Friday, February 29, 2008

Can Anyone even begin to figure this out?

Labor of Love
By Mike Vogel - 11/1/2005

Among the predictable trappings in the Coral Gables office of Stephen Dresnick -- family photos, a picture with Jeb Bush, a few mementos -- are a pair of bright reddish-orange boxing gloves that a friend gave him.

They were a prescient gift for a doctor who's ended up with a big fight on his hands. Sterling Healthcare, which supplies emergency room docs to hospitals, has survived the bankruptcies of two parent companies and is back in the hands of Dresnick, its founder. "I built the company. I sold it. It didn't quite work out the way I had hoped. Very few people get a second chance. I consider myself very, very fortunate to, first, get my company back and, secondly, to have a second go at creating value."

But to rebuild Sterling -- and rejoin the club of major doctor-management companies making money in Florida -- Dresnick has had to brawl with another doctor-entrepreneur who lost ownership of it but refuses to throw in the towel.

Dresnick, 54, is a veteran of Florida's medical entrepreneur scene. A Miami native, he graduated Phi Beta Kappa in premed from the University of North Carolina at Chapel Hill, graduated from the University of Miami med school and completed his residency at UCLA in 1980 en route to becoming one of the first board-certified emergency specialists. He founded the emergency medicine doctor training residency program at Orlando Regional Medical Center.

Dr. Stephen Dresnick founded Sterling in 1987 to help hospitals staff and manage emergency rooms. He sold the successful company in 1996, but the company that bought it foundered.He retains a certain ER, straight-to-the-point manner when talking about his field of expertise, whether it's finances or medical practice. For example, he says flatly, "In our experience, the No. 1 reason for malpractice suits is malpractice. After 20 to 30 years, we know not to do certain things that the young people coming out of residency still have to learn."

Tired of commuting from Miami to Orlando, Dresnick founded Sterling in Coral Gables in 1987 to help hospitals staff and manage their ERs -- for a profit. He recruited doctors, paid them, scheduled them and handled their billings. He did well enough at clinical outsourcing to take Sterling public in 1994.

A similar, separate company to handle billing, collections, cash management and payroll processing for 26 orthodontics practices flopped, but Sterling continued to prosper. From 1990 to 1995, it grew from $15.7 million in revenue to $115.7 million and from break-even to a $2.8-million profit. Sterling numbered 1,000 doctors, 101 ERs and 1.3 million patients annually. In 1996, Dresnick was named Ernst & Young's Florida Healthcare Entrepreneur of the Year.

That same year, San Diego-based FPA Medical Management, a fast-growing managed care company, bought Sterling for roughly double its stock price. Dresnick says he thought FPA's "value proposition was faulty from the very beginning. Nobody really had had a lot of experience in understanding some of these things." But, he asks, "how do you turn down multiples like that for your shareholders?" Dresnick went along in the $220-million stock acquisition as vice chairman of the FPA board. And he continued to run Sterling, getting $1 million to extend his contract and making, on paper,
$20 million in stock gains.

"Today I think managed care is nothing what we thought it would be," Dresnick says. "We thought it was going to take over the world, and it hasn't."

FPA certainly didn't. Fueled by investors, firms like FPA bid up prices -- and overpaid -- for practices and management companies. The hoped-for streamlining and cost-controls didn't materialize. "They had spent too much for the physician practices, and it wasn't enough value added," says longtime healthcare analyst Robert Wasserman, research director at Sky Capital in Boca Raton.

Dresnick, whose stock was worth $78.5 million at the peak, watched it sink. The stock he held on to eventually became worthless. "You live by the sword, you die by the sword," he says. "I think greed and avarice did them in." FPA's chief financial officer was convicted of fraud but, Dresnick says, FPA's biggest problem was that it didn't have the structure and experience to handle its own growth.

As FPA began to fail in 1998, Dresnick was named chief executive and led the firm's decision to file for bankruptcy -- the first by a major physician practice-management firm. The only viable business FPA could sell to pay its debts was Sterling. The best offer, valued at $110 million in cash and assumed liabilities, came from Coastal Physician Group, a Durham, N.C., company run by Steven Scott.

Butting heads
Like Dresnick, Scott was North Carolina-educated (Duke University) and a doctor (Ob-Gyn) who had seen opportunity in ERs. He founded Coastal in 1977 and moved beyond ERs into HMOs.

Dresnick and Scott were at odds once the deal was done. Dresnick says Scott told him he wanted him to stay on to run Sterling, then tried to lock him out of his office after the sale closed. "That's the first time I got an inkling of who the real Steve Scott was," Dresnick says.

Dr. Steven Scott bought Dresnick's company, Sterling, when its parent company ran into financial trouble. From the beginning, he and Dresnick were at odds.Scott says he never told Dresnick he would stay on and gave him four weeks to clear out. It would not be the last time they sparred over the facts. "It was a very sensitive time," Scott says. "We were trying to be compassionate."

Dresnick, bound by a three-year non-compete agreement, stayed out of the ER staffing ring and spent a lot of time fishing and learning about technology. He also started a medical billings company. Meanwhile, Scott looked to Sterling to make his money-losing Coastal profitable. In ER contracts, they were similar in size -- 151 contracts at Coastal to Sterling's 129. Scott assumed he could cut Sterling's overhead -- eliminating its executive staff, for one -- and get more production from the doctors.

He was right about the staff, wrong about the doctors. The company, renamed PhyAmerica Physician Group, later claimed that Sterling doctors, accustomed to a flat hourly wage with Sterling, resisted being moved to a productivity-pay system. The Sterling acquisition proved as unprofitable as the rest of PhyAmerica. (Dresnick says he's baffled by PhyAmerica's reported history. He says Sterling always was profitable.)

To keep afloat, PhyAmerica sold its receivables to Dublin, Ohio-based National Century Financial Enterprises. But the money from the sales didn't cover PhyAmerica's cash needs, so PhyAmerica also sold receivables for business it had performed, but not billed for, and for business it hoped to do -- to the tune of $186.5 million by 2001. The company lost $328.2 million over five years, investors fled and Scott took the company private in 2002, buying the shares he didn't own for 15 cents apiece.

National Century failed in November 2002, and PhyAmerica followed it into bankruptcy court. A PhyAmerica creditors attorney, Joel Sher of Baltimore, says creditors will recover just "pennies on the dollar."

Some of those pennies were to come from the sale of Sterling. Scott wanted it back. Dresnick did too.

Dresnick says the entrepreneur in him drove the decision: "We do what we do because we love what we do." After a 17-hour court proceeding in 2003, Dresnick, backed by a New York investment firm, won the decision with a bid valued at $90.5 million. He says he expected to rebuild the company "in what I thought was a relatively painless way, but it didn't work out that way."

Indeed, Dresnick took a punch right away -- a low blow, as he sees it. One of Sterling's biggest profit centers was its three contracts with the Fort Lauderdale-based North Broward Hospital District, a government body that runs four major hospitals and styles itself one of the five largest public healthcare systems in the nation. The contracts represented $8 million in annual profit, according to Dres-nick. He says that Scott, although bound by a non-compete agreement, set up new corporate entities, cut a deal with the district to replace Sterling on the contracts and lured Sterling's doctors away with promises to indemnify them from legal action for breaking their non-competes with Sterling. "We've always competed, and up until this time we always competed on a fair basis," Dresnick says.

The deal created a tempest in Broward. Local newspapers noted that Scott is a prominent contributor to Republican causes and that Gov. Jeb Bush had appointed all the district board members. Also, a Scott attorney, Bill Scherer in Fort Lauderdale, happened to be the district's general counsel. J. Luis Rodriguez, the board chairman at the time, now says Scherer had an "obvious" conflict of interest and that Scott shouldn't have the contract.

Scherer's firm lost the district's business in August. Scherer's spokesman, Kevin Boyd, says Scherer had no conflict because he didn't make a recommendation on the contracts and because he didn't represent Scott or the district -- Scherer brought in another firm for the district -- on the contracts.

A bankruptcy court judge found Scott in contempt of an injunction barring him from meeting with Sterling employees and interfering with its contracts. Lawyers for PhyAmerica's creditors sued Scott, his companies and the district in bankruptcy court in Baltimore; Dresnick sued earlier this year in Broward Circuit Court. Scott "and I certainly don't share the same value system," Dresnick says. "I don't think Steve Scott believes the rules are made for him."

Scott denies doing wrong. One of his attorneys, Scott Baena, says the district made it clear before Dresnick won Sterling back that it wouldn't extend Sterling's contract and that the contempt order dealt not with the lost contracts but with meetings Scott had with a few Sterling doctors.

With his baby back, Dresnick moved to get it healthy. With the North Broward chunk of Sterling's revenue and profit gone, Dresnick quickly laid off 200 Sterling employees in its former North Carolina headquarters. Learning from FPA and Coastal, he plans to avoid debt and intimates a public offering may come. He has expanded Sterling into pediatricians, hospitalists -- doctors who specialize in hospital care -- radiologists and anesthesiologists. He projects $275 million to $300 million in revenue this year and says the company became profitable in the second half of last year. It has nearly 2,000 doctors, 215 ERs and a way to go before it can contend against clinical outsourcing heavyweight Team Health, based in Knoxville, Tenn., which posted $1.6 billion in revenue last year and has 450 hospital contracts nationally and contracts to run 23 ERs in Florida.

A selling point in winning new contracts will be bringing technology to a field where much is still tracked on grease boards. Dresnick says Sterling is developing software that enables doctors to write prescriptions and discharge instructions, keep medical records and provide correct insurance-coded billing information to billing offices -- all electronically.

The software also provides guidance from lessons learned from two decades of malpractice complaints. For instance, ER doctors seeing a 50-year-old man complaining of back pain will be instructed to check for a ruptured aortic aneurysm.

