Brazil

This week's pictures are from a trip last summer to Brazil. I was asked to go to Brazil to talk about trade opportunities and economic development initiatives. We have a large and growing Brazilian population in Massachusetts. Many are interested in trade opportunities. I traveled to the city of Belo Horizonte and then on to the Town of Ouro Preto. Both are in the province of Minas Gerais. This area is where many of the Brazilians living in Massachusetts lived. It is known for its great minerals and Ouro Preto has a marketplace where all kinds of gem stones can be purchased very inexpensively. The village is also the location where Richard Dreyfuss filmed "Moon Over Parador". The first picture is a town building in a central square in town. It used to be a jail and was used as the Capital of Parador in the film. The second picture is a street with many small markets. It was a great place to visit and we have had ongoing discussions concerning trade leads since I got back. Brazil hosts the second largest medical device trade show in the world and Massachusetts, with one of the highest concentrations of medical device manufacturers in the US, is going to exhibit at that show. We also received a visit from a film maker who is working on securing funding for a film about women who came from Brazil and now live in the state. And the business group that sponsored the trip to Brazil has also held a similar meeting in Boston early this year. This ongoing trade talk is what makes the connections that lead to increased business between the two areas.

Health Care

The following is something that I wrote about in a letter to officials almost 2 1/2 years ago. However, it is from an editorial that I wrote almost a decade ago. Health care is the principal driver in our budget every year, and it is a huge cost for just about everyone in society today. Here is part of that letter:

"I have lobbied in the past to create administrative centers to handle the costs associated with paperwork and the labyrinth of health care plans and insurers. I have used examples where one person may utilize ten or more different venues of health care. Instead of being one person, he/she is treated like ten people with paperwork recreated again and again. If we had administrative centers that treated that person as one individual, we could substantially reduce administrative costs per patient. Not only would this be less costly, but we would reduce patient error and get better, more complete information on each patient. While I don’t envision said centers as gatekeepers, they would be able to more efficiently schedule both time and facilities. This would give us an opportunity to stop the proliferation of medical equipment such as MRI machines. Fewer machines could be utilized more efficiently with better centralized scheduling. This would cut down substantially on costs. The centers could be used to bulk purchase pharmaceuticals, reducing costs. Finally, freed from paperwork, health care officials could do more of what they do best, heal the sick.

Centers would also help to reduce medical errors by giving everyone involved the same information in a timely manner. If we were to combine this with the Computer Physician Order Entry (CPOE) system proposed by a consortium of health care groups through the Massachusetts Technology Collaborative (MTC), the results would be astounding. Not only would this save a tremendous amount of money for our health care facilities, but it would save lives.

Over the last few years, we have invested a lot of state resources into keeping people out of nursing homes and in their own apartments. We should continue this effort by factoring a few elderly units into every state assisted housing project. By building electronic arrays into these units, one nurse or personal care attendant can watch whether people are ok in their own homes. We should utilize technologies in-group homes such as cameras, telephony assessments, and computers to provide assistance to those in little need in order to avoid future larger costs. They can tell if people are taking medications. Again, this is a common sense approach that is part of an overall plan focused on people living healthier less expansively.

Plans to control costs don’t have to be as sweeping as this, but should be combined into a broad initiative. The issue of reuse of pharmaceuticals at Nursing homes is a good example of a small common sense cost savings.

Data Collection is another area where we can do better. For example, there are data collection tools for both Medicaid and Medicare. We use MMQ and the feds use MDS (through CMS) systems. Essentially we collect the same data to ensure against fraud. Each facility uses 1-1 1/2 registered nurses to enter data. This is 50,000-75,000 per facility, and we have 400-500 skilled nursing facilities in Massachusetts. If we eliminate the state duplication and piggy back off of the feds, we save $20-30 million that we are paying for. Plus, we could eliminate most of department staff that looks at the data and does field inspection. That would save us money as well. One of the reasons for not changing in the past has been that the feds do mostly auditing with auto accounting data software, while we do more field inspections, but the feds are starting to do more field inspections. Additionally, Nursing Homes need JCAHO certification to get paid by feds. We have DPH do the same thing. This is done less with hospitals than with nursing homes, but same issue. We need to stop the certification duplication.

