A Report Card on Education Reform

Danny Moloshok/Reuters (left); Charles V. Tines/Associated Press Mitch Daniels, president of Purdue University, left, and John Engler, president of the Business Roundtable.

I sat down last week in Washington with Arne Duncan, the secretary of education, and Mitch Daniels, the former Indiana governor and current Purdue University president, after they had met with several dozen chief executives of big companies to talk about education. Their meeting was at the office of the Business Roundtable, the corporate lobbying group, and joining us for the conversation was John Engler, the former Michigan governor who runs the Business Roundtable.

Neilson Barnard/Getty Images, for The New York Time Education Secretary Arne Duncan

Mr. Duncan is a Democrat, of course, and Mr. Daniels and Mr. Engler are Republicans. But they all sympathize with many of the efforts of the so-called education reform movement. I asked them whether the country’s education system was really in crisis and what mistakes school reformers had made. A lightly edited version of the first part of our conversation follows; the second part will appear on Economix on Thursday.

Leonhardt: You always hear we’re in crisis. But what is the bad news, and what is the good news, and are we making any progress?

Duncan: I do think we have a crisis.  I do feel tremendous urgency.  If you look at any international comparison - which in a global economy is much more important than 30 or 40 years ago - on no indicator are we anywhere near where we want to be.  Whether it’s test scores or college graduation rates, whatever it is, we’re not close. So we’ve got a long way to go.  That’s the challenge.

Why I am hopeful is we have seen some real progress.  Some things are going the right way.  The question is how do we accelerate that progress. College graduations rates are up some. High school graduation rates are up to 30-year highs, which is a big step in the right direction.

The African-American/Latino community is driving much of that improvement, which is very, very important.  There is a huge reduction in the number of kids going to dropout factories. We are seeing real progress. The question is how do we get better faster.

Daniels: I am glad that the secretary didn’t pull any punches. I don’t know any other way to read it. In Indiana, we just had, by far, the best results we’ve ever seen in our state. Everything was up.  The high-school graduation rate is up 10 percent in just four years. Test scores, advanced-placement scores too. But we’re just nowhere near where we need to be.  And the competition is not standing still. So we need many more years of progress at the current rate, and it still maybe too slow. I’m afraid this is a half-empty analysis, but I think it’s an honest one.

Engler: The president of Purdue and the president of the Business Roundtable - we are the consumer groups here at the table. All the products of K-12 system are either going to go to the university or they are going to the work force.  The military is not here, but they’re not very different.

We need to have a system where everybody who leaves high school can go to college without remediation. We are nowhere close to that. And other nations are spending significantly less, but ramping up their performance significantly faster. We’ve got a gap to close.

Leonhardt: So you all agree, essentially, that there is a huge problem, and you all agree we are making progress, and you all agree the progress isn’t fast enough.

Duncan: Yes.

Engler: Yes.

Daniels: Yeah.

Leonhardt: I think - whether you like the term or not - you all identify yourself as sympathetic to the goals of the school-reform movement. Given that, I’d be interested in your thoughts about what has the school reform movement - the “choice” movement or the accountability movement or whatever it is - learned? What did it not have quite right initially, and what has it learned?

Duncan: A huge thing: No Child Left Behind was very well-intentioned. It did lots of things to spotlight the achievement gap. What it didn’t get was the need for high standards. What actually happened, which is really, really insidious, is that you had almost 20 states, in reaction to the law, dummy-down their standards and lower their standards.

The worst thing that I think can happen to kids and families, and particularly disadvantaged communities, is that people expect less of them, to make politicians look good. What I think the reform movement got wrong fundamentally is it was very loose on goals but very tight on how to get there.

I just fundamentally believe in a different theory of change. I believe in being tight on goals - having a very high bar - and loose on how to get there. We should give people a lot more room and flexibility to create and to be innovative.

I think that the reform movement got that wrong in a big way. Not from lack of good intent. And I think that was big. It hurt the country in a way that we’re working hard to correct.

