Upchucked through the mail slot:
Could Carlyle Consultants soon recommend government purchases from Carlyle affiliates?
Friday, December 7, 2007
Wednesday, November 21, 2007
The Wrap: Know Your Wary Supplier
The Bush administration's import safety expert recently advised consumers to know their supplier. HHS Secretary Mike Leavitt encouraged people to buy from organizations they trust. He essentially reiterated the old maxim "buyer beware".
Two stories highlight different aspects of this modern dilemma. First, how does the consumer get information about the firms selling them goods, especially companies that aren't publicly traded. The British have a plan to address the problem of secretive private equity firms. CNN Money reported:
Private equity firms doing business in Britain should publish an annual report that details their structure and portfolio or keep this information updated on their Web site, according to the rules. Public companies bought for more than £300 million or firms that change private hands for more than £500 million should provide information about their ownership, as well as disclose details about the performance of their business. The guidelines are voluntary, but buyout firms that do not comply with them will be obligated to explain why they have not.
If a firm plans on shorting the consumer on quality goods or services, it seems they would be happy to stiff the general public as well. How does a consumer get the information they need to fulfill Mike Leavitt's advice?
The second dilemma is more difficult. What if you really trust the organization where you shop? Let's say the Church of Wall Street has some fine looking crosses to sell. Staff there believe they've been made in Italy, a fine Christian nation. But low and behold, it turns out that maybe Communist market worshipping heathens produce the Christ laden crosses in a modern day sweatshop. Trinity Church's supplier is investigating the conditions under which their products are made.
Investors who purchased high risk mortgages bundled by big Wall Street firms are now trying to find out what's of value in the whole mess. Similarly retailers today can't seem to speak for the goods that rest on their shelves. Which ones actually meet the contractor's specs and which one's have freewheeling substitutes inside that cause varying rates of harm? Who is degraded in the whole process of ever growing profits, the employee, maybe even the consumer?
Two stories highlight different aspects of this modern dilemma. First, how does the consumer get information about the firms selling them goods, especially companies that aren't publicly traded. The British have a plan to address the problem of secretive private equity firms. CNN Money reported:
Private equity firms doing business in Britain should publish an annual report that details their structure and portfolio or keep this information updated on their Web site, according to the rules. Public companies bought for more than £300 million or firms that change private hands for more than £500 million should provide information about their ownership, as well as disclose details about the performance of their business. The guidelines are voluntary, but buyout firms that do not comply with them will be obligated to explain why they have not.
If a firm plans on shorting the consumer on quality goods or services, it seems they would be happy to stiff the general public as well. How does a consumer get the information they need to fulfill Mike Leavitt's advice?
The second dilemma is more difficult. What if you really trust the organization where you shop? Let's say the Church of Wall Street has some fine looking crosses to sell. Staff there believe they've been made in Italy, a fine Christian nation. But low and behold, it turns out that maybe Communist market worshipping heathens produce the Christ laden crosses in a modern day sweatshop. Trinity Church's supplier is investigating the conditions under which their products are made.
Investors who purchased high risk mortgages bundled by big Wall Street firms are now trying to find out what's of value in the whole mess. Similarly retailers today can't seem to speak for the goods that rest on their shelves. Which ones actually meet the contractor's specs and which one's have freewheeling substitutes inside that cause varying rates of harm? Who is degraded in the whole process of ever growing profits, the employee, maybe even the consumer?
Tuesday, November 20, 2007
Strange Coalescence of Bush Operatives
It seems each new story on The Carlyle Group's planned purchase of giant nursing home provider ManorCare reveals another six degrees of Kevin Bacon to the Bush White House. Consider recent announcements:
1) Fran Townsend, White House Homeland Security Adviser announced her resignation yesterday. Mrs. Townsend did a huge favor for The Carlyle Group after Hurricane Katrina. She omitted the private equity underwriter's brand new affiliate, LifeCare Hospitals and their 24 long term, acute care patient deaths from the White House Lessons Learned report. In 2006, LifeCare invested over $500,000 in lobbying services. Did any of that go toward influencing the White House to not weigh in? As for Fran's reason for leaving, it's to enter the private sector, doing risk management for a large bank or investment company. Or maybe a huge private equity firm?
