Thursday, September 30, 2010

Tylenol's "Soft Market Withdrawal"

The House Committee on Oversight & Government Reform heard testimony on Johnson & Johnson's Tylenol problems over the last year.  J & J  conducted six formal recalls on dozens of product, along with a phantom recall on Motrin.

This was the second hearing on the issue.  J & J CEO William Weldon missed the first hearing due to back surgery, relying on Colleen Goggins.  Weldom made this one, along with Ms. Goggins. 

Weldon's testimony omitted his and Ms. Goggins role in bringing about Tylenol's quality crisis.  However, Bill offered the usual ritual sacrifice in his closing:

I would like to close my testimony by noting my appreciation for Ms. Goggins’ leadership of Johnson & Johnson’s consumer group. As you know, she has announced that she will retire from Johnson & Johnson next year.

When asked about the term "soft market withdrawal," used in internal company memos,the pair responded:

Mr. Weldon:  Mr. Chairman, I have no idea what soft market withdrawal is.  I've heard the term.

Chairman Townes:  It's used in the memos and e-mails we received.

Mr. Weldon:  I'm not familiar with the term.  I do not know what it means.

Chairman Townes:  Ms. Goggins, do you know what that means?

Ms. Goggins:  No, we do not use that term regularly.  I've not heard it before this instance.

Chairman Townes:  Why would the employees use it?   Maybe it's the same thing as phantom recall.  I'm trying to figure this out, because you've seen, you've heard it.  What do you think it means?  We don't know.

Ms. Goggins:  I don't.., I agree with you.  I think the language is very unfortunate.  It's terminology we don't use.  Also, I don't think it reflects accurately our priorities and the fact that we try to put safety of patients first, and I think that this language is unfortunate.

Chairman Townes:  Do you want to comment, Mr. Weldon.

Mr. Weldon:  I think, Mr. Chairman, the comment that I would make is I think we've learned a lot of lessons through this, uh, unfortunate situation.  Um, I have said to you, to Mr. Issa and the committee that we have learned and benefited by being here....I can only assure you, we will do everything in our power to never let this happen again.  I think the characterization of phantom, soft, all kinds of things, I cannot explain to you  I wish I could, and I think many different people use many different terms.

It brought to mind BP's Tony Hayward.  I wonder is Bill and Tony used the same PR coach.  Maybe APCO Worldwide?.

(The interchange begins at 1:15:50 mark of CSPAN video)

Wednesday, September 29, 2010

Deficit Commission Holds Public Meeting

CSPAN aired today's meeting of President Obama's Deficit Commission.  This is the fifth public meeting for the Commission.  It's unclear how many private meetings they've held. 

Co-chair Erskine Bowles promised to gore everyone's ox.  Will he include his beast, currently slaving to build a new fortune?

Current Health Insurance Pain

Newsweek reported:

The average total health care premium per employee for large companies is projected to be $9,821 next year, up from $9,028 now. The amount employees will be asked to contribute toward this cost is $2,209, or 22.5% of the total premium, up 12.4% from last year. 

This shows the inanity of President Obama's pledge suggesting people can keep the insurance they had in 2008.  Those policies are long gone, as evidenced by.

Average employee out-of-pocket costs (copayments, coinsurance and deductibles) are expected to be $2,177 next year—a 12.5% increase from this year. These projections mean that in a decade, total health care premiums will have more than doubled, from $4,083 in 2001 to $9,821 next year. Employees' share of medical costs—including employee contributions and out-of-pocket costs—will have more than tripled, from $1,229 in 2001 to $4,386 next year. 
Employers shifted cost increases to employees.  At what point do they drop the benefit altogether and pony up the fine?  Paying $2,000 per employee (for firms with more than 50 workers) could save $8,000 per head. 

CBO projections show employer sponsored coverage falling to 48.5% of all Americans.  It was 63% in 1998.  That 48% may be optimistic given current trends.

Update 8-24-11:  Many large employers plan to dump their health insurance benefit come 2014.   I theorized this was the aim of health reform, a seismic shift in who provides and pays for health care coverage.  That seems to be playing out.

Tuesday, September 28, 2010

Super PAC's

ABC News reported on the newest political animal.  It's a donkey-elephant "money machine" hybrid, known as a Super PAC:

Unlike traditional PACs, or political action committees, they cannot give money directly to candidates or coordinate their efforts with individual campaigns. 

(They were) created in the wake of two Supreme Court decisions earlier this year that lifted some limits on campaign spending and allowed corporations and interest groups to funnel money directly into political campaigns.
One might expect the foulest of political animals to gravitate toward Super PAC's.  They're right.

Gulf Oysters: NOAA Sentinel Species

CSPAN showed testimony before President Obama's Oil Spew Commission. In this morning's testimony, a NOAA scientist said "we aren't testing oysters."  That's odd, given NOAA identified oysters are a sentinel species, the water equivalent of the canary in the coal mine.

Not long ago ABCNews reported:

Gary Ott with NOAA said crews are using oysters to make sure there is no oil sinking to the bottom of the gulf. No oysters have tested positive for oil.

States are responsible for testing oysters.  Mississippi tested 35 oysters between May 26 and September 2, with 10 of those lab results pending.

Meanwhile, Mississippi oyster fisherman don't want the season reopened to give the few remaining oysters a chance to recover.

The mortality rate for oysters was 5% before the spill in the Louisiana Delta.  New Scientist reported it's now 20 to 75%. There's hope that Mother Nature will help the oysters recover.

Oil Spew Commission Focused on Alaska

President Obama's Oil Spew Commission pondered the impact of an oil spill in sensitive Arctic regions, specifically Alaska.  They discussed Alaska's National Petroleum Reserve and the Chuckchi Sea.  Co-Chair William Reilly asked about the impact of drilling delays, which impacts ConocoPhillips.

ConocoPhillips is Alaska’s largest oil and gas producer and the largest owner of state and federal exploration leases, with approximately 1.8 million net undeveloped acres at year-end  2009. Approximately 0.8 million of those acres are in the National Petroleum Reserve-Alaska (NPR-A). 

Chukchi Sea--Conoco Phillips was one of the major participants in the Chukchi Sea federal Outer Continental Shelf (OCS) lease sale held in February 2008. The company was a successful high bidder on 98 OCS tracts, or 0.56 million acres, with total lease costs of $506 million. Plans continue to progress for drilling an exploration well on the Chukchi Sea leases in 2012 or later. In January 2010, Conoco Phillips exchanged a 25 percent working interest in 50 of these leases for cash consideration and additional working interests in the Lower Tertiary Play of the deepwater Gulf of Mexico.

