Article 43


Monday, October 29, 2012

Hiring Geeks


Want a security pro? For starters, get politically incorrect and understand geek culture
Security expert Winn Schwartau says outmoded hiring requirements stifle IT security hiring

By Ellen Messmer
Network World
October 29, 2012

MIAMI—While complaints can be heard far and wide that it’s hard to find the right IT security experts to defend the nation’s cyberspace, the real problem in hiring security professionals is the roadblocks put up by lawyers and human resources personnel and a complete lack of understanding of geek culture, says security consultant Winn Schwartau.

Take Janet Napolitano, U.S. secretary of the Department of Homeland Security, who has said the country can’t find the right people for network defense. The real problem is a misunderstanding of computer geeks, their personalities, habits and their backgrounds, said Schwartau today during his talk at the Hacker Halted information security conference here. 

Computer geeks are discriminated against under hiring rules and legal niceties that often categorize them as undesirables. “We do not fit the mold. We at the outer limits of normal,” Schwartau said.

According to Schwartau, there’s a gauntlet of hiring obstacles today that actually work to discriminate against computer geeks who have the expertise to do the job of protecting government networks. Demands for college degrees and IT certifications and the ability to get IT security clearances should not be a priority in hiring, said Schwartau. “Forget education,” he said, adding, “We need to re-design clearances—they’re a Cold War relic designed for nuclear secrets and 1950s crypto.” The era of 9-to-5 is also over, he added.

He said what’s holding up hiring IT security professionals can be found in the thinking of human resources departments that frown on conditions such as attention deficit disorder and autism, or obsessive-compulsive personalities which are typical of computer geeks willing to focus on an issue through the night. And although hiring rules in place tend to go the extra mile to accept alcoholism, the slightest type of illegal drug infraction makes it tough for job applicants. “We’ve got to start getting politically incorrect if we want to get the job done,” said Schwartau.

If there are tests that need to be done to probe the basic trustworthiness of job applicants for sensitive network security jobs in government or industry, said Schwartau, it would be better to try industrial psychological profiling, making it clear that anyone that passed it and got hired would be subject to it over and over again during the time they were in their job.

Computer geeks could be asked something like, “If your wife and daughter were kidnapped, will you turn against my company?” he suggested. The answer would likely need to be “yes,” because “anything else is deceptive.”

“Do you need a secret clearance to defend a network? They say you do,” said Schwartau, alluding to government rules. But the government is competing against private industry and, yes, the criminal world, for the kind of talent held by those who really know about network weaknesses.

HR’s job is to find something wrong so they don’t have to hire you,” said Schwartau. It could be money you owe, or your age if you’re older, or personality traits seen as either too meek or too aggressive. But he says some of these rules should be tossed out to find the right IT security skills. Computer geeks are often socially awkward, they may be accustomed to blurting out whatever they’re feeling with brutal honesty, and they “won’t kiss ass,” said Schwartau.

“HR and lawyers need to get over it,” Schwartau concluded.

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information.



8 biggest myths about managing geeks
Managing talented techies can be tricky business. Here’s how not to treat IT pros

By Dan Tynan
December 10, 2012

From Sheldon Cooper on “The Big Bang Theory” to Comic Book Guy from “The Simpsons” to Urkel, we know all we need to know about geeks, right?

They eat nothing but pizza and care about nothing but technology. They live by night and are rarely seen in daylight. They’re barely able to communicate with other bipeds. They’d spend all day playing with their toys and getting nada done if you let them. They’re the antithesis of creative.

While some of these stereotypes may seem true at a distance, up close they tend to fall apart. Tech pros are more than the sum of their stereotypes, though they are definitely different and need to be managed accordingly, says Eric Schlissel, founder of tech services provider Geektek IT Outsourcing.

“Managing a geek is different than managing other employees,” says Schlissel. “If business owners want to retain the top talent, they should treat their geeks as a different class of employee. Respect their proclivities, within reason, and judge them based on their work product instead of their tattoos.”

The trouble is in separating the myths from the wisdom when it comes to getting the most from highly trained technology professionals. Here are eight commonly held misperceptions about managing the techie set. If you’re among the (mis)managed, perhaps you can persuade your boss to read this.

Geek management myth No. 1: Pizza in, code out
Though pizza may appear to the culture at large as one of the four basic geek food groups (along with Chinese takeout, microwave popcorn, and Red Bull), stocking the development department with junk food and caffeinated beverages, locking the door, and waiting for a finished product to emerge in the wee hours of the night doesn’t cut it, says Johanna Rothman, management consultant and author of “Hiring Geeks That Fit.”

“Every so often you might encounter someone who can create production-quality code in this kind of environment,” she says. “But I’ve been in the business for over 30 years now and I’ve only met three of them.”

The pizza-in, code-out (PICO) rule usually results in an inferior product, in large part because good code requires collaboration between multiple teams, adds Bruce Eckfeldt, managing director and CEO of Cyrus Innovation, an agile software development firm. (Eckfeldt also recommends an alternative diet of fresh fruit and herbal tea.)

“Developers perform better when working a sustainable pace and collaborating together, as with pair programming,” he says. “This provides a constant rotation of new ideas and distributes knowledge of the system, which speeds up innovation and reduces risk.”

Geek management myth No. 2: Geeks need communication coaching—like Koko the gorilla
It’s a well-worn clich that technologists have difficulty communicating with the rest of humanity. But the truth is not that IT pros can’t talk to normal people—it’s that they often prefer different modes of communication.

Geeks may be reluctant to speak up in group meetings (because they’ve been told all their lives they’re bad at communicating), or they may talk too much, getting bogged down in technical details, simply because the minutiae are important to their work. Worse, they can at times be savagely blunt, skewering the opinions and/or egos of coworkers, thereby unfortunately fueling communication stereotypes.

“Many ‘geeks’ score higher on analytical intelligence than conceptual or social intelligence,” says business coach Nora N. Simpson, principal of Simpson Strategic Solutions. “The analytical thinker craves knowledge and assumes everyone else does too. To prove their worth to a manager, they will often demonstrate their knowledge by providing too many details, which can confuse the issues at hand.”

For techs who are shy about talking in front of others, the solution is to meet with them one-on-one on a regular basis, says Rothman. Another good idea is to use multiple channels of communication—email, chat, IM, texting, intranets, wikis, and so on—which tech pros find less disruptive and more conducive to their skill sets.

“Geeks are excellent communicators; they just don’t use traditional communication channels,” says Chris Kelly, developer evangelist for New Relic, a Web app performance management firm. “They prefer to communicate asynchronously using tools like instant messaging, group chat systems, and email. Phone calls, meetings, and ‘stopping by’ are very disruptive to the process of writing software. When a geek appears to be noncommunicative or antisocial, she’s just trying to focus on the task at hand.”

Geek management myth No. 3: Technologists can’t be bothered with creative challenges
Just because someone takes an analytical approach to problem solving doesn’t mean they’re not creative. Organizations that put “creatives” on one side of the table and engineers on the other need to invest in a new table—preferably a round one where all parties can all collaborate.

“Most managers assume engineers are solely linear thinkers and only looking for the next high-paying job,” says Meredith Munger, principal of small-business consultants Munger & Co. “You’ll have much better success by thinking of and treating your engineers as artists who love creating beautiful things and are proud of their work. That in turn helps managers understand how criticizing an engineer’s work hurts him and damages their working relationship.”

The key is to avoid being too prescriptive in your requirements. Describe where you want your company to be and what the limitations are, then let your engineers figure out whether it makes more sense to build a train, a plane, or a time machine to get you there.

“An old geek management saying goes, ‘Don’t try to herd the cats. Just put them where the mice are, and let nature take its course’,” says Brian Jones, CTO at email marketing software company Aweber. “Rather than force-feeding the engineering team the specific tasks they’ll perform, give them the tools to efficiently self-organize around an issue and eradicate it, because that’s what they want to do.”

Geek management myth No. 4: Geeks are freaks who only come out at night
Though some tech professionals might prefer to work all night and sleep all day, that does not necessarily bind them to the brotherhood of the undead. It does, however, mean they might be better off being unbound by many rules that govern other employees’ temporal existence.

“I’ve had more success letting the folks I manage work on projects when they want to, rather than restraining them to 9-to-5 work days,” says Nicholas Percoco, senior vice president and head of Trustwave’s SpiderLabs, a cloud-based compliance and information security provider. “They’re always held accountable for completing tasks and working as a team, but allowing them to do it when they’re most productive leads to better results for the company.”

Smart managers recognize that geeks are different than their average employee and give a wide latitude for alternative hours, dress, and behavior, says Richard J. Sherman, author of “Supply Chain Transformation: Practical Roadmap to Best Practice Results.”

“Let them work in soft light, let them listen to their music, let the surf the Web, let them find their own technical muse,” Sherman says. “As for time, they cannot have any boundaries. They will work for 72 hours straight when the muse finds them, and they will take 72 hours off when a new release of a computer game comes out. Let them be.”

Geek management myth No. 5: Taking a geek’s toys away will make him more productive
When they spy a techie fiddling with an iPhone or playing a game, many managers see unnecessary distractions that drain productivity. But the geek sees inspiration—or at least something to occupy the lizard brain while their higher thinking chews on tougher problems.

“Managers don’t understand the emotional connection geeks feel toward their personal devices,” says Bill Rosenthal, CEO of Logical Operations, which provides multichannel skills training to businesses. “For many, the feeling is so visceral that policies restricting their use seem like an affront to them. It dampens their enthusiasm and undercuts their productivity.”

That’s especially true for the tools they need to do their jobs, says Brian Kelly, VP of engineering for TimeTrade Systems, maker of Web-based scheduling software.

“Most programmers work best when given the best tools for the job: fast computers, top-quality monitors, noise-canceling headphones, ergonomic chairs, and any software they need,” says Kelly. “The most successful engineer-focused companies out there are well-known for giving their geeks great tools, and that’s no coincidence. At TimeTrade we even describe the tools newly hired programmers will get in our online job postings. That certainly helps attract technical talent to the company.”

When you see geeks glued to their phones or staring at screens for days on end in a seemingly comatose state, don’t panic, advises Rod Bagg, VP of customer support for Nimble Storage, a provider of flash-optimized hybrid storage arrays.

