Tuesday, June 28, 2011

COSA Responds on Health Clinic

Retired Police Chief Russell Smith followed up on issues raised regarding the City Health Clinic for employees and retirees.  He asked Human Resources and Risk Management Director Lisa Marley if services had been reduced to urgent care only and why retirees hadn't been notified.  Marley responded with history on the role of the clinic.:

The first public declaration of the change in Clinic operations was made during the December 1, 2009 Council Meeting, where the discussion was about reverting back to acute care versus family practice, in order to devote time to employee wellness.  Complaints were being heard that patients were unable to secure appointments at the Clinic.  Upon review of the diagnoses it was determined that many appointments were for follow-up and long term care treatments that were better treated by a primary care physician.  Dr. Gordy Day was consulted for a list of the types of treatment that would be suitable for an acute care clinic. 

I believe she means urgent care, as hospitals provide acute care.

The next public discussion was during the November 16, 2010 Council Meeting when the representative of CareHere presented to Council.  The Council took no action of this agenda item.

Which makes that point irrelevant.

In December 2010, the City Manager and I met with employees and retirees during a series of week-long meetings informing them of the impending changes to the health insurance and the way that the self-insurance fund works.  Discussion included the fact that the City would be sending an RFP for bids on the operation of the Clinic.  During that discussion it was explained that the Clinic had morphed from the acute center it was created to be, to a family practice operation. It was discussed at that time that the RFP would ask for bids to operate an acute center because of the difficulty getting an appointment at the Clinic.  One of the meetings was held on December 1, 2010 from 7:00 PM until 9:00 PM specifically for the retirees.  Although the City Manager was unable to attend that meeting, I covered the same material as the daytime meetings, which included the Clinic discussion. 

The City specified the nature of clinic services via the RFP.

The RFP went out for bids in December 2010, and once a selection was made, it was presented to Council at the February 1, 2011 meeting.  Again discussion included acute care and the need for available appointment slots.  Community had made it clear that they would operate on a walk-in basis and would evaluate appointment scheduling if the patient load required.  Employee wellness would be handled through the hiring of a Wellness Coordinator and therefore would not interfere with the slots for seeing patients.
Community responded to mandatory elements of the City's RFP.  The City changed the scope of services relative to prior service offerings.  Note, the Wellness issue also arose in December 2009, but remarkably little progress has been made.

A series of questions were voiced by employees following the announcement that Community would be operating the Clinic.  The questions and answers were posted on the City Intranet page.  When the Clinic was approaching the date that Community would take over the operation, an email went out to employees reiterating the types of treatment that would be covered at the Clinic.  At no time did I conclude that retirees were not informed of this change.  In hindsight, perhaps the questions and answers could have been posted on the Internet versus Intranet page.
Hold onto Marley's position on communicating with retirees.  It comes in handy later.

Since Community took over on May 23, 2011, they have been informing patients, who either come in or call, of the change in operations.  They are accommodating patients who do not have a primary care physician by writing prescriptions for maintenance medications to tide patients over while they seek care elsewhere.  They are also assisting by providing a list of primary care physicians who are accepting patients.

A meeting is scheduled this week with the Community leaders to discuss the range of treatment available at the Clinic.  The County patients are also disappointed with the adjusted treatment.  The City is anxious to come to an agreement on an increased level of treatment available at the Clinic.
Clinic customers include County employees, also unhappy with lesser service.  It seems the City is ready to revisit their December 2010 RFP specs.

Here's the beauty of Marley's defense, which stated "at no time, did I conclude that retirees were not informed of this change."  Informed retirees occurred by what method?

Human Resources does not have a master list of emails for retirees, neither does it have an accurate listing of mailing addresses for retirees.  Any mass mailings to retirees result in one-third being returned for bad addresses.  I have spoken this week to an employee who is going to approach the Retiree Association to either get a complete list of emails or identify someone who can be the contact with HR for these types of notices in the future.
No letter to show, no e-mail to forward.

Thank you.
A June 27 e-mail to employees showed action on identified concerns:

City and County leaders met with the Community hospital leaders this week to discuss the concerns we’ve heard regarding maintenance type medications not being filled through the Clinic.  We have agreed that anyone who is on a maintenance type medication and only needs their levels checked and medications refilled will be able to get that service through the Clinic.  It will be the Clinic who will review your levels and determine whether or not you are still being properly maintained by your medication, or if your levels have changed to such an extent that you need further attention by a physician to get your levels regulated.  If you need specialized attention or a greater degree of medical management, you will be referred to a physician.  Once your levels are stable again, you will be able to continue with medications prescribed through the Clinic. 

