Relevant and even prescient commentary on news, politics and the economy.

Department of Education to Cancel $150 million in Student Loans

CNN, Thursday: The Department of Education will implement a rule known as the Borrower Defense to Repayment created during President Obama’s Administration and blocked by Secretary of Education Betsy DeVos in 2016. The rule or regulation grants federal loan forgiveness automatically for students who could not complete their education due to the schools shutting down before their education was completed while they were enrolled. Unfortunately students are not eligible if they moved to another school to complete their education. The later part sounds ridiculous to me as a fraud is a fraud regardless of where you end up. Anyway, it is a partial victory for a minority of students caught up in the bad student loan environment. Given the magnitude of the issue, more than 1,400 schools closed between 2013 and 2015 stranding many students with excessive loans and an incomplete education by for-profit schools. 15,000 former students are impacted by the court’s ruling and mandate to complete the forgiveness process.

The Michigan Queen of For-Profit Charter Schools who also draws on the local taxes to pay for the unaudited costs of the schools blocked this rule when she took office giving For-Profit so called colleges and mostly bankrupt a chance to challenge (why?) the ruling. 18 states and the District of Columbia took exception to Betsy and the Department of Education blocking the relief to students defrauded by colleges. The Judge ruled in October against the Department of Education, Betsy, and the For-Profit College industry. In December, The Department of Education decided to begin the debt cancellation process and not appeal. The cancellation will take 30 to 90 days to complete or 3 -6 months over all from October 2018? How quick they move.

Meanwhile Ms. DeVos through a spokesperson says: “she ‘respects the role of the court’ but still believes that many provisions in the Obama rule are ‘bad policy.’ The department will continue the work of finalizing a new rule that protects both borrowers and taxpayers.”

Ms. DeVos is promoting a new rule which would proportion the amount of education received from the school against the cost of a completed education and also compare it to earnings of those who completed their education. She conveniently forgets, no completion, no earnings at that level acquired from a complete education. Her comment justifying such actions moves from talking of “saving taxpayers money” to talking of “saving the government money.” Anything to pay down the deficit created by this administration.

Another hypocrisy, bankruptcy protection for business, Trump, and individuals but little or no protection for students.

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The High Cost of End-of-Life Healthcare – Myth?

American Journal of Public Health: “The Myth Regarding the High Cost of End-of-Life Care” December 2015, Melissa D. Aldridge, PhD, MBA and Amy S. Kelley, MD, MSHS

There has been a lot of talk and presentation on End of Life care and its high costs. “The Myth Regarding the High Cost of End of Life Care” reviews those costs and expands the topic beyond End of Life to all the population with chronic conditions and functional limitations.

FIGURE 1
Estimated overlap between the population with the highest health care costs and the population at the end of life (United States, 2011). Source. Total population and health care costs were obtained from 2011 Medical Expenditure Panel Survey data and adjusted to include the nursing home population. The distribution of total costs for the end-of-life population was estimated from Health and Retirement Study data linked to Medicare claims data, adjusted to include non-Medicare payers, and adjusted to 2011 dollars utilizing BLS Consumer Price Index.

US population distribution of health care expenditures exhibits a significant “tail” (fat tail) segment of the population with extremely high costs. The study identified 18.2 million individuals in the top 5% of total annual health care spending. These individuals incurred average annual health care expenditures of $17,500 or more per person and accounted for $976 billion in health care costs overall. Of these estimated 18.2 million individuals (5% of the population) who generated the highest annual costs, only 11% of the population (2 million individuals) are in the last year of life (Figure 1). Longitudinal analyses of spending reveal the population of 18.2 million with the highest annual health care costs can be divided into 3 broad illness trajectories:

– Individuals who have high health care costs because it is their last year of life (population at the end of life),

– Individuals who experience a significant health event during a given year but who return to stable health (population with a discrete high-cost event), and

– Individuals who persistently generate high annual health care costs owing to chronic conditions, functional limitations, or other conditions. These individuals are not in the last year of life and live for several years generating high health care expenses (population with persistent high costs).

TABLE 1
Melissa Aldridge and Amy Kelley: The identification of the appropriate target population for high-quality, cost-saving interventions is critical given the substantial variation in the size of different target populations, the costs generated by different populations, and the proportion of the target population likely to be affected by a specific intervention. Using data regarding the population with chronic conditions and functional limitations and the studies author’s estimates with respect to the population at the end of life, a hypothetical intervention and 3 potential target populations can be determined: individuals with chronic conditions and functional limitations, older adults with chronic conditions and functional limitations, and individuals at the end of life. The authors assuming the percentage of the target population affected by the intervention is 50% and the potential reduction in costs is 10%, a comparison between-intervention cost savings can be made.

