Category Archives: Privatization

Government Oversight of Medicaid: The Shift of Power from Federal Agencies to State Agencies has Been a Disaster for Poor Americans’ Health

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Dave Kingsley

Dismantling of the Federal Administrative State

    President Ronald Reagan said this at a press conference in 1986: “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’” This might have seemed funny at the time but by 2008 when lax federal governmental oversight of the financial services industry led to economic collapse or when in 2020 a deteriorated public health system led to a raging COVID epidemic, the people of America were screaming back to the government these five desperate words: “For God’s sake help us!”

    President Reagan’s quip was a continuation and acceleration of devolution of power from the federal government to the states that began during the Nixon administration. Consequently, the far-right dream of dismantling the federal administrative state has led to funneling federal grants to states as block grants rather than grants-in-aid, which meant less federal control over how states regulated federal-state funded programs such as Medicaid and welfare in general.   

    Some states are more enlightened than other states in how they administer welfare programs.  But during the Clinton Administration, the mistaken notion that people needing assistance for their daily needs – including medical care – would benefit from some tough love like denial of any services after a few years of receiving it.  Aid to Families with Dependent Children (AFDC a grant-in-aid program) became Temporary Aid for Needy Families (TANF – a block granted program with a much more stigmatizing moniker).  By the late 1990s, President Clinton was declaring that “the era of big government is over” – seven very unfortunate words.

    The idea that poor people down on their luck needed some federal assistance for survival was warped into a philosophy that help from the government would induce dependency and that administrative barriers to assistance and forcing people off of aid would somehow be character building.  As has happened since the era of industrialization began, poor people were more intently looked at as irresponsible and the cause of their own plight.  By the turn of the Century, this philosophy had become de rigueur – even in states given to a more empathetic and compassionate approach to the less fortunate (which could be any of us).

How Have States Handled their Increasing Power?

    So, how have states done with the power devolved to them?  Not well.  As an example, consider the prior authorization of Medicaid that I wrote about in my last blog post.  The HHS, OIG had this to say in their recently released report:  “most State Medicaid agencies reported that they did not routinely review the appropriateness of a sample of MCO denials of prior authorization requests, and many did not collect and monitor data on these decisions.”  This seems like very familiar state regulatory behavior to me.  Having reviewed thousands of nursing home cost reports, I have yet to see one properly filled out (in accordance with GAAP/FSAB accounting principles and federal regulations).  Indeed, they are loaded with deceit, misinformation, and what is either profound ignorance or fraud.  And yet auditing at the state level appears to be practically nonexistent.

    There is no point in using nursing home cost reports for research except to raise issues of state incompetence, lack of oversight capacity, and corporate ability to game the system. The same can be said about the giant insurance corporations contracting with states as MCOs.  Indeed, Anthem’s highest MCO denial rate was 34%.  Molina, one of the largest providers had denial rates that ranged from 17% to 41%.  Aetna, Centene, and UnitedHealth denial rates were 5% to 29%, 3% to 23%,  and 7% to 27% respectively.

    The States with the highest rates of denial are Georgia (34%), Michigan (32%), California (29%), Mississippi (27%), New Jersey (27%), Virginia (26%), and Wisconsin (25%).  One can only imagine how difficult and frustrating it is for physicians and Medicaid patients in these states to obtain needed medical care.  None of these states used denial data for oversight.

There is Nothing Funny about Government Help:  We Need it Badly!

    My colleagues and I spend our working hours attempting to ferret out information from states regarding Medicaid outcomes data.  To quote Warren Buffet, “It’s like getting red meat out of a tiger cage.”  But we have been communicating with staff – including auditors – in the OIG’s office and will continue that communication.  Our mission is to fight the state/federal barriers to public information.

    The Medicaid program is nominally a $900 billion federal/state expenditure.  But with tax expenditures (i.e., tax subsidies) for corporations in the business, it is a much larger expenditure in federal and state budgets combined than that. Furthermore, nursing home corporations and the giant insurance corporations contracting as MCOs are extracting immense amount of tax dollars without a correlative investment in a loyal, career-oriented work force, and a medical services infrastructure that welcomes and benefits the people eligible to receive it. 

    Centene, UnitedHealth, and the other large providers are lavishing obscene compensation packages on executives and board members (CEOs are usually receiving about $20 to $24 million per year); they have billions of dollars sitting on their balance sheets, they are paying robust dividends to their shareholders (most of which are asset managers such as Vanguard, BlackRock, and State Street, handling pension, insurance, and sovereign wealth funds); and they have devoted billions to capturing government through lax lobbying and election financing.

    No matter how objective and scientific researchers like to be, this is all about politics.  It’s about what goes on inside the D.C. beltway and in state capitols.  Anyone who thinks they can be politically neutral, purely professional, and outside of politics is sadly mistaken.  Making CMS do its job is a political task and will take political organizing.  The same can be said about making state agencies do their job.  You cannot work within the system and change it that way. 