Due to this added treatment through the Clinic, it may be necessary for the Clinic to return to an appointment system.  Community will evaluate this need and let us know.  Based on the needs of the patients we will continue to adjust and make changes as needed.  Thank you for your continued patience as we work to make the Clinic a better benefit for all.

Patient's patience is required.

Disclosure:  Information in this post did not come from Russell Smith, but from another equally reliable source

Friday, June 24, 2011

Blose Almost Lasts a Year

 Vice President and Provost Anthony Blose will celebrate his nearly one year tenure at ASU by stepping down.  Blose cited personal reasons for the move, which is effective June 30.

Flash back to April 2010, when ASU announced the seledtion:

Dr. Anthony P. Blose, a university administrator with an academic background in physics, has been named provost and vice president for academic affairs at Angelo State University.

ASU President Joseph C. Rallo announced the appointment, effective July 15.

Blose comes to ASU from Lake Superior State University (LSSU) in Sault Sainte Marie, Mich., where he has worked as provost and vice president for academic affairs since 2007.

ASU President Dr. Rallo and Dr. Blose were excited about the budding relationship.

Rallo said, “With his broad academic experience and his strong administrative skills in managing a vibrant academic program with multiple regional centers, Dr. Blose is perfectly suited to meeting ASU’s strategic goals at this point in our history. He understands where we are as an institution, where we want to be and how to get there as an effective member of the Texas Tech University System.”

Blose said, “I am well aware of the strong reputation of Angelo State and enthused to be able to utilize my background and experience to further increase the university’s stature and status. The strong teaching/learning emphasis at Angelo State is extremely important to me since I have been associated throughout my academic career with institutions where those things are highly valued. As a provost, I believe it is my role to advocate for all academics and for the university as a whole.”

Much happened in the past year.  After a promising Fall semester, the Texas Legislature promised to blow a hole in ASU's budget.  The question was "how big it would be?"

Dr. Rallo delegated strategic and budgetary changes to his Vice Presidents, three with less than a year's experience at ASU.  The group committed to informing employees with jobs at risk by April 15.  That leaked to mid June.  Some face employment water torture until August. 

Blose bungled administration's surprise move of eliminating the Honors Program.  He needed a better script to avoid logical inconsistencies.  After all, these were smart students the University was dissing.  Rallo reversed the decision, at least temporarily.

Unlike many employees, a space was made for Dr. Blose:

(He) will return to his position as a tenured professor of physics.
Return?  This might be more accurate:  The university will make space for Dr. Blose in its physics department.

The internal announcement on Blose's move closed with:

Again thanks for all that you do for ASU and I hope the summer will be enjoyable.


Joseph C. Rallo

For some, it's hell and not from the heat.  It's the kind of year that ages people.

Thursday, June 23, 2011

ASU Breaking People

"I was ASU..."
A number of ASU employees found the week of June 13 a most difficult one.  Longtime, dedicated  staff and educators learned their services would no longer be needed.  Some received an extra stab in their self image, as managers cited more than budget constraints.  It's time to move in a different direction.  The department will be just fine without you.

I watched Shannon Health System break department managers after the merger with St. John's.  The system didn't need two managers for one job.  That's understandable.  The process to get there wasn't.  Shannon's and St.John's CEOs met behind closed doors, knocking out a handful of department head winners at a time.  The process dragged out over months, turning Shannon into a misery factory.  That was a long time ago, but ASU's current "nonlayoff" reduction has the same feeling.

Most people in education and healthcare are intrinsically motivated.  They do what they do because they love it.  Bad management systems interfere, even destroy, their internal fire.  The Standard Times posting of ASU salaries confirms to many employees the lack of integrity in the university's wage and salary program.  Employees with years of service can't get good answers as to why their pay is lower than people recently hired.  This is a basic obligation of management, to have fair and explainable pay systems.

I wrote about ASU a number of times this Spring.  Many were serious, research based posts on eliminating the Honors Program or ASU's QEP efforts.  A few were attempts at sarcastic humor, one with President Rallo conducting a Charlie Sheen like "Winning Tour" and another with Vice Provost Nancy Allen hosting "The Secretarial Apprentice."  While these pieces may have shed a little light or laughter in the darkness, they can't fix the significant harm being done to people.

