The following are notes I took this morning on a presentation on health care fraud titled "Lifting the veil: The Citizens Federation’s discoveries of financial mischief by insurance executives and regulators". It was given by Buddy Robinson of the Citizens Federation at the Lake Superior Freethinkers meeting.
His talk was based on "Who Is Minding the Store", a report by the Citizens Federation.
Added up numbers and found that non-profits took profits. Put into reserves which became excessive – twice the safe amount and four times the required amount.
Reserves went into investments which in turn increased reserves. Insurance companies didn't report this to Minnesota legislature.
Several Minnesota counties are dealing directly with the state for employees' health care. Some are now considering opening to public.
Strange things found about financial reporting. CEO compensation reported at half actual - Health Partners
Money from state increased at greater rate than payments to providers.
Overpayment reimbursement not in contracts but if fraud involved then overpayments can be recovered.
Insurance companies don't want to divulge payments to providers.
State allowed companies to police themselves.
Motivation? Medica contracts with former parent UHC, giving it 2/3 of income.
Insurance companies use government money to subsidize commercial policy losses.
Private insurance was to save money; it wound up costing a lot more.
Are HMOs too big to fail or jail?
End of my meeting notes.
So much for the efficiency of private enterprise. Efficiency (sometimes) in lining corporate management pockets!
I gave as my comment Adam Smith's "The proposal of any new law or regulation of commerce which comes from this order…" See "The Invisible Adam Smith".
Showing posts with label subsidy. Show all posts
Showing posts with label subsidy. Show all posts
Sunday, April 07, 2013
Thursday, November 29, 2012
Let's Look at Entitlements
Political reporting is full of stories about the need to rein in entitlements, mostly meaning Social Security and Medicare. Remember these are insurance programs for which people pay premiums.
Consider auto insurance. Suppose you buy a car and buy collision insurance for it. The day after you pay your annual premium of, say $1,000, you are involved in a crash that totals your car. Is the insurance reimbursement an entitlement? Of course it is. Is it an unjustified entitlement. Well, if you've been paying car insurance payments for years and never had a claim, you might think so. It's your premiums that are giving the owner who had made only one payment the reimbursement.
The question with Social Security and Medicare is if enough premiums are being paid in to cover the payouts, not whether those who paid in are entitled to the benefits or not. One can question the level of payouts but not the fact that payouts are made.
In both the auto insurance and Social Security cases, the recipients are not determining the benefits. It is either the insurance companies or the Federal Government.
However, there are other benefits that are being determined by the recipients, not some "disinterested" second party.
Consider CEO salaries. It is not an independent group of shareholders that are determining the ever increasing CEO salaries. It is a board often picked by the CEO!
Consider board member salaries and fees. Who determines that board members will get $100,000 plus for five or six board meetings a year plus expenses? The board members! Who determines the stock benefits given to executives and board members to "align their interests with those of the shareholders"? It's certainly not the shareholders.
Consider the "golden parachutes" given to fired executives. Do you think a laid-off worker would receive a few million dollars and lifetime high-value health insurance? If the worker receives any benefits at all, they are often considered entitlements, especially if part of a union contract. Why don't more supporters of "capitalism" recognize the golden parachutes as undeserved "entitlements"?
Consider that corporations depend on employees and customers to succeed. Employees are often treated as costs rather than investments. Customers are often treated as annoyances rather than supporters and free advertisers. And too often, executive pay is inversely related to customer satisfaction. See "Executive Pay and Customer Satisfaction". That certainly smacks of entitlement on the part of the executives.
Consider that the owners of professional sport teams strong-arm cities and states to provide a larger portion of their increasingly expensive stadiums. They argue that the newer, bigger stadium will be an investment in the local economy. I wonder how many of these owners are willing to pay for all the schools, roads, sewers, and so on that modern communities need and provide. Oh, the stadium will pay for those. That sounds like a multi-million dollar entitlement to me.
My guess is that the "entitlement" of Social Security puts more money into a local economy than all the corporate entitlements. My guess is that the "entitlement" of Medicare gives a lot of support to the local health care facilities than all the corporate entitlements, plus the employees of those facilities spend a lot of their wages in the local economy.
In short, an entitlement is something others receive, we only receive what is due us.
Consider auto insurance. Suppose you buy a car and buy collision insurance for it. The day after you pay your annual premium of, say $1,000, you are involved in a crash that totals your car. Is the insurance reimbursement an entitlement? Of course it is. Is it an unjustified entitlement. Well, if you've been paying car insurance payments for years and never had a claim, you might think so. It's your premiums that are giving the owner who had made only one payment the reimbursement.
