Wednesday, November 17, 2010

Making a profit as a non-profit.

In 1997 the powers that be in the Commonwealth of Kentucky state government and the powers that be in medicine in Louisville Kentucky got together and formed the Passport Health Plan. The organization is non-profit and has a board of directors made up of representatives from the medical practices and hospitals who originally organized the company.

The idea was to make sure indigent and the working poor got good preventative and chronic disease medical treatment and to save money while doing that. Since then the state has been awarding an annual contract which is now at $800 million. By treating a person for minor health problems or routinely for a chronic disease you keep them out of the emergency room and you keep them out of the hospital.

That saves money and everyone agrees on that.

Beyond this point the operation of Passport Health Plan for the benefit of the poor is murky!
This past spring a State Senator Tim Shaughnessy asked State Auditor Crit Luellen to look into the operation of Passport. It took a while to get her hands on the records. Although Passport gets all its funding from the state, they denied her their files. Finally the audit was done. Her report covering the period 2007-2010 was published. The report revealed reason for concern.

Before I go further let me tell you that I question whether Sen. Shaughnessy would have brought this to Mrs. Luellen's attention if he didn't have a divided loyalty. Shortly before his concern was voiced he was laid off from his job as an executive for one of the hospitals involved in setting up Passport. I like to think he would have requested an audit because of his fiduciary responsibility as a State Senator. Some suggest it was revenge for being laid off.

Now, let's turn back to the findings in the report.

Over a million dollars was spent on public relations and to lobby the state legislature. As far as I know there were no other competitors for the state contract. The percentage increase in the contract funding from one year to the next was well below the general increasing health care costs for the community. The question is why spend a million of your state contract funds to lobby those giving you the contract if you don't have a competitor or get increased funding?

The public relations expense included a large balloon version of SpongeBob SquarePants for the Kentucky Derby Pegasus Parade and a contribution to an annual Kentucky Senate cocktail party! The Governor was upset about the cocktail party funding. The President of the Senate David Williams, who hopes to be governor next year, said he didn't understand why the governor was so concerned about the cocktail party. It is Mr. Williams' party by the way and those attending are lobbyists.

Executives of Passport traveled to medical meetings held in lovely spa locations. They used limos and ate lavish meals while staying in palatial hotel rooms. These travel expenses as well donations, holiday gifts and flowers having nothing to do with health care, totaled over $616,000.

Salaries and bonuses to these executives are in the mid six figure range. Despite raking in huge income from Passport some executives have divided loyalties. For example the executive director received compensation from sub-contractors. The Chairman and CEO is an executive at one of the hospitals involved.
The thing that supposedly got Sen. Shaughnessy going however was the distribution of reserves. Thirty million dollars of excess reserves amassed by Passport were distributed not back to the state but were divided amongst the hospitals and medical practices that set up the organization in parts equal to their original participation. In essence this was a distribution of profits from a non-profit organization funded totally by the state.

While there is much ranting and raving about the horrible cost of treating the poor the rest of the story is that setting up and running a non-profit contract to help these most vulnerable is treated as a blank check by the management.

It will be said that this is what you get when you "give" money to the poor. I can almost hear the strident harangue by the resurrected moral majority that everyone should pull their own weight. To paraphrase the Son of God in Matthew 26:11, "the poor shall always be with us." I don't think Jesus wanted us to increase the numbers of poor or steal the most basic of support from them. A self-righteous person thinks they are good but proving that means helping not stealing from the least of us.

Monday, November 1, 2010

Civility, Sexy or is it Sexual?

I like blogs that have only a few followers. There are readers who never sign-up to follow and I know this because I get e.mail from a few myself.

When I find one with sincere and clear writing I feel as though I have found a jewel in the barnyard. These people call out into the unknown trying to communicate, to tell a story of a life.

Sometimes the blog just started. Sometimes they've been blogging for years. When I look at the comments, often there are not any or if any very few.

What motivates someone to write a blog on which no one comments?
The great consuming drama of the mid-term U.S. elections will end tomorrow when the polls close in Hawaii. I'm ready for this to end.

I watched the rally on the Mall in Washington DC on C-Span Saturday. It was put on by a couple of comedians and called "The Rally to Restore Sanity and/or Fear". I'm sure some of you attended. Some friends of mine did and they had pictures. It seemed to be an almost perfect day; no rain, wind or snow and bright sunshine. One person described it as a typical toss the Frisbee to the dog family day outside in the fall.
One thing I noticed as the camera showed those gathered were the smiles. People were smiling, talking to those nearby, laughing and hugging. People walked about with signs: Free Hugs!

Boy those signs were great too. There was a slideshow on a website of over 300 pictures of signs from the Rally. The signs were not angry or putting down anyone. The words were spelled right. Someone professed to being a person who sends grammatically correct text messages. The faces were not all white. There were a lot of brown people. The crowd looked like the America I see every day near my home.

A musician sang "Peace Train" and I almost cried. Tony Bennett sang "America the Beautiful" and I did cry. I am a Liberal and a Democrat. I am a patriot. If you cannot get your mind around that concept then you need to reconsider. Maybe we need to have a reasonable conversation where we both listen.

My favorite sign was the one that said: Civil is Sexy!
This past week it was reported that the University of Louisville had offered two season tickets for home basketball games to each of our state House and Senate members. This has been done for many years and they are offered at the usual price. A lot of the elected legislators appreciate the opportunity and buy tickets every year.

This year all people purchasing season tickets at the new YUM Arena are required to pay an additional "premium" of $1000 per ticket to underwrite the wonderful, fabulous, and modern luxury arena. This year the legislators were surprised at this additional cost. To help the President of the University, Dr. James R. Ramsey offered to pay this premium from funds in the U of L Foundation.

All this was reported in the local paper.

The Letters to the Editors were so hot I had to handle the folded paper that morning with padded gloves.

The next day it was announced that every single legislator had turned done the courtesy of Dr. Ramsey's offer. Although the legislators had not been able to get a budget passed this past session and had to do so in a sixty day special session, their good sense was demonstrated by turning down the offer!

One of the Letters to the Editor suggested they pay the premium with the extra pay they got for the special session!