Saturday, September 26, 2009

Free to Be Drowned Out by Eardrum Bursting Sound Cannon

U.S. authorities mobilized "non lethal" wartime weapons at the G20 meeting in Pittsburgh. What's good enough for Somali pirates and Iraqi insurgents is good enough for protesting American citizens. According to a reporter, a Defense Department source said the sound cannon can burst eardrums, cause internal ear bleeding, even cause fatal aneurysms for those within 30 feet.

One of the first posts on this blog dealt with the Government Industrial Monstrosity, Eisenhower's Military Industrial Complex on steroids. Uncle Sam provides the seed money, uses cost plus indefinite quantity/indefinite delivery contracts, while shielding the manufacturer from liability. Both parties play the game.

It's a sweet deal when the government funds your R&D, guarantees your profit and shields you from liability (not to mention criticism). Yet, the steroid induced GIM wants more, flying into a fit of profit rage. American Technology Corporation is behind the Long Range Acoustic Device (LRAD). The salesman wouldn't identify which government agency purchased the weapon, but was proud of its deployment. ATC wants every police department in America to have one.

One might expect the usual leeches on the carotid artery of the federal government to invest. The sound cannon is one of many innovative battlefield technologies, lethal and non lethal. Other products used against protesters in Pittsburgh, gas canisters and shotgun fired bean bags, are made by a Carlyle Group affiliate, Combined Systems Inc.

The race to the moon brought consumers Velcro. America's tampering in Iraq is yet to bring cheap oil, but it did provide new ways to control the public. What voice can be heard over an ear drum shattering machine? None, and that's the way the GIM wants it.

Power and greed drive America's abysmal leadership. The race to the lowest global common denominator continues for worker pay/benefits, taxes and regulation. Ignore the Obama fluff language, full of generalities and devoid of specifics. It's intended to divert the masses. Look at Congressional implementation. It fosters corporafornication at every turn.

Exempted from the race to the bottom? Executive compensation, lobbying and political donations. The GIM would have it no other way. How many ways can this message be drowned out?

I'm sure the Carlyle Group has a division capable of doing that very thing. Maybe the tech arm of Booz Allen Hamilton, Nielsen or one their dozens of technology, defense or media firms?

(P.S. The story behind the The Drowned Leander Borne by Nereids painting might imply America's democracy has drowned. What else could die with it? Civility and honesty are already gone.)

Wednesday, September 23, 2009

Turn Patriot Act on GIM

Congress debated provisions of the Patriot Act. If the public was being served, it would closely monitor America's Government-Industrial Monstrosity (GIM), Eisenhower's Military Industrial Complex, now Incredible Hulk like from a wicked steroid habit. It's green because that's the color of money.

An article stated one Patriotic requirement:

That businesses produce "any tangible things" at the FBI's request.
Has the FBI asked Tenet Health or LifeCare Hospitals why their combined 35 patient deaths after Hurricane Katrina warranted not one mention in George W. Bush's Lessons Learned Report? The Carlyle Group, infamous for its insider political connections, purchased LifeCare weeks before landfall.

Did the FBI ask Tenet for information on their White House lobbying regarding "corporate governance changes?" A year after the report's release, Red Jeb Bush was named to the Tenet board of directors. He joins the Blue team's Bob Kerrey.

The omitter, Frances Fragos Townsend, now runs Baker Botts corporate risk management consulting division. Fran did a bang us job managing the Carlyle Group's and Tenet's risk post Katrina. It helps to enter wrongful death lawsuits with the feds silent on the matter.

Neither Fran Townsend or Bush Chief of Staff Andy Card would share their Katrina e-mails. Were any to Carlyle Group bigwigs? Andy landed a spot on the Union Pacific board after his government service. Sharing a seat is Mac McLarty, a Carlyle Senior Adviser and ex-Clinton Chief of Staff.

It seems Chiefs do quite well after departing 1600 Pennsylvania Avenue. Ken Duberstein, Reagan's ex-Chief of Staff, made millions off his board service at Fannie Mae. His consulting firm kept the regulatory wolves at bay from 2001-2007. Obama's Chief of Staff Rahm Emanuel has ties to Carlyle's purchase of LifeCare. Was the Illinois Representative asked to keep things on the down low by his investment banking mentor? The GIM is truly bipartisan.

My questions to the FBI are three and a half years old. GIM is remarkably insular and resistant to inquiry. There is nothing open or transparent about it.