Daniels: Yes, I think that was a central policy mistake.  The other, I think, is people still, even to this day, underestimate the sometimes violent resistance that the status quo puts up. All the evidence, all the great speeches, all the leadership, even from both sides of the political fence, have proven inadequate to really move the rock as far and as fast as it needs to move.

Leonhardt: A lot of other Democrats and liberals say, “Hey, this stuff hasn’t worked nearly as well as the proponents say. Charter schools don’t perform any better.  A lot of the stuff has been oversold.”  What is your answer?

Duncan: The truth is that the results are mixed. The truth is also that the highest-performing charters are doing extraordinary things for communities who haven’t had those opportunities. For me, there is nothing inherently good or bad about a school with a name charter. We just need many more high-quality schools, and this is why I think in education, we fight all the wrong battles.

The battle is not traditional versus charter. We have one common enemy, and it’s academic failure. Where charters are reducing academic failure and increasing graduation rates, and sending kids to college, we need to replicate that and learn from it and support it. Where do we have success? Where are parents and students voting with their feet - where you have 1,000 to 2,000 kids looking for that kind of option?  They are telling us something. We’ve got to listen. We owe it to them to listen. Take those lessons into traditional schools. And where traditional schools are doing that same thing, we’ve got to listen.

Anyone who said that every charter is successful is part of the problem. Anyone who says that charters are all part of the problem is part of the problem.

We all know great teachers and principals matter a lot and make a huge difference in kid outcomes. We have 15,000 school districts in this country.  Those should be laboratories for innovation and creativity. We don’t have one school district that I’m aware of in this country, not one out of 15,000, that systematically identifies their highest-performing teachers and principals who get the best results for the kids and puts them with the kids in the communities that need the most help.

What generally happens is exactly the opposite. The kids in the communities who need the most help get the least.

Engler: I think we need to keep data and academic performance the way we keep it on sports. I mean, we know everything about where we stand in the league in football, but we could be last in the league in mathematics for a decade, and we’d never know it. C.E.O.’s talk about the difficulty finding out graduation rates from a local school where they have a facility.

For more on these topics, there is a video of my interview with Mr. Duncan at The Times Center in New York last week.

Medicare’s Lessons for the Affordable Care Act

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

Next week will not be the first time that the federal government has introduced a new, subsidized health insurance program for millions of people. The introduction of the Medicare program a half-century ago provides some indicators of how the Affordable Care Act’s new health insurance marketplaces might evolve after they open on Tuesday.

The Affordable Care Act creates health insurance marketplaces or “exchanges” where families and individuals can purchase private health insurance. Most people currently without insurance will be eligible for assistance with their health insurance premiums, capping their payments at 2 to 10 percent of their household income.

The federal budget, and perhaps also the health of millions of people, depends on how many people take advantage of the new program.

People will not be forced to take part in the exchanges, but those who do not will be assessed a small penalty for not being insured (whichever is greater, 1 percent of household income, or $95 per person) that would appear on their federal tax return when they file in early 2015. Doctors and hospitals may also insist that their uninsured patients join the exchanges rather than requesting “free” care.

On July 1, 1966, Americans 65 and older were first eligible to take part in the new Medicare health insurance program, in which the federal government paid much of the cost. Previously, almost half of the elderly had no health insurance.

By the end of 1966, 19 million people were enrolled in Medicare, almost exactly the same as the number of Americans who were 65 or older at the time. The first full year of the program was 1967.

Source: Bureau of Economic Analysis

Those were the days before rapid Internet communication, and a number of elderly people lived in rural areas away from major hospitals and medical centers. In the current environment, the health insurance programs coming on line next week might spread even more quickly than Medicare did.

On the other hand, the elderly population may have been easier to reach than today’s uninsured nonelderly people, because the elderly had already been participating in the Social Security pension program. Also, the new health insurance exchanges will have staggered enrollment periods (about two months near the end of each calendar year), whereas elderly are enrolling in Medicare all year long (a person’s Medicare enrollment period is seven months based on the date he or she turns 65).

