BusinessWeek's Lead Story Highlights Health Care Deform

Health insurers quietly targeted conservative Democrats to get their way in health reform. While the "Blue Dogged" House passed three health care bills, the issue is stuck in the Senate. Reform is held up by "moderate" Democrats, better known as Corporacrats. Baucus, Bayh, Conrad, Nelson I, Nelson II, and the Senators from the Walmart state gum up the works to benefit For-Proifteers. Meanwhile, the White House and enforcer Rahm Emanuel defend Corporacrats from ads by progressive groups.

The BusinessWeek piece is titled "Health Insurers Have Already Won." It states:

The likely victors are insurance giants such as UnitedHealth Group (UNH), Aetna (AET), and WellPoint (WLP).

WellPoint's Board includes Susan Bayh and William H.T. Bush. Susan is the wife of Indiana Senator Evan Bayh. Flipping her stock options grossed the Bayh family over $1.5 million the last five years. William H.T. Bush is known as "Uncle Bucky" to President George W. who never saw an insurance company he didn't like.

UnitedHealth's board includes Gail Wilensky, an expert who testified before Max Baucus' Senate Finance Committee. She failed to disclose her board role or her $20 million in health care stock holdings in her public testimony.

The industry has already accomplished its main goal of at least curbing, and maybe blocking altogether, any new publicly administered insurance program that could grab market share from the corporations that dominate the business.

The story details a meeting between UnitedHealth CEO Steve Hemsley and Senator Kent Conrad and the introduction of co-ops. Conrad denies Hemsley was the source of his Judas bait & switch, but it is front and center in the Senate Finance Committee's plans. The sausage making update finds:

The several competing bills pending in Congress would guarantee all Americans access to health coverage, addressing the plight of the 47 million who are now uninsured. Congress plans to achieve that by expanding Medicaid, the government program for the poor and disabled; requiring insurers to accept all applicants regardless of their health; and mandating that everyone purchase coverage.

State governors say they can't afford to take on more Medicaid enrollees. Many states are cutting Medicaid eligibility and uncovering services, i.e., shifting costs back on low income patients. Even in "covering more people", risk is being shifted back to the individual through higher deductibles, greater co-pays and fewer services covered. It's a back door way of dumping insurance company risk, a familiar refrain for the For-Profiteers. The BW piece drives this home:

In late spring, the Finance Committee was assuming a 76% reimbursement rate on average, meaning consumers would be responsible for paying the remaining 24% of their medical bills, in addition to their insurance premiums. Stevens and his UnitedHealth colleagues urged a more industry-friendly ratio. Subsequently the committee reduced the reimbursement figure to 65%, suggesting a 35% contribution by consumers—more in line with what the big insurer wants. The final figures are still being debated.

Unless there is catastrophic stop-loss coverage, medical bankruptcies will remain common. The public is being lied to on so many fronts. President Obama urgently mentions 14,000 people losing insurance coverage every day. Yet, expanded coverage for the uninsured won't begin until 2013. Republicans and their scare tactics regarding living wills, a twenty year old patient right, is just as disingenuous. The public is not being told the truth.

Both political franchises wish to abdicate their responsibilities for leadership by delegating to a MedPac, an extra-legislative body. Elected leaders don't have the cohones to do their job. Instead they pander to their corporate sponsors, many with disturbing connections. Page 4 of the BW article mentions UnitedHealth's huge stock option backdating scandal, Arthur Anderson (Enron's partner in accounting crime), Fannie Mae (also guilty of accounting shenanigans and sucking up billions in taxpayer bailout), and ethically challenged Tom Daschle of Alston & Bird (a DC lobbying firm with Tom Scully--architect of Big Pharma's Medicare Prescription Plan). Feel better?

Corporate sponsored health care deform is on the way. Expect to pay more on behalf of the For-Profiteers. Thank your Congressional lackey by throwing him/her out of office in 2010. Judge President Obama by his actions, not words.

Update 1-29-18:  Health care remains un-affordable for many.

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 10-15-18:   After bending the cost curve way higher citizens of both political parties agree our healthcare system is broken and unaffordable.

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 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.   

Rep. Mike Conaway's Odessa Open House on For-Profit Health Care

If there is one health care open house where regular citizens should raise Cain, this is it. Representative Mike Conaway (R-TX) serves a district with a high percentage of uninsured workers. The region had less than 5% unemployment and over 25% without health insurance. Given the 2008 financial implosion and subsequent layoffs, those numbers are likely much higher.

