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The best dataset on American health care will be harder to access

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Prachi Sanghavi, a health-policy researcher at the University of Chicago, studies whether ambulances that provide medical care at the site of the emergency are better than basic ones that simply rush a patient to the hospital. (They are not.) She also studies whether the federal government’s rating system for nursing home quality is any good. (That’s a no, too). Her research helps Americans evaluate the country’s health-care practices. Unfortunately her work is now at risk.

Dr Sanghavi’s research uses data provided by the Centres for Medicare and Medicaid Services (CMS), the federal health-care agency that administers America’s public-health insurance. CMS announced plans in February to change its data-sharing practices. The proposal raises the fees for data and makes access less convenient. Nearly 400 researchers, including Dr Sanghavi, from over 75 institutions across America have signed a letter in protest. They claim that the new restrictions will jeopardise ground-breaking research.

America does not have a national health-records system, so the CMS numbers are the best data available. Over a third of Americans are covered by CMS, and over 1bn medical claims a year are processed through the agency. This makes it a trove for researchers studying anything from health-care privatisation to the causes of the opioid epidemic.

The agency says it is changing the rules over concerns for data security. On the face of it, that sounds reasonable. CMS had a data breach just last year. Sensitive personal information, such as social-security numbers and mailing addresses, was compromised for over 600,000 people. Last month Change Healthcare, a health-care payment company bought by UnitedHealth Group, a large private insurer, was also targeted.

Under the current model of data-sharing, researchers can receive physical copies of the CMS data. They are then responsible for keeping the data secure, explains Alice Burns, a researcher at KFF, a health-policy think-tank. Unlike the CMS data that were hacked, the data for researchers do not contain individual names and social-security numbers.

However, they do contain sensitive information such as health diagnoses and a person’s age, race and zip code. In some instances a determined hacker could be able to identify an individual, but it is highly unlikely, says David Maimon of Georgia State University, who studies cyber-security. The proposed policy requires researchers to switch instead to a virtual centre hosted by CMS.

This is about balancing risk and benefit, says Haywood Talcove of LexisNexis Risk Solutions, a firm that sells fraud-prevention services. In this case the calculus seems lopsided. Since CMS has been hacked before, hoarding the data there doesn’t make it secure.

The researchers say that the benefits of the current model far outweigh the security risks. The protesting scientists claim that less-established researchers and those at poorer academic institutions could lose access. “Why wouldn’t we invite the best public-health experts in the world to look at the same data that we have?” asks Paul Mango, a former chief of staff at CMS under the Trump administration.

All is not lost. The changes have yet to go into effect, and the agency is accepting feedback from researchers until May 15th. But for now, the researchers would like to keep the status quo. Since the vast majority of older adults are on Medicare, these numbers give “a beautiful longitudinal view of a person’s life”, says Dr Sanghavi. It’s hard to put a price on that.

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Economics

Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

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