Managed Care & Privatization was Supposed to Save Taxpayers Money & Work Better than Government Administered Medical Care, but That’s Not What is Happening.

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By:  Dave Kingsley

Managed Care for Poor Peoples’ Medicine is a Chimera

    According to a report released by the HHS OIG’s Office last week[1], the massive Medicaid program intended for poor Americans is beset with denial of authorization for care and weak state oversight.  What that means is this:  poor people who are hard scrabble poor enough to qualify for Medicaid and have the moxie and luck in navigating the bureaucracy to the point of approval for the program, are far too often denied the treatment physicians think they need.  The gigantic insurance companies contracting with states to run their Medicaid programs are denying care at double the rate of Medicare denials under managed care (i.e., Medicare Advantage).

    It is not difficult to understand why an undue administrative burden is placed on poor people for both qualifying for government health care in the first instance and then for receiving needed care once they are admitted to the program.  Powerful insurance companies have a financial incentive to deny a large proportion of care medical professionals think Medicaid recipients need. Furthermore, a lobby for poor people is nonexistent; they are powerless; and they can be pushed around and/or ignored by state bureaucrats.  Nevertheless, a puzzling and mistaken conventional wisdom proclaims that a corporatized and privatized system is a far more efficient and effective way to deliver taxpayer funded medical services.  It is past time that the conventional wisdom undergoes strong pushback from medical professionals, academics, and the media.

Background

    During the 2000 aughts (starting about 2010), states relying on the concept of “managed care” in which insurance companies (known as MCOs) are paid a “capitation rate,” i.e., a specific amount per enrollee, turned over their Medicaid programs to insurance corporations.  If the insurers keep their costs below the total dollars committed for enrollees, they make money.  Patients are, however, required to utilize medical services within “network.”  They must use a medical practice or hospital that is part of the contracting MCOs network of physicians and other medical providers.  Furthermore, care must be authorized by the MCO.

    The size of federal expenditures for Medicaid has resulted in mushrooming revenue for major healthcare insurers such as UnitedHealth, Elevance, Cigna, Centene, and Aetna.  In the early 2000s, no health insurers were in the top 30 corporations listed on the Fortune 500.  By 2022, nearly one-third of the top 30 Fortune 500 companies were related to healthcare insurance and managed care contracting.

    The idea of managed care began with the concept of health maintenance organizations (HMO) such as Kaiser Permanente and Ross Loos.  Individuals can join an HMO, pay the premium and expect low deductibles and co-pays.  However, the HMO or MCO in the case of Medicaid managed care have a network of physicians and other providers.  Enrollees must “stay within network” and receive authorization from an insurer (MCO) for a host of medical services their primary physician thinks they need.  This opens the door to tremendous power of insurance behemoths over Americans’ healthcare needs.

Has Privatization & Corporatization Through the Managed Care Concept Been Beneficial to the Health of Americans?

    As I mentioned, it is conventional wisdom that private, for-profit corporations can do a better job of administering taxpayer funded healthcare than government agencies.  But managed care is not working out in accordance with the widespread belief the government will pay less for healthcare if the profit motive incentivizes better care at a lower price.  Medicare Advantage costs fifteen percent more per enrollee than traditional Medicare.  Medicaid MCOs are paying robust dividends, buying back billions of dollars worth of their stock, and rewarding executives with exorbitant compensation packages while well baby care, infant mortality, heart disease, diabetes, and access to addiction treatment are not significantly improving across the Medicaid eligible population.

    Aetna, UnitedHealth, Centene, and other major insurance companies are reaping huge financial rewards by keeping per capita costs low. That would not in itself be a bad thing if outcomes were improving.  Perhaps having some healthcare is better than nothing.  No doubt, people receiving Medicaid benefits have better health outcomes than people with nothing.  But that is not the point.  Comparing poor people with no health insurance to poor people with Medicaid is illogical.

    Medicaid is lower tier medicine.  So those individuals lucky enough to qualify for it and actually receive it are treated as second class citizens.  So, by virtue of carving out a form of medical care for poor people – which is seen as welfare or a “handout” – the system can exploit them for financial gain while denying them the quality of care every other citizen deserves even though every form of healthcare received by Americans is heavily subsidized in some way or other by government.

Follow Us at the Center for Health Care Information & Policy (a newly formed nonprofit at https://chipcenterus.org/) and on this Blog as We Expose the Illogic and Folly of Privatizing U.S. Healthcare

[1] HHS OIG Report: “High Rates of Prior Authorization Denials by Some Plans and Limited State Oversight Raise Concern About Access to Care in Medicaid Managed Care.” https://www.oig.hhs.gov/oei/reports/OEI-09-19-00350.asp#:~:text=Overall%2C%20the%20MCOs%20included%20in%20our%20review%20denied,rates%20greater%20than%2025%20percent-twice%20the%20overall%20rate.

The “medical industrial complex” is not capitalism, so let’s change the narrative.