While Reilly took a leave from ConocoPhillip's Board of Directors, his stock holdings remain.  Reilly's ConocoPhillips stock is impacted by drilling decisions on Alaska and the Gulf of Mexico.  That puts Reilly in a sweet crude spot.

Monday, September 27, 2010

Reilly Said Drilling Moratorium to End Soon

Bloomberg reported:

President Barack Obama’s moratorium on deep-water drilling is likely to end before it is set to expire Nov. 30, said William Reilly, co-chairman of a presidential panel probing the BP Plc spill.
“I’ll be amazed if the moratorium is not lifted before November 30,” Reilly said today in an interview on Bloomberg Television. It’s unclear “why it’s taking so long” to restart deep-water drilling, he said.

The Reilly led Oil Spew Commission met in Washington, D.C.  Highlights included:

BP still can't answer why they promised a significant skimming capacity, yet never delivered.

Various government officials said a strategic decision was made to disperse (sink) the oil. 

Retired Admiral Thad Allen stated the perception of the response from the America public and government leaders were an impediment to response efforts.  Sorry Thad, blaming the victims is not very responsive.

Coast Guard Admiral Landry stated the oil spill was discovered on April 24.  The blowout occurred April 20.  The rig sank April 22. 

Plaquemines Parish President Billy Nungesser, severely affected by the spill, told the oil spill commission he still doesn't know who is in charge.  "This was a disaster from the way it was handled from day one."

At an earlier hearing a USC Engineering professor weighed in on BP's internal investigative report.  He asked, "How could you call this great work accident investigation ... and not address human performance issues and organizational issues and decision-making issues?"  There's a difference between an investigation and a risk management report.  The Gulf Coast knows this well, having experienced it after Hurricane Katrina with the Bush Lessons Learned report..

It remains to be seen what happens with the spate of investigations currently under way.  Did they ever nail down the aim of Reilly's commission?

Sunday, September 26, 2010

BP Funded Non-Oil Tour

Six travel writers are on Navarre Beach, Florida courtesy of BP money.  This weekend Navarre Beach hosted a sand sculpting competition.  PNJ reported:

The writers arrived Friday and are scheduled to leave today. They visited the new Navarre Fishing Pier, the Gulf Breeze Zoo, Hidden Creek Golf Club in Navarre, Adventures Unlimited north of Milton and the Rufus Hayes Training Stables ranch in Milton.
Here's one assessment:

"What the national media has been saying is totally untrue, for the most part, and blown totally out of proportion," Ron Stern of said. "What they're going to get from me is the truth. You can come down here, and you're not going to get oil on your feet or tar balls on your shoes. ... I haven't seen anything in the sand other than sand, and I've been swimming in the water."
National media?  The people reporting on the spill's effects are local media.  Ron might want to check those stories out, given they're finding oil in the sand and clear looking water. 

Here's another from Apryl Thomas, a freelance writer:

"I knew the spill was kind of blown up. I had done many articles when this happened. The way it was first covered in the national media, you honestly thought, 'It's gone,' but once I did a little research and calling, I felt like it is important to let people know everything is good to go."
Kate Wilkes, Executive Director of the Santa Rosa County Tourist Development Council, said the trip is paid for by BP and is intended to combat the misconceptions created by the spill.  However, she said she doesn't think oil will be a big part of the tour.  I bet not.

Saturday, September 25, 2010

Feinberg: "Bigger, Faster" Means Denial

The AP reported:

"Over the past few weeks, I have heard from the people of the Gulf, elected officials, and others that payments remain too slow and not generous enough," Feinberg said in a statement. "I am implementing new procedures that will make this program more efficient, more accelerated and more generous."

People in Orange Beach, Alabama aren't getting bigger, faster payments, they're getting Feinberg denial letters.

Anthony Kennon, mayor of hard-hit Orange Beach, Ala., said he wasn't moved by the news. He said people in his community need action now, and they don't feel they are getting it. 

Because tourism has taken such a hit in his community, doctors who rely on walk-in tourists for patients in the summer have seen business fall off a cliff. But, Kennon said those doctors' claims to the compensation fund are being summarily denied because of the type of industry they are in.

"I am having a hard time understanding how he is our advocate," Kennon said of Feinberg.

WKRG reported:

"The saga continues doesn't it." Orange Beach Mayor Tony Kennon was back on the phone with Kenneth Feinberg earlier today. "From what I understand the denials are based on proximity to the oil."

"We are a half a mile away from the gulf," says Silvers. "We are probably a third of the mile away from the bay. We had oil all around us."
Feinberg promised rapid and generous payments, yet he delivered denials based on industry and proximity to oil, merely hundreds of yards away.  

A public face hides the real story.  No matter how many local news pieces challenge the fiction, Feinberg, Allen & Dudley deliver their lines.  They'll do so until they are rotated out.  Leaders change frequently, a key part of the unaccountability game. 

NOAA to Look for Oil on Bottom

Gulf Live reported:

The National Oceanic and Atmospheric Administration ship Pisces departed Pascagoula on Friday for a two-week mission to collect samples around the Deepwater Horizon wellhead.

U.S. Coast Guard Rear Admiral Paul Zukunft said the Pisces' mission to see what is on the seafloor and the water column. "

"Just as we were very aggressive in our skimming operations, our removal operations, it is just as imperative that we look below the surface and down to depths as great as 5,000 feet," he said.

Whoa!  Aggressive in skimming operations?  Admiral Thad Allen said it took awhile to organize skimming due to forming the Vessels of Opportunity program.  He then held a skimming tutorial without supplying the response's daily skimming capacity.  

It turned out the response didn't skim one day's worth of BP's hedged skimming number.  Zukunft's comment has me worried about the quality of NOAA's work, which follows that of Woods Hole Oceanographic Institution and University of Georgia.  Let's hope it's not more spin.

Update 10-2-10:  NOAA says sediment on Gulf floor not visibly oiled.

Friday, September 24, 2010

State of Leadership: Bizarre

Here's the rundown:

British Royalty tried to go on the dole for 2004 heating bills.

Shouldn't the U.S. and Israel have to prove they didn't create the Stuxnet Worm?  It's attacking computers at Iran's Bushehr nuclear plant.

Several U.S. Congressmen want a convicted Israeli spy released to further Palestinian peace talks.  The Israeli government-sponsored spy worked as an intelligence analyst for the U.S. government, i.e. not connected to Palestine. 

BP will develop its own spill estimate for the Deepwater Horizon spew.

The Dow Jones Sustainability Index dropped BP after the oil spew.  In BP's place, DowJones added Halliburton.