The Medicare-eligible population - essentially people 65 and over - is also less policy-sensitive than the population eligible for the new exchange plans. People over 65 are created by waiting for 64-year-olds to have another birthday, and there’s not much policy and economic events can do about that. But people eligible for the new exchange subsidies must be in families with income of 100 to 400 percent of the poverty line and must not have a job that offers affordable coverage â€" conditions that economic change or policies might affect.

Incentives and economic events are likely to increase the number of people eligible for the exchange subsidies, but those economic behaviors may take some time to play out. For that reason, participation in the exchange plans may continue to increase significantly even after 2015, when the program will have been two years old.

Based on the Medicare experience, I expect more than 15 million people to enroll in the new exchange plans by 2015, with millions more joining thereafter as the economy adjusts to the new law.

The Path to Dysfunction

Jonathan Ernst for The New York Times

Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities in Washington and a former chief economist to Vice President Joseph R. Biden Jr.

There are many good articles explaining what might happen if the government shuts down next Tuesday. There are fewer on the impact of breaching the debt ceiling, but that is only because we have never been crazy enough to do so.  But at least from what I’ve seen, there is not much on why we are in this mess in the first place.

So here is a brief and surely incomplete road map of the route we have taken to dysfunction junction, in the hopes that it might provide some guidance back to the main highway.

First, and this is not a recommended route back, a number of friends who work in Congress tell me that the absence of earmarks represents the loss of an effective disciplinary measure by which party leaders could keep members in line.  The idea is that if party leaders cannot promise junior legislators some goodies for their districts in return for their votes, they hold less sway over them.

Still, as Mark Schmitt of the Roosevelt Institute points out, it’s not obvious that restoring earmarks would make much difference, as a key part of the most conservative ideology is simply to oppose things that government does (at least, things that help the disadvantaged â€" food stamps, bad; farm subsidies, O.K.).  He notes the examples of some red states that turned down the Medicaid expansion under the Affordable Care Act, initially fully paid for by federal dollars (100 percent for the first three years, phasing down to 90 percent by 2020), or infrastructure spending and extended unemployment benefits under the Recovery Act.

Second, gerrymandering is clearly implicated.  The fact of “safe,” noncompetitive districts also robs the political process of a disciplinary force, where members could conceivably be held to task for shutdowns and defaults.

Third is new, nonestablishment money. There exists today a toxic combination between record levels of wealth concentration and the devolution of campaign finance rules such that independent and often anonymous donors have much more influence.  Again, this breaks down party discipline in ways that are most clearly seen by the frustration of Republican leadership in trying to figure out how to develop candidates who can get past radically conservative primaries to more moderate general election voters.  Accounts of the political calculations of Senator Ted Cruz of Texas provide an excellent microcosm of that dilemma.

Fourth, the political scientists Thomas E. Mann and Norman J. Ornstein, writing about this dysfunction, have concluded that “asymmetric polarization and the mismatch between our parties and governing institutions continue to account for the major share of our governing problems.”  The “asymmetric” part represents their view that a disproportionate share of gridlock is due to the fact that the “old conservative G.O.P. has been transformed into a party beholden to ideological zealots, one that sees little need to balance individualism with community, freedom with equality, markets with regulation, state with national power, or policy commitments with respect for facts, evidence, science and a willingness to compromise.”

The mismatch is the ability of the minority bloc with the attributes cited above to shut the system down.