Having worked in dark organizations in my career, I encourage ASU's downtrodden to stop, center and take a deep breath.  Take one step forward.  I don't know where it will lead, maybe out of ASU or away from San Angelo.  Nevertheless, you did the best you could, helped students and peers in the best way you knew how.  You made a difference for many in your career.  Hold that in your heart as you lift your gaze.  There's a need for good people in education.  May others see what the State of Texas and ASU can't

Saturday, June 18, 2011

Perry's Preliminary Plans Portend Presidential Pitch?

Texas Governor Rick Perry's advisers are sizing up Iowa.  The AP reported:

Perry's chief consultant Dave Carney acknowledged that he was asking questions about the political landscape, the caucus process and rules for the August Republican straw poll in Iowa.

Perry himself plans to start calling key Iowa Republicans after the Texas Legislature concludes its special session at the end of June, Carney said.

High drama is on the way if the Great Texas Ex-Perryment goes national.   As for Perry's hated Washington, Rick loves 1001 Pennsylvania Avenue.  Watch the money backing Perry.  I wouldn't be surprised if it's his fellow Bilderbergers, banksters and private equity underwriters (PEU's).  They're hard to see, but carry a distinct odor at close range.

Update 6-21-11:  I left off a "P"  in the title.  It could've easily included "private."  I don't know how Chron left out Bilderberg in Rick Perry's secret travels.  Will Rove Republican Robert Duncan enable Perry to keep his track's covered?  Funny that a school bill could contribute to lack of education.

Update 6-23-11:  Perry's in for a Presidential run says WSJ.   That ensures the burial of Perry's Vought corporafornication.

Update 6-30-11:  Rick Perry initiated The Response, a day of prayer and fasting at Reliant Stadium in Houston.  The Event Coordinator is an ex-Perry staffer and current consultant to the Governor.   His role includes "working with events."  Some Christians are disturbed by the event.  I assume Reliant Stadium food vendors are also concerned by the day of fasting.  I envision a huge crowd chanting, "Run, Rick, Run."

Update 7-18-11:  Perry said he would decide in two or three weeks, i.e. between August 1 and 8.   "But I'm getting more and more comfortable every day that this is what I've been called to do. This is what America needs,"  The Response on August 6, a "calling," all in the same time frame?  Orchestration at its best.

Update 8-11-11:  Perry's in the race and will make his official announcement Saturday.  Politicians no longer look like people, but like caricatures.  Run, Rickly Pear, run...  Shake off those George W. Bush leg braces.

Friday, June 17, 2011

COSA Wellness: Fat, Fit or Futile?

A San Angelo City retiree recently shared the following:

The City Clinic is now for “urgent care” only.  I just happened to find this out when I went in late last month.  The staff are a P.A., and medical assistant, and a receptionist.  It is walk-in only.  Appointments are not accepted, but at least it is open from 8-4 five days a week now with Dr.Gordy Day overseeing it.  For months prior to that it was staffed from 7:45 to 8:45 am only.  Now the clinic will not do ANY wellness stuff, blood tests, refill ongoing meds, do physicals, Pap smears, etc.  These are all things that we were URGED and ENCOURAGED to do when the Clinic first opened.  We were told we “should” go to the Clinic for all these things to save costs – so many, many of us did.  Now, after all of us have lost relationships (and records) with our former doctors, we are now forced to find new Primary Care Physicians and pay the huge deductibles AFTER we chose a plan (and deductible) in October.

Apparently a letter went out to employees but retirees received NOTHING. I just don’t know what to do! It is very difficult.
City leaders emphasized a wellness program as the key to getting health insurance expenses under control.  They committed to such a strategy in 2009 and reemphasized it in November 2010.

Considerable discussion was held on the wellness program, health risk assessment (HRA) services, etc.

It was a specification in a January 2011 request for proposal.

The City is interested in establishing a successful wellness program.  A baseline health risk assessment with annual evaluations is requested
The RFP provided clinic history:

The Clinic averages 5400 patients per year, 1100 of those are Tom Green County employees who are eligible through an agreement with the City of San Angelo. The Clinic serves approximately 1400 employees (900) or retirees (500) and their insured dependents.

The City opened the Clinic in 2004.  Over the years it transformed into a family practice  operation.

Does ceasing the clinic's family practice nature mean the contractor needs more time to ramp up services?  Or is it a retrenchment by the city in managing its health care costs?  The City of San Angelo's risk shift to employees and retirees continues, the question is the pace of the next phase of the responsibility dump. 

It's difficult to know the City's health insurance plans, despite direct questions.  However, COSA has a clear track record of shedding health programs, as well as insured dependents.  What does the ongoing wellness gap mean?  Fat, fit or futile leaders...

