My wife and I are on a very nice summer cruise on the Seabourne Odyssey in the Black Sea. The main celebrity on the cruise is former Governor and Senator Bob Graham (Dem - Fla.) We had dinner with him and his wife last night, and a very nice couple from Santa Monica, one of whom sits on the Board of Cedars-Sinai Hospital in LA. We discussed many things, among them health care. Aaron, the Board Member, said that foundations seemed like a nice solution to him, especially since it was a good deal for the doctors, who got to have a salary. It was an amiable dinner and no noses were bloodied. But as I objected to corporate medicine, I was asked by the Senator if I could point to any examples of what I would favor in the US currently. I had to admit I couldn't.
As I thought about it, I thought I could respond to him with a short letter, what I couldn't say in the context of a nice dinner. Although it is repetitive of what I have cited here before, I thought it might be worth posting.
Here 'tis:
Dear Senator Graham:
Thank you for having dinner with us last night. It was a treat.
I was embarrassed to admit to you that I couldn’t cite an example of a good model of care somewhere in America that could be emulated. I had to retreat to “three yards and a cloud of dust.” So let me take just a minute to explain why I couldn’t come forth with a trenchant answer.. In brief, the structural problems of American medicine currently set a very unequal playing field that makes it difficult for excellent and adaptive new entities to form. As it stands now, the playing field is tilted toward large corporations to run medical care, which I don’t think will serve our interests well in the long term. So I think the rules of play need to change before we can get to really good systems of care that meet the objectives of patients and doctors alike.
Current Examples
Many analysts, most popularly Atul Gawande in the New Yorker, have cited the examples of the Mayo Clinic, Geisinger, etc. The problem with these examples is that they are elite and special examples, which have taken decades and more to evolve, and have very selected doctors and administrators. They are not going to be able to be replicated elsewhere – in fact, the experience of the Cleveland Clinic and Kaiser and Mayo is precisely that they find it hard to replicate themselves in other parts of the country.
But even if they could be replicated, would we really want that? They are highly structured and corporate entities. This kind of entity usually does not deliver the kind of personal care that our people are used to and want. Large institutions just can’t. As sociologist Eliot Freidson pointed out years ago in “Profession of Medicine,” as you get larger groups, the doctors are more keyed into the opinions and norms of their fellow professionals and even administrators, and less to the patients they serve. It’s only human. So we get what we call “institutional care” rather than personal care. Many patients really wonder if their doctors in these settings really care about them personally, and know them for who they are.
Current Forces
But even if these models are not replicable, we are getting more and more large medical entities forming as American medicine evolves very quickly. Conglomeration has gripped the industry, as hospitals have formed large chains and local monopolies, some large multi-specialty groups have formed, and these large conglomerations have become price-givers instead of price-takers vis-à-vis insurance companies. Using the RBRVS Medicare price system, hospital monopoly and large group contracts have been at a rate of 160% or even 200% of Medicare. Typical physician practices by contrast are at from 100% to maybe 130% of Medicare tops.
As an additional problem, the RBRVS Medicare system (their price list) grossly underpays primary care and non-procedural specialists, and overpays hospitals and procedural specialists. Since the private insurance companies also use the Medicare RBRVS as the basis for their payments, this payment imbalance reverberates throughout the system.
These two forces, hospital and specialist conglomeration and RBRVS payment imbalances, shape our current system. Prevention and primary care practices languish while hospitals and large systems are awash in money. They use this money to pay themselves, and to invest in themselves. Hospitals vertically integrate by employing doctors (in California through foundations), and specialty groups add ancillary services (physical therapy, MRI scans, etc.) Some think that foundations are a good deal for doctors since they don’t have to do the administration themselves and they get paid salaries, but this is only attractive based on the alternative of being starved by the current system of payment. The playing field is very uneven.
What HCR Could Have Done
While the Health Care Reform law successfully attacked many insurance practices that disadvantaged patients, it is completely silent on the insurance company practices that disadvantage small scale physician practices – exactly the practices that people are used to getting their care from, and exactly the practices that are least responsible for the rise of health care costs.
It is quite understandable that the Reform did not reach to the provider-side and stayed only on the patient-side. It was hard enough to get the bill passed as it was. But if political realities were different, what could the law have done?
Perhaps most importantly, the HCR law could have taken steps to even playing field. Currently, only the large conglomerated groups can negotiate with the insurance companies as a single entity. If a group of doctors want to negotiate the same way as these conglomerations, they too need to conglomerate themselves. That would mean, however, that they would lose the very individuality they are seeking to retain. The HCR law could have mandated an exemption from anti-trust law that would enable groups of doctors to negotiate as one with the insurance companies, just like the big boys. This would have leveled the playing field, at least somewhat. There are other steps that could be taken, but this would be the big one.
Personally, this is precisely the situation that we pediatricians find ourselves in the San Francisco East Bay. We have a fairly smoothly functioning group of pediatricians and pediatric specialists, and we would like to bargain collectively with the insurance companies. But because we are forbidden from doing this, we are picked off one by one by the insurance companies, while at the same time they are richly rewarding the large groups such as Sutter Foundation (tied to a dominant hospital chain), and Palo Alto Medical Foundation, which is allied with Sutter. In the oft-repeated words of my step-daughter, “Not fair!” These large clinics have no apparent superiority in services, they simply have more market power, delivered to them by federal anti-trust law.
Is It Just a Retrograde Dream?
Is this a retrograde dream, yearning only for the old, professionally rather than corporate dominated days? Maybe. But there is a theoretical work from the Harvard Business School, Redefining Health Care, that points out that an ideal system would not be an integrated network such as Kaiser or Mayo. At Kaiser, for instance, if the primary care doctor is acting as an agent for the patient, there is little choice of specialist – the patient is sent to the Kaiser cardiologist, or Kaiser neurosurgical clinic. It might be good or not, but it’s theirs. The HBS study says that it would be much better if the primary care doctor could choose among multiple specialty alternatives that compete with each other. This is not so much different from the system we are used to, but that is rapidly disappearing.
[Here is an example (not exactly what I was talking about, but close) close to my home: ValleyCare Hospital in Pleasanton, California, has recently established a Foundation, employed all the obstetricians who practice at the hospital, brought in new pediatricians (all new to the area and graduated in medical schools in foreign countries), and ordered the OB’s to refer all newborns to these new pediatricians. Patient interest? Not really. It’s corporate power interest.]
What the HCR Law Does Do
The HCR Law does look for some experimental changes, most notably the formation of Accountable Care Organizations (ACO’s). The ACO would get paid a set amount for various episodes of care, both within and outside the hospital. The major target for the ACO would be cost reduction by stimulating more coordination among providers. It might work, but there will be major fights among hospitals and doctors for control, and the hospitals will most likely win. If costs are actually reduced, good. We certainly need cost reduction. But this is an untried and slender reed to base major health reform on.
Many analysts have said, however, that the major underlying problem of our current system is the weakness of primary care. The average age of primary care doctors is constantly rising as younger doctors choose the better paid specialties. The HCR law funds more training slots and forgives some loans of graduates who choose primary care and practice in underserved areas. But to make an analogy, they are funding swimming lessons (training) but they are not warming up the pool (the practice of primary care) so that people actually want to go there. So these efforts are likely to be of small value.
The new HCR law does give more power to MedPAC, the agency that sets Medicare payments. They now can set rates that Congress would have to veto, rather than simply making suggestions to Congress, which is susceptible to special interest (hospitals, specialists) pressures. But, of course, this is simply one element.
