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Troy’s Koch Problem May Affect Research Reliability

By Lee Hedgepeth
Alabama Political Reporter

Troy University’s Johnson Center for Political Economy recently released a study examining the legitimacy of two previous analyses done by UAB and University of Alabama considering the economic impact of Medicaid expansion in the Yellowhammer State. The Troy study’s conclusions fly in the face of those of the earlier studies, which forecast revenue for the State of up to one billion dollars in the first three years of expanded Medicaid under the Affordable Care Act.

It appears though, that funding from the Kochs, two Tea Party affiliated billionaire brothers, and other right wing foundations may have influenced the assumptions and outcomes of the Troy study, which conservative groups have used extensively in their insistence on the rejection of a medicaid expansion.

“We just relax a few of the assumptions made in their studies,” said Professor Scott Beaulier, Johnson Center Director and coauthor of Troy’s study about his study’s premise.

Governor Robert Bentley, who has promised not to expand Medicaid, called the earlier research pointing to positive impact “bogus.”

Instead of the one billion dollar tax boon predicted by UAB and UA, the Johnson Center study says Alabama stands to lose – not gain – $450 million during the same period.

The study cites what it claims are faulty premises in the earlier work, such as including indirect as well as direct spending into tax revenue projections, unforeseen costs, and a shortage in health care supply – what Professor Beaulier referred to as “labor market rigidities.”

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One of the assumptions Beaulier and Mixon relied on in their study was the taxpayer cost associated with implementation of an expansion by the Alabama Medicaid agency.

The figure they used, however, has now been disputed by the medicaid agency itself.

A spokesman for the agency, Robin Rawls, has told the press that under an expansion of Medicaid, administration costs would fluctuate between 1.7% and 2.1%, not the 3.3% to 3.6% assumed by the Troy research. That small change in assumptions would amount to millions of dollars the Johnson Center study did not include.

For his part, Troy researcher Phillip Mixon told Alabama Media Group that while the number would definitely change the financial outcome of the study, he does not think it would be by much.

“It would alter it,” he said. “But I don’t think it would alter it in that it would windfall-for the-state alter it.”

Beaulier, the study’s other coauthor, recently appeared on APTV’s Capitol Journal to defend the Johnson Center study.

“You can argue for greater healthcare,” he said, “but it will cost us something.”

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The Alabama Political Reporter has also covered other errors in the Troy University study, primarily the claim in the intro that the first research on the topic, research published by the University of Alabama at Birmingham, was commissioned by the Alabama Hospital Association.

Further, APR’s extensive coverage has already brought into question ties between Troy University’s Johnson Center for Political Economy and the Tea Party affiliated Koch brothers, whose private foundation donated the $3.6 million that allowed for the Center’s founding. Troy University even has a Charles Koch Chair within its economics department.

Though the foundation’s agreement with the school regarding the funding of the Johnson Center has not been made public, similar agreements with such conservative foundations have landed colleges and universities in hot water with faculty, students, and the general public, because of the high level of influence the foundations receive over staff hiring and firing decisions, research topics and outcomes, and even students’ curriculum.

One example, as has been reported on extensively by the Tampa Bay Times, is Florida State University.

After donating $1.5 million to the college’s economics department for the hiring of new staff, the Koch Charitable Foundation was entitled not only to influence over hiring and firing staff – but ultimate veto power.

“Traditionally, university donors have little official input into choosing the person who fills a chair they’ve funded. The power of university faculty and officials to choose professors without outside interference is considered a hallmark of academic freedom,” the Time article read.
“Under the agreement with the Charles G. Koch Charitable Foundation…  faculty only retain the illusion of control. The contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it’s not happy with the faculty’s choice or if the hires don’t meet ‘objectives’ set by Koch during annual evaluations.”

In fact, Koch ended up vetoing 60 percent of the new staff hired for a one year period at FSU, according to the reporting, which also noted that Yale University once returned a $20 million donation because the donor tried to assert a veto power over staff decision, something Yale said was “unheard of.”

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Florida State University students were reported to have started demonstrations over the Kochs’ influence on the school just two days ago, April 21st.

At some point, the question  becomes: If $1.5 million gives you ultimate veto power over staff, can more than double that get you an anti-Obamacare medicaid study? This question was brought even closer to the forefront when APR confirmed that the medicaid study was sent out to the press not by Troy University’s usual public relations desk, but by a Koch-affiliated PR group.