Update 8-28-11:  The City committed to a wellness program in 2004, when Harold Dominguez was Interim City Manager.   The minutes from September 2004 state "Mr. Barta applauded Council's vision in authorizing the establishment of the Health Clinic noting it had a significant impact on negotiations. He stated the Clinic was continuing to average 14 patients per day and that plans were being developed in the area of wellness and health education programs."  Alvin New became Mayor to implement things that had been talked about.  Wellness is clearly one of those things.

Thursday, June 16, 2011

Obama's Performance Judged: "No Learner"

President Obama said, "I'll ultimately be judged on my performance."  Yes, he will.  Two years ago Obama said "if pay for performance works," but never researched the answer  He could call Alfie Kohn, who highlights America's Skinnerian world of punishment/reward and its concomitant dysfunction.  Kohn points out our society's three decade period of denial. In spite of a track record of long term failure, President Obama floors the P4P pedal for education and health care.

I judge Obama a "no learner."  Money is not people's primary motivator.  It ranks 5th or 6th on a list of workplace attributes.  Money becomes a dissatifier, when it is too little.  It's also an indicator of poor working conditions, a bad boss, inadequate staffing. lack of teamwork.  In effect:  "You can't pay me enough to do this job."  

Rewards don't work.  They punish.  Fear and scarcity are the primary foundation of reward/punishment systems.  These encourage individual compliance, not creativity and collaboration.  Once received, the absence of reward feels like punishment.

Rewards rupture relationships, especially incentives offered competitively.  Artificial scarcity turns people into winners and losers, with concomitant bad feelings.  Scarcity and losing applies at a collective level, be it a department, division or organization.

"If you want people to do a good job, give them a good job to do."-- Edwards Deming

"Pay people well, pay people fairly, and do what you can to put money out of their minds."--Alfie Kohn

The Hidden Costs of Rewards by Doug Jenkins described 28 studies on financial incentives for simple tasks done in a short time frame.  Only 5 of the 28 looked at the quality of the work.  No study showed a positive impact of financial incentives on quality.  Those results were compiled in 1978.  Thirty three years later, the Obama team can't find it.  Surely a copy sits in the Library of Congress.

Corporate board rooms produced the most pure incentive compensation, stock options.  Nearly 30% of executives cheated by backdating stock option grants, i.e. stealing from shareholders.  This was a widespread practice over a decade.  What kind of person, already handsomely paid, cheats or steals to get more?  Wealth addicts.

Wealth addicts pretend money is the only valuable thing in life.  They do so to feel better about their addiction, their insatiable quest for more.  What if money junkies had President Obama's ear, even wrote policy? How might that distort things?

"Pay for performance is a toxic daisy chain."--Dr. Don Berwick.  

As Obama's Medicare Chief, Berwick is charged with implementing a Rube Goldberg P4P scheme.  One word summarizes the effort, complexification.  Rewards are effective for getting temporary compliance for simple work within the control of an individual.  Add complexity, interdependence, creativity, problem solving, and higher order decision making and rewards fail.  In health care, which is highly interdependent, competitive incentives are guaranteed to suboptimize.  Berwick cited how a Houston hospital refused to share a clinical breakthrough to retain "competitive advantage."

Toxic daisy chain.  One failure of a theory requires its review and modification.  Taking pay for performance off its pedestal is long overdue.

Obama had the answer before his very eyes and couldn't see it in healthcare.  Hold the Mayo...

Update 9-28-13:  Billionaire Bill Gates proved his No Learner status with his education schemes which focus on extrinsic motivation and giving more work to "star performers".  I suspect Alfie Kohn is smiling somewhere.  What's missing?  Profound knowledge.

Update 9-29-13:  AJC reported Alfie Kohn "blames former President George Bush and President Barack Obama, along with Bill Gates and corporate America, for creating a compliance-driven, test-fixated education system under a mantra of global competitiveness and accountability."  Besides killing kids and teachers intrinsic desire for learning, extrinsic motivation schemes result in widespread cheating.  Atlanta Public Schools know this well.

Update 4-20-14:  Chicago crime statistics were fudged under Mayor Rahm Emanuel, a longtime proponent of extrinsic motivators.  The "drop" puzzled Chicago citizens and police officers.

Update 6-15-14:  The Veterans Administration experienced the widespread harm of extrinsic motivators and exhorting people to meet a waiting time standard with no method.  The crime is that of management in implement reward systems that distort behavior.

Update 11-28-14:  It seems the propensity to cheat within extrinsic reward systems grows as the potential cheater is disgusted.  It's not clear how healthcare workers, with a very high disgust threshold, are impacted.