These all seem right to me, but I’d like to add one that I am particularly concerned about: facts on the run.  Like many in the analysis business, I spend a lot of time with my colleagues at the Center on Budget and Policy Priorities trying to understand and explain critical facts that should inform key debates.  What is it about health care markets that requires a government presence? (Answer: health care has public-good characteristics, and insurance markets are prone to adverse selection.)  What is the connection between food stamp receipt and work? (Answer: most able-bodied, nonelderly adult recipients are in the work force.)  What are the behavioral reactions to tax rate changes? (Not as large as the debate would have you believe.)  Do fiscal stimulus measures work? (Generally yes, in demand-constrained economies, but design matters.)  Would it hurt the economy to breach the debt ceiling? (Duh …)

But â€" and this gradual process has reached a juggernaut â€" it’s not just that concentrated wealth and lax campaign finance means big money can buy the politics it wants.  It can also buy the facts it wants. For every one of the questions above, you can find competing “think tanks” churning out contrary answers that support the ideology described in the Mann-Ornstein citation. In the middle are journalists, fact checkers and bloggers trying to serve as intermediaries, and many are helpful in that regard. But at the end of the day, most observers will throw up their hands and figure that there is no correct answer, so they might as well go with their gut.

When facts and reason leave the building, however, they are too often replaced with prejudice and skewed judgment, especially when growing racial and ethnic diversity coincides with economic trends that have become increasingly harsh to less-advantaged households.

Put it all together, and you have a pretty clear road map to dysfunction, though one that is admittedly incomplete (please add your suggested explanations in comments). Which of course raises the question: What’s the way back?  One is tempted to use the old Maine quip, “you can’t get there from here,” but that’s too defeatist.

The prescription flows from the above diagnosis, and I’ll dig into it in a later post.  But here’s one hint: even Tea Partiers want to keep government hands off their Medicare. That speaks to the need for better information and better policy. The first step, then, is to put Obamacare into effect â€" if we can do so efficiently and effectively, even in the face of such harsh opposition, it may well have the potential to begin to pave the way back to a better politics.

How to Gut Obamacare

If House Republicans want to fray the Affordable Care Act on the eve of its implementation, defunding it won’t work. They’d be better off stripping or delaying the individual mandate.

That’s the conclusion of two recent studies that speak to one of the many moving pieces in this fall’s vicious budget debate.

House Republicans last week passed a bill that would keep on financing the federal government, but not the Affordable Care Act. Specifically, the bill orders: “Notwithstanding any other provision of law, no federal funds shall be made available to carry out any provisions of the Patient Protection and Affordable Care Act” or a related law. It also retracts the “entitlement to benefits” â€" that is, the Medicaid expansion â€" in the law.

If the Senate, with a Democratic majority, passed the bill from the Republican-controlled House as is, the law would be shot. There would be no federal money for the state exchanges, or to cover low-income adults in Medicaid. But there’s no way the Senate would pass the House bill. Even if it did, President Obama has vowed a veto.

Rather, any defunding would be temporary, because of a government shutdown. On the day the exchanges were due to open, much of the federal government would go offline, including a big portion of the Health and Human Services Department that is running the coverage expansion. But legislative inaction cannot gut Obamacare in the way that legislative action could. During a shutdown, implementation would “substantially” continue.

That’s according to a Congressional Research Service report prepared for Senator Tom Coburn, an Oklahoma Republican. In no small part, the reason is that much of the Affordable Care Act’s financing comes from mandatory spending, rather than discretionary spending, and a continuing resolution concerns only the latter. Moreover, some of the law’s money comes from multiyear or “no-year” discretionary funds that do not get wrapped up in the continuing-resolution process either. The Health and Human Services Department says its reform implementation fund would not get touched by a lapse in appropriations.

That is not to say that a shutdown, especially a long one, would not throw a wrench in health care reform or other programs financed with mandatory money. The Congressional Research Service report, for instance, looks at what happened to Medicare during the shutdowns in 1995 and 1996. It continued to pay doctors and hospitals. But its financing for its claims-processing vendors came from the discretionary budget. During the shutdown, those vendors kept working with only the expectation that they would get paid later. And during a long shutdown, “claims payments might cease as vendors ran out of cash to cover their operating costs,” the research service report says.

