humani nil a me alienum puto

random rants about news, the law, healthcare law, economics and anything I find amusing

Op-Ed Columnist – Car Dealer in Chief – NYTimes.com

I think that Brooks has it wrong this time.  I agree that GM cannot restructure itself out of its current situation.  I agree that the Bush administration punted.  I agree that they should have — there needed to be preparation for the imminent bankruptcy.  I also disagree that this one has to remain a political football with Congress or the administration micromanaging GM’s bankruptcy process.   The administration needs to turf this to a real bankruptcy process and then get out of the way.  At the end of the line, it’s a fight between the financial stakeholders, not the politicians.  Throw the bondholders, unions, dealerships and other creditors into the pit (atop the corpse of shareholder equity) and see how it works out.

For 30 years, G.M. has been restructuring itself toward long-term viability. For all these years, G.M.’s market share has endured a long, steady slide…When the economy cratered last fall, the professionals at G.M. went into Super-Duper Restructuring Overdrive… The Bush advisers decided in December that bankruptcy without preparation would be a disaster. They decided what all administrations decide — that the best time for a bankruptcy filing is a few months from now, and it always will be…Today, G.M. and Chrysler have once again come up with restructuring plans…But this, President Obama declares, is G.M.’s last chance. Honestly. Really.No kidding…And yet by enmeshing the White House so deeply into G.M., Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out.  The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck…The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract… The most likely outcome, sad to say, is some semiserious restructuring plan, with or without court involvement, to be followed by long-term government intervention and backdoor subsidies forever…It would have been better to keep a distance from G.M. and prepare the region for a structured bankruptcy process. Instead, Obama leapt in. His intentions were good, but getting out with honor will require a ruthless tenacity that is beyond any living politician.

via Op-Ed Columnist – Car Dealer in Chief – NYTimes.com.

Filed under: Personal Posts, , , , , , , , ,

Top 25 Lawyers Behind the Deals of the Year – DealBook Blog – NYTimes.com

Wow.  It’s a sign of the times when the vast majority of notable deals are hightlighted as non-traditional M&A related to bailouts and collapses! Remarkable times.

Only six of the dealmakers on the list this year were recognized for their involvement in conventional mergers-related deals (most are at the bottom of the list except for those involved in InBev’s purchase of Anheuser-Busch and Mars’s purchase of Wrigley). The various distressed deals and government–brokered mergers topped the list…

Here were the deals noted in American Lawyer:

1. Bank Bailouts: H. Rodgin Cohen, Sullivan & Cromwell

2. Bank of America’s Merrill Lynch acquisition: Edward Herlihy, Wachtell, Lipton, Rosen & Katz

3. Lehman Bankruptcy: Harvey Miller, Weil, Gotshal & Manges

4. TARP: Lee Meyerson, Simpson Thacher & Bartlett

5. A.I.G. Bailout: Michael Wiseman, Sullivan & Cromwell

6. IndyMac Purchase: Paul Glotzer, Cleary Gottlieb Steen & Hamilton

7. InBev’s Anheuser-Busch Acquisition: Francis Aquila, Sullivan & Cromwell

8. Fannie, Freddie Conservatorships: Harold Novikoff, Wachtell, Lipton, Rosen & Katz

9. FGIC Rescue: Corinne Ball, Jones Day

10. Federal Interventions: Thomas Baxter Jr., Federal Reserve Bank of New York

11. Calpine, Solutia Bankruptcies: Richard Cieri, Kirkland & Elli

12. KazMunayGas Pipeline Renegotiation: George Kahale III, Curtis, Mallet-Prevost, Colt & Mosle

13. Mars’s Wrigley Acquisition: John Finley, Simpson Thacher & Bartlett

14. Latin American Project Financings: Cynthia Urda Kassis, Shearman & Sterling

15. A.I.G. Bailout: Marshall Huebner, Davis Polk & Wardwell

16. Visa I.P.O.: S. Ward Atterbury, White & Case

17. Independent Director Representations: Robert Joffe, Cravath, Swaine & Moore

18. Vallejo Bankruptcy: Marc Levinson, Orrick, Herrington & Sutcliffe

19. Clearwire Asset Acquisition: Joshua Korff, Kirkland & Ellis

20. Sirius-XM Merger: Joe Sims, Jones Day

21. Verizon Wireless’s Alltel Acquisition: Jeffrey Rosen, Debevoise & Plimpton

22. Triarc’s Wendy’s Acquisition: Paul Ginsberg, Paul, Weiss, Rifkind, Wharton & Garrison

23. Citigroup Bailout: George Bason Jr., Davis Polk & Wardwell

24. Washington Mutual Bankruptcy: Marcia Goldstein, Weil, Gotshal & Manges

25. A.I.G. Bailout: Eric Dinallo, New York State Insurance Department

via Top 25 Lawyers Behind the Deals of the Year – DealBook Blog – NYTimes.com.

