient-centered medical home (PCMH) or require that the participating entity “bears more than nominal financial risk” for excessive costs. Then, in order to receive the APM track bonus, physicians must have a minimum of 25 percent of their revenue from Medicare come through eligible APMs in 2019, with the minimum increasing through 2023 up to 75 percent. In 2021, a new all-payer Advanced APM option becomes available, allowing providers in APM contracts with other payers to participate in the Advanced APM incentive. To do so, they must meet the same minimum thresholds—50 percent in 2021, 75 percent in 2023—but through all provider contracts, not solely Medicare revenue, while still meeting a significantly lower Medicare-specific threshold. By creating an all-payer option, CMS hopes to enable greater provider participation by allowing all payer revenue to count toward the same minimum threshold. Under the all-payer model in 2021, for example, providers must have no less than 25 percent of Medicare revenue through Advanced APMs and 50 percent of all revenue through Advanced APMs.

MACRA Implementation Details Revealed

The newly released proposed rule provides answers to significant questions that had been left unanswered in the law surrounding the specifics of implementation of MIPS and the APM incentives. At long last, providers are gleaning insight into how CMS intends to implement MIPS and the APM track. Given the fast-approaching MIPS performance period in January 2017, here are three key highlights providers need to know:

1. Qualifying for the APM incentive track—and getting out of MIPS—will be difficult. In order to qualify for the bonus-awarding Advanced APM designation, APMs must meet the “nominal financial risk” criteria, which will be measured in three ways: an APM’s marginal rate sharing for losses, minimum loss ratio (the threshold above which providers would begin sharing in losses), and total potential risk as a percent of expected costs. Clinicians must further have a minimum share of revenue that comes in through the designated APMs.


2. Providers will have fewer opportunities to see and improve their performance on MIPS. Despite calls from provider groups for more frequent reporting and feedback periods, MIPS reporting periods will be annual, not quarterly. This is true for performance feedback from CMS, as well, though they may explore more frequent feedback cycles in the future. Quarterly reporting and feedback periods could have made the incentive programs more “actionable” for providers, alerting them to their performance closer to the time the services were rendered and providing more opportunities to improve performance.


3. MIPS allows greater flexibility than previous programs. Put simply, MIPS is the performance incentive program clinicians will participate in if not on the Advanced APM track. While compelling participation, the proposed MIPS implementation also responds to stakeholder concerns that earlier performance incentive programs were onerous and sometimes irrelevant—MIPS reduces the number of measures required in some categories and allows physicians to select from a set of measures to report on based on relevancy to their practice.

With last week’s release of the proposed rule, the Leonard D. Schaeffer Initiative for Innovation in Health Policy is kicking off a series of work products that will focus dually on further MACRA implementation issues and on translating complex policy into providers’ experience. In the blogs and publications to follow, we will dive into greater detail and discussion of the pieces of MACRA implementation highlighted here, as well as many other emerging physician payment reform issues, as the law’s implementation unfolds.

       

As we explore the social determinants of health, we are discovering some very important things. One is that compared with other developed countries, the United States spends a much higher proportion of resources on medical services to treat people than on social services that improve the prospects for good health. Research shows that countries placing a greater emphasis on social services rather than medical care have better health outcomes. Recent research comparing spending on health and social services among US states also found that spending relatively more on social services is significantly related to better health outcomes.

But getting the health system to “prescribe” social services is hard. Hospitals, in particular, do not easily cooperate with social service organizations in trying to improve community health. There are many reasons for this. Institutional culture can get in the way; the health care sector’s business model is not exactly based on reducing the volume of medical services. Shifting substantial resources from medical services to social services threatens the financial interests of a major industry.

In addition, data systems of medical, educational, and social service organizations often are not compatible, and privacy concerns add to that barrier. Budget and payment systems generally don’t encourage multisector cooperation either, and community organizations often feel their independence is threatened by partnering with a large local hospital.

