Scrupulously Accurate and Rarely Honest

by John W Rodat on April 11, 2012

Today’s Quote of the Day is from Rep. John Yarmuth (D-KY) on Senate Minority Leader Mitch McConnell (R-KY)

I’ve known Mitch for 40 years,” said Yarmuth. “We were political allies at one point. I was a Republican ‘til 1985. In recent years, as I’ve said publicly before, he has a considerable knack for being scrupulously accurate and rarely honest.

It’s unusual for members of the same Congressional delegation to so openly attack one another, but Yarmuth went after McConnell regarding what he regarded as McConnell misleading statements on Federal health reform. In particular, Yarmuth expressed concern that their mutual constituents were not taking advantage of the provisions of the law that are already in effect.

Tagged as: Kentucky, Obamacare, PPACA, QOTD

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Tiptoe Through the Tulips

by John W Rodat on April 10, 2012

Hat tip to the usually sober Richard Mendick, Albany County Legislator (C, R – Selkirk) for today’s quote of the day.

One of the provisions in the resolution establishing Charter Review Commission for Albany County prohibits elected officials to serve. Judging by last night’s chaotic debate over the resolution, the resolution was evidently not well written.

Mendick’s response to the ambiguity in the the clause prohibiting elected officials from serving (I’m paraphrasing here)?

That’s so vague it could apply to Albany’s Tulip Queen.

For more entertainment (or acid indigestion), head over to New York Citizen One’s An Evening With NY’s Most Dysfunctional Legislature. Now there’s a real honor!

Also take a look at Jordan Carleo-Evangelist’s story in the Times-Union.

Tagged as: Albany County, Dysfunction, Governance, QOTD

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Depends on What You Mean by “Correctly”

by John W Rodat on April 9, 2012

Later in the the day after New York’s Public Health & Health Planning Council deferred Albany County’s certificate of need application for the second time, Shawn Morse, the Chairman of the Albany County Legislature pointed to this news story and posted the following on Twitter:

…looks like one county can get it done and done correctly.

Uh. No.

That’s a private facility, not a county nursing home. Is it possible that an inability to get or disinterest in getting basic facts straight might help explain why Albany County continues to stumble? This is, after all, the Chairman of the County Legislature.

Uh. No.

Note the headline: $30 million capital project for a 240 bed facility. Contrast that with Albany’s $70 million for 200 beds. Spending more than twice as much for a smaller facility. Do you think that might help explain why Albany’s is projected to lose a lot of money?

I sat through most, if not all the Legislative Committee meetings when they discussed the proposed replacement. Their reviews were cursory. But their directions were clear and pointed: “We want the best of everything.” That was repeated over and over and over.

And that’s what the architects gave them.

At least on paper.

Tagged as: Albany County, Certificate-of-Need, Do Your Homework, Nursing Home

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There are Mandates and There are Mandates

by John W Rodat on April 9, 2012

Matthew Zeitlin points us to Byron Tau’s “delicious, concise blog post that consists of two things: Newt Gingrich’s support for the “Chilean model” for retirement saving, and then Tau pointing out that the Chilean model relies on mandating that workers devote a certain portion of their wages to private investments.”

Zeitlin goes on:

Gingrich also used to say good things about mandates for health insurance, but more importantly than the opportunistic flip-flopping is that Gingrich’s support for the Chilean model shows how potentially deadly the Republican jihad against the individual mandate could be. In a world where mandates to purchase a private sector good are either unconstitutional or just politically unpalatable, then already existing conservative ideas for reforming the welfare state could then be taken off the table. Also, if conservatives succeed in striking down the individual mandate, it might energize liberals to pursue policies like single payer health care, which are not preemptive compromises with conservatives wary of creating big, new state institutions.

We can be bemused, frustrated, exasperated at the inconsistency, hypocrisy, and poltical-power-for-its own sake negativism. And indeed, were the Supreme Court to take individual mandates off the list of Constitutionally workable policy options might indeed push single-payer to the forefront.

