HOPSITALS: Universal stopped from saving its people by FEMA

We’ve by now heard of the real heroics performed by HCA to get people out of Tulane Hospitals (and the city owned hospital next door). Yesterday Bob Herbert’s NY Times Op-Ed highlights a case I missed where another for-profit corporate parent Universal tried to help one of its hospitals — Methodist — and incredibly FEMA basically requisitioned all their equipment and supplies. None of them got to the hospital. Herbert writes:

Bruce Gilbert, Universal’s general counsel, told me yesterday, "Those supplies were in fact taken from us by FEMA, and we were unable to get them to the hospital. We then determined that it would be better to send our supplies, food and water to Lafayette [130 miles from New Orleans] and have our helicopters fly them from Lafayette to the hospital."

Significant relief began to reach the hospital on Thursday, and by Friday evening everyone had been removed from the ruined premises. They had endured the agonies of the damned, and for all practical purposes had been abandoned by government at all levels.

I can’t find any news story backing this up, other than confirmation from Universal that Methodist is indeed closed, but while Herbert may be a woolly liberal opposed to everything that Bush stands for, it’s unlikely that a for-profit hospital company is making this up just to upset the Administration.

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19 replies »

  1. //Gadfly – Canada has its own constitution//
    I know – I was being facetious… 🙂
    But, yay Canada. I wish I was Canadian for oh so many reasons…

  2. //evil or incompetent become judges//
    From experience, I’d like to point out another evil is that access to lawyers are another market. If you’re case isn’t going to make enough money to be worth their while, lawyers pass you over. No one compensates people for the time spent trying to find a lawyer or the trauma of having to repeat the story of a wrong done over and over (to be capped by yet another rejection from a lawyer). And on top of that there is a social assumption that people will be able to get a lawyer if their case is “worthy” – therefore any delay makes the case look weaker. Court deadlines go by while a person is looking for a lawyer, and this can’t be fixed because a person serves as their own lawyer by default while they are waiting around. And even your friends get judgmental that you aren’t working hard enough to find a lawyer and accuse you of not wanting one if you get tired.
    In this case it doesn’t take an evil judge to commit an injustice. All a judge has to do is follow the law and sanction all the procedural errors of the layman who is untrained in law to make sure evil prospers.

  3. //their unconstitutional single payer system//
    The Canadians have adopted the U.S. Constitution?

  4. Thanks Tom. It was basically my point. A functioning private sector insurance system depends on a competent government. (California had problems when it’s insurance commissioner was a crook, for example.)
    Even Adam Smith said that for a market economy to function, you needed a system of laws, and that requires courts which are an essential government function, and when bad people who are either evil or incompetent become judges, it matters. Notwithstanding the existence of arbitration, it really wouldn’t do to have people shop around for a different answer when they’ve welched on a contract. Now, in a whole host of areas like retail broker suits, the game may be stacked against you as an individual, because of Congress’s stated preference for binding arbitration, but you ought to know that when you enter into the relationship or sign a contract.
    If, on the other hand, an insurance company from whom you bought an individual policy chooses to reneg on its commitments, you can, at least in theory, sue them to enforce the provision. Without that threat, a lot of companies would take your money and run. In theory, you could pick a new provider, but you would be out all of your premiums, and if you were sick, nobody would insure you.
    Now if you get your insurance from your employer, especially if the plan is self-funded under ERISA, you don’t have a contract with the HMO or PPO; your employer does. So the only think that you’re entitled to if the company wrongly decides that something isn’t covered is the cost of that treatment, because Scalia has determined that under the terms of these employee benefits trusts, that’s the basic meaning of remedial relief. Scholars of trust law who have examined this, e.g., Langebein of Yale, dispute that this is an accurate reading of centuries of trust law, but it is a firmly established precedent and we’re stuck with it. (For a long time vefore the 90’s almost no claims were denied. So this never came up.)
    Any decent single payer system would have better remedies when clearly medically necessary treatments were denied. And don’t forget that your employer could now write a plan that says “X is not covered even if medically necessary and even though it’s not experimental” and you’d be up shit’s creek. I’d also bet that there would be decent administrative law provisions for appeals whereas now, you’re just stuck battling the insurance company bureaucracy and there is no PUBLIC record of what other stuff they tried and couldn’t get away with. I think that I would prefer the transparency of a single-payer system with decent administrative hearings.