"The system's ability to communicate useful information in a credible manner has been poor." Frances Townsend

That sounds like a badly needed Lessons Learned Report confession. Politics in, garbage out.

Monday, September 21, 2009

Shannon Trust & Health Deform?

How would the Baucus Plan impact safety net hospitals like Shannon Medical Center? The plan is intended to address America's embarrassing numbers of uninsured. Texas is the blight in this area, with the highest uninsured rate in the nation.

Shannon's service area includes almost 34,000 uninsureds (according to 2006 Census estimates) The Baucus plan is expected to cut America's uninsured by 54% in 2019. The Congressional Budget Office (CBO) estimates 29 million would have coverage, while 25 million remain uninsured, including undocumented immigrants. If San Angelo approximates national projections, the region would have 19,500 uninsureds come 2019. This population will look to Shannon for crisis specialty care and Esperanza for primary care services.

Nonprofit community and safety net hospitals benefit from disproportionate share payments. CBO scoring shows DSH dollars dropping nearly $50 billion. Medicaid DSH would decline $24.9 billion, with Medicare cuts amounting to $22.9 billion.

Other hospital savings amount to $95 billion. These would apply to all hospitals, nonprofit, for-profit and governmental. That's a $142.8 billion total haircut, with Shannon taking their share.

In December 2008 Fitch Ratings reported Shannon Medical Center suffered a multi-year operating loss.

For the third consecutive year, Shannon has recorded a loss from operations, which resulted in the system losing approximately $9 million (negative 3.2% margin) through the September 2008 period.
The Shannon Trust contributed large sums to benefit the Shannon Health System. In 2007 that amounted to $12.2 million. The system has since been dismantled, thus Shannon Medical Center remains the sole beneficiary. SMC garnered $7.2 million from the Trust in 2008. If not for the generosity of the Shannon Trust, the hospital would face serious financial stress in meeting its mission.

Senate Finance Committee Chairman Max showed his disdain for nonprofit safety net hospitals. His Mark Up calls such hospitals "private tax exempt facilities." This lingo originated in the late 1990's when Tom Scully was the head of the for-profit hospital lobby. Scully is now a private equity underwriter (PEU), like White House Health Czar Nancy-Ann DeParle.

How might the Shannon Trust react to an ever stressful political and economic environment? Three years ago they inked a deal with Triad Hospitals, effectively placing Shannon Medical Center in for-profit hands. Triad CEO Denny Shelton sold the deal,which later fell through. He's still shopping for partners under a new corporate umbrella. Plano based Legacy Hospital Partners sounds eerily similar to Shannon's recently shuttered health insurance division.

The Shannon Trust's most recent 990 filing shows four interesting features. One, it reflects the early hammering of investments with last fall's financial implosion. Realized losses on publicly traded securities were $1.7 million, while unrealized investment losses were $9.5 million as of 9-30-08. Investments have made a partial comeback since the September swoon. Unfortunately, the trust owned a big chunk of Goldman Sachs Structured Product, $9.4 million worth. Structured Products imploded with the fall of banks, hedge funds and Lehman Brothers. It's not clear how much it's recovered.

Two, oil royalties were huge, over $22 million for the year. They may not be as high in 2009. Oil prices fell precipitously through December 2008, but recovered nicely since.

Three, the Trust deducted the assets of Shannon Medical Center from their books. This is the first time SMC's facilities have not been listed as part of the trust. Accounting change or precursor to a sale?

The fourth unusual element of the Trust's 990 is the sale of 524.46 acres of Crockett County land. It was sold on 2-20-08 but the seller isn't listed. Was it productive oil producing land? Who got it for $210,576 and why? This is the second sale of estate land. The first occurred on 2-11-05. It didn't specify acreage or the purchaser (who paid $911,881). Might it be compensation for the managing trustee?

Max Baucus positions the for-profit health industry for big gains. Will Shannon change stripes to benefit? Time will tell.

(The Trust's 990 is available on Guidestar or The Foundation Center. Guidestar requires registration to access nonprofit 990's filed with the IRS. )

Baucus Offers Coop Corporafornication

Senator Max Baucus bolstered his status as a For-Profiteer with his coop substitution. Health insurance companies love the wimpy alternative. The Congressional Budget Office said:

The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.
What will America get from the plan? The uninsured won't come close to being covered.

By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants).
Note, the number they refer to totals 54 million. Recent data shows 47.3 million uninsureds. That means 6.7 million won't keep the insurance they have now. That's the real aim of reform. Employers want to dump that pesky health insurance benefit. That leaves the individual or government to pick up the slack. The government looks pretty tapped out, so the citizen will garner most of the burden.

