The State of Shannon

Guidestar posted 2008 990 reports for various Shannon affiliated organizations. Fitch recently rated Shannon Health System's bonds.

Rising stars include:

Shannon Trust-Earned $22 million in oil royalties. For the first time it deducted Shannon Medical Center from its balance sheet.

Shannon Medical Center-After $15 million in help from the Trust, the hospital had an $8 million excess. It sold investments during the credit crisis at a loss of $7.2 million. The hospital gave $70,000 to Esperanza Clinic via a grant and provided over $37 million in charity care. The hospital's interest in net assets of the Shannon Trust were $65.5 million at year end. The hospital filed updated bylaws with their 990. Article V provides for dissolution and liquidation of the corporation.

Shannon Medical Management (new)-This division provides management services for Shannon Clinic. It had $26.7 million in program service revenue in its first year of operation. This is likely associated with the system's demand that doctors become employees of Shannon, in independent practice like arrangements.

Shannon Joint Ventures (Kidney Dialysis)-Program service revenue rose from $2.9 million in 2007 to $3.5 million in 2008

Falling stars include:

Shannon Health System-Program service revenue declined from $7 million to nearly zero.

Legacy Health Plan-shuttered, winding down $6.1 million in assets

Legacy Management Services-shuttered, winding down $414,000 in assets

Legacy Health Solutions-shuttered, winding down $2 million in assets

Shannon Rural Health Clinics Inc.-no filing in 2008, 2007 report showed payment for providers in El Dorado and Ozona

Shannon Surgical Center-Had no revenue and no assets

Shannon Clinic-Program service revenues of $85 million, the lowest number since 2003. $19.5 million deficit for 2008. The clinic paid Shannon Medical Management $26.7 million.

Shannon Real Estate-had a net loss of $5 million in assets for the year. $2.5 million was transferred to Shannon Medical Management.

Angelo Healthcare Services-no longer listed on Shannon 990 reports as a subsidiary.

Floating stars are:

Concho Valley Surgical Partnership-received a loan of $3.4 million from the hospital. This is for the Shannon outpatient surgical center on Sunset Drive.

Regional Cancer Treatment Center-the hospital has a $1.8 million investment in RCTC (book value). This facility is undergoing expansion.

Shannon Business Services-seems to be a catch all category, including support for the helicopter service, the purchase of Dr. Vernon Ryan's practice/Shannon SportsMed, Shannon Wellness and fundraising (Children's Miracle Network).

An eye to the health reform future reveals what about Shannon's stars?

Fitch Upgrades Shannon's Bonds in Dire Environment

Shannon Health System's bonds rose from BBB to BBB+ in the midst of a credit storm and a contentious health reform effort. The issuing agency is Tom Green County Health Facilities Development Corp., but the bonds are backed by Shannon's revenues. Fitch cited several interesting items:

1. Fitch views as a significant positive credit factor the strong support Shannon has historically received from the Shannon Trust (Trust), which had approximately $65.5 million in net assets in 2008.

2. Shannon Medical Center has 55% market share to Community Medical Center's 39%. These numbers have been stable between 2006 & 2008.

3. Shannon plans to call the $15.2 million in hospital revenue bonds in 2011. It will pay bondholders back early.

4. For the fourth consecutive year, Shannon Health System recorded a loss from operations, approximately $5.6 million (a negative 1.9% margin) through the September 2009 period. Shannon's losses from operations stem primarily from additional expenses associated with hiring locum tenens physicians, winding down Shannon's Legacy Health Plan, and higher employee health benefit expenses. Management is budgeting for the system to lose approximately $7 million in FY2010.

5. Shannon's service area, primarily the Concho Valley, has both stagnant population growth and below-average wealth indicators, reflected in a high 11.5% Medicaid payor percentage in 2009.

6. Although operations are expected to be negative in fiscal 2010, the organization has significant support from the Trust, which transferred an average $4.4 million per year over the last four fiscal years to Shannon for capital expenditures.

The report did not cite the Concho Valley's legions of uninsured people. Historically, Shannon's ER saw 80% of uncovered patients, Community Medical cared for 20%. Support from the Trust is critical to hospital operations. It also supports significant physician subsidies in some specialty areas, referred to in the report as locum tenens coverage. Shannon Clinic's 990 report showed expenses associated with two locum tenens firms, costing $1 million in 2008.

To thrive in an era of managed care CEO Tom Alexander and Managing Trustee Lester Smith built the Shannon Health System in the mid 1990's. The system started La Esperanza Clinic (a federally qualified health center), purchased the multi-specialty Angelo Clinic Association (renamed Shannon Clinic), seeded the area with rural health clinics and bought a small insurance company, which became Legacy Health Plans.

The rural health clinics died first. Most closed, but the few profitable ones rolled into the Shannon Clinic. The System played hard ball with physicians, become an employee under a relative value unit payment arrangement or leave. Most chose to stay. Legacy Health was next for dis-assembly.

Here's the irony. Health reform brings back managed care under a new name, "accountable care organizations." Capitation, the managed care payment method, is now "bundled payment." The move implies a new round of provider integration, vertical and horizontal. Three years ago, Shannon Medical Center planned to merge with Community in a new for-profit joint venture under the auspices of Triad Hospitals. The deal fell apart under further scrutiny, but it would not have been consummated.

