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Uneven Results in North Carolina Indicate that New Nonprofit Hospital Rule Might Work

316261297889322-xlNew Orleans   A combination of factors has curbed some, but not all, of the appetite for nonprofit hospitals’ frenzy of legal actions against lower income families in North Carolina, giving hope that the new Affordable Care Act restrictions against draconian collection practices might actually be effective.

We have been following closely whether or not nonprofit hospitals are modifying their behavior around the country in the wake of the final IRS and Department of Treasury rules that will require them to be much more effective in allowing lower income families to access charity care at the peril of their own tax exemptions.  Much of what we have seen while examining IRS form 990s, which the hospitals are required to file annually with the IRS, has not been encouraging given that all of these institutions have known this was coming since 2010 when Obamacare became law.  The leisurely four years until the rules became finalized at the end of 2014 should have allowed mountains to be moved in normal behavior and now that we are entering the penalty phase, the battle lines are being formed.

North Carolina may become one of the more interesting ones.  The passage of the Act and its amendments involving charity care prompted an investigation in 2012 by the states big newspapers, including the Charlotte Observer, in the biggest city uncovered 40,000 lawsuits that the state’s nonprofit hospital has filed to collect debts.  The headlines led to a happy confluence of forces with the legislature passing a law restricting emergency collection practices much like the language in the federal statute.   An updated review of the court records by the newspapers indicates that some hospitals have attempted to comply, others are scofflaws, and some cleaned up their act completely.  On the whole that’s good news and a potential harbinger of good things to come for the rest of the country as well.

A recent story by Ames Anderson and David Raynor in the Charlotte Observer,

…found that lawsuits by the state’s hospitals dropped by more than 45 percent from 2010 through 2014 – from about 6,000 to 3,200. At Carolinas HealthCare System, the state’s largest hospital system, the drop has been even sharper. The Charlotte-based hospital system filed about 1,400 lawsuits against patients last year – roughly half the number it filed in 2010.  One hospital, Iredell Memorial in Statesville, has stopped filing lawsuits against patients. In 2013, it was one of the state’s most litigious hospitals, filing about 270 bill-collection lawsuits. Last year, it filed none.   Lawsuits have also slowed to a trickle at two other hospitals: High Point Regional Hospital, which has recently joined UNC Health Care, and Lexington Medical Center, owned by Wake Forest Baptist Health.

More than 3000 cases is still a lot, and 1400 in one year from the Carolinas HealthCare System is outrageous, but progress is progress, and now with a powerful stick coming into the hand of advocates and organizations in North Carolina that could threaten and remove the hospitals’ tax exempt status, we might see more hospitals devoting themselves to their nonprofit mission like Iredell Memorial.

This is clearly a fight, but seems increasingly like one that we can win.

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Please enjoy Hurricane by Blues Traveler, Thanks to KABF.

Tax Preparers Refund Anticipation Loans are Out of Control – Again!

AP_Tax_Refund_Advances_t_w600_h3000New Orleans         After years of campaigns by ACORN and agreements with the major tax preparers, H&R Block, Jackson-Hewitt, and Liberty Tax Services, to rein in the abuses and predatory pricing of “refund anticipation loans” or RALs, as they are known in the industry, it appears that the rats will play “while the cat is away.”  Nina Olson, the IRS’ national taxpayer advocate was quoted in an AP story calling the situation now the “wild, Wild West” and “called the level of risk for abuse in pricing and quality of service unprecedented.”  What the heck?!?

It seemed just yesterday that the tide was going the other way and that the earlier ACORN victories were being to be set in concrete.  The IRS had announced that they were promulgating rules to restrict the use of RALs – finally.  The IRS was finally going to create some rules of the road, including licensing at some level or something to assure a degree of competency by tax preparers.  Major banks like HSBC and others had refused to continue to offer the lines of credit to the preparers for such products for “reputational” reasons.  The Consumer Financial Protection Bureau had announced that it was on the case as well and strict rules were coming.   And, now it’s the wild West?

Refund anticipation have soared 17% to 21.6 million taxpayers in 2014 compared to 2011 according to IRS data given to the Associated Press.  Worse the big prep companies are hooked on this drug.  RALs and prepaid cards loaded with anticipation refunds make up 10% of H&R Block’s gross sales now, and the even more bottom feeding, Liberty Tax Services, is sucking up 20% of its revenues through such pure and simple exploitation.

