Arcadia Resources (Indiana) Experiences A Fast Collapse

Something ominous in going on in the health care industry. Even as some health care CEOs have become the highest compensated chief executives in the country, a lot of companies are undergoing layoffs. Arcadia Resources, in particular, went from rapid expansion to fast collapse in just a couple of years. Here is the Indianapolis Business Journal with the details:

A major lender to Arcadia Resources Inc. has moved to foreclose on the struggling Indianapolis-based business, which in turn agreed to cease operations.

Arcadia reported the foreclosure agreement with Dallas-based Comerica Bank, which Arcadia owed $11 million, in a Thursday filing to the Securities and Exchange Commission.

The closing represents the probable final fall for the once-promising health care company. Just two years ago, in May 2010, the company announced a huge expansion that it expected would add 930 jobs in Indiana by 2013.

But, according to the company’s last annual report, filed in June 2011, Arcadia administrative staff had fallen slightly in the previous year, to 229. Its field staff, most of whom are not in Indiana, had remained steady.

To help pare down debt, Arcadia completed the sale of its DailyMed pharmacy business in February to a subsidiary of Illinois-based Walgreen Co. But the $2 million in proceeds from the sale went entirely to satisfy a debt to one of DailyMed’s suppliers.

I have been predicting here on TDS that the health care industry is yet another financial bubble that will implode in the coming years. Perhaps we are right now seeing the first signs of that collapse.

Nursing Home Operator In New York Laying Off 100

Medicare and Medicaid cutbacks were the reason for this mass layoff story. Here is a local New York television station with the details:

Central New York’s largest operator of nursing homes is cutting 100 jobs as part of a restructuring plan. Loretto says the move is necessary to ensure its future.

Most of the layoffs are at the management level, while others include clerical and financial positions and don’t involve those who work directly with the residents. The cuts are across the board and do not impact any isolated facility.

With 18 different locations in addition to specialized programs for the elderly, Loretto serves more than 6,000 Central New Yorkers and their families.

“Most of the families who go into our facilities on a day-to-day basis are going to see no difference whatsoever…really the positions affected are not resident-care oriented,” said Loretto Senior Vice President Steve Volza.

While Loretto leaders say no further cuts are planned right now, they are continuing to work with a health-management firm to improve their efficiency as they adjust to new financial difficulties. Those challenges are tied directly to Medicaid and Medicare reimbursements from the government.

“Today, our funding levels are at 2006 levels. While everything is moving forward, ours has moved back. The reason why is to move people out of institutions and into more community-based settings and we understand what that message is about and that's what this change is about,” Volza said.

The company says the layoffs won't hurt the quality of care at its facilities. Sorry, but I don't believe them. It's also worth notingthat even with cutbacks like this, the costs of Meidcare and Medicaid have still been exploding. So what will happen to these nursing homes when the cuts REALLY start to bite?


Bonus: Not the best video quality, but here is Bill Burr on getting old

Medtronic Cuts 220 Jobs In Mounds View (Minnesota)

Yet another mass layoff notice from the health care industry, as reported by Twin Cities.com:

Fridley-based Medtronic is eliminating about 220 jobs in its division for heart rhythm devices.

The business unit, which is headquartered in Mounds View, makes pacemakers and implantable cardiac defibrillators, which shock failing hearts back into rhythm.

Sales of the heart devices have been sluggish for years. In previous years, Medtronic also has announced job cuts during the month of May, shortly after the close of the company's fiscal year in late April.

"They have to keep right-sizing the business to reflect the future prospects," said Tim Nelson, an analyst with Nuveen Asset Management. "I think this was a lot of Minnesota-focused people. It came with a pretty significant reorganization in product development."

Medtronic employs about 8,000 people in Minnesota.

Kathleen Janasz, a company spokeswoman, would not comment on the types of jobs eliminated or the location of affected workers. The reductions are being accomplished through a combination of buyouts and layoffs, Janasz said, adding that those facing involuntary separation are being given benefits including severance pay.

"General managers are now leading the business," she said of a reorganization that's part of the downsizing. "We believe that this is the right model that will be supportive in bringing new products to market faster and being more efficient in doing so."

Yep, because firing workers ALWAYS results in greater production and efficiency. So what is the real reason behind this announcement?

Growth in the market has been hurt by a series of product recalls over the years and, most recently, a federal investigation into whether implantable defibrillators have been over-prescribed. The device systems can cost up to $30,000.

Nelson said the job cuts reflected the sluggish outlook for heart rhythm devices. "This is endemic of a very slow growing - in fact declining - market," the analyst said. "Even though the signs are that things may be stabilizing a bit, they're still down."