Triad sold out to Community Health Systems (CHS), now the largest for-profit hospital chain. CHS rejected Triad's joint ventures. This provided ex Triad CEO Denny Shelton a niche. With the support of CCMP Capital, Shelton started Legacy Hospital Group. He's doing deals like the one that fell apart. Shelton's current and prior board members, Nancy-Ann DeParle, Uwe Reinhardt and David Bernd, are in sweet spots as reform progresses.

Nancy-Ann DeParle-White House Health Czar, ex-board member for for-profit health care firms

Uwe Reinhardt-Princeton health care economist advising on reform, board member for many of the same companies

David Bernd-White House visitor log-April 3, 2009

Will Shannon and LHP Hospital Group resurface past plans? Will Shannon use its good credit alone to re-integrate San Angelo health care? Fitch doesn't cover such questions.

However, Shannon added a new division in 2008, Shannon Medical Management Management. It's primary purpose is to provide management services to the Shannon Clinic. Odd, I thought the Shannon Health System (SHS) did that.

SHS may be headed the way of Legacy Health Plans. Its 2008 990 shows virtually no program service revenue, over $7 million in 2007. The system is a dwindling shell holding revenue bonds and paying Vinson & Elkins legal fees. Will it close in 2011, when the bonds are called and any qui tam lawsuit settled? The shell game continues.

DeParle's Health Reform: Twelve Years Back in Time

White House Health Czar Nancy-Ann DeParle spoke alongside Peter Orzag on health reform's cost containment measures.

DeParle added that it had been twelve years since any real cost containment had been attempted in health care, and it was successful, and that the current reforms would bring back lots of these cost-containment items.

Only they've been renamed. Health maintenance organizations are rebranded as "accountable care organizations." Capitation is now "bundled payment."

Why did managed care decline? People hated plans' restrictive panels and gatekeeper requirements. Providers hated bonuses based on utilization measures and restrictive clinical parameters.

Health reform will incentivize doctors on "quality," i.e. measures eerily similar to those used twelve years ago. Pay for performance has a clear track record over the same period. Executives cheated on a widespread basis on stock option incentive pay, supposedly the most pure form of pay for performance. Surely, doctors and nurses are as smart as corporate chiefs.

My prediction is business and government will continue shifting responsibility for health care to the individual. Corporations badly want to jettison that pesky health insurance benefit. Uncle Sam is tapped out. Look for any reform to go the way of TriCare, with its endless cycle of increased premium sharing, higher deductibles and co-pays.

The administration offers broad statements on reform like:

Moving to a system where providers are paid for overall care – not for each test or procedure they perform.

The chart above shows providers are paid a myriad of ways, capitation, per diems, DRG's, discounted fee for service, and no pays. The current system does not pay for each test or procedure performed. The Obama team is intellectually dishonest in this regard.

The 30,000 foot view shows:

1. Rebranded managed care

2. People having to buy insurance, which over time will shift greater and greater responsibility to the individual.

3. Distorting pay for performance

4. Misrepresenting provider payment

Hold on to your doctor and your wallet. Deform is coming.

Update 4-19-11: Accountable Care Organizations focus on utilization hearkens back to days of widely hated managed care.

Update 8-5-14:  Restrictive provider panels have been rebranded Narrow Networks under PPACA.  Same as it ever was...

Update 9-2-15:  As healthcare costs skyrocket employees get to pay more for less coverage, with the prospect of paying a luxury tax for worse insurance.

Update 10-3-15:  A premium increase of 60% is bending the cost curve in the wrong direction.  Who will hold Nancy Ann DeParle, Peter Orszag, Nera Tanden, Stephanie Cutter, Ezekial Emanual and other PPACA architects responsible?  Most are now making big money in the private sector.  One can only hope their insurance soared by 60% or more.

Update 1-3-18:  Pharmaceutical price increases continue unabated as PPACA did nothing to control them, much less cause them to drop.

Update 2-11-19:  High medical bills are responsible for 2/3 of bankruptcies.   Thanks PPACA!

Update 3-23-19:   Medical bills contributed to 60% of bankruptcies. 

Update 11-12-19:  In the last five years, 34 million Americans watched as someone they knew died because they couldn’t afford medical treatment, according to a survey report. 

Update 4-16-20:  A coronavirus pandemic revealed America's broken healthcare system and PPACA's many shortcomings. How many  22 million newly unemployed  can afford the premiums?  How many of these will get COVID-19 and die at home without proper care?  

Update 1-20-22:  In 2020, the average health insurance premium contribution was 6.9% of median income, while the average deductible was 4.7%, combining for a mighty 11.6% of median income.  Curve not bent in the least.  

Step Up to DeParle

The Obama administration released information on 1660 White House visitors. Visits involving White House Health Czar Nancy-Ann DeParle are below. It is important to note that this is a fraction of Ms. DeParle's actual visitors.

