Real Life Example

A pharmacist in an inter-city Detroit hospital relates the following story. He works at a conglomerate of hospitals in the inter-city that treats a great many Medicaid patients and those with no insurance. That is not the story. What is amazing is that this professional man who works with professional at these hospitals says the staff actually thought medical treatment would be free for their patients and that they would not have to change or pay any more for their personal health insurance.

This week the hospital employees received their health insurance notifications for next year and on average their costs will double what it has costs them in 2013. That’s right double and they are beside themselves. It is understandable that the Medicaid and no health insurance patients would think they are going to get services for free because in all of the Obama administration press releases and speeches it is inferred that health services will be free or paid for by others paying slightly higher premiums. Now we have health care professionals in the heart of a depressed city, Detroit just understanding that they are going to be paying in most cases double what they have been paying. This mild mannered pharmacist said there might be a revolt over these new costs. We don’t know if he meant the patients who will have to pay something for some drugs and services or the professionals who really thought the ACA was free. I’m amazed that these professionals who don’t fit the profile of “low information voters”” didn’t research the impact the new health care laws might have had on them. I’ve urged in every health care column I’ve written to have each of you check with your insurance company to determine what your new costs will be. Surprisely I’ve had a couple of people say that with the delay in “business terms” of the ACA until 2015 they don’t have to think about it right now. They are wrong. Please force your health care services to estimate your new costs and any changes in service you experience before it is too late.

Pensions, Pensions, Pensions

The city of Detroit is buried in pension and health fund debt. That is a simple statement but of course there are two question; what or who caused this disaster and what is the answer to the city coming out of bankruptcy?

My liberal friends will quickly point to corporate greed as the cause of the demise of this once great city and they are to a point correct. The big three automakers give to the unions on retirement benefits and health care services and gave and gave. The auto industry found it easier to give future benefits to its employees without considering the impact on the bottom line. This was in lieu of taking a strike and negatively affecting the performance of the most recent CEO’s retirement bonuses and corporate profit performance record. Really can’t blame the unions for taking everything they could get from the “avoid at all costs strikes” auto industry management.

However before my liberal friends stop shaking their collective heads in agreement with this analysis let’s not forget it is the city of Detroit that is billions of dollars in debt from pension and health funds. The city had no reason to allow their city to agree to outrageous union demands for retirement benefits that would break the budget of a once growing city. Like the auto companies it was easier to give what the unions wanted rather than face unhappy employees who might not vote for them in the next election. It seems impossible to believe that city management didn’t see the financial cliff coming but then we forget about politics and graft.

The politics were centered in the democrat party and its total domination of the city of Detroit. Add in crooked mayors [not just Kwame] and crooked “public servants” and it is inevitable that this city would fall. And yes race does play a roll. I remember Mayor Coleman A. Young answering the question why did a black man get elected as opposed to a competent white? Coleman said [in a city of approximately 85% black residents] that it was “better a black crook than a white crook.” When other cities like Cleveland and Pittsburgh went through a deep financial downturn they regrouped to rise again and are model cities in today’s tough financial times. There was a believe that if the Detroit political operatives stayed loyal to the democrats in congress and when a half black president was elected the city would benefit from federal aid, after all it had worked for fifty five years! But alias, the federal funds started to run out, the state of Michigan started to run out of money even when they had a democrat governor and like many other states they were required to deliver a balanced budget, something Detroit had not seen in forty plus years.

Let’s face it the haves in Detroit who have lived off of the tax funds and democrat influence supported crooks like Kwame and his mother and father as they fleeced the already dieing city.

I’m certain that my liberal friends who support universal health care, union growth, civil servants as a voting block and “taking care of those poor people who can’t or won’t work” will have a totally different take on this bankruptcy. Of course the facts are pretty hard to ignore 18 billion in debt, 7 billion in unfunded health care services, 6 billion in retirement benefits that must be paid and then say to the rest of Michiganders it’s not the residents, political leadership or city management that is at fault. Shame on those liberals who would have the audacity to claim it is not the political machine, unions and corrupt management of the city that caused this bankruptcy.

How does Detroit come out of bankruptcy, cut, cut, cut and then manage in a fiscally sound manner.

The Health Care Message

A few days ago Jim Fuquay a writer for the Star-Telegram in Ft. Worth Texas wrote an article entitled “Texas Health Resources withdraws from Medicare’s Pioneer ACO program.” You may ask what does an action by a health resource and big physicians groups in Texas have to do with my state or my personal health insurance? Believe me it will affect your health coverage.

What is happening in Texas can and probably will occur in many of our states.

Simply stated the two groups involved, Texas health Resources and a major physicians organization, North Texas Specialty Physicians partnered in Plus ACO, an accountable care organization that joined the Medicare Pioneer ACO program in December 2011. The agreement is in essences to achieve savings with both organizations sharing in any savings and of course in any losses accrued to their patient base.