"I've always been enamored with technology," says Dresnick. "That's what turns me on. I can sit here all day long and think of these things, but if I don't have an organization to implement them, they're just thoughts."

Why not start anew rather than rebuild Sterling? "I'm too old. Once you run a big company, it's very hard to start all over. The things you did when you were in your 30s and 40s aren't so easy anymore -- and you don't have to."

Clinical Outsourcing / Practice Management

PainCare Holdings, Orlando, a 310-employee pain management company, acquires practices and sells services to independent practices. Under CEO and co-founder Randy Lubinsky, it has grown quickly since its start in 2000. The company expects to show a $14-million to $14.5-million profit this year on $59 million to $60 million in revenue.

Pediatrix Medical Group, Sunrise, specializing in neonatal care and high-risk pregnancies, was founded in 1979 as a two-doctor practice in Fort Lauderdale. Under co-founder and CEO Roger J. Medel, an M.D. and MBA, it has grown to staff more than 220 neonatal intensive care units nationally and has 800 doctors (625 neonatal care) in 32 states and Puerto Rico. Describing itself as a "national group practice," the company also does research and claims the world's largest neonatal database. Last year, it turned a $98.3-million profit on $619.6 million in revenue.

AmeriPath, Palm Beach Gardens, a pathology company, last year had $1.5 million in profit on $507.3 million in revenue. Owned by New York private equity investment firm Welsh, Carson, Anderson & Stowe, AmeriPath has 400 pathologists, 15 regional labs, 36 satellite labs and performs in-patient diagnostic and medical director services at more than 200 hospitals.


© Copyright 2008 Florida Trend All rights Reserved.

Thursday, February 28, 2008

Where is the fraud prevention in all of this?

Below is an article, THE MEDICARE 45% TRIGGER: WHAT IT IS AND WHY IT MATTERS, that I excerpted from the Center for Medicare Advocacy, WEEKLY (2/21/08) ALERT, ( EVERYONE NEEDS TO READ IT because the article describes a methodology by which an evil and incompetent administration can destroy a social insurance system that has aided millions of Americans.

The Medicare Modernization Act of 2003 (MMA), best known for creating the Medicare Prescription Drug program, or Part D, included a little-discussed provision that could dramatically alter the entire Medicare program. Referred to colloquially as “the 45% Trigger,” the provision declares that if the Medicare Trustees’ find, for two years in a row, that Medicare spending from general revenues (as contrasted with payroll taxes and premiums) is projected to exceed 45% of total Medicare spending for the current or following six years, it shall be treated as a “funding warning.” Such a finding triggers a statutory requirement that the President must submit legislation to Congress to address the funding situation.

The conditions established by the law have now occurred, and the President has sent proposed legislation to Congress. The law dictates elaborate special procedures for Congressional consideration of such legislation. Under the procedures, the President’s proposal, or an alternative proposed by a member of Congress to address the same issues, is likely to be considered with a very short turnaround.

As anticipated, the President’s proposals weaken benefits and other beneficiary protections. The proposals are on top of the President’s Fiscal Year 2009 budget proposals that include $183 billion in cuts from Medicare over a five-year period. Specifically, proposals offered by the President would:

Introduce principles of “value-based purchasing” of health care into the Medicare program (see our Weekly Alert at;
Increase the use of income-based premiums for Medicare Part D (as already mandated for Medicare Part B by the MMA)(see our Weekly Alert at
Restrict patient access to courts to bring medical malpractice claims;

A future Weekly Alert will examine the President’s legislative proposals in more detail.

The MMA’s 45% Trigger is entirely arbitrary, and no such limit exists for any other governmental activity. It forces Medicare to rely primarily on payroll taxes and premiums rather than on the income taxes that produce general revenues, placing a greater burden on lower-income individuals than on middle- and upper-income individuals. Spending from general revenues for Medicare is no different from similar spending for education, housing, defense, or veterans’ programs. All of these areas are 100% financed with general revenues. The real issues concerning Medicare’s future are how much healthcare costs increase and how the Medicare program is designed. The latter issue will be largely determined by the political will of Congress and the American people: in other words, whether health insurance for older people and people with disabilities through Medicare is viewed as a priority by Americans, and, if so, how it should be delivered.

We have reached the 45% Trigger in large part because the prescription drug benefit was funded only by general revenues (except for premiums for Part D plans). That means that the billions of dollars in new expenses that fund Medicare Part D are applied toward the 45% limit. Generally, payroll taxes that go into a trust fund pay for Part A Medicare services, such as hospitalization and skilled nursing care. With respect to physician visits, medical equipment, and prescription drugs provided under Parts B and D, premiums pay for about 25% of the costs while general revenues pay for about 75%.[1] Over time, Congress has shifted Medicare usage from Part A services to services under Parts B and D. For example, hospital and skilled nursing facility services, paid for mostly from the Medicare Trust Fund dollars, accounted for 53% of Medicare costs in 1993, 45% of costs in 2003 and 34% of costs in 2006.[2] Prescription drug costs, not shown as a separate category in either 1993 or 2003, accounted for a full 12% of all Medicare spending in 2006, the first year of prescription drug coverage under Part D.[3]

Another reason we have reached the 45% Trigger is that Medicare costs, like private health care costs, have risen in recent years at a rate that is significantly higher than the consumer price index. Wages do not rise as quickly as health care costs, so that payroll tax revenues, which fund the Part A Trust Fund, do not rise as much as overall program costs. The Medicare payroll tax has not been increased in over 15 years, and thus far any ideas to do so have been ruled “off the table”.

The President’s proposed legislation does nothing to address one dramatic cost of the Medicare program: payments to private “Medicare Advantage” plans which exceed those for a similar beneficiary in traditional Medicare by an average of 13%, and as much as 19%, and which cost every Medicare beneficiary an extra $2/month in Part B premiums. The overpayments are estimated to cost $150 billion over 10 years[4]. This puts an undue burden on both trust fund and general revenue spending.

The issue of Medicare costs needs to be addressed by Congress and the President in ways that recognize that Medicare operates in the context of a larger health care system throughout which spending is rising as a percentage of Gross Domestic Product. Some Medicare experts believe that part of the solution will involve increased taxes to generate needed revenues. The 45% Trigger, however, dictates that needed revenues cannot come from the federal income tax that distributes the tax burden more fairly between rich and poor than other kinds of taxes. Instead, the Trigger requires that Medicare revenues come from increased payroll taxes or premiums - both of which place a greater burden on lower income people - from increased beneficiary cost-sharing, or from reductions or other savings in payments to providers. The 45% Trigger creates a significant obstacle to consideration of a wider array of options to improve and stabilize Medicare.

Tuesday, February 26, 2008

NCFE....Are we really getting the WHOLE truth and nothing but the truth?

We also do not hear the candidates talk about the MASSIVE, MASSIVE, FRAUD in our health care system.

Has anyone heard about the trial that started in February,2008 with NCFE?
This is considered to be larger than the ENRON SCAM? Yet why are we not hearing anything about it?

I think not and I will tell you why.....or at least give you a few hints..

Look back at the Welfare Reform passed during the Clinton years! This is where THIS Fraud began!

Then look at the LARGEST CORPORATIONS in our Healthcare system, back in 1996,1997, 1998 that Needed to DUMP their facilities that were not going to be allowed to RAPE the Medicare Medicaid system with their reduced profits after the Medicare Reform Bill was passed.

This is very complicated but simple once the FACTS are knownn. It is just getting to the facts that require a bit of thought. Remember, we are dealing with very manipulative "CORPORATE" Executives.

Saturday, February 23, 2008 MORE FRAUD I MIGHT HAVE MISSED

Star Prosecution Witness Testifies In National Century Fraud Case
February 22, 2008 in Health Fraud, Securities Fraud by Dave Westheimer | No comments

In the third week of the healthcare finance fraud trial of five former executives of National Century Financial Enterprises (earlier), the prosecution’s star witness testified on Thursday that the deception by management began years before the company collapsed in 2002, resulting in a $1.9 billion loss to investors. Sherry Gibson, National Century’s former Executive VP for compliance, testified that the complex scheme to falsify records and lie to investors and auditors dated back to 1995 and involved all the firm’s principals and senior executives. Gibson pleaded guilty in 2003 to one count of conspiracy to commit securities fraud and agreed to cooperate with prosecutors; she was sentenced to 48 months in prison in June 2004. The trial continues before US District Judge Algenon Marbley in Columbus, Ohio. Bizjournals story here.

New Jersey Brothers Sentenced In Medicaid Fraud
February 11, 2008 in Health Fraud by Dave Westheimer | No comments

Two brothers from the Vineland, New Jersey area were sentenced to prison on Friday by US District Judge Freda Wolfson in Trenton for submitting $5.5 million in false claims to Medicaid for medical services never rendered at their two adult day care centers. Ernest Galletta, vice president of Horizon National Healthcare LLC, was sentenced to 55 months in prison. His brother George Galletta, the owner of Horizon, was sentenced to six months in prison and six months home confinement; he received a lesser sentence because his brother had hidden the fraud from him for more than two years. They had each pleaded guilty on November 2, 2007 to single count informations of conspiracy to commit healthcare fraud. AP here, DOJ Press Release (.pdf) here.

National Century Health Finance Fraud Trial Opens Today
February 4, 2008 in Health Fraud, Securities Fraud by Dave Westheimer | No comments

The trial of five former executives of National Century Financial Enterprises is scheduled to begin today in Columbus, Ohio before US District Judge Algenon Marbley. Co-founders Rebecca Parrett and Donald Ayers and former executives Randolph Speer, Roger Faulkenberry and James Dierker face multiple charges of conspiracy, wire fraud, securities fraud and money laundering. The privately held National Century was once the largest source of health care provider financing in the US. It collapsed six years ago and investors, including institutions and government bodies, lost $1.9 billion in what prosecutors allege was a massive and complex fraud scheme. Four former employees who have pleaded guilty are expected to testify. Former CEO and co-founder Lance Poulsen is scheduled for trial on August 4, 2008 but he first faces a March 7 trial for witness tampering. The Columbus Dispatch story is here; AP here.