Filed under: Personal Posts, , , , , , , ,

How to Save General Motors

In its Dealbook Blog, the New York Times presents a solution by several leading bankruptcy attorneys.  GM has an admitted $100 billion negative net worth.  It cannot survive as structured and it cannot be restructured without some strong decision-maker that can cram very unpleasant concessions down the throats of stakeholders.  In any other scenario, that’s a bankruptcy process.  The authors recognized that this is not an ‘ordinary’ bankruptcy, but it is not without precedent.  They also observe:

The current public debate is misplaced over whether or not bankruptcy is the solution to G.M.’s problems. There is a public misconception about what bankruptcy means for a business enterprise. Bankruptcy can mean liquidation, or it can be a means of renewal, taking a financially distressed business and creating a viable company by restructuring or eliminating burdensome contracts, reducing debt, and securing new financing. Chapter 11 is such a process; it is flexible; and it can, and must for G.M., be quick. The paramount goal of the G.M. bailout should be the expedient creation of a viable G.M. Core. A sale to a G.S.E. as part of a Chapter 11 proceeding seems to us to be exactly the process to achieve that goal.

It is worth a read.  And this (or a variation of it) is what’s going to happen, eventually, even if the economy suddenly bottoms out and begins a climb back upward.  There’s no political process to solve this but for unending government cash flows to these insolvent entities.  And I don’t think the taxpayers have the stomach for the kind of cash that will require over the next six months even.  Further, Obama’s axing of the CEO of GM, GM’s recent change of tune regarding its considering bankruptcy, the strict time lines for GM to strike its own deal as set down by the administration, as well as Obama’s commitment that warranties would be backed by the full faith and credit of the US (which was a main argument by the automakers regarding why the could not go into Chapter 11) are not inconsistent with some bankruptcy process being the end game.

See also U.S. Plan Sees Easing of G.M. to Bankruptcy from the New York Times DealBook on

via Another View: How to Save General Motors – DealBook Blog – NYTimes.com.

Filed under: Personal Posts, , , , , , ,

Healthcare Economist · Think Aloud: A tool for experimental economists

In his Healthcare Economist Blog, Jason Shafrin discusses a new paper that asks the the pressing economic question:  are individuals rational (in face of some pretty kooky decisions that people sometimes make).  He reviews a recent study that asks participants to “talk outloud” when they make a decision.  And, as it turns out, maybe we are rational, but the assumptions that we bring to the table are kooky.  He gives some examples from the study.   It’s a good lesson for those doing such research (are my assumptions the same as potentially idosyncratic assumptions of my test group?).  And also a psychological question for the rest of us — what is “rational” is often based upon the baseline assumptions that people bring to the table.  Maybe it’s there that the rational decision-maker model breaks down.  Ryan, Watson, and Entwistle (2009) ”Rationalising the irrational: a think aloud study of discrete choice experiment responses” Health Economics, v18(3):321-336.

via Healthcare Economist · Think Aloud: A tool for experimental economists.

Filed under: Health Law, Personal Posts, Risk Management, ,

Finding a Doctor Who Accepts Medicare Isn’t Easy – NYTimes.com

A New York Times article on April 1, 2009 discusses some trends: (i) a national shortage of internists, (ii) more internists and other primary care physicians refusing to accept Medicare entirely or at least new Medicare patients, and (iii) boutique/concierge  medicine.

On the first two points:

[T]he American College of Physicians, the organization for internists, estimates that by 2025 there will be 35,000 to 45,000 fewer than the population needs — and internists are increasingly unwilling to accept new Medicare patients. In a June 2008 report, the Medicare Payment Advisory Commission, an independent federal panel that advises Congress on Medicare, said that 29 percent of the Medicare beneficiaries it surveyed who were looking for a primary care doctor had a problem finding one to treat them, up from 24 percent the year before. And a 2008 survey by the Texas Medical Association found that while 58 percent of the state’s doctors took new Medicare patients, only 38 percent of primary care doctors did.

