ScienceDaily (Mar. 5, 2010) — California's dirty air caused more than $193 million in hospital-based medical care from 2005 to 2007 as people sought help for problems such as asthma and pneumonia that are triggered by elevated pollution levels, according to a new RAND Corporation study.
Researchers estimate that exposure to excessive levels of ozone and particulate pollution caused nearly 30,000 emergency room visits and hospital admissions over the study period. Public insurance programs were responsible for most of the costs, with Medicare and Medi-Cal covering more than two-thirds of the expenses, according to the report.
"California's failure to meet air pollution standards causes a large amount of expensive hospital care," said John Romley, lead author of the study and an economist at RAND, a nonprofit research organization. "The result is that insurance programs -- both those run by the government and private payers -- face higher costs because of California's dirty air."
While much work has been done previously to catalog the economic impact of air pollution across California, the RAND study is the first to quantify the cost of hospital-based medical care to various payers caused by the failure to meet federal clean air standards across the state. More people in California live in areas that do not meet federal clean air standards than in any other state.
Romley said the findings show that private insurers, employers and public insurance programs all have a financial stake in improving California's air quality.
"These costs may not be the largest problem caused by dirty air, but our study provides more evidence about the impact that air pollution has on the state's economy," Romley said.
Researchers used records from air pollution agencies and hospitals to estimate how failing to meet federal and state standards for particulate matter and ozone would affect private and public insurer spending for hospital admissions for respiratory and cardiovascular causes, and emergency room visits for asthma throughout California from 2005-2007.
Researchers say the most common hospital-based medical care triggered by elevated air pollution levels are emergency room visits for asthma among children aged 17 and under, with more than 12,000 visits over the three-year study period.
The most costly conditions examined by researchers were hospital admissions triggered by air pollution for acute bronchitis, pneumonia and chronic obstructive pulmonary disease. Those conditions accounted for nearly one-third of the $193 million in health care spending documented over the study period.
Nearly three-quarters of the health events identified by researchers were triggered by high levels of fine particulate pollution -- tiny pieces of soot that can lodge deep in lungs. The health events examined in the study were concentrated in the San Joaquin Valley and the four-county South Coast Air Basin.
The cost of treating health events caused by air pollution is equal to the expense of providing flu vaccines to 85 percent of California children under age 15, according to the report.
Researchers say their study provides a conservative estimate about the costs of medical care triggered by air pollution because it does not include outpatient care provided in clinics or medical offices. Details about that type of medical care are not routinely reported to state agencies and thus could not be analyzed.
The study also includes case studies of individual hospitals in Fresno, Lynwood, Palo Alto, Riverside and Sacramento. That analysis demonstrates that costs and types of illness reported vary by region.
To conduct the study, researchers used epidemiological studies that link elevated pollution levels to respiratory and cardiovascular illnesses, and compared that information to pollution levels measured across the state from 2005 to 2007 by various public agencies. Researchers also reviewed detailed records hospitals report to the state about the patients they treat, the illnesses diagnosed and who pays for that care.
The study, "The Impact of Air Quality on Hospital Spending," is available at www.rand.org. Support for the study was provided by the William and Flora Hewlett Foundation. Other authors of the study are Andrew Hackbarth of the Pardee RAND Graduate School and Dana Goldman of RAND and USC.
Thursday 4 March 2010
Political interference greatest risk for banks
Bankers see politics distorting their lending decisions
KUALA LUMPUR: Political interference is the greatest risk facing the global banking industry now, according to the latest Banking Banana Skins 2010 survey.
In a briefing yesterday, PwC Malaysia partner Ong Ching Chuan said the poll put political interference at the top of a list of 30 most serious risks to banks “as a result of bailouts and takeover” which posed a major risk to their financial health.
The survey shows that the dash by governments to rescue their banks from disaster may have staved off a collapse of the system, but it has left attitudes to the banking industry deeply politicised, a development which is seen by respondents to be the greatest risk now facing the financial sector.
Political interference has never been a top risk since 1996. The top risk is closely linked to the third risk – “too much regulation” – and the concern that banks will be further damaged by over-reaction to the crisis.
Ong Ching Chuan (right) Soo Hoo Khoon Yean at the briefing At No. 2 is credit risk which stemmed from concern about the effects of the economic recession on the banking industry.
Other top risks identified are too much regulation, macro-economic trends, liquidity, capital availability, derivatives, risk management quality, credit spreads and equities.
“With political interference as the top risk and “too much regulation” at number three, the concern is that the financial crisis has taken the banking industry’s future out of its own hands,” Ong said.
He added that the top risk also brought up other concerns such as moral hazard, politicisation of lending and how governments would withdraw their support.
This view was shared by all types of respondents in all the major banking regions.
Bankers saw politics distorting their lending decisions while non-bankers said political rescues had damaged banks by encouraging reckless attitudes.
Meanwhile, regulators are worried that governments would withdraw their support from banks before they had the time to rebuild their financial strength, precipitating another collapse.