These problems are not unique to the health care and social services worlds. When 2 sectors seek to cooperate, the ideal is to harmonize all systems so that they can interact seamlessly. But that is an enormous task, usually requiring daunting changes for organizations in each sector.

A Role for Intermediaries

One way to enable collaboration between large institutions and sectors that find it hard to cooperate directly is to introduce intermediaries to serve as bridges. By intermediaries we mean organizations that operate in the space between institutions or people and help link them together. Successful intermediaries have the trust of each institution, and so they fulfill a “diplomatic” function. They provide skills and capacities that are lacking in the organizations they connect together. In addition to helping us achieve a better combination of medical care and social services to produce improved health, they can help health care and other sectors to work together more seamlessly.

As health care institutions seek to work with other sectors to address social determinants of health, we are beginning to see certain types of intermediaries that will be particularly helpful.

Data Intermediaries

Sharing data on patients and households is necessary to coordinate multisector services, but it also raises technical, governance, and privacy concerns. Some intermediary organizations are addressing these issues by making it easier for institutions to share data and cooperate. For instance, to make service data more available to institutions trying to work together, an initiative called Actionable Intelligence for Social Policy (AISP) works with counties and other jurisdictions to address technical and governance concerns. With the assistance of the nonprofit and nonpartisan advocacy organization Data Quality Campaign as a technical intermediary, many states and counties are tackling the privacy and other issues needed to create integrated data systems—or “data warehouses”—that can enable health systems, schools, and other sectors to coordinate services for each student. Meanwhile the National Neighborhood Indicators Partnership (NNIP) helps develop neighborhood-level data to help organizations design policy plans for addressing social and health needs.

Embedded “Extenders”

Another interesting approach is for institutions, particularly some hospitals, to bring intermediary institutions onto their premises to address social service needs for discharged patients. For instance, the nonprofit organization Health Leads trains and funds individuals to be embedded in hospitals and link patients to an array of social services and community organizations, thereby bringing skills the hospital typically does not possess in-house. Washington Adventist Hospital contracts with Seedco, a national nonprofit focused on work and family supports, to coordinate such services for its patients.

In reverse, some other institutions have an embedded staff that can link them more effectively with the health care system. School-based nurses are an example. In some states, a nonprofit organization called Communities in Schools embeds teams in schools to link students with health care services and with social service agencies that can improve their students’ health and help them succeed academically.

Budget Blenders

Restrictions on who can receive federal and state program money create funding silos that make it hard for health systems to partner with community social service organizations. A 3-track Accountable Health Communities model, which the Obama Administration will be implementing and testing over a 5-year period, may be a step towards resolving that issue. But meanwhile, some intermediaries are helping to address the problem.

One interesting example is made possible by the state of Maryland’s use of Local Management Boards (LMBs). These county-level public or nonprofit entities have the legal ability to deploy certain federal grants and programs administered by the state, as well as state resources, to local organizations with the aim of improving the health and educational success of children. In some cases the boards are governmental institutions, but in other cases, such as the Family League of Baltimore, they are intermediary organizations that coordinate and oversee funds and grantees. In this way, intermediaries that are close to the community and have trusted links with a range of health and social service organizations can help social service and health care institutions concentrate on social determinants of health.

Connectors

Some intermediaries function almost as entrepreneurs, developing creative ways to facilitate relationships between health care institutions and other sectors. The National Collaborative on Education and Health, for instance, brings together multiple organizations focused on steps to create a culture of health within schools. City Health Works, in New York’s Harlem, uses personal coaches to connect households with hospital partners and social service providers to improve health in the community.

This rich tapestry of intermediaries can help the health system collaborate more effectively and seamlessly with social services and community institutions as we focus on social determinants of health. So we can take steps to foster the use of intermediaries. For instance, states can emulate Maryland’s LMB’s, by creating county or city bodies to coordinate funding streams and steer support to innovative community organizations.