Using the White House Super Bowl Party as an example, only 3 of more than 75 participants were listed. That's a paltry 2.5% of attendees. Nancy-Ann's White House visitors include:

Errol Alden-American Academy of Pediatrics-August 11

Cybele Bjorkland-House Ways & Means Committee Staffer-May 28

Sheila Burke-Director of WellPoint & Chubb-August 27
Ms. Burke's annual compensation for her WellPoint board service is $326,500

Katherine M. Campbell-House Energy & Commerce Committee Staffer-August 7

John J. Castellani-President Business Roundtable-Eight visits to the White House from Feb. 18 to July 23. Only one involved Nancy-Ann DeParle.

Stephen Ciccone-lobbyist for Eastman Kodak-July 23

Richard A. Deem-Senior VP American Medical Association-August 11

Jack C. Ebeler-House Energy & Commerce Committee-May 28. Ebeler is the former President Association of Community Health Plans & Multiplan employee. The Carlyle Group purchased MultiPlan in 2006.

Ted D. Epperly-President American Academy of Family Physicians-August 11

Judith M. Feder-Professor of Public Policy Georgetown University, principal architect of failed Clinton health care plan, had 2 unsuccessful runs for Congress in Virginia-April 9

Jennifer L. Friedman-Chicago area OB/GYN, also a D.C. based woman of the same name donated $250 to Judy Feder for Congress-May 28

Maria Ghazal-Director of Public Policy for Business Roundtable-July 23

Tim Gronniger-House Committee on Energy & Commerce Staff-August 7

Robert T. Hall-Personal Injury Attorney in Reston, Va-August 11

Michael M. Hash-Principal at Health Policy Alternatives, a health care lobbying firm-April 21, April 28-29. Mr. Hash gave a presentation on March 8 to the AAGP. Their website details his credentials.

Renee R. Jenkins-Vice President American Academy of Pediatrics-August 11

Therese M. Jornlin-Corporate Wellness-August 29

Purvee P. Kempf-House Energy & Commerce Committee Staffer-August 7

Jeanne M. Lambrew-HHS Office of Health Reform, worked at John Podesta's CAP on health reform, served in HHS for Clinton's failed health reform-Jeanne had 27 visits to the White House between April 28 & August 31. Ten were with Nancy-Ann DeParle.

Jason Levitis-former policy analyst CCBP, member of Obama-Biden Transition Team-Four visits from April 21 to August 14

John C. Lewin-CEO American College of Cardiology-3 visits from March 25 to August 10, one with Nancy-Ann.

Caya B. Lewis-HHS Office of Health Reform-3 visits from July 31 to August 14, two with Ms. Deparle

Virgil A. Milller-House Energy & Commerce Committee staff-August 7

Karen Nelson-Aide to Rep. Henry Waxman-2 visits, May 28 & August 7

Elizabeth J. Noyes-Associate Executive Director American Academy of Pediatrics-August 11

Judith Paltrey-Pediatrician, Harvard School of Medicine-August 11

Antonio Perez-Chairman and CEO Kodak-July 23

Laura Petrou-HHS Chief of Staff (Tom Daschle staffer for 20 years)-6 visits between April 19 & May 18, three visits with Nancy-Ann

William F. Pewen-Congressional Staff for Senator Olympia Snowe-August 31

John D. Podesta-Lobbyist, President Center for American Progress-7 visits between April 13 and August 27, one visit with Ms. DeParle

Andy Schneider-Medicaid Policy LLC, part of Podesta's CAP team for health reform-August 7

Kathleen Sebelius-HHS Chief-3 visits between Feb. 20 and March 13, one with DeParle

Meena Shesamani-HHS Office of Health Reform-3 visits between April 28 & August 15

Rosemarie Sweeney-VP Public Policy American Association of Family Physicians-March 25 & August 11, one with DeParle

Neera Tanden-HHS Office of Health Reform, former John Podesta CAP staffer-4 visits January 28 to August 14, three with Nancy-Ann

David T. Tayloe-President American Academy of Pediatrics-August 11

Nancy E. Taylor-Greenberg Traurig, lobbying firm-Nancy Taylor has numerous health care clients-July 23

John P. Tooker-American College of Physicians (ACP)-Society of Internal Medicine & Director of National Committee for Quality Assurance-August 11

Richard L. Trachtman-Director of Legislative Affairs ACP-August 11

Michele Varnhagan-Congressional Staffer-May 28

Therese Vaughan-Senior Consultant for Charles River Associates-April 21

Brian Webb-One time Blue Cross/Blue Shield lobbyist-Manager Health Policy & Legislation for National Association of Insurance Commissioners-April 21

Chiquita White-Procter & Gamble-May 28

I have several observations. One, numerous Congressional staffers met with Nancy-Ann DeParle. This leads me to believe she had input in the writing of various bills. Two, the list of physician groups is mostly primary care, family practice, internal medicine and pediatrics. I find it hard to believe specialty physician groups weren't stating their case during this time. Three, clearly a number of lobbyists had input. And four, the number of Podesta CAP affiliated visitors stands out.

(Content cross posted on PEU Report)

Stack of Violations to Grow in Nidal Hasan Case?