Health care has long been a hot topic. The San Angelo public excoriated Conaway at his open house two years ago. The main beef was Veterans health care. Mike promised to do better, but little has been seen of him since that dicey public meeting. MyWestTexas reported on his upcoming town hall session on health care:

Congressman Mike Conaway will hold a healthcare legislation town hall meeting at 8:30 a.m. Tuesday (Aug. 11) at East Campus Auditorium of the Odessa Regional Medical center, 515 N. Adams.

Space is limited. Please RSVP by Aug. 10 by calling 582-8399 or contacting jgore@iasishealthcare.com.

Odessa Regional Medical Center is part of a for-profit hospital chain. Iasis Healthcare has 15 acute care hospitals and a health plan. The company is owned by several private equity underwriters (PEU's). Texas Pacific Group holds 74% of Iasis. SEC filings show:

David Bonderman, James G. Coulter and William S. Price, III are directors, executive officers and the sole shareholders of TPG Advisors III, Inc. and TPG Advisors IV, Inc. TPG Advisors III, Inc. and TPG Advisors IV, Inc. through their ownership of TPG, which owns a controlling interest in IASIS Investment, may be deemed to beneficially own all of the shares of preferred stock and common stock owned by IASIS Investment.

David Bonderman gave over $900,000 to mostly Democratic political groups according to Open Secrets. A few Republicans, like Eric Cantor (R-VA), made his list. Rest assured for-profit health care has most moderate Democrats and Republicans in their pocket.

Mike Conaway's selection of an Odessa Iasis facility speaks volumes about his health care positions. I don't expect our CPA representative to mention Iasis' $75 million in annual interest expense or the nearly $500 million in debt coming due in 3-5 years. Surely, Mike won't mention the $5 million management fee the PEU shell charges the company or their stellar third quarter results.

Net revenue--up 13%
Adjusted EBDITA of nearly $79 million--up 13.3%
Net earnings of almost $21 million--up 40%

Conaway will remain AWOL on health care, pulling for for-profiteers while his constituents suffer. The GOP has bipartisan support from Corporatist members of the Blue team. Who knew they could agree on anything?

Cover Ups Are Long American Tradition

Congressman Mike Conaway (R-TX) leads the charge in keeping photographs of detainee abuse secret. There is precedent for covering up America's horrific actions in time of war. It happened after the U.S. dropped nuclear bombs on Japanese cities, Hiroshima and Nagasaki. The Japanese chronicled the devastation in black & white. When the U.S. occupation began, an American team shot film in Technicolor. HuffPo reported:

The public did not see any of the newsreel footage for 25 years, and the U.S. military film remained hidden for nearly four decades.

The negative of the finished Japanese film, nearly 15,000 feet of footage on 19 reels, was sent off to the U.S. in early May 1946. The Japanese were also ordered to include in this shipment all photographs and related material. The footage would be labeled SECRET and not emerge from the shadows for more than 20 years.

Still, the question of precisely why the footage remained secret for so long lingered. Here (the Pentagon's Daniel) McGovern added his considerable voice. "The main reason it was classified was because of the horror, the devastation," he said. "The medical effects were pretty gory. The attitude was: do not show any medical effects. Don't make people sick."

President Obama and Representative Conaway, don't make people sick with America's disturbing acts of war. Don't soil our beautiful minds. Will we be ready between 2034 and 2049 for visual documentation of the horror, gore and medical effects perpetrated on detainees? Will we retch when we find women and children drawn into America's abusive clutches?

Bury it, so the fictions can be maintained. How long before any person in custody is subject to rough interrogation methods? How long before citizens are held without habeas corpus? Think I'm a bit over the top? The Bush administration frequently referred to "tactical" nuclear weapon use. Rough methods could become a similar tactic.

Rahm the Blue Enforcer

White House Chief of Staff Rahm Emanuel warned the progressive wing of his party to stop running ads against corporate sponsored Democrats. The NYT reported:

Mr. Emanuel showed up this month amid internal tension over health care. Asked about liberal advertisements aimed at Democrats in conservative districts, he delivered an obscenity-laced tirade about the senselessness of attacking each other, participants said.