So, it was a crackdown on unnecessary medical procedures being performed in the name of higher corporate profits. At this point, I'm pretty much beyond being surprised by this kind of stuff.


Bonus: Get rhythm

The Type 2 Diabetes Epidemic Among Young People Is A Calamity Just Waiting To Happen

At first glance, this story that appeared on CBS News over the weekend seems to be yet another depressing reflection on just how few people seem to give a damn that their unhealthy lifestyles are not only slowly killing them but their children as well:

There is a growing epidemic among American children, and now there is a new recommendation on how hundreds of thousands of those kids should be treated.

The problem is type 2 diabetes, and it is a problem that is confounding more doctors, families, and health care professionals every day.

CBS News correspondent Tony Guida reports type 2 diabetes was never seen in young people as recently as 15 years ago. Now it's occurring with alarming frequency. Doctors know that a major risk factor is obesity. Beyond that, they were mostly in the dark about this disease.

"Very little is known about the right way to both prevent it and treat it," said Dr. Robin Goland.

A new study out today in the New England Journal of Medicine finds that the standard treatment for type 2 diabetes in children is ineffective because the commonly prescribed drug Metaformin - effective in adults - has a high failure rate in children. Still, a combination of two diabetes drugs is far more effective in treating young people.

"Two drugs right off the bat, that's an important finding," Goland said.

It is important because type 2 diabetes appears to be more aggressive in young people between the ages of 10 and 17, putting them at great risk for life-threatening illnesses typically associated with seniors.

"We want them to grow up and have healthy lives and not be having heart attacks and strokes at terribly young ages," Goland said.

When it comes to preventing type 2 diabetes, more exercise and a healthier diet are key, but doctors know young peoples' habits are tough to change.

"The first surprise that we saw was, number one, how incredibly difficult it was to effect lifestyle change in these children, in these youth that have type 2 diabetes," said Dr. Kenneth Copeland.

Well, of course it is going to be difficult to effect a lifestyle change in those children. If their parents aren't willing to MAKE them change their habits, its a hopeless cause. Right here I could get up on my soapbox about parental responsibilities and and our mindless teevee-dominated culture that has created a generation of fat, slovenly couch potatoes and blah, blah, blah. If you're looking for that kind of commentary, read Karl Denninger's take.

Instead, I'll boil my reaction down to one very simple observation: what in the hell is going to happen to these kids and their parents when our unsustainable health care system starts to break down within probably the next few years? Not to mention that when energy prices become prohibitively expensive, suddenly these wheezing, waddling fools won't be able to rely on their cars and all of the gadgets that make their lives so effort free. I don't think it takes too much imagination to realize that there are many millions of people who are going to be is deep trouble from a health standpoint long before the collapse finally comes.


Bonus: "I hope that you got fat...'cause if you got really, really fat, you might just want to see me come back"

Comparing neo-natal care options

Mint has an excellent graphic that highlights why home-based neo-natal care is an extremely cost-effective approach to addressing India's shockingly high Infant Mortality Rate. It chronicles the success of NGOs in the extremely backward Gadchiroli district of Maharashtra in lowering IMR and improving infant health through neo-natal care delivered at their homes by local community health workers.

The graphic below compares the cost per DALY (disability adjusted life years) saved for different types of interventions. As can be seen, home-based neo-natal care and zinc fortification deliver very high bang for the buck. The Gadchiroli-type initiative costs just $7 per DALY saved.























All this assumes much greater significance in view of the lates UNICEF estimates which show that  deaths in the neonatal period or first four weeks account for roughly 40% of all under-five deaths and their proportion has grown by 10% since 1990.

Raleigh (North Carolina) Diagnostic Lab Laying Off 140

This mass layoff story combines two recent unfortunate trends that I have noticed--jobs being shed in the health care industry and in the Triangle area of North Carolina. Here is the newsobserver.com with the details:

Millennium Laboratory, a diagnostic lab based in Raleigh, is laying off all of its 140 employees.

The company announced the cuts in a notice filed last week with the N.C. Department of Commerce.

In the notice, the company wrote that it is being sold to another laboratory company and that the layoffs would take effect on or near May 4.

Most of the jobs being eliminated are in Wake County, according to the notice.

Jobs include account executives, couriers, phlebotomists and medical technologists.

And so it goes.

Crozer-Keystone Health System To Cut 325 Jobs In Delaware Valley

Here is yet another mass layoff story from the health care industry. Newsworks.org has the details:

The Crozer-Keystone Health System is laying off 325 workers from its five hospitals and one health network in the Delaware Valley.

Spokeswoman Kathy Scullin said the health system's bottom line is hurting from the shift from inpatient to outpatient treatments.