On the last point:

Another, more expensive option is concierge or “boutique” care, which comes in two forms. In the most popular kind, doctors accept Medicare and other insurance, but charge patients an annual retainer of $1,600 to $1,800 to get in the door and receive services not covered by Medicare, like annual physicals. Before signing up and paying the retainer, patients should get a written agreement spelling out which services the doctor will bill Medicare for and which the retainer covers. And always check carefully for double-billing…The other form of concierge medicine — doctors who have opted out of Medicare — is more expensive still. Fees range as high as $15,000 a year and cover office visits, access to the doctor when care is needed, referrals to specialists and thorough annual physicals…Dr. Knope, the author of “Concierge Medicine: A New System to Get the Best Healthcare,” has this kind of practice in Tucson. His patients sign a contract agreeing to pay $6,000 a year for individuals and $10,000 a year for couples. The fee covers office visits, physical exams and phone consultations, and Dr. Knope will meet patients in the emergency room, see them in the hospital and occasionally make house calls…A list of about 500 concierge doctors throughout the country is available on Dr. Knope’s Web site, http://www.conciergemedicinemd.com.

via Finding a Doctor Who Accepts Medicare Isn’t Easy – NYTimes.com.

Filed under: CMP, Concierge Medicine, Health Law, Medicare, Payment, Primary Care, Reform, , , ,

The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”

On the Healthcare Blog, Rober Wachter analyzes the recent NEJM report on hospital readmissions, the related

[T]he DRG system created a big black hole, and it is time to fill it. It’s called the post-discharge period. And one large part of the detritus emerging from that hole is readmissions. You probably saw this week’s NEJM study by Stephen Jencks (a former Medicare official and now a Baltimore-based consultant), and my pals Mark Williams and Eric Coleman, of Northwestern and Colorado, respectively. The study found that 20% of Medicare patients are readmitted within a month of discharge, and one-third return within 90 days. Even more remarkably, by a year out more than half of patients (56%) discharged from an acute care hospital are re-hospitalized. The authors estimate that the cost of preventable readmissions was $17 billion in 2004 (the study year), which would make it more like $25 billion today.

via The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”.

Wachter also summarizes some interesting points of the study:

Like so many things in healthcare, there was striking geographic variation in readmission rates – from a low of 13% in Idaho to 23% in Washington, D.C.

There were also variations by DRG, with the highest readmission rates in patients with heart failure, psychosis, vascular and cardiac surgery, and COPD – pointing the way toward targeted interventions.

More than half the patients readmitted within 30 days appeared not to have had an outpatient visit between hospital discharge and readmission, perhaps another target for intervention.

Most (70%) surgical patients who are readmitted come back for a medical diagnosis such as pneumonia or UTI.

Approximately 30% of readmitted patients come back to a different hospital, so hospitals will underestimate the extent of their readmission problem by looking solely at their own bounce-backs.

via The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”.

Wachter continues and and discusses why this is becoming critical (healthcare reform/savings dollars) and the health system’s current state as it relates to discharge planning/readmissions:

The Obama budget plan depends on figuring this out. The budget, which aims to save $300 billion (which used to seem like a lot of money) in Medicare/Medicaid costs over the next decade, includes a projected $26 billion in savings from “driving down hospital readmission rates for Medicare patients” …The manifestations of this myopic focus on hospitalization as the unit of analysis can be seen in the paucity of attention that hospitals give post-discharge care. Studies have chronicled a litany of post-discharge disasters…In other words, when it comes to post-discharge care, we suck…Despite powerful literature that shows that simple interventions – like post-discharge phone calls or the use of a transitions coach – can lead to impressive improvements in post-discharge care and decreased readmission and return-to-ED rates, few hospitals have put these interventions in place.

Wacther then makes an observation concerning financial efforts to address the system’s performance in this area:

Harvard’s Arnie Epstein reviews the policy initiatives addressing readmissions – including those that are here today (publishing readmission rates on the Web) and those being actively discussed (financial penalties to hospitals with high readmission rates). But the Cool Kid on the Payment Block is “bundling” – aggregating  payments for doctors and hospitals for a period of time after an illness (an “episode of care”) in an effort to create accountable integrated entities that will improve care across the continuum (the entities somehow have to split up the spoils between hospitals, hospitalists, SNFs, primary care docs, specialists, care coordinators… Have fun with that). Epstein’s verdict: worthy of pilot studies, but “the likelihood that [bundling] will prove to be a successful model is still uncertain.”

He recognizes the challenges, and the laments, of hospitals, that have difficulties in controlling other healthcare provider’s post-discharge data.  Why, hospitals ask, can you hold us responsible if we are not in control of this.

I would also put on the table that if the government goes this route, query if it makes any sense to maintain Medicare CoP restrictions on promotion of hospital/health system owned and controlled providers — such as those exist for home health.

He observes that there are tools ready out there to assist hospitals in this area, including those developed through the Society of Hospital Medicine and its “splendid” Project Boost.