2) Capital Hill hearings on the deal focused on concerns regarding patient care and patient safety. One might expect Carlyle's clear track record of failing patients in a time of disaster to be pertinent. With this Congress and Executive, that's apparently not the case. If Carlyle can fail patients in one of twenty one LTAC's, what might they do with 550 mostly nursing homes?
3) Having encountered some resistance to the deal, Carlyle put its lobbyists in gear. Guess which group landed squarely on Carlyle's side? The American Health Care Association/Alliance for Quality Nursing Home Care and its contracted lobbyist, Tom Scully. Tom happens to be a General Partner for a different private equity firm, Welsh, Carson, Anderson and Stowe. But he currently hangs his hat at Alston & Bird, alongside Bob Dole and Tom Daschle. Tom Scully served under President Bush as the head of Medicare/Medicaid. He designed the Medicare Prescription Drug benefit before cashing in big in the private sector. A recent article mentioned Tom's lobbying to prevent cuts in payments to long term hospitals (like Carlyle's LifeCare Hospitals). Chambers USA said of Alston & Bird, "the firm is particularly good for healthcare lobbying.”
4) Another ex-Medicare/Medicaid chief under George H.W. Bush, Gail Wilensky will pocket $790,000 in options and stock appreciation rights from the sale of Manor Care. Her 27,205 shares of owned stock at $67 per share bring her total take to $2.6 million. Her capital gains tax savings due to Bush Jr.'s tax cut could amount to $130,000. Note that over two thirds of Manor Care's 2006 revenue came from Medicare and Medicaid, Gail's prior responsibility. (Ms. Wilensky is also a director of Cephalon, Inc.; Gentiva Health Services, Inc.; Quest Diagnostics Incorporated; SRA International; and United HealthCare Corporation.)
5) The Service Employees International Union claims to take the high road on behalf of health care workers. Yet, their claims ring hollow as union President Andy Stern already called employer sponsored health insurance "dead." Andy has his eyes on being a huge group contractor for employees having to buy their own health insurance (this is from a Republican and Democratic plan offered in Feb. 2007). Mr. Stern wants to manage those billions in health insurance funds in a strangely Carlyle like echo.
6) President George W. Bush served on the Board of a Carlyle affiliate, CaterAir in the 1990's.
7) While the American Health Care Association pushes for the Carlyle sale to go through, it's also targeting members of Congress in the Fall 2008 elections. Why are they giving Republicans a free pass on the issue AHCA uses to rake Democrats over the coals? The Alliance for Quality Nursing Home care continues to spend money on Tom Scully's services at Alston & Bird.
Time will show if Fran Townsend ends up with as good a job as Tom Scully, but she clearly will make yacht loads. The question is will it be for The Carlyle Group? They'll have just made a killing in China from the IPO of China Pacific Life. Unfortunately, real death happened in LifeCare and Tenet hospitals after Hurricane Katrina. Between the two health care companies, they spent nearly $1.9 million in lobbying services for the year Katrina struck and the following one when Fran produced her investigative report. Somehow they managed their risk well enough to warrant not a mention. Yes, Fran's global risk management skills could come in handy, for the right firm.
Saturday, November 17, 2007
Where's Ombudsman on Carlyle/ManorCare Deal?
The Carlyle Group's purchase of huge nursing home provider, ManorCare, needs an ombudman. Where's the impartial third party capable of investigating patient quality problems and holding a health care company's feet to the fire? The long term care consumer advocate wrote the Toledo Blade on how she can help patients and their families.
As the state long-term care ombudsman, my role is to resolve problems for long-term care consumers wherever they live, facilitate public comment on long-term care issues, and monitor and comment on public policy.
The problem is the ombudsman is needed on the deal itself. Carlyle has a past failure to long term acute care hospital patients that has never been addressed. After Hurricane Katrina, Calyle affiliate, LifeCare had the largest hospital death toll. George Bush's White House couldn't even put this fact in its Lessons Learned report. That whitewash proved his and foul mouthed Fran's inability to act as an ombudsman.
Anyone who has a question or concern about long-term care services should contact an ombudsman at 800-282-1206. We can provide information about regulatory surveys, family and resident satisfaction with facilities, and verified complaints.
Who failed as an ombudsman in regard to the treatment of long term acute care patients post Katrina and its bearing on the Carlyle/ManorCare merger? Both Texas Senators, Rep. Mike Conaway, The White House, the Department of Justice, the FBI, the Federal Trade Commission and the Joint Commission for the Accreditation of Hospitals.