"Insurance companies who used to reimburse us for a three-day patient stay are now only reimbursing us for 18 hours, so we're losing thousands of dollars on these cases," Scullin said.
In the last 18 months, Scullin said, about 25 percent of traditional inpatient business has shifted to outpatient.

Scullin says the layoffs will be enacted proportionally throughout the health system's 7,000 employees.

So far, 150 employees have taken the early retirement packages offered to reduce forced layoffs.

Bill Cruice, from the union that represents nurses at Crozer-Chester Medical Center, said the reasons given by the hospital for the layoffs do not ring true to him.

"They made $8 million the first six months of the (fiscal) year," Cruice said. "So there doesn't seem to be a sync between the hospital making money and saying that they need to downsize."

Bill...Bill...Bill...how is the hospital ever going to attract a top CEO talent vulture if it actually has to pay its employees?


Bonus: There's no truth to the rumor that Crozer-Keystone employs Dr. Nick

Eight Old School Diseases Making A Comeback

The economic collapse is only just beginning, and already some infamous long thought defeated diseases are alarmingly starting to reappear. The reasons for the resurrection of these various scourges upon humanity vary, but the timing of their return is quite ominous. This helpful list comes to us via Mental Floss.com:

1. Scarlet Fever

This deadly disease was first described in the 1500s. Due to its contagious nature and debilitating, if not deadly, effects, outbreaks of scarlet fever were greatly feared. Fans of the Little House on the Prairie series will remember that it was scarlet fever that resulted in Mary’s blindness.

Penicillin proved an effective treatment for the disease, until last year. A sudden spike in scarlet fever cases in China and Macao, up almost threefold and fivefold from 2010, respectively, has alerted scientists to a new, more virulent form of the disease. It was not just Asia that reported more cases, with a sharp increase in incidents in Michigan last year.

2. Rickets

Rickets was most common in industrialized cities during the 1800s. Children who worked in factories had poor diets and got little sunlight, resulting in a Vitamin D deficiency. This can lead to bone problems, bowed legs, and stunted growth. Since it is such an easy disease to avoid simply by spending a few minutes in the sun each day, as child labor laws limited kids’ time trapped inside, rickets all but disappeared.

Since rickets had been perceived as a disease that was “taken care of” for almost a century, doctors in the US and Europe were astonished when it suddenly started showing up in increasing numbers of children in the last decade, with several hundred cases in England alone in 2009. Part of the problem is that many children are back to having poor diets and spending very little time outside. But the problems also present themselves in infants, ironically because new mothers are trying to do everything right. Breast milk does not contain Vitamin D and as more women breastfeed their children exclusively, and for longer time periods, as well as protecting their children’s sensitive skin from the sun when they go out, Vitamin D deficiencies are becoming more common in infants. Doctors urge women to keep breastfeeding, but to give babies vitamin supplements as well.

3. Gout

The first documented case of gout was in Egypt in 2600 BC. While anyone could get it, it was known as “the king’s disease” because symptoms most often presented themselves in royalty and the wealthy; Henry VIII and George IV were both sufferers. There was no cure, and once someone had one attack of gout they were likely to get it again. The main symptom was unbelievably excruciating pain in a joint, usually a toe. Attacks could last up to a week, made walking almost impossible, and even covering one’s self with a light blanket was usually too much pressure on the joint.

The number of people suffering from gout in the US has almost doubled since the early 1990s, with 4% of adults presenting symptoms in 2010, and the numbers are expected to keep rising, for two reasons. One, our diets are atrocious. Eating rich, fatty foods, and drinking alcohol add to your risk of getting a gout attack. Two, gout is much more prevalent in the elderly. 13% of Americans over 80 suffer from gout, an increase of 7% in the last 20 years alone, and as more people live to that age the number will most likely continue to increase.

4. Syphilis

This sexually transmitted disease first appeared in Italy in 1494. While no one is sure where it came from, the date and location have led many historians to conclude it came to Europe from the Americas. For over 400 years it was completely untreatable, and became an epidemic in some areas. Vincent van Gogh’s brother, Winston Churchill’s father, and Al Capone all died of syphilis, while everyone from Henry VIII to Oscar Wilde to Adolf Hitler are suspected cases.

The discovery of penicillin in 1943 as well as a greater awareness of the dangers of unprotected sex led to increasingly fewer people presenting symptoms of the disease. In 2000, public health officials announced that syphilis was almost completely eradicated in the US. But over the next decade the number of people testing positive more than doubled.