Ong said banks might feel it was alright to fail as they would be bailed out. “The managing director of risk at a large US bank said that it had already begun to breed complacent attitudes: ‘We’ll always be bailed out’.”
Meanwhile, the bulk of the respondents fears a “double-dip” recession with a further wave of bad debts hitting the banks. In the Asia-Pacific region, respondents are worried that a new asset bubble may burst, bringing about a collapse of confidence in the credit markets.
However, the survey shows that some risks are seen to be easing as the world pulls out of the economic crisis. A number of financial risks – liquidity, derivatives, credit spreads and equities – are down from the previous poll in 2008.
A striking fall is the risk from hedge funds, down from tenth to number 19, as their threat is seen to diminish.
Meanwhile, respondents from the Asia-Pacific put “too much regulation” as their top risk. Macro-economic trends and credit risk took the second and third place respectively.
PwC Malaysia partner Soo Hoo Khoon Yean said Malaysia’s issues were probably more akin to the results from the Asia-Pacific.
He said new regulations such as Basel 2 and changes to regulatory capital structure may not be friendly to emerging economies like Malaysia.
Soo said there were some concerns on banks’ capital requirement but it was not as acute as in Western countries, noting that most Malaysian banks were already well capitalised.
The survey, conducted by the Centre for the Study of Financial Innovation (CSFI) in association with PricewaterhouseCoopers (PwC), is based on 443 responses of which 62% are bankers, 32% observers and 6% regulators from 49 countries.
However, there were no responses from Malaysia in the survey. The study was conducted in November and December 2009.
Source: The Star, By Leong Hung Yee
KUALA LUMPUR: Political interference is the greatest risk facing the global banking industry now, according to the latest Banking Banana Skins 2010 survey.
In a briefing yesterday, PwC Malaysia partner Ong Ching Chuan said the poll put political interference at the top of a list of 30 most serious risks to banks “as a result of bailouts and takeover” which posed a major risk to their financial health.
The survey shows that the dash by governments to rescue their banks from disaster may have staved off a collapse of the system, but it has left attitudes to the banking industry deeply politicised, a development which is seen by respondents to be the greatest risk now facing the financial sector.
Political interference has never been a top risk since 1996. The top risk is closely linked to the third risk – “too much regulation” – and the concern that banks will be further damaged by over-reaction to the crisis.
Ong Ching Chuan (right) Soo Hoo Khoon Yean at the briefingOther top risks identified are too much regulation, macro-economic trends, liquidity, capital availability, derivatives, risk management quality, credit spreads and equities.
“With political interference as the top risk and “too much regulation” at number three, the concern is that the financial crisis has taken the banking industry’s future out of its own hands,” Ong said.
He added that the top risk also brought up other concerns such as moral hazard, politicisation of lending and how governments would withdraw their support.
This view was shared by all types of respondents in all the major banking regions.
Bankers saw politics distorting their lending decisions while non-bankers said political rescues had damaged banks by encouraging reckless attitudes.
Meanwhile, regulators are worried that governments would withdraw their support from banks before they had the time to rebuild their financial strength, precipitating another collapse.
Ong said banks might feel it was alright to fail as they would be bailed out. “The managing director of risk at a large US bank said that it had already begun to breed complacent attitudes: ‘We’ll always be bailed out’.”
Meanwhile, the bulk of the respondents fears a “double-dip” recession with a further wave of bad debts hitting the banks. In the Asia-Pacific region, respondents are worried that a new asset bubble may burst, bringing about a collapse of confidence in the credit markets.
However, the survey shows that some risks are seen to be easing as the world pulls out of the economic crisis. A number of financial risks – liquidity, derivatives, credit spreads and equities – are down from the previous poll in 2008.
A striking fall is the risk from hedge funds, down from tenth to number 19, as their threat is seen to diminish.
Meanwhile, respondents from the Asia-Pacific put “too much regulation” as their top risk. Macro-economic trends and credit risk took the second and third place respectively.
PwC Malaysia partner Soo Hoo Khoon Yean said Malaysia’s issues were probably more akin to the results from the Asia-Pacific.
He said new regulations such as Basel 2 and changes to regulatory capital structure may not be friendly to emerging economies like Malaysia.
Soo said there were some concerns on banks’ capital requirement but it was not as acute as in Western countries, noting that most Malaysian banks were already well capitalised.
The survey, conducted by the Centre for the Study of Financial Innovation (CSFI) in association with PricewaterhouseCoopers (PwC), is based on 443 responses of which 62% are bankers, 32% observers and 6% regulators from 49 countries.
However, there were no responses from Malaysia in the survey. The study was conducted in November and December 2009.
Source: The Star, By Leong Hung Yee
Bank Negara ups interest rates
Overnight policy rate increased to 2.25%
PETALING JAYA: Bank Negara raised its overnight policy rate (OPR) by 25 basis points to 2.25% yesterday, signalling the time was ripe to normalise interest rates with the improvement in economic conditions.
The Monetary Policy Committee (MPC) said the hike was to prevent any financial imbalance that could take place should rates remain too low for longer than necessary and said Malaysians should expect the rate of inflation to rise but remain moderate given the prevailing economic conditions.
