Wednesday, July 8, 2009

Seattle Doctors Try Flat-Rate No-Limit Primary Care

Seattle doctors try flat-rate no-limit primary care

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A Seattle clinic for people fed up with insurance, started by doctors fed up with insurance, has gotten $4 million in private venture capital money to expand, it announced on Monday.

Qliance says it has a profit-making solution to the problems of long waits, rushed doctors and cursory care that bother patients, at the same time that it eliminates the paperwork and pressure that plague primary care doctors.

"If you spent five minutes in my office you would notice there is nobody waiting. We don't have to stack them up like jets over Newark," said Garrison Bliss, a doctor and co-founder of the primary care clinic.

The new venture funding comes from Second Avenue Partners with participation by New Atlantic Ventures and Clear Fir Partners, bringing total capital raised to about $7.5 million.

Co-founder Norm Wu said per-patient revenue is triple that of insurance-based clinics. He said many costs are fixed so the firm, now losing money, will turn to profit as business grows.

More than 50 noninsurance clinics operate in 18 U.S. states, based on different business models, Wu noted.

The backers believe Qliance can grow very profitable, and the clinic uses stock options to attract new doctors. The next step is to open a suburban office.

Qliance says it is a private alternative to the failures of insurance, which have made health care President Obama's top legislative priority in Congress, with a price tag of $1 trillion or more.

Qliance customers pay $99 to join, then a flat monthly rate of $39 to $119, depending on age and level of service. Patients can quit without notice and no one is rejected for pre-existing conditions.

Patients must go to outside brokers and qualify medically to buy catastrophic care. One broker said a 30-year-old could expect to pay $133 per month for such care, and a 60-year-old nearly $400, plus substantial deductibles.

Qliance patients get unrestricted round-the-clock primary care access and 30-minute appointments.

"Why would a doctor not want to see sick people? That doesn't make sense, unless you're an insurance company," Bliss said.

He rejected the idea that unrestricted access causes overuse, calling that "nonsense promoted by insurance companies .... There's nobody I've ever met who gets their pleasure by seeing doctors."

Bliss said dumping rigid, convoluted insurance requirements and paperwork saves large amounts of money.

UnitedHealth, which processes 60 billion health care transactions a year, argued in June that better use of technology would save $332 billion annually, with some going to physicians.

Other big health insurers include WellPoint, Humana, Cigna and Aetna.

More Female Veterans Are Winding Up Homeless

More female veterans are winding up homeless

VA resources strained; many are single parents

By Bryan Bender

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The number of female service members who have become homeless after leaving the military has jumped dramatically in recent years, according to new government estimates, presenting the Veterans Administration with a challenge as it struggles to accommodate the hundreds of thousands of returning veterans from Iraq and Afghanistan.

As more women serve in combat zones, the share of female veterans who end up homeless, while still relatively small at an estimated 6,500, has nearly doubled over the last decade, according to the Department of Veterans Affairs.

For younger veterans, it is even more pronounced: One out of every 10 homeless vets under the age of 45 is now a woman, the statistics show.

And unlike their male counterparts, many have the added burden of being single parents.

“Some of the first homeless vets that walked into our office were single moms,’’ said Paul Rieckhoff, executive director and founder of Iraq and Afghanistan Veterans of America. “When people think of homeless vets, they don’t think of a Hispanic mother and her kids. The new generation of veterans is made up of far more women.’’

Overall, female veterans are now between two and four times more likely to end up homeless than their civilian counterparts, according to the VA, most as a result of the same factors that contribute to homelessness among male veterans: mental trauma related to their military service and difficulty transitioning into the civilian economy.

But while veterans’ services have been successfully reaching out to male veterans through shelters and intervention programs, women are more likely to fall through the cracks.

“While the overall numbers [of homeless vets] have been going down, the number of women veterans who are homeless is going up,’’ Peter Dougherty, director of homeless veterans programs at the Department of Veterans Affairs, said in a telephone interview.

The trend has alarmed top lawmakers and veterans groups, who fear that the federal government - which is already straining to care for new veterans suffering from post-traumatic stress disorder, brain injuries, and other physical ailments - is ill-prepared to deal with the special needs of female veterans who find themselves on the street.

Many of them are like Angela Peacock, a former Army sergeant who was diagnosed with PTSD when she returned from Iraq in 2004 and became addicted to pain-killers.

Later evicted from her apartment in Texas, she spent more than two years “couch-hopping’’ between friends and family before moving in as a squatter in an empty house in St. Louis.