Oil spill study likely won't include all U.S. expert scientists.  Given the narrow nature of oil spill science, all is not a big number

Banks rushed to loan BP money for its Azerbaijan oil acquisition.  While BP sells assets worldwide, it purchased assets in the Caspian Sea. 

The Small Business Administration is closing Business Recovery Offices in Alabama and Mississippi.  As oil remains on the floor of the Gulf, you'd think they might wait until the end of peak hurricane season.

Guess who's the dog and has to pay for the gear?  It's not elected officials or royalty.

Taxes Qualify as Medical Expenses

Congress delegated the definition of medical loss ratio to an industry trade group, the National Association of Insurance Commissioners (NAIC).  The medical loss ratio is the amount of premium required to be spent on medical care vs. administrative expenses.  The battle over what qualifies as medical care nears an end with the NAIC's draft regulation.

Under a draft plan released on Thursday, insurers would be allowed to deduct nearly all federal and state taxes except for federal income taxes on investment income and capital gains in making their calculations.
"It's written the way insurers wanted it to be written, and so that is good for the insurers," said Amy Thornton, an analyst at Concept Capital's Washington Research Group.

The bill also gives a generous definition of medical expenses intended to improve the quality of care.

In its proposal, NAIC said medical expenses aimed at health quality "must be directed toward individual enrollees" and "should not be designed primarily to control or contain cost."
Here's the definition from the NAIC:

Improving Health Care Quality Expenses – General Definition:
Quality Improvement (QI) expenses are expenses, other than those billed or allocated by a provider for care delivery (i.e., clinical or claims costs), for all plan activities that are designed to improve health care quality and increase the likelihood of desired health outcomes in ways that are capable of being objectively measured and of producing verifiable results and achievements. The expenses must be directed toward individual enrollees or may be incurred for the benefit of specified segments of enrollees, recognizing that such activities may provide health improvements to the population beyond those enrolled in coverage as long as no additional costs are incurred due to the non-enrollees other than allowable QI expenses associated with self insured plans. Qualifying QI expenses should be grounded in evidence-based medicine, widely accepted best clinical practice, or criteria issued by recognized professional medical societies, accreditation bodies, government agencies or other nationally recognized health care quality organizations. They should not be designed primarily to control or contain cost, although they may have cost reducing or cost neutral benefits as long as the primary focus is to improve quality. Qualifying QI activities are primarily designed to achieve the following goals set out in Section 2717 of the PHSA and Section 1311 of the PPACA:
• Improve health outcomes including increasing the likelihood of desired outcomes compared to a baseline and reducing health disparities among specified populations;
• Prevent hospital readmissions;
• Improve patient safety and reduce medical errors, lower infection and mortality rates;
• Increase wellness and promote health activities; or
Enhance the use of health care data to improve quality, transparency, and outcomes.
I bolded the "enhanced use of health care data" in light of Peter Orszag's recommendation that health care move from double blind clinical studies to clinical modeling.  Oddly, he suggested economics move in the opposite direction, away from econometrics to designed economic experiments.  That was after econometric models designed "fail proof" Triple A mortgage backed securities, which later imploded.  What Quants did for Wall Street, they can do for health care. 

Insurance "medical expenses" will include corporate taxes and Quants doing data mining.  That doesn't seem right, not in the least.  Did they tell President Obama, HHS Secretary Kathleen Sebellius, Health Reform Czar Nancy-Ann DeParle and White House spin-mistress Stephanie Cutter in their recent meeting?

Democrats Join Republicans as Dog Food

"The Republican brand is in the trash can. I've often observed that if we were a dog food, they would take us off the shelf."--Rep. Tom Davis (R-Va.) June, 2008

The AP reported on a recent poll regarding Congress::

60 percent disapprove of the job congressional Democrats are doing - yet 68 percent frown on how Republicans are performing. While 59 percent are unhappy with how Democrats are handling the economy, 64 percent are upset by the GOP's work on the country's top issue. Just over half have unfavorable views of each party. 

Both should be recalled.  Instead the parties will foist inflammatory ads upon the public, while hiding those paying for the untruths.  Maybe, people don't like the Red or Blue brand of politics.

Wednesday, September 22, 2010

"If Pay for Performance Works": Answer for Obama

President elect Obama said "if pay for performance works" in a December 2008 press conference. That "big if" has one new answer. A three year study on teacher incentive programs revealed no impact on test scores vs. teachers not receiving incentive pay.

In Nashville, the three-year study specifically found that students whose teachers were offered bonuses of up to $15,000 annually for improved test scores in math registered the same gains on standardized exams as those whose teachers were given no such incentive.
Texas has two pay for performance efforts in education.

The National Center on Performance Incentives released a smaller study in 2009 on one of the state's programs, the Texas Educator Excellence Grant. The researchers found that the $300 million program, which the state has since scrapped, had no significant impact on student achievement gains, but teachers who got larger bonuses were more likely to stay on the job.

The Houston Independent School District evaluated their P4P program.

A 2009 analysis of HISD's bonus system found some small positive effects on student test scores. That study was done by researchers with North Carolina's SAS Institute, which is under contract with HISD to do the statistical analysis that is the basis for the bonuses.

"I would not be opposed to someone else doing that study because of the criticism that comes when a group does a study of their own work and it comes out positively," Grier said.
Two out of three studies show incentive pay does not achieve higher student test scores, while the third showed small positive effects. The jury rang in on Obama's question.

Not only is pay for performance bad management theory, it doesn't produce what it purports to accomplish. A decade of CEO stock option compensation showed widespread malfeasance. Teachers have seven years to prove they can cheat as skillfully as executives.

Next up is healthcare, where Peter Orszag said the government would "throw things against the wall to see what sticks." That includes livers. Greek Gods punished Prometheus, having an eagle pluck out his liver every evening.

A health care "pay for performance" system shares the name Prometheus. It has the same feel as managed care incentive plans in the late 1990's. Prometheus pilot sites began in January 2009. There's no word on their impact to date.

Update 4-16-11:  Naked Capitalism tackled P4P, throwing the "one size fits all" solution nicely to the dirtNew Scientist raised deep concerns about the very foundation of pay for performance.  It quoted a research study from UK health care system, where years of P4P made zero difference in outcomes for patients with hypertension..

Louisiana State Officials Keep Clean Record

It's hard to find oil related fish kills or sick crabs if state officials don't test carcasses. After the reporter appeared, officials said they would test the fish from the latest fish kill in Plaquemines Parrish.