Vanmoor Convicted In Fake Cancer Cure Case
January 25, 2008 in Health Fraud by Dave Westheimer | No comments

Arthur Vanmoor: Mensa member, inventor and patent holder; notorious “Big Pimpin’ Pappy” of the escort service business in Broward County, Florida until he was convicted on state racketeering and prostitution charges (2004 story here). Now Vanmoor has been convicted by jury trial on 19 federal counts including mail fraud, wire fraud, Food Drug & Cosmetic Act violations and conspiracy; the March 2005 indictments arose from his operation of websites offering fake cures for cancer, migraine, flu and other diseases or conditions. Vanmoor’s websites falsely claimed to be selling FDA approved drugs and contained fake articles written by fake doctors; evidence at the trial showed that Vanmoor continued to operate the websites in violation of a December 2005 restraining order. Sentencing has not been scheduled; the DOJ Press Release is here.

Attorney Sentenced To 78 Months In Fen-Phen Fraud
January 22, 2008 in Health Fraud by Dave Westheimer | No comments

Attorney Robert Arledge of Vicksburg, Mississippi on Thursday was sentenced to 78 months in prison and ordered to pay $5.8 million in restitution by US District Judge David Bramlette in Jackson. Arledge was convicted by jury trial in October on 7 counts including conspiracy, wire fraud and mail fraud in a scheme to defraud Wyeth Pharmaceutical by knowingly allowing clients to submit false Fen-Phen claims for $250,000 each to a settlement fund. More than 20 claimants were charged in the scheme; most have been sentenced. WAPT has the AP story here.

Vytorin: Two Sources of Fraud?
January 16, 2008 in Health Fraud, Insider Trading by Dave Westheimer | No comments

Merck/Schering-Plough’s Vytorin is a combination of Merck’s Zocor and Schering’s Zetia. Zocor’s patent has expired and Zetia has never been proven effective in improving clinical outcomes. The pharmaceutical joint venture company has been under fire for repeatedly refusing to release the results of clinical trials which examined the effectiveness of Vytorin over Zocor alone. The trials ended in early 2006 . After announced delays in November 2006 and April 2007, the company issued a press release in November 2007 (here) in which it attempted to change the endpoints of the study. After a storm of protest, the company released the results Monday (here): Vytorin is no more effective than Zocor alone. A Bloomberg story here has further details, including calls by two Congressmen for further investigation of the ad campaign for Vytorin. Sandy Szwarc at Junkfood Science has analyzed the developing story here and previously here.

Now it has been reported (Brandweek NRx via Junkfood Science) that Schering President Carrie Smith Cox sold 900,000 shares of company stock worth $28 million last spring, after the clinical trials ended but long before the results were released.

Whatever comes next, we can only hope for the demise of the obnoxious and misleading Vytorin commercials.

Thursday, February 21, 2008

More peanuts thrwon your way.......where are the BIG NUTS?

February 20, 2008

A Murrysville man was sentenced in federal court last week for his role in a scheme to commit health insurance fraud.

Brandon E. Burns, 31, of 4955 Bulltown Road, was sentenced to three years probation and ordered to pay $64,637 in restitution after being convicted of health care fraud.

Burns was accused of helping a chiropractor submit approximately $64,000 in false insurance claims to Highmark Blue Cross/Blue Shield.

For his role in the scam, Burns received about $17,000, prosecutors said.

Jailed Kansas Doctor in Pain Pill Storm......just give em a pill!!

Jailed Kansas Doctor in Pain Pill Storm


Associated Press Writer

3:59 AM EST, February 20, 2008


Schneider Medical Clinic was once open seven days a week for as many as 11 hours a day. Patients, scheduled 10 minutes apart, often waited hours for an appointment.

Today, its doors are shuttered and the couple who ran the clinic are in jail, charged with allegedly operating a “pill mill” linked to 56 overdose deaths.

But Dr. Stephen Schneider and his wife, nurse Linda Schneider, are getting some high-powered help: An advocacy group for chronic pain patients has taken over their criminal defense.

The New Mexico-based Pain Relief Network hopes to mount what it vows will be a landmark federal case over prescription painkillers.

“It has all the elements we want: an innocent doctor, destroyed vulnerable patients, a wonderful legal team with heart, a family that really hangs together — right in the Heartland of America. I couldn’t ask for more,” said Siobhan Reynolds, the network’s president.

Reynolds likened the federal indictment against the Schneiders to other high-profile prosecutions of physicians nationwide that it contends have spooked doctors from treating chronic pain patients.

The Schneiders were indicted in December on federal charges including conspiracy, unlawful distribution of a controlled substance resulting in death, health care fraud, illegal money transactions and money laundering. They have vehemently proclaimed their innocence.

The indictment links their clinic to the accidental overdose deaths of 56 patients. The government charged the doctor and his wife with directly causing four deaths and contributing to the deaths of 11 other patients cited in the indictment.

The indictment alleges that the doctor and his assistants wrote unlawful prescriptions for narcotic painkillers, muscle relaxers and other drugs. It states that Schneider, 54, was known as “The Pill Man” and “The Candy Man.”

The doctor’s 49-year-old wife helped run the $1 million, state-of-the-art clinic built by the couple in 2002 in this suburban community of 10,000 people.

Reynolds contends that autopsies of chronic pain patients who are treated with high doses of painkillers commonly blame overdoses when other medical causes actually caused the death.

The Associated Press reviewed 31 autopsies of clinic patients whose deaths were tied to drug overdoses and found that in 16 of those cases other causes of death also were listed. Another two deaths were ruled suicides by the coroner.

The government’s prosecution of the Kansas doctor and his wife is set against the backdrop of other unrelated celebrity deaths, including the accidental drug overdose death of actor Heath Ledger and Anna Nicole Smith.

Family and patients defended the beleaguered Kansas doctor and his wife. Pain patients signed petitions and held a rally in support of the doctor.

Pat Hatcher, Linda’s sister, said the clinic had four medical providers and contends that Schneider did not even treat all the patients whose overdose deaths are alleged by the government. She said the doctor and his wife saw people nobody else wanted to treat because those patients were uninsured.

Prescription drug abuse is widespread across the country. The number of emergency room visits nationwide linked to drug abuse has increased more than 160 percent since 1995, government statistics show.

Painkiller retail sales surged 150 percent in volume nationwide in 2001 in the wake of unprecedented marketing campaigns and an aging, aching population. But experts say high-profile prosecutions of pain management specialists has since spooked medical providers from writing pain medication.

The National Association of Attorneys General, alarmed by stepped up enforcement, sent a letter to the Drug Enforcement Administration in 2005 saying they were exerting “a chilling effect” on the willingness of physicians to treat pain patients. It was signed by the attorneys general of 29 states.

The shuttering of Schneider’s clinic has been felt by some of his former patients. Eight held a news conference Tuesday to complain that medical providers have repeatedly refused to treat them out of concern that they could be subjects of similar prosecution.

Roy Ralstin suffers from an enlarged heart and has been out of his high blood pressure medication for a week. He said he can’t find anyone to treat him or his wife, Jennifer, who suffers from rheumatoid arthritis.

The couple have called 133 doctor offices, all of whom refused to see them after finding out they were Schneider’s patients, Jennifer Ralstin said.

“They are taking away our freedom to be pain free,” Jennifer Ralstin said.

Monday, February 18, 2008

National Century investors lost more than $1.9 billion

Former National Century exec grilled about what he said, when he said it
Monday, February 11, 2008 9:38 PM
By Jodi Andes

The truthfulness of testimony by a former executive of National Century Financial Enterprises, considered a key witness for the prosecution, became an issue today in a trial of five other former company leaders accused of contributing to the downfall of the company.

Attorneys for some of those defendants talked today in U.S. District Court of seeking a mistrial.

National Century investors lost more than $1.9 billion when the company, which loaned money to health-care companies, collapsed in 2002. More than 275 health-care companies failed as a result, affecting thousands of workers and patients. The case is considered the largest case of fraud involving a private company.

Jon A. Beacham testified that he didn’t try to defraud investors while he was National Century’s vice president of securitizations. The division he led cultivated investors so that the company could loan money to health-care providers, such as hospitals and nursing homes, for a fee.

Beacham already has pleaded guilty to fraud and conspiracy to commit fraud, and is awaiting sentencing.

He and three other former executive, who also have admitted guilt, are key witnesses against Rebecca S. Parrett, Donald H. Ayers, Roger S. Faulkenberry, Randolph H. Speer and James E. Dierker. The five are charged with securities fraud, conspiracy and other counts. Each has pleaded not guilty.

On Friday, Beacham testified that the five executives on trial misled investors about the security of their investments.
That, though, is not what Beacham told FBI agents after his plea last year. At that time, Beacham never alleged the executives did anything wrong, defense attorneys said, pointing to a transcription of the interview.

And today, as defense attorney Javier Armengau questioned Beacham about the facts surrounding his own case, Beacham, on each point, said he did nothing wrong.

Assistant U.S. attorneys have agreed to recommend that Beacham’s prison term be cut in half as long as he proves to be of “substantial assistance.”

Four other defense attorneys took turns dissecting Beacham’s testimony and actions on the stand.

Beacham testified that he didn’t think he did anything wrong until 2006. From 2002 to 2006, he was occupied with his family, including the birth of his fourth child, he said.

However in 2006, a consultant hired by his attorney told him that securities law has a “strict liability,” which could hold him accountable if he knew investors were misled.

It was then, Beacham said, he decided to plead guilty.

By day’s end, three defense attorneys told District Judge Algenon L. Marbley they were looking into having Beacham’s testimony removed from the record or asking for a mistrial.