Update 12-24-21:  Committing fraud to garner performance bonuses resulted in U.S. military families getting substandard housing service from contractor Balfour Beatty.  The fraud ran from "around 2013 to around 2019."

“Instead of promptly repairing housing for U.S. servicemembers as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses."

Update 5-30-23:  HuffPo's "The Golden Age of White Collar Crime" stated:

32 percent of American managers said they were comfortable behaving unethically to meet financial targets.

Wednesday, June 15, 2011

Angelo State's New "Leanness & Meanness"

The Standard Times reported:

Kent R. Hance, chancellor of the Texas Tech University System, told the San Angelo Chamber of Commerce that Angelo State University and other members of the TTUS, will be "running lean and mean" in the wake of state funding cuts to higher education.
Is it lean or mean to:

1.  Say there will be no layoffs, then cut six secretarial positions

2.  Emphasize distance learning, while axing internal resources in that arena

3.  Eliminate web design classes, while emphasizing "real world" skills training

4.  Not renew lecturers with outstanding student evaluation scores, while calling for quality teaching

5.  Tell honors students they get too much money, cut the benchmark program, then temporarily reinstate it.

6.  Double class sizes, while still bragging on the old faculty student ratio.

7.  Have a widespread staff reduction when the University's accreditation is at risk.

8.  Keep budgeted administrative raises, because it's hard to find "good" administrators

To longtime ASU staffers, leaders look more than "lean and mean.  They look "willy and nilly."  ASU threw out their strategic plan, sequestering four Vice President's to make the budget balance.  The Four VP's of ASU's Apocalypse have less than 7 total years ASU.  To take into account tradition, one must first know it.

Leaders get what they want.  Texas legislators set up Governor Rick Perry for a Presidential run with a bone crushing budget.  Hance and ASU President Rallo publicly complied with politicians' wishes.

There are multiple methods for lean and mean weight loss.  Did TTU leaders use a laxative to lose $7 million so quickly?  Fecal matter rolls downhill, even in a West Texas drought.  It just gets a little dusty.

Watch where you step.  There might be an ex-ASU staffer down there.  Give them a hand up, if you get the chance.  Maybe, even help 'em wash up.

Monday, June 13, 2011

City of San Angelo Health Insurance Update: Straight from ...

After meeting with Mayor Alvin New in April and discussing health insurance, I submitted questions to City leaders.  Public Information Officer Ty Meighan and Human Resource/Risk Management Director Lisa Marley kindly responded. Lisa's answers to my questions are below, after which I comment:

1. How much is the city projected to save from 192 people (employees, retirees and dependents) dropping coverage on January 1, 2011?

The City only saves contributions on the employees or retirees who dropped coverage all together. There is no savings when dependents are dropped (except for savings on any claims being submitted). There were 45 who dropped coverage altogether (37 active, 4 pre-65 retirees and 4 post-65 retirees). The annual savings in premiums for those 45 people is $189,603.96, which simply remains in the self-insurance fund and is used to either pay for claims or for new employees who enroll during the year.
Comment:  The City chose not to share any savings from experience in light of dropping 147 dependents. HR states the City is paying premiums to their third party administrator for people who aren't enrolled (by having the $190,000 remain in the insurance fund).  If this is happening, the City improved health insurance funding for employees remaining in the plan.

2.  How much Early Retiree Reimbursement Program (ERRP) funding does the city expect in 2011 and how much are they willing to apply to health insurance cost increases?

The estimates have not changed: low estimate is $91,217, high estimate is $383,915. All of the ERRP money will return to the self-insurance fund. HR will present the funds to City Council and the Council will determine how to use these self-insurance funds.
Comment:  City staff are yet to make a presentation on ERRP to City Council in a public meeting.  Given "the estimates" are from July 2010, a year's experience produced no new data.  After qualifying for ERRP last August, the City has been unable to file a reimbursement claim on its own. Other Texas cities received ample ERRP reimbursement.  COSA sought a bid for filing assistance from its third party administrator (BC/BS of Texas).  The contract may still sit in the legal department.  HR is silent on COSA submitting an ERRP claim., which it may not want to do, should it wish to switch health insurance plans.  This leads to my next question

3. From a meeting with Mayor New, I understand he has a different vision for health insurance,  It's along the lines of pension models, defined contribution vs. the current defined benefit.  I know Town & Country used what's known as a "mini-med" under Alvin New. Does the city plan on switching to a different type of health insurance plan for 2012?