Contrast this with the Annals of Internal Medicine. They recommend monitoring the 50,000 workers and citizens exposed. This includes testing. The article astutely stated:

In the Deepwater Horizon spill, tension has already developed between the desire to fully investigate the health consequences of the spill and the desire to provide reassurance that will reinvigorate the region's tourism and seafood enterprises.
It's not clear what's left to reinvigorate.

Columbia Researchers Find 6 Inches of Oil Snow on Gulf Floor

Live Science reported:

A research team from Columbia University in New York returned this past weekend (Sept. 17 to 19) from a tour of duty in the Gulf of Mexico with new data to attempt to measure the location and magnitude of subsurface oil plumes, and their effects on the marine ecosystem, which have recently been the focus of much debate.

They found oil on the seafloor, evidence that it may be in the food chain, and signs that it may be hidden in large marine mammals. In spots, the "oily snow" — degraded oil and other organic material that clings to it — was up to 6 inches (15 centimeters) deep on the seafloor, said Columbia oceanographer Ajit Subramaniam.

The graphic information above is from the Thomas Jefferson in early June. The red cylinder is the Macondo well head. Red and yellow columns are oil and gas leaks. Possible oil and gas anomolies are shown by brown, green and white spheres. It'd be interesting to see this information updated.

Tuesday, September 21, 2010

The Representative Accountant in Conaway

The Standard Times reported:

The certified public accountant in Rep. Mike Conaway came out Monday night.

Conaway said as an accountant, he thinks the value added tax and the current tax code — which he described as overly complex — are both inefficient taxation models and suggested a fair tax, another kind of consumption tax that would put a single tax on retail products and replace the federal income tax.

Conaway said such a tax would not be a tax cut but a more efficient way to collect taxes at the federal level. “There is a better way to go at it and I’m encouraged that a fair tax is growing in support across the country.”

Odd, Mike's peers (CPA's) changed fair value accounting to take away its pro-cyclical nature. They did so under threat from fellow West Texas Congressman Randy Neugebauer. Now Conaway wants to implement a pro-cyclical tax system?

It might make sense if Congress showed the ability to set aside rainy day money during good times, but elected officials haven't displayed this capability. Mike Conaway was elected in 2002. At no point since 2003 did America come close to a balanced budget, much less run a surplus.

I attended Conaway's health reform open house and the accountant was remarkably AWOL. I'm not sure the whole CPA showed up for this one.

Monday, September 20, 2010

Amber Burton to Throw Rep. Conaway Another Fundraiser

For at least the sixth time, Amber Burton of Capital Strategies DC will hold a fundraiser for Rep. Mike Conaway (R-TX). The theme is Texas wine tasting. Note the donor designations, Cabernet ($2.500), Merlot ($1,000) and Chardonnay ($500).

The fundraiser will occur at the Credit Union House on C Street. Their description cites "elegant", "modern day amenities" and "top notch facility."

Amber Burton held other fundraisers for Congressman Conaway:

9-25-06 Reception--USA Rice Federation
2-27-08 Luncheon--National Auto Dealers Association
2-24-10 Luncheon--Associated General Contractors of America Townhouse
4-28-10 Cookout--641 C Street NE (it's not clear is it's this C Street home)
5-18-10 Golf--TPC Potomac at Avenel Farm
9-23-10 5th Annual Texas Wine Tasting

You can still make the last one. Call Amber.

Lobbyist on Both Sides of N.C. Senate Race

The Senate race in North Carolina pits incumbent Senator Richard Burr (R-Red) vs. challenger Elaine Marshall (D-Blue). The Charlotte Observer noted fundraisers for the candidates. One K Street firm, The Podesta Group, stood on both sides of the divide.

The Podesta Group is headed by Tony Podesta of the lobbying Podesta family. Wife Heather has Heather Podesta & Partners, while brother John runs the Center for American Progress.

The Podesta Group sponsored a breakfast at the Capital Hill Club for Senator Burr. It will do the same for his challenger:

Tony and Heather Podesta, two top Washington lobbyists, along with Democratic Sen. Kay Hagan, will hold a fundraising breakfast for Elaine Marshall on Oct. 5 on Capitol Hill. Ticket costs range from $500 for a guest to as much as $2,500 for a political action committee.

Tony and Heather need to keep their $32 million franchise going. K Street lives. D.C.'s dirty waters still run.

Sunday, September 19, 2010

BP Sticks America's Head in the Sand

More news reports on the oil spill response from local media and independent sources.

Oil Hot Spots

Courtesy of NOLA

Consider how long the public has been played:

Thad Allen's Anticlimactic "Stake in the Heart"

National Incident Commander Thad Allen released a statement on the success of the relief well cement job. I'll omit Thad's usual obfuscation and jump to the key message:

We can now state, definitively, that the Macondo well poses no continuing threat to the Gulf of Mexico.

It also stated:

Oversight of the well now transitions from the National Incident Command to the Bureau of Ocean Energy Management, Regulation and Enforcement.

Thad had oversight of the well? Funny, he didn't have a clue as to the formation below the last casing. That's but one of many questionable statements by Allen.

The public might expect an appearance from the National Incident Commander, complete with charts and querying news reporters. However, we're within two months of an election and politicians want this story to go away.

Thus, there will be no ceremony, no celebration, no "Mission Accomplished" banner, no Q & A. Politics demands Thad issue a press release and walk away. President Obama followed with a statement of his own.

I'll raise a toast to not having to use the Matt Simmons/Bill Clinton solution, bombing the well bore for a permanent seal. The geological monster is dead. They've extinguished the heart of the beast, but it's toxic blood continues to migrate in the Gulf of Mexico.

Only, there's another monster lurking, a mechanical one. BP's risk management machine grinds onward.

Saturday, September 18, 2010

Dys-Unified Area Command

Tainted crabs caught, not tested:

First fish kill in Plaquemines Parrish.

Second fish kill in Plaquemines Parrish.

Plaquemines Parish coastal zone director P.J. Hahn said Thursday that the fish covered at least one-fourth of a square mile, with oil visible among them. He said he wanted the area tested because it was affected by oil from the Gulf of Mexico spill.

Third fish kill in Plaquemines Parrish.

In addition to hundreds of thousands of dead fish floating west of the Mississippi River in Bayou Chaland, several days before, a large starfish kill was found in nearby Barataria Bay, and a dead baby whale was discovered near Venice a few days later.

Parrish leaders say relationship with BP, Feds becoming strained again.

Jefferson Parrish councilman Chris Roberts pointed out what he believes is a big problem with the communication between the two sides. He said from meeting to meeting, local leaders are working with a rotating cast of unified command personnel.