Governments and foundations can also provide the modest seed capital needed for intermediaries to develop data systems, so that they can play a more sophisticated role. The federal government can tweak the community benefit requirements for nonprofit hospitals to encourage them to invest in nonmedical services that promote health. Most important and starting at the local level, health plan administrators, health care professionals and facilities, government, school districts, and social service agencies need to sit down together to identify how to improve community health by changing patterns of spending.

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Editor's note: This piece originally appeared in JAMA Forum.

       

       

       

On February 9, President Obama submitted his FY 2017 budget request to Congress. The proposed international affairs budget is down 1 percent from current funding levels and 12 percent (in constant dollars) since 2010, better than many domestic accounts. In addition, outside the regular budget, the administration is proposing $1.8 billion ($376 million from the international affairs budget account) to meet the latest pandemic—the Zika virus. Given the budget environment, the proposed amounts for the international affairs budget seem reasonable.

But from a long-term perspective, the budget is alarming. It seems unable to take account of global trends, it relies on fractured and ad hoc processes, and it is excessively siloed into pre-determined sectors.

Being satisfied with relatively small budget cuts does not face the reality of far greater and more pressing challenges today than in 2010. Today, Iraq and Afghanistan are still demanding sizable budget resources. We need to respond to Russia’s muscle-flexing by demonstrating our commitment to its independent neighbors. The effort to move HIV/AIDS to a more sustainable model is commendable but showing minimal success, so U.S. funding cannot slip. The Ebola crisis has been succeeded by the Zika virus. The Middle East is unstable and violent, with half the population of Syria killed or displaced. Sixty million displaced persons is the highest level ever reached. The world is addressing four Level 3 humanitarian crises, an unprecedented number. The fear of terrorism is spreading and disrupting rational political dialogue. Domestic violence and civil strife is increasing in Central America. Free expression is under siege in many countries and civil societies are in need of reinforcement.

Many of these challenges reflect an underinvestment in development in the past. We are using a Rube Goldberg budget system that cobbles together funding from multiple sources for a single objective and locks in funding several years before a penny flows, making it difficult to adjust to changing circumstances.

The budgeting system problem

The 2017 budget uses a gimmick that may not be sustainable. To fund the Iraq war, the Bush administration invented an off-budget account (Overseas Contingent Operations, or OCO, a successor to earlier emergency funding) that does not count against the annual budget caps. The State Department and USAID got part of their budgets starting in 2012 from this account. OCO for FY 2017 is proposed at one-quarter of the international affairs budget. The problem is that OCO cannot be counted on in the long-term, and the sustainable base budget for FY 2017 is down 30 percent from FY 2010 in constant dollars.

The budget process is also absurdly long. The Obama administration began planning the FY 2016 budget in the spring of 2014, roughly 18 months before Congressional appropriations. Typically, it could take another six months for agency officials and appropriation committees to agree on country and program allocations. Only then, 30 months later, can U.S. development professionals working overseas get on with the business of putting those resources to work.  

This budget process, with its long timeframes and pre-determined earmarks and presidential initiatives, means that despite best efforts by USAID, it is difficult to respect “local ownership” of development—something that development experience demonstrates is fundamental to successful and sustainable development.

Presidential initiatives have their place as a way to bring along political allies and the American populace. It is also appropriate and constructive for Congress to weigh in on funding priorities. But it can be counterproductive to effective development when presidential initiatives and congressional earmarks dictate at the micro level and restrict flexibility in implementation, especially in a rapidly changing world with frequent crises. 

Another problem with the current budget system is that most but not all sectors are protected by budget accounts or earmarks. Health is protected and the funding divided into various sub-accounts. Education and agriculture get earmarks. New in the FY 2016 appropriations bill is a separate line item for democracy.

