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

By:

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

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.

By:

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

By:

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!

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!

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.