“The wheels are churning,” he says. “They’re going to get it done. Just stay out of their way.”

Geek management myth No. 6: Techies couldn’t care less about business
Another familiar myth is that IT pros are completely uninterested in what the business side is doing. That’s simply wrong, says Dave Gruber, director of developer marketing for Black Duck Software, a management and consulting firm for businesses that rely on open source software.

“Geeks get excited about more than code,” he says. “Engage them in your business. You’ll be surprised how interested most geeks are in understanding the bigger picture and will ultimately develop more relevant code when they do.”

Organizations that fail to invite tech pros to the table miss out on the expertise and experience they may bring in other areas, such as Internet marketing, UX design, and market segmentation, to name a few examples, says Brett Suddreth, editor at IT Career Paths.

“We are more than just technology gurus,” he says “We have a lot of insights into the business that could help push the organization forward. Start including us in your brainstorming meetings when you are about to pitch new clients—you never know what we will come up with.”

Geek management myth No. 7: Geeks are antisocial misfits
While the tech field tends to attract more introverts than extroverts, the image of geeks holed up in their cubicles thrumming away on their keyboards while everyone else around parties just doesn’t hold water.

“I think the biggest myth is that geeks are antisocial,” says David Jessurun, freelance Web designer and consultant. “In fact, one of the best guys I ever had in my teams had only one major issue: I had to constantly track him down and pry him away from the pretty girls in other departments—and they from him.”

Encouraging tech staff’s social side is in fact a great motivator, says Live Leer, director of internal communications at Web browser company Opera Software.

“We host Friday beers, International Women’s Day events, plus Christmas and summer parties, and our employees have organized among themselves board-games nights, singing groups, sailing trips, and dance classes,” she says. “Also contrary to ‘geek’ stereotypes, we’ve found that offering a psychology service, having a masseur visit weekly, and generally offering a family-friendly workplace where staff can bring their children to work if needed is great for accommodating our employees and their needs.”

Geeks need to develop good relationships with their coworkers, even if they are reluctant to do so, says life coach Scott Crabtree, chief happiness officer (yes, really) for Happy Brain Science.

“Introverts won’t shout about how they need contact with people; they might even resist social activity,” he says. “But science suggests that both introverts and extroverts benefit greatly from social contact. Providing opportunities for geeks to be social will boost their happiness and therefore their productivity, creativity, and health.”

Geek management myth No. 8: Solving tech problems is all the satisfaction a geek needs
For years, stingy employers have used the myth that geeks care only about technology—and not money—as an excuse to underpay and overwork them. If this dubious notion was ever true, it isn’t any more, say experts. But money is only one of several key motivators, along with recognition from their peers, flexible work environments, or simply the opportunity and the tools to writetight code or solve a thorny problem.

“Money matters, of course, but mostly as public reward for a job well done,” says Munger. “Instead of an end-of-year holiday bonus, though, it’s far better to walk into their work area with crisp $100 bills and reward victories throughout the year. For engineers who’ve spent extra time crashing on the job, I have sometimes bought a weekend getaway at a hotel resort for the whole family to enjoy after the project is done. Spouses appreciate that the company recognizes their sacrifice as well.”

A job well done—and recognized as such by management—goes a long way to keeping the tech staff happy and motivated.

“Geeks build stuff, and there is no greater sense of achievement than seeing their app live and in use,” says Nikki Garg, COO for Icreon, a tech consulting and development company. “Give them visibility; show off photographs or promotion material of the project, share the usage statistics, and tell the stories at internal staff meetings or events. Don’t forget to celebrate victories together.”

Even simple praise can do the trick—just as it does with the rest of the nongeek staff, notes Suddreth.

“The old adage that geeks like to stay hidden in the dark while hand jamming away at their computers is really a thing of the past,” he says. “They want to be appreciated and recognized just like anyone else in the organization. So be sure and give them a shout-out when they do a good job.”


Posted by Elvis on 10/29/12 •
Section Personal
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No Warning Redux

House GOP Voted To Cut Disaster Relief In Order To Preserve Military Spending

By Pat Garofalo
Think Progress
October 29, 2012

As part of their bill to void the MILITARY SPENDING CUTS included in the Budget Control Act which was passed as a result of 2011’s GOP inspired debt ceiling standoff.  House Republicans proposed eliminating a program that helps states and localities respond to disasters like hurricanes.

The House Republicans Sequester Replacement Reconciliation Act of 2012, which was PASSED WITHOUT A SINGLE DEMOCRATIC VOTE, called for ZEROING OUT FUNDING for the SOCIAL SERVICES BLOCK GRANT (SSBG), a program that provides funding to state and local governments to aid needy children, adults, and the disabled. As the Center for Budget and Policy Priorities noted, the SSBG also offers assistance for disaster relief:

The SSBG has served as a conduit for emergency appropriations to help residents and communities respond to the additional social service and health needs resulting from natural disasters, such as floods, wildfires, and hurricanes.

For example, in response to the 2005 Gulf Coast Hurricanes - including Hurricane Katrina Congress provided an additional $550 million in emergency funding to states via SSBG for use by public, non-profit, and private entities to repair, renovate, or construct health care facilities, among other purposes. The funds were disbursed promptly ח within two monthsa and SSBGגs flexibility allowed states to streamline eligibility for services funded by the emergency appropriations. Eliminating SSBG could make it harder to provide this sort of flexible human services funding in the face of emergencies.

President Obamas budget proposed maintaining the SSBG’s annual funding of $1.7 billion; it has had that funding level since 2001. As CBPP noted, Although the SSBG has received bipartisan support from governors and members of Congress, it has lost 77 percent of its value since 1981, due to inflation, funding freezes, and budget cuts.Ӕ This chart shows the drop:

Republicans last year held disaster relief funding hostage several times, demanding offsetting budget cuts. They also attempted to slash disaster funding in a 2011 continuing resolution. The Budget Control Act itself, meanwhile, cuts $900 million from the Federal Emergency Management Agency.


Posted by Elvis on 10/29/12 •
Section General Reading
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Saturday, October 27, 2012

Dying In The Sun


I’m a VETERAN ENGINEERING TECHNICIAN bouncing about from temporary job to temporary job because this is now how companies are doing business. No benefits raises their profit margin. I had my home of 15 yrs foreclosed upon in April and am now relegated to living in one of these motels in farflung places. Those of you who are so smug have no idea that you too are being socially engineered...and your time is coming also. Say goodbye to your pensions, social security, etc.
- Mike, El Dorado, AR, Mail Online, 7/9/11

“There was a reason: I had no hope,” she recalls. “There was no point for the future. I had just lost another job opportunity that I thought I had done a really good job at and they just dismissed me. I was old, and they’re not going to hire me. With that, I couldn’t have my life back.”
- The Link Between Unemployment And Suicide, Huffington Post, April 15, 2011

Flanagan apparently masked the depth of the distress he felt as he fought to save his position. He felt like he was fighting a large corporation that pretty much didn’t care, his father said. “This final blow was so devastating. He couldn’t deal with it.” The father said he saw no other signs of depression before his son’s suicide.
- Bad Dreams, Bad Truths, 2/8/07

The links between unemployment and suicide are more evident in the older male population.
- Unemployment Can Triple The Risk Of Suicide, Angela Wilson, 4/1/09

It is the scar of feeling like you are worthless and of no light at the end of the tunnel… The long term unemployed do not show up on the unemployment numbers.  They spend their days looking over job boards trying to network and doing everything that experts tell them to do but they are not finding the doors open when they knock.
- Scars Of The Long_term Unemployed, Rich’s Management Blog, 6/24/11

IMAGINE YOURSELF a single, 55 year old BABY BOOMER whose LAST REAL JOB - and hope of RETIREMENT - ended a decade ago.
- Dark Tunnel of The Burned Out Boomer, October 14, 2012

Stress really does mess with your mind. A new study has found that chronic stress can create many of the brain changes associated with mood disorders.
- Why Stress Makes You Miserable, Science, 6/25/2012

There are 5.4 million people who’ve been out of work for more than six months, which is generally considered when long-term unemployment begins. They make up 42.8% of the unemployed.
- Only 1 on 10 find job after long-term unemployment, CNN, June 14, 2012


Well, the checking account is almost empty.  I HELD ON to the house, my dignity, and mental health through three corporate downsizings, LONG STRETCHES OF UNEMPLOYMENT, a couple of dozen temp jobs, and a fiance walking out on me after one of those downsizings.  I abandoned my elderly mother and KILLED MY CAT to try to hold on to the last good paying job that had me TRAVELING ALL THE TIME - two things I’ll never forgive myself for - but it looks like MY LUCK’S FINALLY RUNNING OUT here in the sunshine state.  It took nine years.

With no job, no hope, no dreams, and paralyzing fear of the future, the light in my heart is all but BURNED OUT.

Why so GLOOMY?

False Hope

There’s lots of jobs on the public job boards, and lots of busy work applying for them all. 

The State of Florida even has a WEBSITE that emails me a list of new jobs every day.

And lots of headhunters call inquiring about my availability for work, and what my career goals are. 

They sound like there’s a million jobs to pick from, and the tuff part for me will be choosing.

I wonder how many of those opportunities they’re talking about ARE REAL.

Gutting of Unemployment Insurance

I went over LAST MONTH’S JOBS REPORT and the UNEMPLOYMENT insurance program in FLORIDA.  The news makes it seems like the economy’s on a rebound.  Nothing can be farther from the truth.  Not IN MY ZIP CODE anyway.

DID YOU KNOW that until NEOCON Rick Scott took over as Florida’s governor, the state’s 60 year old unemployment insurance SAFETY NET used to pay benefits up to 26 weeks?

NOW it’s a sliding scale with MAXIMUM WEEKS AT 23, decreased one week for each half a point the STATE UNEMPLOYMENT RATE goes down under 10.5 percent.

So if the unemployment figure is eight percent - the maximum benefits anyone can get is 17 weeks.  17.  Nine less than 26. 

82 less if you include the ENDING OF FEDERAL EXTENSIONS this year thanks to the LOOKBACK LAW.