The question with Social Security and Medicare is if enough premiums are being paid in to cover the payouts, not whether those who paid in are entitled to the benefits or not. One can question the level of payouts but not the fact that payouts are made.
In both the auto insurance and Social Security cases, the recipients are not determining the benefits. It is either the insurance companies or the Federal Government.
However, there are other benefits that are being determined by the recipients, not some "disinterested" second party.
Consider CEO salaries. It is not an independent group of shareholders that are determining the ever increasing CEO salaries. It is a board often picked by the CEO!
Consider board member salaries and fees. Who determines that board members will get $100,000 plus for five or six board meetings a year plus expenses? The board members! Who determines the stock benefits given to executives and board members to "align their interests with those of the shareholders"? It's certainly not the shareholders.
Consider the "golden parachutes" given to fired executives. Do you think a laid-off worker would receive a few million dollars and lifetime high-value health insurance? If the worker receives any benefits at all, they are often considered entitlements, especially if part of a union contract. Why don't more supporters of "capitalism" recognize the golden parachutes as undeserved "entitlements"?
Consider that corporations depend on employees and customers to succeed. Employees are often treated as costs rather than investments. Customers are often treated as annoyances rather than supporters and free advertisers. And too often, executive pay is inversely related to customer satisfaction. See "Executive Pay and Customer Satisfaction". That certainly smacks of entitlement on the part of the executives.
Consider that the owners of professional sport teams strong-arm cities and states to provide a larger portion of their increasingly expensive stadiums. They argue that the newer, bigger stadium will be an investment in the local economy. I wonder how many of these owners are willing to pay for all the schools, roads, sewers, and so on that modern communities need and provide. Oh, the stadium will pay for those. That sounds like a multi-million dollar entitlement to me.
My guess is that the "entitlement" of Social Security puts more money into a local economy than all the corporate entitlements. My guess is that the "entitlement" of Medicare gives a lot of support to the local health care facilities than all the corporate entitlements, plus the employees of those facilities spend a lot of their wages in the local economy.
In short, an entitlement is something others receive, we only receive what is due us.
Thursday, August 16, 2012
Solyndra loan, just the facts, ma'am
The Republicans have been jumping all over the Obama administration for the collapse of Solyndra; Paul Ryan accusing the Obama administration of "crony capitalism". Guess which administration actually approved the loan? The Bush administration! The loan was not actually made until Obama was in office. See "Clean Energy: Obama Says It's the Future, Paul Ryan Calls It a Fad", Stacy Curtin, Daily Ticker, 2012-08-16.
Meanwhile, the Republicans don't seem to notice the subsidies to oil, gas, coal, and nuclear.
Ryan also said, "We want to get Washington out of the business of picking winners and losers." He seems to forget that the last great Republican President, Abraham Lincoln, was very much in the business of picking winners and losers and providing subsidies. What would this country be like if he hadn't pushed the Transcontinental Railroad with "subsidies" of bonds and free land?
BTW: one of the commenters asked where Paul Ryan called clean energy a fad. Given how quotes of any kind get distorted and go viral, it is hard to find sources for a supposed quote. What Ryan said was "fads like Solyndra" on "60 minutes" with Bob Schieffer. I can't find a direct quote from 60 minutes, but dozens of repeats by many sites, each with its own particular bias.
Whatever, the fact is the Bush administration approved the loan. Now the Republican Party has morphed to promote only fossil fuels and nuclear energy and to disparage any alternate sources of energy.
Meanwhile, the Republicans don't seem to notice the subsidies to oil, gas, coal, and nuclear.
Ryan also said, "We want to get Washington out of the business of picking winners and losers." He seems to forget that the last great Republican President, Abraham Lincoln, was very much in the business of picking winners and losers and providing subsidies. What would this country be like if he hadn't pushed the Transcontinental Railroad with "subsidies" of bonds and free land?
BTW: one of the commenters asked where Paul Ryan called clean energy a fad. Given how quotes of any kind get distorted and go viral, it is hard to find sources for a supposed quote. What Ryan said was "fads like Solyndra" on "60 minutes" with Bob Schieffer. I can't find a direct quote from 60 minutes, but dozens of repeats by many sites, each with its own particular bias.
Whatever, the fact is the Bush administration approved the loan. Now the Republican Party has morphed to promote only fossil fuels and nuclear energy and to disparage any alternate sources of energy.
Thursday, July 21, 2011
A hidden cost of health insurance "efficiency"
As regular readers know, I take a dim view of those who tout efficiency because they use it as a code for lower obvious costs. They ignore that lowering costs may reduce effectiveness or may increase costs elsewhere.