"Just as we start to get comfortable with who we're working with -- and they learn the processes -- they change the individual. So, it becomes very frustrating because, basically, one person agrees to one thing, then another person denies," Roberts said.

Thad Allen steps down in two weeks, leaving lots of room for the next person to deny.

BP's Relief Well: America's Rolaids

BP's Development Driller III finished cementing the base of their renegade well. Several interesting facts were revealed in news reports. WSJ reported:

BP PLC said Saturday it is waiting for the cement it pumped into the bottom of the Deepwater Horizon well to set before proceeding to test it.

The company said in a statement that cementing operations, which are the final part of the effort to kill the well for good, finished on Friday at 8:30 p.m. CDT. The procedure involved flooding the gap between the well casing and the rock formation that surrounds it with cement.

From BP's press release:

Operations conducted bottoms up circulation, which returned the contents of the well’s annulus to the rig for evaluation. Testing of the drilling mud recovered from the well indicated that no hydrocarbons or cement were present at the intersect point.

The Development Driller II continues its work to gather additional data from the MC252 well and try to determine the location of the drill pipe that was originally in the well at the time of the accident.

Searching for the drill pipe in a "dead well" sounds like BP risk management, which got a boost from the no hydrocarbons present at intersection.

WaPo reported:

It opened a hole into the space between the shaft's wall and the outer layer of pipe. There was no camera recording it, but engineers could learn about the outer space around the Macondo well pipe by studying fluid that rose from the other well's drill pipe. When no oil came up, they knew that the Macondo well was plugged at its source.

That was a good thing for the gulf. But it could also be a good thing for BP's legal case, because it could be a signal that the blowout was not caused by a problem with BP's design for the well's pipes.

"All the information we have gathered to date . . .leads us to believe conclusively that the well design did not contribute to this accident and the well has complete integrity," Daren Beaudo, a BP spokesman, said in a statement Friday.

USA Today reported:

Rich Robson, the offshore installation manager on the Development Driller III, told the AP that about 74 barrels of cement pumped in Friday have dried. Robson said the pressure test will happen about 11 p.m. CT, and will take 30 minutes.

National Incident Commander Retired Adm. Thad Allen will not declare the well dead until it is sealed from the bottom.
They had me until the Thad Allen declaration. His performance on the Vessels of Fleeting Opportunity casts doubt on his credibility. Thad cited 7,000 vessels of opportunity, while schizophrenic BP gave two numbers, 5,000 and 3,500. Regardless, the program was a fleeting one, as is Thad's National Incident Commander-ship. He steps down October 1. Consider his recent statement:

"When we're all done, there may still be oil in the marshes but there will be nothing more we can do without damaging the marshes."

I thought Thad and BP were supposed to restore the Gulf. With this pair the bar always changes. Stake in the heart of the well, curtains closed. Everybody move on to the great egress.

Friday, September 17, 2010

BP News Summary

In case you missed it:

Obama's Oil Spew Commission interviewed independent scientists (video above).

Those Gulf skin sores.

BP's Hammond, Indiana pipeline leak is a hazard to human health.

EPA to investigate month-long toxic release at BP's Texas City refinery.

Thad Allen continues his obfuscation, this time on the relief well.

BP's 2 million barrel oil spew comprises no hazard to human health (video below).

Max Baucus Theater

Senator Max Baucus, chief architect of health reform, stated America's soaring number of uninsured came as the result of "egregious insurance company abuses." These include denying coverage for pre-existing conditions and capping coverage at arbitrary spending amounts. Baucus said reigning in these abuses will help protect patients.

There's one problem with Max's pontification. Six million newly uninsured fell from the rolls of employer sponsored health insurance. They have the right to remain insured via COBRA, should they have the funds. Millions of newly uninsured aren't impacted in the manner Baucus assessed.

However, Max's calling the insurance industry "egregious" is good public theater. Baucus blocked for private, for-profit health insurers at every turn. There is neither a public option nor federal rate review. The federal government takes risk from insurers through a number of reinsurance programs and creates a $ billion fund for health care investments.

"Egregious" might apply to CEO pay, but Max didn't speak to that. While America's uninsured rose to over 50 million people, health insurers had a banner year, with most CEO's getting millions in incentive pay.

How many businesses can lose millions of customers and make higher profits, driving more obscene CEO compensation? Health insurance companies can. That gives them the ability to donate $1.3 million to Senator Baucus over his career.

Next up for Senator Baucus, tax reform. It will offer the same lines as health reform: Make America more competitive in a global economy, The perfect is the enemy of the good...

One of the first witnesses to testify is Rep. Dick Gephardt. Gephardt sits on the board of Cenetene, a health insurance company, as does Tommy Thompson. During the break, Dick should thank Max for his insurance-oriented health reform bill. They can chuckle over political theater, even when the lines don't make sense.

Thursday, September 16, 2010

With Growing Legions of Uninsureds

Given that 7 million people fell from employer health insurance rolls in 2009, one might expect private health insurers to feel the pain. They didn't. This post will examine five major health insurers in three areas, number of people covered, profits, and CEO pay.

For those who don't like detail, the general picture looks like this:

Fewer people covered
Higher corporate profits
Fatter CEO pay


Number of people covered--WellPoint covered 33.67 million people in 2009, down from over 35 million in 2008. As of June 10, 2010 WellPoint covered even fewer, 33.5 million people.

Profits--WellPoint's income before taxes more than doubled from $3.1 billion to $7.4 billion. Netting out a one time gain from the sale of a subsidiary, income before taxes still increased to $3.6 billion.

Executive Pay--WellPoint CEO Angelo Braly's compensation rose from $8.7 million in 2008 to $13.1 million in 2009.

UnitedHealth Group

Number of people covered--United Health served 70 million people in 2009, down from 73 million in 2008. As of July 20, 2010 United covered 6 million more people, but the increase is due to acquisitions of Health Net of the Northeast and PPC Worldwide.

Profits--United Health's income before taxes increased from $4.6 billion in 2008 to $5.8 billion in 2009.

Executive Pay--UnitedHealth CEO Stephen Hemsley's compensation rose from $3.2 million in 2008 to $8.9 million in 2009.


Number of people covered--CIGNA's medical membership declined to 11 million people in 2009 from 11.7 million in 2008. As of August 5, 2010 CIGNA covered more people, 11.3 million.

Profits--CIGNA's income before taxes increased from $382 million in 2008 to $1.9 billion in 2009.

Executive Pay--CIGNA CEO David Cordani's compensation dropped from $7.1 million in 2008 to $6.5 million in 2009, however the non-equity incentive portion of his pay soared to $5 million.