Emanuel has a history of slamming carving knives into wooden picnic benches, while shouting "dead" in reference to political opponents.

The issue is health care reform, where infamous ads abound. Many are run by corporate for-profiteers, intent on spinning change to their advantage. Many "moderate" Democrats are majorly funded by these same firms. The White House Health Czar, Nancy-Ann DeParle, has an impressive for-profit health care background.

Why is Rahm Emanuel reading the riot act to progressive groups? Consolidating power is the prime objective. Machiavellian Emanuel works to achieve absolute power for Corporacrats. He defends Blue Dogs, while dining with financial barbarians at the Blue Duck Tavern. Greed applies to money and power. Rahm wants both very badly.

Argentina's Newest Financial Firecracker is American Ambassador

President Barack Obama nominated Vilma Martinez, a respected civil rights leader, as ambassador to Argentina. A quick review of her background revealed her heavy hitter financial credentials. Ms. Martinez sat on the board of numerous companies. Below is her latest annual board compensation from three firms:

Fluor--$226,004
Burlington Northern Santa Fe--$267,577
Anheuser Busch--$202,166

They total nearly $700,000 in annual board pay. What about her stock holdings in those same firms?

Anheuser Busch sold out to InBev, netting Vilma $2.9 million. Her holdings in Fluor and Burlington Northern amount to over $3 million. Due to her political appointment, Mrs. Martinez may need to sell her holdings. She'll get a capital gains tax deferral, courtesy of Uncle Sam.

Hank Paulson benefited from this rule as George W. Bush's Secretary of Treasury. White House Health Czar Nancy-Ann DeParle did likewise from selling her vast holdings in a variety of for-profit health care firms. The latest beneficiary will head HHS's IT. He'll get a deferral on his $45 million in stock holdings.

It's interesting to see the more things change, the more they stay the same. On the bright side, Vilma's stepping down from the Fluor Board opened a slot for Nader Sultan, Carlyle Group's Middle East-North Africa Senior Adviser. Carlyle's David Rubenstein predicts big rises in oil prices, as high as $200 a barrel oil in a few years.

America's elite contributes to the two political franchises. In turn they get czar posts and ambassadorships, complete with capital gains tax deferments. They can game the system to benefit fellow Corporatists. It's a disturbing pattern, one perpetuated by a branded change agent.

The question is how will Vilma Martinez's corporate credentials manifest in Argentina? Some believe the American Business Mafia acted badly in Central America, with a Chiquita Banana-CIA redux. This time it was in Honduras (2009), not Guatemala (1954) or Chile (1973). Note: In 2007 Chiquita Banana paid a $25 million fine for sponsoring terrorists in Colombia. No Chiquita execs ended up in a stockade next to Jose Padilla.

As for Argentina, stay tuned! Don't cry for me...

LCRA Sells Two Water Systems to Aqua America

The Lower Colorado River Authority sold two water systems to Aqua America, a publicly traded company. The two systems are the Harper Water System in Gillespie County and London Water System in Kimble County. Combined they serve 480 people. Aqua America paid $330,000 to the LCRA. It's not clear the value of the assets acquired or the size of the revenue stream.

However, it is crystal clear that Aqua America is in it for a profit. Consider their recent earnings report:

Aqua America Chairman and CEO Nicholas DeBenedictis said, "I am pleased that the Board of Directors has confidence in the company's long-term strategy as evident by the 7.4 percent dividend increase. This is the eleventh consecutive year we have been able to increase the dividend above our stated 5 percent target."

DeBenedictis continued, "Considering the unfavorable weather and the economic slowdown, we are pleased with our ability to continue to grow earnings. The efforts of Aqua America's management team to limit expense increases, recover capital investments through rate relief, and continue to acquire new water and wastewater systems has the company on track to increase net income again year over year for the tenth consecutive year."

What was the unfavorable weather? DeBenedictis said:

"The Philadelphia area, for example, had 16 days of rain in June, which was more than twice last year's number, while for the quarter there were 45 days of rain versus just 29 days in 2008. Rainfall, especially frequent rainfall, leads to less water usage, which results in less revenue. The temperature in many of our service areas in June was also cooler than normal, resulting in less lawn watering."

The CEO best not use such language in West Central Texas. His "unfavorable weather" is a gift from the heavens. Rain happens to refresh the watershed and aquifers (from which the LCRA and now Aqua America draws water to sell).