Putting to rest a meme; Many proposals to reduce health care costs in the United States target the high cost of end-of-life care. Yet at the population level, the cost of caring for individuals in their last year of life accounts for only 13% of total annual health care spending. Many believe or expect the majority of decedents in the highest cost group are in the last year of life; however, the majority of individuals in the group are not in their last year of life. Specifically, there is approximately 11% of the individuals in the highest cost group in the last year of life. Efforts to improve the quality of care for this group of 2 million are warranted; however, expecting such interventions to those in the last year of life to have a large impact on overall health care costs is misguided. Not only is this group small, but the window of time for a significant impact on costs is limited by the patients’ life expectancy.

If healthcare was to target those with chronic illness and functional limitations, the impact is 4 to 5 times greater than targeting those at end of life illness (Table 1).

Reference: American Journal of Public Health: “The Myth Regarding the High Cost of End-of-Life Care” December 2015, Melissa D. Aldridge, PhD, MBA and Amy S. Kelley, MD, MSHS

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Heads Up on Out of Network ER Doctors, etc. in 2019

Last December 2017, Envision Healthcare Corporation paid an approximate $30 million to settle allegations for subsidiary EmCare doctors getting bonus payments for admitting patients to hospitals when it was not necessary.

History:

A subsidiary of Envision, EmCare is a provider of physician services to emergency departments, inpatient services for hospitals, acute care surgery, trauma and general surgery, women’s and children’s services, radiology / teleradiology programs and anesthesiology services. If you have ever been hospitalized, Radiology is one service which always seems to have someone other than the hospital billing you. One study of billing practices of 194 hospitals in which EmCare handled billing and was out-of-network; the average out-of-network billing rate was 62% higher than the national average of 26%. When EmCare’s billing was compared to that of a competitor TeamHealth, the latter’s billing in other hospitals was less and there was a smaller increase in out-of-network service billing.

If you remember a while back, Rusty and I would discuss the ongoing consolidation of hospitals, clinics, and pharmacies. The reasoning behind the consolidation was to have enough market clout when negotiating with insurance and Medicare. Having a larger presence and being able to set pricing nationally and regionally is a big factor in the rising cost of healthcare.

Envision is the biggest player in staffing ERs and Anesthesiology departments with 6% of the $41 billion emergency department and hospital-based physician staffing and 7% of the $20 billion anesthesiologist staffing. Two-thirds of all Emergency Departments (ED) do some type of outsourcing even if it is short term.

Present:

United Healthcare insurance is pitted against Envision’s practice of over pricing for it’s 25,000 emergency doctors, anesthesiologists and other hospital-based clinicians charge to patients and pass through. The disagreement over pricing and how it is paid for by insurance as billed by 3rd party providers will spill over into patients being billed more frequently for higher prices not accepted by insurance.

UnitedHealthcare’s 27 million privately insured patients could face expensive and unexpected doctor bills as of 2019 if Envision doctors become out-of-network for United Healthcare. According to the research group NORC at the University of Chicago more than half of Americans have received an unexpected medical bill. In another study by economists from the Federal Trade Commission in 2017, 1 in 5 emergency-room admissions resulted in a surprise out-of-network bill.

While the ACA increased the numbers of people insured, approximately 20% of people have problems paying medical bills largely because healthcare is still rising faster than most other costs and income. One source of increased costs has been the billing from out-of-network doctors billing patients utilizing in-network facilities such as hospital Emergency Departments. NEJM recently published a Yale Study by Zack Cooper, Ph.D., and Fiona Scott Morton, Ph.D. (Out-of-Network Emergency-Physician Bills — An Unwelcome Surprise) reported on the increased occurrence of surprise-billing for out-of-network services.