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By:

Dave Kingsley

Genuine Capitalist Enterprises are Not Operating in Anti-Competitive, Government Rigged, Systems.

As a proponent of capitalism, I resent the U.S. privatized, government-funded, health care system and the implication that it is a suitable representative of a capitalist system.  It is not.  The system of nursing homes, hospitals, and clinics through which patients pass for care is a financialized[1], corrupt, rigged, system.  Furthermore, some services important to society should not be industrialized under the farcical notion that return on capital will drive quality care.

Reformers have failed to create a narrative to defeat the financiers’ mantra that privatizing appropriate government services will increase quality and productivity.  History has taught us a very clear lesson:  industrialization and privatization of medical care and a host of other government services are unproductive and lead to excess extraction of capital, lower productivity, and reduction of innovation and reinvestment.

You Can’t Shame the Shameless

There is an unfounded belief that exposing bad operators in sensational mainstream media articles will force a change for the better in nursing homes and hospitals.  The misguided view that the medical-industrial complex will be moved by horror stories reminds me of an old T-Shirt in my closet with the following silkscreened on it: “We Don’t Care, We Don’t Have to Care, We’re EXXON.”  You could substitute the words medical-industrial complex, The American Health Care Association (AHCA), Ensign Group,” Welltower Corporation, Centene, United Health, and thousands of other corporate associations and entities for EXXON on such a T-Shirt.

Nursing home and hospital corporations don’t care about the shaming they deserve because politicians in federal and state legislatures have their backs.  Furthermore, they have captured the agencies charged with regulating them.  The Center for Medicare & Medicaid Services, and 50 state agencies are dominated by the industry and their well-financed lobbying organizations (not to mention the FDA, the FTC, the CFTC, etc.).  You can shame private equity as a business model, scurrilous operators, low wages/salaries, understaffing, and other outrageous practices, but financiers in the healthcare business are, for the most part, shameless. 

For at least a decade, I have been urging advocates to form a narrative and political strategy.  Playing rope, a dope with an industry that has a very well devised, effective, and well-funded narrative will change nothing.  The nursing home industry has a narrative based on falsehoods, which are comprised of frames related to the hardships endured by noble businessmen and investors.  Frames in which the industry purports to be suffering from low Medicare/Medicaid reimbursement, and low net income (profits) are blatantly false and misleading.  Regardless of how unbelievable the frames comprising industry propaganda, they are never seriously challenged by the constellation of nonprofit and government entities representing the elderly.  Furthermore, do-gooder commissions charged with studies of nursing homes, hospitals, and other health care subsystems generally whitewash and paper over the unethical, inhumane, and anti-democratic nature of the entire medical-industrial complex.[2]

Let’s Get Technical

I propose that advocates create frames that can be integrated into and support this narrative: “The privatized U.S. healthcare system is not fair, capitalistic, or ethical.”  Frames accusing industrialists of manipulation of markets, financial machinations, pay offs/bribes to legislators, and covering up corruption through well-funded lobbying entities such as the AHCA (nursing home lobby) are necessary but risky for professionals who want to go along to get along.

Industry moguls and their minions in government know from 70 years of history that their propagandistic efforts work well. They have been able to convince the public that privatized, for profit, services are better than non-profit and government services.  This mantra has gained traction and is embedded deeply in the American zeitgeist.  It will take a concerted effort across a broad array of nonprofit advocacy organizations to destroy a narrative based on industry lies and complex financial maneuvers.

However, before advocates can suitably frame messages for the media and legislators, a considerable amount of research, data collection, and analysis must be undertaken.  Data and evidence related to “rent seeking,”[3] “net operating income,” and “cash flow,” is necessary for debunking the “low net,” “thin margins,” and other hardship frames of the industry.  The nursing home system must be unraveled and explained as a network of capital flows from taxpayers and other sources through Real Estate Investment Trusts (REITs), private equity firms, LLCs/LLPs, and C-Corporations.

It is necessary to show how excessive capital flows through nursing homes and hospitals to investors and executives.  REITs have been existing under the radar and never discussed at legislative hearings (See my blog post: “Real Estate Investment Trusts (REITs) are Big Players in the Nursing Home Industry:  That Should Concern All of Us” February 13, 2021).  We must recognize how the entry of private equity and REITs around 2000 literally transformed the industry.

Advocacy research must include data from cost reports submitted by facilities to CMS and state agencies.  Falsehoods in these reports are pervasive.  Nevertheless, it is important to organize the data to make a case and support our frames pertaining to corruption and excessive extraction of capital at the expense of care.

We Are on It!

A team of people across the U.S. have come together to initiate solid, evidence-based, research.  With some help from the LTCCC and a lot of volunteer work, a group of us have been organizing data from cost reports and digging into financial machinations, ownership, and the flow of capital from various sources (including taxpayers) to investors, executives, and family wealth. 