Summary
In summary, I can’t point to a model that will work. I can only say that the course we are set on – large scale corporate control of medicine with emphasis on specialist care – will be a radical departure for American medicine, and will turn out to look far more like socialized medicine (very large scale, clinics, etc.) than most of us, patients and providers, would really want. There are some steps that could have been taken, and still could be taken, to allow us to evolve in a way that might give Americans and American doctors care with a human instead of a corporate face. To choose this path, the field must be leveled, and only government can do this.
Budd Shenkin
Thursday, July 29, 2010
Monday, July 5, 2010
Lying Scumbags and Health Insurance
Some of you will recall that we had health reform earlier this year. Some of it eliminated egregious practices by health insurance companies, which is very good. Who could believe that in the United States of America a company could rescind a health insurance policy once the patient became ill? Maybe that tells us more about our country than we would like to know.
But insurance companies don’t just interface with patients; they also interface with us, the doctors. Health insurance companies are equal opportunity companies – they treat us just the way they like to treat patients, and this side of the pathology of American medicine went completely untouched by Health Reform. Alas. Just this week a fine example of insurance pathology visited itself upon me. It has been uncomfortable.
The issue in question is this: immunizing children with vaccines has always been important, but in recent years many new vaccines have been introduced. These new vaccines are not only numerous, they are costly. When I first started in practice a vaccine cost about $5 apiece; now some are in the $100-$200 price range, some of them requiring three shots for the series.
Happily, the new vaccines are very effective. In fact, they are so effective that pediatricians and hospitals now care for many fewer illnesses. Financially speaking, I’m not certain of the ultimate effect for health insurance companies and pediatricians. Health insurance companies pay for vaccines, but they also have to pay for fewer sick office visits and hospitalizations. They don’t win on the new vaccines that prevent genital warts and subsequent cervical cancer years later, but I bet they are winners for vaccines that prevent pneumonia, septicemia, and meningitis. I used to have several cases of meningitis per year, now not at all. My intuition tells me that they make money on the deal, but I can’t be sure.
I’m also not sure of the financial balance for us as practitioners. We can make money on giving the vaccines (if the insurance companies allow us to – that’s one of the points of this post), but we certainly care for fewer sick children – thank God, of course. It really depends on how well we are paid for our vaccination services. (Children’s hospitals, on the other hand, simply lose the income of caring for sick kids. But I never feel sorry for those inefficient, union-bedeviled, nurse-bedeviled financial sinkholes called hospitals.)
Thus, our work as pediatricians has changed. Vaccines have become less of a sideline for us, and more of the main show. In business terms, they have become a full-fledged service line for pediatricians. It’s good – getting paid for keeping kids healthy rather than tending to them when they are sick. But this substitution has changed the business model of pediatrics. If we don’t make money on this important business line, we will be out of business. Most pediatricians are not great business people, and most pediatricians don’t yet realize this. The more savvy pediatricians do realize this, and our section of the American Academy of Pediatrics put together “The Business Case for Vaccines.” This paper calculated that paying us 117-128% of the vaccine cost would cover overhead. That calculation is certainly too low (leave it to pediatricians to shortchange ourselves), because they neglected important elements of vaccine loss, which happens in every office – from omissions in billing, lost vials, parents deciding at the last minute they don’t want the vaccine after all even after it has been prepared, a kid grabbing the dose and throwing it away, just kicking a dose under a table, whatever. But even if the number is too low, there it is, a number to be respected.
In contrast to pediatricians, however, Insurance companies, understand their business pretty well, at least in the short run. They are, after all, pretty much exclusively business enterprises, rather than professional care givers plus businessmen as pediatricians are. Insurance companies see the increased price of vaccines and try to figure out how to lower their costs. It’s not their business to figure out how to keep pediatricians in business – it is up to pediatricians to take care of themselves and their incomes. The insurance companies also don’t figure it’s their business to fix the American health care system, which is very deficient In primary care mainly because primary care docs don’t get paid nearly as well as specialists. For insurance companies, if they can economize on the cost of vaccines and still reap their benefit of fewer sick bills, it’s a wonderful life.
Bad as they are, health insurance companies have their own pressures. They are being squeezed by consolidated hospital systems that are price-givers rather than price-takers, and by large integrated multi-specialty groups, such as Sutter Foundation and Palo Alto Medical Foundation here in Northern California. The insurance companies figure that they need those contracts, and as a result they pay those providers very, very well. In addition, I think corporations like to do business with other corporations, rather than a different kind of entity completely, which doctors in private practice are.
So, the health insurance companies give here and take there. Private practice primary care docs, however, are prevented from negotiating together by antitrust laws, despite the fact that the health insurance companies on the other side of the table are very consolidated. The results of these negotiations are then predictable.
Right now, this business drama is playing itself out with a new vaccine, called Prevnar-13. The old version, Prevnar-7, protects against 7 types of pneumococcus, a virulent pathogen that causes pneumonia, sepsis, meningitis, and ear infections. The new Prevnar-13 adds six more serotypes of the bacteria to the protected list. Pediatricians buy the new version for 30% more. Most insurance companies are raising their payments appropriately. Anthem Blue Cross – that’s right, the same company that proposed 39% premium increases to patients right at the end of the health care debate, thus helping immeasurably to pass the legislation – wants to pay us 5.6% less for this more expensive vaccine.
The decrease in payment is partly because we have had a pretty good contract for the last three years after some very tough negotiating. But it’s also because Blue Cross has been bought out by Anthem, and Anthem plays even harder ball than Blue Cross used to, and they were very bad boys and girls indeed.
Clearly, since our new business model depends on vaccine delivery as a major service line, we can’t accede to this new fee schedule. They will hit us first for Prevnar-13, and then come after the rest of the vaccines. So we have to be strong in negotiating, and possibly even terminate our contract. This would be a major step to be taken only with lots of forethought, but if they are persistent, it may be necessary. It’s uncomfortable, but it’s business. In fact, for me personally, it’s very uncomfortable, not my favorite part of the business. But on the other hand, I’m not one to back down. Quite the opposite. You don’t screw around with Budd Shenkin.
All companies are not the same. There is no one way to do business. A company can be businesslike and aim for profit, but also be civil, honest, and look for common elements. In the negotiation three years ago, I emphasized how common our interests are. They sign the patients up and we have to make sure they are well served and happy. Together, the insurance company and Bayside have the common competitor of Kaiser – we both have to give patients a reason to come to us. They listened then, maybe bought it, maybe didn’t. I heard that what really clinched it was they were convinced that if we didn’t get a decent deal we were going to terminate.
On the other hand, a company can be dirty and demeaning. Guess where this story is going now.
First of all, at the beginning of the year Anthem Blue Cross stopped paying us for an emergency care code (a billing code is how we get paid), 99058. They just said they weren’t recognizing that code anymore. Can you believe they can do that unilaterally? I actually don’t think they can, and maybe we can take them to court over that – just the kind of diversion from our main business of running our practice that we need. Doesn’t it sound like the way they have treated patients, with rescissions, etc.? Then I just found out this week that, at the same time they stopped recognizing the 99058 emergency code to all their contractors, they raised the amount they are paying for vaccine administration (we get paid separately for the vaccine itself and for administering it). Amazingly, while they took away our emergency fee, they didn’t revise our payment for this fee upward. Dirty pool.