Patients typically do not choose to use out-of-networks doctors or facilities. They will choose an in-network facility and expect an in-network doctor(s) to care for them. Healthcare insurance expects its buyers to use in-network services or pay a penalty for not doing so. When one arrives at an in-network Emergency Department, they expect to be cared for by an in-network doctor. I have yet to hear a doctor on duty offering up he or she is not employed by the hospital but instead by a third party. The patient is not aware of in-network or out-of-network issues until they get the bill. The market place is not working for the customer and the doctor still gets the business regardless of the price and there is no competition from other facilities or in negotiated pricing due to having insurance. The third party employer knows this issue as well as the hospital. The only fool in the room is the patient waiting to be cared for and be used. Insurance will pay a portion of the cost or negotiate with the hospital for a price. The third party company employing the doctor may yet charge the patient for the balance of the costs associated with the doctor and at a higher percentage than normal. The uncovered and unexpected higher cost is the rub.

The authors of the Yale study analyzed the claim’s data of a large commercial insurance company insuring tens of millions of people, focusing on ED visits for people under 65 years of age, occurring between January 2014 and September 2015, and at hospitals registered with the American Hospital Association. They chose hospitals with over 500 ED visits and identified the Hospital Referral Region (HRR). Utilizing the breakdown criteria yielded “more than 2.2 million ED visits Broken in 294 of the 306 HRRs, covering all 50 states, and capturing more than $7 billion in spending.” The map of the United States (above) is a pictorial representation of the data.

Summarizing their finding and estimating cost impact, Yale: “of the 99.35% of ED visits occurring at in-network facilities, 22% involved out-of-network physicians. The greater than 1 in five ratio (22%) masks a significant geographic variation in surprise-billing occurrence to patients among HRRs. 89% and 62% of surprise-billing rates occur in McAllen, Texas and St. Petersburg, Florida as compared to Boulder, Colorado and South Bend, Indiana with the surprise-billing rate there near zero.”

Envision questions the validity of the study and blames United Healthcare for not paying the billing and claiming insurance is the problem. Insurance coverage is a problem; but, it is not of the same magnitude when one starts to look at the increase in costs of $1 trillion from 1996 to 2013 of which 50% was due solely to price increases.

Additional Costs?:

And yes there are “potential” extra costs for patients who are treated by an out-of-network ER physician or any out-of-network service. In one hospital I was in, Radiology was out of network as well as one surgeon. Both negotiated a rate with United Healthcare. Then too, this was written into the ESI policy. I had no choice in doing in-network as I came through the ER each time and was too ill to decide and/or go to another hospital.

In a Kaiser/New York Times Survey: Among the insured with problem medical bills, a quarter (26%) said they received unexpected claim denials and about a third (32%) say they received care from an out-of-network provider that their insurance wouldn’t cover. The out-of-network charges were a surprise for a large majority: 69 percent were unaware that the provider was not in their plan’s network when they received the care.

The same NEJM/Yale study which had looked ay frequency of surprise Out-of-Network Emergency-Physician Bills also looked at the costs of the bill and what was left over for patients to pay. On average, in-network emergency-physician claims were paid at 297% of Medicare rates. For reference in the Yale study, the authors used other medical disciplines as a benchmark. Orthopedists are paid at 178.6% of Medicare rates for knee replacements and internists are paid at 158.5% of Medicare rates for routine office visits. The Yale study showed out of-network emergency physicians charged an average of 798% of Medicare rates resulting in a calculated, potential, and additional cost for patients. The difference between the out-of-network emergency physician charge and 297% of the Medicare rate for the same services in the patient’s location could be billed for an average balance of $622.55 (unless their insurer paid the difference). It is also important to note that the potential balance bills can be extremely high; the maximum potential balance bill faced by a patient included in our data set was $19,603.

The suggested solution from the study was for states to require hospitals to sell a bundled ED care package that includes both facility and professional fees. In practice, that would mean that the hospital would negotiate prices for physician services with insurers and then apply these negotiated rates for certain designated specialties. The hospital would then be the buyer of physician services and the seller of combined physician and facility services. If physicians considered the hospital’s payment rates too low, they could choose to work at another hospital.

The hospital, doctors, and the insurance companies would compete for the best package to service the patients utilizing them. In the end, this is a stopgap measure until healthcare costs can be brought under control in a better manner.

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Michigan’s Lame Duck Republican Legislature

Michigan Electablog “Lame Duck Republican Majority at work in Michigan.”

Accrued Sick Time: This was one of the proposals not allowed to go to the ballot. Why? Because if it passed and it would have, Repubs would have needed 2/3rds vote to overturn it. Instead they passed it before November 6th and now they are altering it by taking coverage responsibility from over 93% of Michigan’s firms. The threshold for exemption from the law was raised from 5 in the proposal to 50 in proposed legislation.