There are a few reasons for this. One is that more people are getting tested for STDs in general, so more cases are being caught. But doctors also say it is because of problems with sex education. Many people who test positive contracted the disease through oral sex, which they mistakenly believe is safe without protection. Also, since the disease was so close to being eradicated, many young people were not taught about it in school and are unaware of the symptoms to watch out for.

5-7. Measles/Mumps/Rubella

In the last 150 years, measles is estimated to have killed over 200 million people. Mumps was once the leading cause of viral meningitis. And rubella epidemics resulted in tens of thousands of miscarriages and deaths. Then in the 1960s, vaccines for all three of these diseases were developed. They were combined into one simple vaccine, the MMR, and the number of cases plummeted.

But in 1998, the prestigious medical journal The Lancet published a study that linked the MMR vaccine to autism. The results were widely reported, fueling the anti-vaccine movement, and large numbers of parents stopped vaccinating their children against these diseases. In 2004 and again in 2010 the article and its findings were officially rejected as “utterly false” by the medical community, but the damage had been done. Outbreaks of all three diseases are increasing.

In 2011, 25 states recorded cases of the measles, the most in a decade and a half. The disease is especially dangerous in populations that have had no exposure to it, as the US hasn’t for forty years, meaning incidents are expected to increase among the unvaccinated. Britain, France, Germany, the Netherlands, Norway, Romania, Russia and Switzerland all showed increasing numbers of cases in the past decade. In 2010 a mumps outbreak occurred in young, unvaccinated men in Ireland. A mumps outbreak at the University of Iowa lasted 6 months and spread to 13 states. And just last month, more than 20 mumps cases were diagnosed on the Berkeley campus. Doctors expect more outbreaks of these diseases, as the children who were not vaccinated in the immediate aftermath of the article start sharing dorms with each other.

8. Polio

While suspected cases of polio go as far back as Ancient Egypt, the first clinical description of the disease wasn’t written until 1789. While occasional individual cases were not uncommon, it wasn’t until the 20th century that a worldwide polio epidemic occurred, peaking in the 1950s. Franklin D. Roosevelt is probably the most famous sufferer, but at its peak polio paralyzed or killed half a million people every year. Then two different vaccines completely eradicated the disease in all but four countries.

Those countries—Afghanistan, Nigeria, India, and Pakistan—are all showing increased cases of the disease in the last decade. In 2003 leaders in northern Nigeria warned against getting vaccinated, claiming it could cause infertility. This resulted in the disease spreading into Chad, where it had previously been eradicated; 132 cases were reported there in 2011. Afghanistan reported an all-time low number of cases in 2010, but that number more than tripled in 2011, thanks to some people’s refusing to vaccinate their children on religious grounds, as well as the open border with Pakistan, who also saw their reported cases more than double in 2011. Some extremist Muslim leaders in that country have denounced vaccinations as a Western conspiracy.

Of all the diseases on the list, Gout would have to be the least worrisome. There are going to be a lot fewer people eating rich fatty foods and aggravating their joints in the near future. Rickets will probably cease to be as much of a problem when people begin having trouble finding shelter and are out in the sun a lot foraging for food.

As for the others, I can picture them reaching epidemic proportions not long after the medical system finally collapses. This list serves as another sobering reminder of how grim the post-collapse world is likely going to be for most people.


Bonus: Difficult to cure

Fee-per-service Vs bundled payments

One of the biggest challenges with cost-control in health insurance is with the payment model for health services delivery.

The prevailing fee-per-service model disaggregates services into doctor consultation, diagnostic services, and surgical treatments. Individual payments are made accordingly for each service. This naturally distorts incentives, in so far as it encourages each service provider to over-diagnose or over-treat, so as to maximize their revenues. Since many doctors also have their own diagnostic equipments, it is natural for them to prescribe the full range of diagnostic tests.

In contrast, in countries like India, treatment of a medical condition is the basis for insurance payments. In other words, payments are bundled into a package and the insurer makes the payment to the service provider. The service provider is generally a hospital which either has all these facilities in-house or has a contract with various other external service providers for delivery of integrated services for that particular treatment. This is a much more desirable model since it mitigates and eliminates many of the incentive distortions associated with fee-per-service models.

However, a more ideal payment model for insurers would be diagnosis based bundled payment. A typical diagnosis can have multiple treatment options, based on prior medical history, clinical judgement of the doctors, and so on. This has the potential to create incentive distortions, in so far as it can encourage doctors to prescribe surgery and other invasive treatment intensive treatment regimes where they stand to benefit. A diagnosis based payment model, wherein all treatments in a Diagnosis Related Group (DRG) are covered by a flat fee, can align the incentives of all sides to optimize among treatment alternatives.