“They could kick me out anytime they want,’’ Peacock said in an interview. “I have been clean for two and a half years and am working on getting my life back, but it doesn’t happen overnight.’’

According to the National Coalition for Homeless Veterans, a nonpartisan advocacy group in Washington, about 23 percent of the homeless population in the United States are veterans. Nearly half are from the Vietnam era and three-fourths experience some type of alcohol, drug, or mental heath problem.

Most of the homeless vets, who are estimated by the Veteran’s Administration to number at least 130,000 on any given night nationwide, are men older than 50.

With a new generation of veterans from Iraq and Afghanistan leaving the armed forces, however, the demographics are swiftly changing. And with more women serving on active duty - a full 15 percent of the military is now female - the share of female homeless veterans has grown from about 3 percent a decade ago to 5 percent, according to the VA.

Among younger veterans, meanwhile, the share of women is nearly double, making up 9 percent of homeless veterans under the age of 45.

“There are twice as many under 45 than above,’’ said Dougherty, who is also the executive director of the Interagency Council on Homelessness, which coordinates the federal government’s efforts to combat homelessness.

In recent days, senior members of Congress have called for an expansion of some of the VA’s programs to ensure they are properly suited to meeting the needs of the growing female population.

“Women veterans and veterans with children often have different needs and require specialized services,’’ Senator Patty Murray, a Democrat of Washington and a member of the Senate Veterans Affairs Committee, said in a statement.

Senator Jack Reed, Democrat of Rhode Island and a former Army officer, also believes more women-focused veterans services are needed.

“We need to adapt services for our veterans to reflect this shift and provide more gender-specific resources, such as housing and counseling to prevent female veterans from becoming homeless,’’ Reed said.

For example, Rieckhoff, who served in Iraq before founding the Iraq and Afghanistan veterans group, said female veterans often face unique homelessness risk factors, including sexual assault while in the military and diminished earning potential in civilian life.

But he also believes that the culture of the VA is mostly geared toward meeting the needs of men.

“They are having a tough time evolving to meet the demands of women, who are at a higher risk for homelessness to begin with,’’ Rieckhoff said.

The Obama administration has taken some steps toward combating homelessness among all veterans, including allocating $75 million to public housing authorities in the 50 states, Puerto Rico, and Guam to provide permanent housing and dedicated case managers for an estimated 10,000 veterans.

“For a woman veteran in particular, this is a way for them to have a place to live and not have to ditch the child while they take care of other needs that they have,’’ said Dougherty.

But Murray, Reed, and others say far more needs to be done, especially for homeless veterans with children.

They have sponsored legislation that calls for $50 million in extra funding over the next five years to allow the Veterans Affairs and Labor departments to make special grants to homeless veterans with children, including for transitional housing.

The legislation would also allow the Labor Department to fund facilities that provide job training and child care for female veterans.

Lenders Avoid Redoing Loans, Fed Concludes

Lenders avoid redoing loans, Fed concludes

Study cites lack of profit in aiding the distressed

Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.

The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.

One of the study’s coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans.

“Loan modification is not profitable for lenders,’’ Willen said. “If it were profitable, they would go out and hire staff.’’

US Representative Barney Frank, head of the House Financial Services Committee, said the study results may provide answers about why so few struggling homeowners have been able to get help.

Frank, a Newton Democrat, said he is holding a hearing Thursday on his proposal to provide government loans to homeowners who have lost their jobs and can’t qualify for loan modifications and other help because they don’t have income.

“The problem is worse than we thought,’’ Frank said. “The failure to do these modifications means the whole situation stays bad longer.’’

The Fed’s study found that only 3 percent of seriously delinquent borrowers - those more than 60 days behind - had their loans modified to lower monthly payments; about 5.5 percent received loan modifications that did not result in lower payments.

The study focused on 665,410 loans that were originated between 2005 and 2007 and subsequently became seriously delinquent. It also followed about 150,000 borrowers for six months after they received help, through the end of 2008.

The lenders may have compelling reasons not to find new borrowers to help, according to the study. For example, up to 45 percent of borrowers who did receive some kind of help on their loans ended up in arrears again, the study found. Conversely, about 30 percent of delinquent borrowers are able to fix their problems without help from their lenders.

“A lot of people you give assistance to would default either way or won’t default either way,’’ Willen said. “They are trying to maximize profits, and at this point maximizing profits does not mean modifying loans.’’

Officials from Hope Now, the private-sector alliance of mortgage servicers and investors, were unavailable for comment yesterday.

US Treasury officials declined to comment on the Fed study, but noted in a statement that more than 240,000 homeowners have received loan modifications this year under the president’s program. Moreover, federal regulators said the pace of loan modifications has been increasing steadily since last year.