“Based upon his testimony that he didn’t commit a crime, how could there be a conspiracy,” asked attorney Fred Benton.

Marbley seemed to disagree.
“(Beacham) said he knowing gave false information and that he later learned that was criminal activity,” Marbley said.

financially unstable were evident six years before it collapsed,

National Century's troubles were evident years ago, jury told
Thursday, February 7, 2008 9:01 PM
By Jodi Andes

View a timeline and story archive
Signs that the National Century Financial Enterprises company was financially unstable were evident six years before it collapsed, the government’s first witness in a fraud trial for its top executives testified today.

William Parizek served as National Century’s director of corporate financing from October 1996 until he resigned in January 1997. He said he moved his family from Kansas to Dublin after already knowing a lot about the company.

His former employer, Koch Industries, asked him to investigate National Century before the oil and gas company agreed to invest in the Dublin-based health-care financing company.

But less than a month after working at National Century, Parizek said he realized investors, such as his former company, had been duped.

“I felt (National Century) would be unable to survive for more than two or three months” because they were so shaky financially, Parizek testified.

National Century loaned more to small hospitals, clinics and nursing homes than the company could repay, he said.

Parizek said he disagreed with National Century’s practices so strongly that he quit without having another job. That meant giving up a $75,000 annual salary that had a potential $3 million bonus if he raised $50 million in equity capital for the company.

Former National Century executives Rebecca S. Parrett, Donald H. Ayers, James E. Dierker, Roger S. Faulkenberry and Randolph H. Speer are on trial on charges of fraud, securities fraud, wire fraud and money laundering in connection with the company’s collapse, which eventually led to the loss of nearly $2 billion by investors.

Parizek’s testimony was cut short this afternoon, after defense attorney Brian Dickerson’s questioning revealed Parizek still had handwritten notes warning company executives about the financial problems.

Prosecutors, though, had not given defense attorneys copies of the notes.

Federal Judge Algenon L. Marbley had the court make copies of Parizek’s 34 pages of notes and gave them to defense attorneys.

Without stating what prosecutors are required to do, Marbley said he expects copies to be given out a day in advance and warned prosecutors not to let it happen again.

The testimony came after a morning in which defense and prosecuting attorneys painted vastly different pictures in opening statements as to the reasons behind the company’s demise.

“This is a case about promises made, promises broken and a massive coverup,” assistant U.S. attorney Doug Squires said.The company’s financial problems stemmed in large part from loaning hundreds of millions more to health-care providers than what the companies qualified for, Squires said.

National Century did have problems with communication among its divisions, but there were always rating agencies, auditors, banks and investors watching everything they did, Dickerson said.

“If it’s a coverup, there’s a lot of people covering up a lot of things,” he said.
Other defense attorneys agreed that the downfall wasn’t the result of any criminal activity at all.

“There is a vast difference between bad business decisions and criminal activity,” James Ervin Jr. said. “This case is about business decisions, not illegal conduct.”

National Century started in 1991 with less than 10 employees and grew to 357. It loaned money to more than 2,000 health-care providers, helping them to stay in business.

“You cannot be the backbone to so many health-care providers across the country if you are not making good decisions,” defense attorney Javier Armengau said.

Before the trial started yesterday, one juror asked to be dismissed.

Marbley said he excused a man because of work and family conflicts. The jury is now made up of eight women and four men, with three women serving as alternates.

$3 billion fraud through a business that bought accounts receivables from health-care providers

The fraud trial of executives at what was once the nation's largest health-care finance company opened Thursday in Columbus with competing claims of what caused the company's multibillion-dollar collapse.

U.S. District Court Judge Algenon L. Marbley began the National Century Financial Enterprises Inc. trial by instructing the 15 seated jurors how they should decide the fates of the five former company executives.

The government is alleging the five executives and two others who will be tried later, including National Century CEO Lance Poulsen, masterminded a $3 billion fraud through a business that bought accounts receivables from health-care providers at a discount and packaged the accounts as bond funds, which were sold to raise money to buy more accounts. The government has accused the executives of diverting $2.84 billion for their benefit.

The Dublin company collapsed into bankruptcy in 2002. The executives were later indicted on conspiracy, securities, fraud and money laundering charges. Poulsen also faces claims he tried to bribe a government witness.

"This case is about promises made, promises broken and a massive cover-up," said Assistant U.S. Attorney Douglas W. Squires, who began the day's opening arguments.

Over the course of 25 minutes, Squires told the jury how National Century's business plan was supposed to work, then he alluded to payments the company allegedly made to health-care providers in which National Century's owners and founders - Poulsen, Donald H. Ayers and Rebecca S. Parrett - had financial interests.

In the end, Squires said the case is a simple one of fraud and cover-up.

Defense lawyers, meanwhile, disputed the government's claims, stressing the complexity of everything surrounding National Century.

Brian Dickerson, attorney for the 71-year-old Ayers, said he expects the government will give jurors just a fraction of the story during the trial.

Dickerson told jurors that evidence will show Ayers, the company's chief operating officer, sunk $2 million of his money into National Century, a company he said helped hospitals and health-care facilities stay in business.

Fraud Fraud Fraud

According to some reports and various leaks, the Dubai International Capital bid to take Liverpool FC over is gathering pace. It does seem that DIC have been dealing separately with both Tom Hicks and George Gillett. Hicks is seen as the man wishing to make money at any cost, now the only one of the owners who actually speaks about the club. Gillett is considered to be the man who yes, wanted to make money, but not necessarily at any cost. The pair are now said to be completely at odds with each other, Foster Gillett resigning from the position he held overseeing the running of the club from England. Tom Hicks and his son Tommy Junior are now the names who seem to be dealing with activity at the club, usually through third-party PR people.

There is a chance that DIC will buy from one owner before the other, and there were some claims that Gillett will get out for a much smaller figure than Hicks – but Hicks is digging his heels in, almost in revenge at the way his deceit has been exposed.

I found an old article from Harpers magazine, first published in around 2000, written by Joe Conason, called “Fortune’s Child”. This was before current US president George W Bush got into power and the article asks some interesting questions, raising some important issues.

I’ve included extracts below, cutting the original text down slightly, but there’s still a lot to read. Grab yourself a coffee and look just how much suspicion was being pointed at Hicks eight years ago.

A link to the full version will follow…

Merck to Pay $670 Million for Medicaid Fraud

The drugmaker failed to pay the appropriate rebates to Medicaid and other goverment health care programs, and also paid kickbacks to doctors and hospitals to induce them to prescribe various meds. The allegations were brought in two separate lawsuits filed by whistleblowers under the False Claims Act. Merck has also agreed to a Corporate Integrity Agreement, which means good behavior is now required for the next five years.“Not only is the combined recovery in these two cases one of the largest healthcare fraud settlements ever achieved by the Justice Department,” says Attorney General Michael Mukasey, in a statement, “it reflects our continuing effort to hold drug companies accountable for devising pricing schemes that deliberately seek to deny federal health care programs the same lower prices for drugs that are available to other commercial customers.” Here is the statement from Merck, which signaled this deal two months ago by discussing a $670 million charge to cover investigations into Medicaid marketing….read rest of story

Texas Investment Management

His past dealings...

The University of Texas Investment Management, scandal.

Tom Hicks began raiding the University's public funds after the University refused to invest in his dental company in the early 90's, that dental supply company that went bankrupt three years later.

The investment decisions of UTIMCO were made largely in secret, though subsequent research has uncovered some of the areas to which the funds were directed.

1996 UTIMCO invested = $20 million in a deal involving the Bass family, which became extraordinarily rich with the help of Richard Rainwater, who had joined Bush in the Texas Rangers deal. These are only a handful of the deals organized by Hicks, which by no means benefited only Bush’s friends—they also benefited Hicks.

"Almost a third of the $1.7 billion has been committed to funds run by Hicks' business associates or friends. These questions have remained unanswered and Hicks has been unwilling to answer questions about his activities on the publics behalf. "
- The Houston Chronicle

Bad deals made by Hicks Muse Tate between 2000-2004.

* Hicks' telecom investments ended very ugly. All five of his businesses he invested in, would end up having to file for bankruptcy. With one collapsing in only six months after receiving a infusion of $230 million infusion from Hicks' firm.

* Then there was the meltdown of the Argentine economy, which hit three Hicks' firms investments - two of which are in default, the other in bankruptcy.

* His you have him firm's $500 million investment in Regal Cinema that hit the wall when the company declared bankruptcy.

The Texas Ranger deal.

Bush and co. made $15 million from the Texas Rangers deal.

Hicks bought the Texas Rangers from Bush and co. in 1998. The price was $250 million, three times what Bush and co. had paid for it.

In the deal Hicks gets free stadium - payed for with tax payers money, it come out taxpayers paided for the stadium built for the Stars aswell.

Hicks attempts to tap in to the lucrative South American market

1999 - Tom Hicks' buy out firm, announced a deal in April giving it the marketing and licensing rights for Corinthians and later Cruzeiro.

They were immediately promised these things:

Huge transfer funding; and New stadiums.

They got neither, Hicks lost $500 million in two years andto this day any people it was case of pure money laundering.

"Hicks waited too long to reinvest the profits, it hurt Corinthians' performance and irritated fans used to a better playing team"

"He warns that the strategy may cut into future team profits if Hicks, Muse doesn't get busy building the team up again."
- Carlos Roberto de Mello, Corinthians' vice president.

The sale of ConAgra's beef operations - Swift and Company.

The transaction, valued at about $1.4 billion, took place in August, when a 54 percent ownership of Swift passed to an investor group led by Hicks, Muse, Tate & Furst, Inc. (HMTF) and Gillet in the background.

Seeing as it was Hicks, Muse, Tate & Furst, Inc. - or the now HM Capital heading up this transactions, with Gillet in the passenger seat. It's safe to say it was as leveraged buyout.

The Management Corporation of Vail Associates - a company George Gillet brought in 1984, took over the managerial reins.