Interestingly, the bundled payment regime in India, followed by many state and private insurance programs in the country, is a consequence of the nature of the Indian health care market. In US, Canada, and especially Western Europe, individual medical practitioners and diagnostic testing centers maintain their separate identitities from clinics and hospitals, thereby forcing insurers to deal with them separately. However, in India, the larger integrated specialty hospitals have come to dominate the formal health care market. Insurers therefore deal with them directly or with hospitals who in turn contract with certain diagnostic testing centers and specialists elsewhere. Bundled payments therefore become possible.  

Any universal health insurance scheme for India should have bundled payments as one of its pillars.

146 Workers To Be Laid Off At Joerns Plant In Stevens Point (Wisconsin)

This was yet another mass layoff story from the healthcare industry. Here is a local Wisconsin radio station with the (admittedly few) details:

A Stevens Point medical supply company announced they'd be laying off 146 employees.

Reports say Joerns Healthcare will start those layoffs in June. The department of workforce development announced the mass layofffs today. Joerns said in a statement back in January that the jobs in Stevens Point would be moving out of state to Texas, Mexico and Arkansas.

The company says it will keep several employees in Point to provide customer and technical support and to design and develop products.

And so it goes.


Bonus: Did you all know that Stevie "Guitar" Miller is from Wisconsin?

Health care graphics

I am copying these excellent graphics from Derek Thompson on the challenges facing health care sector in the US. They are representative of the problems faced by health care sector across many countries.

Health care is most cost-effective in Western Europe and East Asia. The contrast with the hugely expensive and relatively ineffective American health care system is stark.



America's health care inflation over the past 30 years trumps that in all other major economies.



Contrary to conventional wisdom, health care costs are not dominated by insurer profits and transaction costs, but by hospital and physician costs and pharmaceuticals.



Slowing the growth of health care spending would require squeezing many of these slices of the pie at the same time by, for example, increasing the payoff of investments, making hospitals more efficient, reducing doctor pay, and making prescription drugs less expensive.


The top 5% of spenders account for almost half of all health care spending.



The top 1% spends $90,000 per person on health care, 381 times more than the bottom 50%. This also means that certain categories of consumers soak up a major share of the health care spending. This also means that the focus of cost-cutting should be focussed on them.



The 1% of health care spenders are much, much sicker than the rest of the country. But almost half of them are in good, very good, or excellent health. Is there a window for cost cutting there?



But of the top 1% of health care spenders who make up 20% of all health care spending, 2/3rds are older than 55.



America's long-term budget crisis is nearly entirely a crisis of government health care spending, which is overwhelmingly in Medicare and Medicaid.



Thanks to incredible advances in heart surgery and medicine, the cardiovascular related deaths per capita have declined by 80 percent since 1950.

10 Million Americans Lost Employer Sponsored Dental Benefits in 2010

I know we have an awful lot of Anglophiles living in the U.S., but this is ridiculous. Here is the San Francisco Chronicle with the details:

Employer sponsored dental benefit enrollment declined by 5.7% in 2010, according to the National Association of Dental Plans. It's the first drop in dental enrollment since 1994, the year NADP began tracking enrollment. The Value Dental Plan, which hopes to capitalize on the decline in employer sponsored dental insurance, is not traditional insurance but rather a program providing significant discounts to its members with over 50,000 participating dentists across the US.

The "2010 Dental Benefits Enrollment Report," issued by NADP and Delta Dental Plans Association, revealed that only 166 million Americans (54%) were covered by some form of dental benefit through group or individual plans in 2009.

The 5.7% dip reflects about 10 million fewer Americans with dental coverage, compared to 2008 figures. Still, enrollment from 2006 through 2008 increased in line with U.S. population growth, remaining steady at 57%, according to the research.

"While total enrollment significantly declined in 2010, the number of employer groups offering dental benefits remained consistent, compared to the previous year. Based on data submitted for the report and other industry studies by LIMRA and NADP," says Evelyn F. Ireland, executive director of NADP. The recession and a stalled economy contributed, in part, to decreased enrollment. "The reduction in subscribers in some employer groups in 2010 most likely reflects family financial constraints and layoffs.

Dental insurance for many has never been all that great. My own health care plan, which is quite good otherwise, only covers a very small percentage of my dental care. On the flip side, there doesn't seem to have been nearly the explosion in dental costs like there has been for other areas of health care. I had a crown put in last year that probably only cost about 20% more than one I had put in 15 years ago. There's a lesson there somewhere.


Bonus "Dental plan....Lisa needs braces...dental plan...Lisa needs braces"--The remix

Education and healthcare as sources of middle class deprivation?