We want to direct attention to more than horrendous examples of nursing home abuse and neglect.  The industry justifies poor care with a well-honed, richly funded, propaganda campaign. We should not respond to their “woe is me pleas for increased funding.”  Rather we should follow the money and make the trail available to legislators and journalists that we know will utilize it (think Senator Elizabeth Warren).  I don’t want to engage them in their claim that investors in the nursing home industry are suffering.  My only response to that is investors are not stupid.  If returns were no good in public-funded, skilled nursing care, investors would be investing somewhere else. 

[1] By labeling the system “financialized,” I mean that financial maneuvering for extracting cash takes precedence over increased productivity and quality of services.  Shareholder value is the primary mission of most healthcare private corporations.  Stakeholders are of secondary importance.  Often stakeholders suffer for the sake of enhancing and protecting shareholders’ interests.

[2] While COVID was surging in the Spring of 2020, CMS convened an “independent” commission the management of which was outsourced to the Mitre Corporation.  The report of this commission was a whitewash and papered over general neglect by the nursing home industry which resulted in 200,000 patient and employee deaths.  Contrary to suggesting accountability for lack of infection control and no preparation for a pandemic that scientists had been warning about for decades, the final report recommended more financial assistance for the industry.  Recently, a commission under the auspices of the National Academy of Sciences, Engineering, and Medicine (NASEM) in operation for a number of years entitled “National Imperative to Improve Nursing Home Quality” issued a report of their work. This commission tiptoed around the corruption, deceit, and excessive extraction of capital at the expense of quality care.

[3] “Rent seeking” has evolved in the field of economics to describe corporate efforts to extract wealth without a correlative increase in the production of goods and services.  The nursing home, finance, real estate, lobby is constantly hectoring legislators for an increase in reimbursement without any real, scientific, evidence that the cash flow and return on their investment is inadequate.

Liz Fowler – New Top CMS Official – Is Too Deeply Enmeshed with the Medical-Industrial Complex

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Dave Kingsley

The Industry-Government Revolving Door

I remember a trip to the White House in 2012 with a group sponsored by the Committee to Preserve Social Security & Medicare. The purpose of the trip was to lobby against proposed cuts in SS and MC – two highly successful and popular government programs (funded mostly by the beneficiaries of the programs). President Obama had earlier almost caved into Republican demands for devastating cuts in both programs. Subsequently, the President appointed a commission (The Simpson-Bowls Commission) loaded with budget cutters and deficit hawks intent on recommending deep cuts to the programs.

We were in a room with all of the top Obama White House staff, which included Liz Fowler. At the time, I had not heard of Ms. Fowler. It didn’t take long for me to learn that she was President Obama’s point person on the Affordable Care Act. The route to that job, I soon learned, was from a John Hopkins PhD in Health Care Policy & Management, through the major health insurance company WellPoint, and then to the Senate Finance Committee under Chairman Max Baucus – a staging point for moving from government service to a high paid job lobbying – a revolving door between the Senate and K-Street.

It is my belief that Senator Baucus “put” Liz Fowler in the White House to insure that President Obama did the right thing vis a vis industry in the design of a health care program that would funnel enormous amounts of business to private insurers and pharmaceutical corporations. Indeed, she left the White House soon after passage of the law for a job with Johnson & Johnson – a major corporate beneficiary of Obamacare.

Liz Fowler’s Move Back to Government

Liz Fowler’s bio (posted by CMS) conveniently excised her first career at WellPoint (https://www.cms.gov/about-cms/leadership/center-medicare-medicaid-innovation). Furthermore, it says nothing about her years with J&J after leaving the Obama White House. It is interesting to note that the bio says, “She also played a key role drafting the 2003 Medicare Prescription Drug, Improvement and Modernization Act (MMA).” My question is, “Was she working for WellPoint at the time?” The MMA propelled the Republican mission of privatizing Medicare forward at a breathtaking pace. It also included a new prescription drug plan (Part D) in which government negotiation of drug prices with major pharmaceutical companies was disallowed.

Ms. Fowler’s new job at CMS is not insignificant. Indeed, as Deputy Administrator and Director of the Center for Medicare and Medicaid Innovation (CMS Innovation Center), she will have a say over the kinds of innovation in care we need to see in delivery of medical services in nursing homes, hospitals, and clinics. Financial innovation in the nursing home industry has been vast in the past 40 years while innovation in care for patients has been practically nil.

Advocates Need to Seek Liz Fowler’s Removal from CMS

Taxpayers deserve to be represented by government officials who best represent their interests. Innovation in government funded healthcare will require a considerable amount of financial innovation that is fair to patients and taxpayers, availability of data, and transparency. Let’s take the big one: negotiation of drug prices. The excessive costs of pharmaceuticals reflects a toxic, perverse, symbiotic relationship between government and industry. That is not capitalism – it is statism – a necessarily corrupt and debauched form of economics.

Nursing home innovation will require major changes in operations that will humanize treatment and raise standards of medical ethics – which are sorely lacking at this time. Those innovations will reduce the amount of excess capital flowing from treatment facilities to investors.