Health systems that use community pharmacies waste money. The average supply dispensed of an average drug is a twenty-day supply. The average Medicare patient spends $25 per day on drugs. Waste is estimated at fifty per cent. Why? Two things. First, patient gets sick and is off meds. Second, patient has to change dosage. Systems are now being put in place in some hospitals to give dosage as needed on a day-to-day basis to stop waste. It is estimated in one community facility in my district that they would save $400,000- 600,000 in that one facility if they went to day-to-day dosage. Plus, hospitals pay less for drugs than do pharmacies. It is relatively easy to save where a hospital owns a nursing home. Should we do a pilot program?

Look at payment plans in Massachusetts. Institute of Medicine has estimated that we could save $265 billion nationally by changing our billing structure. Need to conduct a pilot program “to identify, pilot test, and evaluate various options for better aligning payment methods with quality improvement goals. Examples of possible means of achieving this end include blended methods of payment designed to counter the disadvantages of one payment method with the advantages of another, multiyear contracts, payment modifications to encourage use of electronic interaction among clinicians and between clinicians and patients, and bundled payments for priority conditions.” We should explore federal funding to conduct pilot programs. Again, this is a function that could easily be accomplished by setting up regional administrative centers

We should look at the creation of regional health and human service organizations. Many of our agencies handle parts of a problem or duplicate a type of service offered by another agency. Better coordination of efforts would lead to a reduction of costs through duplication and would lead to better services through a more holistic approach to a person’s problems. Just as we know that an individual with a chronic illness has multiple illnesses in most cases, an individual with a substance abuse or domestic violence problem may also need educational, job training, or housing assistance. By providing comprehensive services to combat multiple symptoms, we are able to avoid recidivism of individual in use of social services.

As we listened to businesses on our listening tour, we promised business that we would not merely pass an economic development bill, but would partner with businesses in order to maintain a better economy for the Commonwealth. We need to do the same with health care. Now that we have passed this unprecedented health care bill, you have given."

Health Care is an incredibly complex issue that people try to break down into a seemingly simple issue of single payer. No one state can do this alone. For example, single payer advocates don't take into account multi-state companies or tourists that would have their own health plans. That means we can't eliminate handling all the other health plans in our health facilities. But we can have a single biller plan. It gets us to the same place. Additionally, we can better use technology in a state where we have some of the most technologically advanced companies in the US. Regardless of how we do this, we have to get better at controlling costs and we need the federal government to step up on this.

Springtime in Florida

Florida Massachusetts that is. This week's rain froze in Florida while it washed away at lower locations. Florida is situated in the Hoosac Mountain range and holds the highest elevation of the Mohawk Trail at around 2170 feet at the Whitcomb Summit. Florida was my home town growing up. I lived in the valley that holds the eastern portal to the Hoosac Tunnel. It is a beautiful little village of around 60-70 people along the Deerfield River which has some of the best fly fishing in New England.
Florida is a small community of around 700 people, most on top of the mountain and the rest in the valley. It is home to a bronze statue of an Elk, and hosts the annual Florida Mountain Turnip Festival! It is a great community where people care about their neighbors and participate in their town meetings.
The storm this past week left the trees loaded with ice. In many spots, the trees were bowed down by the weight and when I snapped these pictures the wind was blowing and the trees were crackling as they swayed in the wind. The ice would break and reform and the sound was like listening to static electricity. For long stretches of the road (Route 2) the trees on the sides of the road sparkled with the ice as the sun hit it. I thought it looked like a glass forest.

Life Sciences

Lost in the casino debate is that the House passed a $1 billion life science initiative a few weeks ago. The Senate is now working on their version and we hope that we will have something on the Governor's desk soon. The following is the press release that we put out shortly after passage of the House version.

Representative Daniel E. Bosley (D-North Adams) and the House of Representatives today overwhelmingly voted to invest $1 billion in the state’s burgeoning life sciences industry. The economic development package takes a targeted approach to growing high-paying, quality jobs, drawing biotech companies to Massachusetts, and retaining talented scientists and researchers at state institutions.

The 10-year initiative includes $250 million in tax credits for life sciences companies that promise to create jobs in the Commonwealth and $250 million in direct research grants to encourage the best and brightest in the industry to continue research in Massachusetts, and $500 million in capital investments in the industry.