So now we’re fighting over payment for the new vaccine. Here is how it is going. You know how doctors complain about the part of managed care where they have to justify their plan of treatment for patients to an under-educated insurance company employee? It’s an insulting process to the doctor, not only because of the educational discrepancy – why should a doctor have to get permission from a clerk? - but even more because of the social power discrepancy. The usual roles have been reversed in a sociological anomaly. It’s like my objection when I go to a doctor’s office and some 25 year old high school grad comes to the waiting room and shouts out, “Budd?” It’s Dr. Shenkin, you twit.
So, this is what I have been going through. There is the local Anthem Blue Cross employee, a not very nice young woman who declares their policy to me in imperious tones. When I object in writing and declare myself insulted, she becomes more fearful and conciliatory and we consult superiors, I make phone calls that go unanswered, and finally reach someone, who sets up a call with the VP of Reimbusement Strategies, a man whom I will call John Doe, because my attorney wife informs me that identifying exactly in writing the person I will refer to as the Lying Scumbag might lead to legal troubles, despite the unquestionable accuracy of the charge.
So in my quest for fair payment for Prenar-13, I have to endure a one-hour conference call with the young imperious rep, the nicer superior who is unaware of these issues but wants peace, and the Lying Scumbag. The Lying Scumbag then proceeds to lie like a scumbag. He tells me that the American Academy of Pediatrics has approved of their payments – a claim made earlier by the young imperious rep. “Oh, yeah?” I say. I was elected to the Board of the AAP Section on Administration and Practice Management (SOAPM), and selected for the Committee on Child Health Financing (COCHF). Who exactly gave that OK?
The Lying Scumbag gives one source as the California Pediatric Council. Another is the national AAP representative for private payers. I know he is being mendacious. I have made sure to inquire, and they have assured me that’s not so. The Lying Scumbag tells me that of the 14 states he covers, I am the only pediatrician who has complained and been dissatisfied. That’s a pretty amazing claim, and clearly counterfactual. He sidesteps my assertion that every other insurance company (except one, CIGNA, so far at least) pays a lot more. I tell him I know he feels this is a triumph for his company, to pay less than others.
The Lying Scumbag quotes our own Business Case on Vaccines to the effect that if you add together the payment for vaccine and administration and get up to 117-128%, that’s enough. The wording of the Business Case could be clearer, but that’s not the case at all. He tells me, “Let me explain to you how this works,” about our own Business Case. The Lying Scumbag then deigns to instruct me on the economics of our practice and how it works. He wonders if he can explain to me the RBRVS system, which governs our payments. He is a young man, full of himself but not very smart, it seems. He tries to snow me. I tell him, stop being patronizing. I’m more of an expert on this than he is. I tell them all that their policy is self-defeating. If they starve us and let the corporate practices thrive, that’s all they will have left to deal with, and how will that be for them? Long silence. They have a mission, which I view as search and destroy. I’m not at the right level of Anthem Blue Cross employee. I’m stuck with someone whose role is to be a Lying Scumbag.
The Lying Scumbag repeatedly refers to a “neutral party” that they consulted that recommended their proposed payment rate. He also tells of the approval he got from the AAP national when he proposed to inform pediatricians how to buy vaccines more cheaply (he’s telling me?) so that Anthem Blue Cross could then pay us less. The Lying Scumbag and his confederates on the phone all inform me that Anthem Blue Cross considers vaccines “just a commodity.” “We’ll pay you for your work, but not for a commodity,” they tell me pointedly. That’s the tone, from these jerks.
So, as I say, market power reigns, corporations take over, pipsqueaks and Lying Scumbags come to the fore, and this is what we have to deal with. There is a market imbalance, and Health Care Reform did not address it. The power imbalance is too much to deal with, since there are a few powerful health insurance companies, and private practitioners are forbidden to combine in negotiations. In addition, while some elements of the AAP are supportive, the Board and the President of the AAP maintain a distance from the fray – God forbid they should get involved with the financial viability of their constituents.
With this kind of market economics prevalent, it’s hard to see how the health care system can improve on the foundation of primary care. And me – I’m trying to stop steaming. I think I’ll try to hire someone to do this negotiating. It’s just too wearisome. I can’t ruin my life dealing with Lying Scumbags and Jerks. And that’s all too much the story with this most heinous of industries, the health insurance industry.
Budd Shenkin
But insurance companies don’t just interface with patients; they also interface with us, the doctors. Health insurance companies are equal opportunity companies – they treat us just the way they like to treat patients, and this side of the pathology of American medicine went completely untouched by Health Reform. Alas. Just this week a fine example of insurance pathology visited itself upon me. It has been uncomfortable.
The issue in question is this: immunizing children with vaccines has always been important, but in recent years many new vaccines have been introduced. These new vaccines are not only numerous, they are costly. When I first started in practice a vaccine cost about $5 apiece; now some are in the $100-$200 price range, some of them requiring three shots for the series.
Happily, the new vaccines are very effective. In fact, they are so effective that pediatricians and hospitals now care for many fewer illnesses. Financially speaking, I’m not certain of the ultimate effect for health insurance companies and pediatricians. Health insurance companies pay for vaccines, but they also have to pay for fewer sick office visits and hospitalizations. They don’t win on the new vaccines that prevent genital warts and subsequent cervical cancer years later, but I bet they are winners for vaccines that prevent pneumonia, septicemia, and meningitis. I used to have several cases of meningitis per year, now not at all. My intuition tells me that they make money on the deal, but I can’t be sure.
I’m also not sure of the financial balance for us as practitioners. We can make money on giving the vaccines (if the insurance companies allow us to – that’s one of the points of this post), but we certainly care for fewer sick children – thank God, of course. It really depends on how well we are paid for our vaccination services. (Children’s hospitals, on the other hand, simply lose the income of caring for sick kids. But I never feel sorry for those inefficient, union-bedeviled, nurse-bedeviled financial sinkholes called hospitals.)
Thus, our work as pediatricians has changed. Vaccines have become less of a sideline for us, and more of the main show. In business terms, they have become a full-fledged service line for pediatricians. It’s good – getting paid for keeping kids healthy rather than tending to them when they are sick. But this substitution has changed the business model of pediatrics. If we don’t make money on this important business line, we will be out of business. Most pediatricians are not great business people, and most pediatricians don’t yet realize this. The more savvy pediatricians do realize this, and our section of the American Academy of Pediatrics put together “The Business Case for Vaccines.” This paper calculated that paying us 117-128% of the vaccine cost would cover overhead. That calculation is certainly too low (leave it to pediatricians to shortchange ourselves), because they neglected important elements of vaccine loss, which happens in every office – from omissions in billing, lost vials, parents deciding at the last minute they don’t want the vaccine after all even after it has been prepared, a kid grabbing the dose and throwing it away, just kicking a dose under a table, whatever. But even if the number is too low, there it is, a number to be respected.
In contrast to pediatricians, however, Insurance companies, understand their business pretty well, at least in the short run. They are, after all, pretty much exclusively business enterprises, rather than professional care givers plus businessmen as pediatricians are. Insurance companies see the increased price of vaccines and try to figure out how to lower their costs. It’s not their business to figure out how to keep pediatricians in business – it is up to pediatricians to take care of themselves and their incomes. The insurance companies also don’t figure it’s their business to fix the American health care system, which is very deficient In primary care mainly because primary care docs don’t get paid nearly as well as specialists. For insurance companies, if they can economize on the cost of vaccines and still reap their benefit of fewer sick bills, it’s a wonderful life.
Bad as they are, health insurance companies have their own pressures. They are being squeezed by consolidated hospital systems that are price-givers rather than price-takers, and by large integrated multi-specialty groups, such as Sutter Foundation and Palo Alto Medical Foundation here in Northern California. The insurance companies figure that they need those contracts, and as a result they pay those providers very, very well. In addition, I think corporations like to do business with other corporations, rather than a different kind of entity completely, which doctors in private practice are.