It seems George Gillet is in debt to Tom Hicks, without the track record of Hicks' firm - Hicks, Muse, Tate & Furst, Inc - when it came to leveraged buyouts, George Gillet wouldn't had the opportunity to be part owner of Swift.

Since 2002 Swift and company have generated sales of $7.73 billion dollars.

Business men like Hicks are absolute devotion to making money, it often conflicts with real values and it complicates things for people involved. This attitude comes from the fact that money to someone like Hicks is a measurement of power, a proof of worth that has a recognized and accepted meaning to others who share his believes - not matter how deluded they are.

The amount of money he has made for himself though lies is amazing, the amounts he has lost are too, he lost 500 million and had to declare bankrupt a few years ago, although lucky for him he is a king of the leveraged buyout - so having capital isn't so important. Having bank will to lend it to you is but if your friends with Bush no bank will turn you away - especially any American bank.

For somebody who is in bed with Bush should we should not surprised the slightest and hey - he is great at what does - hijack business deals using lies and trickery. Many in America have compared him to Michael Milken, a man who pleaded guilty to six felonies in the biggest fraud case in the history of the US securities industry and there is proably more truth to that than there is to weather Hicks has an honest bone bone his body.

There are times were having a person like Hicks around is useful, when your is against the wall, if you want to buy something and you can't afford it Hicks is your man, a true business man of the 21st century. Some idiots want to be him, everbody else despises him. His idea is to never sells his investments unless you double your money - hence the 1 billion valuation of Liverpool FC.

He is not interested in a small profit, and doesn't care if the investment defaults or goes bankrupt.


What about HCA & IHS sales in 1999?

Two executives of health-care companies testified in the National Century Financial Enterprises Inc. trial Tuesday that the company gave them far more funding than they deserved.

In a session abbreviated because of the inclement weather, the government witnesses - both former chief financial officers of National Century customers - told jurors the Dublin business funded their financially troubled employers with millions of dollars in excess of the receivables it had purchased so the firms could continue operating.

National Century bought accounts receivable from health-care providers at a discount in exchange for fast cash to the owners. It would then package the receivables as bonds and sell them to investors, while collecting on its customers' bills. The privately held company collapsed in 2002 owing nearly $3 billion to creditors.

Bryan Weiss testified that his former employer, MediManagement, ran several southern California psychiatric clinics and a 46-bed hospital in east Los Angeles that were so strapped for money they operated week to week. He told the jury he was concerned about the long-term viability of MediManagement because it had a large amount of unsecured debt owed to National Century, its only lender.

MediManagement, Weiss said, was owned by National Century and three of its executives, CEO Lance Poulsen, Chief Operating Officer Donald Ayers and Vice Chairwoman Rebecca Parrett.

National Century financed MediManagement through its NPF XII fund, which the Justice Department has alleged the owners of National Century used to divert millions of dollars to benefit themselves.

Parrett, Ayers and three other National Century executives have been on trial since Feb. 4 in U.S. District Court in Columbus facing criminal fraud, conspiracy and money laundering charges. Also charged were CFO Randolph Speer, Executive Vice President Roger Faulkenberry and James Dierker, a vice president.

All have pleaded not guilty to the charges.

Poulsen will stand trial in late summer, after he is tried on accusations he and an associate tried to bribe a government witness. Another executive, James Happ, is scheduled to stand trial in the fall.

Business troubles
In his testimony, Weiss said Poulsen informed him in a fax that the Ohio company would stop funding MediManagement on Oct. 31, 2002, a day before the business was scheduled to issue payroll for its hospitals and 18 days before National Century would file for bankruptcy. Weiss said MediManagement went into bankruptcy a few weeks later, with a debt of more than $200 million.

James Happ is scheduled for trial in October because he wasn't charged in connection with the company's failure until last May.

National Century's indicted Poulsen hires new lawyers
The founder and former chief executive of National Century Financial Enterprises Inc. has hired lawyers from Charlotte, N.C., to represent him in criminal trials stemming from the Dublin health-care finance company's collapse in 2002.

Anderson Terpening PLLC, a white-collar criminal defense law firm that specializes in fraud cases, said Lance K. Poulsen retained its lawyers for an obstruction trial scheduled for March and a securities fraud trial scheduled for August. Poulsen needed new lawyers because his former defense attorneys pulled out of the case last year.

Poulsen, 64, faces 13 counts of securities fraud, concealment of money laundering, conspiracy, wire fraud and money laundering conspiracy in connection with company's financial collapse. The federal government later indicted the former CEO and an associate, alleging they attempted to bribe a government witness.

Five other National Century executives are being tried in a criminal case that began this week in U.S. District Court in Columbus. The government has alleged those five executives, along with Poulsen and another executive were behind a $3 billion fraud at the company.

Poulsen's lawyers, Thomas and James Tyack of Tyack Blackmore & Liston Co. LPA, pulled out of the case last November, telling a judge that Poulsen's Oct. 23 indictment on conspiracy charges created a conflict of interest. According to the indictment, Poulsen and associate Karl A. Demmler allegedly hatched a scheme to give $500,000 to an ex-National Century executive if she would develop "amnesia" when testifying as a government witness about the firm's collapse. A revised indictment in January added a count each of witness tampering and witness tampering by influencing testimony to the conspiracy charges.

Poulsen and Demmler in January pleaded not guilty to the charges.

Anderson Terpening said its attorneys have argued for Poulsen's release from the Ross County Jail in Chillicothe, where he was transferred in January from the Franklin County Jail, saying having him out from behind bars is necessary to allow "direct and daily interaction" with his lawyers and complex documents.

Poulsen isn't the only National Century executive scheduled for a trial apart from the five now in court. James Happ is scheduled for trial in October because he wasn't charged in connection with the company's failure until last May.

NCFE...financially unstable were evident six years before it collapsed.

There is so much more to this story that has yet to be told......and who is really behind this so called Financial Institute related to HEALTHCARE

Feb 08, 2008 (The Columbus Dispatch - McClatchy-Tribune Information Services via COMTEX) -- CYFL | news | PowerRating | PR Charts -- Signs that the National Century Financial Enterprises company was financially unstable were evident six years before it collapsed, the government's first witness in a fraud trial for its top executives testified.

William Parizek served as National Century's director of corporate financing from October 1996 until he resigned in January 1997. He said he moved his family from Kansas to Dublin already knowing a lot about the company.

His former employer, Koch Industries, had asked him to investigate National Century before the oil and gas company agreed to invest in the Dublin-based health-care financing company.

But less than a month after starting to work at National Century, Parizek said he realized investors, including his former company, had been duped.

"I felt (National Century) would be unable to survive for more than two or three months" because they were so shaky financially, Parizek testified.

National Century loaned more to small hospitals, clinics and nursing homes than they could repay, he said.

Parizek said he disagreed with National Century's practices so strongly that he quit without having another job. That meant giving up a $75,000 annual salary and a potential $3 million bonus if he raised $50 million in equity capital for the company.

Former National Century executives Rebecca S. Parrett, Donald H. Ayers, James E. Dierker, Roger S. Faulkenberry and Randolph H. Speer are on trial on charges of fraud, securities fraud, wire fraud and money laundering in connection with the company's collapse, which eventually led to the loss of nearly $2 billion by investors.

Parizek's testimony was cut short yesterday afternoon after questioning by defense attorney Brian Dickerson revealed that Parizek still had handwritten notes of his warning company executives about the financial problems.

Prosecutors had not given defense attorneys copies of the notes.

Federal Judge Algenon L. Marbley had the court make copies of Parizek's 34 pages of notes and gave them to defense attorneys.

Marbley said he expects copies of such documents to be given out at least a day in advance and warned prosecutors not to let it happen again.

The testimony came after a morning in which defense and prosecuting attorneys painted vastly different pictures in opening statements as to the reasons behind the company's demise.

"This is a case about promises made, promises broken and a massive coverup," assistant U.S. attorney Doug Squires said.

The company's financial problems stemmed in large part from loaning hundreds of millions more to health-care providers than what the companies qualified for, Squires said.

Dickerson said National Century had problems with communication among its divisions, but that there were always rating agencies, auditors, banks and investors watching everything they did.

"If it's a coverup, there's a lot of people covering up a lot of things," he said.

Other defense attorneys also said the downfall wasn't the result of criminal activity.

"There is a vast difference between bad business decisions and criminal activity," James Ervin Jr. said. "This case is about business decisions, not illegal conduct."

National Century started in 1991 with fewer than 10 employees and grew to 357. It loaned money to more than 2,000 health-care providers, helping them to stay in business.

"You cannot be the backbone to so many health-care providers across the country if you are not making good decisions," defense attorney Javier Armengau said.

Before the trial started yesterday, one juror asked to be dismissed.

Marbley said he excused a man because of work and family conflicts. The jury is now made up of eight women and four men, with three women serving as alternates.
In a surprise, NCFE trial kickoff draws in the publicOhio media pays attention to arcane fraud case that's likely to drag on for quite a while

By: Cinda Becker

Story posted: February 13, 2008 - 1:34 pm EDT

One might think that the embarrassing if not ignoble collapse of what was once described as “the country’s largest provider of healthcare accounts-receivable financing” would only be of interest to some affected healthcare providers, accounting nerds and burned Wall Street investors. But the criminal trial of five former executives of National Century Financial Enterprises is actually front-page news in Columbus, Ohio, where the trial got under way last week in a U.S. District courtroom.

In fact, based on a story that ran on the front page of the Columbus Dispatch the Sunday before the trial, defense attorneys motioned last week to conduct individualized and comprehensive voir dire of the dozens if not hundreds of prospective jurors. Without one-on-one questioning to determine otherwise, the attorneys said they were concerned that the prominent media coverage might have contaminated the pool.

