Recent articles and editorials in a variety of newspapers and blogs have expressed concern about Minnesota’s standing and direction in its deployment of broadband technology. Specific concerns seem to fall into two categories; that Minnesota does not seem to be as competitive in its efforts to get its share of the $7.2 billion in stimulus funding dedicated to broadband development; and second, that the leadership and direction from our Governor in this regard is both confusing and unclear.
Regarding the Governor’s action, I must admit to some confusion myself. For those who don’t follow this closely, governors across the country were asked to provide their input on the many stimulus proposals submitted from their respective states; and our governor did just that. However, Governor Pawlenty chose not to publicly disclose his input to the federal government; which creates some confusion in helping us better understand his vision for the State of Minnesota in this regard. At the same time, while keeping his thoughts confidential is somewhat unusual, I really do not believe that it had a meaningful impact on the competitiveness of the collective proposals from Minnesota.
Regarding our standing as a state, I am not overly concerned that we are collectively lagging behind; or that we will not be receiving our fair share of the federal funding pie. First, it has been clear to me that relative to most other states, Minnesota as a whole has always been in pretty good shape. Sure we have rural areas that are both digitally unserved and underserved, but all states that have large rural tracts are in that position. In fact, the initial data and maps produced last year by Connect MN indicated that a large majority of Minnesota is well served, with reasonably good connection speeds. In other words, we have a good base to work from.
Looking forward, there’s much to be excited about given the numerous broadband activities occurring all over Minnesota. First and foremost was the passage of a bill by the legislature establishing statewide goals and leadership for broadband development. Senate File 2254 was sent to the Governor for his signature in late April.
I am also encouraged by the broadband projects that have already been funded and the proposals that are currently being reviewed for funding. Some selected projects underway include:
• A $6.3 million project being lead by the C.K. Blandin Foundation to increase awareness, provide training and increase broadband adoption among households and businesses all across rural Minnesota.
• A 2.9 million initiative conducted by the University of Minnesota to establish public computer centers in multiple low–income neighborhoods in Minneapolis and St. Paul. These centers will provide digital literacy training and access to immigrant and other low-income populations.
• A $12.8 million project by the Southwest Minnesota Broadband Group to expand the current fiber-to-the-premise network deployed in Windom to the communities of Jackson, Lakefield, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake and Okabena. When completed, this fiber project will provide state-of-art Internet connections to these rural communities that surpass the current capacity of many metro-area communities.
• A $1.4 million project by the Minnesota Valley Improvement Corporation in Granite Falls to expand their wireless broadband network to unserved and underserved parts of South Central and West Central Minnesota.
• A $43 million project by the Northeast Service Cooperative to create a 915-mile fiber backbone that will cover 8 counties in northeast Minnesota. Once in place, the fiber backbone will allow local broadband providers to have a quality access point from which they can serve their customers.
• And finally, Qwest Communications recently announced their application for a $350 million grant to enhance broadband capacity in their 14-state region. If funded, approximately $54 million is set aside for Minnesota.
It is also important to remember that this is just the first round of these federal broadband grants and loans, which focused primarily on unserved areas. As we move into the second round, projects to enhanced underserved regions as well as more competitive areas will follow.
As stated in the recently passed Senate File 2254, Minnesota aspires to be one of the top five states in the nation in universal access, connection speeds and broadband adoption. Projects like these and the ones that will follow are precisely what we need to do to achieve that goal.
Monday, April 26, 2010
Thursday, April 1, 2010
Another Focus on Rural Broadband Adoption
On March 25th the U.S. Dept. of Commerce announced the awarding of a $4.7 million grant to the Grand Rapids-based Blandin Foundation, to conduct a statewide broadband development project across rural Minnesota. Through this grant, the Minnesota Intelligent Rural Communities (MIRC) coalition will bring a network of resources and support to rural Minnesota individuals and communities—especially those unemployed and seeking employment, small businesses, coalitions of government entities, and local leaders.
The EDA Center at the University of Minnesota, Crookston will serve as the lead evaluator for this large and broad-based project. Go to: http://broadband.blandinfoundation.org/news/news-detail.php?intResourceID=1208 to learn more.
The EDA Center at the University of Minnesota, Crookston will serve as the lead evaluator for this large and broad-based project. Go to: http://broadband.blandinfoundation.org/news/news-detail.php?intResourceID=1208 to learn more.
The Health Care Outlier
Outlier\ noun – a statistical observation that is markedly different in value from the others of the sample.
Now that the National Health Care Bill has been signed, I think it is fair to conclude that few policy issues are more politically polarizing. One side argues that the federal government needs to have an increased role to ensure access to all Americans and help lower costs; while the other side suggests that allowing market forces to work more freely would have the effect of lowering costs and increasing access. And the recent news that several health insurers were proposing to increase insurance rates to individual policy holders by more than 30% seemed to simply have the effect of throwing gasoline on an already blazing fire. In fact, one of the most frequently heard questions in this debate is, “can we afford to turn over 16 percent of our economy to the federal government?”
