Archive | January, 2010

The battle over the president’s health-care plan is over

31 Jan

Writing  in the January 30, 2010 Wall Street Journal, Peggy Noonan analyzes the Presidents State of the Union address.  Here is what she says about health care reform:

The president did not speak of health care until a half hour in. “As temperatures cool, I want everyone to take another look at the plan we’ve proposed.” Then, “If anyone has a better idea, let me know.” Those bland little sentences hidden in plain sight heralded an epic fact: The battle over the president’s health-care plan is over, and the plan will not be imposed on the country. Waxing boring on the virtues of the bill was a rhetorical way to obscure the fact that it is dead. To say, “I’m licked and it’s done” would have been damagingly memorable. Instead he blithely vowed to move forward, and moved on. The bill will now get lost in the mists and disappear. It is a collapsed soufflé in an unused kitchen in the back of an empty house. Now and then the president will speak of it to rouse his base and remind them of his efforts.

Hillary and Bill Clinton tried and failed to change health care in the U.S., no one else has given it a serious effort (except expanding it as in Medicare Part D and new benefit mandates on a regular basis) and given the current state of things, there isn’t anyone who is likely to try in the near term.  I am not sure the Obama effort is as dead as Noonan believes, but surely anything that does pass will be far less ambitious and likely just as unsuccessful in reforming much of anything.  We will attribute this failure to opposition by special interests, the every evil insurance companies, drug companies, hospitals and device manufacturers, but you also have to include the limited points of view for unions, employers, Medicare beneficiaries and the medical community. 

In reality, this effort failed because once again the fear of health care in all its complexity is an overwhelming fear of all Americans.  The status quo of health care, how it is provided and paid for is so ingrained in our society it simply cannot be changed. It is like the weather, everyone complains and nobody does anything about it. Years of experience tells employers that there is an irrational fear of changes in a health plan, premium increases, out of pocket limits, and of selecting the wrong plan.  Patients have a trust in their physician that is not based on any set of objective facts, they believe whatever their doctor or his staff say regardless of the fact they have no knowledge about a given health benefits plan.  Patients believe that each and every procedure, test, etc. should be covered by health insurance and when there is a denial it is always the fault and misdeeds of the insurance company that is to blame not the terms of a plan or any flaw in the treatment protocol.

Until all these attitudes and perceptions change the chance of true health care reform is remote.  Employers who have been struggling for decades with this problem will continue to do so and their efforts should include keeping a close eye on incremental changes that are likely to be a hallmark of Congress in the months and years ahead.

Good luck!

Here come the trains

30 Jan


When I was working, I traveled to Newark, NJ virtually every day for nearly forty-eight years.  Several years ago, someone came up with the brilliant idea of adding a new light rail train from one station to another in Newark, the idea being that people in the western suburbs would take the train all the way to Newark airport (changing trains three times in the process).  On my way to work the train passed in front of me while I sat at a light, this happened nearly every day and I was struck by one thing day after day; there was not one person riding this train yet day after day it sped along on its merry way as happy as Thomas.  Even years later hardly a person rides this multi-million dollar endeavor, especially any time after the early morning rush hour.  One projection was for 7,000 riders per day by 2010 and another on the NJ Transit site said the number was to be 3,500.  I could not find the actual number, but even with the 3,500 estimate it would take about 87 years to recoup the initial cost never mind the ongoing maintenance costs. It was, in fact, a good, impractical idea.

I like you Joe, but just you and me on this thing is starting to get old

Don’t get me wrong, I like trains; I think trains are a good idea, especially high-speed trains, but the key is not the government throwing money into large projects here and there, but rather is there a demand for new high-speed trains?  Will Americans give up their cars to drive from Orlando to Tampa or Miami to Tampa?  Take all the hassle of flying and transfer that to short trips around the US, is that the American way?  Then of course, we have the age old NIMBY.

President Obama’s administration is awarding $810 million to establish a high-speed passenger rail line between Madison and Milwaukee, though it will likely take years to establish the Madison to Milwaukee line and bring it up to 110 mph service. Additional hurdles could also still need to be cleared, such as approval by the Legislature’s budget committee. Scott Harmsen/Kalamazoo Gazette

TAMPA, FL — President Obama spoke to a roaring crowd of supporters at the University of Tampa Thursday.  He said the Florida High Speed Rail Project is the future of United States  transportation.

“There is no reason other countries can build high speed rail lines and we can’t,” Obama said. “That’s what’s going to happen in Tampa.”