Much needed innovations include data collection processes that provide valid and reliable data for evaluating the effectiveness of industry’s utilization of tax dollars versus excessive investor extraction of taxpayer provided capital. Also, data will be of no use to advocates, scholars, and the public in general if it is not readily accessible. That is not the case now, which is inexcusable in a super-wealthy country with unlimited resources for providing something as simple as a sophisticated, easily accessed, data system.

Unless Ms. Fowler has had an epiphany and a conversion experience, she does not, as a top official, belong in an agency taxpayers and program beneficiaries depend on for regulation, patient protection, and systems for monitoring provider activity. The tactic of corporate shills in government is the “tweak,” which typically changes little and reinforces corrupt, inhumane, and costly programs. The U.S. healthcare system is a disgrace and an embarrassment because of a corrupt relationship between industry and government the likes of which have never seen in U.S. history. It is time to stop thinking that the system can be transformed or even improved while the revolving door continues to revolve.

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Data Analytics, The Stock Market, & Healthcare Justice

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By:

Dave Kingsley

Current public relations carried on by the hospital and nursing home
industries are based on bogus claims designed to mislead the public. The
variety of wealthy lobbying organizations for the medical-industrial complex
are promoting false narratives based on either an invalid interpretation of
financial data (intentional) or making claims of hardship, e.g. “low net
margins” that are not supported by solid, scientific, factual information
(also intentional).

Big and increasingly dominant hospital and nursing home corporations have
sophisticated data analytic departments on which they rely for management
decisions affecting cash flow and shareholder interests. These multi-billion-dollar
companies determine razor thin margins acceptable for minimal staffing, pay,
food quality, training, and equipment. Even the smaller chains are implementing
productivity enhancement efforts with software designed to determine maximum
acceptable acuity levels for billing and cash flow.

Unfortunately, providers of long-term/skilled nursing care (i.e. nursing
homes operators) are not applying advanced technology and data analytics to
quality of care. I follow industry trade publications and financial reports and
can find no evidence that providers are employing sophisticated analyses to
efforts for optimizing the health and quality of care at a cost that returns a
reasonable value to executives and shareholders rather than a return that can
pass muster with regulators and legislators.

Because much essential financial data pertaining to tax supported medical
care operations are hidden from public view or nearly impossible to wrest out
of government agencies, advocates for patient and employee justice in hospitals
and nursing homes are in an asymmetrical fight with lobbyists. Because the
nursing home industry is more of a real estate/finance industry than a
medical/patient care industry, the lobbying power in federal and state
legislatures constitutes a juggernaut that can only be defeated through an
organized advocacy effort that fights for transparency and fully utilizes what
is available now to feed into a truthful narrative for media, legislative, and
research actions.

What Is The Stock Market Telling Us About The Financial Condition of
Nursing Homes & Hospitals After Two Years of COVID?

Some data pertaining to the financial condition of nursing homes and
hospitals are readily available from the U.S. Securities & Exchange
Commission (SEC). I have been tracking the stock of publicly listed
corporations with operations in nursing homes and hospitals. Most nursing home
corporations listed on a public exchange are real estate investment trusts
(REITs) that are becoming increasingly powerful in the long-term care/skilled
nursing business (they trade and lease real estate but also operate
facilities).

The last three months have not been good for the equities market. Stock
prices have been falling precipitously. But that’s not the case for stocks of
corporations in the business of providing tax funded medical care.

Brookdale Senior Living & The Ensign Group

Let’s consider the two biggest nursing home operators listed on a public
exchange that are not REITS: Brookdale Senior Living and The Ensign Group.
Since late November, the DOW has dropped approximately 3%, the S&P has
declined by 6.5%, and the NASDAQ has fallen by 17%. But these nursing home
corporations have gone in the opposite direction.

Closing price of Brookdale November 29, 2021 – $6.30 Close on February 26,
2022 – $7.00

Closing price of Ensign November 29, 2021 – $77.20 Close on February 26,
2022 – $82.19

So, Brookdale stock is up by 11% and Ensign stock is up 6.5% during the same
period we’ve seen a drop in the markets like we haven’t seen since March of
2020 when they crashed due to COVID but recovered rather quickly.

Most of the REITs heavily involved in the nursing home business have seen
their stock rise during the time that the market has been falling rapidly.
Welltower, the big one, is up 1%. Ventas, the other big one, is up nearly 8%.

Publicly listed hospital corporations are doing well also. HCA stock has
climbed from $229 in late November to $253 at the close yesterday – a 10.5%
increase. Tenet jumped from $74.46 to $85.71 since November 29th – a 15%
increase!

Why is the stock of these hospital and nursing home corporations doing so
well when the market is in correction territory? The primary reason is this:
they are heavily subsidized by the taxpayers. Indeed, their prices are set by
state agencies much like like utility company rates are set. They submit their
costs and are reimbursed for those costs plus increases for inflation and
healthy percentage increases above costs. Furthermore, they are structured for
each facility to pay lease expenses and other ancillary expenses to other
corporations they own.