Drive through any low-and-moderate income area and the tax payers are housed cheek to jowl along the main thoroughfares.  When you see the young people dressed in atrociously green Statute of Liberty costumes dancing with arrow signs to lure you into fast service at a Liberty storefront, don’t laugh, because the bait is luring victims into the trap.  Make no mistake about where the predators are feeding.  The IRS data reveals that “about half the purchasers are EITC recipients.”  The Earned Income Tax Credit touted by Presidents of both parties as their major anti-poverty program for low income, working families is only available for such families as a way to get ahead and survive, but those are the pockets being picked.  Of all victims of these high interest loans charging usurious rates between 250 and 400%, 84% are low-income.  There’s no question about what’s going on here.

The IRS is whining because they lost a court appeal on their licensing effort for tax preparers, but what happened to their efforts to rein in the RALS.  They have tools a plenty.  The Consumer Financial Protection Bureau now claims they are close to having something written up, but their scope seems limited to more transparency, and looks good, but has little practical impact on the predation.  ACORN got all of the companies to make posters with the rates that preparers would show at their desks and on their computer screens, but that was just the toll people had to pay to get on the faster highway to get their money.

The IRS and other agencies of government are essentially allowing an income transfer from the federal government intended for lower income families to become a direct remittance to private companies’ bank accounts, because they are unwilling to either put their foot down on the practice or step up and move all or part of the refunds to families more quickly themselves or through preferential preparation sites.

This ought to be a scandal, and, if intent counted, it’s a crime.  Without a doubt it’s a government approved swindle.

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Street Dogs – Unions and the Law (Alt Version)

Hospitals Cutting Costs by Helping the Poor

OLYMPUS DIGITAL CAMERANew Orleans       We’ve all heard the sayings before.  A stitch in time saves nine.  An ounce of prevention is worth a pound of cure.  Now it seems that with some incentives being provided to hospitals through the Affordable Care Act, some of them are learning these old lessons, perhaps for the first time with feeling.

The real moral of these pilot programs is that if you deal directly with poverty, people will have better health.  Amazing that we need a bunch of pilot programs to prove the obvious, but in this case attention is being paid because hospitals actually can save money by dealing with the issues of poor people before they end up in the emergency room.

The New York Times Quotation of the Day came from someone the reporter interviewed in Minneapolis which is running one of the pilots.  Ross Owens, a hospital official there, said, “We had this forehead-smacking realization that poverty has all of these expensive consequences in healthcare.  We’d pay to amputate a diabetic’s foot, but not for a warm pair of winter boots.”  Good news for the poor people of Minneapolis that this realization came better late than never, now if we could get have reality slap more than a score of Republican governors up the side of the head who are standing at the hospital door blocking the expansion of Medicaid to more of the poor through the Affordable Care Act, that would really be something!

Here’s how the pilot worked in Minneapolis:  “The hospital, Hennepin County Medical Center…would be paid a fixed amount per patient and it would get to keep the money even if patients did not show up, or used less medical care than was paid for.  The pilot program would work on caring for patients in places outside the hospital that are cheaper.”  Since 2012 the medical costs at the hospital have fallen by 11%.  And, here’s another kicker, “Some of the biggest cost reductions were among the more than 250 patients who were placed into permanent housing.”    Obviously, this is a public hospital so perhaps they were committed to trying to break away from the business model of paying for every procedure to look at healthcare more holistically and finding rewards there in their communities and at their bottom line.

Other pilots saved by creating a separate space for sobering up rather than the hospital.  In Portland they used community outreach workers, helped with obtaining driver’s licenses, “bus tickets, blankets, calendars and adult diapers.”  In New York they tried to stop evictions and trained staff, according to the Times to deal with evictions like medical emergencies.  In Philly they did shopping.   Essentially in the name of public health many of these pilot communities linked their health department and their social services department and focused on super-users and the most vulnerable parts of the population including the homeless, alcoholics, and drug users, and by applying an ounce of prevention won a pound of cure and their own lottery of huge financial savings.

Kinder and gentler is working as public policy compared to recycling people from the hospitals to the streets.  Now, lesson learned, what will it take to get the dogmatic ideologues in other parts of the government to learn some simple truths from these important experiments linking better health with poverty interventions?

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Strawbs – Part of the Union 1973

Affordable Care Act Backwash

k10329New Orleans         Talking to Professor Adam Seth Levine of Cornell University on Wade’s World  about his new book, American Insecurity:  Why Our Economic Fears Lead to Inaction, about how our political and organizational communication can subvert our own message or “self-undermining rhetoric” in his words, I asked him for his opinion about how the Administration “sold” the Affordable Care Act in the first enrollment period.  Specifically, I was curious if he had paid any attention to the early avoidance of any discussion of penalties and their last minute shift of emphasis on the same issue to incentivize enrollment.  Professor Levine was careful in his response, since one of the groups where he surveyed message reactions was HCAN, Health Care for America Now, an advocacy supporter of Obamacare’s passage that included ACORN in many states.  Careful, but not conclusive, although increasingly the backwash on enrollment, including the impact of the penalties, income estimates, and overall individual costs, are becoming a major part of the story.