House Speaker Salvatore F. DiMasi (D-Boston) said of the historic legislation, “The biotech industry has been a valuable economic engine for our state and the investments we voted for today will fuel that engine. This bill will open the next chapter of economic prosperity in the Commonwealth and keep our state on the forefront of science and technology worldwide.”

Of particular importance to Berkshire County, $49.5 million of the capital appropriations will be allocated for the construction of a new science and innovation center at the Massachusetts College of Liberal Arts. As Representative Bosley said, “this building will provide excellent opportunities for the students and faculty of MCLA, a great potential for the entire region. This gets our foot in the door for quality, high-paying jobs in the innovation sector for residents of the Berkshires.”

Bosley noted that “Massachusetts is home to the world’s largest super-cluster of life science companies. Other states and countries are going to great lengths to lure these companies away from us. This bill provides us the tools to retain these companies and incentives to attract new life sciences companies to the Commonwealth.”

Other highlights of the bill include:

• Capital investments in the life sciences industry, including $90 million for the RNAi Center at the University of Massachusetts to promote the work of Professor Craig Mello, the Nobel laureate, $95 million to create a life sciences center at UMass-Amherst and $120 million to establish the Massachusetts Life Sciences Opportunity Relocation and Expansion Jobs Capital Program Trust Fund.

• Direct grants and programs for the industry, such as $40 million for seed money to address federal funding shortfalls for life science research, $30 million to aid post-doctoral and graduate students studying life sciences, the establishment of new grant programs to boost the biotechnology workforce ($25 million), and “requipment” grants ($30 million) that provide funding for the state’s vocational and technical schools to train the next generation of life science employees. This funding makes the future of the life sciences industry more inclusive for all of the residents in the Commonwealth.

• Tax incentives for certified $25 million companies per year, including a tax credit toward the purchase of property for life science companies, extending from five- to 15-years the tax exemption for life science companies and additional tax credits for companies located in Economic Opportunity Areas throughout the state.

“This bill spends our money in an intelligent manner in order to develop the life sciences industry, an important economic driver with the state. These newly created workforce training programs and the vocational tech “requipment” grants will help many schools in our region such as the McCann Technical School” said Representative Bosley, Chairman of the House Committee on Economic Development and Emerging Technologies.

photography

I have been blessed with the ability to travel around the world. I have been taking pictures for many years now and have thousands of pictures from all sorts of places. While I am only an avid amateur photographer, I get a lot of pleasure showing off my photos. Occasionally, I will post a few photos. These are from around the First Berkshire District. I hope you enjoy them. It is truly a beautiful area.

response to chamber study on gambling

The Greater Boston Chamber of Commerce released an independent study of Gov. Patrick's casino proposal. The study pretty much mimicked his revenue and permanent job projections. I like the two consultants that did the study but was unimpressed by the actual study. They looked at 200 studies, articles or papers on gambling and used 10 for their study. These were disproportionately from the casino industry themselves. They used mostly the same studies that the Governor used, so it is no surprise that the numbers are very close. However, I believe these numbers are flawed. (What is the definition of insanity? To do the same thing over and over again and expect a different outcome?) The attached is the email that I sent to members on this.

The Greater Boston Chamber of Commerce has released an independent report that on face value affirms the Governor’s revenue and permanent job creation figures. I believe this is an independent evaluation done by consultants with no ties to the gambling industry. However, this is also their first attempt to look at the casino issue. As such, they used studies that have been called into question in the past. I am not surprised that their numbers are close to the Governor’s own figures. They used the same underlying numbers used by the Governor’s staff from such resources as the Center For Policy Analysis at UMass Dartmouth. If we were to use these same studies to base our deliberations on, we would reach the same conclusions. However, I, and others have called these figures into question in the past and continue to question their validity. So while I believe that this is an honest attempt to reach an answer on revenue figures, I believe it is flawed and contradicts other studies available.

Second, while I question their conclusions, there has never been a question over the creation of a revenue stream from casinos. If you build them, people will spend money. However, there is a vast difference between economic development and revenue and the administration fails to realize this. Concerning revenues, one has to ask two questions:

Where does this revenue come from?