So, the health insurance companies give here and take there. Private practice primary care docs, however, are prevented from negotiating together by antitrust laws, despite the fact that the health insurance companies on the other side of the table are very consolidated. The results of these negotiations are then predictable.
Right now, this business drama is playing itself out with a new vaccine, called Prevnar-13. The old version, Prevnar-7, protects against 7 types of pneumococcus, a virulent pathogen that causes pneumonia, sepsis, meningitis, and ear infections. The new Prevnar-13 adds six more serotypes of the bacteria to the protected list. Pediatricians buy the new version for 30% more. Most insurance companies are raising their payments appropriately. Anthem Blue Cross – that’s right, the same company that proposed 39% premium increases to patients right at the end of the health care debate, thus helping immeasurably to pass the legislation – wants to pay us 5.6% less for this more expensive vaccine.
The decrease in payment is partly because we have had a pretty good contract for the last three years after some very tough negotiating. But it’s also because Blue Cross has been bought out by Anthem, and Anthem plays even harder ball than Blue Cross used to, and they were very bad boys and girls indeed.
Clearly, since our new business model depends on vaccine delivery as a major service line, we can’t accede to this new fee schedule. They will hit us first for Prevnar-13, and then come after the rest of the vaccines. So we have to be strong in negotiating, and possibly even terminate our contract. This would be a major step to be taken only with lots of forethought, but if they are persistent, it may be necessary. It’s uncomfortable, but it’s business. In fact, for me personally, it’s very uncomfortable, not my favorite part of the business. But on the other hand, I’m not one to back down. Quite the opposite. You don’t screw around with Budd Shenkin.
All companies are not the same. There is no one way to do business. A company can be businesslike and aim for profit, but also be civil, honest, and look for common elements. In the negotiation three years ago, I emphasized how common our interests are. They sign the patients up and we have to make sure they are well served and happy. Together, the insurance company and Bayside have the common competitor of Kaiser – we both have to give patients a reason to come to us. They listened then, maybe bought it, maybe didn’t. I heard that what really clinched it was they were convinced that if we didn’t get a decent deal we were going to terminate.
On the other hand, a company can be dirty and demeaning. Guess where this story is going now.
First of all, at the beginning of the year Anthem Blue Cross stopped paying us for an emergency care code (a billing code is how we get paid), 99058. They just said they weren’t recognizing that code anymore. Can you believe they can do that unilaterally? I actually don’t think they can, and maybe we can take them to court over that – just the kind of diversion from our main business of running our practice that we need. Doesn’t it sound like the way they have treated patients, with rescissions, etc.? Then I just found out this week that, at the same time they stopped recognizing the 99058 emergency code to all their contractors, they raised the amount they are paying for vaccine administration (we get paid separately for the vaccine itself and for administering it). Amazingly, while they took away our emergency fee, they didn’t revise our payment for this fee upward. Dirty pool.
So now we’re fighting over payment for the new vaccine. Here is how it is going. You know how doctors complain about the part of managed care where they have to justify their plan of treatment for patients to an under-educated insurance company employee? It’s an insulting process to the doctor, not only because of the educational discrepancy – why should a doctor have to get permission from a clerk? - but even more because of the social power discrepancy. The usual roles have been reversed in a sociological anomaly. It’s like my objection when I go to a doctor’s office and some 25 year old high school grad comes to the waiting room and shouts out, “Budd?” It’s Dr. Shenkin, you twit.
So, this is what I have been going through. There is the local Anthem Blue Cross employee, a not very nice young woman who declares their policy to me in imperious tones. When I object in writing and declare myself insulted, she becomes more fearful and conciliatory and we consult superiors, I make phone calls that go unanswered, and finally reach someone, who sets up a call with the VP of Reimbusement Strategies, a man whom I will call John Doe, because my attorney wife informs me that identifying exactly in writing the person I will refer to as the Lying Scumbag might lead to legal troubles, despite the unquestionable accuracy of the charge.
So in my quest for fair payment for Prenar-13, I have to endure a one-hour conference call with the young imperious rep, the nicer superior who is unaware of these issues but wants peace, and the Lying Scumbag. The Lying Scumbag then proceeds to lie like a scumbag. He tells me that the American Academy of Pediatrics has approved of their payments – a claim made earlier by the young imperious rep. “Oh, yeah?” I say. I was elected to the Board of the AAP Section on Administration and Practice Management (SOAPM), and selected for the Committee on Child Health Financing (COCHF). Who exactly gave that OK?
The Lying Scumbag gives one source as the California Pediatric Council. Another is the national AAP representative for private payers. I know he is being mendacious. I have made sure to inquire, and they have assured me that’s not so. The Lying Scumbag tells me that of the 14 states he covers, I am the only pediatrician who has complained and been dissatisfied. That’s a pretty amazing claim, and clearly counterfactual. He sidesteps my assertion that every other insurance company (except one, CIGNA, so far at least) pays a lot more. I tell him I know he feels this is a triumph for his company, to pay less than others.
The Lying Scumbag quotes our own Business Case on Vaccines to the effect that if you add together the payment for vaccine and administration and get up to 117-128%, that’s enough. The wording of the Business Case could be clearer, but that’s not the case at all. He tells me, “Let me explain to you how this works,” about our own Business Case. The Lying Scumbag then deigns to instruct me on the economics of our practice and how it works. He wonders if he can explain to me the RBRVS system, which governs our payments. He is a young man, full of himself but not very smart, it seems. He tries to snow me. I tell him, stop being patronizing. I’m more of an expert on this than he is. I tell them all that their policy is self-defeating. If they starve us and let the corporate practices thrive, that’s all they will have left to deal with, and how will that be for them? Long silence. They have a mission, which I view as search and destroy. I’m not at the right level of Anthem Blue Cross employee. I’m stuck with someone whose role is to be a Lying Scumbag.
The Lying Scumbag repeatedly refers to a “neutral party” that they consulted that recommended their proposed payment rate. He also tells of the approval he got from the AAP national when he proposed to inform pediatricians how to buy vaccines more cheaply (he’s telling me?) so that Anthem Blue Cross could then pay us less. The Lying Scumbag and his confederates on the phone all inform me that Anthem Blue Cross considers vaccines “just a commodity.” “We’ll pay you for your work, but not for a commodity,” they tell me pointedly. That’s the tone, from these jerks.
So, as I say, market power reigns, corporations take over, pipsqueaks and Lying Scumbags come to the fore, and this is what we have to deal with. There is a market imbalance, and Health Care Reform did not address it. The power imbalance is too much to deal with, since there are a few powerful health insurance companies, and private practitioners are forbidden to combine in negotiations. In addition, while some elements of the AAP are supportive, the Board and the President of the AAP maintain a distance from the fray – God forbid they should get involved with the financial viability of their constituents.
With this kind of market economics prevalent, it’s hard to see how the health care system can improve on the foundation of primary care. And me – I’m trying to stop steaming. I think I’ll try to hire someone to do this negotiating. It’s just too wearisome. I can’t ruin my life dealing with Lying Scumbags and Jerks. And that’s all too much the story with this most heinous of industries, the health insurance industry.
Budd Shenkin
Sunday, June 27, 2010
Corporate Medicine
I had lunch with a pediatric specialist in a field that doesn't have a lot of procedures, and so like those of us in primary care, is relatively poorly paid. She is currently employed by the Sutter Health Foundation.