Another structural issue is the crisis-reactive nature of our assistance programs. Health, which garners the lion’s share of U.S. economic assistance, has been dominated for nearly two decades by responses to global crises — first massive funding for combatting HIV/AIDS, followed by significant funding to tackle malaria, Ebola, and now the Zika virus. It is funding by individual disease. Crisis galvanizes political and popular support for the here and now. But what if we had focused on building up national health systems for the last 20 years rather than fighting one-off diseases? If we moved to more preventive approaches now, maybe in 10 or 20 years the pandemic of the day could be met less by the U.S. ramping up in a crisis mode and more by the health systems in those countries affected, with the U.S. playing a supportive and technical role rather than the core funding role. 

These issues are examples of why it is imperative for the next administration and congress to engage in a strategic dialogue on the objectives and priorities of foreign assistance programs, both in funding levels and how the funds are used. It is time to move away from the current structure that resembles building a Cadillac from parts of models stretching from 1949 to 1973, as in the Johnny Cash song "One Piece at A Time.”

Figure 1: How we build our budget

Source: Abernathyautoparts, CC BY-SA 2.5

It is not unrealistic to envisage a more strategic approach. One option is to return to the approach in the 1970s, when all development funding was put into one of just five or six functional accounts, and provide some flexibility in moving funds between accounts.

Policymakers who believe that America is an exceptional or indispensable nation and that world problems do not get solved without American involvement need to take a hard look at whether they are providing the U.S. government with the required diplomatic and development tools. It is high time for U.S. policymakers to take a more strategic approach to the level of funding of international affairs and how the U.S. uses its foreign assistance. The inauguration of a new president and Congress in 2017 offers the opportunity to seize this challenge.

      

From a distance, the finger-pointing and the hand-wringing over the seeming demise of plans to build rail to Dulles Airport make it appear that the project collapsed under its own weight.

The Dulles dust-up is not a unique disease, but rather a symptom of a much larger national transportation illness. As hard as it may be to think of a $5 billion mega-transportation project as a “microcosm” of anything, right now that is exactly how one should consider the Dulles rail controversy.

The disagreements about the planned 23-mile Metrorail line through Tysons Corner in Virginia, continuing to Dulles International Airport — stalled now due to ideological differences over the appropriate federal role in transportation — are a subset of a larger battle taking place.

Around the country, metropolitan-based civic and business leaders are constructing 21st-century visions for transit, engaging local governments in true regional decision making and leveraging private funding for infrastructure projects.

Formerly auto-centric metropolitan areas such as Los Angeles and Dallas have made transformative use of new investments in key transit corridors. Metropolitan Denver is embarking on arguably the most extensive transit expansion this nation has ever seen.

These regions have looked to transit to shape future growth, to provide more choices and to at least somewhat mitigate climate changes.

Unfortunately, most of this innovation is happening in spite of — rather than in conjunction with — the federal government.

The sad fact is that our national government takes an impeding and outmoded approach to transportation innovation, establishing starkly different rules that favor highways over transit projects.

This unlevel playing field has profound effects on metropolitan America and, by extension, on the economic competitiveness of the nation.

The federal program that funds new transit projects is totally discretionary and highly regulated by the U.S. Department of Transportation. Projects must prevail through an onerous review before final recommendation is made. Even then, each project is subject to the annual congressional appropriations process.

Clearly, some kind of competitive process is warranted. However, the current bureaucratic rigmarole is so torturous, it is no wonder that some metropolitan areas are forgoing the federal process completely and funding new transit segments on their own.

In addition, this administration’s inexplicably hostile approach to nonhighway projects has compounded the problem, resulting in shortsighted thinking that ignores the realities and challenges of the modern metropolis.

But no such federal gantlet governs highway projects. Simply put, the states do not have to seek federal permission to build them.

More inequity exists in terms of what the federal government is willing to contribute to investments.

Federal law created 50 years ago establishes 80 percent to 90 percent of the funding for highway projects. For transit investments, the contribution is much lower — just 47 percent, according to the Office of Management and Budget. The Dulles share is only 20 percent.

Finally, developers of federal transit projects must demonstrate a long-term ability to operate and maintain the facility.