It was bad enough a soldier committed fratricide against 13 people, while wounding over 30 others. Compounding the disturbance, Major Nidal Hasan was a trained psychiatrist, a medical doctor sworn to the Hippocratic Oath of "do no harm." He clearly planned the crime and executed it with precision.

The final violation might be an insanity defense, under consideration by Hasan's defense attorney.

"Anybody who allegedly engages in conduct that is completely contradictory to his lifestyle and military career - an insanity defense has to be considered."

The attorney left out religion. As for the use of allegedly, Nidal Hasan was physically shot in the commission of the crime, whether sane or insane.

One might expect the Army chain of command to identify mentally ill soldiers, especially a psychiatrist. Did Hasan's peer review show any signs of instability? What did other doctors think of Nidal's psychiatric diagnosis and treatment skills?

It seems the worst kind of violation had the Army employed an armed, insane Muslim psychiatrist and known about it. My guess is this is just "defense attorney talk." It reverberates as many boundaries are breached in America today. Who can anyone trust? Not the financial adviser, the hamburger grinder, the sheet rock maker, the politician, the vaccine maker, the ponzi scheme cleanup guy, the surgical tech, or the syringe maker. With profits over people the rage in today's management schemes, who can be surprised?

Like his "profit obsessed" counterparts, the defense lawyer wants to win. It matters not his "means to an end" adds another horrible layer to boundary violations.

Senators Name Their Price

Conservative Democrats held out for booty in the Senate's slug toward health reform. Here's the take:

Senator Mary Landrieu (D-LA) : Money

"I am not going to be defensive," she declared. "And it's not a $100 million fix. It's a $300 million fix."

Senator Ron Wyden (D-OR): Helping employers ditch health insurance

Mr. Wyden Friday secured a commitment from Mr. Reid to support a $4 billion amendment designed to give workers greater flexibility to purchase health insurance outside the workplace. Mr. Wyden said the proposal represented a "modest step" forward and was "my price" for supporting moving ahead.

Senator Ben Nelson (D-NE): Covering for insurers

Mr. Nelson got Reid to protect health insurers' antitrust exemption.

Senator Blanche Lincoln (D-OR): Concessions to be named later

Lincoln made clear that she still planned to hold out for many more concessions in the debate that will consume the next month.

The price is right can be seen in Washington, D.C. It's noticeably absent from Blue blogs.

Senate Health Bill: Nonprofit Community Hospitals Now PTEF's

The Senate health reform bill provides new nomenclature for nonprofit community hospitals. They're now "private tax exempt facilities." This cold, bristly language comes straight from the for-profit hospital lobby, the Federation of American Hospitals (FAH). They've used such terms for over a decade. It finally made a Congressional bill.

The last time a FAH chief impacted health reform, it was Tom Scully and Medicare Part D. Incidentally Tom Scully works alongside Tom Daschle at Alston & Bird.

This round of reform is steered by For-Profiteer Nancy Ann DeParle, now White House Health Czar. In an interview with Ezra Klein, DeParle referred to big pharma as “our industry.” It went over Klein’s head.

Corporatism is alive and well in America’s Government Industrial Monstrosity. It was formerly known as Eisenhower’s MIC. Decades of steroids ballooned it beyond the military. It now encompasses health care, infrastructure and education.

It’s a sad day when "nonprofit community hospitals" purposefully get a bad name. Is there an ulterior motivation? Citizens might not be upset if it closes or sells out to a proprietary chain. White House Health Czar Nancy-Ann DeParle has experience doing that very thing. President Obama talks a good game, but his implementation leaves much to be desired.

Townsend Testifies before Homeland Security Committee

Three years after snubbing the Senate Homeland Security Committee over the White House response to Hurricane Katrina, Frances Fragos Townsend testified before the august body. She said:

"I worry about a sense of political correctness."

"We can't allow [investigators] to be reluctant to follow the facts, just because they are afraid they will be criticized for not being politically correct."

The cardinal rule of information sharing: If you "see it, say it."

One could expect Fran to follow her own advice. The world saw hospital patients stranded in toxic gumbo, while the Bush White House dithered. It noted Fran transferring a few phone calls, before jumping on a plane to Saudi Arabia to deliver a letter on terrorism. After her return, Townsend conducted the Bush whitewash on Katrina, formally known as the Lessons Learned report.

She refused to share her e-mails on Katrina, much less testify. Yet, private sector Fran appeared before the Senate committee four years, three months and three weeks after Katrina struck. Did they assure her that no Katrina questions would be asked?

Frances Fragos Townsend is now risk management practice leader for Baker Botts. Townsend has a history of managing risk as a public servant. She omitted the hospital with the highest patient death toll. Memorial Medical Center lost 35 patients in Katrina's hellish aftermath. Ten deaths lay on Tenet Health's shoulders, while 25 belonged to renter LifeCare Hospitals.

See it, say it.

Her silence helps Memorial's corporate owners, Tenet and The Carlyle Group. Carlyle purchased LifeCare weeks before landfall. The Baker in Baker Botts is James. A the III, long associated with Carlyle.