Certainly, we all know that health care and health insurance is plenty expensive; but have you ever wondered why it has grown to be 16 percent of our gross domestic product (GDP)? Well a report that was released last year by the Organization for Economic Cooperation and Development (OECD) sheds some interesting comparative data on this (see http://www.oecd.org/dataoecd/46/2/38980580.pdf ).
As noted in the OECD report, total health care spending accounted for 16.0% of GDP in the United States in 2007; by far the highest share among the 30 OECD nations. The U.S. was followed by France, Switzerland and Germany, which allocated respectively 11.0%, 10.8% and 10.4% of their GDP to health care. Interestingly, the OECD average was almost half of the U.S. percentage at 8.9% of GDP.
Looking at per capita health care costs (expressed in U.S. dollars and adjusted for purchasing power parity) the report documents that the United States ranks far ahead of other OECD countries, spending $7,290 per person. This is more than twice the OECD average of $2,964. In second place was Norway, spending $4,763 per capita and in third place was Switzerland, spending $4,417 per capita.
For the overwhelming number of OECD nations, public health care expenditures far exceed private expenditures. Some would clearly call this a government takeover of the health care sector. For example in the United Kingdom where they have a National Health Service, more than 80 percent of all health care expenditures are public. This is true for most OECD nations; while the United States is the exception, with the majority of its health care expenditures in the private sector. But looking at the weight of this data on its surface seems to make you wonder, if freeing up market forces is the most effective way to decrease costs, then why is the U.S. with its focus on competitive, private sector health care so much more expensive than these other similarly industrialized counties?
One possibility maybe lies in the adage, “you get what you pay for?” After all, maybe the reality is that while our health care is much more expensive than in other countries, our superior health outcomes are worth the added costs? Unfortunately, here the report goes on to document that in fact compared to the OECD average, the U.S. actually has fewer physicians per capita, a lower life expectancy rate and a higher infant mortality rate. In other words, we’re paying a lot more but receiving a lot less. And if that doesn’t bother you, the non-partisan Congressional Budget Office estimates that if left on its current trajectory, health care costs will rise over the next 25 years to 31% of GDP. It’s not exactly the value proposition Americans deserve.
So while the politicians here in Washington continue to batter each other back and forth in an effort to turn this issue toward their political advantage in November, let’s at least agree on one thing; while being an outlier in some instances might be flattering, this isn’t one of them.
Now that the National Health Care Bill has been signed, I think it is fair to conclude that few policy issues are more politically polarizing. One side argues that the federal government needs to have an increased role to ensure access to all Americans and help lower costs; while the other side suggests that allowing market forces to work more freely would have the effect of lowering costs and increasing access. And the recent news that several health insurers were proposing to increase insurance rates to individual policy holders by more than 30% seemed to simply have the effect of throwing gasoline on an already blazing fire. In fact, one of the most frequently heard questions in this debate is, “can we afford to turn over 16 percent of our economy to the federal government?”
Certainly, we all know that health care and health insurance is plenty expensive; but have you ever wondered why it has grown to be 16 percent of our gross domestic product (GDP)? Well a report that was released last year by the Organization for Economic Cooperation and Development (OECD) sheds some interesting comparative data on this (see http://www.oecd.org/dataoecd/46/2/38980580.pdf ).
As noted in the OECD report, total health care spending accounted for 16.0% of GDP in the United States in 2007; by far the highest share among the 30 OECD nations. The U.S. was followed by France, Switzerland and Germany, which allocated respectively 11.0%, 10.8% and 10.4% of their GDP to health care. Interestingly, the OECD average was almost half of the U.S. percentage at 8.9% of GDP.
Looking at per capita health care costs (expressed in U.S. dollars and adjusted for purchasing power parity) the report documents that the United States ranks far ahead of other OECD countries, spending $7,290 per person. This is more than twice the OECD average of $2,964. In second place was Norway, spending $4,763 per capita and in third place was Switzerland, spending $4,417 per capita.
For the overwhelming number of OECD nations, public health care expenditures far exceed private expenditures. Some would clearly call this a government takeover of the health care sector. For example in the United Kingdom where they have a National Health Service, more than 80 percent of all health care expenditures are public. This is true for most OECD nations; while the United States is the exception, with the majority of its health care expenditures in the private sector. But looking at the weight of this data on its surface seems to make you wonder, if freeing up market forces is the most effective way to decrease costs, then why is the U.S. with its focus on competitive, private sector health care so much more expensive than these other similarly industrialized counties?
One possibility maybe lies in the adage, “you get what you pay for?” After all, maybe the reality is that while our health care is much more expensive than in other countries, our superior health outcomes are worth the added costs? Unfortunately, here the report goes on to document that in fact compared to the OECD average, the U.S. actually has fewer physicians per capita, a lower life expectancy rate and a higher infant mortality rate. In other words, we’re paying a lot more but receiving a lot less. And if that doesn’t bother you, the non-partisan Congressional Budget Office estimates that if left on its current trajectory, health care costs will rise over the next 25 years to 31% of GDP. It’s not exactly the value proposition Americans deserve.
So while the politicians here in Washington continue to batter each other back and forth in an effort to turn this issue toward their political advantage in November, let’s at least agree on one thing; while being an outlier in some instances might be flattering, this isn’t one of them.
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