Makes sense, right? It is one thing to create a project but, as the collapse of the bridge in Minneapolis underscored, maintaining it is entirely another. Yet recipients of highway dollars amazingly are not responsible for this.

All of this brings us back to the Dulles rail project. Understandably, many feel that the Department of Transportation’s lack of clear guidance and direction, astonishing miscommunication, unprecedented heavy-handedness and traditional, road-centric thinking may be too much to overcome.

Yet the hope is that cooler heads prevail. The focus now must be on making Dulles rail a negotiated success rather than a standoff failure, because too many benefits are on the line.

The project promises to transform a congested suburban corridor, contribute toward energy independence and take advantage of a unique private finance and development partnership to accommodate decades’ worth of metropolitan growth. It also will anchor Washington’s status as an international capital.

Right now, though, our outmoded transportation infrastructure, both here and around the country, is ill-served by an outmoded federal partner.

Robert Puentes is a fellow at the Brookings Institution’s Metropolitan Policy Program.

      

      

It's almost that time: the once-a-decade-moment when the U.S. Census Bureau tries to determine the population.

Counting more than 300 million residents is a complex and costly operation (an estimated $14 billion), but the results yield the basis for how we apportion Congress, distribute more than $400 billion in federal funds and understand basic changes to the number and geographic distribution of U.S. residents.

The largest challenge that the Census Bureau faces is ensuring everyone is counted, regardless of where they live, who they live with and perhaps most controversially, regardless of whether they are authorized to live in the United States.

Most households will receive a census form by mail in mid-March to be filled out as of Census Day, April 1. First results of state counts for redistricting purposes must be delivered by December 31. The rest of the results will be released over a period of time that ends in 2013.

Filling out a census form is mandatory by law. The 2010 Census will have 10 basic questions for each household member, but it is viewed as a burdensome task by some, because they see the questions as too personal or the process too intrusive. Others distrust what the government will do with the information or fear that it may be used against them. Some are hampered by language barriers. Still others have more than one residence.

Every decade, the Census Bureau works hard to make sure everyone is counted once and only once. And it makes an extra effort to count those who have traditionally been hard to count: racial and ethnic minorities, immigrants and the poor.

This coming census -- the largest count of the U.S. population with more immigrants and minorities than ever -- will be complicated further by the economic downturn and foreclosure crisis because many people are "doubling up" or otherwise living in temporary quarters.

The Census questionnaire asks for a count of all people who live and sleep in the household "most of the time," as of April 1, but not those who are living away at college or in the military or those who are living in a nursing home or who are in a jail, prison or detention facility. (They are counted separately from households.)

"Home" may have changed recently for those whose hardship leaves them little choice but to live with relatives or friends, however temporary that may be. "Home" for displaced residents of the Gulf Coast may be miles away from where they lived before the devastation that Hurricanes Katrina and Rita wrought in their communities.

"Home" for some immigrants is in U.S. communities even though they are not legally residing in the United States. And "home" may be in a prison or detention center in a state far away from the inmate's hometown residence.

These are the very residents that the Census will try hardest to enumerate this spring. Abutting the challenges of where to call home are the public debates surrounding them:

• Civil rights leaders, recognizing the unique context of the Gulf Coast region, are working hard to ensure an accurate local census. At the same time, other regional leaders would like to see displaced Gulf Coast residents counted where they lived before the storms.
  
  
• A coalition of African-American leaders is lobbying for inmates to be counted in their place of residence before imprisonment.
  
  
• A tug-of-war has ensued between Latino leaders on one side who are working to get an accurate count of the population regardless of legal status, and those on the other side who are advocating a census boycott by immigrants as a way to put pressure on Congress to move forward with federal immigration reform.
  
  
• A recent amendment introduced in the Senate would have delayed the implementation and hiked up the cost of the Census, had it passed. In an attempt to exclude the unauthorized population from the official count for congressional apportionment purposes, it would have required questions on citizenship and immigration status for each respondent. That data is not collected to encourage participation in the census. The senators missed the deadline by two years to make a change of that order of magnitude.