As part of Obama’s new federal spending bill, Florida is  getting 1.3 billion dollars to build the first phase of the rail as early as next year.  The second phase could begin as soon as 2013 and reach all the way to Miami. 

At 120 miles an hour, hourly departures will speed travelers from Miami to Orlando in 90 minutes for about 50 dollars a ticket.

There is no reason other countries can provide universal health insurance and we can’t either, but that doesn’t seem to matter.  We keep forgetting that “other countries” are not the United States.  Fifty dollars a ticket, we are years and years away from the first person stepping onto this train and yet someone alredy knows what the ticket will cost (with or without subsidy)?

This new push for high-speed rail all sounds just grand, too grand, more Washington speak during a tough economy, and we have heard it all before.  Grand ideas should never be dismissed out of hand and neither should the idea of high-speed rail.  However, rather than being caught up in the rhetoric, the environment, the politics and the promise of jobs (someday in the future), we should be looking at the details, the real and ongoing cost, the practical problems and the demand for this grand idea.  Grabbing headlines may be fine for politicians, but when our attention moves on to something else, we are left with the mess and the costs to deal with. 

By | The Tampa Tribune

Published: October 27, 2009

TAMPA – Amtrak lost money on 41 of its 45 train lines in 2008, including a $145.23 per passenger loss on the Silver Star that serves Tampa on its New York-Miami run, a Pew Charitable Trusts research group reported Tuesday.

System-wide losses ranged from about $5 to $462 per passenger. The average loss per passenger was about $32, four times the $8 per passenger Amtrak computed using different methods, according to the study by Subsidyscope, which reports on how federal subsidies are used.

Curious isn’t it?

29 Jan

Isn’t it curious that we find it appalling that banks are doing everything possible to make a profit including leveraging cheap money? Isn’t that what a profit making institution is supposed to do?

Why are banks taking money to bail them out any different than the millions of Americans who cheat on their income taxes or those who have convinced themselves that being paid in cash somehow carries a different tax status than credit card sales or W-2 earnings?

Why are “big” bonuses that find their way back into the economy (and charity) different than taxpayer money thrown around as stimulus?

It just gets curiouser and curiouser. What would life be without politicians stirring the pot?

There is no joy in Mudville…

28 Jan


Mighty Barack has struck out.

Those of us who found little value and a lot of trouble in the Obamacare proposals should find no joy in health care reform going to the back burner as they say in corporate speak, or is it being placed in the parking lot?  No matter, we are still facing increasing health care costs, convoluted incentives to spend money and not to care about the cost and oh yes, people without coverage. Nobody is winning.

Doing nothing is almost (but not quite) worse than doing something akin to current proposals and doing only part of what is now on the table could be worst of all.

Health care reform is dead, health care reform is dead! What do you mean, I lose my coverage when this gig is up?

What we need is to get 20 smart knowledgeable people in a room and say, forget the politics, forget the oxen, and forget the special interests, what is the right thing to do that will:

Make the delivery of health care more efficient and assure consistent high quality no matter where the care is delivered, and

Assure that access to that care is available to all Americans on a fair and equal basis, and

Assure that the growth in the cost of health care remains at a reasonable pace in the future (reasonable meaning something akin to general inflation)

That is not asking too much is it.  I doubt I will be asked to be one of the twenty in this room, but I do know that what comes out of the discussions will mean:

  1. Tax laws will change
  2. Individual responsibility (for health and costs) will increase
  3. No health care services will be totally free
  4. Reimbursement methodologies will change
  5. Treatment protocols will be applied uniformly
  6. The concept of health insurance will be reinstated
  7. Drug companies, insurers, device makers and some providers will make less money (unless they become highly efficient and innovative).
  8. There will be a long transition period
  9. Nobody will be truly happy
  10. In ten years, no one will remember how the system used to work. 

Those who think victory is found in the defeat of health care reform are fools; the need for reform was never in question.

Another chance at change, do two changes make a no change?

28 Jan

Hold on there a minute, we are changing direction, no wait, we are making an adjustment, oh no we are going back to the fundamentals, err, we have reassessed our priorities…

It appears change really is hard, especially in Washington.  Those cynics among us, me included, never had much confidence in this change idea and we were often amazed that so many of the American people thought that anything in Washington politics would change simply because they elected a charismatic politician to the highest office in the land.  I saved the entire content of the Obama campaign website to see how well he did, but I have given up on that idea as I already know the answer.