She makes pretty good money there. Sutter is rolling in cash, being a corporation based on a hospital system that has a very powerful position, little reason to economize, and is a price giver rather than a price taker with insurance companies. This specialist bills an unholy amount for office appointments and gets paid accordingly, because the contracts that Sutter extracts from payers are, well, rich. So she makes money.
But, are the patients well served, and is she well served? As in many corporations, the staff are not directly responsible to the doctors. She can still be seeing patients and if it's lunch time, adios! A patient became unresponsive in the waiting room and luckily someone brought this to the doctor's attention and she could administer to him, because the staff had vacated the premises for lunch.
If she wants a chair to sit in - a chair! - it has to go through innumerable levels for authorization, if the site administrator deigns to send the request in. Administrators tell her where her office will be without asking her first. They just tell her, they don't care about her. Administrators come and go, no one caring very much. It's corporate and it's large.
I am currently looking for an Administrator at Bayside and our headhunter has told me several times that she understands, I started this practice and it's my baby. Well, sure, I thought. But now it really hits me what she meant. When she searches for a corporate client, it's much less serious business. The level of performance matches the level of caring. Good enough is really good enough. Me, I really care.
In capitalism, the theory is that competitors with superior efficiency and customer satisfaction should rule the roost. But look how that isn't true here. The market really isn't working. Sutter gets big contracts and makes big money, pays the doctor probably more than I can - I'm hopeful that maybe I can match, but it will be hard - and it sure ain't because of efficiency or customer service. It's market power, pure and simple.
And why market power? It's partly because of size - Blue Cross needs to contract with Sutter or close up shop in Northern California. But I'm wondering if it's also because of like liking like. Big corporations seem to like each other. The minions get together and they are in it together. So they scratch each others back? Is corporate medicine what they are both most comfortable with?
Corporations, administrators. It reminds me when I worked for government. People would talk about "government," and said that it was inherently unresponsive and rather evil. When I was on the inside, I looked around and saw what people did, and I thought they weren't capable of much, and/or they didn't care. The few who got something done took themselves off in a corner with a few other good people and actually got good things done. Management to good effect was scarce. I always thought, yes, the structure allows them to do this, but then, they are the ones who did it. If they were more ethical and less immature and self-indulgent, they could do the right thing. If they cared. I guess I still feel the same way. But now I also think, that's the way people are. It's really a shame.
Budd Shenkin
She makes pretty good money there. Sutter is rolling in cash, being a corporation based on a hospital system that has a very powerful position, little reason to economize, and is a price giver rather than a price taker with insurance companies. This specialist bills an unholy amount for office appointments and gets paid accordingly, because the contracts that Sutter extracts from payers are, well, rich. So she makes money.
But, are the patients well served, and is she well served? As in many corporations, the staff are not directly responsible to the doctors. She can still be seeing patients and if it's lunch time, adios! A patient became unresponsive in the waiting room and luckily someone brought this to the doctor's attention and she could administer to him, because the staff had vacated the premises for lunch.
If she wants a chair to sit in - a chair! - it has to go through innumerable levels for authorization, if the site administrator deigns to send the request in. Administrators tell her where her office will be without asking her first. They just tell her, they don't care about her. Administrators come and go, no one caring very much. It's corporate and it's large.
I am currently looking for an Administrator at Bayside and our headhunter has told me several times that she understands, I started this practice and it's my baby. Well, sure, I thought. But now it really hits me what she meant. When she searches for a corporate client, it's much less serious business. The level of performance matches the level of caring. Good enough is really good enough. Me, I really care.
In capitalism, the theory is that competitors with superior efficiency and customer satisfaction should rule the roost. But look how that isn't true here. The market really isn't working. Sutter gets big contracts and makes big money, pays the doctor probably more than I can - I'm hopeful that maybe I can match, but it will be hard - and it sure ain't because of efficiency or customer service. It's market power, pure and simple.
And why market power? It's partly because of size - Blue Cross needs to contract with Sutter or close up shop in Northern California. But I'm wondering if it's also because of like liking like. Big corporations seem to like each other. The minions get together and they are in it together. So they scratch each others back? Is corporate medicine what they are both most comfortable with?
Corporations, administrators. It reminds me when I worked for government. People would talk about "government," and said that it was inherently unresponsive and rather evil. When I was on the inside, I looked around and saw what people did, and I thought they weren't capable of much, and/or they didn't care. The few who got something done took themselves off in a corner with a few other good people and actually got good things done. Management to good effect was scarce. I always thought, yes, the structure allows them to do this, but then, they are the ones who did it. If they were more ethical and less immature and self-indulgent, they could do the right thing. If they cared. I guess I still feel the same way. But now I also think, that's the way people are. It's really a shame.
Budd Shenkin
Monday, June 7, 2010
Missing Old Times
I thought time was supposed to dull missing departed people. So I thought. I was always touched when we still had the San Francisco Examiner and each Christmas publisher Randy Hearst published a long poem of his father’s on the editorial page, about the renewal of life, and how water rolls down to the sea and returns as rain. Then he said that he missed his father and he always would. I hadn’t lost my father yet, but I was forewarned.
My father died in December, 2007 – he missed the big financial meltdown, he missed Obama, he missed a much-wanted great grandchild. And I miss him. It isn’t getting any better. I kinda knew I idolized him when he was alive, and fought against him, but it’s just gotten worse since he left us.
I think about how we used to be. I remember when I was in high school, and when I was away at college and knew my parents were there, even when I called home reluctantly on Sunday night – no cell phones, he kinda missed that, too, he was too old when they came – and my Mom and my Dad were on the phones and I said some of my courses were hard, and Dad said, “Well, it’s long distance, so, ….”
And my Mom said, “Henry! He needs you!”
And then my Dad said, “Well, everyone knows that math and science are the hardest.”
I hadn’t even known that I needed him. I never thought I did before. Just knew that I needed to please him or I’d feel crappy. Not that I ever did displease him, so far as I knew. Displease my mother, that seemed easier. I still remember the call; it must have helped, I’m sure it did. Nothing had been particularly hard before, I guess. Except mechanical drawing, and I could always just spend more time on that. But in college we were steaming ahead.
And I remember sitting with my parents and with Betty Jane Lipshutz from up the street, whose daughter Margie was friends with my sisters. Who was it on the TV? It must have been the Beatles, because Elvis came on Ed Sullivan when I was in high school, and this must have been later, when I was older. It doesn’t matter. I just remember they were watching the old 21-inch black and white TV in my parents bedroom, and we heard them screaming, like girls were supposed to do, probably a replay of the bobby soxers. And the parents looked at each other and laughed.
Why does that make me cry? I just don’t know. I do know I miss them.
My first play was Our Town. I was in 7th grade and played Wally Webb, Emily’s little brother. My whole family came to see my one line, “Aw, Mom, by 10 o’clock I have to know all about Canada!” Wrung every emotional note out of it I could. Emily gets to go back and look at the past, against the advice of the Stage Manager. Don’t do it, he says. Oh, but I want to, says Emily.
I can see why. I can imagine myself there right now, just like Emily. I look down on the parents, on me, and I want to say, I’m right here! I love you all! You were so wonderful! Can you hear me?
I love Thornton Wilder. It’s just what I want to say. I can see us all, I really can – and I’m not stoned. True, I’m listening to Beatles music and 50’s music and 60’s music, but I’m not stoned, really I’m not.