We can't allow [investigators] to be reluctant to follow the facts, just because they are afraid

Was Fran afraid of offending politically linked corporations? Tenet and LifeCare spent big money on lobbying after Katrina struck. Was she building her private sector risk management credentials, while supposedly serving the public? Fran and the Homeland Security Committee have something in common. They both gave Memorial Medical Center a free pass in their investigative reports.

"I worry about a sense of political correctness."

So do I, Fran. So do I. As for answers, I'm still waiting.

Update 4-22-11:  Fran's "see it, say it" will become official Homeland Security policy.  The five colored terror threat levels will be reduced to two, “elevated” and “imminent.”  The pot boils for America's frogs.

Congressman's Flapping Lips: Like Butterfly Wings

Members of Congress are like butterflies, only elected officials flap lips, not wings. Chaos theory has the butterfly effect, how small differences in initial conditions causes dramatic changes in the long term behavior of a system.

The flapping of a single butterfly's wing today produces a tiny change in the state of the atmosphere. Over a period of time, what the atmosphere actually does diverges from what it would have done. So, in a month's time, a tornado that would have devastated the Indonesian coast doesn't happen. Or maybe one that wasn't going to happen, does.

What happens when a Congressman flaps his lips in a small town in central Texas? Can it be felt in Arkansas? Rep. Mike Conaway (R-TX) hopes so. The Burnet Bulletin reported on Mike's effort to stymie health reform:

“The grassroots organizations, individuals and collective groups can weigh in on the 100 senators that are going to be making this important decision over the next three to four weeks and stop this bill,” Conaway said Friday evening at an open forum at the Burnet Bulletin newspaper office on the Burnet square. “…So if you are part of the group that wants to see it stopped and you know someone in Arkansas, have them call up the senator.”

A Congressman flaps his gums in central Texas, phones ring in Arkansas. Conaway hopes for a Blanche effect. Mike's prior utterances were Genentech talking points. Congressional chaos at its best.

Obama's Dirty Water Nominations

President Obama promised to clean up the political waters around the White House. Instead he nominated two prominent Bush staffers to key positions. The Bush White House produced effluent 24/7 from corporafornication. Here are the appointments:

Dana Perino-Broadcasting Board of Governors

Frances Townsend-Homeland Security Advisory Council

Dana provided spun half truths or ignorance during her time as White House Press Secretary. Her explanation of interrogation torture was Fran Townsend worthy. Townsend butchered the White House Lessons Learned Report on Hurricane Katrina. It read more like a risk management document for two politically connected hospital companies, Tenet and LifeCare.

For their hapless public service Dana landed a job with public relations firm Burson-Marsteller, while Fran was hired to head up the risk management consulting practice of Baker Botts, the law firm of James A, Baker, III. However, private citizenship turned Ms. Townsend magnanimous. She'll now testify before the Senate Homeland Security Committee, something she refused to do as a public servant.

It's hard to clean the water with Dana and Fran's offal still floating. Change has a funny smell. Why does it sounds like jingling coins? If you want to hear Dana shill for Mark Penn's Burson-Marsteller, it's on BeetTV. Penn worked in the Clinton White House.

Update 9-6-13:  Obama's Perino, nominated for the Broadcasting Board of Governors had this to say.   If atheists don't like having "under God" in the Pledge of Allegiance, well, "they don't have to live here."  "I'm tired of them." She continued, "I remember working at the Justice Department years ago when I first started right after 9/11 and a lawsuit like this came through, and before the day had finished, the United States Senate and the House of Representatives had both passed resolutions saying that they were for keeping ‘under God’ in the pledge."  "If these people really don't like it, they don't have to live here," she concluded.

Townsend to Testify Before Senate Homeland Security Committee Three Years Late

In 2006 White House Homeland Security Adviser Frances Townsend refused to testify before the Senate Homeland Security Committee on her role in the hapless Hurricane Katrina response (prior to flying to Saudi Arabia to deliver a letter). Ironically, Mrs. Townsend retired from public service, in part due to a fear of subpoenas.

Senator Joe Lieberman complained about the virtual nonexistent cooperation from the White House in conducting the Senate investigation. Joe submitted a separate letter stating:

The Committee’s efforts to understand the role the White House played in events leading up to and following the catastrophe were severely hindered by the White House’s failure to comply with Committee requests for information, documents, and interviews. As a result, we learned much too little about what the White House and the Executive Office of the President were doing during the critical days before and after Katrina struck.

Senator Lieberman (I-CT), opportunity knocks. Fran will testify before the very committee she snubbed. Might she be marketing Baker Botts risk management consulting services? Townsend heads up James A. Baker, III's consulting practice.

Senator Susan Collins (R-ME) had Fran's back as Committee Chair in 2006. Listen to the Senator's current position on major homeland security events like the Fort Hood massacre:

"We have the obligation at the Homeland Security (committee) to ask the tough questions," Collins said.

Good. Which senator will ask Frances about Hurricane Katrina? Who will ask why she omitted the hospital with the highest patient death toll post landfall? None will.

The Senate report mirrored Fran's pathetic investigation. It also failed to mention Memorial Medical Center, its 35 patient deaths, or its two corporate owners, Tenet Health and LifeCare Hospitals. The Carlyle Group purchased LifeCare just weeks before Katrina devastated the Gulf Coast. Both firms lobbied the White House in 2005-2006. Tenet talked corporate governance issues, later appointing Jeb Bush to its board of directors. Who will query if an omission warranted a commission? None will.