Now we start the second year of this presidency and head off in another direction seeking change, or more accurately at this point perhaps seeking survival.  I would settle for some real bipartisan accomplishment, some transparency and a president that stops his rhetoric of blame and populist pandering that serves only to further divide American.  We are, after all,  in this together. 

Let’s lift people up to their full potential rather than tear down those who have achieved theirs.

Priority one… Two…three????

28 Jan

Yikes, health care reform is no longer the top priority, what am I going to write about, what are lobbyists to do, the consultants are going to be bored, conference calls will decline by 80% benefit departments will again be relagated to second fiddle and the economy with be in shambles for the lack of work this new lack of interest will cause.

On the other hand, CFOs are still obsessed with the retiree medical liability, nobody likes their premium and Medicare is going bust.

Oh well, we have more speeches to look forward to.

Health care reform on the ropes

27 Jan

This from the New York Times (1/27/1010:40pm) on the blog related to the Presidents State of the Union address:

“The strategy now, aides to the president say, is to let the issue fall below the radar, become less radioactive and hope to resurrect a scaled-back version at some point. “

And we thought health care reform was a done deal. Just as the average person is unable to objectively deal with health care and it’s costs so it seems that politicians have learned the same lesson. What people say they want and what they are willing to pay for it are too different things.

President to spend more time in the field

24 Jan

According to an article in the NYT the White House is going to send the President out into the country “considerably” more in 2010 than during his first years in office.

How is that possible? Seems to me he already is spending more time on the road than is desirable. Those who voted for change should be saying, get back to your desk and get to work and stop running for office. While you are there try sitting more in the center of the desk.

Apparently his advisors fear he failed to connect with voters. Could it be he and a growing number of voters are running on different tracks making any connection unlikely? Not surprisingly, it’s all about votes rather than doing the right thing for the Country, but that certainly isn’t anything new, Obama is just is better at making it sound good than most politicians.

The real question is just how gullable Americans are when it comes to lapping up the rhetoric again.

For Republicans the issue is how to not be positioned as the party of no and how to avoid the pitfalls of arrogance as as result of recent victories. I’m betting they blow it.

Real change

23 Jan

Here is a headline from the New York Times today.

“Obama, With Defiant Tone, Vows to Push Agenda”. The article notes that in a speech the President used the word “fight” twenty times.

Just what we need, a defiant president who rather be on the campaign trail than on the Oval Office leading all the American people and the Country.

Our real concern should be the new direction in the rhetoric from change in the old way of politics to populist blame games, scapegoating and moving more and more off center without regard to the views of the majority of Americans.

Once a politician always a politician.

Half a loaf may not be better than none

23 Jan

Watch for big unintended consequences in health care reform as Congress seeks to do the easy and popular stuff like insurance reforms without the hard stuff to make it work like expanding the coverage base.

What can happen? Well costs will simply go up for everyone with coverage or who buy it after reform.

Hmmm, unintended perhaps not.

Pay close attention to the details, claim appeals are a good example

22 Jan

Assuming some form of health reform legislation is adopted shortly, one aspect that is likely to be included is the Senate version of a new appeals procedure for denied or disputed claims. The idea behind this is to make rules that apply to insured plans also apply to self-insured employer plans regardless of the fact that strong ERISA appeal rules are in place today. The new rules require external an appeals procedures under rules that follow the NAIC Uniform External Model Act or standards adopted by the Secretary of HHS.

External review is used by many large employers to obtain an independent medical review of a disputed claim especially where medical necessity is the questionable issue. Now we are talking about going further in the process. For example, under the proposed legislation benefits must continue until all appeals are resolved. It is difficult to see exactly how this would work. Let’s say the dispute is continuing chiropractic care or mental health counseling, a claim would arise when a claim is processed and benefits are denied, will a patient continue denied treatment and for how long? If the appeal is denied, who is responsible for the treatment received? Alternatively, perhaps the denial is of a predetermination for a major medical procedure, if the procedure must be covered until the appeal is resolved who accepts the potential liability? Extensive regulations are no doubt on the way, but for employers and insurers the complications and additional work are significant.

The next week will tell the story

21 Jan

Democrats are struggling to figure out what to do about health care reform and we may know more by the middle of next week. Meanwhile, Republicans are trying to make the Massachusetts election a national referendum on health care reform, that may be a stretch but what’s new in the world of politics?  There is a strong sense that Democrats need to move quickly on health care and that they may do, but what will they do?