Number of people covered--Humana's medical membership declined to 10.3 million people in 2009 from 11.6 million in 2008. As of August 2, 2010 Humana covered virtually the same number, slightly less than 10.3 million.

Profits--Humana's income before taxes increased from $993 million in 2008 to $1.6 billion in 2009.

Executive Pay--Humana CEO Michael McCallister's compensation rose from $5.2 million in 2008 to $6.5 million in 2009.

Aetna (the trendbreaker)

Number of people covered--Aetna served 18.9 million people in 2009, up from 17.7 million in 2008. As of July 27, 2010 Aetna's medical membership decreased by 86,000 to 18.602 million; pharmacy benefit management services membership decreased by 90,000 to 9.695 million; and dental membership decreased by 41,000 to 13.912 million.

Profits--Aetna's income before taxes fell from $2.2 billion in 2008 to $1.9 billion in 2009.

Executive Pay--Aetna CEO Ronald Williams' compensation declined from $18.6 million in 2008 to $18 million in 2009.

Williams recently told CNBC that Aetna had "margin improvement" included in its pricing. I wonder how those struggling to afford coverage can foster Aetna's growing margins.

With growing legions of uninsureds, health insurers made more profit and CEO's got greater incentive pay. President Obama made this group the cornerstone of reform. Amazing.

America's Legions of Uninsureds Grow

The number of Americans without health insurance skyrocketed between 2008 & 2009. Census Bureau statistics show:

The number of people without health insurance coverage rose from 46.3 million in 2008 to 50.7 million in 2009, while the percentage increased from 15.4 percent to 16.7 percent over the same period.

The number covered by employment-based health insurance declined from 176.3 million to 169.7 million.

Comparable health insurance data were first collected in 1987. The percentage of people covered by private insurance (63.9 percent) is the lowest since that year, as is the percentage of people covered by employment-based insurance (55.8 percent)

7.5 million children were without health insurance.

The number of uninsured in the South region rose from 20.2 million to 22.1 million.

That's a lot of immediate pain for people. Health reform designer Peter Orszag utilized the "political economy of delayed implementation."

Another reform foundation shifts financial risk from employer to tapped out governments and struggling individuals. Major help for the public is on the way come 2014.

BP in the News

As the relief well closes in on a bottom kill, BP made the news:

BP ends Vessel of Opportunity program in three states.

CNOOC, China's largest offshore oil company, can buy BP
one chunk at a time.

Ken Feinberg's stories and promises
keep changing.

BP says some residents
don't have the right to sue.

Feds signal
intent to sue, asserting rights over other citizen lawsuits.

serious profit for BP.

Tony Hayward goes before Parliament for one final shaming.

Wednesday, September 15, 2010

Healthy Texas Approves Centene, United Health

Healthy Texas aims to make health insurance affordable for small employers. The program leverages state dollars and federal grant funding with the potential for more savings from the federal tax credit for small businesses. Healthy Texas signed contracts with two insurance companies, Celtic Insurance (a division of Centene Corporation) and United Healthcare. ABJ reported:

A Premium Stabilization Fund will subsidize high-cost claims, shielding carriers from many large losses it would otherwise be exposed to. Insurance carriers in the program will be reimbursed for 80 percent of claims between $5,000 to $75,000. Carriers will cover the cost of claims below $5,000.
“Because the carriers have some protection, they are able to lower the premiums,” said Amy Einhorn, project manager for Healthy Texas.
The $35 million Premium Stabilization Fund is designed to last at least two years. Legislators will need to reauthorize funding if it’s to continue beyond that.

Centene also received a lucrative contract from Illinois for Medicaid HMO services. It will enroll 40,000 Medicaid recipients into a managed care program. Managed care became very unpopular in the late 1990's to early 2000's, due to restricted access to specialists and high out of network deductibles and co-payments. It's now the main method for covering the poor. Centene also provides public insurance coverage in Massachusetts and Arkansas.

Centene, like BP, was a Founder level sponsor of the Southern Governors' Association recent meeting. The SGA highlighted the Texas deal.

Centene's board members include Tommy Thompson and Dick Gephardt, while United Healthcare has Gail Wilensky and Richard Burke, one father of the HMO. It's unclear how they will personally benefit from providing insurance for the poor and disabled.

Should Healthy Texas run out of money, I know where they can find $35 million plus interest. However, The Carlyle Group could own Centene by then.

Update 1-6-13:  Centene is sponsoring President Barack Obama's inauguration, Part Deux.

Bishop Mike's Gathering

Good hearted Bishop Michael Pfeifer convened a meeting of Concho Valley leaders. They came from Robert Lee, Bronte, Menard, and Miles. Elected officials included Rep. Drew Darby, Tom Green County Judge Mike Brown, and San Angelo Mayor Alvin New. Each had a few minutes to make remarks.

Bishop Pfeifer cited the impetus for the gathering, a discussion with Alvin New. The meeting focus-- quality of life and issues of development.

Alvin New spoke to a process for local leaders to collaborate on quality of life, water & economic development. He encouraged cohesiveness and cooperation.

Drew Darby noted we're all in this together and leaders have to make decisions. He projected the number of West Texas representatives (excluding El Paso) in the Texas House will drop from 20 to 18 due to population changes. He said the divide in the legislature was more urban vs. rural than Republican vs. Democrat. Darby spoke to transportation, water, education, economic development and higher education/community colleges. He stressed the importance of vision, initiative and action. Redistricting will be a stark contrast to any uplifting vision, given its messy, partisan nature.

Mike Brown spoke of unincorporated communities within the county and the challenges of financing public service expansion in these areas. As granting agencies restrict funding to one project, the County cannot go after outside funds for multiple unincorporated areas. This means improvements, like fixing Christoval's water quality issues, take place over multiple years. Judge Brown noted the high number of guardianships in the county, over 500. He cited that 70% of the budget is justice related. Another large budget item is County Indigent Health. He cited his working with this author to make the program a model within the state.

Bishop Pfeifer revisited quality of life, noting his work with Census representatives to ensure an accurate count for our community. Census results can help our area obtain funding and emerge in better shape after redistricting. He worked to elevate the discussion around three pillars, communication, cooperation and collaboration. He described cooperation as sharing common issues, stressing collaboration involves working together to address them. He used the image of a blind folded woman with scales in one hand and a sword in the other. This represents Justice. Should the scales get unbalanced, the sword of justice will fall. Quality of life equals the common good. It involves basic needs like health, life and water.

The bishop opened up the discussion at this point. Topics included economic development, water, rail infrastructure, highway construction, public transportation, sports facilities, housing and child care.