Baucus has the individual mandate, complete with huge fines for noncompliance. He can call it a fine, but it's clearly a tax. Expect to pay, and pay dearly. Rest assured the new system will be gamed to the advantage of the For-Profiteers, sponsors of numerous red and blue members of Congress. Dirty Max and his fellow corporafornicators ensure it.

As for President Obama, it's two more campaign promises out the airplane window. Jettisoned at 30,000 feet? Opposition to individual mandate and a government run public option.

Saturday, September 19, 2009

Baucus Corporafornication Includes Toothless Employer Penalty

The Dirty Max Baucus Mark Up of America's Healthy Future Act is noteworthy in its corporafornication. It specifies an annual tax penalty for employers, should any of their workers receive subsidies to purchase insurance through the public exchange. Time reports:

Businesses with fewer than 50 employees would be exempt from this tax.
And who can get insurance on the exchange?

In 2017, states must develop and submit to the Secretary a phase-in schedule (not to exceed five years), including applicable rating rules, for incorporating firms with 50 or more employees into the exchange. Initial phase in for these firms would begin in plan years in 2018 and beyond.
Thus, the only employers allowed in the exchange are exempt from penalties. If small employers aren't paying, who is? The individual and government. The government provides tax credits to qualifying citizens. Yet, that money goes directly to insurance companies:

The Treasury would pay the premium credit amount to the insurance plan in which the individual is enrolled.
The government will also make up losses from reinsurance gone bad. The plan requires a $20 billion nonprofit reinsurance system, which takes the risk off of insurance companies, now selling kajillions of private policies. Uncle Sam will backstop the re-insurer.

If the allowable costs for the plan for the year are greater than 103 percent, but not greater than 108 percent, of the target amount for the plan and year, the Secretary would make a payment to the plan equal to 50 percent of the difference between the allowable costs and 103 percent of the target amount. If the allowable costs for the plan for the year are greater than 108 percent of the target amount for the plan and year, the Secretary would make a payment to the plan equal to the sum of 2.5 percent of the target amount and 80 percent of the difference between the allowable costs and 108 percent of the target amount.

Max is still gunning for nonprofit community hospitals. He specifies additional requirements for 501(c)3 hospitals and his mark requires data collection comparing nonprofit, for-profit and government hospitals, specifically on:

Community benefit activities incurred by private tax-exempt hospitals.
Corrupt Bill Thomas and lobbyist/private equity maven Tom Scully turned nonprofit community hospitals into private tax-exempt hospitals. Dirty Max and his partner in crime, Chucky Grassley, continue the tradition of dissing safety net facilities. They much prefer for-profit chains that make big campaign donations, despite having no hospitals in Montana or Iowa. How many safety net hospitals can fall to their knees, between now and 2013? How many can be bought out on the cheap by Max and Chuck's sponsors?

I'm sure there is more in the Baucus bill, but lunch is approaching. I want my food to settle. As I predicted months ago, health care deform is clearly on the way. Baucus corporafornicates with the best of 'em.

Tuesday, September 15, 2009

Answering President Obama

President Barack Obama asked how many more workers have to lose health insurance? Democratic projections indicate huge numbers. That's the difference between the latest Census data and Center for American Progress (CAP) projections on employer sponsored coverage.

Census 2008-176.3 million had workplace provided health insurance

CAP projects 122 million with employer coverage

176.3 million
122 million
54.3 million losing employer paid coverage
President Obama, there's your answer.

Update 9-27-09: ex-President Bill Clinton spoke with David Gregory on Meet the Putz. Clinton noted the CEO of a large company told him health reform was needed badly. If employers can dump the pesky health insurance benefit, Clinton implied worker raises are possible. Bill also noted corporate profits were up during a time of low to no wage increases. Why won't employers pocket any gains from transferring responsibility to individuals or the government? Past behavior says they'll do that very thing. It makes Clinton look like a corporate shill, but that's nothing new.

Kay Bailey Rails Against Government Run Health Care at Shannon

Senator Kay Bailey Hutchison is opposed to "government run health care." She visited Shannon Medical Center and spoke to dozens of people at a press conference. Does she know Shannon's payor mix? Fitch cited Shannon Medical Center's "unfavorable payor mix" in a December 2008 report. That means high Medicare, Medicaid and uninsureds. The first two are government run health care, while the latter is the target of health reform.