  5. Tom,
    Why can’t people understand what you are thinking? You are correct that Socialism was really bad for the Soviets. It’s a 20th Century thing.
    I just love it when Canadians discuss HSAs. When we get done reforming the US health care system let’s bee-line it to Canada and help them reform their unconstitutional single payer system with tax free HSAs.

  6. Trapier, there’s a difference between an incompetent administration and one that holds its own government in contempt. Our government has strong institutions, a highly capable bureaucracy (sure, laugh, but it’s true), and a citizenry trained in democratic decisionmaking. Contrast the U.S. with, say, Russia, where those conditions are not present, and you see how well off we are. Not surprisingly, the private sector is a mess in Russia. A working public sector is essential to having a thriving private sector. I think that’s Abby’s point.
    But if you declare government to be the enemy and advocate the election of people who view government as the enemy, and they get into office and make 16 different kinds of stinky messes, and you then turn around and hold them up as proof that government can’t be trusted with big responsibilities, then I am reminded of a little story. Boy kills his mother and father in cold blood. Goes to court and pleads for mercy on the grounds that he’s an orphan. Stop me if you’ve heard it.

  7. Trapier,
    Insurance is a pretty regulated market and depends on competent government. I’m not talking about coverage requirements as much as basic reserve rules etc. If your insurer goes out of business after you’ve paid them money, you’re kind of in trouble.

  8. Good point Mr. Hillard, but isn’t it the point? The Clinton administration did believe in a strong government and Bush did fill FEMA with cronies. This is the classic fault with dependence upon the state: we are always one election, or one executive appointment away from incompetence or corruption. And that’s too dangerous, considering the large number of appointments a universal system would require, to risk with something so important as healthcare.
    Yet the moment a private company begins to waiver there will be hundreds of others, faster, smarter, younger, and more willing to please the public, eager to perpetuate the progression towards something better.

  9. Abby,
    You only talk with Libertarians? My wife calls herself a Reagan Republican but I’m the new kind of Republican, called Bush Republicans.
    When the public figures out about the tax free HSA and the Ownership Society and how President Bush slipped it by Ted Kennedy and Hillary before they could even demonize it, everybody will want to put President Bush on Mt. Rushmore. Then the Bush Republican ranks will swell about the time of the next Presidential election.
    Ignoring the HSA never makes it go away, ask Senator Kennedy. Shoot, the President got AARP to endorse the HSA passage and they hate it. I talked to a 62 year old couple this week that had AARP health insurance quotes. It’s expensive and you should see what coverage AARP is selling. I could never sell that stuff. People get sick you know. AARP hates private accounts in Social Security too. With the HSA AARP hates the 100% payment on covered expenses that HSA law requires in my opinion. AARP is in business to sell insurance is another opinion of mine.
    Besides, Libertarians support the tax free HSA too. Everybody does except those letharic Democrats who are completely out of ideas. The whole party needs Viagra.

  10. gadfly,
    Sorry gadfly, to this very day I can honestly say, I’ve never made a penny on an HSA, ha ha, or an MSA either, darn it. You don’t see anything that says there is a commission on the HSA. What you see is commissions on all the different health insurance. Trust me, if I didn’t make some money on the low cost HSA health insurance I would have to jerk the advertising.
    I’m sure you understand gadfly I can’t pay all the expenses and then not make anything, come on. I know this MBA agent that charges people $250 just to get a quote. We don’t do that, we give quotes for free. You just have to know who to trust gadfly and you can trust me. Because I do all that additional tax free HSA paperwork and let people go tax free for the rest of their lives for nothing. I guess I could tell people go find your own HSA at the bank and let them do all the paperwork. But this HSA is free and pays 6% interest so I do all the extra effort because we are the best. Besides I do a better job of explaining it for free than some high priced banker who goes home at 3PM. Also, this way we can say it’s one stop shopping. You know how much consumers like that.