Given the findings, Dean Baker, codirector of the Center for Economic and Policy Research in Washington, D.C., said Willen’s suggestion to give money to borrowers rather than lenders makes sense.

The number of foreclosure proceedings increased to 844,389 during the first quarter of 2009, up 73 percent from the first quarter of 2008, according to the Office of the Comptroller of the Currency.

“You have more money going to the banks and the servicers than you do to the homeowners,’’ he said. “It would make more sense to just give money to the borrowers.’’

The $75 billion Obama administration plan, announced in February, provides incentives to motivate companies that service mortgages to make loans more affordable, including $1,000 bonuses for each modified loan and an additional “pay for success’’ fee of $1,000 a year for three years if borrowers stay current on their new terms.

Willen said the success bonus could have the unintended effect of steering loan servicers away from those who need help the most, and toward only those borrowers most likely to recover on their own anyway. He said that if modifications increase, it won’t be by much. “My guess is they are going to help people who are OK, and they are not going to help people who are deep trouble,’’ he said.

Alan White, a professor at Valparaiso University School of Law in Indiana, said lenders could cut down on the number of borrowers who end up defaulting again by giving them more help in the first place. He said too many modified loans don’t result in low enough payments. Also, he said, there may be fewer borrowers who can get out of trouble on their own because of continuing difficulties in the economy.

“The servicers are making assumptions that are much too anti-modification,’’ White said. “The servicers have the authority’’ to help borrowers, “they just don’t want to use it.’’

The study, coauthored by Manuel Adelino and Kristopher Gerardi, also rebuts a widely held suspicion that the holdup in modifying loans is because of investors who control them through mortgage-backed securities. The Fed found no difference in the rate of aid between investor-controlled loans and those that lenders own directly.

Sick America

Sick America

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In spite of all the ill spoken about it, the American health care system is even sicker than is generally believed, if only for economic reasons.

The mother of all battles began a few weeks ago in Washington over the question of reform of the American health care system. This battle is not the first; in fact, the first proposals for in-depth change go back to the Truman administration years.

As everyone knows, one of the important reasons for this desire for change derives from the fact that the United States is the only developed country in the world, the whole population of which is not covered by one or another form of health insurance. Close to 50 million Americans, or 16 percent of the population, are purely and simply left on their own.

What is less often said is that this incomplete coverage costs Americans dearly. In fact, it's the most expensive coverage of all, not only in absolute value, but also in relation to GDP. In 2005, the United States consecrated 15.3 percent of its GDP to health care, or almost double the average for developed countries. In comparison, that proportion hit 10.5 percent in France, 9.9 percent in Canada, 9.2 percent in Sweden, 8.1 percent in the United Kingdom and 8 percent in Japan.

Always very swift to characterize other systems as "socialist" because of the role governments play in them, Americans don't even have the consolation of less recourse to public money than other countries. The cost of government insurance programs for the poor (Medicaid), the aged (Medicare), veterans and federal employees, added to the costs of the bonuses and fiscal advantages conferred on private insurance companies, represent about 60 percent of the country's total health costs. In other words, the American government today spends as much for health care (about 9.2 percent of GDP) as the governments of the Canadian, British and French "socialist" systems.

One could say that Americans have every right to treat themselves to a more expensive health care system that's better than the others. The problem is that they're far from getting value for their money, even when one leaves out the 50 million uninsured and the numerous others who have to fight their insurers to get their aid when they need it.

23 Percent of Expenses a Pure Loss

It's true that the American health care system makes a good impression on the international scene when it comes to fighting breast cancer and brain cancer detection, The Economist recently noted. But it's a completely different story in other domains, such as infant mortality (6.7 per 1000 births versus an average of 4.0 for the OECD excluding Mexico and Turkey) or the rate of death following a cerebral hemorrhage (25.5 percent versus 19.8 percent).

In fact, at least 20 percent of the higher costs generated by the American system are simply due to higher administrative costs, according to the firm McKinsey Global. That's because there are so many forms to fill out and second opinions to seek out in a system that involves so many private and public stakeholders. It's also because insurance companies spend money in new product development, purchases of financial guarantees and advertising.

Another factor: nothing in the system encourages expense control, whether through avoiding useless medical interventions, by improving productivity or by favoring prevention, The Economist observed last week. Company insurance policy costs are tax-deductible no matter what their cost; doctors are paid by intervention and patients who do have insurance always prefer to get too much care rather than not enough.