Don’t believe the industry’s hardship pleas. That is all a lie. It is a
scurrilous behavior indeed for the American Health Care Association – the
nursing home industry lobby – and the American Hospital Association to be
putting out false information to snow the taxpayers who are so generous with
their subsidies for executive pay and shareholder dividends.

House Subcommittee on the Coronavirus Ignores Nursing Home Deaths. That is a Human Rights Violation.

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Dave Kingsley

U.S. House Committee Eliminates 141,000 Patient and 2,177 employee Nursing Home Deaths From Reality: Nothing to See There.

According to the Center for Medicare & Medicaid Services (CMS), 141,084 nursing home patients and 2,177 employees have died from the Coronavirus pandemic (https://data.cms.gov/covid-19-nursing-home-data). The House Select Committee on the Coronavirus under the leadership of Congressman James Clyburn – one of the three most powerful Democrats in the House – addressed 249 deaths in meatpacking plants but totally ignored nursing homes.

I have carefully read the Subcommittee’s recently released report More Effective, More Efficient, More Equitable and can find absolutely nothing about the biggest loss of life in an institutionalized population in the history of the United States (see: https://coronavirus.house.gov/news/press-releases/select-subcommittee-s-year-end-staff-report-highlights-oversight-work-releases). Adobe Acrobat PDFs have a search function. Having utilized that function on the report, I can say with certainty that words such as nursing homes, long-term care, skilled nursing, nursing home industry, or any other word that would suggest that elderly and people with disabilities institutionalized in these facilities were of any concern whatsoever to the subcommittee.

How can 141,000 patient and 2,177 employee deaths in one institutionalized population – which constitutes about one percent of the U.S. population in any one year but nearly 20 percent of the COVID-19 deaths since the pandemic appeared in 2020 – be erased from reality? Whose interests are being served by these types of hearings in Congress? Indeed, there has, in fact, been no real serious investigation by the U.S. Congress or any state legislature into the nursing home coronavirus tragedy (at least none that I have found).

The Nursing Home COVID Tragedy Was Avoidable. Therefore, It Is an Atrocity and a Human Rights Violation.

Elderly and disabled Americans were allowed to die because an industry failed to spend the money necessary to save them. The U.S. government has turned over the care of frail and disabled people to an industry well paid to care for them. It is well known and scientifically proven that the industry charged with responsibility for patients in nursing homes has consistently placed shareholder value above medical care. That fact has been demonstrated repeatedly and consistently for the past 70 years that federal and states funds have supported a privatized long-term care and skilled nursing system.

Here are the facts:

Epidemiologists and other scientists renowned in the field of emerging diseases have warned for decades that pandemics like we have experienced in the 2000s would become worse (e.g. See Laurie Garrett, The Coming Plague).

SARS taught the world a lesson about pandemics and the vulnerability of nursing home patients. Hong Kong and other Asian countries took steps to counter future pandemics. The Hong Kong Guidelines were well known throughout the world and yet the U.S. nursing home industry and government regulatory agencies ignored those guidelines while the industry created sophisticated legal and financial structures to drain ever more tax and reimbursement dollars out of the system for the benefit of executives and shareholders (See: https://www.cmaj.ca/content/192/19/ES11; https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7899229; https://www.ncbi.nlm.gov/pmc/articles/PMC723424/; https://www.theguardian.com/world/2020/may/19/mps-hear-why-hong-kong-had-no-covid-19-care-home-deaths.)

Political contributions suggest that the nursing home industry has tremendous sway over congressional and agency oversight. For instance, of the top 100 2019-2020 contributions to Congressman Clyburn – which total over $1 million dollars – approximately half came from corporations and lobbying groups with a vested interest in nursing home finance.

The American Health Care Association – the nursing home corporation lobbying organization – contributed $10,000 to Congressman Clyburn in the 2019-2020 cycle, but it is important to recognize that the nursing home industry is primarily a finance-insurance-real estate as well as a medical industrial complex with interlocking interests between real estate, finance, and medical sectors of the economy. Therefore, consider the following donations to Chairman Clyburn in 2019-2020:

American Healthcare Association (nursing home corporation Lobby): $10,000

National Association of REITs: $10,000

National Bankers Association: $10,000

American Hospital Association: $10,000

National Association of Realtors: $10,000

Johnson & Johnson: $10,000

KMPG: $10,000

Investment Corporation Institute: $10,000

USAA: $10,000

CVS Health: $10,000

Capital Financial: $10,000

Deloitte: $10,000

Abbot Lab: $10,000

Eli Lilly: $10,000

Bank of America: $10,000

Pfizer: $10,000

Pensare Acquisition Group: $10,000

Prudential: $19,000

AFLAC: $34,925

Government & Industry Abuse of An Institutionalized Population is A Human Rights Violation Causing A Massive Number of Fatalities. Government Officials Must Be Held Accountable. But there is No Organized Political Movement to Force that to Happen.