An insurance review committee was appointed by the City Manager in January 2011.  They are working with the Holmes-Murphy Consultant to prepare an RFP that will go out for bids on health insurance on July 1. All plans/models will be considered based on the criteria that will be established by the Committee. RFP is scheduled to close on August 31, 2011. Following the September review of the bids, a recommendation will be made to Council in October, with open enrollment scheduled for November 2011.
Comment: The City sprung draconian health insurance increases for dependents on employees/retirees at the last minute in 2010.  They have a chance to make their thinking clear.  Let's hope leaders are more open and transparent.

4. What are the city's budget assumptions for health insurance for 2012?

Budgets for 2012 are still being prepared.  Nothing will be firm on health insurance until the RFP is completed.
Comment:  Nothing should be firm until City Council hears options, considers public input and makes a decision.   At least, I hope that's the case..

Tuesday, June 07, 2011

Rube Goldberg Health Deform

Nearly two years ago, I offered two predictions.

1.  Reform sets the table for employers to shed that pesky health insurance benefit.

Marketwatch reported 30% of employers will drop health insurance as a benefit when health reform is enacted in 2014.  The Congressional Budget Office's projections for health reform already indicated a seismic shift in responsibility for health care coverage.  How long can safety net hospitals survive in this dire environment, where employers pull back from the table?  That leaves a tapped out Uncle Sam and individual citizens, the likely bag holder.. 

2.  Incentive pay will make things worse

Medicare Chief Dr. Don Berwick once called pay for performance a "toxic daisy chain."  The same poison that infects executive suites and board rooms will suboptimize health care delivery.  Ironically, nearly 30% of executives cheated or by backdating stock options, supposedly the most pure form of pay for performance.  This mendacious leadership behavior occurred over a twelve year period.  Surely, a sizable chunk of doctors and nurses will take the unethical executive route to pay maximization

Customer satisfaction surveys are the means for incentivizing providers to do a good job.  Extrinsic motivators may improve performance in simple tasks under the control of one person, but they do great damage to complex systems requiring collaboration.  It's bad management, in concept as well as application

Medicare revealed Rube Goldberg complexification in it proposed rules for accountable care organizations (ACO's).  Providers don't know who their ACO patients are until the plan year is up.  Think of the wooden board with lots of pins.  A ball falls, striking the first pin and bouncing in various directions as it makes it way to the bottom.  Which ACO bucket will it land in?  Who will garner the prize?

Managed care had to reach 40% of a doctors practice to shift provider behavior.  Under that system, they clearly knew who their patients were.  ACO's will have a list of maybe patients, free to go anywhere that accepts Medicare.  The plinking ball will retrospectively assign them to a health care system, rewarding or punishing that provider for their ability to generate savings.

The rules say providers will continue to be paid "fee for service," only Medicare pays by DRG, not discounted, much less full charges.  DRG payment was implemented to address incentive problems with fee for service. 

Providers must save Medicare 2% to be eligible for cost sharing money.  Since Medicare continues paying "fee for service," savings must come from reduced utilization or from allowable costs in the Medicare cost report.  One of those costs is health insurance, which averages 13%,of payroll, but can be as high as-20%..  Health care salaries and benefits run 45% of total costs.

Thus, an ACO could save 5.85% by doing one thing, eliminating the employee health insurance benefit.  Adjusting for the 8% payroll tax for employers dropping their health insurance plans, savings stand at 2.25%, enough to meet Medicare's ACO savings target. 

ACO's also have to submit data to Medicare on 65 quality parameters.  One rule states providers must be in the top 30% on all 65 measures.  While process outcomes are not probability and many of the measures are interdependent, a coin toss came to mind.  What's the likelihood of tossing 65 heads or tails in a row? The same probability that Medicare's extrinsic motivation schemes will make things better.  Find a coin and start tossing.

Lucky citizens will have their safety net hospital survive until 2014.  I wish good health to the rest.

Update 6-8-11:  McKinsey came to the same conclusion I did, only two years later.  McKinsey stated "Our survey found, however, that 45 to 50 percent of employers say they will definitely or probably pursue alternatives to ESI in the years after 2014. Those alternatives include dropping coverage, offering it through a defined-contribution model, or in effect offering it only to certain employees."  What role will their study have in the second wave of the great health insurance tsunami?  Mayor Alvin New of San Angelo told me he wanted to move to a defined contribution model for health insurance.  It remains to be seen how that interest expresses in budget reality.

Update 9-3-11:  DeParle wrote a stinging defense of her health care plan.  She failed to mention her residual private equity, health care stakes, which continued paying off in public office.

Update 2-10-14:  Obama delayed the employer mandate until 2016 for firms with 50-99 employees.