Time is such a pisser. We just can’t beat it. I hope they knew how much I would appreciate them, how much I loved them. I know they loved me. And I just realized a couple of days ago how young they were. My Dad was 26 when I was born, my Mom I guess just shy of 24. So when I was 20, they were just 46 and 44, already had 4 kids whom they had sent to private school until we moved to Lower Merion, a summer house down the shore (who knew that “down the shore” was a localism?), a succession of cars, etc. Rock and roll had just come and no one knew how to treasure it yet. No one knew Mad Magazine was a classic. No one knew we’d be flying on jets, listening to IPods, and the world would be getting less dangerous from H-bombs but more dangerous from terrorism. No one knew that the US would get better and better. Now we know. Too late, man! That doesn’t help them now! They couldn’t plan on that, and now they’re fucking dead!
All we have is the present, but I sure miss the past, and I miss my mommy and daddy.
Budd Shenkin
My father died in December, 2007 – he missed the big financial meltdown, he missed Obama, he missed a much-wanted great grandchild. And I miss him. It isn’t getting any better. I kinda knew I idolized him when he was alive, and fought against him, but it’s just gotten worse since he left us.
I think about how we used to be. I remember when I was in high school, and when I was away at college and knew my parents were there, even when I called home reluctantly on Sunday night – no cell phones, he kinda missed that, too, he was too old when they came – and my Mom and my Dad were on the phones and I said some of my courses were hard, and Dad said, “Well, it’s long distance, so, ….”
And my Mom said, “Henry! He needs you!”
And then my Dad said, “Well, everyone knows that math and science are the hardest.”
I hadn’t even known that I needed him. I never thought I did before. Just knew that I needed to please him or I’d feel crappy. Not that I ever did displease him, so far as I knew. Displease my mother, that seemed easier. I still remember the call; it must have helped, I’m sure it did. Nothing had been particularly hard before, I guess. Except mechanical drawing, and I could always just spend more time on that. But in college we were steaming ahead.
And I remember sitting with my parents and with Betty Jane Lipshutz from up the street, whose daughter Margie was friends with my sisters. Who was it on the TV? It must have been the Beatles, because Elvis came on Ed Sullivan when I was in high school, and this must have been later, when I was older. It doesn’t matter. I just remember they were watching the old 21-inch black and white TV in my parents bedroom, and we heard them screaming, like girls were supposed to do, probably a replay of the bobby soxers. And the parents looked at each other and laughed.
Why does that make me cry? I just don’t know. I do know I miss them.
My first play was Our Town. I was in 7th grade and played Wally Webb, Emily’s little brother. My whole family came to see my one line, “Aw, Mom, by 10 o’clock I have to know all about Canada!” Wrung every emotional note out of it I could. Emily gets to go back and look at the past, against the advice of the Stage Manager. Don’t do it, he says. Oh, but I want to, says Emily.
I can see why. I can imagine myself there right now, just like Emily. I look down on the parents, on me, and I want to say, I’m right here! I love you all! You were so wonderful! Can you hear me?
I love Thornton Wilder. It’s just what I want to say. I can see us all, I really can – and I’m not stoned. True, I’m listening to Beatles music and 50’s music and 60’s music, but I’m not stoned, really I’m not.
Time is such a pisser. We just can’t beat it. I hope they knew how much I would appreciate them, how much I loved them. I know they loved me. And I just realized a couple of days ago how young they were. My Dad was 26 when I was born, my Mom I guess just shy of 24. So when I was 20, they were just 46 and 44, already had 4 kids whom they had sent to private school until we moved to Lower Merion, a summer house down the shore (who knew that “down the shore” was a localism?), a succession of cars, etc. Rock and roll had just come and no one knew how to treasure it yet. No one knew Mad Magazine was a classic. No one knew we’d be flying on jets, listening to IPods, and the world would be getting less dangerous from H-bombs but more dangerous from terrorism. No one knew that the US would get better and better. Now we know. Too late, man! That doesn’t help them now! They couldn’t plan on that, and now they’re fucking dead!
All we have is the present, but I sure miss the past, and I miss my mommy and daddy.
Budd Shenkin
Sunday, June 6, 2010
Health Care Evolution as Seen From the Bottom
We know that the money in health care is going to the hospitals. If you are half-decently managed and you have a half-decent payor mix, you will be making a lot of money. Non-profit has no meaning in health care; it was shown long ago that for-profit and voluntary hospitals act equivalently. The money they make goes for very handsome executive salaries and retained earning to be spent on system development. “System development” for hospitals can mean more and more technology. It can also mean buying up doctors and controlling the field, vertical integration.
Here’s what this process can look like on the ground. There is a voluntary hospital in Pleasanton called ValleyCare. The CEO is a firebrand named Marcy Feit, who began life as a nurse, but who has now been in Pleasanton for over a decade and is very well entrenched. She decided a couple of years ago to construct a Foundation. In other states the hospitals simply hire doctors; in California it is illegal for non-doctors to hire doctors, so instead there are Foundations, which are non-profit entities governed by Boards, which are essentially run by the hospitals that establish the foundations.
In forming the Foundation, Marcy and her aides identified a primary care doctor well-schooled in previous medical care wars, John Yee, to head the group, and I understand he is being paid $1.5 million over three years to be Medical Director. Between these two and some others, they rule the Foundation without opposition. Their view seems to be that anyone who hasn’t joined the Foundation is the enemy.
Two pediatric practices were approached about joining the Foundation on what they judged were unfavorable terms, so they declined. Outraged, Marcy vowed to hire pediatricians on her own, which she proceeded to do, and hired all the obstetricians practicing at ValleyCare, and ordered the obstetricians to refer exclusively to the newly hired pediatricians. It was essentially a got-out-of-town verdict for practices that had been there for 30 years and who had done much to build the hospital’s pediatric program.
Marcy and her associates, I understand, are insisting that most prominent Medical Staff positions be held by Foundation members, although so far the staff as a whole has managed to remain independent. They sought to vote democratically for their member on the hospital Board, but their nominees were disqualified by Marcy and a Foundation doctor appointed.
There are two large radiology groups in the East Bay, one of which holds the ValleyCare contract. Marcy informed the group holding the contract that if they wished to continue to do so, they would be required to discharge two of their radiologists there, both competent and very long standing members of the staff, whom she judged disloyal. The group is now in a condition similar to Google in China – important market, but mindful of their ethics. Not easy.
It’s an interesting story, and an extreme. But to my mind the ValleyCare situation highlights the forces in medicine as they are being played out currently. It’s hard to know how it will play out, but if people are interested, I’ll keep you posted.
Budd Shenkin
Here’s what this process can look like on the ground. There is a voluntary hospital in Pleasanton called ValleyCare. The CEO is a firebrand named Marcy Feit, who began life as a nurse, but who has now been in Pleasanton for over a decade and is very well entrenched. She decided a couple of years ago to construct a Foundation. In other states the hospitals simply hire doctors; in California it is illegal for non-doctors to hire doctors, so instead there are Foundations, which are non-profit entities governed by Boards, which are essentially run by the hospitals that establish the foundations.
In forming the Foundation, Marcy and her aides identified a primary care doctor well-schooled in previous medical care wars, John Yee, to head the group, and I understand he is being paid $1.5 million over three years to be Medical Director. Between these two and some others, they rule the Foundation without opposition. Their view seems to be that anyone who hasn’t joined the Foundation is the enemy.
Two pediatric practices were approached about joining the Foundation on what they judged were unfavorable terms, so they declined. Outraged, Marcy vowed to hire pediatricians on her own, which she proceeded to do, and hired all the obstetricians practicing at ValleyCare, and ordered the obstetricians to refer exclusively to the newly hired pediatricians. It was essentially a got-out-of-town verdict for practices that had been there for 30 years and who had done much to build the hospital’s pediatric program.