Health care was mentioned twice. John Jacobs from Robert Lee mentioned that residents came to San Angelo for health care. Bronte's Tammy Thorn cited the high number of uninsured residents and the lack of doctor or pharmacy services in Coke County. The only facet picked up by other leaders was patient's transportation needs, available via Thunderbird.

As health care was a minor topic in the session, I held my question. Representative Darby kindly gave me time after the meeting. I asked about prospects for Children's Health Insurance in the coming legislative session. He stated he strongly supports CHIP, even in a tight financial environment. Darby noted the $28 billion burden on Texas from federal health reform.

I shared how prior CHIP changes, greater premium sharing and higher deductibles/co-pays, by the Texas legislature impacted local enrollment, virtually cutting it in half from 2002 to 2007. Would those return?

It remains to be seen, however Darby indicated the general trend would have the legislature putting more responsibility on the individual. Arizona eliminated its CHIP program, giving 100% responsibility to children and their parents.

Texas will likely walk back on its CHIP promises. Leaders did it before when revenue was tight. Given revenue budget shortfalls, Darby believes things look even tighter. It's the era of individual responsibility, which seems to fly in the face of the Bishop's common good. The blindfolded lady may need to raise her sword of justice.

Update: A KLST report on the meeting is available here.

Update 1-3-11:   The City of San Angelo plans to increase Miles water rates by 113%.  This follows the City's increasing health insurance for early retirees by as much as 58%.

Update 3-5-11:  Texas state legislators proposed cutting Medicaid by 10%.  The City of San Angelo caused 192 people to lose health insurance with their premium increases.  Forty five were employees/retirees and 147 were dependents.  The Tom Green County Indigent Healthcare program budgeted $458,000 for 2011.  It spent $1.96 million in 1999.  The Bishop's concerns have realized.  How might the sword of justice swing?

Update 3-29-11:  Area health providers held a press conference on draconian Medicaid budget cuts and their corresponding job decimation.  Bishop Pfiefer contributed a piece on water for the paper, which ran on 3-23.

Update 8-26-12:  Rep. Darby illuminated his transportation concerns, which the Standard Times endorsed.

Update 11-22-13:  Texas State Rep. Drew Darby is facing a felony charge after he attempted to take a weapon through a security screening at Austin-Bergstrom International Airport this month

Tuesday, September 14, 2010

Uninsured Kids in Tom Green County

Health Affairs reported 5 million children are eligible for Medicaid or CHIP but not enrolled. Nearly 40% are in three states, Texas, California and Florida.

The number of kids with CHIP in Tom Green County are as follows:

The high numbers early in the program were due to low premiums, good coverage benefits and a coordinated roll out/sign up effort. The community-wide sign up was coordinated by San Angelo's Health Access Coalition, a collaborative of providers, government, employers, faith groups, school systems and interested citizens.

Coverage dropped when the state increased cost sharing for premiums and co-pays. The Texas legislature eventually addressed affordability, causing enrollment to rise again, although not to prior levels.

The state legislature faces huge budget pressures. Based on other states, Texas CHIP likely will be impacted. How might that impact quality of life?

Tylenol Past & Present

Johnson & Johnson's McNeil division has a history with removing dangerous Tylenol from the shelves. Flash back to fall 1982:

Wednesday, September 29, 1982--seven people in the Chicago area ingested cyanide laced Extra Strength Tylenol capsules. All died, three of the seven were in the same household. A hospital nurse made the connection based on those three deaths. She went with the police to the home, found the Tylenol bottle and counted out the remaining pills. Six were gone, three adults-two pills apiece, all dead. She sounded the alarm. The media picked it up.

Thursday, September 30--Johnson & Johnson executives learn of the poisonings. It’s estimated 200 million Extra Strength Tylenol capsules were on the shelf or in distribution centers. CEO James Burke started his legendary crisis management effort. He sent the McNeil Consumer Products Chairman to their plant in Fort Washington, Pennsylvania. He formed an Executive Strategy Group, which met twice a day to make decisions on the rapidly developing situation. Based on the bottle lot number, Tylenol recalled 4.7 million capsules.

Friday, October 1--J&J recalled another 8.5 million capsules from their Round Rock, TX plant. McNeil officials urged consumers across the country to discontinue using the capsules pending further investigation. They posted a $100,000 reward for information leading to the arrest and conviction of the person or persons responsible for tampering with the drug. McNeil set up a telephone number with recorded information and another number to call for answers to further questions.

Monday, October 4--J&J announced it halted Tylenol production and advertising.

Tuesday, October 5-J&J recalled all Tylenol products, an estimated 31 million bottles at a cost of $100 million. That happened within a week of the deaths.

What message did the customer get? If J&J can’t sell a safe product, they won’t sell anything.

What happened? At the time of the scare Tylenol’s market share collapsed from 35% to 8%. It rebounded in less than a year, a move credited to J&J's prompt and aggressive reaction. In November, it reintroduced capsules but in a new, triple-sealed package, coupled with heavy price promotions and within several years, Tylenol had become the most popular over-the-counter pain medicine in the US.

Flash forward to the present state of Tylenol, McNeil and Johnson & Johnson. Consider the spate of recalls in the last year:

Recall #1 September 2009--J&J recalled liquid Children’s and Infants’ Tylenol Products due to “an unused portion of one inactive ingredient not meeting all quality standards.” The recall covered 21 products and 57 production lots.

Recall #2 November--The company recalled five lots of its Tylenol Arthritis Pain 100 count with the red EZ-open cap due to reports of an unusual moldy, musty, or mildew-like odor that led to some cases of nausea, stomach pain, vomiting and diarrhea.

Recall #3 December--McNeil expanded that recall to include all available product lots of Tylenol Arthritis Pain caplet 100 count bottles with the red EZ-open cap.

Tylenol conducted three official recalls in 2009 and an unofficial one. In summer 2009 contractors hired by J&J carried out a scheme to secretly recall damaged Motrin by going store by store and quietly buying every packet. Moving on.

Recall #4 January 15, 2010--McNeil recalled an undisclosed number of containers of Tylenol, Motrin and other over-the-counter drugs after consumers complained of feeling sick from an "unusual" odor. The list of recalled products is 15 pages long. The public story is a chemical got transferred to the product from wooden pallets.

Recall #5 April 30--McNeil recalled some 50 children's versions of non-prescription drugs (136 million bottles), including Tylenol, Motrin and Benadryl. Johnson & Johnson suspended production at the Fort Washington, Pennsylvania plant.

The FDA detailed dusty and filthy conditions at the plant, including "incubators with a large amount of visible gray and brown dust/debris, a large hole in the ceiling and thick dust covering the grill inside a filtered cabinet."