I have written about the coming middle class deprivation due to the rising cost of healthcare, education, housing, and energy prices.

In this context, Stephen Rose has two excellent graphics in The Atlantic. The first shows the relative changes in prices of household consumption basket in the US over 60 years. Health care and education stand out as items which have experienced the biggest increases in prices.



The second shows the relative changes in the shares of items in that basket over the past 40 years. Here too health care stands out. Its share of the household consumption basket has risen from 8.1% in 1967 to 18% in 2007.



Necessities like food and clothing, which gobbled up 42% of our spending in 1947, have dwindled to just 16% of spending by 2007.

The larger point, of relevance to countries like India, is that poverty and middle-class deprivation in the coming years will be driven by the increasing cost of health care and higher education.

Northwest Community Healthcare (Illinois) Lays Off 104 Workers

More bad news from the health care industry. Here is Crain's Chicago Business with the details:

Northwest Community Healthcare laid off 104 employees this week after the Arlington Heights-based system lost $13.2 million on operations in 2011, the third-straight year of losses.

The job cuts represent about 3 percent of the workforce, said Jackie Speckin, Northwest's director of strategic marketing, who confirmed the layoffs.

Employees were laid off on Monday and Tuesday, she said. Most of the jobs were eliminated at the 496-bed Northwest Community Hospital, where average occupancy fell to 67 percent during the fiscal year ended Sept. 30, from 70 percent during fiscal 2010.

Nothing terribly remarkable there, but check out this passage:

Ms. Speckin blamed the performance on industry trends.

“We're experiencing what every other hospital nationwide is experiencing, and that's a decrease in the amount of inpatient volume,” she said.

A decrease in inpatient volume, eh? Given that the population continues to both grow and the average age is gradually increasing with the graying of the Baby Boomers, why do you suppose that would be? More people losing their health insurance who can't afford hospital stays?

That would be my guess.


Bonus: In light of this story, here is a good sentiment from the late, great Warren Zevon...too bad he didn't manage to avoid it himself

Study: Health Care Premiums Will Surpass Median U.S. Incomes By 2033

I've asserted here before on TDS that you really don't have to be an Ivy league educated intellectual to be able to spot all of the ominous trends in our society. Sometimes all it takes is a basic math skills and a little common sense. Last September 29th, I wrote a post called, "Cost of Family Health Care Coverage Doubled in the Past Decade," in which I cited a news story about rapidly rising health insurance premiums. Taking the figures from the story, I did a little math and made the following calculation:

Keep in mind that the median household income in America is somewhere around $49,000. So that means it costs nearly a third of a family's annual income to provide that family with adequate medical coverage. And the cost just continues to rapidly spike upwards despite the corporate giveaway known as Obamacare.

By my back-of-the-envelope calculation, at the same 9% rate of annual increase in health insurance costs seen during this past year, the total cost of the insurance would more than double again by the year 2020, to just over $32,000. Given that incomes remain stagnant, and are at best likely to continue to be so as the Great Recession drags on, that means the cost of a family's health insurance would then consume nearly two-thirds of their annual income before taxes.

A scary prediction, right? Well, now comes the confirmation that I wasn't all that far off in my assertions. As reported by the Raw Story, the Annals of Family Medice just published a report on this very same topic, and the statistics are grim:

The cost of health care will surpass the price of a median income household in the United States by 2033 if current trends continue, according to a study published in the March/April issue of Annals of Family Medicine.

Researchers accumulated data from the U.S. Census Bureau and the Medical Expenditure Panel Survey to compare Americans’ incomes and the premiums they’ve paid from 2000 to 2009. The cost of premiums rose by eight percent over that time period compared to just two percent of incomes.

If those trends continue, the average cost of a family premium will be half the income of a median household family, which was $49,800 in 2009, in 2021. Premium costs would exceed the median family’s income by 2033 if trends remain unchanged.

Once again, I take no satisfaction in being right when the implications are so dire. In my original blog post, I wrote the following in conclusion:

When a trend appears to be unsustainable, you can bet darn well that it is. At this staggering rate of increased costs, the American medical system is headed for collapse, and not in the distant future either. Unless something dramatically changes, I don't see how the system as currently constituted survives even the current decade.

Bonus: "I know the whiskey won't soothe my soul...and the morphine won't heal my heart"

Medicare Cracks Down On Power Wheelchair Claim Fraud

You can hardly leave the house these days without seeing someone riding around on one of those power wheelchairs. And if it seems like some of the people using them don't really need them and should be up and walking around, there might just be a very good reason for that. Here is the Tampa Bay Times with the story:

Whether covered by insurance or not, many Americans have power wheelchairs and scooters, as anyone visiting a supermarket or shopping mall can attest.