One must also mention the influence of a more-than-generous legal system for the victims of medical mistakes. Hospitals and doctors quickly understood that it's always better to go in for a few extra tests and interventions in case they have to defend themselves in court.

Overall, close to a quarter (23 percent) of all the money spent on health care in the United States is a pure loss, deems one major American business association (Business Roundtable), cited last week by the New York Times.

Claiming to be ever more disadvantaged by the system's costs compared to their foreign competitors, companies are starting to withdraw from them. While 82 percent of Americans enjoyed health care insurance offered by an employer right after the Second World War, that number is only 60 percent today and could soon fall to 45 percent.

In that context, it's not surprising that practically everyone in the United States, on the left as well as on the right, agrees that changes are necessary. Reforms seem all the more urgent in that everyone sees the aging of the population and the acceleration of the increase in costs that will accompany it coming here as everywhere else.

But that's where happy agreement ends and the political battle begins: ideological debates and the play of political influence. But that's another story.

Historian says US backed “efficacious terror” in 1965 Indonesian massacre

Historian says US backed “efficacious terror” in 1965 Indonesian massacre

By John Braddock

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The United States and British governments, supported by Australia, were deeply complicit in the murder of more than half a million alleged communist sympathisers in the wake of the 1965 Indonesian coup, a prominent historian told an international conference in Singapore last month.

Brad Simpson, Assistant Professor of History and International Studies at Princeton University and author of “Economists with Guns: Authoritarian Development and US-Indonesian Relations, 1960-1968”, said the US and British governments did “everything in their power” to ensure that the Indonesian army would carry out the mass killings.

The conference, entitled “The 1965-1966 Indonesian Killings Revisited”, held at the National University of Singapore from June 17-19, was a rare forum on the subject. The event, co-hosted by the university, the Asia Research Institute and the Australian Research Council, involved some 30 scholars from around the world.

Within Indonesia, the history of the political slaughter carried out between October and December 1965 has been suppressed for decades. The massacre of at least 500,000 people, the jailing without trial of about a million others and the widespread use of torture and rape, ranks as one of the great crimes of the twentieth century.

Despite the official secrecy surrounding the events, the consequences still reverberate within the country’s social and political life. The current ruling elite can trace its history back to the 1965 events. President Susil Bambang Yudhoyono, for instance, is a former general while his father-in-law, Sarwo Edhie Wibowo, was an Australian-trained officer who led the killings in Central Java.

No such conference could be held in Indonesia and most of the participants were non-Indonesian. Since the fall of the Suharto regime in 1998, tentative attempts to examine the coup have foundered on opposition from the military. A truth and reconciliation commission set up by parliament never got off the ground and the Constitutional Court has now ruled it unlawful. School textbooks reflect the military propaganda, which maintains that the killings were part of a “patriotic campaign” against communism. Marxism remains officially proscribed.

The Age interviewed two elderly survivors of the massacre, Sumini and Anwar Umar, who maintain a weekly vigil across the road from the president’s offices in Jakarta. Sumini, a former kindergarten teacher was arrested, tortured and imprisoned for ten years for being a member of Gerwani, a women’s movement linked with the Indonesian Communist Party (PKI). Anwar, who had been secretary-general of a civil servants union, spent 12 years in prison and was also tortured. Even after their eventual release, their identity papers were marked to show they were former political prisoners and they were unable to work.

The coup followed a period of sustained political upheaval following World War II. The Indonesian masses were determined to throw off the desperate poverty and oppression that had been imposed for over 350 years, firstly by the Dutch, then the Japanese. During the struggles for independence, hundreds of thousands of workers had joined the Stalinist PKI, erroneously believing that it still represented the revolutionary socialist traditions of the Bolshevik revolution.

Following independence, President Sukarno precariously balanced between the various demands of the ruling elites and widespread social unrest among workers and the poor. Posturing as an “anti-imperialist” and a “man of the people”, Sukarno increasingly relied on the PKI to contain the demands of masses.

In 1957, foreign domination over the economy was shaken by a massive eruption of workers and peasants who seized or occupied factories, plantations, banks and ships. Sukarno relied on the PKI to ensure that the property was handed over to the army, which was sent to suppress the movement. Following further unrest in 1962, and again in early 1965, Sukarno brought the army commanders and PKI leadership into his cabinet.

In the midst of the Cold War, as it became involved in Vietnam, Washington was increasingly concerned at the PKI’s size and influence. In 1965, however, as preparations for a military coup became evident, the PKI continued to subordinate the masses to Sukarno, in line with the reactionary Stalinist theory of a “two-stage” revolution, and insisted on the “peaceful road” to socialism, promoting deadly illusions in the armed forces. Even as Sukarno banned all strikes, the PKI blocked any independent movement of the working class, thereby encouraging the military to act with the backing of the US and its allies.