Temporary defunding probably would not do much. But Congress could substantially mar the law by stripping or delaying the tax penalties on Americans who decline to buy insurance â€" the so-called “individual mandate.” And it is one tactic that Speaker John A. Boehner of Ohio is mulling.

A new Urban Institute study explains why. Using Congressional Budget Office figures, it shows that delaying the individual mandate for a year would reduce coverage by about 11 million people in 2014. That would save the government some money. However, the effect on the health insurance marketplace might be profound. Many young and healthy people would decline to buy insurance coverage, with no penalty. The pool of the insured would be relatively sicker. Insurers would be forced to increase rates, as the healthy would do less to cross-subsidize the ill. Premiums would shoot up.

Here’s the institute on the multibillion-dollar problems that might create:

There is significant risk that low exchange enrollment in the first year due to the lack of a mandate could begin an adverse selection cycle which would make it difficult to establish viable risk pools in the exchange in future years. While the Urban Institute estimated that premiums without the mandate could be up to 24 percent higher than with the mandate, that analysis assumed fully effective risk adjustment across the exchange and nonexchange markets. Less effective risk adjustment could lead to even higher premiums in the exchange without the mandate and could dissuade insurers from participating in the new markets; this could then further dissuade healthier individuals with current nongroup coverage from entering the exchanges, exacerbating the effect in the following years.

In short, even a one-year delay in the mandate might cause cost problems throughout the insurance market â€" and from the perspective of the law’s supporters, that might be a lot worse than hassles related to a temporary shutdown.

50 Years After the House Vote for the Kennedy Tax Cut

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform â€" Why We Need It and What It Will Take.”

On Sept. 25, 1963, the tax cut proposed by President John F. Kennedy took its first major step toward enactment when the House of Representatives voted in favor of it. Its comfortable victory, however, does not mean the tax cut was a slam dunk. On the contrary, it was an uphill struggle that required considerable work by the White House to gain passage. In this post and a subsequent one, I’ll look at how Kennedy prevailed.

Contrary to his reputation as a wild-eyed liberal Keynesian who supported budget deficits as economic stimulus, Kennedy was in fact very conservative, fiscally and on national security. For example, in 1957 he opposed a tax cut, in large part because the nation’s growing military demands required more, not less, government revenue.

As I explained in an earlier post, Kennedy changed his mind when confronted by an economy that was growing too slowly, which threatened his re-election in 1964. But he was constrained by two things. First was the opposition to deficit spending by conservatives, including many powerful Southern Democrats.

Second was the precarious position of the dollar and the system of fixed exchange rates, which required the Treasury to freely trade dollars to foreign central banks for gold at $35 an ounce. The large current account deficit made maintenance of that system increasingly difficult. Deficit spending threatened inflation, which would also make it difficult to prevent a devaluation of the dollar.

Kennedy’s principal response was that a recession would be far more injurious to the dollar and the deficit. In a Feb. 14, 1963, news conference, he said, “If we don’t have the tax cut, it substantially, in my opinion, increases the chance of a recession, which will increase unemployment, which will increase the size of our deficit.”

He also said a recession would make the balance of payments worse: “The tax cut argument rests with the desire to stimulate the economy and prevent a recession which will cost us the most - domestically, internationally â€" on our budget and on our balance of payments.”

Kennedy’s original tax plan contained substantial reforms, but in a Feb. 25, 1963, speech, he said he was willing to abandon them to get a tax cut.

Republican economists including Arthur F. Burns and Raymond J. Saulnier, both of whom served as chairmen of the Council of Economic Advisers under Dwight D. Eisenhower, made the now-familiar argument that the tax cuts needed to be paired with spending cuts to be effective. This view was echoed by Republicans in Congress.

Surprisingly, the public was cool to a tax cut, even though the high tax rates of World War II and the Korean War were largely still in effect. The top statutory tax rate was 91 percent and the bottom rate was 20 percent. A Sept. 2, 1963, Harris poll published in The Washington Post found voters putting a balanced budget ahead of a tax cut, 41 percent to 36 percent.