Now Medicare says it has been spending far too much on them, and Florida is one of the first states where the agency is cracking down.

In 2009, the most recent year for which figures were available, Medicare spent $723 million on power wheelchairs and scooters. And after a study, the agency estimated that at least 60 percent of claims were paid despite shoddy paperwork or were for devices that the recipient didn't need.

So just how bad is this form of Medicare fraud?

How much is Medicare losing? A review of power wheelchair claims for the first part of 2007 found that more than half of $189 million in claims were medically unnecessary or so poorly documented it was impossible to tell whether they were needed, resulting in $95 million in improper payments.

But beyond scammers trying to rip off there government, there is a larger problem here:

Dr. William Quillen, who directs the University of South Florida's school of physical therapy and rehabilitation science, agrees that some people really do need these devices.

"But there are also people you see at Target, Walmart or the mall (using power devices), and there doesn't appear to be any readily apparent medical need," he said.

But if you're capable of rehabilitation, the longer you spend in a power chair makes it more likely you'll never get out of it.

"They lose muscle strength and gain weight," said Kavita Jain, a therapy team leader at the Florida Hospital rehab unit. "We view it as equipment of last resort."

Etman said she thinks some doctors don't want to lose a patient by taking a tough stand, and so they sign the prescription.

"But they don't realize that it's hindering the patient, not helping them," she said.

Quillen said patients often ask about power chairs and scooters.

"Our first line of response is, 'let's not get down that road until we complete your rehab,' " he said. "We're not going to throw in the towel."

Staying active is especially important for people with chronic conditions such as diabetes, heart disease and obesity.

"It's kind of move it or lose it," said Dr. Richard Morrison, a Tampa heart surgeon. "We want them up and moving. If they stop that . . . (their) cardiovascular system isn't going to be in good shape."

Etman said she sometimes gets patients who have used a power chair for years.

"They hate us," she laughed. "We're trying to get them to where they can use a walker or a cane, or nothing, and they don't want to."

I really cannot fathom the mentality of a person who would rather be helplessly confined to a wheelchair rather than have the freedom to get up and walk around on their own. A few years ago, I suffered a total ACL tear and could not walk without crutches for about a month after the knee operation. Being essentially confined to my couch for all that time drove me absolutely stir crazy. I couldn't wait to get the physical therapy started so I could start moving around without assistance again.

The bottom line with this story is that you have several of the very worst traits of modern America all intertwined: corporate greed on the part of the companies that sell the chairs, an unaccountable big government program carelessly throwing taxpayer money away, and patients who have been conditioned to be lazy and helpless while expecting someone else to pick up the tab for their bloated medical expenses. It's upon reading stories like this one that you begin to realize just how traumatic collapse is eventually going to be for a very large percentage of the population.


Bonus: For anyone who doesn't realize that this band actually recorded more songs than just "Stuck in the Middle With You"

Walgreens Lays Off 123 In South Florida

Looks like Walgreens operations in the Sunshine State are taking a big hit. Here is the South Florida Business Journal with the details:

The Walgreen Co. warns it may lay off 123 workers in Miami Lakes, according to a state notice.

The Deerfield, Ill.-based company filed a Workers Adjustment and Retraining Notification (WARN) notice with the state of Florida on March 1, warning of mass layoffs from the closing of the central pharmacy operation portion of its Miami Lakes facility at 14901 N.W. 79th Court.

The layoffs are expected to take place around May 1 and the company expects the closure to be permanent, according to a letter to the state from Cassie Jesse, human resources manager. The letter did not address the reason for the pharmacy operation closure.

Positions being eliminated include group manager, central utility specialist, resolution center specialist and patient prescriber review operator.

Yet another blow for workers in the health care industry.


Bonus: "Mainline Florida, O.K."

HP Enterprise To Eliminate Nearly 160 Positions In Madison, Milwaukee

This layoff notice article from a local Wisconsin radio station did not say so, but I gather these job losses resulted from the recent cutback in Medicaid and Medicare payments:

The largest private company in Wisconsin that helps run the state’s Medicaid programs will eliminate almost 160 jobs.

HP Enterprise Services has told state officials it will cut 134 positions in Madison and 23 in Milwaukee. The layoffs will occur between late April and late August.

Most of the jobs are clerical, and HP says some of the affected workers could get new jobs with the company.

It’s the state’s largest private vendor for Medicaid programs that serve well over a million poor and elderly clients in Wisconsin.

Not that it really means anything, but these will count as "private sector" layoffs, when clearly these jobs would not have existed in the first place without the two giant government programs. Something to keep in mind whenever a commentator talks about private versus public sector employment as if the former is somehow more noble than the latter. In the end, you're little people either way.