How much does it cost to get it?

On the first question, the chamber study uses their questionable data to look at recapture rates from outside of Massachusetts. These figures are not supported by studies done in other states. There is a University of Rhode Island study that indicates they are wrong on this recapture rate, and a Federal Reserve Bank study that indicates that much of the money (perhaps as much as 75%) spent at a casino is already spent in our economy. This economic redirection cannot be counted as “new” revenue as the administration has stated time and again.

On the second question, the Committee has looked at cost centers that cost the state more money in order to bring casinos into Massachusetts. These cost centers are, to name a few, costs of a gaming commission, of increased public safety, of socio-economic impact from the growth of compulsive gambling, of loss to the bottom line of the lottery, and the loss of jobs through economic shift. We will examine these more over the next few weeks.

This chamber study is silent on the loss of jobs elsewhere in our economy as money is shifted towards casinos. We have information and testimony from numerous cities and states that indicate that this shift is dramatic. The administration not only ignores this, but has stated on several occasions that casinos will grow other businesses. Sadly, this is not the case. Not only are jobs lost, we get less economic activity from our spending.

The chamber study expressed frustration at the lack of information concerning the social costs of gambling. We agree. However, we do note that regardless of the lack of studies, this number is big and we need to factor this into any deliberations on the subject.

The chamber study falls into the same trap as the administration of looking to substitute casino profits for lottery losses. The problem here is that we make more from every dollar played on lottery products than we would from casino profits. That means that far more dollars need to be played in a casino simply to run in place with losses from the lottery. This factor alone calls into question the revenue figures from casinos.

Finally, the chamber study is a static analysis of the revenue impact should we enact casino legislation. We have to look at other factors. If we go from two to five casinos in New England, what is the saturation point? If Connecticut decides to expand or increase competition in order to keep market share, what goes that do to casino success in Massachusetts? These are just a few issues, there are far more. These issues are difficult and nuanced and need to be studied.

Casino legislation is very complex. One of my frustrations is that each time we question the assumptions of the administration’s bill; we get the same sales pitch repackaged instead of backup data. Some people think that if you say something enough times, it becomes the truth. We need to be the arbiters of what is sound public policy. We need to take that seriously and we need to do so with intelligent and with information with which to back up our conclusions. Sadly, this has not happened. We cannot ignore these questions in an eagerness to rush towards increased revenues that may not be there.

FCC Testimony

I was invited to sit on a panel at the Boston hearing on net neutrality. I was mismatched on this panel. While the catalyst for this hearing was the controversy over Comcast slowing down Bit Torrent transfers, the realm issue, I thought was not content, but capacity. We are the only industrialized nation that has no national broadband strategy. Guess I was wrong to think that the Commission cared about this. While the telecom companies spent over $70 Billion on their collective systems last year, there are still vast areas in this country that are still on dial-up! The best case scenario is a duopoly between the incumbent carrier and the local cable company. We need to do better to stay competitive in today's technological global economy. Guess we will have to wait for the next administration and see what they think.

Representative Daniel E. Bosley

House Chairman

Joint Committee on Economic Development and Emerging Technologies

Rm 42, State House, Boston, Ma.

Testimony:

FCC Public En Banc Hearing on Broadband Network Management Practices

Monday, February 25, 2008

Thank you Mr. Chairman for the opportunity to participate in this hearing today. Broadband, particularly as it pertains to our economic development efforts in Massachusetts has been a focal point of my committee over the past few years. My district, the First Berkshire District, is a more rural part of the Commonwealth and our efforts to create jobs has been hampered by the inability to bring broadband to many of the communities of western Massachusetts.

For the record, I was the House Chair of the Government Regulations Committee for over ten years. This was the committee that heard all of our public utility legislation. For the last three plus years, I have been the Chair of the Economic Development and Emerging Technology Committee. More than that, I have been working for better telecommunication services in my district and throughout the state for all 22 years in the Legislature. Nineteen years ago I was an intervener in the first major rate case in telephony in many years. I took our Public Utilities Commission to the SJC in 1991 suing over rulings regarding rates and expansion of calling areas. In 1995, I was able to fund a Western Massachusetts initiative that became Berkshire Connect, a collaborative partnership formed to improve our county’s telecommunication system and Internet services.