Senator Joe complained mightily in 2006. The law of repeating opportunities for intervention will express tomorrow. I fully expect Joe to pass.

McCain's Wall Street Indignation a Fractal in The Democratixx?

Senator John McCain showed a touch of Wall Street indignation on the Senate floor. He did so while skewering the looming health care reform bill. Was chaining Wall Street shenanigans to a health reform bill, in an effort to take it down precipitously, drown it? Curiosity aroused, I searched McCain's donation history with Wall Street.

1. Merrill Lynch-$454,020
2. CitiGroup-$398,366
4. Goldman Sachs-$337,065
5. Morgan Stanley-$316,002
6. JP Morgan Chase-$272,960
7. UBS-$243,693
9. Credit Suisse-$216,053
10. Bank of America-$210,526
11. Wachovia-$206,613

Nine of the top eleven lifetime donors come from Wall Street. Add this to John's taint from the Keating Five scandal. Senator McCain is on the side of big money, in this case for-profit health care.

Follow the money. It's all back stage, behind the curtain. The front they show the public is the Democratixx. McCain is but one agent. They can replicate.

SPLC President Sends O'Reilly Dunning Letter

In July Bill O'Reilly hosted Southern Poverty Law Center President J. Richard Cohen. The following interchange occurred on the program:

O’REILLY: CNN is never going to fire him, you know that…

COHEN: I’m not quite as cynical as you are Bill. I think that if enough people speak out, CNN will listen and be more responsible in the future.

O’REILLY: You wanna bet?…I’ve got ten grand for Habitat for Humanity on the table if you wanna bet me.

COHEN: How about ten grand for the Southern Poverty Law Center?

O’REILLY: But I’m not going to take your money. There’s no real bet there — he’s not going to get fired.

With CNN and Lou Dobbs parting ways, Cohen sent a dunning letter. It begins with:

Dear Bill,

You lost the bet. Time to pay up!

One might expect an attorney to check gambling laws in New York, home of Fox News, and Alabama, site of the SPLC, before sending a collection letter.

Alabama:

GAMBLING . A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health or accident insurance.

New York:

“Gambling” A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.

I’m sure Bill has the Fox legal team working the case on his behalf. “It was hyperbole, not gambling. @#%& it! We’ll do it live!”

Political theater doesn't require ethics, truth or legality. It's a show to manipulate the masses. Behavior that would land the common man in handcuffs is overlooked when done by the politically powerful or their support staff.

What if someone bet on a chicken named "Lou Dobbs" in a cock fight? O'Reilly and Cohen are on tape with their wager in a pundit skirmish. Don't bet on any attorney generals taking up the case. That would be a supremely bad wager.

CMS Predicts 2009-2010 Health Insurance Carnage

SEIU President Andy Stern said employer sponsored health insurance is "dead and not coming back." Facts bear that out. In 1999 employers covered 70% of Americans under age 65. By 2019 that will drop to 50%. The Centers for Medicare/Medicaid released projections based on the House reform bill. It paints a bloody 2009-2010, projection employers to shed 12 million people from the coverage rolls.

2008 Census data--176.3 million with employer coverage
2010 CMS projections--164.4 million with workplace health insurance

That's a decline of 11.9 million in two short years.

Politicians are not talking about these facts. Speak up or become a pawn in the race to the lowest global common denominator on worker pay/benefits, taxes and regulations. Health reform is intended to drive down worker benefits.

More and more health care costs will land in the individual's lap. Corporations clearly want to do less and a tapped out Uncle Sam will sigh while holding empty pockets. That leaves you to pay.

Of course, Andy Stern and his union friends want to step in and offer group insurance plans. It's their way of making unions relevant in the Postmodern Guilded Age. The SEIU is no more your friend than the current gaggle of corporafornicating politicians. The whole red and blue lot is tainted. Spit polish can't hide it.

House Bill Projects 8 Million Fewer with Employer Sponsored Health Insurance

A progressive think tank promoted increased employer coverage under the House Health Reform bill. It is a misrepresentation at best. The trend of employers doing less will continue. Here's the history:

70.4% of Americans got employer health insurance in 1999

58.3% received employer provided coverage in 2008

12.1% decrease from 1999-2008

Looking at projected numbers, we see:

176.3 million with employer coverage in 2008 (Census Data)

168.4 million with workplace health insurance in 2019 (CMS projection)

7.9 million decrease in Americans with workplace coverage under House bill

Please stop lying to the American public. Employers clearly want to do less. The government can't afford to do more. That leaves the individual responsible. I will be impressed if only 8 million fewer have employer coverage in 2019.

Obama & Rick Perry's $1 Million Jobs

News reports show the Afghan war costing $1 million per soldier. That's the budget request submitted by President Barack Obama. Texas Governor Rick Perry has something in common with the President.

Gov. Perry gave Vought Aircraft, a Carlyle Group affiliate, $35 million to add 3,300 jobs by 2009. Current data shows Vought employing 35 fewer people than their 2004 numbers. Texas gave Vought $1 million for every job eliminated. The Reds and Blues have much in common.