This comes at at time when long term unemployment is facing FIVE MILLION PLUS Americans.  From the uneducated to the highly-educated.  From young to old. From black to white. From New York to San Francisco. From the WASHINGTON POST MAY 2012:

Right now, nearly 30 percent of all unemployed Americans have been out of work for more than a year. All told, thats 3.9 million workers, slightly more than the number of people who live in Oregon.

For one, long-term unemployment is an equal risk for all unemployed workers, regardless of education level.

And if you’re a revolving TEMP you may NEVER qualify for unemployment insurance.

Nobody Cares

A big surprise in last week’s presidential debates was the first question to both candidates asked about the over five million, forgotten LONG-TERM UNEMPLOYED.  It was sad but not suprprising to hear them both talk over eachother but say ABSOLUTELY NOTHING.  Another SIDESTEPPED QUESTION asked about getting JOBS FOR KIDS FRESH OUT OF COLLEGE.  More long-winded posturing from both of them.

But nothing of substance like what the STATE OF CONNECTICUT IS DOING to help it’s people.

Why do we support SHIPPING JOBS OVERSEAS while more and more Americans are INVOLUNTARILY OUT OF WORK?

Half this country lost it’s MORALITY, and the other half isn’t doing much more than TALK ABOUT IT. Check out THIS POST, or watch the 15 minute video clip.  Does it move your heart at all?

Skewing The Numbers

The BLS U6 report is a more accurate representation of the unemployed population than the report we hear on the news because it includes those that fell off the radar - including people that exhaused their unemployment insurance (that’s right - if you use up your unemployment benefits, and still don’t have a job, statistically your’e not unemployed anymore,) part-timers, and long-term unemployed.  From the BLS WEB PAGE:

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

At least it was.  To artificially fluff those numbers, full time work is now officially 30 hrs/week. 

We can thank OBAMACARE and our elected officials for that BRIGHT IDEA.

And look forward to more DUBIOUS REPORTS of an economic recovery.

Reverse Discrimination

Back when I went to school a high school diploma was as important as a college degree is today to secure a job.  What’s the first two questions interested employers ask? 1) Are you working now? 2) Do you have a college degree? A lot of people my age don’t have degrees.  We’re not stupid. Thats just the way it is.  Plus we’re over 40.  That’s QUESTION THREE. Another BIG PROBLEM.  Employers act like being a seasoned-veteran with good work ethics and lots of experience whose job was outsourced to India - doesn’t make a good worker.

My neighbor’s son lives alone and rent free in the house his dad left him after moving back to Mexico.

Although YOUNGER than me, and bi-lingual, we both lack meaningful employment.

The difference between us is he gets government assistance - like $200 a month in food stamps along with that free house.  And if he winds up in a hospital, may be able to get treated for free, UNLIKE THE REST OF US.

I get penalyzed with a 10% early withdrawal penalty for using my 401K and RETIREMENT SAVINGS to keep the mortgage paid, and food in my mouth.  That’s about 30% tax on that money.  Without a job.  While my neighbor gets government assistance from all those taxes I paid over the past 40 years.  Not that he shouldn’t be denied help if he can’t find a job - but neither should I.  And I certainly SHOULDN’T BE PUNISHED for using my hard earned retirement money to weather this financial storm, and trying to keep a roof over my head.

Highest Foreclosure Rate in Country

The housing crisis in Florida has been BAD AT LEAST AS LONG as I’ve been writing here.  Now the state’s foreclosure rate is the WORST OF THE WORST in America:

For the first time since 2005, Florida led the nation for foreclosures, according to a report by a real-estate research group that tracks home sales across the country.

During the past year, foreclosures dropped 13 percent nationally but increased by more than that amount in Florida. The state had one FORECLOSURE legal filing for every 117 houses during the third quarter the highest rate in the country and double the rate for the entire nation, according to a third-quarter report by RealtyTrac.

A Glimmer Of Sunshine For Orlando Home Sellers

For Orlando homeowners thinking of selling - the Orlando Sentinel REPORTED in August - home values may be going up.

Can you believe it?

“People have gone from not being able to find a buyer to not being able to find a seller,” Tenaglia said. “It’s completely upside down from where it was a few years ago.  It’s really exhausting. You just convince a client about the market and then it changes - ‘Oh, now there’s not 50 houses on the market. Now there are just five.’”

Such examples may be heartening to the legions of homeowners eager to restore property values damaged by the housing slump, recession and global credit crisis of the past five years, but they do not constitute a normal, stable market.

In terms of price, the more-affordable properties have been the most in demand recently. Houses priced under $100,000 are “ridiculously” hard to find right now, according to one local real-estate agent, and it is getting difficult to locate listings priced under $200,000.

Wanna buy a $100K house in beautiful Seminole County Florida, just outside lovely Orlando?

Mine will be on the market pretty soon.  Make me an offer - before the bank takes it away.

Dark Night Of The Soul

If I told you I’m not suffering DEBILITATING DEPRESSION and numbing fear from the hopelessness and painful awareness of the lack of job prospects for long-term, unemployed, middle-class, baby boomers, or emptiness and deep sadness of LOSS and loneliness from being single with no wife or kids for support, and DISAPPEARING FRIENDS that shun me like I’m a leper - I’d be lying.

If I told you I can rise above this mental and emotional anguish like the Buddhists who claim suffering is a result of temptation - I’d be lying too.

Next stop in life for this HOPELESSLY UNEMPLOYED American is to be shed AGAIN of all DIGNITY, self-esteem and attachments - cause NO JOB = no money to pay the mortgage, and the ultimate failure of not being able to provide for one’s self, loved ones, or the greater good.

Just in time for another THANKSGIVING AND CHRISTMAS.

Thank God I don’t have kids.

But I wish I had some hope.

YOU’LL KNOW WHEN I’m out of money because this website will go dark once the electric gets shut off.


Posted by Elvis on 10/27/12 •
Section Revelations
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Wednesday, October 24, 2012

The Oracle Of Delphi Redux


If you missed these articles - THE ORACLE OF DELPHI and A CORPORATE ELITIST SPEAKS - go read them now.

If those two stories didn’t MAKE YOU SICK seven years ago, and force you to wake up to WHAT’S HAPPENING to America’s middle class - keep reading.

One of the brains of the CAPITALIST movement to screw the backbone of this country’s people IS RUNNING FOR PRESIDENT OF THE UNITED STATES.

And Corporate America’s CEOs are still raping this country and it’s people.

Almost makes me long for the dark days of DUBYA.

Because THE DARKNESS is now blinding.


Romney & Co Shipped Every Single Delphi UAW Job to China

By Greg Palast
The People’s Voice
October 24, 2012

He’s kidding, right? Did I just HEAR Mitt Romney say, “I would do nothing to hurt the US auto industry”

Really? REALLY?

Here’s the facts, ma’am:

As I reported in this week’s Nation magazine cover story ”MITT ROMNEY’S BAILOUT BONANZA”, the Romneys are in a special partnership with the vulture fund that bought Delphi, the former GM auto parts division.

The Romney vulture fund investment syndicate shipped every single UAW production job EVERY job - to China.

Just after Nation broke the story, Washington newsletter THE HILL received the Romneys admission of profiteering:

“Romney’s campaign did not deny that he profited from the auto bailout in an email to The Hill, but it said the the report showed the Detroit intervention was ‘misguided.’”

THE TTRUTH? On June 1, 2009, the Obama Administration announced that Detroit Piston’s owner Tom Gores, GM and the US Treasury would buy back Delphi. The plan called for saving 15 of 29 Delphi factories in the US.

Then the vulture funds pounced.

Nation discovered that, in the two weeks immediately following the announcement of the Delphi jobs-saving plan, Paul Singer, Romney’s partner, secretly bought up over a billion dollars of old Delphi bonds for pennies on the dollar.

Singer and partners now controlled the company ... and killed the return of Delphi to GM.

These facts were revealed in a sworn DEPOSITION of Delphi’s Chief Financial Officer John Sheehan, confidential, but now released on the web.

Sheehan said, under oath, that these speculators threatened to withhold key parts (steering columns), from GM. This would have brought the auto maker to its knees, immediately forcing GM’s permanent closure.

The extortion worked. The government money that was supposed to go to save jobs went to Singer’s hedge fund Elliott and its partners, including the Romneys.
Once Singer’s crew took control of Delphi, they rapidly completed the move to China, sticking the US taxpayers with the bill for the pensions of the Delphi workers cut loose.

Dan Loeb, a million-dollar donor to the GOP, who made three-quarters of a billion dollars off the legal scam, proudly announced that, once he and Elliott took control, ”Delphi kept virtually no North American unionized labor.”

In all, three hedge funds run by Romney’s million-dollar donors have pocketed $4.2 billion, a return on their “investment” of over 3,000%, all care of the US taxpayer. The Romneys personally earned minimum $15.3 million, though more likely $115 million a range their campaign does not dispute.

Frankly, I’m no fan of the way Obama handled the Delphi bail-out. Allowing these speculators to crank the US taxpayers for $12.9 billion in subsidies - and losing almost all the auto parts jobs in the process.

But when I heard that Son of a ...Detroit, Mr. Romney, tell us, ‘I would do nothing to hurt the US auto industry,’ I thought I’d lose my dinner. I suggest Romney repeat this directly to the Naylor family of Kokomo, Indiana.

Bruce Naylor lost his job at Delphi, then his health insurance (terminated by the Romney syndicate) - then his home to foreclosure.

Should Obama have done something about that? You bet. If I were the president, I’d have started with putting the vulture speculators out of business including Elliott’s silent, hidden partner, one Mitt Romney.

* Want the full story of Romney’s vulture-pack partners? I have several chapters on Paul “The Vulture” Singer and other million-dollar donor magnates backing Romney (and those backing Obama too) in my new book, BILLIONAIRES AND BALLOT BASTARDS, with an introduction by Robert F. Kennedy Jr. and illustrations by Ted Rall.

* And a question to the US media: HELLO, ANYBODY HOME?

This info on Romney’s profiteering and the shipping of Delphi jobs to China by his cronies is on the COVER of Nation Magazine and in a New York Times bestseller (Billionaires & Ballot Bandits). So, where is the New York ‘Paper of Record’? Or, for that matter, MSNBC?