Marcy and her associates, I understand, are insisting that most prominent Medical Staff positions be held by Foundation members, although so far the staff as a whole has managed to remain independent. They sought to vote democratically for their member on the hospital Board, but their nominees were disqualified by Marcy and a Foundation doctor appointed.
There are two large radiology groups in the East Bay, one of which holds the ValleyCare contract. Marcy informed the group holding the contract that if they wished to continue to do so, they would be required to discharge two of their radiologists there, both competent and very long standing members of the staff, whom she judged disloyal. The group is now in a condition similar to Google in China – important market, but mindful of their ethics. Not easy.
It’s an interesting story, and an extreme. But to my mind the ValleyCare situation highlights the forces in medicine as they are being played out currently. It’s hard to know how it will play out, but if people are interested, I’ll keep you posted.
Budd Shenkin
Sunday, May 23, 2010
Budd's Advice to the Democrats
It’s true – I am negative on the Democrats. But I wonder why. And I believe I’ve said a word or two about poor spending on the Stimulus Bill. I haven’t liked their timidity vis-à-vis the financial industry, and their obeisance to the powerful interests in health reform – nor the kowtow to clinics and nurses. When my friend Michael, returned from a year’s stint in the Defense Department, asked Ann and me how we felt about Obama last Monday night, I said I was disappointed. Why? Lack of apparent leadership, I said. Obama’s inexperience was showing.
But isn’t that terribly short-sighted of me? I thought that the Obama Administration should go for a lot of big goals simultaneously, and not scale down objectives and go one by one. They took my advice, and it has worked out. There has been a spate of articles in the last few days pointing out that the triumphs of Obama puts him in the league of FDR, LBJ, and Reagan for changes made and influence felt. That’s big league, and they are just talking about domestic policy, leaving out the important foreign policy advances such as nuclear reductions, temperature lowering with the Russians if not the Chinese.
Here is a typical quote from Steve Benen, reflecting on how voters tend to vote for and to vote against: “This year, the Democratic Party really hopes that it can benefit from both. On the one hand, they argue, Democratic policymakers have an impressive list of accomplishments, mirroring the platform they ran on -- economic recovery, health care reform, Wall Street reform, student loan overhaul, withdrawing troops from Iraq, restoring the nation's global stature, advances on civil rights, Lilly Ledbetter Fair Pay Act, expanded stem-cell research, new regulation of the credit card industry, new regulation of the tobacco industry, a national service bill, the most sweeping land-protection act in 15 years, etc. On the other hand, the Democratic argument goes, Republicans have moved sharply to the right, and generally act as if the GOP has gone stark raving mad.”
I said a couple of months ago that the Democrats needed to get past health care reform, and then make a very big deal about Wall Street reform, daring the Republicans to stick up for the plutocrats. They are doing that, but in their moderation, the Republicans are able to support it, and not take the bait. Hard to find sympathy for Lloyd Blankfein. So we’ll get some good law, not enough but something – and the problem is that it will not provide an electoral theme.
So, what is the Obama Administration to do? Again, I’ll go back to 1934. Everyone advised Roosevelt that the opposite party always loses seats at the midterm elections. They advised him not to risk his prestige in a lost cause. Roosevelt overruled them, set out aggressively to campaign hard and nationwide, and came up aces. Similarly now, with everyone expecting a Democratic debacle, what really does Obama have to lose? If anybody can make a case, he can.
It’s probably a question of timing. Right now, the Gulf Spill is the problem, and the Administration needs to come out heroes, if they can. Then in the fall, take the one item that the great Spill brings to the fore, energy policy (used to be climate policy, but that doesn’t sell.) Obama can say that his Administration has shown they can be successful, but more remains to be done. We can’t have any more oil spills. We need to completely reform the governmental part of it (the hapless Materials Division of Interior, or whatever it is, the sex and drugs haven), and institute strong incentives for alternative energy generation, and tax carbon.
There has to be more to the campaign, of course, and maybe this isn’t even the main part. But the tone and the energy needs to come forth, even if it seems like a risk. Not playing hard is the real risk.
Budd Shenkin
But isn’t that terribly short-sighted of me? I thought that the Obama Administration should go for a lot of big goals simultaneously, and not scale down objectives and go one by one. They took my advice, and it has worked out. There has been a spate of articles in the last few days pointing out that the triumphs of Obama puts him in the league of FDR, LBJ, and Reagan for changes made and influence felt. That’s big league, and they are just talking about domestic policy, leaving out the important foreign policy advances such as nuclear reductions, temperature lowering with the Russians if not the Chinese.
Here is a typical quote from Steve Benen, reflecting on how voters tend to vote for and to vote against: “This year, the Democratic Party really hopes that it can benefit from both. On the one hand, they argue, Democratic policymakers have an impressive list of accomplishments, mirroring the platform they ran on -- economic recovery, health care reform, Wall Street reform, student loan overhaul, withdrawing troops from Iraq, restoring the nation's global stature, advances on civil rights, Lilly Ledbetter Fair Pay Act, expanded stem-cell research, new regulation of the credit card industry, new regulation of the tobacco industry, a national service bill, the most sweeping land-protection act in 15 years, etc. On the other hand, the Democratic argument goes, Republicans have moved sharply to the right, and generally act as if the GOP has gone stark raving mad.”
I said a couple of months ago that the Democrats needed to get past health care reform, and then make a very big deal about Wall Street reform, daring the Republicans to stick up for the plutocrats. They are doing that, but in their moderation, the Republicans are able to support it, and not take the bait. Hard to find sympathy for Lloyd Blankfein. So we’ll get some good law, not enough but something – and the problem is that it will not provide an electoral theme.
So, what is the Obama Administration to do? Again, I’ll go back to 1934. Everyone advised Roosevelt that the opposite party always loses seats at the midterm elections. They advised him not to risk his prestige in a lost cause. Roosevelt overruled them, set out aggressively to campaign hard and nationwide, and came up aces. Similarly now, with everyone expecting a Democratic debacle, what really does Obama have to lose? If anybody can make a case, he can.
It’s probably a question of timing. Right now, the Gulf Spill is the problem, and the Administration needs to come out heroes, if they can. Then in the fall, take the one item that the great Spill brings to the fore, energy policy (used to be climate policy, but that doesn’t sell.) Obama can say that his Administration has shown they can be successful, but more remains to be done. We can’t have any more oil spills. We need to completely reform the governmental part of it (the hapless Materials Division of Interior, or whatever it is, the sex and drugs haven), and institute strong incentives for alternative energy generation, and tax carbon.
There has to be more to the campaign, of course, and maybe this isn’t even the main part. But the tone and the energy needs to come forth, even if it seems like a risk. Not playing hard is the real risk.
Budd Shenkin
Saturday, May 22, 2010
Spending ARRA Money
It’s pretty clear that the government needs to spend money to keep the economy going. That’s basic Keynesian counter-cyclical governmental action – buy when no one else is buying. That’s not the time to worry about the deficit (but at the same time one hopes that in better times the deficit will be worried about – ojàlà). So I’m for priming the pump, and I wish we had another round coming.
But, then, even I have my doubts. I haven’t seen any big exposés of the shovel-ready projects of the original ARRA legislation – where is William Proxmire’s Golden Fleece Award when we need it? It’s really strange, come to think of it, that the Republicans haven’t come out with sensational stories about multiple bridges to nowhere. I wonder why. Maybe it’s mutual respect for each other’s district spending.