What happens when rain squashes revenues? Aqua American asks for rate increases.

Aqua America continued to receive rate awards in the quarter and has been granted rate relief to date in 2009 designed to increase annual operating revenues by $27.2 million. These include awards in Pennsylvania, Ohio, New York, Florida, Indiana, South Carolina and North Carolina as well as infrastructure improvement surcharges in Illinois, Indiana, Ohio, and Pennsylvania. The company currently has collective rate requests pending in Pennsylvania, New York, Indiana, Maine, Missouri, Florida, and Virginia totaling $9.2 million and expects to seek additional rate relief of approximately $50 million in 2009. The timing and extent to which rate increases might be granted by the applicable regulatory agencies will vary by state.

If the profit incentive for public water systems doesn't bother you, maybe Aqua America's garnering federal stimulus money will stick in your craw. Their press releases brag about receiving millions in loans and grants from the American Recovery and Reinvestment Act of 2009. How much of Aqua America's $300 million in infrastructure program funds will come courtesy of the taxpayer?

What about the seller of the Harper and London Water Systems?

LCRA is a Texas conservation and reclamation district operating with no taxing authority.

The LCRA could be viewed as a co-op, providing a variety of needed public services. This co-op sold its small water and waste water operations to a for-profit firm. Their website offers no information on the sale. It says nothing about the costs or benefits for people in Gillespie or Kimble Counties.

This development bears watching, especially as Aqua America hopes "to grow here." It could shed light on the relationship between co-ops and their for-profit brethren, a big discussion in the health care reform debate. It's also a timely topic in the infrastructure arena.

Capitation and Managed Care Return as Global Payments and Accountable Care Organizations

Massachusetts covered 97% of citizens under its requirement that residents purchase health insurance. The state assists residents with health coverage based on household income. However, Massachusetts doesn't like the cost. It plans to shift payments from fee-for-service. NYT reported:

Instead, primary care physicians, specialists and hospitals would group themselves into networks that would be responsible for a patient’s well-being and would be compensated with a flat monthly or annual fee known as a global payment.

Global payments, it is thought, would reward health care providers for keeping their patients well rather than for merely treating their ailments. If the cost of treating a patient was less than the global payment, the provider networks, called accountable care organizations, would keep the difference as profit.

It is thought? America did this in the 1990's. It was called capitation and payments were made to managed care organizations. It produced widespread dissatisfaction by those covered. Eventually, businesses moved away from managed care due to employee complaints.

Note Massachusetts' first step covered the vast majority of people. The second step may control costs via a "new authority that would be created to establish and oversee the new payment system." That's the Obama game plan, require people to buy health insurance and control payments via MedPAC, an unelected body.

The House Ways & Means Committee read their health reform bill. I noted from the CSPAN program that taxes associated with reform begin in 2011, while reform itself doesn't start until 2013. Watch Massachusetts. They are the model.

Don't believe politicians who say they'll improve on capitation and managed care.

Global payments are hardly a new idea, as the concept closely resembles the capitation model that incited a backlash by consumers who accused health maintenance organizations of skimping on care. But members of the Massachusetts commission said their plan would offer financial incentives for performance that would transform physicians into care coordinators rather than gatekeepers.

Financial systems for performance? Is this is addition to the incentive to provide care below the capitated payment? What will be incented? The last round saw:

Per-member/per-month visits, pharmacy utilization, specialty referrals, inpatient days, ER visits, and charges per case or visit.

It produced widespread physician resentment and a public outcry about perceived perverse incentives. Politicians promise better measures, but the result will be the same. Doctors and hospitals will focus on maximizing payment, not quality.

Recall how incentive pay imploded Wall Street. They packaged investment junk for the public. Goldman Sachs bet against the products held by their customers. It made them billions. Goldman is as unpopular as managed care at the moment.

Don't forget the decade of widespread stock option backdating by corporate executives. Stock options were the "most pure form" of incentive compensation. Yet, nearly 30% lied, cheated or stole.

Incentives distort, a clear theme in high quality care communities. Doctors are paid a fair salary and supported in a laser like focus on quality.

Global Payment and Accountable Care Organizations are repackaging, simple bait and switch. You can buy it. I'm not.

Update 8-3-14:  Restricted provider networks are back and people aren't happy, but there's no employer to complain to and the government doesn't listen to people..