Given the demands and challenges, it is vital that we bear in mind the importance of achieving an accurate count and the economic, political and policy implications if we fail.

• Understanding our changing population: State and local data on age, race and ethnicity, household size and composition help communities with projections for school enrollment, housing, transportation and health care. Businesses use Census data for decisions about where to locate and for marketing purposes. Information from the census is used to prepare for emergency services, research changes and advocate for various causes.
  
  
• Distributing federal dollars geographically: More than $400 billion a year is at stake, federal funds that go to states and localities to build schools, hospitals, highways and fund programs such as Medicaid.
  
  
• Apportioning Congress: The redistricting and apportionment of Congressional seats is contingent on census results. This is the primary purpose of the Census as written into the U.S. Constitution. States and localities also use the data to redistrict; therefore it is in every state's interest to be accurately represented based on their residents.

One debate that has been resolved: Census 2010 will not use statistical sampling, as many Republican leaders have feared. Sampling has been proposed as one way to mitigate the undercount of minority populations, the majority of whom are assumed to vote Democratic. The U.S. Bureau of the Census does use sampling in its annual American Community Survey that collects more detailed data, including social, economic, and demographic characteristics.

The political and equity arguments will continue to surface as we head into Census 2010. Public officials, advocacy groups, and community organizations will need to work together with census officials to get the most out of what will be a difficult enumeration, but one that sets the stage for the next decade.

      

At a news conference in Seoul today, the United States and the Republic of Korea jointly announced the decision to deploy a Terminal High Altitude Area Defense (THAAD) missile defense system on the Korean Peninsula, with operational deployment planned by the end of 2017. Though many details are still pending, the decision is not a surprise, and the purposes of the deployment are wholly transparent.

As elaborated in the official announcement, the THAAD deployments are intended to defend the infrastructure and citizens of South Korea, and to protect core military capabilities underpinning the U.S.-Korea alliance. It is not a panacea for South Korea’s potential vulnerabilities to North Korean missile attack, but it will appreciably buttress Seoul’s still-limited air and missile defense capabilities, and explicitly link them to the far greater assets of the United States. 

Seoul did not undertake this commitment lightly. In recent years, South Korean strategic analysts have hotly debated the missile defense issue, but the political-military leadership has proceeded very deliberately. It was only in the aftermath of North Korea’s fourth nuclear test in early January and a long-range rocket test that soon followed that President Park Geun-hye’s administration agreed to initiate consultations on the “earliest possible” deployment of a THAAD missile battery. The North’s accelerated missile testing program, evident since April, reinforced the need for a meaningful response to Pyongyang’s actions.

Neither China nor Russia seems mollified by today’s announcement. Beijing and Moscow both perceive a malign U.S. strategic design, purportedly intended to detect and intercept Chinese and Russian strategic missiles, thereby invalidating their respective deterrence capabilities. But these worst-case estimates attribute technical reach and refinement to the Raytheon radar system likely to accompany the THAAD deployment that substantially exceeds even the manufacturer’s claims. 

China and Russia also contend that the THAAD deployment will further complicate the larger goal of denuclearization and threat reduction on the Korean Peninsula. But this places the cart before the horse. Pyongyang’s determination to expand and diversify its nuclear and missile programs has triggered the THAAD decision. Without the North’s accelerated military efforts, it is very doubtful that sentiment in Seoul would favor deployment of THAAD. Beijing and Moscow assuredly know how to connect the dots, but they seem unwilling to do so. 

At a time of increased Chinese wariness about U.S. military strategy along China’s periphery, it is not a surprise that Beijing has paid little heed to American and South Korean assurances.