The Wall Street Journal relied on a survey by McKinsey & Company indicating that “12% of uninsured people would buy policies if informed of the penalty” though, although there seems to have been no question that asked how many that had signed up did so because of the penalty or a way to separate the twin programmatic dynamic between mandatory and penalty.   The same survey also found that 41% were “unaware of the penalty.”  Many opted to pay the penalty for the first year of $95 or 1% whichever is higher largely based on their own personal cost-benefit analysis.  31% didn’t believe they needed health insurance and embraced the penalty as a savings.  26% believed they needed insurance but couldn’t afford it and went with the penalty.   The Obama Administration has extended signup periods until April 15th, tax day, since the penalties are deducted from tax refunds.  An observer commented that the extension was “good PR,” but the inaction on signups might indicate that their ambivalence about banging on the penalties may involve Levine’s “self-undermining rhetoric.”

H&R Block found through February that half of its clients who had subsidies because of their income are having to repay some of their subsidy through their tax refunds, which isn’t as painful, but still stings. Block claims that more than half of its customers underestimated their income, leading to a higher frontend subsidy causing an average $530 in reduced returns or 17% by their numbers.   This was still a smart way for the Administration to handle this collection problem though, since as Block, Jackson & Hewitt, Liberty, and countless tax preparers could have told the government from their experience with predatory pricing on refund anticipation products, people are more forgiving about losing money before it gets in their hot hands.

The penalties will get higher in coming years, so we need more information, messaging, and more effective outreach that drives people into insurance, but the rub will continue to be the costs and the fact that there are no limits to the deductibles for qualified plans.  Congressman Paul Ryan and a host of Republicans are trying to come up with so-called alternatives, but most of them focus on bringing the zombie policies back to life with lower-cost, limited-coverage plans that are virtually worthless. Consumers are looking at the monthly costs along with $5000 and $6000 deductibles and too many of them, pressed for money, are concluding that if they can walk and talk still, they are better off saving the money now. Unless costs are addressed more aggressively and deductibles and copays are capped, as they are in Massachusetts, rising penalties will build a political base for worthless plans that only have value at best for catastrophic health crises, not for better health for all our people.

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BLAKSAND FEAT. MADDZART – POOR PEOPLE SONG

Tough Problems on Overtime for Salaried Workers

Time is moneyNew Orleans               The Department of Labor has overshot its goal of writing new regulations on overtime rules for salaried workers by about six months.  Sometimes the issue is foot dragging, but this time it may be simply the fact that it is a very, very difficult issue to handle.

Keep in mind that hourly workers have a right to overtime without exemption.  The issue here is workers who receive a salary, guaranteeing weekly and annual income.  Some of these workers are exempt because of their discretionary, supervisory, or administrative duties amounting to 27% of the salaried workforce.  The other 73% are the issue, though sometimes the classification of the exempt workers are tough issues as well.  Organizers with wildly flexible work hours and job discretion are among the exempt categories.

The levels were set a long time ago in the 1970’s at a $455 per week salary or $23660 per year, so just the tick-tock of time alone makes a case that an adjustment is bound to be called for at some level.  Studies of census data reviewed by the Economic Policy Institute (EPI) find that 12% of salaried workers are below the $455 per week standard now, compared to 65% that were below that number in 1975 when the current rules evolved.

Where the rubber hits the road is the at the level of the increase and the issue of what is known as “compression” in labor economics and collective bargaining, meaning the impact of other wages in relation to each other.  $23660 might not seem like much, but it’s more than 50% above the annual pay at the current minimum wage which would be $15080, if such a minimum wage worker was fortunate enough to get guaranteed hours, which many do not.

Editorially the New York Times is advocating that overtime should be guaranteed to salaried workers who are making less than $1000 per week.    $52000 might seem like chump change in New York City these days in the unforgiving land of the 1%, but let’s keep in mind the fact that 50% of all workers make less than $28031 per year and almost 75% make less than $52000.  Some of these arguments feel like the tactical problem of imagining how we jump the minimum wage from $7.25 per hour to $15.00.   In many places in the country, such a jump is so unfathomable that it makes the whole campaign seem rhetorical, rather than real.  It has also pretzeled even our victories into long timelines stair stepping to the higher numbers.   $50000 feels like that same kind of “pie-in-the-sky” problem, even though it would move over 50% of salaried workers into the overtime bracket.