Update 11-20-14:  Incentive pay making things worse is the subject of a NYT op-ed.

Update 11-25-14:  Incentives are based on meeting numbers and people will lie to garner the prize, be it money or acclaim.

Update 3-15-15:   Hospitals are using big data to identify high dollar patients.  They put an individual's data into a "predictive model" and out comes a risk score.  Like Wall Street models that imploded, healthcare algorithms come from mining existing data, i.e., after this, therefore because of this.  They may work for segments of the population, like pharma studies done on white males, but they won't apply to, much less benefit everyone.  Sadly, Bloomberg reporters continued the fiction of hospitals being paid fee for service.

Update 3-15-18:   Skyhigh healthcare costs differentiate the U.S. from the rest of the globe.  PPACA's cost curve bent in the wrong direction, acceleration.

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

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 8-14-20:  Health insurers saw second quarter profits double in the midst of a pandemic.  Rebates anyone?

Update 4-3-22:   The average health insurance premium more than tripled for a family plan since PPACA passed in 2010.  Cost curve bent but in the wrong direction.  Concave went convex.   

Sunday, June 05, 2011

Bad Dream: ASU's Allen Hosted Secretarial Apprentice

Let me be clear, this is a dream story, not reality. Normally the host of The Apprentice waits until the end of the competition to say "You're fired!"  That wasn't the case in my nightmare.

The antagonist in my dream was Angelo State University Vice Provost and "Queen of Mean" Nancy Allen.  She stood at a podium before six secretaries, announcing, "Your jobs have been eliminated."

She magically produced a platter of sandwiches and carried them around the room.  The first secretary took a bite and gagged.  "This tastes like dog crap."

"That's because it is," Allen replied before cackling like the Wicked Witch.  "There's good news my sweets.  You can apply for three new office professional jobs, or other positions that may arise."

My dream shifted to The Junell Center/Stephens Arena , the selection site for new office staffers.  ASU's Four Vice Presidents sat with the backs to the candidates ready to go "mano a mano" on a computer keyboard.  Nancy Allen acted as host.  She introduced the first fight pairing, Beverly and Dia.

"In this corner is Beverly, a conscientious office professional with honest intentions and a soothing phone voice, Beverly knows over 10 software programs and has already covered for her worthless boss five hundred times. Originally from Mertzon, she's worked at ASU for twenty years, always looking for that big break, which I assured she never got."

"Her competition is Dia, a 23-year-old office professional from Rowena who is half German and half Czech. Her career aspiration has been a soap opera actress on RamTV, but her considerable typing talents may steer her elsewhere. A life-long bookworm, Dia also writes novels and children's books, which by the way are crap.  She disgusts me!"

Beverly and Dia played a keyboard duet.  Beverly's composure and experience showed early, but it didn't take long for Dia's youthful speed to wow the crowd.  .

Judges used their ear to evaluate candidates, a bad sign given ASU's "tin eared" VP group.  Limbaugh took copious notes.  Blose stared toward the ceiling with a faraway look.  Reid used a spreadsheet with explicit criteria to rate the competitors.  Valerio took IPhone pictures of the younger lady's knees moving nervously in and out.

The keyboards stopped, as did Valerio's flashing.  The crowd roared, until Nancy took control with a "Shut the hell up!"  Allen followed up with a string of invectives.  When things couldn't get more bizarre, Nancy fired Blose and sat in his chair.  Beverly and Dia glanced at each other, joined hands and ran like the wind. I chased them for an interview, but saw the back of their heads as the pair squealed out of the parking lot in a blue convertible

My dream made me wonder about the key to future employment at ASU?  Note:  Any similarities between my dream and popular television shows are coincidence.  Fiction has its fractal side.

Thursday, June 02, 2011

Vought's $35 Million Agreement Complied with HB 2457

The Houston Chronicle reported:

State lawmakers moved to make two economic-development funds — the Texas Emerging Technology Fund and the Texas Enterprise Fund - more transparent in the wake of a recent audit that was critical of the tech fund's oversight.

The bill says any grant agreements must contain provisions requiring the creation of a minimum number of jobs and deadline for the job creation. Recipients who fail to meet the job creation performance targets will have to repay all or a pro-rated portion of the grant.

The bill awaits the governor's signature. Separately, both programs received all of their unexpected balances and interest earnings for 2012 and 2013. For the Texas Enterprise Fund, about $148.5 million was appropriated for 2012 and $1.5 million for 2013. For the Texas Emerging Technology Fund, about $139.5 million was appropriated for 2012 and $1 million for 2013.