If Carlyle can fail one of twenty one long term acute care hospitals in time of crisis, what can they do with 550 mostly nursing home facilities? Afterwards, expect them to blame the feds and throw their clinicians under the bus. They have a clear history of both with LifeCare. Why this has gotten zero attention is simply amazing. (Update: Santa delivered ManorCare to Carlyle according to a December 24th Washington Post article)
As the state long-term care ombudsman, my role is to resolve problems for long-term care consumers wherever they live, facilitate public comment on long-term care issues, and monitor and comment on public policy.
The problem is the ombudsman is needed on the deal itself. Carlyle has a past failure to long term acute care hospital patients that has never been addressed. After Hurricane Katrina, Calyle affiliate, LifeCare had the largest hospital death toll. George Bush's White House couldn't even put this fact in its Lessons Learned report. That whitewash proved his and foul mouthed Fran's inability to act as an ombudsman.
Anyone who has a question or concern about long-term care services should contact an ombudsman at 800-282-1206. We can provide information about regulatory surveys, family and resident satisfaction with facilities, and verified complaints.
Who failed as an ombudsman in regard to the treatment of long term acute care patients post Katrina and its bearing on the Carlyle/ManorCare merger? Both Texas Senators, Rep. Mike Conaway, The White House, the Department of Justice, the FBI, the Federal Trade Commission and the Joint Commission for the Accreditation of Hospitals.
If Carlyle can fail one of twenty one long term acute care hospitals in time of crisis, what can they do with 550 mostly nursing home facilities? Afterwards, expect them to blame the feds and throw their clinicians under the bus. They have a clear history of both with LifeCare. Why this has gotten zero attention is simply amazing. (Update: Santa delivered ManorCare to Carlyle according to a December 24th Washington Post article)
Friday, November 16, 2007
Studies Predict Widespread Health Care Cheating Under Bush P4P Plans
Researchers found that do gooders frequently became the worst cheats. A new study shows how a sense of moral superiority can lead to unethical acts, such as cheating. This can be exacerbated by structural elements that encourage competition.
American stockholders suffered mightily from widespread executive cheating on stock options. Some 30% of publicly traded companies fudged the dates of the option grants to maximize their incentive compensation. The Bush administration wants to spread the toxin of incentive compensation to health care, a field rife with do gooders. The AP article stated:
A competitive playing field, whether at a university or business, can also motivate cheating behaviors. "Cheating is a way to get ahead in a competitive environment where there are rewards for winning or getting ahead of others," said Daniel Kruger, an evolutionary psychologist at the University of Michigan.
It's spreading like wildfire in education and coming to healthcare. Hold on to your hats because an ill wind is ready to spread through the land of do gooders.
American stockholders suffered mightily from widespread executive cheating on stock options. Some 30% of publicly traded companies fudged the dates of the option grants to maximize their incentive compensation. The Bush administration wants to spread the toxin of incentive compensation to health care, a field rife with do gooders. The AP article stated:
A competitive playing field, whether at a university or business, can also motivate cheating behaviors. "Cheating is a way to get ahead in a competitive environment where there are rewards for winning or getting ahead of others," said Daniel Kruger, an evolutionary psychologist at the University of Michigan.
It's spreading like wildfire in education and coming to healthcare. Hold on to your hats because an ill wind is ready to spread through the land of do gooders.
Herb Kohl's Statement on ManorCare/Carlyle Deal Laughable
The Washington Post did a story on Capital Hill hearings related to The Carlyle Group's acquisition of huge nursing home provider, ManorCare. Of course there is no mention of the private equity underwriter's failure to patients in its LifeCare hospital after Hurricane Katrina. LifeCare had the largest number of hospital patient deaths.
One might expect regulators to consider a firm's track record owning health related companies. Not this Executive or Congress. The Post piece closed with a quote from Senator Herb Kohl, D-WI, "Often the only way to ensure the improvement of any entity is to bring its failings to light." Great advice, Mr. Kohl, if only you and your committee would follow it.
The White House already showed its incompetence in this regard. One might expect the hospital with the largest patient death toll post Katrina to warrant a mention in Bush's Lessons Learned report. Nope, nada, zippo, not one word. I bet the boys at Carlyle were most grateful for the White House pass. They're likely all smiles if the Capital Hill hearings made a similar omission.