But it’s getting increasingly difficult, even impossible to believe that many on the right actually want to solve social and economic problems. Their patterns of behavior and rhetoric are so consistently negative and misleading that it’s hard to believe many don’t actually prefer society that is a combination of Ayn Rand and Charles Dickens.

Tagged as: Ayn Rand, Dickens, Mandates, Social Security

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The Tail of the Recession

by John W Rodat on April 6, 2012

Even though the most recent “Great Recession” is officially over and even though it appears we are slowly emerging from its aftermath, governmental finances have not escaped its gravitational pull. The recession was bad enough. Many communities, which were economically strapped to begin with, started with a small buffer and are just now running out of time.

The most recent in New York are Yonkers and Suffolk County.

Here’s the New York Times story on Yonkers and here’s the report put together for the new Mayor, Michael Spano, by Richard Ravitch and Richard Brodsky.

And here’s a story on Suffolk County.

Look around the country, you’ll see others, like Detroit.

More on these later.

Tagged as: City, County, Deficit, Suffolk County, Yonkers

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“Everything Has Changed.” Albany County Gets to Try Again, but the Bar Will be Even Higher

by John W Rodat on April 6, 2012

“Everything has changed.”

Well, New York’s Public Health & Health Planning Council did not reject the Albany County Nursing Home application. As predicted here yesterday, they deferred it. But the Committee still heard testimony both for and against the application and they discussed it at some length.

However in the vote of the Establishment and Project Review Committee, there were more votes to reject a motion to approve the application (five) than there were to approve it (four). Seven affirmative votes are required for passage of any motion. So another motion was offered, to defer action again. That was unanimously approved both in the Committee and in the full Council.

Of equal or perhaps greater importance, in a subtle but important manner, the Council raised the bar for any subsequent review. And their informal discussion of the future of Medicaid suggests that Albany should raise the bar for its own review.

This past November, the Committee asked the County to re-analyze its figures before expressing again its commitment to the project. The County did not do that and at least one member of the Committee was clearly irritated by that failure. Instead, the County re-asserted its commitment to the project while arguing over the validity of and even the source of the financial projections. State Health Department staff made a minor modification to the County’s projections based on a subsequent release of the effects of a new reimbursement methodology. This modification was less than $100,000 on a projected loss of over $26 million.

After today’s Committee discussion, the County is going to have to actually analyze the forecasts and arguably, rethink its proposal. The Committee does not merely want another expression of commitment, they want evidence that the County has actually re-thought its proposal.

This discussion carried over to the full Council after all the other Albany County folks had left. This occurred as Jason Helgerson, New York’s Medicaid Director went through his report to the Council. Relevant parts of this discussion included:

  • The potential effect of Medicaid’s movement to managed care and managed long term care for all clients, including nursing home clients. Helgerson, said, “we’re on a three year glide-path to phase out fee-for-service.” (Not discussed at this meeting but part of the State’s schedule is mandatory enrollment in managed long term care. The schedule for Albany County is December, 2013.)
  • New York’s Medicaid Reform process will now allow diversion of some nursing home savings into supportive housing programs.
  • Helgerson also mentioned in passing, some capital issues. We’ll return to those issues in a later post.

At the end of Helgerson’s presentation, one of the Council members tied the issues discussed to the debate he had just listened to regarding the Albany County Nursing Home. He mused that Albany submitted its application in late 2010 and in the 18 months since, “everything has changed.”

For those who have not been following the Medicaid changes, here are just a few of the relevant implications:

Managed care and managed long term care plans will be enrolling all client/patients, including those already in nursing homes.