The U.S. government has a long history of looking the other way while widespread abuse and neglect continues pervasively throughout a privatized nursing home system funded with taxpayers’ hard earned dollars. Furthermore, over that 70-year history, an aging enterprise has been spawned by the Older Americans Act and do-gooder contributions to 501C3 organizations. We have Area Agencies on Aging, all sorts of aging-related professional organizations, gerontology professional groups, advocacy groups, the AARP, and countless other special interest organizations have settled into a comfortable relationship with government agencies responsible for regulating nursing homes and the industry itself, which has a high powered PR machine. An ongoing game of rope-a-dope between the industry and advocates over minor tweaks to a system that should be ended not mended takes place ad nauseum, ad infinitum in legislatures across the land.

Nursing home neglect and abuse continues on a regular basis while shareholders and executives get fabulously rich from Medicaid and Medicare funded commercial real estate. It appears, however, that a coalition of so-called senior advocacy organizations cannot mobilize to force congress to take a hard look at the COVID-19 nursing home tragedy that didn’t have to happen.

Capitalism Can Only Thrive in a Robust Democracy. As Democracy Weakens, Capitalism Rots

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Dave Kingsley

Democracy is becoming weaker in the United States and the economic system is becoming increasingly corrupt and inefficient. 

    The primary hallmarks of a well-functioning capitalistic system are competitive free-markets, disruption of stagnant companies and industries by innovative startup companies, widespread opportunities for entrepreneurship, and a government with the political will to regulate the economy and business on behalf of the people and the general welfare.  These characteristics have been alternatively strengthened and weakened in the United States over the past 200+ years.

    Currently, the super-rich, and major corporations representing a burgeoning oligarchy have plied their increasing share of the wealth to government capture. Consequently, the U.S. government and a large proportion of the corporate world have settled into a destructive, money-driven, relationship.  Over the past few decades, the amount government largess channeled into corporations, their shareholders, and executives has accelerated. It is important to recognize this as one major underlying cause of what may be the twilight of American democracy and a free enterprise system.

We Cannot Overlook the Role of Religion in the Rise of Anti-Democratic Corruption

    I believe that a major cause of deteriorating democratic systems in this country is the money washing over elections and office holders. Our seriously corrupted political system is due in large part to dominance of the Supreme Court by a Christian-theistic-fascistic movement which has a propensity to throw its weight behind a strongman leader and a conservative, wealthy, white, elite.   For instance, Citizens United is merely a convoluted decision handed down for the purpose of legitimating the purchase of legislators by oligarchs and entire industries.

    Recent world history has taught us that major elements of modern Christianity are prone to collaboration with fascist autocrats.  Examples of Christian leadership’s deference to and support of strongmen abound.  The most recent example of course is the Christian white nationalist movement’s strong backing of the vile Donald J. Trump. The Catholic Church has a well-known history of providing comfort and aide to fascists throughout Latin America. 

    During the fascist-Nazi movement of the 1930s, the Catholic church was all too often willing to place its imprimatur on German, Italian, Spanish, (European) Nazism, and fascism.  Following the Holocaust, ratlines set up by Catholic priests helped shuttle war criminals such a Mengele and Eichmann to Latin America.

    Most Christians and Christian leaders in the United States are opposed to the vicious, vile politics of Donald Trump and today’s Republican Party.  Unfortunately, they are far too passive, unorganized, and quiet.  I say to them: “Please do not underestimate the organization, money, passion and commitment of the proto-fascist Christian white nationalists promoting Trump and Republican candidates.” 

    The Wasteful, Corrupt, U.S. Healthcare System is a Symptom of a Sick Political System

    There is a reason Americans pay two to three times per capita for healthcare than peer countries in the advanced, industrialized sphere of the global economy:  corruption.  How many ways can we document the claim that corruption is at the root of the wasteful, inefficient, U.S. healthcare system?  In so many ways that they are too numerous to mention in one blog post.  I will discuss some in this post and many more in future posts, but I first want to say as a capitalist that privatization and healthcare are not compatible.  Medical care cannot be reduced to an industrialized, free market model and at the same time optimize the health and wellbeing of the U.S. population.

    As dark money as well as money right out in the open began to flood into the political system, the American people were conditioned to believe that traditional government programs on behalf of the general welfare were necessarily wasteful and inefficient.  We were sold the myth that private enterprise is more competent than government bureaucracy.

    Actual practice – for instance in the case of the military, infrastructure, Social Security and Medicare – belie this deceit.  Nevertheless, practically every facet of the public domain supported by taxpayers has been handed over to private corporations.  That includes the publicly funded healthcare system.  The mind-boggling amount of capital that has flowed from the pockets of ordinary, non-wealthy, Americans into the holdings of the 1% is so excessive that it will be difficult for those hardworking, every day, Americans to grasp.

