Elizabeth Warren’s Plan Would Take Money From Black Schools And Give It To White

Elizabeth Warren has a plan to sort out the higher maternal mortality rate among black women in America. She’s going to fine hospitals that have high rates and give more money to hospitals that have low rates. Hmm, well, sure, incentives matter.

But there is a slight problem with this idea. Imagine that we applied exactly the same one to, say, high schools. We’d end up taking money away from schools with predominantly black populations and giving more to those with disproportionately white ones. Which isn’t, as we know, exactly what public policy is these days. And certainly not an idea that Elizabeth Warren would support. So, there’s either something wrong with the way we deal with schools or Warren’s plan about maternal mortality is full of it.

It’s the second of course.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Warren unveiled for the first time an idea to tackle the grim reality that women of color have significantly higher maternal mortality rates than their white counterparts: Hospitals that can bring down the number of deaths would receive a “bonus,” and if they don’t, “they’re going to have money taken away from them.” “I want to see the hospitals see it as their responsibility to address this problem head-on and make it a first priority,” Warren said, “and the best way to do that is to use money to make it happen.” [/perfectpullquote]

Warren’s statement here starts from her view that the mortality problem itself is about prejudice. Which certainly exists, sure it does, but it’s not the cause here. The medical profession doesn’t skew white enough for that to be a reasonable cause.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Speaking in Houston on Monday, the Massachusetts Democrat suggested that medical providers should be rewarded with “bonus” funds for reducing those numbers, which are three or four times higher than for white women.
“And if they don’t,” the presidential candidate said, dropping the carrot to wield a stick, “then they’re going to have money taken away from them. I want to see the hospitals see it as their responsibility to address this problem head-on and make it a first priority. The best way to do that is to use money to make it happen, because we gotta have change and we gotta have change now.”[/perfectpullquote]

So, let’s translate that plan over to education. Predominantly black schools – the inner city ones – have vastly worse graduation rates than those pinkish suburban ones. Do we therefore send less money to those inner city schools? Actually, no, we don’t. Baltimore, an appalling school system, has one of the highest funding rates in the country. Because we say that the constituent population has large and severe problems that have to be compensated for. Poverty, single parent families, violence in the area, bad housing….we have to spend more on each pupil to try to overcome these problems.

Hey, whether that’s right or wrong – my own thought is that it’s the way the money is spent, the system, not the amount but – that is the argument used to determine such budgets.

So, why is there this higher black maternal mortality rate? Well, pretty much the same set of problems. Poverty, violence, lack of pregnancy care, obesity, diabetes – a large contributor those last two – and so on. The mortality rate is driven by much the same things we talk about with education. For much the same reasons, the living conditions of much of black American are worse than those of pinkish America.

So, what incentive are we now offering to a hospital. There’s this population here, easily identifiable by skin colour, who for reasons entirely beyond your control are going to have a higher mortality rate. If you don’t do something about the mortality rate of those treated in your hospital you’re going to lose money. So, what will the hospital do? It’ll try and slice and dice into that troublesome population and only take those as patients who seem to be healthy. The unhealthy group – the diabetic perhaps, the obese, young single mothers, those most at risk – will be rejected as patients.

Sure, we can even make it illegal to so slice and dice but that won’t stop it happening. Liz Warren’s plan to deal with black maternal mortality will raise black maternal mortality. By making it more difficult for those who really require tender maternity care to get any maternity care at all.

Well done to Ms. Warren then, well done there. If only she could grasp the central point of economics, incentives matter.