Schools Want You to Know Jack!

Meet the Press Host David Gregory focused on reforming education with guests Arnie Duncan, Newt Gingrich, and Al Sharpton. Arnie talked about dramatically improving outcomes, not through inputs but through rewards. Schools would compete for over $4 billion in bonuses, an almost Goldman Sachs like standard.

How might principals lie, cheat, and steal to garner payola? Nearly thirty percent of CEO's backdated stock options to maximize compensation. The practice ran over a decade's time. Might a similar number of principals do likewise? Would they incentivize teachers, like Wall Street traders? Or, will they make teachers fear for their job with consequential performance rankings?

Arnie talked about "top-middle-bottom" teacher performance. In a Jack Welch like move, Duncan wants poor performing teachers gone, fired. GE CEO Welch was known as "Neutron Jack" for eliminating head count. Annually the bottom 10% of the GE workforce got a pink slip. The reason? Poor performance.

Dr. Deming's Red Bead Game showed the folly of such practices. Management should be clear on the aim of the system and provide leadership for improvement. That requires Profound Knowledge, an understanding of Psychology, Systems, Variation, Knowledge and their interactions. Arnie quipped "continued improvement" in the interview, but it's clearly not founded on W. Edwards Deming's teachings.

Psychology includes motivation, both intrinsic (from within) and extrinsic (from without). The most powerful motivators are internal. Pride in work, contributing to something greater, a supportive work environment, and the natural joy of learning are intrinsic motivators. What happens to them when one is worried about falling into the "ready to be axed" category? They evaporate. Dr. Deming noted that fear causes wrong figures. I expect any teachers near Arnie's bottom to do some "adjusting."

Optimizing pay suboptimizes the system. Executives looted millions from shareholders to maximize their pay. Wall Street pushed junk financial products for commissions and bonuses. How will principals and teachers respond to Duncan's two edged sword, $4 billion in rewards scattered amongst a field of thousands of fired teachers? It won't be pretty. Will they call him "Atomic Arnie"?

Update 2-5-11:   The rush to rank, reward and punish teachers for student performance has many potholes, including a low predictive track record for top teachers.  How educated are those pushing these systems?  Dr. Deming would call them hacks.

Update 7-6-11:  Teachers and principals are as smart as CEO's.  Rampant test cheating occurred in Atlanta., amongst other cities.  Education Secretary Arnie Duncan attempted to defend his bad theory, by blaming bad apples.  P4P is a bad system for improving performance.  Wait until doctors and nurses get teacher like demands.   "Data and meeting ‘targets’ by whatever means necessary, became more important than true outcomes."  Highly predictable in competitive, extrinsic motivation schemes.

Update 3-29-14:   Arnie opened the doors for the big money boys to deform public education.  

Update 6-3-22:   Former General Electric chief executive Jack Welch takes the blame for much of what's wrong with businesses today.  Bad management theory remains widespread but Welch is getting his due.  

Update 6-5-22:  Welch's firing employees when things were going well was his contribution to selfish, greedy management which got outsized rewards.  His cost cutting ways were imitated by other CEOs and that led to the Boeing 737 Max and other disasters (BP Texas City Refinery explosion and Gulf Oil Spew).  Welchism led to offshoring and economic wastelands in the U.S.  That aided the rise of Donald Trump, who only thought of himself while in the White House.  

Update 6-11-22:   Management followed Jack Welch instead of Dr. W. Edwards Deming and our world is much worse off for it.  Ignorance and selfishness are widespread.   

Update 11-26-23:  Jack Welch lives on in Amazon's "performance management system."  Forced rankings and eliminating bottom x percent of workers.  Can you say morale killers?  What's a lazy, ignorant manager to do? 

Update 3-29-24:  Some have become aware of the damage done by Jack Welch's executive pay optimization management:

...“ranking and yanking” by firing the bottom 10% of employees every year, playing endless accounting games to make quarterly earnings goals, not thinking long-term

Friday PM News: Revealing

A late Friday search of the news wires usually uncovers how our elected officials have shafted us, or plan to do so in the near future. Take this story in the WaPo, published at 4:54 PM:

Health insurers could bypass some key reforms
Legislators are designing this new insurance marketplace to protect consumers from many of the pitfalls and inequities in the current system. But even as they focus on the details of how the marketplace will work, senators have indicated that they would allow insurers to continue operating outside it, much as the health insurance lobby has sought.

The exchange will be full of individual policies. To the extent healthy people go outside, as allowed, the worse things will be for those left inside.

Huge loopholes exist, like grandfathering in physician owned hospitals. The greediest parts of the system can drive profit trucks through the gaps. Simply amazing and a classic 5:00 pm Friday news piece. It has a weekend to die.

Blue corporafornicates as good as Red. The bill might be bipartisan after all!

RiceHadley LLC Joins Bush Think Tank: "TwiceBadly PUK"

Pull out the giant scissors for the Red ribbon cutting. Condoleezza Rice and Stephen Hadley opened a consulting firm, while their former boss will announce the formation of a public policy institute in a speech at SMU. SMU will house the George W. Bush Presidential Library and think tank, which will serve as a:

forum for study and advocacy in four main areas: education, global health, human freedom and economic growth. Advisers said he hoped his institute would be more focused on producing results than many research organizations are.