For those of you who did not work for one of the 275 healthcare providers that supposedly went bankrupt after NCFE’s collapse, or are not accountants, burned investors or Columbus-area residents, here’s the back story: NCFE purchased medical accounts receivable from providers typically in dire financial straits, raising capital by selling AAA-rated asset-backed bonds or notes to investors. Prosecutors are alleging that it was all a sham that eventually led to the November 2002 collapse of NCFE days after FBI agents raided its Dublin, Ohio, headquarters. They claim that the fraud cost investors more than $1.9 billion.

Fortunately for the court calendar, Judge Algenon Marbley, a folksy man both pragmatic and aware of the legal rules, found a way around the voir dire motion that was amenable to both sides. Even with that, jury selection took three full days, putting the trial, which is expected to last four to six weeks, behind by a full day before it even got started.

The irony here is that jury selection traditionally gives lawyers an opportunity to taint the jury pool by their line of questioning, and this was very much apparent on the third day of questioning. The pool had already been whittled down to a mere courtroom-size group with prospective jurors sitting in every available seat, including the jury box. Marbley started things off that day by asking if a six-week trial would be a hardship for anyone. Several people raised their hands, including a waitress who said she would not get any pay and a young man who informed the judge that he worked for his family’s plumbing business.

“I was informed yesterday by my father that he would not pay me,” the young man said, lightening the mood in the courtroom.

Defense attorneys’ questions to the prospective jurors grew progressively rhetorical in nature after the jurors were first screened on direct questions like whether they had been victims of bankruptcy or whether they had ever been involved in any whistle-blower complaints. (One prospective juror had been employed by WorldCom and another by the now defunct Dublin Securities.)

Questions then seemed to get broader and more tangential as the pool was quizzed on their knowledge of financial concepts; auditors, specifically Deloitte & Touche; credit-rating agencies; trustees; and whether anyone had ever bothered to read their credit-card agreements. They also were asked how they felt about executive compensation—is $500,000 a year too much?—and whether they knew what a “144A offering” was. The pool was casually surveyed as to how many of them held job titles that had anything to do with what they actually did for a living and whether anyone had ever heard of the term “healthcare securitizations.” (No one had, or at least no one admitted they had.) During the course of this line of questioning, one woman in the back of the courtroom revealed that she is a personal friend of the chief executive officer of Deloitte and her husband had been at one time chief financial officer of Ford and Battelle. She was not selected.

Another prospective juror who was not selected was a man who works for Cardinal Health, also headquartered in Dublin, who said he reported directly to a vice president. On the other hand, one of the few people who raised their hands when asked if they actually wanted to serve on this jury was selected. When asked why he wanted to serve, he replied, “I think it’s a duty, and if anyone didn’t know anything (about this case) when they came in, I was him.”

No one connected with the trial has any inflated hopes of swift justice. Each of the five defendants had at least two defense lawyers sitting with him, and there were four lawyers sitting at the U.S. attorney’s table so that whenever there was a request for a sidebar—and there were many—there was a sea of dark suits huddling to the side of the courtroom while Musak played over the courtroom speakers. Yet for all of the dissension in the reams of motions and trial briefs that are accumulating with the case, the prosecutors and defense attorneys actually seemed to get along very well.

But missing from the defense side of the courtroom is perhaps the most contentious principal involved with NCFE: Lance Poulsen, one of NCFE’s founders and its former president, chairman and chief executive officer. Poulsen’s case was severed from the trial earlier this year; he will be tried in August. In the meantime, considered a flight risk, he is sitting in jail outside Columbus, facing separate charges of witness tampering at a trial expected to take place this spring.

Poulsen has fallen far. NCFE and Poulsen were once held in high enough regard in the Columbus area that the Dispatch profiled him in its business section in May 2000. Poulsen noted in the profile that marketing had been his primary focus over the previous 32 years of his career. His first professional position was with Hamm’s Brewery in St. Paul, Minn., according to the profile. He also said that as a result of his first job as a teenager working as a box wrapper and part-time salesman at the Robert Hall clothing store, he had learned, “Selling and marketing is more lucrative than packaging.”

As for his biggest mistake (up until that point in time), he recalled a boating accident that, in hindsight, might have been prophetic. He said: “Once while cruising in the coastal waters of Florida, I inadvertently turned the chart upside down and ran my vessel hard aground at a high speed.” How did he resolve the mistake? “I now make sure I always have the chart right-side up. Much like life, some things appear different than they actually are, and we must take time to examine the facts.

United Health Care, nation's largest health insurer

Hmmmmm......lets put it together ,,,,,,,real soon

Suspecting Fraud, NY Attorney General Investigates United Health Care
Filed under: Health Care
New York Attorney General Andrew Cuomo announced today that he has opened an investigation into whether Minneapolis-based United Health Care, the nation's largest health insurer, has been fleecing patients on out-of-network charges for the last decade.
Remember, HCA - The Healthcare Company, HCA Inc., Hosptical Corporation of America, or whatever other names they have used , was once the largest Healthcare Provider in the US also has a history of fraud.

AS of today, we have NCFE, the largest fraudulent scheme in the history of this country, even larger than Enron is currently at trial. (One of the executives, not yet on trial until OCTOBER, (Who knows why) came from ......HCA!!!!

Oh yea!!!

Federal investigators recouped $2.2 billion during fiscal 2006

Federal investigators recoup $2.2B in healthcare-fraud prosecutions
By Jeffrey Young
Posted: 02/14/08 05:43 PM [ET]
Federal investigators recouped $2.2 billion during fiscal 2006 by prosecuting companies and individuals who allegedly defrauded government healthcare programs, an interdepartmental task force announced this week.

A report, issued by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Department of Justice, details efforts by investigators and prosecutors from both departments to root out scams and reclaim money improperly paid out under programs such as Medicare and Medicaid.

The OIG-Justice Health Care Fraud and Abuse Control Program has channeled $10.4 billion into the Medicare trust fund since 1997, the agencies reported.

That includes $1.5 billion put back into the Medicare trust fund as a result of these joint efforts in fiscal 2006. The remainder of the $2.2 billion recouped in 2006 goes to the agencies that were allegedly defrauded, primarily the Centers for Medicare and Medicaid Services. HHS claimed more than $378.4 million.

The departments are required to offer an annual report to Congress on their progress in recouping funds lost through fraud, an ongoing problem for government health programs.

The results for 2006, the most recent fiscal year reviewed by OIG and Justice, surpass those from the previous fiscal year:

In 2005, task force investigators and prosecutors won $1.47 billion from healthcare fraud and abuse cases.

Authorities began 836 new investigations during the year, raising the total number of actions to 1,677; in 355 of those cases, charges have been filed. During fiscal 2006, prosecutors won convictions against 547 defendants.

In addition to the criminal cases, Justice has more than 2,000 open civil cases involving healthcare fraud, 915 of which were launched in 2006, according to the report.

The cases ranged considerably in scope and scale. The largest recovery came from a settlement with Tenet Healthcare Corp., one of the largest for-profit hospital chains in the United States. In a well-publicized case, whistleblowers from inside the company alerted federal authorities, which uncovered evidence that Tenet was manipulating Medicare’s payment system to boost revenue and paid kickbacks to physicians who sent their patients to Tenet facilities. To settle the charges and avoid a court judgment on the accusations, Tenet agreed to pay the government $900 million over the course of four years.

Other hospital companies also coughed up millions to the federal government in fraud and abuse cases in fiscal 2006, including St. Barnabas Health Care System in New Jersey ($265 million), Beth Israel Medical Center in New York ($73 million), the Chattanooga-Hamilton County Hospital Authority in Tennessee ($37 million), University Hospitals Health System in Ohio ($13.8 million), Our Lady of Lourdes Regional Medical Center in Louisiana ($3.8 million) and the Milton S. Hershey Medical Center in Pennsylvania ($2.9 million).

In addition, prosecutors scored convictions against several hospital managers, such as two former psychiatric hospital executives in San Diego who were convicted of defrauding Medicare and ordered to pay more than $15.7 million to the government.

Hospitals weren’t the only sector of the healthcare industry forced to pay up over fraud and abuse allegations. The pharmaceutical company Serono paid $704 million to settle charges that it illegally advised doctors to prescribe an AIDS medicine called Serostim for uses not approved by the Food and Drug Administration (FDA), paid kickbacks to cooperative physicians, and conspired with the diagnostic device maker RJL Sciences to market a device not approved by the FDA. RJL Sciences pleaded guilty to its role.

Schering-Plough, another drug company, is on the hook for $435 million as a result of several charges, including allegedly giving false information to the FDA, which was investigating whether the company’s marketing practices violated the law.

Other cases outlined in the report involved nursing homes, physicians, medical equipment suppliers, power-wheelchair retailers, ambulance companies, dentists and others.


Defense lawyers question National Century witness' credibility
Thursday, February 14, 2008

Defense attorneys seemed to play a game of good cop-bad cop Thursday afternoon with a former National Century Financial Enterprises Inc. vice president, as one of the lawyers questioned the truthfulness of her testimony that the company shuffled money between accounts to keep them afloat.

Jessica Bily, an associate vice president in the Dublin company's funding department, told a federal court jury in Columbus earlier in the day there wasn't enough money in two key company accounts to meet government and investor fiduciary requirements. Because of the shortfall, she said, National Century transferred money between them to keep from alarming investors.

The Justice Department has accused executives of using those accounts to defraud investors and divert money for their own benefit.

Dublin-based National Century, now defunct, bought accounts receivables from health-care providers at a discount, packaging the receivables as bonds in subsidiaries such as NPF VI and NPF XII and selling the securities to investors while collecting on its customers' bills.

Five National Century executives are facing criminal fraud, conspiracy and money laundering charges for the alleged scheme. Charged are Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. National Century CEO Lance Poulsen and executive James Happ are scheduled to stand trial separately later this year.

All have pleaded not guilty to the charges.