According Simpson’s paper, “Capitalists come back! The Political Economy of the 1965-1966 Killings,” there was “a lot of evidence that the US was engaged in covert operations ... to provoke a clash between the army and the PKI ... to wipe them out.” Even at the height of the massacre, and while harboring deep reservations about the military’s willingness to enact the sweeping political and economic changes Washington deemed necessary, US officials and their regional allies were “weighing the conditions under which they would resume assistance to Jakarta”.

In an interview with the Darwin-based Southeast Asian Times on June 7, Simpson said US and other Western officials viewed the mass killings as “efficacious terror”, an essential building block of the “quasi neo-liberal policies that the West would attempt to impose on Indonesia after Sukarno’s ouster”. They viewed the wholesale annihilation of the PKI and its supporters as “an indispensable prerequisite to Indonesia’s reintegration into the regional political economy and international system, the ascendance of a military modernising regime and the crippling or overthrow of Sukarno”.

Immediately after the coup, the US administration rushed to express political support for the Suharto regime. It provided covert monetary assistance to the Indonesian armed forces, while the CIA organised arms from Thailand. The US government also provided communications equipment, medicine and a range of other items, including shoes and uniforms.

“The United States was directly involved to the extent that they provided the Indonesian Armed Forces with assistance that they introduced to help facilitate the mass killings,” Simpson told the conference. The British government also extended an emergency loan of 1 million pounds to Indonesia in late 1965 and promised not to attack Borneo if Indonesia withdrew soldiers engaged in a conflict with British-backed Malaysia, Simpson said.

While Simpson claimed that he found “zero evidence” that the US government masterminded the coup itself, it is unlikely that the military plotters proceeded without assurances from the US and its allies. The full story of US involvement remains to be told.

The pretext for the coup was the kidnapping and murder on September 30 of six generals, allegedly at the PKI’s instigation. Suharto swiftly rounded up the “rebels”, took control of the capital and launched his anti-communist pogrom, which was designed to exterminate every known member and supporter of the PKI, along with thousands of trade union members and ordinary workers, peasants and students.

US diplomats and CIA officers, including the former US ambassador to Indonesia and Australia, Marshall Green, subsequently admitted working hand-in-glove with Suharto and his butchers in carrying through the massacres. They personally provided the names of thousands of PKI members from CIA files for the death lists.

In another paper to the conference, David Jenkins, former foreign editor of the Sydney Morning Herald, said that the Australian, British and US embassies were aware of the mass killings, but did not raise a single protest to the systemic slaughter. All the embassies knew the PKI had not initiated the coup but did nothing to protect the victims from the military.

Archive documents released in Australia in 1999 proved that the Johnson administration in Washington was actively agitating for the formation of a military regime, and urging its embassy in Jakarta to co-ordinate closely with the army and insist that the generals act ruthlessly to crush the PKI. When, at the end of October, Washington determined that Suharto should establish a military government, it did so in close consultation with both the British and Australian governments (see “US orchestrated Suharto’s 1965-66 slaughter in Indonesia”).

Other conference speakers highlighted the significant role played by the Muslim organisations Nahdlatul Ulama (NU) and Muhammadiyah in the killings. These right-wing organisations, acting at the behest of and at times organised by the military, willingly participated in the eradication of workers and peasants who were seen as a threat to traditional landowners and vested religious interests.

Historian Greg Fealy from the Australian National University cited instructions from NU leaders to its members exhorting them to physically eliminate all traces of communism. According to Fealy, “they made frequent references to terms such as menumpas [eradicate or annihilate], membersihkan [cleanse], mengganyang [crush], and mengikis habis [eliminate].” Muslim clerics played central roles in overseeing and directing the killings, and coordinated with military officers.

The killings were notable for their gruesome character. Many victims were either beheaded, garrotted or had their throats slit with knives or machetes wielded by the Islamic militias. “It was done face-to-face,” Fealy said. Unlike the “mechanical” processes employed by the Nazis, or Pol Pot’s farms, the executions were “done by hand”.

American anthropologist Mark Woodward said that in Yogyakarta, leaders of Muhammadiyah, the dominant Islamic group in the area at the time, issued statements declaring the destruction of the Communist Party an individual religious obligation, not just a collective one. Katharine McGregor of the University of Melbourne said that following the killings, NU members touted their participation as “a form of patriotic service to the nation” and reminded Suharto’s New Order regime of the debt owed to the religious community.