While Plus ACO is on pace to save $10 million annually they are looking at penalties in 2013 of between $6 million and $9 million and they will avoid those penalties by pulling out of the company.

The cause of this problem and decision by this major health group is the result of quality and cost benchmarks used by Medicare to determine ACO’s performance.

ACO’s facing performance guides by Medicare are likely to withdraw from the ACO services and further weaken the over all performance of the countries health services. This means another loss for the ACA.


Twenty-eight years ago George Adams came to my office at The Stroh Brewery Company for a meeting. George’s brother Bill Adams was the head of the MTV office in Detroit and had called on me at Campbell Ewald a major advertising agency handling Chevrolet and other GM products and services where I was Vice President of Media. When I moved to the Stroh Brewery Company as an officer of the company in charge of media Bill put together plans for some of our key brands targeted to demos that drank beer and malt liquor products.

Bill asked me to meet with George, a recent graduate of the University of Michigan with a degree in Health Care. I asked Bill what health care had to do with marketing beer and in addition to that in 1984 I didn’t know U of M even gave degrees in “health care?” Bill said George had a business plan that he wanted me to consider and because Bill asked me to do it I met with George.

When George came into my office I asked why he would be contacting me about health care. He said: that health care was going to be the growth industry in the United States and eventually the world. I said; what has that got to do with marketing beer? He said; well heath care is an issue for The Stroh Brewery right now. I said; how? He said that I was wrestling right now with a flat sales market and part of that sales problem stemmed from the aging population, particularly men.

I was shocked because I was looking at a demo report that reflected that issue, the aging population of the country and most specifically beer drinking. It didn’t take a brain surgeon to know that as drinkers get older their consumption is reduced and in many cases they stop drinking altogether. However at that time we noted that young drinkers were not filling the spot [the preferred beer drinker consumed eight glasses of beer each and every day] of aging drinkers and the industry was in a flat spell, expectation were that the drinking base would not grow over the next two decades.

George made the point to me that Health Care was the way of the future and would in time be second only to the U.S. government in volume of business.

George’s business proposal was that he start a newspaper directed at the health care professionals, doctors, nurses, hospital administrators, lab technicians, lawyers, accountants and of course state government officials and elected representatives. I asked why the paper wouldn’t be directed to the consumers and George explained to me that consumers would not recognize the importance of health care for many years while the professionals would see the signs and try to plan to accommodate the dramatic changes that the future held.

In 2013 there is no need to say George was right on target on all counts. In any case he convinced me to put in my own money along with his brothers, Bill and Dennis, a doctor of some renowned and we opened Health Care Weekly Review™. It was a sweet feeling about the future.

Over the next twenty-eight years we bought Bill and Dennis out of the company because they didn’t want to pay for efforts to expand our coverage outside of the state of Michigan. One thing many people didn’t understand was that the way the insurance companies, state insurance commissions, state government laws and hospital associations worked each state was unique onto its self and so what applied in Michigan had no applications in Ohio, Indiana, Illinois, etc. We wanted to open new offices using the trademarked name Health Care Weekly Review™ and the format that we had found successful. It was a risk and I understand why the brothers didn’t want to take it. The paper’s future was further complicated by the fact that George as the driving force of the paper wanted to become an investment banker. Eventually I bought him out and was sole owner of the paper.

During my tenure with Stroh, The Martin Group Inc and finally as creator and CEO/President of PentaCom I was owner but my son Bret really ran the day-to-day including editing and being the IT expert. When I retired from PentaMark the holding company for PentaCom I spent most of my time on the paper. Eventually personal issues and my health caused me to sell the paper to Mark Spiess. Mark had been the sales manager for a few years and understood the business. The sale began three years ago and here is the bitter, the sale was completed about four weeks ago. I feel lonely, no longer editing the paper and no longer an integral part of the health care profession in the state of Michigan. It is a bittersweet set of memories.

Special Assessment

Special Assessment

If you belong to a neighborhood association or own a condo you’re probably familiar with “special assessments” for roofs, gardening, building repairs, etc. Well the government is no slouch and they have announced a special assessment for health care services.

I shouldn’t say the government announced because they didn’t but the Associated Press on Tuesday December 11 ran a story about a 25 billion dollar assessment charged to the insurance companies and businesses offering health insurance programs to employees under Obamacare. The assessment is actually a $63 per person fee to cushion the cost of covering people with pre-existing conditions under the new Obamacare health care overhaul.

This assessment is completely legal and is somewhat buried in the Affordable Care Act legislation is going to be a burden that according to most large corporations will be passed on to the workers. One employer said; we are being hit with a multi-million dollar assessment without getting anything back for it.

I should point out that the assessment goes into the HHS department and it is part of a bigger package of taxes and fees to finance Obama’s expansion of coverage to the uninsured. The projected cost of this coverage is to be $700 billion over the next ten years. However it is reasonable to assume that just like this 25 billion dollar assessment you and I can expect additional “assessments” because it is almost a certainty that like almost all federal government projects the actual costs will be wildly under estimated.