Bill Press explained it to me when I was on his show this morning, “Sorry, Greg. There’s no more investigative reporting in America. No reporters, just repeaters.”

That’s why I fear Jimmy Carter’s statement that, “The American people deserve a president as good as they are.” Now I’m afraid that’s exactly what we’ll get.

Greg Palast is the author of the New York Times bestsellers The Best Democracy Money Can Buy, Armed Madhouse and Vultures’ Picnic. Palast’s brand new book Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps, will be out on September 18. You can pre-order Billionaires & Ballot Bandits from Barnes & Noble, Amazon or Indie Bound. Author’s proceeds from the book go to the not-for-profit Palast Investigative Fund for reporting on voter protection issues.



10 Filthy-Rich, Tax-Dodging Hypocrites Pushing Disastrous Austerity on America
The Fix the Debt coalition is using the so-called fiscal cliffӔ to push the same old corporate agenda of more tax breaks while shifting the burden on to the rest of us.

By Sarah Anderson, Scott Klinger
October 26, 2012

Brace yourself for one of the most aggressive corporate lobbying campaigns of all time. And one of the most hypocritical.

FIX THE DEBT is a coalition of more than 80 CEOs who claim they know best how to deal with our nations fiscal challenges. The group boasts a $60 MILLION budget just for the initial phase of a massive media and lobbying campaign.

The irony is that CEOs in the coalition’s leadership have been major contributors to the national debt they now CLAIM TO KNOW how to fix. These are guys whove mastered every tax-dodging trick in the book. And now that they’ve boosted their corporate profits by draining the public treasury, how do they propose we put our fiscal house back in order? By squeezing programs for the poor and elderly, including Social Security, Medicare, and Medicaid.

FIX THE DEBT claims their agenda is not just about spending cuts. But when it comes to their tax proposals, they use the slippery term “pro-growth reform” to push for cuts in deductions that are likely to include credits for working families and - you guessed it - more corporate tax breaks. Chief among these is a proposal to switch to a TERRITORIAL system under which corporate foreign earnings would be permanently exempted (instead of being taxed when they are returned to America).

This idea, also supported by the Bowles-Simpson deficit commission, would make it even more profitable for big corporations to use accounting tricks to disguise U.S. profits as income earned in tax havens. Citizens for Tax Justice ESTIMATES that such tax haven abuse will cost the Treasury more than $1 trillion over the next decade.

So who are the CEOs who are telling the rest of us to be responsible and tighten our belts after theyve spent decades stiffing the U.S. Treasury? Of the 80 members of Fix the DebtҒs CEO Fiscal Leadership Council, here are 10 that stand out as the biggest hypocrites:

1. Jeffrey Immelt, General Electric
Perhaps no tax-dodging U.S. corporation has done more to drain the U.S. Treasury than General Electric. Over the last 10 years GE reported more than $80 billion in U.S. pre-tax profits and yet paid a federal CORPORATE INCOME TAX rate of just 2.3%.

One of GEs favorite tricks is the “Active Financing Exception.” U.S. corporations are supposed to pay U.S. taxes on interest income earned anywhere in the world. But GE enjoys this special exception for companies that have ԓcaptive foreign finance subsidiaries, such as their credit card arm. The measure was repealed as part of fair taxation reforms in 1986, but GE led a successful lobbying effort to bring it back in 1997. Although the exception was supposed to be temporary, Congress has renewed it six times. And, despite all the public hand-wringing over the deficit, lawmakers are seriously considering extending this and other corporate loopholes before the end of the year.

2. Jim McNerney, Boeing

Last year, Boeing was one of 25 major U.S. firms that PAID THEIR CEOS more than they paid Uncle Sam in corporate income taxes, according to an INSTITUTE FOR POLICY STUDIES REPORT. The aerospace giant enjoyed a $605 million tax refund in 2011, despite reporting more than $5 billion in U.S. pre-tax profits. CEO Jim McNerney made $18.4 million in personal compensation. In fact, Boeing is a SERIAL TAX DODGER, having paid federal corporate income taxes in only two of the last 10 years.

One of the ways Boeing avoids paying taxes is by taking advantage of the RESEARCH AND EXPERIMENTATION TAX CREDIT, which saved the $137 million last year alone. Government investment in basic research is not a bad idea, but current R&D credits are structured in a way that primarily benefits large, well-resourced high-tech firms like Boeing that would probably do the research anyway. CEO McNerney also chairs the Business Roundtable, which aggressively lobbies for more corporate tax breaks.

3. Lloyd Blankfein, Goldman Sachs

Few corporations have been as dependent on U.S. taxpayers for their very existence as Goldman Sachs. The 2008 bailout of American International Group and the steady stream of low- and non-interest loans for the financial sector have kept the company alive.

CEO Blankfein says he’d accept a small increase in individual taxes for the wealthy in exchange for a comprehensive budget deal. But his corporate tax proposals would wipe out the revenue gains from rolling back the Bush tax cuts for top earners. Blankfein is a big supporter of the territorial tax system explained above. This is hardly a surprise, since Goldman Sachs already operates 37 subsidiaries in tax havens.

Blankfein has also used his position at the helm of the Financial Services Forum, a club for the CEOs of 20 top banks, to oppose financial transaction taxes—small levies on trades of stock, derivatives, and other financial instruments. Goldman Sachs has made as much as $300 million per year from the volatile high-frequency trading strategies that would be hardest hit by such a transaction tax. In early October, 11 European governments announced a plan to implement such taxes, with expected revenues in the neighborhood of $75 billion per year. But Goldman Sachs and other Wall Street firms have blocked U.S. progress on this major revenue-raiser.

4. Brian T. Moynihan, Bank of America

Over the last three years, Honeywell received more than $2.7 billion in federal defense contracts and reported more than $2.5 billion in U.S. pre-tax profits. And yet thanks to corporate deductions, tax subsidies, and loopholes, Honeywell has claimed $377 million in federal tax refunds during this period.

Honeywell CEO David Cote has been a fixture at Congressional hearings calling for a territorial tax system for corporations. He is also Vice-Chair of the Business Roundtable, a club for big business CEOs that has called for an extension of all the Bush tax cuts, including those for millionaires and billionaires, as well as the tax cuts on unearned income from capital gains and dividends. These combined measures would add $1.5 trillion to the debt over the next ten years.

6. Randall Stephenson, AT&T

AT&T is another firm that paid its CEO more last year than they paid in federal corporate income taxes. CEO Randall Stephenson made $18.7 million, while the firm enjoyed a $420 million refund from Uncle Sam.

AT&T is a major beneficiary of “accelerated depreciation” rules that allow companies to turbo-charge tax deductions in the early years of the life of an asset. A 2009 accelerated depreciation rule saved the company $5.2 billion on their 2011 taxes, according to the firms 10-K report. Although touted as a way to jumpstart spending in a downturn, such tax breaks often result in taxpayers bearing a substantial portion of the cost of investments firms wouldҒve made anyway.

7. Arne Sorenson, Marriott International

In 2009, the U.S. Department of Justice prosecuted Marriott International for using an illegal tax shelter swindle dubbed Son of Boss.Ӕ The scam involved setting up a series of complex paper transactions between company subsidiaries to create $70 million in fake losses that could be offset against Marriotts real profits. Presidential candidate Mitt Romney, a long-time friend of the Marriott family and named after MarriottҒs patriarch J. Willard Marriott, was the head of the hotel giants audit committee in 1994 at the time the board first approved the Son of Boss transaction. According to Bloomberg, Marriott has also shifted profits to a Luxembourg shell company and avoided hundreds of millions of dollars in taxes through one federal tax credit for so-called synthetic fuel that Senator John McCain dubbed an ғexpensive hoax.

8. Alexander Cutler, Eaton Corporation

Less than two years after accepting $90 million in taxpayer-financed subsidies to locate a new world headquarters in the suburbs of Cleveland, Eaton Corporation announced that it would be moving its headquarters and reincorporating as an Irish company. The move is part of a merger deal with Cooper Industries, another FIX THE DEBT coalition member. The two companies boast that EatonԒs departure after 100 years in Cleveland will cut their tax bill by $160 million. Meanwhile, Eaton is fighting a $75 million bill from the IRS for back taxes and penalties related to alleged violations of transfer pricing agreements.

9. Lowell McAdam, Verizon

Verizon is one of 30 companies identified by Citizens for Tax Justice as having paid less than nothingӔ in federal income taxes over the entire 2008-10 period. Despite earning $32.5 billion in profits during these three years, the firm got so much in tax subsidies that they wound up with a net tax refund of $951 million. That works out to a tax rate of negative 2.9%. In effect, every Verizon phone customer paid more in federal telephone excise taxes than Verizon paid in federal income taxes.

10. Steve Ballmer, Microsoft

A recent Senate investigation exposed how Microsoft has used Olympic class accounting acrobatics to avoid paying taxes. Specifically, the Senate Permanent Subcommittee on Investigations charged that the software giant had devised a complicated transfer pricing agreement with a subsidiary in Puerto Rico to lower its tax bill on goods sold in the U.S. market by as much as $4.5 billion from 2009 to 2011. The investigation also accused Microsoft of avoiding billions in U.S. corporate income taxes by shifting royalty revenue to low-tax jurisdictions. Subcommittee Chair Carl Levin described Microsofts strategies as ғtax alchemy, featuring structures and transactions that require a suspension of disbelief to be accepted. Such alchemy, while not illegal, is a major contributor to the national debt.

Sanders to CEOs: Look in the Mirror

When Fix the Debt launched their 80 CEO-strong coalition on October 25, Senator Bernie Sanders responded by stating, ԓBefore telling us why we should cut Social Security, Medicare and other vitally important programs, these CEOs might want to take a hard look at their responsibility for causing the deficit and this terrible recession.

Instead, the FIX THE DEBT coalition members are portraying themselves as the honorable ones who are brave enough to push the tough austerity medicine that is the only remedy for our fiscal ills. Nonsense. We are the richest nation in the history of the world. Our problem is that too much of our wealth is going into the coffers of rich individuals and corporations and to pay for misguided wars.