  • In order to continue to serve Medicaid clients, nursing homes will have to have contractual relationships with such plans. Most nursing homes, certainly private ones will move quickly to do so and they will have to bargain. However, they will bargain in private. County facilities will be burdened by governmental contracting requirements and processes that tend to slow things down. Moreover, their contractual relationships, including prices will be public.
  • Plans will contract with nursing homes based on what works best for their clients and themselves, factors such as quality and price. This means that they can and will negotiate prices.
  • Plans will have a significant financial incentive to minimize the number of patients admitted to nursing homes and a significant financial incentive to limit the time patients spend in nursing homes. Both will reduce the need for nursing homes and both will reduce nursing home revenue
  • Nursing homes will not be able to count on getting new patients merely by working with hospital discharge planners and family members.
  • Nursing homes will not bill Medicaid directly for fee-for-service patients. They will have to bill each plan separately.

Though I am uncertain that these are the sort of issues that members of the Committee had been thinking of, certainly they are not only relevant for regulatory approval, they are relevant to the wisdom of whether Albany County should proceed. It will be one thing to “provide more information” to the Committee and Council. It will be quite another to re-think the implications of the changes in Medicaid.

On a related matter, in response to my testimony and perhaps to what I had written to the Council (essentially what’s here and summarized here), one Committee member asked the Department’s Counsel whether the County Legislature and County Executive’s “commitment” to funding the deficit could be undone at a later time. The answer was yes. As we’ve said, no legislature may permanently bind its successors. Not everyone has figured this out, but clearly some Council members have. The days are limited for allowing local tax subsidies to get over the financial feasibility requirement in the existing regulatory environment. In the coming managed care environment, providing local tax subsidies for a nursing home would also be providing local tax subsidies to a managed care plan, which was already being paid in full for all the care required by its members. That not only makes no sense. It’s ludicrous.

Tagged as: Albany County, Certificate-of-Need, Deficit, Managed Care, Managed Long Term Care, Medicaid, New York, Nursing Home, QOTD

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Three, Not Two Options Tomorrow on the Albany County Nursing Home

by John W Rodat on April 4, 2012

After constant struggles, tomorrow’s schedules for the Establishment and Project Review Committee and the New York Public Health and Health Planning Council (PHHPC) include review of the certificate of need application (CON) to build a new Albany County Nursing Home.

In response to howls of protest by the Albany County Legislative leadership that the Department of Health was dragging out the process, the review is scheduled for a special Establishment and Project Review Committee immediately before the PHHPC meeting. Here are the meeting materials.

Three things can happen

  1. The Committee and Council can, as they should, reject the application.
  2. The Committee and Council can approve the application. The rueful observation making the rounds is that if the State does approve the application and the County proceeds to borrow $70 million and build a new facility, that ultimately it will be an Albany County Financial Control Board that makes the decision to shut down ACNH. For those not paying close attention up to now, there is currently no Albany County Financial Control Board. But the County’s pattern of decision making the past few years sets the stage and taking on the additional losses from a new Nursing Home would push the County over the edge.
  3. The third option is that, once again, action on the application will be deferred.

Though I’d much prefer option one, rejection, I’d bet on three, another delay. Only this time a delay will not be because the State wants to drag the process out any further. Rather, it will be because Albany County officials have come to realize that if they push for a decision from the Committee and Council tomorrow, they’ll get one. And they won’t like it. Further delay by Albany County officials is another form of reality denial, but it won’t be unusual.

Tagged as: Albany County, New York, Nursing Home, PHHPC

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Another County Nursing Home for Sale

by John W Rodat on April 3, 2012

Now it’s Essex County. Some of the reported issues are interesting.

Tagged as: Deficit, Essex County, Nursing Home

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From Sustainability to Resilience?

by John W Rodat on April 2, 2012

Ali Hibbs points us to Is it Too Late for Sustainable Development?

On March 2, 1972, a team of experts from MIT presented a groundbreaking report called The Limits to Growth to scientists, journalists and others assembled at the Smithsonian Castle. Released days later in book form, the study was one of the first to use computer modeling to address a centuries-old question: When will the population outgrow the planet and the natural resources it has to offer?

The researchers, led by scientist Dennis Meadows, warned that if current trends in population, industrialization, pollution, food production and resource depletion continued, that dark time—marked by a plummeting population, a contracting economy and environmental collapse—would come within 100 years.