    Officially, healthcare accounts for $5 trillion or 20% of the U.S. economy.  I think it is more than that due to the generous tax reductions gifted to corporations, boards of directors and executives in the healthcare industry.  In my view, practically all revenue streaming into corporations providing medical services is coming from government sources – taxpayers – such as Medicare, Medicaid, the VA, and Obamacare.  At the same time, lobbying and campaign contributions keep costs spiraling up while care deteriorates and shareholders, boards, and executives pocket immense amounts of dividends, stock-growth, and compensation.

    The Finance-Insurance-Real Estate (FIRE) lobby, Big Pharma, device manufacturers, physician associations, the nursing home industry, and other powerful representatives of industries benefitting from corruption and excessive payouts can see the limitless government largesse available to them and have their representatives crawling all over our Nation’s capitol and the legislatures of the 50 states.  Legislators of both major political parties have become dependent on campaign contributions from the medical-industrial complex.

    In future blog posts, we will be documenting the inordinate corruption overtaking the government funded U.S. healthcare system.  See the coming post regarding 1Health Healthcare and the Centene Corporation.  Two of a very large number of scandalous and yet typical cases of healthcare rip offs at the expense of “we the people.”

Fight Privatization of Kansas Government!

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Beware of Privatization of Government Services

In response to today’s editorial, “Privatization caution,” I submitted the following letter to the Lawrence Journal World:

A move is under way to privatize government services and jobs in Kansas.  The so-called Reason Foundation (heavily funded by the Koch Billionaires of Wichita) is pushing this irrational idea.  In pushing their wacky form of right-wing libertarianism, the Koch oil magnates and other far-right billionaires will claim that their purpose is economy and efficiency in government.  Don’t fall for this.

Privatization has historically cost taxpayers more than services provided by government employees and has essentially lined the pockets of executives and investors.  If you don’t believe this, just consider the costs of outsourced defense/war functions.  Logistics and food services provided by KBR are far more expensive than when these services are provided by the military.  One small example:  The Army Times reported on their website on Nov. 1, 2009, that Pentagon auditors are attempting to deal with KBR’s “disjointed processes” and “weak accounting practices.” 

While troop levels are dropping off in Iraq, KBR’s level of employment has remained at the January 2008 level (17,000 employees).  During my service in the Marine Corps in the 1960s, I paid the same dues as every other Marine had paid up to that time.  I served on mess duty.  Cooking and other food services were provided by sergeants, corporals, and privates.  You can bet that this was done far cheaper than it would have been done by KBR.

Consider Medicare Part C (Medicare Advantage Plans).  According to the Center for Medicare Services, the federal government pays private insurance companies on average 14 percent more for providing coverage to Medicare Advantage beneficiaries than it pays for the same services to beneficiaries in the traditional Medicare program (20 percent more in some parts of the country).

Examples of these types of rip-offs of taxpayers abound.  The right-wing, anti-government libertarianism promoted by the Kochs has, as its primary objective, the destruction of government programs.  Furthermore, the main result of privatization is transfer of wealth from the bulk of U.S. taxpayers to the top 5 percent of wealth and income classes.

Legislators are being irresponsible when they hand your government, and in effect your taxes, over to the likes of Halliburton, Cigna Insurance, and the Correction Corporation of America.  One Republican legislator was quoted in the Journal World on Nov. 30 as telling the Reason Foundation representative, “You had me at hello.”  This is a mindless bending to the will of a powerful private interest with selfish motives that are contrary to the best interests of the people of Kansas.

Beware of the Kochtopus!

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If you read the Lawrence Journal World this morning (Nov. 30, 2009), you may have noticed on page 3A that some outfit called the Reason Foundation is pushing Kansas state legislators to “privatize” more public services and, consequently, to privatize more public jobs.  What the article by Scott Rothschild (“Push to privatize is on the table“) failed to mention is that the Koch family billionaires of Wichita (and Park Avenue in New York City) are putting up the money for this nasty little piece of  anti-human libertarianism.

The “Kochtopus” (a term I borrowed from Thomas Frank’s What’s the Matter with Kansas) wants to wrap its blood-sucking, dollar-soaked tentacles even more tightly than they are already wrapped around the Kansas legislature, and, in essence, kill government.  What the Kochs are really all about is enriching themselves at everyone else’s expense.  For instance, the Kochtopus–through its front group, Americans for Prosperity–was a financial force behind the tea bagger movement to kill health care reform.  Americans for Prosperity is one of  many Koch front groups put in motion to transform the United States into a two-tier society…with the Kochs and a few of the other super rich on top, and the rest of us on the bottom, serving them.

A primary objective of this blog is to watch the Kochtopus and to reveal its stealthy goings-on.  If you think that the Koch blob has not been effective, you would be wrong.  One Republican, State Representative Kasha Kelley, was quoted as saying to the Koch apparatchik, “You had me at hello.”  That would probably be correct for practically all of the Republicans in the Kansas State Legislature.