Out of 173,309 businesses in Michigan, 162,003 firms have fewer than 50 employees.

The amount of required leave will be cut in half from 72 to 36 hours. It will also take hundreds of hours of work to accrue a few days of leave as employees must work 40 hours to earn an hour of leave instead of the 30 established in the citizens-backed initiative.

One Fair Wage: Michigan Senate Republicans voted to gut the minimum wage increase.

An amendment to the minimum wage increase passed earlier this year to deny voters a chance to vote on the citizens-backed initiative as a Proposal. Instead Senate Bill 1171 will add eight years to the deadline for increasing the minimum wage to $12, from 2022 to 2030. Tipped workers will be hurt the most with their pay capped at $4 an hour.

Unions: In an effort to stop union leaders from being able to take paid leave to do their jobs as union stewards, etc. Republican Senator Marty Knollenberg introduced Senate Bill 796. Democratic Senator Vincent Gregory had this to say about the bill:

“Bills like this only serve one purpose, they are just another step in the systematic destruction of unions and workers’ rights. Union leave time arrangements are an efficient, cost-effective way to quickly resolve employee disputes, disciplinary issues and other matters, and they help not just workers but also management.”

Puppy Mills: State legislators are working to protect puppy mills by ensuring they can continue to sell puppies to Michigan pet stores. House Bills 5916 and 5917 narrowly passed the Michigan House of Representatives last Thursday. It now goes to the Senate.

Ohio based Petland is the backer of these bills. Over 280 localities across the country have passed laws to prohibit the sale of puppies in pet stores, in order to protect animals and consumers. Petland has gone state-to-state lobbying lawmakers to shield the corporation from local regulation. In the past two years, they have failed in Florida, Georgia, Tennessee, and Illinois.

Recycling aluminum and PET. District 17 House Representative Joseph Bellino:The bill removes aluminum and PET plastic away from community-based recycling systems. Rerouting these materials into local recycling programs would provide the boost recyclers need to sustain their programs and expand access to even more communities.”

What he fails to say is that ALL of the returned containers are now recycled. If the 1976 “Bottle Bill” is repealed, many of those returned containers would end up in landfills.

Wetlands: Michigan State Republican Senator – Escanaba Tom Casperson proposed Senate Bill 1211 redefining which wetlands require state Department of Environmental Quality permission to modify or fill and doubling the size threshold at which regulation is required, from 5 acres to 10 acres.

Senate Bill 1211 would remove 70,000 wetlands statewide from protection totaling about a half-million acres. In most Michigan counties, it would include about half of their remaining wetlands. These wetlands, lakes and streams can be filled, dredged, and constructed on without a permit according to Tom Zimnicki, agriculture policy director for the Michigan Environmental Council.

Mackinaw Tunnel: Lame Duck Republican Gov. Rick Snyder struck a tunnel agreement in October with the Canadian oil transport giant. The company would pay to build a $350-million tunnel beneath the straits that would encase a replacement pipeline to prevent a spill and allow the existing line to be decommissioned. The state is also expected to kick in $4.5 million in infrastructure costs for the tunnel.

To bypass environmental approvals and accelerate required land condemnation, Snyder wants the tunnel overseen and owned by the Mackinac Bridge Authority.

• Finally, Staff Allocations: Newly elected Democratic Senator Jeff Erwin revealed; Democratic members of the state Senate are given $129,700 plus two staff benefit packages (for two staff members.) Republican senators, in sharp contrast, are given $212,700 plus four staff benefit packages (for FOUR staff members). Democratic Senators get HALF of the staff and 61% of the financial resources of Republican Senators to run their offices.

These allocations are hold overs from the budgets created by outgoing Senate Majority Leader Arlan Meekhof. According to Irwin, legislative staff salaries range from $25,000-$75,000 with some exceptions. “As a minority member, I have learned, we can buy benefit packages from the Senate business office and squeeze a third staff member into that budget as long as the salaries are less than the total,” he told me.

I guess we will have to pound them into the ground again.

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North Carolina and Wisconsin

Persuasive Case of Voter Fraud and Republicans Do Not Care North Carolina: The first public indication things were not right in Bladen County occurred weeks ago. The North Carolina State Board of Elections did not certify the results of the closely watched 9th Congressional District race. Republican Mark Harris appeared to defeat Democrat Dan McCready by just 905 votes.