In a $347 million economic development bill that I co-authored 2 years ago, I inserted a section creating an office of Broadband Director in our Economic Development Secretariat. The directive for that office included working on broadband expansion and this year, our Governor, Governor Patrick filed a bill to commit $25 million towards making Broadband ubiquitous in the Commonwealth.

I have made such an effort because the Internet has changed the way we conduct our business in the US, and it has changed our way of life. When I was first elected, I had one telephone number. Today I have eleven, I think. In those twenty-two years we have fundamentally changed our conduct based on new technologies. Without access to those technologies, we fall far behind other regions and other nations in our ability to create jobs and conduct commerce. I am here today to say that I support the efforts to craft some form of net neutrality legislation as a way of keeping the Internet vibrant, vital, and innovative. Without net neutrality, things such as Berkshire Connect would not happen and innovation will be stifled. Obviously, while my focus as a legislator has been on the business aspects of broadband, it is a much larger issue than just commerce. Broadband is dramatically changing the way we educate our children and treat our sick. In fact, in 1996, I was in a small town in Russia advising the region on how to set up unemployment systems. I had occasion to talk to a group of students from the Pskov Polytechnic Institute. I asked these students what brought about democratic changes to Russia and they immediately answered that the Internet was responsible. The government could no longer control the information that people received. The internet is a powerful influence in every facet of our lives today.

Mr. Chairman, in my ten years as Chairman of the Government Regulation Committee, I have seen many initiatives that were designed to advantage one company or another. These things include Reciprocal Compensation, Franchise Fee fights, open access or open documents, right of way fees and ownership as well as bandwidth and frequency issues. The discussions and deliberations over these issues have all been made from two very different perspectives. Businesses such as the Bells or Cable companies have a responsibility to their shareholders and want to profit from any expansion that they invest in. They argue for little government interference and the right to build out their networks as they see fit. Internet and smaller or start up companies want unlimited cheap access to the largest available customer base. They can argue as they see fit. On both sides it is their responsibility to argue the best possible policy for their companies or constituency. It is our responsibility in government to be the arbiters of what is good policy for our citizens.

There have been cases where Internet providers have slowed access or in a isolated cases to this point, denied access to certain sites. I know that they argue that they are doing so in order to ensure that they will be able to service customers and that it is not discrimination on their parts to do so, but good business practices. They also argue that they should have the right to tier their services or charge premiums for some sites especially those that use more bandwidth. I think they are wrong for several reasons. First, you can’t argue that you are not restricting access and then argue that you have that right. They have to pick one argument or the other. Both can’t be right. Second, millions in this country access the Internet at any one time. We cannot allow a few large companies to pick and choose what people should have access to. Tiering services creates the kind of stratification in our society that we are trying to get rid of and further restricts access to services and companies. The issue of tiered services reminds me of the issue of slotting for space in supermarkets. In any large supermarket, there are tens of thousands of different products. In order to ensure premium exposure some enterprising company offered to pay the supermarket for product placement. This is a good marketing strategy. However, today almost all firms are charged a slotting fee in order to get their product anywhere on the shelf. Small firms fall by the wayside and firms that could be major market players, or may have better products are prohibited from participating in the market. Many think this has thwarted competition and customer choice. What started out as an economic and marketing tactic has lead to a stifling of competition and only the wealthy companies can compete. Today, Food producers are routinely charged thousands of dollars for shelf space and even more money if they then want their product advertised or promoted. The markets use the same argument that is used by large Internet providers. If we don’t charge the users of shelf space, we will have to charge customers more for the goods we sell. Or if we can’t produce this revenue, we will have to limit our size and we can’t provide the services needed. I would submit that we should let customers decide which goods they want and let competition keep costs down.