Throughout cross-examination Thursday afternoon, defense attorneys started with aggressive questioning, then shifted to a more conciliatory approach.

Leonard Yelsky, the attorney for Dierker, set the tone, asking Bily if her actions at the company, in which she helped to hide account shortfalls, could be considered lies. When she answered yes, Yelsky asked her to add up how many times she lied during her employment at National Century.

Bily answered she lied more than 200 times.

"How do we know you're telling the truth?" Yelsky asked. "Are you (testifying) because you're a good citizen now?"
Bily replied she was testifying because she hoped to avoid prosecution by the government in the future and because it was the right thing to do.

Yelksy later attempted to imply Bily was still lying, and called her credibility into question.

In between objections from the government that the defense attorney was being argumentative, Yelsky asked Bily questions relating to notes she had written on company documents. Many of the questions Bily did not understand.

Yelsky also attempted to prove that advances to one of Dierker's clients were paid out of the NPF XII account funds when the advances should have been made from a different fund. Bily admitted Dierker didn't sign forms authorizing advances out of NPF XII to his client, but added he knew that's where the money was being drawn.

Javier Armengau, attorney for Faulkenberry, asked questions with a lighter tone, making a point of telling Bily he would refer to her actions at National Century as errors and not lies. He then asked if she agreed National Century's goal was to do everything it could to help its health-care clients stay in business, to which Bily agreed.

Armengau also asked Bily about the information she gave to the FBI. In particular, Bily acknowledged she told the FBI there were no efforts by those at National Century to conceal cash advances the company made to clients over and above the receivables for which the company had paid.

She also said she told FBI agents many National Century employees were reluctant participants in actions that Poulsen asked them to take.

Multi Billion $$$ Fraud and a $250,000 fine

National Century exec says colleagues lied to investorsFebruary 11, 2008 5:37 PM ET
The final hours of testimony by former National Century Financial Enterprises Inc. executive Jon Beacham became heated Monday afternoon in U.S. District Court.

The former director of securitizations at Dublin-based National Century argued with a defense lawyer over whether he believed he had engaged in a criminal act. Leonard Yelsky, an attorney for defendant James Dierker, who is standing trial with four other former National Century executives on criminal charges, implied Beacham didn't have all the facts about the company to know whether anything illegal took place.

"Sir, I don't need all the facts. I have enough," Beacham said, adding he knew all the defendants made a material omission when providing information to investors, which he said was the same as lying.

Under questioning by government attorneys Friday, Beacham testified he and other executives at the company, then the nation's largest health-care financing company, lied to investors and ratings agencies when the business issued its NPF XII fund.

"There was definitely material omissions at (investor) presentations," Beacham told jurors Friday.

Beacham, 41, headed the department that sold asset-backed bonds to investors.

When defense attorneys got their chance to question Beacham Monday, they tried to show he was an unreliable witness because he changed his earlier not guilty plea after agreeing to be a government witness. Now a stay-at-home father in Gross Pointe, Mich., Beacham pleaded guilty in July to a count each of securities fraud and conspiracy to commit securities fraud and wire fraud. He also agreed to forfeit $330,000.

He faces up to five years in prison with three years of supervised release, plus a $250,000 fine. He has yet to be sentenced, and as of January the government had not recommended his sentence be reduced.

Under later questioning by defense attorneys, Beacham testified he found out in October 2002 that National Century CEO Lance Poulsen had used all of NPF XII's reserve fund to buy additional accounts receivables. Beacham recounted how he alerted investors to the problem.

But Beacham qualified that even though the problem was disclosed in late 2002, he said there was still underlying conspiracy because no one told investors about potential problems earlier.

During Beacham's time on the witness stand Monday morning, defense lawyers spent their time asking him about his plea agreement with the government, implying he made a deal with the Justice Department not because he thought he was guilty, but because he wanted to reduce time away from his wife and four children.

Beacham was indicted in 2006 with the five executives now on trial -- National Century's chief operating officer, Donald Ayers, 71; the company's vice chairwoman, Rebecca Parrett, 58; Randolph Speer, 57, its chief financial officer; Roger Faulkenberry, 46, an executive vice president; and Dierker, 39, a vice president. The five are facing criminal charges they were behind a $3 billion fraud at the privately held company, which went bankrupt in 2002.

National Century financed health-care businesses by purchasing accounts receivables from medical providers at a discount and then packaging the accounts as bond funds. The government has accused the executives of diverting $2.84 billion for their benefit.

All have pleaded not guilty to charges that include conspiracy, securities, fraud and money laundering charges.

Poulsen, 64, is set for trial in August, five months after he is scheduled to be tried on allegations he and an associate attempted to bribe a government witness.

If found guilty, the defendants face 30 years to life in prison.

$3 billion collapse in 2002.....Keep Digging

Friday, February 15, 2008
Defense lawyers try to put National Century star witness in poor light

A key government witness in its case against five executives of National Century Financial Enterprises Inc. has "psychological issues," a former company employee testified Friday in the 10th day of the fraud trial.

Sherry L. Gibson, once an executive vice president at National Century, is expected to testify next week that she was at the center of an alleged fraud involving senior managers that lead to the Dublin firm's nearly $3 billion collapse in 2002. But defense attorneys got company insider Jessica Bily to say Friday that Gibson was unstable.

Bily, who was an associate vice president in National Century's funding department, recounted for defense attorneys that Gibson treated her staff poorly and in a "demeaning manner." On at least one occasion, she said, Gibson marched all of the women in her department into the restroom for "Toilet Paper 101" because someone hadn't replaced a roll of toilet paper.

Bily said many people at the company tried to avoid Gibson; in her case, she used a senior executive as a buffer.

Gibson was indicted with the other National Century executives but pleaded guilty to fraud charges in 2003 and was ordered to forfeit her entire net worth, estimated $300,000 to $500,000. She is also expected to testify that Lance Poulsen, National Century's CEO, attempted to bribe her with $500,000 last summer to change her testimony.

National Century, now defunct, bought accounts receivables from health-care providers at a discount, packaging the receivables as bonds and selling the securities to investors while collecting on its customers' bills. The Justice Department has accused the executives of using those accounts to defraud investors and divert money for their own benefit.

Five company executives are facing criminal fraud, conspiracy and money laundering charges - Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker.

Poulsen and executive James Happ are scheduled to be tried separately later this year.

All have pleaded not guilty to the charges.

Defense lawyers Friday asked Bily about a wide range of issues, particularly information she gave to government agents that wasn't brought up earlier when she testified under questioning by Justice Department lawyers.

Bily told jurors Wednesday and Thursday there wasn't enough money in two key company accounts to meet government and investor fiduciary requirements because National Century was sending out millions of dollars in unsecured advances to clients. Because of the shortfall, she said, National Century transferred money between accounts to keep investors from finding out.

Under questioning from Parrett's lawyer, Gregory Peterson, Bily admitted the unsecured advances she was concerned about could have been supported by collateral from clients. She also acknowledged auditors knew about unsecured advances National Century was making to clients and they specifically directed her department to create a special bookkeeping category so the advances could be tracked.

Computer systems operating at National Century were also at times inefficient and unreliable, Bily said, which caused bookkeeping problems.

Frederick Benton, the attorney for Speer, asked if there were others responsible for major decisions made at the company besides the defendants, and Bily answered that the board of directors and bank trustees were also important to National Century's day-to-day operations.

Attorneys also attempted to cast doubt on Bily's expertise within her department, getting her to say she never read corporation documents that laid out how her department was expected to work. Bily said she reviewed some of those documents, but mostly relied on the training she received from superiors.

$1.9 billion fraud case

AFX News Limited
Former executive wants house arrest
02.15.08, 6:21 PM ET
COLUMBUS, Ohio (AP) - A former health care executive facing trial in a wants to be released from jail so he can have more time to prepare his defense.

Lance Poulsen, former president of National Century Financial (other-otc: CYFL.PK - news - people ) Enterprises near Columbus, says he's only getting access to a work room at the Ross County jail in southern Ohio for two hours a day and no time on weekends.

U.S. District Judge Algenon Marbley last month denied Poulsen's request for house arrest but ordered a room be reserved for use eight hours a day, seven days a week.

A message was left with the jail seeking comment.

Former executives of National Century are currently on trial. Poulsen faces a witness-tampering trial next month and his own fraud trial in August.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Neither the Subscriber nor AFX News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by AFX News and its third party content providers for your personal information only, and neither AFX News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.

Thursday, February 7, 2008

five executives and two others who will be tried later, including CEO Lance Poulsen, masterminded a $3 billion fraud

Running behind schedule, jury selection in the criminal trial of five executives of the failed National Century Financial Enterprises Inc. was completed late Wednesday with lawyers' opening arguments scheduled to begin Thursday morning in U.S. District Court in Columbus.

Throughout the afternoon, the third day in which attorneys worked to pick jurors, defense lawyers attempted to divine how fair and impartial jurors could be in light of their experiences with large corporations, the health care industry or their impressions of government witnesses.

Attorneys winnowed more than 250 prospects to 12 jurors with four alternates by the end of Wednesday. An extraordinarily large number of candidates were called because the trial is expected to be complex and last at least two months.

The government is alleging the five executives and two others who will be tried later, including CEO Lance Poulsen, masterminded a $3 billion fraud through their business of buying accounts receivables from health-care providers at a discount and packaging the accounts as bond funds, which were sold to raise money to buy more accounts. The government has accused the executives of diverting $2.84 billion for their benefit.

The Dublin company collapsed into bankruptcy in 2002. The executives were later indicted on conspriacy, securities, fraud and money laundering charges. Poulsen also faces claims that he tried to bribe a government witness.

Toward the end of jury selection, defense attorneys began to offer some insight into their clients' defense claims.

Javier Armengau, attorney for Roger Faulkenberry, 46, former director of securitizations at National Century, asked jury candidates if they thought it was reliable to rely on the advice or direction of their immediate supervisor or corporate counsel when making decisions.