Atlantic Staff Writer: David A. Graham “A congressional race in North Carolina suggests that the likeliest threats to the integrity of elections are not the ones GOP lawmakers are addressing.”

Documents released by the NCSBE on Tuesday revealed a political-consulting firm contractor for the Harris campaign had requested almost 600 absentee ballots in Bladen County. According to reporters and in sworn affidavits, Dowless had a team of workers going around collecting absentee ballots from voters, a violation of state law. The affidavits also allege, the Harris campaign workers helped to complete ballots for voters, another violation of the law.

Both Bladen and Robeson Counties had an unusually high number of unreturned absentee ballots indicating they were collected by someone and never turned in. It is unclear to the extent whether these workers were aware they were breaking the law. Harris’s campaign says he was unaware of any illegal activity. The Harris campaign and Red Dome consulting firm, Red Dome received NCSBE subpoenas.

Dowless was hired to get the vote out, and he got results. More absentee votes came in by mail from Bladen County than any other county in the 9th district. Bladen was also the only county in the district where Harris beat McCready in mail-in votes. even though the district’s party registration leans Democratic.

Republicans Stymie Democrats in After the Election Wisconsin: In the early-morning hours Wednesday, Republicans in majority control of the Wisconsin legislature carried out their plan to neuter the Democrats who were elected to office in November.

In party-line votes, Republicans passed legislation to limit the ability of the incoming governor (Tony Evers) and the new attorney general, (Josh Kaul), to deliver on their campaign promises of protecting the ACA, expanding infrastructure spending, and overhauling the state’s economic-development agency. The Republican legislature scaled back early voting in Wisconsin. They shifted power from the state’s executive branch to be administered by Democrats in January back to the Republican legislature.

In Lame Duck session, Republicans did all this over the protests of demonstrators who swarmed Madison and those of Democrats. Republicans did little to dispute what Democrats called a power grab.

In both North Carolina and Wisconsin, let alone Georgia and Florida; the battle over voting and aftermath election practices is still going on today. More on Michigan.

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A Letter to Michigan Governor Rick Snyder

Governor Rick Snyder:

I would ask you to block any legislation from the Michigan Lame Duck Legislature which would overturn the will of the constituents as determined through the November 6th vote or endorsed by petition and thereby blocked from being placed on the ballot due to deliberate legislative action passing it in the Michigan House and Senate pre-November 6th. As you already know proposals passed through elections require a two-thirds legislative vote to overturn them or alter.

It bothers me to have to write to you and urge you to block something which will subvert the will of your constituents in favor of a political party and which should also be very apparent to our State Senators and Representatives. I should not have to pen this email to you as they should know by now which is the more important of the two choices . . . we the constituents who they “should represent” in the Michigan State House/Senate or a gaggle of special interests such as big business, PACs funded by the Koch Brothers etc., or the 1% of the Household Taxpayers making greater than $500,000 annually in income. It was far greater than 51% of those who voted favorably in this last election for the proposals. It was those who also signed petitions to place other proposals on the ballot which were deliberately blocked and passed by legislative action in the State Legislature so they could later be overturned or changed in Lame Duck session. Do not allow the Legislature to:

– Change the intent of the Michigan One Fair Wage initiative by delaying and diminishing an increase in the minimum wage, something which came about as a result of a constituent Initiative.

– Change the intent of the Michigan Time To Care initiative by delaying and decreasing the amount of a worker’s earned sick leave, something which came about as a result of a constituent Initiative.

– Weaken the authority of the Michigan State Attorney General to bring suit or interfere with the Michigan Courts.

– Weaken the authority of the Secretary of State in monitoring elections and associated practices within Michigan.

– Block the new, popularly elected, State of Michigan Governor by diminishing the authority of the position making it less than what it is today under yourself.

I am adding my voice to the tens of thousands in Michigan calling upon you to act responsibility in representing us the constituents of your state and veto any and all changes to the recent proposals passed through a vote and those deliberately passed through legislative action (to be overturned after the election) before the November 6th election and endorsed by petition.

Thank you for your time and consideration.

Regards,

run75441

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Increase in Uninsured Children

I get the alerts from Georgetown University Center for Children and Families weekly. The news much of the time is a reflection of the number of attacks on families and children who have lesser means to provide for healthcare themselves and depend upon Medicaid, ACA, and CHIPS for care. Since the election of Trump, McConnell and Ryan have been strutting around like the cocks on the walk demonstrating their machismo as they hold women, children and families hostage. Tough guys both and it is easy to threaten women and children.