There are numerous budget plans by Senator Sanders, the Congressional Progressive Caucus, and others that would get us on the right track. At the Institute for Policy Studies, weԒve identified a dozen policies that would collectively raise trillions of dollars to in ways that would not only address the fiscal challenge but help make our economy more equitable, green, and secure. The report also points out that until we recover from the current unemployment crisis, we should not be contemplating any spending cuts that could deepen the crisis.

The FIX THE DEBT coalition is using the so-called “fiscal cliff” as an opportunity to push the same old corporate agenda of more tax breaks while shifting the burden on to the middle class and the poor. If America’s CEOs really want to Fix the Debt, they should first commit to eliminating the loopholes that have allowed them to avoid paying their fair share of the cost of government, including investments necessary to keep our families and our communities strong and secure.

Sarah Anderson is Global Economy Project Director and Scott Klinger is an Associate Fellow of the Institute for Policy Studies. .


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Tuesday, October 23, 2012

Medical Emergency


Consumers Often Pass on Health Care When Costs are High

By Lisa Zamosky
Web MD
October 11, 2012

Two new reports highlight how inextricably linked HEALTH AND MONEY are in this country, and how many people are making medical decisions based on the state of their finances.

The first survey (below), conducted by consulting firm, Hill & Knowlton Strategies, found that nearly 1 in 3 people put off medical treatment or a checkup because of cost. The survey included 800 people, 85% of whom had some type of health insurance coverage; 11% were temporarily unemployed.

According to the survey:

45% of people questioned said they worry a lot about paying medical bills in the event of a catastrophic illness or accident

36% are very concerned about paying for health-insurance coverage

53% said cost is the number one problem with health care in the U.S.

Given those numbers, perhaps not surprisingly, most people expressed a greater interest in health care companies figuring out ways to lower costs than finding new medicines or cures.

Health Care Costs Eat Away at Savings

Another recent STUDY conducted by the Employee Benefits Research Institute found that cost was the main reason behind in the increase in the percentage of Americans who rate the U.S. health care system as poor.

Particularly troubling in the research findings is that rising health care costs are eating away at Americans ability to plan for their financial security. Of those who saw their health costs rise, 31% say they’ve started to contribute less money to their retirements plans. More than 50% have reduced the amount of money they sock away in savings.

And when they look down the road, Americans expect a LOWER LEVEL OF CONFIDENCE in their future ability to afford health care than they have now. Today, 34% of Americans claim to feel confident that theyll be able to afford the health care they need. Put another way, nearly 7 in 10 people believes they can’t afford needed medical care.

Only 17% of Americans expect theyll be able to afford needed health care once covered by Medicare.



Health-Care Costs Keep 1 in 3 Americans From the Doctor

By Shannon Pettypiece
October 02, 2012

Health-care costs are keeping patients away from the doctor with about 1 in 3 Americans saying they put off a medical treatment or regular checkup because of the expense.

Medical costs were the most important factor in making a health-care decision for 27 percent of people, outweighing ADVICE from their physician, according to a survey of 800 people by New York-based Hill & Knowlton Strategies. The results were released today at the Bloomberg Healthcare Innovations Conference in New York.

The price of insurance premiums have risen 97 percent since 2002 with families now contributing about $4,300 a year to employee-sponsored health plans, according to a report last month by the Commonwealth Fund. Still, most Americans said they arent willing to cut back on choice to save money and don’t want companies to scale back innovation to keep costs down.

“What the public needs and what it ultimately values - and will pay for—are not always the same thing,” said Susan Thiele, U.S. health-care practice director at Hill & Knowlton. In this environment, it’s critical to understand shifting public opinion so that new advances are developed and positioned in a way thats meaningful to consumers.Ҕ

In the survey, 45 percent of people said they worried a lot about paying medical bills in the event of a catastrophic illness or accident, and 36 percent said they are very concerned with paying for health-insurance coverage. When asked what the biggest problem facing health care in the U.S. was, 53 percent said cost.

Most respondents weren’t concerned about having access to the latest and most cutting-edge treatments. Instead, they said they would rather see companies come up with innovative ways to lower costs rather than finding new medicines or cures.

Of those surveyed, 85 percent had public or private health insurance and 11 percent were temporarily UNEMPLOYED.



Study Links Medical Costs And Personal Bankruptcy
Harvard researchers say 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems, and 78% of those filers had insurance

By Catherine Arnst
Business Week
June 4, 2009

A recent HARVARD STUDY tells us that health problems cause more than half of America’s bankruptcies, and that the vast majority of people seeking bankruptcy protection have health insurance. The study paints a hauntingly familiar picture: people get sick, insurance covers nothing, so they’re forced to mortgage their homes to stay alive.

Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.

Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 STUDY of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings. This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college.

But medically bankrupt families with private insurance reported average out-of pocket MEDICAL BILLS of $17,749, while the uninsured’s bills averaged $26,971. Of the families who started out with insurance but lost it during the course of their illness, medical bills averaged $22,658. “For MIDDLE-CLASS Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments, and deductibles that illness can put you in the poorhouse,” said lead author Himmelstein. “Unless you’re Warren Buffett, your family is just ONE SERIOUS ILLNESS AWAY from bankruptcy.”

The study UNDERSCORES President Barack Obama’s arguments in calling for health-care reform legislation this year. In a letter to Democratic Senate leaders this week, the President said:

“Health-care reform is not a luxury. It’s a necessity we cannot defer. Soaring health-care costs make our current course unsustainable. It is unsustainable for our families, whose spiraling premiums and out-of-pocket expenses are pushing them into bankruptcy and forcing them to go without the checkups and prescriptions they need.”

Highest Costs for Diabetes, Neurological Illness

The study was funded by the Robert Wood Johnson Foundation and published online June 4 by the American Journal of Medicine. It will appear in the Journal’s August print edition. The researchers examined the court records of a random sample of 2,314 bankruptcy filings across the nation during early 2007, and also contacted those filers for written explanations. The researchers then followed up with extensive phone interviews of 1,032 of those filers.

They found that a number of medical factors contributed to a family’s financial disaster. More than 90% of medically related bankruptcies were caused by high medical bills directly or medical costs that were so high the family was forced to mortgage their home. The remaining 8% went bankrupt because a medical problem caused them to lose income. The authors were not able to track credit-card defaults caused by medical bills, but a 2007 study found that, of low- and middle-income households with credit-card debt, 29% used their plastic to pay off medical expenses.

Individuals with diabetes, one of the most common chronic diseases in the U.S., and those with neurological illnesses such as multiple sclerosis had the highest costs, an average of $26,971 and $34,167, respectively. Hospital bills were the largest single expense for half of all medically bankrupt families.

Dr. Woolhandler, an ADVOCATE of a single-payer health-care system, said lawmakers in Washington should reconsider health-care reform in light of the study. “Covering the uninsured isn’t enough,” she said. “Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it.”



Insured, but Bankrupted by Health Crises

By Reed Abelson
NY Times
June 30, 2009

Health insurance is supposed to offer protection both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.

And so, even as Washington tries to cover the tens of millions of Americans without medical insurance, many health policy experts say simply giving everyone an insurance card will not be enough to fix what is wrong with the system.

Too many other people already have coverage so meager that a medical crisis means financial calamity.

One of them is Lawrence Yurdin, a 64-year-old computer security specialist. Although the brochure on his Aetna policy seemed to indicate it covered up to $150,000 a year in hospital care, the fine print excluded nearly all of the treatment he received at an Austin, Tex., hospital.

He and his wife, Claire, filed for bankruptcy last December, as his unpaid medical bills approached $200,000.

In the House and Senate, lawmakers are grappling with the details of legislation that would set minimum standards for insurance coverage and place caps on out-of-pocket expenses. And fear of the high price tag could prompt lawmakers to settle for less than comprehensive coverage for some Americans.

But patient advocates argue it is crucial for the final legislation to guarantee a base level of coverage, if people like Mr. Yurdin are to be protected from financial ruin. They also call for a new layer of federal rules to correct the current state-by-state regulatory patchwork that allows some insurance companies to sell relatively worthless policies.

“Underinsurance is the great hidden risk of the American health care system,” said Elizabeth Warren, a Harvard law professor who has analyzed medical bankruptcies. “People do not REALIZE they are one diagnosis away from FINANCIAL COLLAPSE.”

Last week, a former Cigna executive warned at a Senate hearing on health insurance that lawmakers should be careful about the role they gave private insurers in any new system, saying the companies were too prone to “confuse their customers and dump the sick.”

The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance,” Wendell Potter, the former Cigna executive, testified.

Mr. Yurdin learned the hard way.

At St. David’s Medical Center in Austin, where he went for two separate heart procedures last year, the hospitals admitting office looked at Mr. Yurdin’s coverage and talked to Aetna. St. Davids estimated that his share of the payments would be only a few thousand dollars per procedure.

He and the hospital say they were surprised to eventually learn that the $150,000 hospital coverage in the Aetna policy was mainly for room and board. Coverage was capped at $10,000 for “other hospital services,” which turned out to include nearly all routine hospital care - the expenses incurred in the operating room, for example, and the cost of any medication he received.

In other words, Aetna would have paid for Mr. Yurdin to stay in the hospital for more than five months as long as he did not need an operation or any lab tests or drugs while he was there.

Aetna contends that it repeatedly informed Mr. Yurdin and the hospital of the restrictions in policy, which is known in the industry as a limited-benefit plan.

The company says such policies offer value by covering some hospital expenses, like surgeons’ fees or a stay in the intensive care unit. Aetna also says all of its policyholders receive significant discounts on the overall cost of hospital care. But Aetna also acknowledges that a limited-benefit plan was inappropriate in Mr. Yurdins case because his age and condition - an irregular heartbeat made him likely to require more comprehensive coverage.

“Limited benefits arent right for everyone, and it clearly wasn’t right for Mr. Yurdin, said Cynthia B. Michener, an Aetna spokeswoman.

Charles E. Grassley, the ranking Republican on the Senate Finance Committee, which is taking a lead on health legislation, says Congress needs to make “meaningful insurance coverage more affordable and accessible. But until that happens,” he said, “any presentation of limited-benefit plans ought to be completely straightforward, and not misleading in any way.”