The hike in OPR, the benchmark interest rate which determines banks’ lending rates, is the first increase in close to four years.
“The recovery in the global economy is progressing amidst continued policy support and improvements in financial conditions,” the central bank said in a statement yesterday.
Dr Yeah Kim Leng (left)expects an increase of between 75 and 100 basis points this year It said going forward, domestic growth was expected to strengthen further, supported by domestic demand and continued improvement in external demand, particularly from the regional economies which had expanded strongly in the fourth quarter.
Malaysia recorded its first growth of 4.5% after three consecutive quarters of contraction in the last quarter after a combination of government spending, a lower inflation rate and accommodative monetary policy helped boost domestic demand.
“Given this improved economic outlook, the MPC decided to adjust the OPR towards normalising monetary conditions and preventing the risks of financial imbalances that could undermine the economic recovery process,” it said.
While external factors, including rising global commodity and food prices might exert some additional upward pressure on domestic prices, inflation was expected to remain moderate this year, Bank Negara said.
Domestic consumer prices rose for a second month in January, up 1.3% year-on-year.
The OPR has remained at a historical low of 2% since February last year amid a severe and fundamental economic downturn. “These conditions no longer prevail,” Bank Negara said, adding that the stronger growth performance in the fourth quarter affirmed that the economic recovery was “firmly established”.
Accordingly, the floor and ceiling rates of the corridor for the OPR were raised to 2% and 2.5% respectively yesterday.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng described the hike both as a signal of the central bank’s confidence that the local economy recovery was on track and as a “gradual normalisation” of the historically low rates.
Bank Negara had earlier also indicated the need for the normalisation of rates, adding that any increase should be viewed as “normalisation” and not “tightening”, which is normally implemented to slow consumer demand in an overheated economy with high inflation.
According to Yeah, a “normal” level for the OPR is between 3.25% to 3.5%. He expects an increase of between 75 basis points to 100 basis points this year backed by improving economic conditions.
AmResearch Sdn Bhd senior economist Manokaran Mottain said the increase was within AmResearch’s expectations and believed that given increasing inflationary pressures, there would be at least another increase of 25 basis points this year.
“It is needed for a gradual move towards the normalisation of rates,” he said.
At the new OPR level, the stance of monetary policy continued to remain accommodative and supportive of economic growth, said Bank Negara yesterday.
For Bank Negara statements click here
Source: The Star, By Yvonne Tan
PETALING JAYA: Bank Negara raised its overnight policy rate (OPR) by 25 basis points to 2.25% yesterday, signalling the time was ripe to normalise interest rates with the improvement in economic conditions.
The Monetary Policy Committee (MPC) said the hike was to prevent any financial imbalance that could take place should rates remain too low for longer than necessary and said Malaysians should expect the rate of inflation to rise but remain moderate given the prevailing economic conditions.
The hike in OPR, the benchmark interest rate which determines banks’ lending rates, is the first increase in close to four years.
“The recovery in the global economy is progressing amidst continued policy support and improvements in financial conditions,” the central bank said in a statement yesterday.
Dr Yeah Kim Leng (left)expects an increase of between 75 and 100 basis points this yearMalaysia recorded its first growth of 4.5% after three consecutive quarters of contraction in the last quarter after a combination of government spending, a lower inflation rate and accommodative monetary policy helped boost domestic demand.
“Given this improved economic outlook, the MPC decided to adjust the OPR towards normalising monetary conditions and preventing the risks of financial imbalances that could undermine the economic recovery process,” it said.
While external factors, including rising global commodity and food prices might exert some additional upward pressure on domestic prices, inflation was expected to remain moderate this year, Bank Negara said.
Domestic consumer prices rose for a second month in January, up 1.3% year-on-year.
The OPR has remained at a historical low of 2% since February last year amid a severe and fundamental economic downturn. “These conditions no longer prevail,” Bank Negara said, adding that the stronger growth performance in the fourth quarter affirmed that the economic recovery was “firmly established”.
Accordingly, the floor and ceiling rates of the corridor for the OPR were raised to 2% and 2.5% respectively yesterday.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng described the hike both as a signal of the central bank’s confidence that the local economy recovery was on track and as a “gradual normalisation” of the historically low rates.
Bank Negara had earlier also indicated the need for the normalisation of rates, adding that any increase should be viewed as “normalisation” and not “tightening”, which is normally implemented to slow consumer demand in an overheated economy with high inflation.
According to Yeah, a “normal” level for the OPR is between 3.25% to 3.5%. He expects an increase of between 75 basis points to 100 basis points this year backed by improving economic conditions.
AmResearch Sdn Bhd senior economist Manokaran Mottain said the increase was within AmResearch’s expectations and believed that given increasing inflationary pressures, there would be at least another increase of 25 basis points this year.
“It is needed for a gradual move towards the normalisation of rates,” he said.
At the new OPR level, the stance of monetary policy continued to remain accommodative and supportive of economic growth, said Bank Negara yesterday.
For Bank Negara statements click here
Source: The Star, By Yvonne Tan
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