For the first time in a decade, the number of uninsured children rose in the US. It is not much of a surprise to me as Republicans made it miserable for many in states which did not expand Medicaid, held CHIPS hostage, and threatened those applied to become citizens with denial if they used the nation’s healthcare.

Some Stats:

The Georgetown University Center for Children and Families:

– An estimated 276,000 more children were uninsured in 2017 than in 2016
– Three-quarters of the children who lost coverage between 2016 and 2017 live in non-expansion Medicaid coverage states for parents and low-income adults. The uninsured rates for children increased at almost triple the rate in non-expansion states compared to Medicaid expansion states.
– Nine states experienced statistically significant increases in their rate of uninsured children (SD, UT, TX, GA, SC, FL, OH, TN, MA).
– Texas is #1 again. Texas has the largest share of children without health coverage with more than one in five uninsured children in the U.S. residing in the state.
– States with larger American Indian/ Alaska Native populations tend to have higher uninsured rates for children than the national average.

Some History:

The funding for CHIP expired September 2017 and Republicans and Trump were playing cat and mouse with Democrats to extend it while they looked for ways to repeal the ACA or weaken it. As Joan Aker the Executive Director of the Center for Children and Families stated;

“The majority of uninsured children are already eligible for Medicaid or CHIP but are not currently enrolled. The name of the game here is to make sure that families are aware that their child has a path to coverage and that these kids get enrolled and stay enrolled.”

2017 was tumultuous for families dependent on Medicaid, CHIPs, and the ACA. Added to this was Trump’s hostility towards immigrant families. 25% of the children living in the United States have a parent who is an immigrant. For “mixed status” families, the fear of interacting with the government deters them from enrolling their children in government sponsored health coverage.

Conclusion:

Again, Joan Akers of the Center for Children and Families: “The nation is going backwards on insuring kids and it is likely to get worse.”

If we can get the Democrats in the House off their butt and start to represent “their constituents” as determined by the founding fathers who designed the House to represent the population, we may be able to put in place the foundation for future healthcare gains. Instead, we have the House Representatives playing the secret ballot game for House Speaker with a promise of a Dean Wormer double-secret ballot come January.

Under Trump, Number Of Uninsured Kids Rose For First Time This Decade

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Cindy Hyde-Smith Says She Never Lost Faith in Mississippi

Some humor, sarcasm, and disappointment.

JACKSON, MISSISSIPPI (The Borowitz Report)—Celebrating her election victory on Tuesday night, U.S. Senator Cindy Hyde-Smith said that, despite predictions that her state was ready to turn the page on its shameful past, “I never lost faith in Mississippi’s racists.”

“For weeks, we’ve been hearing national pundits say that Mississippi was ready to enter the twenty-first century,” Hyde-Smith told a crowd of supporters at her victory rally. “Tonight, with your help, we proved them wrong.”

Hyde-Smith said that, despite the media’s unearthing of a cavalcade of embarrassing comments and actions from her past, “I never doubted that, at the end of the day, the people of Mississippi would listen to the racist voices in their heads.”

Choking back tears, Hyde-Smith thanked her supporters for honoring Mississippi’s storied heritage of hatred and cruelty.

“Mississippi voters do not want to tear down the relics of our Confederate past,” she said. “As such a relic, I am eternally grateful.”

Exit polls showed that Hyde-Smith performed extremely well with voters who described themselves as bigots, and dominated among those who could not correctly spell “Mississippi.”

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Aetna and CVS Merge

Nearly one year after agreeing to merge in a bid to reinvent healthcare for Americans, CVS Health and Aetna sealed the deal on Wednesday, bringing together one of the nation’s largest pharmacy chains and one of the largest health insurers.

CVS Health President and CEO Larry Merlo: “Today marks the start of a new day in health care and a transformative moment for our company and our industry. By delivering the combined capabilities of our two leading organizations, we will transform the consumer health experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care.”

Despite warnings from provider groups, patient advocates, economists, and antitrust experts of the combination harming competition and patients, the $69 billion merger scored approval from U.S. Justice Department antitrust enforcers and insurance regulators in 28 states. On Monday and surprisingly for me those regulators who always appear to be going after someone of some business, New York regulators became the last to sign off on the deal.