Meanwhile, Leonard Yelsky, the lawyer for ex-Vice President James Dierker, 39, brought up infamous government mob informants and asked jury prospects to consider during trial whether informants in the case are telling the truth "after finding Jesus" or are attempting to lessen any criminal sentence they may face.

The government has indicated in court documents that it plans to call four National Century employees as witnesses to testify against the executives, including Vice Chairwoman Rebecca Parrett, 58; Chief Operating Officer Donald Ayers, 70; and Chief Financial Officer Randolph Speer, 57.

Retirement funds were the biggest losers; Why does Healthcare relate to pensions?

Trial Begins For Execs Of Collapsed Health Care Financing Company
Feb 06 2008 7:24PM
COLUMBUS, Ohio - Opening statements are scheduled Thursday morning in what federal prosecutors have portrayed as one of the largest corporate fraud cases since Enron.

National Century Financial Enterprises was based in Dublin before it went under in 2002, 10TV's Paul Aker reported.

The government said the officials conspired to defraud investors by diverting their money for improper uses, making up data in financial reports and moving money back and forth between accounts to conceal shortfalls in investor funds.

Prosecutors said five executives paid off their personal debts.

Some lived in mansions, like a $1.1 million home at Dublin's Muirfield Village Golf Club. At the same time, the company was going broke before finally falling into bankruptcy and taking hundreds of its own medical company clients with it, Aker reported.

The impact also stung Wall Street. Retirement funds were the biggest losers, from city employees in Arizona to police in New York. American investors lost nearly $3 billion.

While the corporate executives were allegedly running their business into the ground, at least one was living like a millionaire. 10 Investigates found a home belonging to National Century senior executive Don Ayres. Neighbors said Ayres rarely uses it. Real estate records show he also lives in Fort Myers Fla.

The defendants are not taking reporters' questions but will likely spend the next two months answering their criminal charges. They could face life in prison, Aker reported.

Former National Century executives, including ex-chief executive officer Lance Poulsen, will go on trial later this year.

Stay with 10TV and refresh for continuing coverage.

Defense attorney Brian Edward Dickerson ...whho is this guy?

More than 100 potential jurors report for National Century trial
Tuesday, February 5, 2008 5:43 PM
By Jodi Andes


The number of potential jurors for the National Century Financial Enterprises fraud trial continued to be whittled down today.

One hundred and twenty-five jurors reported to federal Judge Algenon L. Marbley’s courtroom this morning. After a series of questions from the judge and Assistant U.S. Attorney Doug Squires, all but 45 of the jurors were dismissed.

Many were excused by Marbley because of health reasons, work conflicts that could occur in a trial that might last two months or concerns from the potential jurors themselves that they would not be unbiased.

The 45 who remain, as well as roughly 90 who were not excused Monday, are being asked to report to the courthouse at 8:30 Wednesday. Marbley is allowing defense attorneys a chance to question the group before jury selection begins.

The judge has said several times that he hopes to begin arguments by Wednesday afternoon.

However, late today defense attorney Brian Edward Dickerson told the judge that defense attorneys might have more questions for the jurors than originally thought because of a story that appeared about the trial in Sunday’s Dispatch.

Dickerson and defense attorney Javier Armengau said they were concerned whether the article influenced potential jurors.

Two of the company's three founders, Rebecca S. Parrett and Donald H. Ayers, and former company executives James E. Dierker, Roger S. Faulkenberry and Randolph H. Speer are on trial for charges of fraud, securities fraud, wire fraud and money laundering.

The company's third founder, Lance K. Poulsen, will be tried on 13 counts of fraud in August. He and Karl A. Demmler, who did not work for National Century, are set for trial next month on witness-tampering charges related to the case.

A seventh National Century executive, James K. Happ, is scheduled for trial on fraud charges in October.

In 1991, Ayers, Parrett and Paulsen founded National Century to offer financing to small hospitals, clinics, nursing homes and other health-care providers.

National Century agreed to buy the providers' debt, or accounts receivable, giving them cash to cover expenses. The smaller companies didn't have to wait for insurance reimbursements, and National Century kept a fee or percentage of what was collected.

In 2002, the Dublin-based business filed for bankruptcy, and at least 275 health-care companies collapsed.

Assistant U.S. attorneys allege that criminal practices led to National Century's demise. Executives are accused of falsifying financial reports, giving companies money without ever formalizing a loan, and using millions for their own lavish lifestyles.

Wednesday, February 6, 2008

Have you asked yourself, WHy does your Employer dictate what health care you receive?

Op-Ed Columnist
The Cooper Concerns
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Del.icio.usDiggFacebookNewsvinePermalinkBy DAVID BROOKS
Published: February 5, 2008
I’m not a Hillary-hater. She’s been an outstanding senator. She hung tough on Iraq through the dark days of 2005. In this campaign, she has soldiered on bravely even though she has most of the elected Democrats, news media and the educated class rooting against her.

Blogrunner: Reactions From Around the WebBut there are certain moments when her dark side emerges and threatens to undo the good she is trying to achieve. Her campaign tactics before the South Carolina primary were one such moment. Another, deeper in her past, involved Jim Cooper, a Democratic congressman from Tennessee.

Cooper is one of the most thoughtful, cordial and well-prepared members of the House. In 1992, he came up with a health care reform plan that would go on to attract wide, bipartisan support. A later version had 58 co-sponsors in the House — 26 Republicans and 32 Democrats. It was sponsored in the Senate by Democrat John Breaux and embraced by Daniel Patrick Moynihan, among others.

But unlike the plan Hillary Clinton came up with then, the Cooper plan did not include employer mandates to force universal coverage.
On June 15, 1993, Cooper met with Clinton to discuss their differences. Clinton was “ice cold” at the meeting, Cooper recalls. “It was the coldest reception of my life. I was excoriated.”

Cooper told her that she was getting pulled too far to the left. He warned that her plan would never get through Congress. Clinton’s response, Cooper now says, was: “We’ll crush you. You’ll wish you never mentioned this to me.”

In the weeks and months following that meeting, the Clinton administration reached out to Cooper. As David Broder and Haynes Johnson wrote in “The System,” their history of the health care reform effort, President Bill Clinton invited Cooper to go jogging and play golf. Others in the Clinton White House thought Cooper was right on the merits, and privately let him know.

But Hillary Clinton set up a war room to oppose Cooper, who was planning to run for the Senate in 1994. As the Broder and Johnson book makes clear, Clinton and her aides believed Cooper was pursuing his own political agenda. They accused him of crafting his plan in order to raise money from the insurance and hospital industries. They said he was in league with the for-profit hospitals to crush competitors and monopolize the industry. They did this despite the fact that Cooper’s centrist health care approach was entirely consistent with his overall philosophy.

At one meeting in the West Wing, a source told Broder and Johnson, Clinton “kind of got this evil look and said, ‘We’ve got to do something about this Cooper bill. We’ve got to kill it before it goes any further.’ ”

Clinton denounced the Cooper plan as “dangerous and threatening.” Deputies were dispatched to Tennessee to attack his plan. Senator Jay Rockefeller said that Cooper is “a real fraud. I hope he doesn’t make it to this place.” According to Newsweek, Clinton brought an aide with a video camera to a meeting with senators and asked the senators to denounce Cooper on the spot.

The Clinton effort backfired. It temporarily raised his profile back home. Her health care reform failed, too. She says she’s learned the lessons from that failure, but she remains icy toward Cooper. Her health care memos, including a three-page memo drafted in preparation for her meeting with Cooper, have not been made public by the National Archives.

Moreover, the debate Clinton is having with Barack Obama echoes the debate she had with Cooper 15 years ago. The issue, once again, is over whether to use government to coerce people into getting coverage. The Clintonites argue that without coercion, there will be free-riders on the system.

They’ve got a point. But there are serious health care economists on both sides of the issue. And in the heat of battle, Clinton has turned the debate between universal coverage and universal access into a sort of philosophical holy grail, with a party of righteousness and a party of error. She’s imposed Manichaean categories on a technical issue, just as she did a decade and half ago. And she’s done it even though she hasn’t answered legitimate questions about how she would enforce her universal coverage mandate.

Cooper, who, not surprisingly, supports Barack Obama, believes that Clinton hasn’t changed. “Hillary’s approach is so absolutist, draconian and intolerant, it means a replay of 1993.”

He argues that her more coercive approach would once again be a political death knell. No Republican will support it. Red state Democrats will face impossible pressures at home. It’s smarter to begin by offering people affordable access to coverage and evolve from there.

Cooper is, of course, a man who has been burned in the past. But it is legitimate to wonder if adults can really change all that much. A defter politician would have reached out to Cooper and made an attempt to address the concerns he represents.


"Managed Care" was supposed to be the solution to rising health costs. HMOs would cut out the waste and keep an eye on doctors who ordered unnecessary tests and procedures, saving consumers big money. But it was the HMOs that made the big money–by restricting care.

Their philosophy was summed up by Richard Rainwater, cofounder of the for-profit HMO Columbia-HCA: “The day has come when somebody has to do in the hospital business what McDonald’s has done in the fast-food business and what Wal-Mart has done in the retailing business.”

Poll after poll shows that a majority of Americans want a national health system that guarantees care for everyone. In fact, a Wall Street Journal survey found that more than half of those asked would be willing to pay $2,000 a year extra in taxes to guarantee health care for those who don’t have access to it.
What exists in the U.S. today is really two health-care systems: one for the haves and one for the have-nots. For the rich, no expense is spared in using the latest techniques and technology on medical problems.

For the rest, health care is “rationed.” Drugs and treatments that could help people live longer, healthier and more fulfilling lives are often beyond reach because of a bewildering array of restrictions–imposed in the interests of the bottom line.

So it’s no surprise that the most important factors determining a person’s health have nothing to do with diet or exercise or smoking. The most important factors are social class and race.