Insurers like Aetna generally defend limited-benefit policies as a byproduct of the nation’s FLAWED HEALTH CARE SYSTEM, which they say makes it too expensive to adequately insure someone like Mr. Yurdin.

IF EVERYONE in the country were required to have insurance, the industry says a mandate that Congress is contemplating the costs and risks of insurance would be spread over a large enough pool of people to let insurers provide full, affordable coverage even to people with pre-existing medical conditions.

Mr. Yurdin worked at TEK SYSTEMS, which employs people for short periods as contractors for other companies. TEKsystems says it does not pay for the contract workers health benefits, but it does enable them to purchase individual policies with limited benefits so they have at least some coverage.

“Theres no way we make this sound like regular coverage,” said Neil Mann, an executive vice president at Allegis Group, which owns TEKsystems.

Although Mr. Mann acknowledged that the plan Mr. Yurdin purchased excluded routine hospital care, he said he thought it still provided value to employees who wanted peace of mind.

True peace of mind, however, comes with a much higher price tag. When Mr. Yurdin no longer qualified for the Aetna coverage after he left TEKsystems and his eligibility eventually ended, his only option was a special state plan in Texas for people who are at high risk for expensive medical care. He has been paying more than $1,000 a month for comprehensive coverage, compared with the roughly $250 a month he was paying for the Aetna plan.

But as of Wednesday, his future insurance problems are largely solved: he qualifies for Medicare because he turns 65.

Many insurers, as part of the Congressional overhaul of their business, say they expect the demand for limited-benefit policies to fall. “Until the nation achieves the universal coverage that we strongly support, some individuals will want to be able to choose limited indemnity products, but with comprehensive health reform we think that need should diminish,” said Simon Stevens, an executive at UnitedHealth.

UnitedHealth drew criticism last year for selling policies with sharply limited coverage through AARP, the advocacy group for older people. One of the plans capped reimbursement for an operation at $5,000, for example, although many procedures cost at least several times that amount. After Senator Grassley began investigating its sales practices, UnitedHealth agreed to stop offering the limited AARP plans.

Mr. Yurdin and his wife say it was not clear that he was liable for tens of thousands of dollars in hospital bills until after he had the first two of what would eventually be four operations. St. Davids says it tried to persuade them to apply for charity care, under which the hospital would absorb much, or all, of the unpaid bills.

But the couple says a lawyer advised them to turn to bankruptcy as the way to be certain they would not be left with too much debt. “I knew we were getting way, way over our heads,” Mrs. Yurdin said.

While Aetna disputes the Yurdins’ and the hospitals version of events, it also says it has tried to clarify the language it uses to describe the coverage. In its most recent brochure, the fine print describing the limits to “other hospital services” now defines what they are in a footnote on the same page and warns that the excluded expenses could be significant.

Senator John D. Rockefeller IV, Democrat of West Virginia, who is also on the Finance Committee, has introduced legislation that would require insurers to be more clear about what they do - and do not cover. He says he advocates such a change, even if Congress cannot agree to a more sweeping overhaul of the health insurance industry.

But advocates for broad changes to the health care system say Congress can succeed only by making sure health reform goes beyond giving every American a buyer-beware insurance card. One such person is Len Nichols, a health economist for the New America Foundation.

“Conceptually,” he said, ”insurance means normal people should not go bankrupt from serious medical conditions. “



When Health Insurance Doesn’t Insure

By Andrea Orr
Economic Policy Institute
July 14, 2009

A recent HARVARD UNIVERSITY STUDY found that 62% of personal bankruptcies resulted in part from medical costs and some 78% of those people who filed for bankruptcy had health insurance, in most cases private coverage.

It is an alarming statistic, underscoring why health care reform is needed not just for the millions of Americans who do not have health insurance, but for many others who are insured.

Following are some of the major reasons that health insurance seems to provide little financial insurance against bankruptcy:

Job loss While the CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT (COBRA) was designed to help people who lost their jobs retain their employer-provided health insurance by paying for it themselves for 18 months, the proposition is prohibitively costly for many who have lost their incomes. Since the cost of employer-provided insurance is usually shared between the worker and the employer, COBRA premiums tend to be significantly higher - often double, triple, or more - what individuals pay when they are working. Average monthly COBRA payments for a family typically exceed $1,000, while the average monthly unemployment insurance payment, calculated from weekly average payments, is $1,316.81.

The economic stimulus package Congress approved in February provided for the government to temporarily subsidize 65% of those premiums, and also increased weekly unemployment benefits by $25, but that still means most families’ monthly health insurance bills exceed $350, a significant amount that many cannot afford on a tight budget.

And while many laid-off workers are able to pick up coverage when they find a new job, allowing coverage to lapse even temporarily can be costly. According to the Harvard study, the single most important predictor of medical bankruptcy was a gap in health insurance coverage for any family member. As long-term unemployment rises, these lapses in employer-sponsored health coverage are likely to last longer as well.

High out-of-pocket costs The New York Times recently profiled a couple whose health insurance provided for $150,000 a month in hospital coverage,Ӕ but excluded nearly all the routine care that hospital patients typically receive such as tests, medication, and operating room care, essentially meaning that the insurer treated hospital stays like hotel visits, covering room and board but very little treatment. In the Harvard study on medical bankruptcy, the average out-of-pocket medical costs incurred with those who had private health insurance was close to $18,000.

Rescission, or customer dumping This widely-reported practice of insurers canceling policies after an individual becomes sick was confirmed recently when executives of three of the nations largest health insurers told the House Subcommittee on Oversight and Investigations that they sometimes did cancel medical coverage for sick policyholders and that the practice was not limited to individuals who engaged in fraud in order to conceal certain illnesses. A House committee investigation of the three largest insurers found they canceled coverage of more than 20,000 people, saving more than $300 million in medical claims over a five-year period. The hearing included testimony from one woman whose coverage was cancelled after she was diagnosed with breast cancer, allegedly for her failure to report a visit to a dermatologist.

Wendell Potter, a former senior executive for Cigna, also shed light on this practice during a recent Senate hearing. “They dump the sick, all so they can satisfy their Wall Street investors,” Potter said. “They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy.”

Sham plans, or fake insurance The National Association of Health Underwriters warns that rising price tags on health insurance has paved the way for the creation of more sham plans, often which offer lower cost and coverage than the market standard. These plans, it says, are created to look like authorized health insurance plans but are never intended to pay benefits or abide by state insurance laws.

You or a family member gets sick A great irony of health insurance, as it is structured today, is that people are most challenged to keep their health insurance when they become ill. Even if the health insurance works, as designed, to insulate people from high medical bills, it does nothing to ensure that people remain employed after becoming sick. In fact, the Harvard study found that illness led to job loss for 38% of patients’ families.

In addition to resulting in an inability to work and a much higher health insurance bill under COBRA, a chronic illness could trigger a rescission, discussed above, or uncover loopholes that allow the insurer to deny coverage in a plan that had appeared watertight in times of good health.



Hospitals Stuck With Illegal Immigrants, Uninsured Permanent Patients at Massive Cost

The Blaze
January 4, 2012

An unpleasant new report claims that many hospitals in major metro areas are struggling with the growing problem of “permanent patients.”

Whats a “permanent patient?” According to the New York Times they are mostly illegal immigrants or people who lack insurance or their own housing that the hospital cannot turn away.

The Times defines a “permanent patient”:

...[someone who has] been languishing for months or even years in hospitals, despite being well enough to be sent home or to nursing centers for less-expensive care, because they are illegal immigrants or lack sufficient insurance or appropriate housing.

Of course, having dozens of patients hanging around that long means these hospitals are absorbing the bill for millions of dollars in unreimbursed expenses annually.

Unsurprisingly, the majority of these “permanent patients” are illegal immigrants because, as mentioned in the above, they have no housing or family in the area.

“Medicaid often pays for emergency care for illegal immigrants, but not for continuing care, and many hospitals in places with large concentrations of illegal immigrants, like Texas, California and Florida, face the quandary of where to send patients well enough to leave,” writes Sam Roberts of the Times.

What kind of cost are we talking about here?

“Care for a patient languishing in a hospital can cost more than $100,000 a year, while care in a nursing home can cost $20,000 or less [emphasis added],” Roberts reports.

“Patients fit to be discharged from hospitals but having no place to go typically remain more than five years,” says LaRay Brown, a senior vice president for New York City’s Health and Hospitals Corporation.

She says that there were about 300 patients in such a predicament throughout the New York City area alone, most in public hospitals or higher-priced skilled public nursing homes, though a few were in private hospitals, according to the Times.

“Many of those individuals no longer need that care, but because they have no resources and many have no family here, we, unfortunately, are caring for them in a much more expensive setting than necessary based on their clinical need,” said Brown.

The report goes on to cite an example where one patient from Queens, NY, has been at the Coler-Goldwater Specialty Hospital and Nursing Facility for 13 years because the hospital has no place to send him.

The patient, who is in his mid-60s, has been there since an arterial disease cost him part of one leg below the knee and left him in a wheelchair, according to the report.

Or another example:

Five years ago, Yu Kang Fu, 58, who lived in Flushing, Queens, and was a cook at a Chinese restaurant in New Jersey, was dropped off by his boss at New York Downtown Hospital, a private institution in Manhattan, complaining of a severe headache. Mr. Yu was admitted to the intensive-care unit with a stroke.

Mr. Yu remained in the hospital for over four years until he was transferred last spring to the Atlantis Rehabilitation and Residential Health Care Facility, a private center in Fort Greene, Brooklyn, after the federal government certified him as a permanent resident under color of law, essentially acknowledging that he could not be returned to China and qualifying him for medical benefits.

“This gentleman cost us millions of dollars,” said Jeffrey Menkes, the president of New York Downtown. “We try to provide physical, occupational therapy, but this is an acute-care hospital. This patient shouldn’t be here.”

“The fact of the matter is that hospitals in metro areas that host a large illegal immigrant population are unable to turn away patients who have neither insurance nor proof that they are in the United States legally” - two things necessary for discharge purposes and reimbursements, said Chui Man Lai, assistant vice president of patient services at a New York state hospital.

“These patients often arrive in the emergency room acutely ill and unaccompanied, and we have to treat them until they can be discharged safely,” Ms. Lai said. “The hospital is required, by law and its mission, to care for these patients.”