So, in lieu of Proxmire, here are my own personal observations of how money is filtering down to be government-spent. Item #1 – two weeks ago we received a notice from our local Contra Costa County Health Department. They had a $1 million grant program that they themselves could not spend directly, but had to divvy up among others (if they could have spent it themselves, knowing that health department, believe me, they would have. A classic health department, bureaucracy and empire building.) Anyway, we were notified about this program with one day turnaround time required – they are not used to involving others in money spending, I guess.
This grant program was a mélange of rules. How to apply, what criteria to meet, how to measure, who would be eligible for what, etc. etc. Just the reason I don’t deal with governments. Half the value of the grant, if received, would have been spent (and not reimbursed) by time and effort filling out the damn grant application. So typical. Then reviewed by the huge brains in the health department.
And what was the object of this million dollars to be spent, and the time of application to be spent on unpaid work, and the time of bureaucratic efforts to conceive the project, make the rules, and review the applications and later the work? Get this. Spending all this money to find the hard to reach populations in Contra Costa County and immunize them against H1N1!! Jesus! Talk about a stupid objective! Where is the evidence that this is a worthwhile objective? Where is the evidence of how much money would be spent per shot delivered? Where is the evidence that this is worth anything at all, especially when so many regular people are declining the H1N1 shots for various reasons of their own? Do we think that H1N1 is that much of a threat now? Anyone there with experience in trying to wipe out smallpox or polio with the CDC worldwide, who would know how uninformed this choice of objective is on so many levels? Government!!!
OK, so that’s only a million dollars. Then a friend of Sara’s who works for the health department in Seattle was visiting last week. Now we’re talking $25 million. What are they looking to spend $25 million on? Tobacco and obesity. What are they going to do about tobacco and obesity? OK, tobacco public health campaigns have been effective, and I love the old ads that were so sarcastic and hardhitting, about the hard-bitten faux advertising guys plotting about how to make kids into cigarette addicts. They probably helped. And it’s true that tobacco is a huge public health problem. Although it’s also true that probably the most important element of the anti-tobacco crusade was the tax policy. But OK, I’ll give them this on tobacco – important objective and a somewhat proven track record. On the other hand, I doubt if this money is going to lead to much increased employment, except maybe for the health department people and some advertising agencies. Not exactly the people I would target to get this country going again.
But obesity? What the hell are they going to spend the obesity money on? There is no proven way to combat obesity. We don’t know anything about advertising about obesity – who and what are going to be the targets? No one knows anything that will work! Gym memberships? Lectures about fast food? Hit squads on fructose-rich corn syrup? General money for the health department personnel so they avoid layoffs? Personally, I’d rather see some Ben Shahn art commissioned – at least that leaves a trace. I smell another Golden Fleece, sorry to say.
Which leads us to taxes. By the grace of God, I am a highly taxed person. I don’t squawk much about taxes, but lots of people do. They might give lots of reasons for their discomfiture, both practical and theoretical, but I think it comes down to this – what are we getting for our tax money? Even if we are borrowing money now and these expenditures might not be coming directly from taxes yet, we still pay interest and we the people will have to pay it somehow sometime. What are we getting for it?
When the money goes out to health departments and they are told, “Spend it in a good cause,” I don’t buy that. Pea brains don’t do well in spending Other People’s Money (OPM). Large brains don’t even do so well. I look at these idiocies and say, why not fix the pot holes on I-880? It turns out that construction projects don’t have a very good multiplier effect in rocketing money around in the economy. But then I have to ask, does giving money to public health agencies and advertising agencies do better?
That's what I see and that's what other people see.
Anyone ever thought of subsidizing bloggers?
Budd Shenkin
But, then, even I have my doubts. I haven’t seen any big exposés of the shovel-ready projects of the original ARRA legislation – where is William Proxmire’s Golden Fleece Award when we need it? It’s really strange, come to think of it, that the Republicans haven’t come out with sensational stories about multiple bridges to nowhere. I wonder why. Maybe it’s mutual respect for each other’s district spending.
So, in lieu of Proxmire, here are my own personal observations of how money is filtering down to be government-spent. Item #1 – two weeks ago we received a notice from our local Contra Costa County Health Department. They had a $1 million grant program that they themselves could not spend directly, but had to divvy up among others (if they could have spent it themselves, knowing that health department, believe me, they would have. A classic health department, bureaucracy and empire building.) Anyway, we were notified about this program with one day turnaround time required – they are not used to involving others in money spending, I guess.
This grant program was a mélange of rules. How to apply, what criteria to meet, how to measure, who would be eligible for what, etc. etc. Just the reason I don’t deal with governments. Half the value of the grant, if received, would have been spent (and not reimbursed) by time and effort filling out the damn grant application. So typical. Then reviewed by the huge brains in the health department.
And what was the object of this million dollars to be spent, and the time of application to be spent on unpaid work, and the time of bureaucratic efforts to conceive the project, make the rules, and review the applications and later the work? Get this. Spending all this money to find the hard to reach populations in Contra Costa County and immunize them against H1N1!! Jesus! Talk about a stupid objective! Where is the evidence that this is a worthwhile objective? Where is the evidence of how much money would be spent per shot delivered? Where is the evidence that this is worth anything at all, especially when so many regular people are declining the H1N1 shots for various reasons of their own? Do we think that H1N1 is that much of a threat now? Anyone there with experience in trying to wipe out smallpox or polio with the CDC worldwide, who would know how uninformed this choice of objective is on so many levels? Government!!!
OK, so that’s only a million dollars. Then a friend of Sara’s who works for the health department in Seattle was visiting last week. Now we’re talking $25 million. What are they looking to spend $25 million on? Tobacco and obesity. What are they going to do about tobacco and obesity? OK, tobacco public health campaigns have been effective, and I love the old ads that were so sarcastic and hardhitting, about the hard-bitten faux advertising guys plotting about how to make kids into cigarette addicts. They probably helped. And it’s true that tobacco is a huge public health problem. Although it’s also true that probably the most important element of the anti-tobacco crusade was the tax policy. But OK, I’ll give them this on tobacco – important objective and a somewhat proven track record. On the other hand, I doubt if this money is going to lead to much increased employment, except maybe for the health department people and some advertising agencies. Not exactly the people I would target to get this country going again.
But obesity? What the hell are they going to spend the obesity money on? There is no proven way to combat obesity. We don’t know anything about advertising about obesity – who and what are going to be the targets? No one knows anything that will work! Gym memberships? Lectures about fast food? Hit squads on fructose-rich corn syrup? General money for the health department personnel so they avoid layoffs? Personally, I’d rather see some Ben Shahn art commissioned – at least that leaves a trace. I smell another Golden Fleece, sorry to say.
Which leads us to taxes. By the grace of God, I am a highly taxed person. I don’t squawk much about taxes, but lots of people do. They might give lots of reasons for their discomfiture, both practical and theoretical, but I think it comes down to this – what are we getting for our tax money? Even if we are borrowing money now and these expenditures might not be coming directly from taxes yet, we still pay interest and we the people will have to pay it somehow sometime. What are we getting for it?
When the money goes out to health departments and they are told, “Spend it in a good cause,” I don’t buy that. Pea brains don’t do well in spending Other People’s Money (OPM). Large brains don’t even do so well. I look at these idiocies and say, why not fix the pot holes on I-880? It turns out that construction projects don’t have a very good multiplier effect in rocketing money around in the economy. But then I have to ask, does giving money to public health agencies and advertising agencies do better?
That's what I see and that's what other people see.
Anyone ever thought of subsidizing bloggers?
Budd Shenkin
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