A recent case was that someone thought that Medicare Advantage participants getting health club memberships was a cost that could be eliminated. I'm sorry that I didn't note where I read it.
However, a health club membership can cut costs elsewhere. Granted that not everyone who has such membership gets any real gain. Some show up for the sauna or the hot tub and get no real exercise. Probably sufficient numbers show up and do exercises that increase bone mass, muscle tone, and cardio-vascular function so that they will be less likely to be hospitalized than those who don't show up. In other words, the cost of the health club membership can offset the costs of major medical intervention.
A recent case was that someone thought that Medicare Advantage participants getting health club memberships was a cost that could be eliminated. I'm sorry that I didn't note where I read it.
However, a health club membership can cut costs elsewhere. Granted that not everyone who has such membership gets any real gain. Some show up for the sauna or the hot tub and get no real exercise. Probably sufficient numbers show up and do exercises that increase bone mass, muscle tone, and cardio-vascular function so that they will be less likely to be hospitalized than those who don't show up. In other words, the cost of the health club membership can offset the costs of major medical intervention.
Tuesday, July 19, 2011
When do subsidies outlive their usefulness?
Sen. Amy Klobuchar (D-MN) wrote an op-ed piece "A mature industry can sacrifice: That was the case with ethanol, and it's especially the case with oil" in today's Star Tribune.
She and others worked "to end the major tax credit for ethanol". Ethanol production "is now a competitive, established industry in the energy market…"
She asks why the oil industry isn't treated the same.
I think the answer is two-fold - lots of conservatives don't like the ethanol industry but they are paid big bucks by the oil industry.
Were all the oil subsidies a good idea some time in the past? Possibly. Consider that lots of oil was discovered and extracted by wildcatters. These were small groups that took the risks, financial and physical, to find the oil and drill the original wells. Many were the dry holes that they drilled.
Congress in its great wisdom saw the huge benefit of an oil-based economy and gave the hundreds or thousands of wildcatters a boost through various tax credits.
Now the oil industry is a mature industry of only five companies. Their probability of dry wells is practically nil compared to the wildcatters. Even with their safety shortcuts, their financial risks are small.
It's way past time to cut the oil subsidies.
She and others worked "to end the major tax credit for ethanol". Ethanol production "is now a competitive, established industry in the energy market…"
She asks why the oil industry isn't treated the same.
I think the answer is two-fold - lots of conservatives don't like the ethanol industry but they are paid big bucks by the oil industry.
Were all the oil subsidies a good idea some time in the past? Possibly. Consider that lots of oil was discovered and extracted by wildcatters. These were small groups that took the risks, financial and physical, to find the oil and drill the original wells. Many were the dry holes that they drilled.
Congress in its great wisdom saw the huge benefit of an oil-based economy and gave the hundreds or thousands of wildcatters a boost through various tax credits.
Now the oil industry is a mature industry of only five companies. Their probability of dry wells is practically nil compared to the wildcatters. Even with their safety shortcuts, their financial risks are small.
It's way past time to cut the oil subsidies.
Saturday, January 22, 2011
If government should get out of the way of business, why…
If government should get out of the way of business, why do so many businesses keep asking for government help?
Wellington Management Inc. wants to develop the former State Farm Insurance site in Woodbury, MN into an office park, a senior housing center, and a Costco store. Among government assistance it would like is financing through bonding or tax exemption. See "State Farm site plan may need state help", Star Tribune, 2011-01-22.
The owner of the company claims that the project will create 2,000 new jobs. I won't judge the accuracy of that projection, but it would be interesting to see how many such projections come true. It certainly didn't happen with United Healthcare in Duluth.
Some critics of government support for industries, for example, ethanol production, say government shouldn't be picking winners and losers in business. I wonder how many supporters of the Woodbury project are among those critics. I do know some supporters of the project belong to the same party as those critics. Many members of that party do say that government should get out of the way of business.
Wellington Management Inc. wants to develop the former State Farm Insurance site in Woodbury, MN into an office park, a senior housing center, and a Costco store. Among government assistance it would like is financing through bonding or tax exemption. See "State Farm site plan may need state help", Star Tribune, 2011-01-22.
The owner of the company claims that the project will create 2,000 new jobs. I won't judge the accuracy of that projection, but it would be interesting to see how many such projections come true. It certainly didn't happen with United Healthcare in Duluth.
Some critics of government support for industries, for example, ethanol production, say government shouldn't be picking winners and losers in business. I wonder how many supporters of the Woodbury project are among those critics. I do know some supporters of the project belong to the same party as those critics. Many members of that party do say that government should get out of the way of business.
Subscribe to:
Posts (Atom)