Massachusetts, who would have thought?  No matter we know best.  If we could only keep these deals quiet.

Doing nothing is the most unlikely scenario. The second most unlikely is for the House to pass the Senate bill as is (they don’t have the votes in the House).  Then we have the possibility for the House to pass the Senate bill under a deal that would make further changes wanted by House members in other subsequent legislation, perhaps via a budget reconciliation bill that requires only a simple majority to pass. How this would play with the voters who appear to be paying attention to all these deals and machinations is questionable.

Another possibility is to pass a limited bill, in other words take an incremental approach (hopefully, but questionably with Republican support).  Such a bill could change the rules for pre-existing conditions, and other plan limits, dependent age limits and many subsidies.  Such a move may drag the debate on longer.

Keep one thing in mind, regardless of what the American people think, the President and the Democratic leaders remain committed to getting something done and want to move forward. Moving forward and attempting to address some of the most visible lightening rods in the legislation is likely. The danger of course is that they are once again misreading the American people and their fears about major changes to a system that while costly beyond sustainability, is effectively serving the majority of the population for the time being.

Something happening is still a likely possibility before the State of the Union Address even if it is modest changes with more to come. Keep in mind we are dealing with politicians, and their leaders are out of touch with the mainstream of America.

What to do, what to do

20 Jan

The following alternatives were prepared by the staff of the U.S. Chamber and are contained in an e-mail to committee members. The general consensus is that the Democratic Congress is caught between a rock and a hard place.  If they ram the current version of reform through, they risk the ire of many, many Americans in November.  If they play procedural games it may be no better.   If Congress does nothing, then they really upset many in their liberal base. 

1)    Ram it through. This would require the Senate and House negotiators to finish negotiations to merge their bills (which have been going on for months), as soon as possible. They would then need to send the merged bill to the Congressional Budget Office, who would take 5-10 days to score the costs of the probably 3,000 page bill. Then the House and Senate would both need to vote on the merged bill, before Senator-elect Brown is sworn in. 

This is probably impossible. Not only is there a lack of political will (many members are now afraid they will lose their seats if they vote for health reform), but the timing seems unrealistic. There had been speculation that Massachusetts Secretary of the Commonwealth William Gavin would drag out certifying the election for 15 days in order to buy time, and that U.S. Senate Majority Leader Harry Reid would delay swearing Brown in. However, both have refuted that notion and the process has already begun. Further, Senator Jim Webb (D-VA) made a statement last night that no action should be taken on health reform until Brown is seated. Therefore, this may be an option, but it is effectively dead. 

2)    Reconciliation. This is the process in which a bill could be passed in the Senate by a simple majority – 50 votes, with Vice President Biden to break a tie. It would entail sending the bills back to Committee where they would again be amended, debated, etc. There is just about zero will to do this. Worse, many provisions in the bill (for instance, a ban on pre-existing condition exclusions) could be stripped from the bill by a simple 1-Senator objection. Worst of all, the non-tax provisions of a reconciliation bill could expire in 5 years, meaning this entire endeavor would have to be repeated.  

There have been some House members who have enjoyed making threats to do this, but in the Senate this seems an incredibly unlikely choice of paths, one fraught with problems that would enrage the populace. 

3)    Cross the aisle. With Senator-elect Brown promising to be the 41st vote against the bill, Majority Leader Reid would need to convince a Republican to join the remaining 57 Democrat and two independent Senators to pass a new bill. The obvious targets would be Voinovich, Collins, and Snowe – all of whom have been pretty clear that they will not support. Voinovich staff insist that his visit to the White House yesterday had nothing to do with health care, they were only discussing ways to lower the deficit. 

4)    Roll the House. Since the Senate already passed one bill, and since they may not be able to pass another, the last resort may be for the House to pass the Senate bill verbatim, with no changes. This would mean all of the negotiations that have happened over the past month would be thrown out, and many House members would have to vote for a bill they literally hate. Remember, many House Democrats believe the Senate bill was actually written by insurance companies. However, House Majority Leader Steny Hoyer may have best summed up the position of many House Democrats: “The Senate bill is better than nothing.” But Bart Stupak, an influential pro-life Democrat in the House, had another view on the Senate bill this morning: “There is no way that bill is going anywhere…. I bet it wouldn’t get 100 votes.” Note that it would need 218. 

START OVER! The President could always walk across the street and ask the Chamber how to write a health reform bill that Americans would support.