What politician shows up at a business wanting to eliminate their main payment source, while ignoring the largest burden? Kay Bailey did at Shannon. She joins Rep. Mike Conaway and Judge Mike Brown in dancing away from the Concho Valley's embarrassing number of uninsureds.

But our elected officials are not alone. The Standard Times continues their health reform no show. If they had a reporter attend on Sunday, they are yet to produce a piece.

Thursday, September 10, 2009

Hyper-Competition on Health Care Reform Warrants Examination

I avoided the speech last night. It turns my stomach to see America's elected leaders act like the inter-fraternity council at a two frat school for rich boys. This morning friends asked my opinion of health care reform, given my over twenty years experience as a hospital administrator. I wrote the following:

The Red Team is blatantly irresponsible in their framing of health care reform. They have little, if anything to offer. My CPA Representative couldn't speak intelligently on health care reform. He had to offer his party's hollow talking points in a town hall meeting.

While I strongly agree with the need for change, I have concerns about elements of the plans on the table. I hoped to read a final reconciled bill before responding, but that might take months. That said, I offer:

1) Incentive pay will make things worse. Doctors and hospital administrators are as smart as Wall Street executives (who optimized their compensation at the expense of larger system). The notion that all payments are "fee for service" is bunk. Hospitals are paid DRG's, per diems, capitated rates, and highly discounted fee for service.

2) President Obama brags on the Mayo and Cleveland Clinic models for achieving quality. They pay doctors a salary. making quality the #1 priority. His plans contain little of the measures used by those organizations. It will impose barriers to improving quality the way Mayo does.

3) His plan to add more primary care doctors is a joke. The measly stipend is like spitting into a Category 4 hurricane. Also, it takes as long to train new physicians as it does to find carbon based energy sources, a decade. The only way to get doctors quickly is importation/immigration. Hospitals have done this with nurses.

On the process to date:

1) Obama's choice to lead reform is a For-Profiteer.

2) Many Congressional leaders (Max Baucus, Kent Conrad, Evan Bayh and about 8 other "moderate" Democrats) are in the pocket of health insurance, medical device, pharma, and other health care companies. They are enough to swing a bill in the Senate.

3) Conflicted insiders regularly advise Congress and various committees. This list includes Uwe Reinhardt, Gail Wilensky and Tom Scully. They have big ownership stakes in for-profit health care companies.

I believe a bare bones plan will pass, one with an individual mandate. While unstated as an objective, I believe reform sets the table for employers to shed that pesky health insurance benefit.

Democratic projections show 122 million with employer coverage after reform. Today, the Census Department revealed 176.3 million have work provided health insurance. That's a 54.3 million drop in employer coverage in just four years.

Unions will stand ready with group coverage, thus avoiding the public exchange. In most cases, I believe the employee will foot the bill for coverage in new union group coverage plans. This is why card check sits in the same Congressional cycle as health reform and why many unions have made reform a "do or die" initiative.

Even if the employer mandate stays, the payroll tax is 8%. Health insurance currently averages 12% of payroll. Employers could ditch the plan and save 4% of payroll costs. This is not mentioned by any politicians. On CNBC Rep. Debbie Wasserman Schultz said employers would be free to drop coverage, but they would be required to pay into the pool. She didn't illuminate any cost savings from doing so.

I could say more, but those are the low lights. I reserve the right to change this when a final reconciled bill is produced

Sunday, September 06, 2009

Alston & Bird Hits .500 on Stephanopoulos' This Week

Two of George Stephanopoulos' guests on This Week work for the Alston & Bird, a D.C. based lobbying firm. Tom Daschle and Bob Dole spoke on health care reform in a four person panel. Did they represent their clients, their respective political parties, or their pocketbooks? Bob Dole joked that he "needed work." At least Dole had the decency to register as a lobbyist. Tom's wife Linda has her own lobbying firm with health care clients.

It's a shame Tom Scully couldn't join his fellow Alston & Birdans. Would Scully give another commercial for SHPS, like he did on C-SPAN? Does anyone disclose potential conflicts of interest anymore? Not ex-politicians tied to private equity underwriters (PEU's).

Forstmann Little appointed Bob Dole to the board of Community Health Systems, a for-profit hospital chain. How much CHS stock does Mr. Dole still own? In an odd coincidence, Community's purchase of Triad Hospitals grossed White House Health Czar Nancy-Ann DeParle over $1.4 million.

Tom Dachle has PEU ties. He has a short stint with Apollo Group, then landed a Board Chair with Intermedia Advisers.