But even worse than “permanent patients,” those who essentially live in hospitals already operating on thin budgets, are what some refer to as “pop drops”: grown adults leaving their parents at the hospitals so that they can go on vacation.

“Hospitals are reluctant to complain publicly about such patients for fear of being perceived as callously seeking to dump nonpaying patients,” writes Roberts. “Elected officials are generally loath to be seen as encouraging illegal immigrants by changing reimbursement formulas. The issue was never addressed during the debate over national health care legislation.”

Read the full report HERE.



Healthcare Isn’t A Free Market, It’s A Giant Economic Scam

By Mike Masnick
Tech Dirt
February 22, 2013

Not long ago, someone I know who had no medical insurance, but who had some serious medical issues, ended up in the hospital for a few weeks. Some procedures needed to be done, but nothing that most people would consider too “drastic.” Eventually, the bills showed up, and they were in the range of half a million dollars, for someone who did not have anything close to that. You hear stories about crazy medical bills, but what very few people realize is that the reality of hospital bills can often be orders of magnitude more crazy than what most people expect. Just last week, a friend of mine posted the following image to Facebook, noting that when his normal medical insurance billing statement has room for seven digits (i.e., millions of dollars) something is clearly screwed up.
A few years back, the folks at Planet Money tried to dig in and demystify some of the secrets of medical bills, but that only scratched the surface.

Stephen Brill has a very long, but absolutely gripping, detailed analysis of the insanity of medical billing for Time Magazine. It’s a truly astounding piece, that hopefully will open many people’s eyes. It will take a while, but find some time to read it, just to get a sense of how totally screwed up the entire system is. I’ve been working on some other stories about some really sketchy activity on the pharmaceutical side of things, but this article really shines a light on the disgusting underbelly of the healthcare system. As Brill notes, so much of the debate about healthcare is really focused on “but who will pay for these things.” But what it tends to ignore is why are the prices absolutely insane.

When medical care becomes a matter of life and death, the money demanded by the health care ecosystem reaches a wholly different order of magnitude, churning out reams of bills to people who cant focus on them, let alone pay them. Soon after he was diagnosed with lung cancer in January 2011, a patient whom I will call Steven D. and his wife Alice knew that they were only buying time. The crushing question was, How much is time really worth? As Alice, who makes about $40,000 a year running a child-care center in her home, explained, “[Steven] kept saying he wanted every last minute he could get, no matter what. But I had to be thinking about the cost and how all this debt would leave me and my daughter.” By the time Steven D. died at his home in Northern California the following November, he had lived for an additional 11 months. And Alice had collected bills totaling $902,452. The family’s first bill for $348,000 - which arrived when Steven got home from the Seton Medical Center in Daly City, Calif., was full of all the usual chargemaster profit grabs: $18 each for 88 diabetes-test strips that Amazon sells in boxes of 50 for $27.85; $24 each for 19 niacin pills that are sold in drugstores for about a nickel apiece. There were also four boxes of sterile gauze pads for $77 each. None of that was considered part of what was provided in return for Seton’s facility charge for the intensive-care unit for two days at $13,225 a day, 12 days in the critical unit at $7,315 a day and one day in a standard room (all of which totaled $120,116 over 15 days). There was also $20,886 for CT scans and $24,251 for lab work. Alice responded to my question about the obvious overcharges on the bill for items like the diabetes-test strips or the gauze pads much as Mrs. Lincoln, according to the famous joke, might have had she been asked what she thought of the play. “Are you kidding?” she said. “I’m dealing with a husband who had just been told he has Stage IV cancer. That’s all I can focus on.  You think I looked at the items on the bills? I just looked at the total.”

If we want a real fix to the mounting costs of healthcare (which are a massive drain on the economy), we need to start there. Unfortunately, those who are making out like bandits from this system have tremendous political clout, and they have no interest in letting the easy money go away.

Throughout the piece, Brill repeatedly discusses the “chargemaster,” which is basically the internal price list at every hospital, which has no basis in reality whatsoever, but which the poorest patients, and those without insurance, or with limited insurance, are often hit over the head with. Throughout the article, Brill details over and over and over again how hospital administrators and spokespeople all refused to address the chargemaster at all, constantly blowing it off as no big deal, because so few people actually pay the list price. But they completely ignore a bunch of points, including that some patients are charged upfront for these things, and no one is ever told that the prices are negotiable, even though they all are.

What you see is a system where supposedly “non-profit” and “charitable” institutions are raking in massive profits—while still begging the public for donations, and suggesting that any effort to reign in costs would put people at risk by cutting back on necessary hospital services. At times, these statements are so obviously bullshit, that it’s really sickening.

In December, when the New York Times ran a story about how a deficit deal might threaten hospital payments, Steven Safyer, chief executive of Montefiore Medical Center, a large nonprofit hospital system in the Bronx, complained, œThere is no such thing as a cut to a provider that isnt a cut to a beneficiary ҅ This is not crying wolf.

Actually, Safyer seems to be crying wolf to the tune of about $196.8 million, according to the hospitalԒs latest publicly available tax return. That was his hospitals operating profit, according to its 2010 return. With $2.586 billion in revenue җ of which 99.4% came from patient bills and 0.6% from fundraising events and other charitable contributions Safyerגs business is more than six times as large as that of the Bronxs most famous enterprise, the New York Yankees. Surely, without cutting services to beneficiaries, Safyer could cut what have to be some of the BronxҒs better non-Yankee salaries: his own, which was $4,065,000, or those of his chief financial officer ($3,243,000), his executive vice president ($2,220,000) or the head of his dental department ($1,798,000).

Sometimes these stories make you wonder if some of these “charitable” organizations deserve to be called charities at all:

Mercy Hospital is owned by an organization under the umbrella of the Catholic Church called Sisters of Mercy. Its mission, as described in its latest filing with the IRS as a tax-exempt charity, is to “carry out the healing ministry of Jesus by promoting health and wellness.” The overall chain had $4.28 billion in revenue that year. Its hospital in Springfield, Mo. (pop. 160,660), had $880.7 million in revenue and an operating profit of $319 million, according to its federal filing. The incomes of the parent companys executives appear on other IRS filings covering various interlocking Mercy nonprofit corporate entities. Mercy president and CEO Lynn Britton made $1,930,000, and an executive vice president, Myra Aubuchon, was paid $3.7 million, according to the Mercy filing. In all, seven Mercy Health executives were paid more than $1 million each. A note at the end of an Ernst & Young audit that is attached to Mercy’s IRS filing reported that the chain provided charity care worth 3.2% of its revenue in the previous year. However, the auditors state that the value of that care is based on the charges on all the bills, not the actual cost to Mercy of providing those services in other words, the chargemaster value. Assuming that Mercyגs actual costs are a tenth of these chargemaster values they’re probably less all of this charity care actually cost Mercy about three-tenths of 1% of its revenue, or about $13 million out of $4.28 billion

While I actually think it’s a bit of a cheap shot to repeatedly show CEO salaries, the real issue is how these hospitals can ratchet up the prices with no basis in reality, simply because they know they can do so. Even if they recognize most people don’t pay those fees, they still send such bills out there, which creates a tremendous amount of stress.

The stories of obvious overcharging fill the piece and demonstrate a key point in all of this. For all the talk about “free market” healthcare, nothing in our healthcare system is anything resembling a free market. You have truly “captive” customers with almost no price elasticity, combined with a system whereby it’s rare for the buyers to actually be the ones “paying.” If you were to design the most fucked up economic experiment ever, this might be it. And you can see the results.

Steve H.’s bill for his day at Mercy contained all the usual and customary overcharges. One item was “MARKER SKIN REG TIP RULER” for $3. That’s the marking pen, presumably reusable, that marked the place on Steve H.’s back where the incision was to go. Six lines down, there was “STRAP OR TABLE 8X27 IN” for $31. Thats the strap used to hold Steve H. onto the operating table. Just below that was “BLNKT WARM UPPER BDY 42268” for $32. That’s a blanket used to keep surgery patients warm. It is, of course, reusable, and its available new on eBay for $13. Four lines down there’s “GOWN SURG ULTRA XLG 95121” for $39, which is the gown the surgeon wore. Thirty of them can be bought online for $180. Neither Medicare nor any large insurance company would pay a hospital separately for those straps or the surgeons gown; that’s all supposed to come with the facility fee paid to the hospital, which in this case was $6,289.

Or how about this one:

His bill which included not only the aggressively marked-up charge of $13,702 for the Rituxan cancer drug but also the usual array of chargemaster fees for basics like generic Tylenol, blood tests and simple supplies - had one item not found on any other bill I examined: MD Anderson’s charge of $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.

The article is chock full of these kinds of stories. They’re not anomalies, nor are they extreme outlier cases. They happen quite frequently. It’s standard operating procedure. And, contrary to what most people think, these things don’t just apply to those who are without insurance. While insurance may protect against some of these situations, often people discover that their insurance doesn’t cover nearly as much as they expected (in part because they never think that bills could possibly be so high. And, while some hospitals are more open to forgiving massive debt for those who are poor, when those who thought they were comfortably in the middle class suddenly realize they may owe hundreds of thousands of dollars unexpectedly, the hospitals are a lot less sympathetic.

Not surprisingly, nearly every hospital that Brill tried to speak to about all this refused to talk about it. Sometimes they gave completely bogus excuses, such as claiming that it’s “against the law” to discuss why they charge massive markups on basic items:

Wright said the hospital’s lawyers had decided that discussing Steve H.s bill would violate the federal HIPAA law protecting the privacy of patient medical records. I pointed out that I wanted to ask questions only about the hospital’s charges for standard items such as surgical gowns, basic blood tests, blanket warmers and even medical devices - that had nothing to do with individual patients. “Everything is particular to an individual patient’s needs,” she replied. “Even a surgical gown?” “Yes, even a surgical gown. We cannot discuss this with you. Its against the law.” She declined to put me in touch with the hospitals lawyers to discuss their legal analysis.

In one case where he finally got an administrator to speak about the chargemaster rates, the answers were astounding, and either completely mendacious or disconnected from reality (I’m not sure which one is scarier).