In four decades, The Limits to Growth has sold over ten million copies in more than 30 languages. The book is part of the canon of great environmental literature of the 20th century. Yet, the public has done little to avert the disaster it foretells.

The Smithsonian story is a good one, but if anything, it understates the criticism that Donella Meadows, Randers, and Dennis Meadows, Forrester and their colleagues endured. It was so fierce that even the some otherwise thoughtful, capable people rejected not only the model, but the model-building methodology, System Dynamics (More here).

The book was updated a couple years ago as “Limits to Growth, The 30 Year Update,” (Chelsea Green Publishing). For the more geeky, you can get a copy of the model and run it on your PC.

Meadows’s point that we may now be past the point where we might restructure for sustainability and now need to think in terms of “resilience” is a good one.

“Resilience” is now being discussed with considerable concrete detail, by John Robb, who among other things, is a military theorist. That’s not likely a coincidence. Robb’s focus on resilient communities is here.

Am I sounding like a “survivalist”? Perhaps a bit.

But the longer we live, the longer we can think.

I hope.

Update on 4/4/2012

To compare the original model results with what’s happened so far, take a look here.

Tagged as: Economics, Resilience, Sustainability, System Dynamics

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Doubling Down on Public Pension Investments

by John W Rodat on April 2, 2012

Pension costs going up faster than revenue? You have three choices:

  • Raise taxes, cut spending on other items and pay more into your pension reserve. Those are certainly not politically attractive options, but as often as not, these are the options for grown-ups.
  • Reduce pension liabilities by reducing pensions promised. These are politically ugly options, even when they are valid (and often they’re driven by ideology more than anything else. But whatever the motivation, the savings from these choices usually take a very long time to accrue.
  • Going for higher investment returns for your pension funds.

With respect to that last strategy, Julie Creswell, of the New York Times, starts her article, Pensions Find Riskier Funds Fail to Pay Off with the following:

Searching for higher returns to bridge looming shortfalls, public workers’ pension funds across the country are increasingly turning to riskier investments in private equity, real estate and hedge funds.

But while their fees have soared, their returns have not. In fact, a number of retirement systems that have stuck with more traditional investments in stocks and bonds have performed better in recent years, for a fraction of the fees.

Consider the contrast between the state retirement fund for Pennsylvania and the one for Georgia.

The $26.3 billion Pennsylvania State Employees’ Retirement System has more than 46 percent of its assets in riskier alternatives, including nearly 400 private equity, venture capital and real estate funds.

The system paid about $1.35 billion in management fees in the last five years and reported a five-year annualized return of 3.6 percent. That is below the 8 percent target needed to meet its financing requirements, and it also lags behind a 4.9 percent median return among public pension systems.

In Georgia, the $14.4 billion municipal retirement system, which is prohibited by state law from investing in alternative investments, has earned 5.3 percent annually over the same time frame and paid about $54 million total in fees. The two funds represent the extremes, with Pennsylvania in a group of pension systems with some of the highest percentages of investments in alternatives and Georgia in a group of 10 with some of the lowest, according to groupings of funds identified by the London-based research firm Preqin.

All too often, this kind of choice is just another form of “one-shot,” more bury-your-head-in-the-sand avoidance of the consequences of over-promising in good times and not wanting to deal with the financial consequences and political fallout.

For more background, here’s a U.S. Government Accountability Office (GAO) study, State and Local Government Pension Plans: Economic Downturn Spurs Efforts to Address Costs and Sustainability. And here’s a study by National Institute on Retirement Security (NIRS), Pensionomics 2012: Measuring the Economic Impact of DB Pension Expenditures. Here’s a commentary by Ady Dewey on both and related issues.

For you New Yorker’s here’s a story in the Democrat & Chronicle about Rochester, NY and its pension challenges. To get a concrete sense of what kind of money is involved in New York, take a look at the Chronicle’s database, under the title, Pension burden for local entities.

Tagged as: Doubling Down, Expenditures, Pensions

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