Alston & Bird must be proud of the Sunday morning coup. Two birds on one show. I can hear the lobbying cash register chinging.

Wednesday, September 02, 2009

Pfizer's $2.3 Billion Fine Sends Clear Message: Corporations Can Buy Their Way Out

Pfizer paid $2.3 billion relative to illegal promotion of Bextra and twelve other medications. The government assessed a $1.3 billion criminal fine, while a $1 billion civil penalty made fraud charges disappear. There was no examination of patients harmed by Pfizer's practice. This closes the case. It contains a five year corporate integrity agreement. Which law firms will make huge money off that?

The pharmaceutical industry paid over $11 billion in fines and settlements the last decade. How many pharma executives spent time in jail? Very, very few. This is Pfizer's fourth legal settlement during that period. Note that Pfizer previously committed to corporate integrity agreements. That commitment produced a record penalty, larger than Columbia/HCA's $1.7 billion fine.

The Pfizer announcement occurrs in the midst of a heated health care debate. The White House negotiated with the pharmaceutical industry in reforming health care. In a recent interview, White House Health Czar Nancy-Ann DeParle referred to pharma as "our industry." Does that mean unethical partners and insiders reassemble health care pieces in back room deals? To what end?

Corporations can buy their way out, as well as in. What a lesson for our children to learn...

Lobbying the Government-Industrial Monstrosity

The new millennium found Eisenhower's Military-Industrial Complex on steroids. It morphed into the Government-Industrial Monstrosity (GIM), encompassing much more than wartime implements. It gorged on intelligence, homeland security, education, health care, almost anything the monstrous general contractor touched. Lobbyists are the grease for the giant GIM machine. Consider the following cases:

Health Care:

Tenet Health & LifeCare Hospitals spent $1.8 million on lobbying in 2005 & 2006. Tenet hired Quinn Gillespie to lobby the Executive Office of the President on two items. They discussed the Stafford Act, the law allowing FEMA to respond to disasters. The firm also shared corporate governance issues with the White House. What return did they get on their lobbying investment? The hospital with 35 deaths after landfall got not one mention in the Bush Katrina Lessons Learned report. A year after the report's release, Jeb Bush landed a high paying spot on the Tenet Board of Directors.

LifeCare didn't need lobbyist to advance their case. Their new corporate owners, The Carlyle Group, had the ability to share their concerns directly with the Bush White House. Carlyle is a private equity underwriter (PEU) known for its political connections. (In the early 1990's President George W. Bush served on the board of CaterAir, a Carlyle affiliate.) Katrina investigator Frances Townsend granted the same courtesy, omitting any mention of LifeCare's 25 patient deaths and their 48% unit mortality rate post landfall.

Foreign Investment in the U.S.

In the second half of 2006, the Carlyle Group had the Federalist Group lobby the Commerce Department, Congress, State Department, Treasury Department and the U.S. Trade Representative on "issues related to CFIUS." The same lobbyists, now under Ogilvy Government Relations, continued their CFIUS push in 2007. They paid the firms $720,000 for services.

Why the interest in foreign investment in the U.S.? An outraged public ended the sale of U.S. port operations to Dubai Ports World in early 2006. Politicians clamored to stop the sale. The Carlyle Group wanted to sell two aviation affiliates, Landmark Aviation and Standard Aero, to Dubai Aerospace. Combined the companies had operations at 50 North American airports.

Landmark Aviation ponied up $560,000 in lobbying, while Dubai Aerospace kicked in $140,000. Carlyle mobilized up to $1.3 million to push the deal silently through Washington, D.C. They got their wish. Senator Chuck Schumer called the ports deal outrageous. His comment on 50 airports?

"This purchase is not as much of a security risk as Dubai Ports World," Schumer said in a statement. "If a thorough ... review is done and necessary safeguards are taken, the deal is unlikely to have problems in Congress."

A month after the deal closed, President Bush shared his concern over products smuggled through Dubai to Iran and Afghanistan.

PEU Connections

GTCR, the firm that sold LifeCare Hospitals to the Carlyle Group, is the same investor that purchased Landmark Aviation from Dubai Aerospace. Talk about trading greed fueled nightmares. GTCR's Chairman mentored Rahm Emanuel, Obama's Chief of Staff. Emanuel was in Congress during these deals. Lobbyists have to meet with someone. Did Rahm facilitate anything?

Corporate money-lobbyists-elected officials, the trademark of America's Government-Industrial Monstrosity...