‘We think the chargemaster is totally fair, says William Gedge,” senior vice president of payer relations at Yale New Haven Health System. ‘It’s fair because everyone gets the same bill. Even Medicare gets exactly the same charges that this patient got. Of course, we will have different arrangements for how Medicare or an insurance company will not pay some of the charges or discount the charges, but everyone starts from the same place.” Asked how the chargemaster charge for an item like the troponin test was calculated, Gedge said he didn’t know exactly but would try to find out. He subsequently reported back that “it’s an historical charge, which takes into account all of our costs for running the hospital.”

It’s fair because we charge absolutely everyone insane amounts that have no basis in reality, and which we mark up ridiculously—and then we offer discounts to many, but certainly not all patients. This answer is bullshit. Not everyone starts from the same place, but even if we grant that ridiculous claim, having everyone start at insane prices doesn’t make it fair. It still makes it a giant scam.

And, of course, the hospitals know they’re getting away with all sorts of crap here. Even when they’re talking about things like Medicare, where the government is the “buyer,” the situation is crazy. While the hospitals, pharma companies and others complain that government supported healthcare artificially deflates revenue and limits their ability to provide patient care, the article goes into a fair bit of detail about how that’s hogwash, and the hospitals (and doctors) are massively profiting off of the taxpayer—sometimes in completely cynical ways.

One of the benefits attending physicians get from many hospitals is the opportunity to cruise the halls and go into a Medicare patient’s room and rack up a few dollars, says a doctor who has worked at several hospitals across the country. “In some places its a Monday-morning tradition. You go see the people who came in over the weekend. There’s always an ostensible reason, but there’s also a lot of abuse.”

If you know even the slightest bit about basic economics, the deeper you look at this system, the more and more you realize how insane it is. Nearly every single incentive is skewed, often dangerously so. The system is more or less designed to be abused, while making it increasingly difficult for people to get reasonable care. I’d argue that it may be worse than if you asked a bunch of economists to design the worst possible system of incentives.

And we’re more or less stuck with it. For all the debate and the fight over reform, the reform package we got really did next to nothing to address any of these kinds of underlying issues. And this has nothing to do with silly claims of whether or not it’s “socialist”. The entire healthcare system, before and after the recent health reform, does not resemble anything even remotely close to a free market system. And, while there are some who argue that healthcare itself shouldn’t be subjected to free market forces, but rather towards what provides the best care, it’s not like the system is designed to match up with that belief either.

The system is completely broken. In researching other aspects of the system, I’d already come to the conclusion that it should be scrapped entirely, with something completely different put in its place, but this article just helps take that belief to another level. And, the scary thing is that the chances of that happening are basically zero. We’re stuck with this system, in part because the economic incentives are screwed up so much that it’s ripe for widespread abuse. And when you have so many billions of dollars flowing, with a small group of folks profiting massively from that, there’s simply no chance they’ll allow for any real changes.

And, the really scary thing is that the bits I’ve talked about here really only scratch the surface of Brill’s overall article. And, his article really only touches on one part of the problem. It is a key part of the problem, but it’s still just one part. And each of the other parts tend to look equally insane when you start digging deeper. We are in the middle of the most horrifying economic experiment ever constructed with our healthcare system, and it’s only impacting almost everyone’s lives. Oh yeah, and there’s no real interest in taking on the actual problems.



There’s a great ARTICLE in Time this month:

Changing Our Choices

We should tighten antitrust laws related to hospitals to keep them from becoming so dominant in a region that insurance companies are helpless in negotiating prices with them. The hospitals continuing consolidation of both lab work and doctors’ practices is one reason that trying to cut the deficit by simply lowering the fees Medicare and Medicaid pay to hospitals will not work. It will only cause the hospitals to shift the costs to non-Medicare patients in order to maintain profits which they will be able to do because of their increasing leverage in their markets over insurers. Insurance premiums will therefore go up - which in turn will drive the deficit back up, because the subsidies on insurance premiums that Obamacare will soon offer to those who cannot afford them will have to go up.

Similarly, we should tax hospital profits at 75% and have a tax surcharge on all nondoctor hospital salaries that exceed, say, $750,000. Why are high profits at hospitals regarded as a given that we have to work around? Why shouldn’t those who are profiting the most from a market whose costs are victimizing everyone else chip in to help? If we recouped 75% of all hospital profits (from nonprofit as well as for-profit institutions), that would save over $80 billion a year before counting what we would save on tests that hospitals might not perform if their profit incentives were shaved.

To be sure, this too seems unlikely to happen. Hospitals may be the most politically powerful institution in any congressional district. They’re usually admired as their community’s most important charitable institution, and their influential stakeholders run the gamut from equipment makers to drug companies to doctors to thousands of rank-and-file employees. Then again, if every community paid more attention to those administrator salaries, to those nonprofits’ profit margins and to charges like $77 for gauze pads, perhaps the political balance would shift.

We should outlaw the chargemaster. Everyone involved, except a patient who gets a bill based on one (or worse, gets sued on the basis of one), shrugs off chargemasters as a fiction. So why not require that they be rewritten to reflect a process that considers actual and thoroughly transparent costs? After all, hospitals are supposed to be government-sanctioned institutions accountable to the public. Hospitals love the chargemaster because it gives them a big number to put in front of rich uninsured patients (typically from outside the U.S.) or, as is more likely, to attach to lawsuits or give to bill collectors, establishing a place from which they can negotiate settlements. Its also a great place from which to start negotiations with insurance companies, which also love the chargemaster because they can then make their customers feel good when they get an Explanation of Benefits that shows the terrific discounts their insurance company won for them.

But for patients, the chargemasters are both the real and the metaphoric essence of the broken market. They are anything but irrelevant. They;re the source of the poison coursing through the health care ecosystem.

We should amend patent laws so that makers of wonder drugs would be limited in how they can exploit the monopoly our patent laws give them. Or we could simply set price limits or profit-margin caps on these drugs. Why are the drug profit margins treated as another given that we have to work around to get out of the $750 billion annual overspend, rather than a problem to be solved?

Just bringing these overall profits down to those of the software industry would save billions of dollars. Reducing drugmakers prices to what they get in other developed countries would save over $90 billion a year. It could save Medicare - meaning the taxpayers more than $25 billion a year, or $250 billion over 10 years. Depending on whether that $250 billion is compared with the Republican or Democratic deficit-cutting proposals, thatגs a third or a half of the Medicare cuts now being talked about.

Similarly, we should tighten what Medicare pays for CT or MRI tests a lot more and even cap what insurance companies can pay for them. This is a huge contributor to our massive overspending on outpatient costs. And we should cap profits on lab tests done in-house by hospitals or doctors.

Finally, we should embarrass Democrats into stopping their fight against medical-malpractice reform and instead provide safe-harbor defenses for doctors so they dont have to order a CT scan whenever, as one hospital administrator put it, someone in the emergency room says the word head. Trial lawyers who make their bread and butter from civil suits have been the Democrats’ biggest financial backer for decades. Republicans are right when they argue that tort reform is overdue. Eliminating the rationale or excuse for all the extra doctor exams, lab tests and use of CT scans and MRIs could cut tens of billions of dollars a year while drastically cutting what hospitals and doctors spend on malpractice insurance and pass along to patients.

Other options are more tongue in cheek, though they illustrate the absurdity of the hole we have fallen into. We could limit administrator salaries at hospitals to five or six times what the lowest-paid licensed physician gets for caring for patients there. That might take care of the self-fulfilling peer dynamic that Gunn of Sloan-Kettering cited when he explained, “We all use the same compensation consultants.” Then again, it might unleash a wave of salary increases for junior doctors.

Or we could require drug companies to include a prominent, plain-English notice of the gross profit margin on the packaging of each drug, as well as the salary of the parent company’s CEO. The same would have to be posted on the company’s website. If nothing else, it would be a good test of embarrassment thresholds.

None of these suggestions will come as a revelation to the policy experts who put together Obamacare or to those before them who pushed health care reform for decades. They know what the core problem is lopsided pricing and outsize profits in a market that doesnגt work. Yet there is little in Obamacare that addresses that core issue or jeopardizes the paydays of those thriving in that marketplace. In fact, by bringing so many new customers into that market by mandating that they get health insurance and then providing taxpayer support to pay their insurance premiums, Obamacare enriches them. That, of course, is why the bill was able to get through Congress.

Obamacare does some good work around the edges of the core problem. It restricts abusive hospital-bill collecting. It forces insurers to provide explanations of their policies in plain English. It requires a more rigorous appeal process conducted by independent entities when insurance coverage is denied. These are all positive changes, as is putting the insurance umbrella over tens of millions more Americans a historic breakthrough. But none of it is a path to bending the health care cost curve. Indeed, while Obamacareגs promotion of statewide insurance exchanges may help distribute health-insurance policies to individuals now frozen out of the market, those exchanges could raise costs, not lower them. With hospitals consolidating by buying doctors practices and competing hospitals, their leverage over insurance companies is increasing. ThatҒs a trend that will only be accelerated if there are more insurance companies with less market share competing in a new exchange market trying to negotiate with a dominant hospital and its doctors. Similarly, higher insurance premiums much of them paid by taxpayers through Obamacare’s subsidies for those who cant afford insurance but now must buy it - will certainly be the result of three of Obamacares best provisions: the prohibitions on exclusions for pre-existing conditions, the restrictions on co-pays for preventive care and the end of annual or lifetime payout caps.

Put simply, with Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay.

When you follow the money, you see the choices we’ve made, knowingly or unknowingly.

Over the past few decades, weve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs. Meanwhile, weҒve squeezed the doctors who dont own their own clinics, don’t work as drug or device consultants or don’t otherwise game a system that is so gameable. And of course, we’ve squeezed everyone outside the system who gets stuck with the bills.

We’ve created a secure, prosperous island in an economy that is suffering under the weight of the riches those on the island extract.

And we’ve allowed those on the island and their lobbyists and allies to control the debate, diverting us from what Gerard Anderson, a health care economist at the Johns Hopkins Bloomberg School of Public Health, says is the obvious and only issue: “All the prices are too damn high.”

Posted by Elvis on 10/23/12 •
Section Dying America
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