Beijing also calculates that warning South Korea of unspecified consequences will convince Seoul to forego the THAAD decision. But this underestimates the South’s determination to proceed with missile defense, which will tie Seoul even more integrally to longer-term cooperation with the United States. This decision is unwelcome in China, but it is wholly within Seoul’s sovereign right to defend its vital interests by all appropriate means; China routinely does the same.

In meetings with Chinese counterparts, senior Korean officials have repeatedly stated that the THAAD deployment serves one irreducible purpose: the protection of South Korean vital national security interests. Seoul is keenly aware of Chinese strategic equities, and will remain very mindful of Beijing’s concerns as it moves ahead with this program. 

At the same time, Seoul and Washington have repeatedly conveyed their willingness to impart to officials in Beijing the limited purpose of the THAAD deployment. It will be directed entirely towards the North’s threats against the South; it will be exclusively bilateral in design; and it will not be targeted against the capabilities of any other party. 

At a time of increased Chinese wariness about U.S. military strategy along China’s periphery, it is not a surprise that Beijing has paid little heed to American and South Korean assurances, at least publicly. But officials and analysts in China must quietly grasp the reasons for the THAAD decision. The North’s nuclear and missile programs worry China deeply, as well. 

The need for a quiet, private conversation about the risks to stability on the peninsula has never been greater. The United States and South Korea are surely ready for this conversation. Whether China is ready remains to be seen.

       

       

       

       

       

It is estimated that there are 95 mobile phone subscriptions per 100 inhabitants worldwide, and this boom has not been lost on the developing world, where the number of mobile users has also grown at rocket speed. In fact, in recent years the information communication technology (ICT) revolution has provided opportunities leading to “death of distance,” allowing many obstacles to better livelihoods, especially for those in remote regions, to disappear. Remarkably, though, the huge proportion of poverty-stricken populations in so many of those same regions persists.

How might, then, we think differently on the relationship between these two ideas? Can and how might ICTs act as an engine for eradicating poverty and improving the quality of life in terms of better livelihoods, strong education outcomes, and quality health? Do today's communication technologies hold such potential?

In particular, the mobile phone’s accessibility and use creates and provides us with an unprecedented volume of data on social interactions, mobility, and more. So, we ask: Can this data help us better understand, characterize, and alleviate poverty?

Mapping call data records, mobility, and economic activity

The first step towards alleviating poverty is to generate poverty maps. Currently, poverty maps are created using nationally representative household surveys, which require manpower and time. Such maps are generated at a coarse regional resolution and continue to lag for countries in sub-Saharan Africa compared to the rest of the world.

As call data records (CDRs) allow a view of the communication and mobility patterns of people at an unprecedented scale, we show how this data can be used to create much more detailed poverty maps efficiently and at a finer spatial resolution. Such maps will facilitate improved diagnosis of poverty and will assist public policy planners in initiating appropriate interventions, specifically at the decentralized level, to eradicate human poverty and ensure a higher quality of life.

How can we get such high resolution poverty maps from CDR data?

In order to create these detailed poverty maps, we first define the virtual network of a country as a “who-calls-whom” network. This signifies the macro-level view of connections or social ties between people, dissemination of information or knowledge, or dispersal of services. As calls are placed for a variety of reasons, including request for resources, information dissemination, personal etc., CDRs provide an interesting way to construct a virtual network for Senegal.

We start by quantifying the accessibility of mobile connectivity in Senegal, both spatially and across the population, using the CDR data. This quantification measures the amount of communication across various regions in Senegal. The result is a virtual network for Senegal, which is depicted in Figure 1. The circles in the map correspond to regional capitals, and the edges correspond to volume of mobile communication between them. Thicker edges mean higher volume of communication. Bigger circles mean heavier incoming and outgoing communication for that region.

Figure 1: Virtual network for Senegal with MPI as an overlay

Source: Author’s rendering of the virtual network of Senegal based on the dataset of CDRs provided as a part of D4D Senegal Challenge 2015

Figure 1 also shows the regional poverty index[1] as an overlay. A high poverty index corresponds to very poor regions, which are shown lighter green on the map. It is evident that regions with plenty of strong edges have lower poverty, while most poor regions appear isolated. 