One might expect regulators to consider a firm's track record owning health related companies. Not this Executive or Congress. The Post piece closed with a quote from Senator Herb Kohl, D-WI, "Often the only way to ensure the improvement of any entity is to bring its failings to light." Great advice, Mr. Kohl, if only you and your committee would follow it.
The White House already showed its incompetence in this regard. One might expect the hospital with the largest patient death toll post Katrina to warrant a mention in Bush's Lessons Learned report. Nope, nada, zippo, not one word. I bet the boys at Carlyle were most grateful for the White House pass. They're likely all smiles if the Capital Hill hearings made a similar omission.
Thursday, November 15, 2007
Bush's Measurement Errors on Health Savings Accounts
What would you think if you read the following "3.2 million covered by HSA type insurance plans"? Need help with the definition of an HSA? It's a health savings account where an employee or individual sets aside money tax free for uncovered or out of pocket health care costs. They can only be opened in conjunction with what's known as a high deductible health plan.
Now are you ready to answer the question? The phrase makes it sound like 3.2 million people have high deductible plans and have set aside money for those possible future expenses. Yet, the statement on the Department of Treasury website doesn't mean that at all. It means 3.2 million people are covered by high deductible plans.
How many actually have a health savings account? That's a horse of a different color. While 3.2 million are covered by HSA type insurance plans, only 26% or 820,000 have any tax free money sitting in an account. Nearly 2.4 million potentially joined the ranks of the underinsured, where they stand at risk should a major illness or traumatic event occur.
Low income workers likely don't have $2,000 to $4,000 to meet the individual or family deductible, much less the annual out of pocket limit, at least $1,000 dollars higher. So what do they do when faced with a health problem? Many likely go without.
That brings up back to the bigger Bush record on health insurance coverage. While he waved HSAs as his signature solution for the ills of the health care marketplace, the number of uninsured rose from 43.5 million in 2004 to 47 million in 2006. From the time he implemented high deductible health plans, more people lost insurance than rode his magic bullet.
The jury is out for the latest year, as 1.3 million more enrolled in "HSA type insurance plans." That brings the total to 4.5 million living under high deductible health plans. If only 26% still have funded HSAs, then the free market purchasing power of 1.2 million consumers with ready tax free cash to spend can be unleashed to drive down high health care prices.
If American businesses covering 176 million lives can't stem the hemorrhaging of high medical costs, I don't think a mere 1.2 million thrifty shoppers will do much. The other 3.3 million with high deductibles and zero balances in their HSAs likely are praying they don't get sick. Just remember the President's other signature solution for health care problems, "go to an ER." Be sure to send the bill to 1600 Pennsylvania Avenue.
Now are you ready to answer the question? The phrase makes it sound like 3.2 million people have high deductible plans and have set aside money for those possible future expenses. Yet, the statement on the Department of Treasury website doesn't mean that at all. It means 3.2 million people are covered by high deductible plans.
How many actually have a health savings account? That's a horse of a different color. While 3.2 million are covered by HSA type insurance plans, only 26% or 820,000 have any tax free money sitting in an account. Nearly 2.4 million potentially joined the ranks of the underinsured, where they stand at risk should a major illness or traumatic event occur.
Low income workers likely don't have $2,000 to $4,000 to meet the individual or family deductible, much less the annual out of pocket limit, at least $1,000 dollars higher. So what do they do when faced with a health problem? Many likely go without.
That brings up back to the bigger Bush record on health insurance coverage. While he waved HSAs as his signature solution for the ills of the health care marketplace, the number of uninsured rose from 43.5 million in 2004 to 47 million in 2006. From the time he implemented high deductible health plans, more people lost insurance than rode his magic bullet.
The jury is out for the latest year, as 1.3 million more enrolled in "HSA type insurance plans." That brings the total to 4.5 million living under high deductible health plans. If only 26% still have funded HSAs, then the free market purchasing power of 1.2 million consumers with ready tax free cash to spend can be unleashed to drive down high health care prices.
If American businesses covering 176 million lives can't stem the hemorrhaging of high medical costs, I don't think a mere 1.2 million thrifty shoppers will do much. The other 3.3 million with high deductibles and zero balances in their HSAs likely are praying they don't get sick. Just remember the President's other signature solution for health care problems, "go to an ER." Be sure to send the bill to 1600 Pennsylvania Avenue.
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