Finally, he observes that “I, like you, don’t know where the money will come from for all of this.”   I tend to disagree.  I pretty much know where (most of) the money will come from — where the largest portion of the Medicare premium dollar comes from — inpatient admissions.   Get ready!

Filed under: Comparative Effectiveness Rearch, Health Law, Medicare, Payment, Quality Reporting, Reform, Risk Management, , , ,

Doctors Urge End to Corporate Ties – NYTimes.com

The NY Times Health Blog on April 1 reports that JAMA published a paper in its April 1, 2009 edition.   The paper recommends that medical professional associations adopt stricter conflict-of-interest guidelines.  Mere disclosure of financial ties to drug and medical device companies is not sufficient.  They also advocate barring members industry financial ties from entering leadership positions and participating in influential committees within the association.

The blog further reports that:

The authors are particularly adamant that professional medical associations should neither accept corporate money to underwrite the development of practice guidelines nor allow members with financial ties to industry to serve on committees that develop the guidelines, which are usually widely adopted as the gold standard for medical practice. … “The consensus here was quite clear: You do not want the piper calling the tune,” said David J. Rothman, a professor of social medicine at Columbia University. “We ask that these groups make every effort to get to zero percent and, knowing that it is very difficult to do that, that they move as rapidly as possible to no more than 25 percent,” referring to how much of their support should come from industry.

Commentary from Marjorie Powell, senior assistant general counsel for Pharmaceutical Research and Manufacturers of America was also reported in the blog, reminding of the amount of money that industry provides for necessary research and other support of healthcare providers.

“The vast majority of the research is funded by pharmaceutical companies,” Ms. Powell said. Important decisions regarding practice guidelines might be made, she said, by “very junior people who have no experience.”

via Doctors Urge End to Corporate Ties – NYTimes.com.

Note a similar post in the WSJ Health Blog.

Filed under: Conflicts of Interest, Drug Policy, Health Law, Pharmacy, Reform, , , ,

Hospital Doors Revolve for Many Medicare Patients – Health Blog – WSJ

The WSJ Health Blog reports on April 2, 2009 that MEDPAC is recommending restructuring hospital payments in a “bundle” to incentive hospitals to minimize readmissions of Medicare patients.  We’ll see how this plays out, but I can certain envision greater integration of bundled prospective payments for, at least, certain types of admissions.

Some 20% of Medicare patients discharged from the hospital are readmitted within a month, and 34% return within three months, according to a study published in the current New England Journal of Medicine. Unplanned rehospitalizations cost Medicare $17.4 billion in 2004, the study says…MedPac, a commission that advises Congress on Medicare policy, has recommended that Medicare start a pilot program in which “bundled” payments extend beyond the first hospital stay to include, say, the first 30 days after discharge. The idea, which is also part of President Obama’s budget proposal, is that if hospitals get paid fixed rates for caring for certain conditions — and they don’t get paid more for those same conditions if patients return — hospitals will have a financial incentive to reduce the risk of readmission.

via Hospital Doors Revolve for Many Medicare Patients – Health Blog – WSJ.

Filed under: Comparative Effectiveness Rearch, Health Law, Medicaid, Medicare, Payment, Quality Reporting, Reform, , , ,

Health Reform Dialogue Issues Recommendations – Health Blog – WSJ

The WSJ reports the publication of a “Health Reform Dialogue” issued a set of recommendations today aimed at governing the debate over restructuring health care.  The WSJ observed it was generally consistent with the “direction the Democrats are heading.”  Reviewing the short report, I find the following notable:

The ultimate public policy goal is to increase value for America’s health care consumers and the system as a whole, that is, the highest quality of care delivered in the most efficient manner possible: significantly improving treatment of chronic disease; researching the effectiveness of comparative treatments; paying for quality care, not quantity of care; providing relief for patients, clinicians, and providers caught up in the web of medical liability processes; encouraging public reporting of information that clarifies the performance of individual clinicians and providers; creating a robust health information technology infrastructure; and beginning to significantly transform the health care delivery system through some much-needed payment reforms.

They then discuss some of the efforts that can be undertaken to do this including advocating clinical effectiveness research studies, quality measures and strong HIT infrastructure support by the federal government.

As the WSJ blog notes, while this shows some common agreement and coordination among an impressive cadre of provider, business, hospital, insurance and other interest groups, the agreement ends at, and punts on some of the more difficult policy questions, such as insurance mandates.   I found the language subject to wide interpretation even on the areas of agreement.

In any event, these groups will all have a significant and important seat at the table when the scope, provisions and cost of healthcare reform is debated.

Health Reform Dialogue Issues Recommendations – Health Blog – WSJ.

Filed under: Reform, , , ,

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