This is another example of the healthcare enterprise, big business, etc. getting ready for government sponsored single payer, Medicare-for-all, public option, etc. (whatever you wish to call it) having the power to negotiate pricing/costs of delivered healthcare if legislators actually decide to have such power. Otherwise, it becomes a simple cost shift to the government which will result in higher taxes and uncontrolled costs for healthcare which can be had for far less cost in our equivalent European neighbors countries. Other bloggers and many readers here and other places are used to calling out for these popular memes without definition.

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CSX Slowly being Disassembled by Mantle Ridge Hedge Fund

CSX connects most major U.S. cities east of the Mississippi River. Since 2017, the railroad has laid off 6,000 employees, cut back on capital spending, and slashed the number of trains it runs and discontinued hundreds of the routes it serves.

Together CSX and Union Pacific serve major U.S. cities west of the Mississippi River and together they discontinued service on 197 out of 301 cross-country routes that the two rail giants partnered on in September 2017.

The results of these actions leaves shippers who want to send goods across the country no “direct” means to send a container by rail from Houston to Baltimore. Instead, CSX will take the container as far as Chambersburg, Penn. And the rest of the way will be by a container trucker going the remaining 77 miles to Baltimore. The same exists if the shipper uses Norfolk Southern. Norfolk will take the container only as far as Harrisburg, Penn. And the container will be transferred to a container trucker for the balance of the 76 miles to Baltimore.

Why would CSX owners do this when the need still exists? The cost cutting brings short-term profits and a soaring stock price. Between the beginning of 2017 and the end of this year’s third quarter, CSX labor expenses declined by 18% and the value of its stock rose by 106 percent. Rather than increase the price on its route, CSX can maximize profits and minimize capital and maintenance costs by cutting service in the aggregate. The cut in Labor cost is just an add on when compared to the cuts in Overhead costs.

Side Note: So much for common carrier and public utility laws. “The term utilities can refer to the set of services provided by these organizations consumed by the public: Coal, electricity, natural gas, water, sewage, telephone, and transportation. Broadband internet services (both fixed-line and mobile) are increasingly being included within the definition” while a “common carrier offers its services to the general public under license or authority provided by a regulatory body. The regulatory body has usually been granted ‘ministerial authority’ by the legislation that created it. The regulatory body may create, interpret, and enforce its regulations upon the common carrier (subject to judicial review) with independence and finality, as long as it acts within the bounds of the enabling legislation.”

E. Hunter Harrison is the man who figured out how-to pump-up profits by cutting service. Over the course of his career at the Illinois Central, Canadian National, and Canadian Pacific Railways; Harrison implemented his trademark program: “precision scheduled railroading.” Besides cutting capital (engines, cars, etc.) Overhead (maintenance of equipment, facilities rail beds, costs associated with Labor, etc.) and Labor costs; precision scheduled railroading means less service, fewer and longer trains, fewer routes, and ignoring some major cities.

Side Note: This is the same type of cuts in service many politicians and competitors of the USPS are pushing for today. Railways like the postal service are utilities and are vital to the community. The purpose of both mail and railroads was to provide a service as a public utility. Railroads being granted exclusivity for certain routes and governed by common carrier law. Someone is purposely asleep at the switch and abating the destruction of infrastructure.

Why would CSX cut service drastically? Hedge fund Mantle Ridge and founder and CEO Paul Hilal. Mantle Ridge had and still has only one investment, an initial $1.2 billion stake in CSX stock purchased in late 2016. The $1.2 billion is now worth nearly $3 billion as of the last quarter. In January 2017 with Mantle Ridge’s investment, Hilal pushed CSX to hire his partner Harrison and implement precision schedule railroading (nothing to do with schedules and more to do with providing service).

CSX agreed to Hilal’s demands. Shareholders salivated at the thought of Harrison boosting CSX’s profits right into their pockets and showed large support for Harrison’s leadership at CSX. Harrison saying that “shareholders took a much more active role than I’ve ever seen before. They wanted change.”

Of course, they wanted change at CSX for short term profits or rent taking. They will leave CSX a shadow of its formal self. The loss of the necessary infrastructure promoting the transportation of goods in the US will be born by its citizens in increased costs and impinge upon national security.

On a similar note and action . . . October 15, 2018 Sears faced a deadline for payment of $134 million on its debt. It didn’t have the money, so it filed for protection from its creditors. Eddie Lampert — the largest shareholder in the company, with nearly half its shares — stepped down as CEO. Another corporate pirate who will strip the assets of the company and leave Sears a shell of its former self.

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