  11. gadfly, let’s just agree to ignore Ron’s comments. I thought that Tom Hilliard’s answer was in response to Trapier’s comments. I’m perfectly willing to discuss issues with libertarians like Trapier and Eric Novack, but we can just ignore Ron.

  12. Ron – I just saw an ad for Fortis which says it offers “strong commissions and bonuses” for its agents, including HSAs. Some of the bonuses seem to be coming from the insurance plan you place the HSA with. Still want to claim you aren’t making money off pushing HSAs?

  13. Your right Tom,
    It was President Clinton and Hillary that greatly enhanced government control over health insurance in America. Remember when President Clinton said, “Most Americans have their health insurance from their employer and we should build on that system.” He was wrong and look at the explosion in cost for employer health insurance.
    You can say that the Governor of Florida was helped during last year’s hurricanes because it was an election year, but that’s just too goofy. What you mean to say is that Florida’s Governor was a leader and Governor Blanco is not. This is well documented where this goofy post is not. See the difference?

  14. I love it when libertarians cite FEMA to show how inept government is. A President who believed in the power of government to help the public – fellow by the name of Clinton – appointed a seasoned professional to run the government’s disaster agency and gave him the support to do an outstanding job. That president was replaced by one who viewed the disaster agency as a patronage dumping ground, perhaps because his administration had no interest in providing disaster relief except in election years.
    Sounds to me like a case study in the consequences of political philosophy.

  15. Governor Jeb Bush said, “We don’t get 25,000 people together without food and water in Florida.”
    Katrina just proves we need a Hurricane President in 2008. I hope Karl Rove and Barbara Bush let Jeb run.

  16. Trapier, you are so correct. Katrina was a fiasco. Let’s put FEMA in charge of your Medicare. Better yet, let Democratic Governor Blanco be in charge of your Medicare or the NO Mayor.
    In Most of America’s Newspapers Today: Workers average family health insurance is $10,880 per year for family coverage in 2005. The average worker paid $2,713 and the employer paid $8,167. The average single coverage was $4,024 with $610 paid by the employee and $3,413 paid by the employer. Of course this will all inflate in a couple of months with 2006 prices.
    Real costs for individual HSA Qualifying health insurance in America is $1,961.88 for a 30 year old couple and 2 children in Lansing, Michigan. If this family moves to Tampa Bay, Florida the cost will double to $3,969.24 per year. I understand why Governor Jeb Bush doesn’t say, “Move your business to Michigan and enjoy the lowest health insurance rates in America.” I also understand that Governor Granholm and the Democrats fight the HSA by never mentioning them, good luck.
    By the time the 2006 election hits millions of Americans will have gone tax free with an HSA and it will be hard for Governor Granholm to avoid them. It will be a totally different world than today. HSA knowledge is exploding as we speak.
    Also, the new HSA product with restricts maximums on out patient expenses is only $95 a month in Lansing for the above family. The consumer has new choices to go tax free. I salute the group health plans as they try and survive their coming cat-a-clysmic collapse, you tried your best. If I’m ever on Fox News and need someone to pretend to argue for the present government controlled and employer based health care system, I will call you Matthew.
    Read’em and weep.

  17. HCA and Universal (for-profit corporations) come out looking competent and heroic, while FEMA (government bureaucracy) appears to be a huge bungler and now even a thief.
    When libertarians argue against a universal, government health care system it isn’t because we are heartless. It’s because we fear this flavor a thousand times over.