In 2000, President Abdurrahman Wahid, who was a senior member of NU, issued an apology to people affected by the violence and proposed to officially lift the ban on communism. The move met vehement opposition from senior NU members and the military. During a recent interview conducted by McGregor, NU chairman Hasyim Muzadi declined to comment on the role of NU in the 1965 violence, saying “all that happened must be considered history and not opened up again, otherwise another civil war might occur.”

The sensitivity of the Indonesian ruling elites to the airing of these terrible crimes underscores the need for workers and young people to learn the political lessons of the PKI’s betrayal that led to this strategic defeat for the working class.

Bankruptcy judge approves sale of GM assets

Bankruptcy judge approves sale of GM assets

By David Walsh

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A judge in New York City late Sunday approved the sale of General Motors assets to a new company, 61 percent owned by the US government, opening the way for the auto company to emerge from bankruptcy. GM filed for bankruptcy protection June 1, the largest such industrial failure in US history, following a similar move by Chrysler April 30.

The ruling, by Judge Robert E. Gerber of the US Bankruptcy Court, is less a legal decision than a ruthless business measure taken as part of the restructuring of the auto industry in the interests of Wall Street and the corporate elite. The Obama administration, with the full complicity of the United Auto Workers (UAW), is presiding over and driving this process at the expense of tens of thousands of auto workers, their families and entire communities.

The bankruptcy plan has already meant the destruction of 21,000 additional jobs at GM, the closure of a dozen or more of its plants and the elimination of 2,600 GM dealerships.

Gerber’s approval of the asset sale, following three days of hearings and in the face of hundreds of objections, means that the deal between GM and the US Treasury may be consummated as early as Thursday, one day before the deadline set by the government. The Obama administration had made clear that it did not intend to provide another penny to the auto maker after July 10.

In addition to the US government, the Canadian government will own 12 percent of the new firm, with the UAW, through a retiree health-care trust, controlling 17.5 percent, and other unsecured creditors getting another 10 percent. The Obama administration has committed some $50 billion to the restructuring. Administration officials have repeatedly explained they intend to take no part in the day-to-day management of the company and would like to sell the government’s stake in the new GM at some point in 2010.

Under the sale plan, the auto maker’s profitable assets—including the Buick, Cadillac, Chevrolet and GMC brands—would be sold off to the new GM, “while assets and liabilities deemed to be a drag on the automaker would be left behind in bankruptcy.” (Washington Post)

In rejecting the claims of product-liability claimants and others, Gerber declared, “Bankruptcy courts have the power to authorize sales of assets at a time when there still is value to preserve—to prevent the death of the patient on the operating table.”

Lawyers representing the claimants had argued that the new company should be responsible for lawsuits arising from accidents involving GM cars before the company entered bankruptcy. GM management only recently accepted, under pressure from a number of state attorneys general, the principle that the new company should be required to take claims from future victims.

The GM bankruptcy process has been a stark demonstration of whose interests prevail within the US political and judicial system.

Gerber ruled in late June against General Motors’ retired salaried workers who wanted to see the creation of a special committee to represent their benefit issues. As part of the restructuring plan, GM will continue paying the 122,000 retirees’ health care and life insurance benefits for the moment, but the benefits are expected to be slashed and retirees will be forced to pay a far larger share of their costs.

GM attorney Harvey Miller argued that the company had always had the right to alter the salaried retirees’ benefits and the creation of a committee “would simply add more costs.”

Gerber also ruled against a request from an unofficial committee of individuals with asbestos-related claims to appoint a “tort czar,” according to the Associated Press, “that would oversee all future claims against the old GM, not just those related to asbestos.” While secured lenders—all major Wall Street banks and financial institutions—will be paid the $6 billion they are owed, unsecured creditors, like the asbestos victims, will see little, if anything.

On July 1, hundreds of retirees from GM plants whose bargaining agent was the International Union of Electrical Workers-Communications Workers of America (IUE-CWA) picketed the courthouse in lower Manhattan where the hearings were taking place to protest the likely eventual elimination of their health care and insurance benefits.

Lawyers for 50,000 retired IUE-CWA, United Steel Workers and International Union of Operating Engineers members asserted in court that GM was attempting to evade its legal responsibilities to these workers by pursuing bankruptcy under Section 363 of the Bankruptcy Code, which provides almost no benefit protection, as opposed to Section 1114.

The IUE-CWA claimed that a deal was worked out more than a year ago, ratified by its members, creating a GM-funded Voluntary Benefit Employee Association (VEBA). On January 9, 2009, a company lawyer informed the IUE-CWA that the auto maker would not live up to the deal.