Finally, and most notably, there is the case of the University of Illinois at Urbana-Champaign.

In 2007, an agreement between a right wing private foundation known as the Academy of Capitalism and Limited Government Foundation and the University came to light.

The agreement, which had not been discussed with the faculty, drew wide criticism for its broad terms and influence. Not only did it give what the faculty senate called illegal influence over hiring decisions,  it also allowed for studies’ outcomes to be predetermined by ideological dogma.

Part of the faculty’s report on the financial relationship addresses the issue sharply:

“Simply put, the University of Illinois may not accept fund for an endowed appointment conditioned on the donor’s having a voice in the selection of the appointee, even if not a determinative voice. Neither may it give donors a co-determinative voice in critical academic decisions over curriculum, research, faculty selection, student support, and the like.”

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It further went on to explain that the mission statement of the foundation, and its goals to be advanced in the university setting, lead to slanted research outcomes, an issue very relevant to the Troy case.

“Some areas in the [agreement],” the report says, “are outcome-neutral, but other areas would seem to invite [foundation] support only researchers base their research on a tacit assumption of what can be accomplished – or better accomplished – by free market capitalism.”

The report citing the following from the agreement as one example of goals that lead to assumed outcomes:

“The Academy will support studies asking why communism, socialism, government bureaucracy and high taxation have failed to bring prosperity, and how capitalism brings material wealth to a broad spectrum of society.”

The faculty report responds to that “goal:”

“That governmental regulation and… taxation… have in fact failed to bring prosperity is surely academically contested terrain, as the experience in the Nordic countries evidences.  Equally contested is the assertion that capitalism in the US has brought material wealth to that rather large segment of the American workforce that has experienced wage stagnation despite rising productivity over the past several decades.”

After more examples, the report says that “it would appear that studies that do not share the Academy’s premises would not qualify for institutional support.”

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So it may be at Troy University’s Johnson Center for Political Economy. Though it may seem a stretch, Troy’s level of conservative foundation funding appears to be much higher than that of University of Illinois at Urbana Champaign’s. UI received $64,000 for programs from the foundation in one year according to reporting from the Tampa Bay Times; Troy, though, has received over $600,000 from conservative foundations – only including money secured by Scott Beaulier, the medicaid study’s author.

Finally, though, in the the UI faculty senate report, the conclusions on the agreement and its legitimacy were extremely terse:

“It is deeply troublesome that the [agreement] – a document so at odds with governing principles and that trenches so deeply into the areas of primary faculty responsibility – was negotiated without consultation with the faculty. It is also troublesome that the terms agreed to were held in confidence for so considerable a period of time.”

“Aspects of [the agreement] are incompatible with the principles and policies ‘essential to the maintenance of a free and distinguished university.’ To that extent, implementation of [the agreement] is not practical.”

Oddly enough, the mission statement of the conservative group questioned in the report is nearly identical to the mission statement of Troy’s Johnson Center.

From the Academy on Capitalism and Limited Government Foundation:

“We will provide finds for the study of the interrelatonship of capitalism, markets, taxation, government spending and regulatory policies as they affect economic growth, income distribution, and the quality of life, including personal economic well-being, social responsibility, and individual liberty. We will also address the historical and moral underpinnings of capitalism.”

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From Troy’s Johnson Center of Political Economy:

“The Manuel H. Johnson Center for Political Economy at Troy University provides a dynamic and rigorous education program focused on the moral imperatives of free markets and individual liberty, as well as relevant policy research on current and local issues. We will also cultivate within our students the virtues of entrepreneurship, individual responsibility, free enterprise, leadership, and openness.”

Whatever their missions’ similarities, it is undeniable in the professors’ statements and actions. In reference to the error in incorrectly assuming high administrative costs, Troy’s Phillip Mixon said even if he uses medicaid’s numbers, the conclusions will probably still be wrong, based on the fact that – well – the government basically sucks at doing anything, an assumption that UI’s Academy would surely have endorsed.

From AL.com:

“Mixon said he also is somewhat skeptical that the administrative costs could be contained as well as Alabama Medicaid officials project given the fact that government programs often prove more costly than originally predicted”

So while it may seem Troy University’s professors do not care for facts, it may just be a Koch problem.

 

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