EPI found that there are also negative consequences of going too high, too fast, not surprisingly in reducing flexibility of work schedules over $40,000.  We found this in a bargaining unit of Licensed Practical Nurses at a nursing home represented by Local 100 in Shreveport, Louisiana.  The nurses make in the range of $17 per hour and the company wanted to ask them to be “on call” for $50 one day on a weekend of every three month period.  Few are ever called so for most this would have been an easy $200 per year, and the union was glad to ask for more.  The workers though were boiling over the issue, because they just plain did not want to lose the flexibility on even those four days of the year.  That was interesting to me!

Maybe we should settle for a fast jump to the $28000 number and a series of bumps to $35000 or $40000 and a sunset provision that forces reevaluation of the standard in a certain number of years.  It is hard to imagine the appetite for a doubling the wage standard of salaried workers in this political climate.  Most salaried workers are way outside of union protection and representation, and the New York Times is not actually their bargaining representative.  We might want to settle for something real so we have something to show for the struggle before Obama hits his expiration date as well.

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Colt Ford – Overworked & Underpaid (Feat. Charlie Daniels)

Sorting Out the Issues, Interests, and Impact of the Clinton Foundation

clinton_foundationNew Orleans    The donors and activity of the now named Bill, Hillary, and Chelsea Clinton Foundation are becoming a front page political issue that increasingly seems like to roil the coming Presidential campaigns.  From what we know now, including recent reports from the Wall Street Journal, it seems possible to make an early assessment on the likely political impact of the issue.  So, far my assessment is that it will likely deny the chances of Bill or Chelsea ever winning a Nobel Prize, but in and of itself, the foundation will not be a decisive factor in Hillary’s winning or losing in her bid.

The primary issue raised is whether or not donors, including foreign governments and some of the rich individuals close to them or seeking favor from and for them, who are sometimes carrying heavy reputational baggage, would have undue influence with a potential candidate due to their donation and special relationship with the foundation.  This issue is at the heart of transactional versus transformative politics and philanthropy.   It is also politically impossible to prove because any quid pro quo understandings would be unspoken, whether sought by the donor or implicitly understood by the gift seeker.  The fact that it smells bad, doesn’t necessarily mean it is bad though, and that’s important to remember although in public life largely irrelevant.  Nonetheless no one will doubt that many of the donors hoped for something in their own self-interest from the donation and some are obliquely clear about their motivations, even while they try to put lipstick on the pig.

Whatever little fire may be under this smoke should allow Hillary to walk away from the scene, because she had a day-job during most of the foundation’s activity, and it was about Bill and how he spent his time, so it will stick more on his shoes than hers.   Looking at the list of the big donors and their connection to countries is a mixed bag.  Ukraine is a big hitter along with Saudi Arabia, but so are England, Germany, Canada, and India.  For the foundation they come off looking like a giant, unfocused slush fund of sorts with nebulous grab bag programs around economic development, healthcare and opportunities for women and girls.  Haiti has pretty much destroyed any mantle of success around development.  Some of the drug pricing arrangements, particularly in Africa have been significant but won’t stand tall enough in a storm, and the advantage of the women’s programs is already being undercut by criticisms focused on contributions from countries with abominable policies for women.  The lack of clarity between the foundation, the Clinton Initiative, and likely political donors muddles even more.  A foundation policy of disclosing donation “ranges” rather than transparent amounts and information is also not something that going to get them any kind of good governance award from the Journal of Philanthropy. 

You just wish they stood for something more firmly that could give a better explanation to the controversy.  I’m no huge fan of billionaire Bloomberg, but I have to respect the fact that he hates smoking and traffic deaths, guns, and sugar-soda fed obesity and is willing to put his money behind his mouth and step into controversy about it.  He can because it is his money after all, so critics be damned.  The Clinton Foundation is a channeling agency for the rich, whether people, governments, or corporations.  The Clintons are certainly rich themselves now, but not Bloomberg, billionaire rich, and this is where a history of messy and the message get woefully mangled.

In short, for Hillary the foundation controversy itself is one she can outrun and outlast.  Perhaps harder will be the general “guilt by association” problem not with individual donors and suspect governments, but the huge distance she has opened up between how she rolls with the rich and the rest of us.  Way past peoples’ boredom with any foundation issue will still be a nagging feeling that her crowd is not our crowd, and solving that problem is not a matter of convenience, but of urgent necessity.

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The Chemical Worker’s Song by Great Big Sea