In court IUE-CWA lawyer Tom Kennedy pointed to remarks made by a top member of Obama’s Auto Task Force, Harry Wilson, under cross-examination July 1. “We told GM to cut two-thirds, Wilson said; we told them to figure out how to do it. On June 4, Treasury rejected a 62 percent cut. The additional 5 percent taken out to meet the task force’s 67 percent target represents $400 million in the [non-UAW] retirees’ benefit programs, Kennedy said.” (Youngstown Business Journal)

In a bitter press release, the IUE-CWA accused Obama’s Treasury Department of treating the retirees as “road kill.”

GM attorney Miller explained cynically that while the “new GM” needed the UAW to function, it didn’t need the other unions, whose members worked in plants that were no longer operating. Under questioning, GM CEO Fritz Henderson testified that he “expected” the non-UAW retiree health care benefits would be dropped by the new company. In response, Kennedy pointed to an email Henderson had sent the Obama task force’s Steven Rattner lobbying to keep GM executive retirement benefits.

Gerber rejected the IUE-CWA objections along with all the others.

The Washington Post noted, “Throughout the court proceedings, the government and GM were repeatedly questioned about why they chose to assume certain assets and liabilities while rejecting others.

“In response, government and GM officials said the only measure was whether or not the assets and liabilities would support the commercial viability of the new GM.”

Underlining the political character of his decision, Gerber rejected the claim that the US government had been overbearing in negotiations to restructure the car maker. “The US Treasury, in making hard decisions about where to spend its money and make New GM as viable as possible, made business decisions that it was entitled to make,” he wrote.

Elsewhere in his decision, Gerber declared, “The only alternative to an immediate sale [of GM assets to the new company] is liquidation—a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their existence, and the communities in which GM operates.”

The decline of General Motors has already been an unmitigated disaster for auto workers, suppliers, dealerships and entire communities. The continued private ownership of the automobile industry, or government control on behalf of corporate interests, only holds more of the same in store.

The UAW apparatus, which hopes to prosper by operating the VEBA retiree health-care trust, merely reported on its web site—with obvious pleasure—that the Bankruptcy Court had “issued its ruling approving the proposed restructuring, and the UAW Retiree Health Settlement Agreement.”

The media campaign to convince auto workers that the judge’s decision will save GM and their jobs began as soon as the ruling was issued. The Detroit News lost no time in claiming, “The sale will preserve hundreds of thousands of GM jobs in North America, and around the world, and bolster a reeling network of auto industry suppliers.”

It will do no such thing. The sale will trigger a new round of plant closures and demands for concessions. With global auto sales plummeting, profitability can only be restored at GM and its rivals by impoverishing workers to insure the investments and profits of corporate executives and financiers.

US Medicare, Medicaid cuts threaten health care

US Medicare, Medicaid cuts threaten health care

By Kate Randall

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Congress returns this week from its Fourth of July break with the health care issue at the top of the agenda. Three different versions of legislation are working their way through Congressional committees. In the name of “reform,” medical services in all of these versions would be subject to “evidence-based” analysis, leaving intact the profits of the insurance giants, pharmaceutical companies and health care conglomerates.

The three sets of legislation—from the Senate Finance Committee, the Senate Committee on Health, Education, Labor and Pensions (HELP), and the House Tri-Committee (Ways and Means, Energy and Commerce, Education and Labor)—have placed cost-containment as their central goal. President Obama has repeatedly stressed that any challenge to delivery of health care in America based on private profit would be “disruptive” to the free-enterprise system.

The Senate Finance Committee, while currently still supporting a “public option” component—insurance coverage managed by the federal or state governments—is reportedly considering junking it altogether in favor of some form of health care “cooperatives.”

As one of its chief cost-cutting measures, the Obama administration plans to slash $317 billion through Medicare and Medicaid “efficiencies ... such as reducing Medicare overpayments to private insurers,” according to Obama budget director Peter Orszag. Obama’s stimulus package includes a paltry $268 million in funding for public hospitals.

These cuts come on top of another $313 billion in cuts from the two programs, “including a proposal that will generate about $106 billion in savings over 10 years by reducing payments that help hospitals with the cost of treating patients without insurance,” says Orszag.

The White House is seeking to justify these cuts by claiming that under any new health care reform, these funds will be less needed. According to Nancy-Ann DeParle, director of the White House Office of Health Reform, the number of uninsured will be “reduced dramatically as we move to cover everybody,” and there will be “less of a need for hospitals to get the payments.”