On the eve of the House Ways and Means Committee’s vote on the tax cut, Kennedy was forced to respond to criticism that a tax cut would widen the deficit. In a Sept. 10, 1963, speech, he said, “By reducing the costly drain of unemployment and recession, while expanding our national income and tax revenues, it will, combined with an ever stricter control of expenditures, reduce and eventually end the pattern of chronic budgetary deficits.”

The Ways and Means Committee supported the tax cut, 17 to 8, with two Republicans in favor. One of them was Representative Howard H. Baker of Tennessee, later the Senate majority leader and the White House chief of staff for President Ronald Reagan. The New York Times reported, however, that the tax cut’s prospects in the Senate were always the primary White House concern.

Most Republicans continued to denounce the tax cut as economically unsound. In a nationwide radio and television address, Representative John W. Byrnes of Wisconsin, the ranking Republican on Ways and Means, called the Kennedy tax cut “an unprecedented gamble” with the economy and said it was like “playing Russian roulette with our destiny.”

Representative Byrnes insisted that spending be cut if taxes were to be cut and that a tax cut should be made contingent upon reduced spending. Failure to do so would be dangerously inflationary, he said. “All of this threatens confidence in the dollar at home and abroad, leading to the risk of bringing on a worldwide depression,” he warned.

On the House floor, Republicans made an effort to tie the tax cut to spending cuts. But their only hope of victory lay with support from conservative Southern Democrats, who viewed the G.O.P. approach as gimmicky and unworkable.

On Sept. 25, 1963, the final House vote was taken. The Republican plan was rejected, 226 to 199, gaining the support of only 23 of the 95 Southern Democrats in the House. The final vote in favor of the tax cut was 271 to 155, with 48 Republicans supporting it and 126 opposed. Among Democrats, 223 voted in favor, with 29 against.

Most of the Republican yea votes came from the Northeast, where the party then had a substantial presence. Among those supporting it were Representatives John V. Lindsay, who was later mayor of New York City, and Charles E. Goodell, who later was a United States senator from New York.

Among the Republican no votes were a number of representatives who later became staunch supporters of tax cuts under Ronald Reagan. These included Representatives Bob Dole of Kansas, who went on to serve as Senate majority leader and was the 1996 Republican candidate for president; Bill Brock of Tennessee, later senator and chairman of the Republican National Committee; and Donald H. Rumsfeld of Illinois, who twice served as secretary of defense. Representative Baker ended up voting no as well.

Opponents of the tax cut immediately shifted their attention to the Senate, where opposition among Southern Democrats was much stronger. In particular, Senator Harry F. Byrd Sr. of Virginia, chairman of the powerful Senate Finance Committee, strongly opposed a tax cut without corresponding spending cuts. Another opponent was Senator Albert A. Gore Sr. of Tennessee, whose son was later vice president.

It is quite possible that the tax cut would have died in the Senate, but the political landscape changed strikingly before the Senate could act, when President Kennedy was assassinated on Nov. 22, 1963. I will have more to say about the tax cut in a subsequent post.

National Health Costs vs. Your Health Costs

Health Care Cost Institute Out-of-pocket spending from the Health Care Cost Institute. Total health spending from the Centers for Medicare and Medicaid Services.

Health care spending growth has plummeted to the lowest levels ever recorded. But many Americans insist that they are paying more and more.

It is jarring, but both of those things are true, as a report from the Health Care Cost Institute helps to show. Out-of-pocket spending on things like deductibles and co-payments has shot up faster than overall spending of late. That means that even while hospitals and insurers have wrung billions of dollars out of the system, many individuals are feeling a heavier and heavier burden.

In its 2012 Health Care Cost and Utilization Report, the nonprofit research group found that health spending grew slowly last year, at a 4 percent annual rate. (The institute looks at the 156 million Americans under the age of 65 with employer-sponsored insurance.)