In addition, the FDA said some drums used to transport raw materials to the Fort Washington facility were contaminated with a bacteria identified as B. cepacia. It’s dangerous to people with weak immune systems. However, no bacteria was found in the final product.

McNeil failed to follow up on 46 consumer complaints received from June 2009 to April 2010 "regarding foreign materials, black or dark specks."

The FDA stated the plant "does not maintain adequate laboratory facilities for the testing and approval (or rejection) of components of drug products." (CNN)

These FDA findings are serious. They speak to problems with suppliers and processes.

May 4—-J&J said it is working in close consultation with the FDA.

May 27--Congress held a hearing on the recalls. CEO William Weldon sent Colleen Goggins, Chief of J & J’s consumer products division to testify. Fortune stated: “Goggins's approach -- one part apology and promise to do better to three parts disclaimer and evasion -- embodies J&J's recipe for addressing the crisis. The company has been less than forthcoming about the Motrin recall, which it still defends, and was rebuked by a Congressman for failing to respond quickly to requests for information. "At every step in this process J&J has not been transparent," says Don Riker, a consultant to OTC drug companies. "Every bit of information is cagey, secretive, and micromanaged."

June 24—J&J said in a press release: “it does not anticipate having sources of supply before the end of 2010 for most of the products that were produced at its Fort Washington manufacturing facility.

Recall #6 July 8-—J&J recalled 21 lots of over-the-counter medicines as follow up to its January recall.

July 9--J&J was sued by US consumers for fraud and racketeering. The suit demands cash compensation for recalled children’s cold and allergy medicines. The four cases were brought in the Northern District Court of Illinois, Chicago. (Bloomberg) There’s irony in the case being brought in Chicago, the site of the 1982 Tylenol poisonings.

September 5--Financial Times interviewed J&J CEO William Weldon.

September 9--Weldon went on CNBC, speaking with Maria Bartiromo. (The video is embedded at the end of this post.)

Nearly a year after the first official recall, Weldon talked solutions. They closed the Fort Washington plant, laid off 300 workers, and replaced a number of senior executives. Weldon established an executive position responsible for J&J's supply chain. The position reports directly to him. J&J expects a loss of $600 million in revenue due to the recalls.

Reading between the lines, J&J has supplier quality problems. They face other significant concerns, according to Fortune magazine. Consider stories from a series of articles:

1. CEO William Weldon stayed behind closed doors, granting interviews only in the last few weeks. Weldon became CEO in 2002. His leadership has been marked by mergers and cost cutting.

2. McNeil quality began to slowly weaken in 2002. “The culprit was a familiar one -- cost cutting -- but in a subtler form. There were no wholesale layoffs in quality control. Instead experienced staffers were repeatedly laid off and replaced with newbies who mostly lacked technical pharmaceutical experience. By 2008 the analytical laboratory, formerly staffed almost entirely by full-time scientists, was half-full of contract workers.

"Once stricter than a schoolmarm, the department grew lax. The team that tested the production lines was dubbed the "EZ Pass system." In one instance an engineering flaw on a line made it difficult to clean liquid-medicine bottles. Rather than find a way to fix the problem, an engineer says, the team instead tried to simply eliminate that check from the test. "They were trying to take a lot of short cuts.”

3. One day in 2005 a batch of more than 1 million bottles of St. Joseph aspirin failed a quality test because a sample didn't dissolve properly. Following company procedures, two employees blocked the batch from being shipped. Their manager then called them into his office. "He said, 'You like working here? This should pass. There's no reason this should fail.'" Ultimately the two quality workers were ordered to retest the drugs, then average the new scores to arrive at a passing grade so that the pills could ship. Says one of them: "You get to the point where, like me, you end up doing what you're told."

4. The last few stories show McNeil already had a compromised internal quality function. Then came the integration with Pfizer’s consumer products division. The target was $500 to $600 million in cost savings from combined production lines. One former executive described the environment. "I was given savings goals that were mind-boggling, unheard-of. They were raised by 25% to 30%."

5. A Vice President remembers arguing with McNeil executives about how much it would cost to transfer Pfizer production lines to McNeil's Fort Washington plant, an arduous process that is heavily regulated. "The normal cost to do a transfer for a product might be $600,000" he says. "Those folks would say, 'That's way too expensive. It's only going to cost $250,000.'" McNeil employees knew it would be nearly impossible to meet those demands, he says, without screwing the process up. But they did it anyway for fear of being fired.

That same year, 2007, J&J announced it was laying off more than 4,000 people. The workforce at the Fort Washington plant was slashed by 32% between 2005 and 2009. The biggest cuts came on the factory floor.

A layoff casualty was the corporate compliance group, a SWAT team meant to keep the various quality-control groups in line. A former executive said after the group was cut, some divisions lost their focus on quality. "The heads of the operating companies let their hair down."

6. Weldon’s plan to hire a chief quality executive rankled staffers, given the 2007 elimination of J&J’s corporate compliance group, which rode herd on quality.

7. Weldon gave two drastically different messages to Fortune, “We hope we never experience this again.” “Quality remains our #1 focus.”

It's clear William Weldon's focus has not been quality. Weldon's mark is a never ending cycle of been doing more with less, interspersed with stretch goals. William Weldon isn't alone.

Four years before the Texas City refinery explosion, BP issued a stretch goal. "Reduce business unit cash cost for the year 2001 by at least 25 percent from the year 1998 levels."
BP CEO Lord John Browne oversaw that decree with deadly consequences. Browne is doing the same for the British government, cutting the budget by 25%. Stretch goals can break production processes, as William Weldon knows. Browne and Weldon are in good company. It's a club, one producing a record "wealth gap" along with "buyer beware."

Members of San Angelo's Sunrise Rotary Club will recognize much of this information. They heard Dr. Deming's management theory, something badly needed in today's world. It seems quality has no meaning anymore.

Update 12-13-10:  J & J recalled Mylanta, AlternaGEL, contact lenses and Rolaids.  "Recall Bill" Weldon met with Tim Geithner.  With 80% of drug or drug ingredients coming from China or India, did they discuss how medicine taking has turned into Asian Roulette?

Update 1-14-2011: Yet another Tylenol recall due to insufficient or undocumented equipment cleaning.

Update 4-9-11:  J&J settled with the Justice Department for criminal wrongdoing for $70 million.  The agreement resolves "improper payments by J&J subsidiaries to government officials in Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act (FCPA) and kickbacks paid to the former government of Iraq under the United Nations Oil for Food Program."

Update 4-17-14:  Heinz may be the next Tylenol or BP.