Bonus: Did someone say "Enterprise?" Ha! Gives me an excuse to post this awesome parody video

Jackson Health System (Florida) to Eliminate Over 1,000 Jobs

This is one of the more infuriating layoff stories I've read in awhile. Here is NBC Miami with the appalling details:

Jackson Health System’s CEO announced Tuesday that his organization is laying off 920 staffers and eliminating another 195 vacant positions to give the organization the “rock-solid foundation” it needs as he right-sizes it.

Carlos Migoya said Jackson will also create about 350 new part-time jobs so it still maintains “the proper staffing levels to provide excellent medical care and customer service for our patients.”

In all the moves will save Jackson about $69 million per year, including about $55 million in benefits, Migoya estimated.

So you wanna hear the punchline? It's a doozy:

The president of SEIU Local 1991, Martha Baker, slammed Migoya for the "massive layoffs" in a statement Tuesday evening.

"This is what you get when you hire a billionaire banker and then cut him loose to take a chainsaw to healthcare in Miami-Dade County," said Baker, who is a registered nurse. "It’s unbelievable that he wouldn’t consult the nurses, doctors and healthcare professionals – who have sacrificed out of their pockets to keep Jackson afloat – about how his plan to ‘right-size’ the system might harm patient care. We have no idea how Mr. Migoya thinks patient care can be maintained with such drastic cuts to frontline caregivers."

Migoya said in a letter to members of Jackson’s Financial Recovery Board Tuesday that Jackson will have cut spending by a total of about $91 million per year, counting the new reductions and other “staffing initiatives” rolled out since last June.

“These actions will be painful for many people, including those whose positions are eliminated and those who will be working even harder to care for this great system and its patients,” Migoya wrote. “We are making every attempt to be sensitive to the emotional nature of these changes, including the continued availability of our employee assistance program and offering transition support services for impacted employees.”

He expressed his confidence “that Jackson will emerge as a stronger and more nimble organization that is better positioned to reach its strategic goals.”

Yep--I too would really like to know what qualifies a billionaire banker to be the CEO of a hospital system. Seems like a recipe for disaster to me. I also wish the article had mentioned how much Jackson Health System CEO Carlos Migoya's compensation package is worth. Because if he's getting paid tens of millions of dollars like some other health care CEOs are and then laying off staff to save a similar amount, this story becomes even more outrageous.


Bonus: Everybody knows the fight was fixed...the poor stay poor, the rich get rich

Psychiatric Patients With No Place to Go But Jail

A few days ago, I posted a story about how because of draconian sentences, America's prisons are being turned into retirement homes. Well, now comes a story from The New York Times about how, thanks to state government budget cuts, they may also be being turned into psychiatric wards:

The sounds of chaos bounce off the dim yellow walls. Everywhere there are prisoners wearing orange, red and khaki jumpsuits. An officer barks out orders as a thin woman tries to sleep on a hard bench in a holding cell. This is a harsh scene of daily life inside what has become the state’s largest de facto mental institution: the Cook County Jail.

About 11,000 prisoners, a mix of suspects awaiting trial and those convicted of minor crimes, are housed at the jail at any one time, which is like stuffing the population of Palos Heights into an eight-block area on Chicago’s South Side. The Cook County sheriff, Tom Dart, estimated that about 2,000 of them suffer from some form of serious mental illness, far more than at the big state-owned Elgin Mental Health Center, which has 582 beds.

Mr. Dart said the system “is so screwed up that I’ve become the largest mental health provider in the state of Illinois.” The situation is about to get worse, according to Mr. Dart and other criminal justice experts. The city plans to shut down 6 of its 12 mental health centers by the end of April, to save an estimated $2 million, potentially leaving many patients without adequate treatment — some of them likely to engage in conduct that will lead to arrests.

“It will definitely have a negative impact on jail populations,” said Mr. Dart, who noted that the number of people coming into the jail with mental health problems was already increasing. “It will have direct consequences for us in my general jail population and some of the problems I have here, because a lot of the people with these issues act out more, as you would expect, so that’s a direct consequence.”

It costs an estimated $143 a day to house a typical detainee in the Cook County Jail. The cost to house someone with serious mental health issues is two to three times that amount. Mr. Dart said that prisoners with mental health problems are in a disproportionate number of fights and make more suicide threats, and managing them takes more resources.

“And then there’s the humane side of it,” he said. “Not treating people with mental illness is bad enough, but treating them like criminals? Please, what have we become?”

Indeed, Mr. Dart, what HAVE we become? I ask myself that question nearly every single day.