“Although average health care expenditures grew at nearly the same rate in 2012 as 2011, the causes of the 4 percent increase in spending each year were quite different,” David Newman, the institute’s executive director, said in a statement. “In prior years, rising health care prices drove up spending. In 2012, we saw utilization start to change health care trends for prescription drugs and professional procedures. Preliminary evidence suggests this may be indicative of a larger shift in care as people search for lower-cost care alternatives.”

The institute found that out-of-pocket spending growth outpaced overall spending growth, jumping about 4.8 percent to $768 a person. Older adults, 55 to 64, spent about $1,265 out of pocket, with those under 18 incurring just $427 in uncovered costs. Women also had greater out-of-pocket expenses than men, by more than $200 a year.

Those rising out-of-pocket costs are a major reason that the slowdown in cost growth feels so alien to so many Americans. Health care providers and insurers may see it in their data and their bottom lines. But millions of working Americans don’t. Moreover, economists believe that rising out-of-pocket spending is a major reason that the health care cost curve seems to be bending, accounting for about 20 percent of the slowdown, according to one study published in the venerable journal Health Affairs.

That is because workers with employer-sponsored insurance tend to think twice about medical care when they need to pay $2,000 out of pocket before their insurance kicks in. And that kind of situation is happening more and more. A Henry J. Kaiser Family Foundation survey released in August found that the proportion of workers enrolled in a plan with a deductible of at least $1,000 has climbed to 28 percent this year from just 6 percent in 2006. The average annual deductible has risen to $1,097 in 2012 from $735 in 2008.

Some more interesting findings from the H.C.C.I. report:

• Spending on inpatient services â€" those expensive hospital visits â€" grew more slowly than any other medical service category at 2.4 percent. Spending on often-cheaper outpatient services grew the fastest, at 6.5 percent.
• The gap between spending for women and men widened last year, with expenditures running about $5,246 per woman and $4,125 per man.
• Brand-name prescriptions got a lot more expensive, driving a big decrease in utilization: prices surged 25.4 percent and use declined 20.7 percent, meaning overall spending on brand-name drugs fell about 0.6 percent.
• Health spending grew fastest for young adults (5.4 percent for those aged 19 to 25) and slowest for older adults (2.5 percent for those aged 55 to 64).

More Manufacturing Coming Back to the U.S.

A study by the Boston Consulting Group documents what many manufacturers have quietly discovered in recent years â€" bringing production back to the United States from overseas carries some advantages.

More than half of executives at manufacturing companies with sales of more than $1 billion plan to return some production to the United States from China or are considering it, according to the report. That’s up from 37 percent in February 2012.

And the number of respondents in the process of moving back also rose, with 21 percent engaged in returning work to the United States, or “reshoring,” compared with 10 percent in 2012.

The study, conducted last month, elicited responses from more than 200 decision makers at companies across a broad range of industries. Virtually all of the companies manufacture in the United States and overseas and make products for consumption both in the United States and abroad.

One surprise is that energy costs â€" often mentioned by supporters of the natural-gas extraction process known as “fracking” as an argument for increased energy exploration to foster creation of manufacturing jobs â€" actually was the factor least cited by executives.

Instead, the leading advantages include competitive labor rates, proximity to customers, product quality, skilled labor and transportation costs.

While the survey is good news, the broader economic problem is that even as manufacturing returns to American shores, the old jobs associated with the sector are not coming back. As an article by Stephanie Clifford showed last week, renewed production of textiles in South Carolina factories features plenty of machines but few workers on the factory floor.

That phenomenon â€" more production with fewer workers â€" is something that often goes unmentioned when advocates like President Obama speak of a manufacturing renaissance that will produce middle-class jobs.

Indeed, while the sector is no longer hemorrhaging jobs as it did over the past decade, recent gains have been very modest. So far this year, the manufacturing sector has shown a net gain of only 2,000 jobs â€" even as unemployment has come down and overall private payrolls have increased by more than 1.3 million.