Bush failed miserably on two of the four, healthcare and the economy, during his dual terms. The number of uninsured rose by 10 million, while the country entered the deepest recession since the Great Depression.

“He wanted to do something very different from other former presidents, and that is to create a research institute that’s independent, nonpartisan and scholarly and that will have an impact on the real world.”

Independent, nonpartisan and scholarly? In other words, nothing like the Bush Presidency. We felt Bush's impact on the real world. As poverty grew domestically, the rich got richer.

The Carlyle Group funds managed

2001 $12.5 billion
2008 $91.5 billion

I suggest the Bush think tank be called "TwiceBadly, PUK." Bush used the federal government as his Personal Unlocking Key (PUK) for his party and friends. I expect that to continue.

Which Bush underling will you hire? Michael Chertoff, Frances Townsend (Baker Botts), or RiceHadley? Might you go for the big guy himself at "TwiceBadly PUK"? They're all open for business.

Come to think of it, the W. policy institute could be called "The Best Corpora-whorehouse in Texas."

Bill Clinton Shares Preference for Privates with Senate Democratic Caucus

President Bill Clinton carried several mantras into his meeting with the Senate Democratic Congress. First, he channeled Rahm Emanuel with "the perfect is the enemy of the good." Ironically Mr. Emanuel extended the invite to Mr. Clinton. The other inviter was Senator Majority Leader Harry Reid, submitter of a secret health bill over two weeks ago. It awaits CBO scoring.

Second, Bill echoed Denny Shelton, ex-CEO of Triad Hospitals circa 2007, and ex-Triad board member, Nancy-Ann DeParle. Shelton said American business cannot compete in a global economy under the burden of health care costs. Denny sold out. Shelton also said he wouldn't pay more in taxes to cover uninsured children, despite making over $40 million from Triad's sale.

President Bill Clinton privatized U.S.I.S., the security investigation arm of the federal government. It changed hands several times. The Carlyle Group flipped it for big money.

The Clinton Global Initiative is a public-private partnership orgy. His preference for privates is clear. Who did he encourage to join the Big Blue sellout before going to a fundraiser at the House of Blues?

SEC Filings Point to Millions More Uninsured

WellPoint, UnitedHealth, Aetna, Cigna and Humana shared their medically insured totals in their latest 10-Q (SEC filing). Only one of the five increased their core health insurance business in the last year.

WellPoint insured 33.9 million, down 1.5 million from 2008. Nearly 1 million lost commercial coverage, representing employer sponsored insurance. It's not clear how many of the 1.5 million were dropped for financial reasons.

UnitedHealth covered roughly 32 million people. Their commercial coverage fell by 1.7 million, while Medicaid, Medicare Advantage and Senior insureds increased. Overall UnitedHealth's business is down 820,000.

Aetna provided insurance for 19 million people, up 1.4 million from 2008. It reversed the trend by adding business, over 1 million in the commercial segment. Medicare and Medicaid increased as well.

Cigna covered 11.1 million people, down 800,000 from 2008. Their filing cited the decrease was "primarily driven by disenrollment across all funding arrangements as a result of the current economic environment."

Humana insured 10.3 million people, 1.2 million fewer than last year. Most of the decline came in the stand alone Medicare Prescription Drug program. Did seniors get pinched in the downdraft and drop coverage or did they switch providers?

Netted out, nearly 3 million fewer Americans were insured by the big five in the second quarter of 2009. That would bring the total of uninsureds to 50 million.

Note: Kaiser Family Foundation did a similar analysis. It was issued 12-9-09.

Parents Sell Test Points in Fundraiser

The parents advisory council of a North Carolina middle school will sell 20 test points for $20 in a fundraiser. The AP reported:

Students can add 10 extra points to each of two tests of their choice. The extra points could take a student from a "B" to an "A" on those tests or from a failing grade to a passing grade.

Principal Susie Shepherd says it's not enough of an impact to change a student's overall grades.

Buying grades at an early age? Surely, we're training a future batch of Congressmen and women.

Add the Arnie Duncan model of paying kids for "A's" and you have a transactional education micro-economy. How did people learn before institutionalized bribing?

Extrinsic motivators, like money, kill intrinsic motivation, the natural pride and joy in learning and doing a good job. Where there once was joy...

USAID Nomination: Sets Stage for PPP?

President Obama nominated Dr. Rajiv Shah as head of USAID. Dr. Shah is the former executive with the Bill & Melinda Gates Foundation. How might Dr. Shah work with his former employer?

Secretary of State Hillary Clinton shared her vision of working with private groups and individuals. Her husband runs the Clinton Global Initiative, a foundation intent on leveraging the private sector to solve world problems.

Giants of philanthropy gathered in New York in May. Rumors suggested big donors could name their project and get matching taxpayer dollars. Is Dr. Shah the man to implement such a "public-private partnership" plan, hiding behind the modernization euphemism? It's hard to turn around without tripping over a pile of PPP's.