House Bill 2457 purports to fix longstanding holes in Governor Perry's Texas Enterprise Fund.  Only it doesn't address one of Rick Perry's most egregious cases.

The Carlyle Group's Vought Aircraft Industries promised Texans 3,000 new jobs in 2004 in return for $35 million from the Texas Enterprise Fund.  Vought shelved plans to move operations from Nashville and Florida to Dallas.  Then they located Boeing 787 Dreamliner production in South Carolina.  They failed to meet their promises by December 31, 2009.  Over the five year period Vought cut 35 Dallas jobs, a $1 million incentive per job lost. The agreement had a clawback or repayment plus interest provision

Vought refunded Texas $900,000 per their SEC filing, while the Governor's report credited Vought with a $970,000 repayment.  That's far short of $3.5 million plus interest owed to Texas taxpayers.

What happened?  Governor Perry renegotiated the agreement in secret as Carlyle put Vought up for sale.  Perry fabricated results by claiming Vought's 3,000 existing jobs were new jobs and adding an economic impact column using a job multiplier. Vought's CEO admitted an internal liquidity crisis  in ramping up 787 production, so Texas' $35 million in financing came in handy.  TEF is pubic money incentivizing jobs.  It's not intended to carry an employer through tight cash flow periods.  That's what Rick Perry did for at least one Carlyle affiliate.

HB 2457 is silent on the Governor's ability to renegotiate TEF contracts in secret and contains no punishment for fictional results.  Problems with Perry's pet funds remain.

(click on the image above to make it larger)

Wednesday, June 01, 2011

Texas May Divert DSH/UPL Funds

Senate Bill 23 has the state seeking a Medicaid waiver.  It's clear the intent is to offer a lesser benefit to citizens, while leveraging more federal money.  SB23 dumps state sponsored kids coverage on the CHIP program, which receives federal funds.

The bill sets up the Health Opportunity Pool Trust Fund.  The executive commissioner may use Medicaid disproportionate share and/or Upper Payment Limit money in the waiver. 

Safety net hospitals receive DSH & UPL payments to make up for Medicaid being such a poor payer.  These funds could be in jeopardy,  Shannon Medical Center received $15.5 million in DSH/UPL funding in 2010, according to Fitch Ratings.  What happens is if a portion, say half, gets diverted?

The state says it wants to reduce the number of people without health coverage and maintain and enhance the community public health infrastructure provided by hospitals.  These words ring hollow for anyone watching Legislators ignore the plight of the uninsured for over a decade while hospitals cost shift to make up for Medicaid's woeful reimbursement. Other payors ensure hospitals survive.  Many would close if Medicaid was their only source of business.

Texas safety net hospitals have to survive until 2014, when the only real help from PPACA arrives.  They may negotiate SB 23 minefields in the interim, thanks to the legislature living within its meanness.

Update 6-9-11:  The special session is entertaining SB 7.  It is yet to take up SB 23.

Texas to Dump 6,500 Families from State Sponsored Health Insurance?

The Texas Legislature's Special Session agenda includes Senate Bill 23.  Section Four of SB23 calls for Texas to eliminate the State Kids Insurance Program within the Employees Retirement System of Texas.  Should the bill pass nearly 6,500 families would be impacted.   Dumping dependent children from state health insurance rolls saves money, but the ka-ching comes from shifting kids to CHIP, which is federally funded.

Abolishing the SKIP program and enrolling eligible children in CHIP is estimated to have a net savings of $2.9 million in All Funds in fiscal year 2012 and $3.0 million in All Funds in fiscal year 2013 and subsequent fiscal years; estimated savings to General Revenue Funds ($13.0 million in fiscal year 2012, $13.2 million in fiscal year 2013 and subsequent fiscal years) are higher due to the federal matching rate for CHIP, which results in a smaller proportion of funding from General Revenue Funds in CHIP than in SKIP.

Gov. Rick"Say No to Washington" Perry will happily milk $20.3 million from Uncle Sam.  Texas may join the City of San Angelo in shifting the burden of dependent coverage from the employer to a tapped out Uncle Sam.  City Human Resources passed out CHIP applications to staff facing draconian premium increases for dependents.

Poser Perry postures as anti-Washington, but his track record shows otherwise.  He pandered to 1001 Pennsylvania Avenue, home of The Carlyle Group.  The occupants owed Texas taxpayers nearly $35 million, until Perry renegotiated the deal and Carlyle sold Vought Aircraft Industries.  That pool of money won't return to help reduce the stress.  Kids must pay, so adults can play with their spoils.