Enough about supermarkets. If we want a truly innovative Internet, we need to make sure it is nondiscriminatory. That is my definition of net neutrality. The large providers will tell us that in order to provide services they must have some leeway in deciding what to slow down or they reserve the right to tier services so that people will pay for more excessive use of bandwidth. The question is, who decides what is excessive use? Is it the 50th Youtube video of people tasering one another? Is it the 100^th video of people using Mentos and Coca Cola to create an explosion? Or is it a fringe political group? Or how about a group of social activists? How about such as the views of a black minister who was sick of discrimination and wants to become active in his community? If firms could prohibit some users and the Internet was in effect at the time, would the Reverend Dr. King get his website published or would it be excessive use to go to the website of a small town activist preacher? Would Google become a leader today used by millions if it couldn’t pass muster on start up as worthy of placing in an affordable tiered service. The answer is we need all of these sites if the Internet is to be truly nondiscriminatory and ubiquitous. Let users decide what they should open and download. That said, there should be some small exceptions. Providers should be able to remove viruses and viral sites as well as be able to remove or restrict sites that demonstrate a clearly defined public safety danger.

Lastly on this, providers claim that competition will keep them affordable and keep most websites in service supposes that there is enough competition to achieve this. This is just not so. In many places there is one provider. Some small providers try to compete by reselling services, but that leaves them subject to the whim and the bandwidth of the large providers. That doesn’t solve the problem. We must keep the Internet open and free from a few deciding what we can or can’t open and/or download.

Finally, Mr. Chairman, the issue is not content, it is capacity. And here the large providers have a point. The chairman of Cisco Systems has said that in one day, Youtube sends data equivalent to 75 billion emails. This is a problem and we need to keep up with expansion if we are to continue to expand the content and knowledge found on the Internet. I would make two suggestions. First, by keeping the Internet open and nondiscriminatory, we will continue to witness the kinds of innovation that has kept up with market demand for many. DSL was an innovation that allowed us to receive higher speed Internet over old twisted copper wires. Today people are looking at VPN or P4P in order to work within the existing system. Innovators are working to make packets smaller with new compression techniques. As long as they can participate in an open system, creative individuals and companies will find innovative ways to adapt and achieve more service within our existing system.

Second, we need a national broadband plan. Business claim that they have to maintain the right to make bandwidth decisions is a perverse incentive that allows them to maximize profits by keeping the system restricted. There is no incentive for them to expand capacity as supply drops demand and price. Yet, this system is as important to us as deployment of universal voice was in its time. Government must step in with a plan and with money to build out our systems, and not just to keep up with demand, but also to increase our average US speed in order to compete in the global marketplace. We are falling behind other countries in our ability to conduct business at maximum speeds. Japan is ten times faster than our speeds and others, such as Korea, France, and Singapore to name a few are leapfrogging over our aging infrastructure . Today Japan has fiber to the home in 80 percent of their households. We need to act to compete. We need a national plan to achieve universal coverage and to increase speed to 100MBpS. We need fiber to the house. A.T. & T’s stated policy is fiber to the neighborhood node, while Qwest hasn’t even committed to that penetration! This may be good for their shareholders but it is disastrous for our long-term needs. We need more long term planning and planning that takes into account our national needs and not just short-term profit margins. There is nothing wrong with making a profit and certainly these companies have a responsibility to their bottom line. But we have a national need that we need to address that transcends any one companies’ corporate strategy. While we have been trying to devise a plan in Massachusetts and other states, such as New York in the planning stages or Kentucky has implemented are increasing coverage on a state by state basis, we are the only industrialized nation in the world without a national broadband strategy. The Brookings Institute has said that widespread increased coverage of high-speed broadband would immediately add hundreds of millions to our economy and over 1.2 million jobs per year. This is too important and too expensive to presume that large companies will do this by themselves. I read recently that the large North American providers invested $70 billion in infrastructure last year alone. But at the end of the day, they have invested where they think they can make the most profit and investment is uneven. Verizon alone has spent hundreds of millions in Massachusetts over the last few years, and yet one third of Western Massachusetts has little or no access to Broadband, and those that do are at much lower speeds than are necessary to be competitive in today’s marketplace. Just as Massachusetts is poised to commit $25 million or more to broadband development, other states and the federal government need to work together to develop a national strategy. This is critical. We should be partners with companies to build a strong competitive market in order to keep up with demand, negate the argument for discrimination in use of bandwidth, lower costs to international levels, and provide the strong business network we need to compete with in today’s global economy.

Thank you and I look forward to questions after the entire panel has spoken.