Such predictions are not substantiated by the current state of affairs at hospitals across the country, which have seen a significant decline in revenues, particularly due to the impact of the recession. In recent months, this has led to the shutdown of departments, rationing of care and significant cutbacks in vital medical services.

These conditions are likely to worsen—not improve—as the recession deepens. Even with the inclusion of a “public option,” cut-rate care, high deductibles, and penalties imposed for not purchasing insurance will still leave millions without quality health care or the means to pay for it.

According to a survey released this spring by the 5,000-member American Hospital Association (AHA), since the onset of the recession one in five hospitals have reduced services that “communities depend on”. These cuts have come in such areas as behavioral health, post-acute care and outpatient services. These cutbacks have come despite consolidation of medical services at nearby facilities. Nine in ten facilities have trimmed their budgets in response to the economic conditions.

The AHA also reports more patients delaying “non-emergency” elective procedures, such as knee or hip operations, or surgery to remove heart blockages. Untreated, the latter could lead to preventable cardiac arrest.

At the most fundamental level, reductions in services are motivated by hospital administrations’ efforts to protect their bottom lines, even at so-called community hospitals. AHA senior vice president Rick Wade told the Chicago Tribune, “When you look to the future, all of those programs going away are from hospitals that are going to be constrained for resources as far as the eye can see. Coming out of [health-care] reform, there is going to be a lot of belt-tightening.”

In comments to, David Seaman, executive vice president of the Michigan Health and Hospital Association representing the state’s community hospitals, notes that as more cash-strapped patients skip visits and under-compensated cases increase, hospital revenue has plummeted.

In 2008, Michigan hospitals spent $879 million subsidizing services for those patients unable to pay, and that figure is expected to rise to $1 billion in 2009.

Hospital administrations have responded by implementing staff cuts and curtailing new projects. Facing a projected $52 million deficit in the coming year, St. Joseph Mercy Health in Ann Arbor plans to cut 350 jobs. Beaumont Hospital in Royal Oak, which lost nearly $30 million last year, has postponed a $159 million project to build a cancer radiation facility.

Urban areas have been particularly hard-hit. In the Chicago area, St. James Hospital and Health Centers will be moving most elective surgery procedures from its Olympia Fields campus to its Chicago Heights facility this week. Just a few years ago, St. James also consolidated its obstetrics department at Chicago Heights.

About 14 percent of the patients who come to St. James Hospital’s two campuses are uninsured, more than double the Illinois state average. Commenting on the consolidations, St. James President Seth Warren told the Tribune, “We have been suffering losses over the last 12 years. We feel that the decisions we are making are long-term because we don’t expect there is going to be a huge windfall coming our way.”

In the Washington, DC area, hospitals are experiencing sharply increased demand from uninsured patients, combined with plummeting revenue from declines in investment income, charitable giving and elective surgery.

If the economy continues to tumble, the impact of Obama’s proposed reductions in hospital reimbursements could result in “ugly scenarios that would require wrenching changes and scaling back of services,” Chris Bailey, senior vice president of the Virginia Hospital and Health care Association, told the Washington Post. “There will be a loss of hospitals that won’t survive,” he added.

Both public and for-profit hospitals in the DC area have responded by freezing workers’ salaries and delaying construction projects and equipment purchases. At the National Rehabilitation Hospital in Northwest Washington, investment losses and reduced federal reimbursement for elderly patients have led to a $1 million deficit. One-third of full-time staff has given up three vacation days, while equipment purchases for stroke victims have been put off.

Hospitals in South Florida have also faced huge losses. In fiscal year 2008, the Baptist Health system lost $71.7 million while Miami Children’s lost an equally high amount—$72 million. Holy Cross lost $25 million; Mercy, $34.8 million.

Linda Quick, president of the South Florida Hospital and Health care Association, told the Miami Herald, “It’s going to a particularly tough year, more so for the public-financed facilities.” She pointed to a survey that showed for every 1 percent increase in the national unemployment rate, there are 100,000 new Medicaid-eligible patients.

This is particularly significant as unemployment rates continue to rise sharply. Unemployment figures rose to a 26-year high of 9.5 percent last month, as US employers cut another 467,000 jobs. All evidence points to a protracted recession with increasing numbers of jobless workers. (See “US unemployment rate for June at 9.5 percent”)

The Obama administration’s claims that its massive cuts to the Medicare and Medicaid programs will be offset by decreasing numbers of uninsured and underinsured patients under new health care legislation are belied both by these economic indices and the present perilous state of the nation’s hospitals and health care facilities.

Common Man News 7/2009

News for the common man because the elite already know!



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