Now, how can we give a more detailed look at the distribution of poverty? Using the virtual network, we extract quantitative metrics indicating the centrality of each region in Senegal. We then calculate centrality measures of all the arrondissements[2] within a region. We then correlate these regional centrality measures with the poverty index to build a regression model. Using the regression model, we predict the poverty index for each arrondissement.

Figure 2 shows the poverty map generated by our model for Senegal at an arrondissement level. It is interesting to see finer disaggregation of poverty to identify pockets of arrondissement, which are most in need of sustained growth. The poorer arrondissements are shown lighter green in color with high values for the poverty index.

Figure 2: Predicted poverty map at the arrondissement level for Senegal with MPI as an overlay

Source: Author’s rendering of the virtual network of Senegal based on the dataset of CDRs provided as a part of D4D Senegal Challenge 2015.

What is next for call data records and other Big Data in relation to eradicating poverty and improving the human development?

This investigation is only the beginning. Since poverty is a complex phenomenon, poverty maps showcasing multiple perspectives, such as ours, provide policymakers with better insights for effective responses for poverty eradication. As noted above, these maps can be used for decomposing information on deprivation of health, education, and living standards—the main indicators of human development index.

Even more particularly, we believe that this Big Data and our models can generate disaggregated poverty maps for Senegal based on gender, the urban/rural gap, or ethnic/social divisions. Such poverty maps will assist in policy planning for inclusive and sustained growth of all sections of society. Our methodology is generic and can be used to study other socio-economic indicators of the society.

Like many uses of Big Data, our model is in its nascent stages. Currently, we are working towards testing our methodology at the ground level in Senegal, so that it can be further updated based on the needs of the people and developmental interventions can be planned. The pilot project will help to "replicate" our methodology in other underdeveloped countries.

In the forthcoming post-2015 development agenda intergovernmental negotiations, the United Nations would like to ensure the “measurability, achievability of the targets” along with identification of 'technically rigorous indicators' for development. It is in this context that Big Data can be extremely helpful in tackling extreme poverty.

Note: This examination was part of the "Data for Development Senegal" Challenge, which focused on how to use Big Data for grass-root development. We took part in the Data Challenge, which was held in conjunction with NetMob 2015 at MIT from April 7-10, 2015. Our team received the National Statistics prize for our project titled, "Virtual Network and Poverty Analysis in Senegal.” This blog reflects the views of the authors only and does not reflect the views of the Africa Growth Initiative.

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[1] As a measure of poverty, we have used the Multidimensional Poverty Index (MPI), which is a composite of 10 indicators across the three areas: education (years of schooling, school enrollment), health (malnutrition, child mortality), and living conditions.

[2] Senegal is divided into 14 administrative regions, which are further divided into 123 arrondissements.

      

Education is at a critical juncture in many nations around the world. It is vital for student learning, workforce development, and economic prosperity. For example, research in Turkey has found that raising the compulsory education requirement from five to eight years increased the percentage of women having eight years of school by 11 percentage points, and had a variety of positive social consequences.

Yet despite the emergence of digital learning, most countries still design their educational systems for agrarian and industrial eras, not the 21st century. This creates major problems for young people who enter the labor force as well as teachers and parents who want children to compete effectively in the global economy.

In this paper, Darrell West examines how mobile devices with cellular connectivity improve learning and engage students and teachers. Wireless technology and mobile devices:

• Provide new content and facilitate information access wherever a student is located
• Enable, empower, and engage learning in ways that transform the environment for students inside and outside school
• Allow students to connect, communicate, collaborate, and create using rich digital resources, preparing them to adapt to quickly evolving new technologies
• Incorporate real-time assessment of student performance
• Catalyze student development in areas of critical-thinking and collaborative learning, giving students a competitive edge

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• Download the paper