While I doubt it will happen, the best alternative is to quickly start a real bipartisan effort to modify this legislation, perhaps look for stages of implementation and educate Americans as to what it will really take to “reform” health care, how much it will cost and why.  Let’s start by getting representatives for all players in the room at the same time without a member of Congress or the administration present.  Let’s lay our cards on the table and fix what is broken in a manner that does not gore anyone’s ox more than any other. 

I was in a diner this morning listen to several conversations going on at the various tables.  Not surprising, the topic was the Massachusetts election and health care.  Frankly, I was a bit shocked at the dislike being expressed for both the current administration and the health care bill.  I was also a bit surprised at the level of knowledge displayed about what is going on in the health care reform effort, especially the various deals being made.  For reference the diner was in North Jersey, hardly a Republican  stronghold. 

Let’s not forget that Massachusetts is the one state with experience in health care reform, where coverage is mandatory, where the government runs exchanges and subsidizes some segments of the population.  This experience has expanded coverage, but it has done nothing to control costs and now the State is looking at changes in the delivery system to help control costs.  In other words on a limited basis it provides an early view of what is ahead with the proposed federal legislation, facts that are pretty well confirmed by the CBO in its various assessments.  As I have pointed out many times, the people who come up short are those who already have health insurance especially those Americans with employer based coverage.  That view may be the most misunderstood by many members of Congress and given these people are the great majority of Americans, that is a problem.

It’s not a done deal, so don’t look away

19 Jan

Nothing in health care reform is a done deal, close but no cigar (depending on your point of view).

One issue where employers must not give up is the change in tax status for the employer prescription drug rebate under the Senate reform bill. Many CEOs sand CFOs are now involved directly talking to members of Congress.  Over 350 companies have signed on to a letter to Congress in opposition to this taxation and the potential adverse impact on millions of retirees.  If you have not gotten involved in this debate, now is the time.

Don’t hold your breath for the Massachusetts results to change much expect perhaps to accelerate Congress to action.   Focus on the Senate bill as passed already because one strategy may be to get the House to simply approve the Senate bill as is and send it to the President without further debate or vote.

Helping Haiti…or not (beyond this emergency)

19 Jan

Talk about wealth transfer and throwing the good after the bad.

The tragedy that is Haiti  has prompted an outpouring of sympathy, cries for help and more of the same when it comes to helping poor often dysfunctional countries…send in the cash.  While an array of help is needed for the immediate emergency, merely sending cash has never worked as a long term solution to poverty, and it will not work with Haiti, but that does not stop some on the left from trying.  They should stop and ask what massive government spending has ever eliminated poverty, especially in a country that is corrupt and dysfunctional or better still has it even worked in the United States?  A country is not poor because it lacks money; it is poor because it lacks a society that can generate money.  Such a society has fundamental faults that must be corrected, often that is only possible from within and certainly not from outside intervention alone.   Teach them to fish. Think of it as health care reform, bashing insurance company premiums and forcing them down does nothing to improve the fundamental faults in the health care system, but that does not stop many in Washington from pursuing that dream.

Probably most absurd example of this is found in a recent blog post by economist Jeffrey Sachs on The Cap Times, he writes in part:


Hey, I’m an influential person and the tux is rented

The Haiti Recovery Fund should be constituted for five years — a suitable period to respond to such a challenge. Electoral politics in Haiti should be suspended for at least one year as well. This is no time for national elections; the people’s survival is the first purpose of politics.

How much money would the Haiti Recovery Fund need? And where should it come from? Here is a rough estimate: Before the earthquake but after the hurricanes, I had calculated an urgent (and unmet) development financing need of $1.4 billion per year for Haiti, up from about $300 million currently. Basic urgent reconstruction costs will add perhaps another $5 billion to $10 billion over the next few years. One can imagine annual disbursements of $2 billion to $3 billion annually over the next five years.

Obama should seek an immediate appropriation of at least $1 billion this year and next for a Haiti Recovery Fund, and ask other countries and international agencies to fill in the rest, not with promises but with cash. The obvious way for Washington to cover this new funding is by introducing special taxes on Wall Street bonuses, utterly unjustified payments that will be announced in the next days.

I added the last sentence emphasis, but I am not sure it is needed.  I have an alternative, I think we should tax Conan O’Brien’s $40 million cancellation deal at 50% just like in the UK.  He is being paid for doing nothing; at least those on Wall Street are doing something for their money.

This approach to providing aid reminds me of a man in New Jersey who won $5 million in the lottery and a year later was bankrupt.

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