Monday, December 15, 2008

Health Care Organizations Ensnared in Giant Ponzi Scheme

It seems that news about concentration and abuse of power in health care, about ill-informed, ill-advised, conflicted, self-interested, even corrupt management of health care organizations, has almost been swamped by stories of even worse concentration and abuse of power elsewhere, from mysterious hedge funds, to US state government, to countries on multiple continents. And yet, health care and health care organizations seem to have been swept up into these larger fiascos. We commented briefly earlier on one health care connection to the allegations that the Governor of Illinois tried to auction off an appointment to a US Senate seat.

Now it turns out that the spectacular collapse of a financial organization that really was a giant Ponzi scheme also has ensnared many health care organizations.

Reporting on the collapse of Bernard L Madoff Investment Securities is everywhere. (See this initial story, for example, in the New York Times.) Here is a list of the health care organizations that are involved.

Madoff was on the Board of Trustees of Yeshiva University, and its Treasurer. Yeshiva University is the parent university of the Albert Einstein College of Medicine. (The Board of Trustees web-site has had its content removed, but the cached version listed Madoff. This role was also reported by Bloomberg.)

Another member of the Yeshiva University board, J Ezra Merkin, ran a hedge fund, "which then put almost all of its $1.8 billion in capital in Madoff's hands." (per AP)

Yeshiva University itself was reported to have "lost tens of millions of dollars, if not more." (per New York Magazine.)

The Carl and Ruth Shapiro family charity, formerly a major donor to Boston health care institutions such as the Beth Israel Deaconess Medical Center, Boston Medical Center, and the Dana/Farber Brigham and Womens' Cancer Center, lost about half its assets, which had been invested with Madoff (per the Boston Globe).

Robert Jaffe, who "operated a company whose sole purpose was to market Madoff investment products," is "an overseer of Beth Israel Deaconess Medical Center." (Also per the Globe.)

The North Shore - Long Island Jewish Health System was "believed to have lost millions" (per AP).

So besides being a stunning example of financial mismanagement and fraud, this case is a reminder of how prominent health care institutions got caught up in the contemporary business culture, which in turn was dominated by the self-proclaimed Masters of the Universe who lead the big financial institutions. But after the Madoff case, as one writer on put it, "does anyone still doubt that the global banking and investing industry is full of greedy idiots?"

ADDENDUM (16 December, 2008) - see multiple posts about the relationships among Yeshiva University and Madoff on the University Diaries blog.

1 comment:

Anonymous said...

Another suspicion and reason for health care reform:

Facts that are believed to exist regarding the present U.S. Health Care System-
This may be why about 80 percent of U.S. citizens want our health care system overhauled:
The U.S. is ranked number 42 related to life expectancy and infant mortality, which is rather low.
U.S. is ranked number one in the world for spending the most for health care- as well as being number one for those with chronic diseases. About 125 million people have such diseases. This is about 70 percent of the Medicare budget that is spent treating these terrible illnesses. Health Care cost presently is over 2 trillion dollars of our gross domestic product. One third of that amount is nothing more than administrative toxic waste that does not involve the restoration of the health of others. This illustrates how absurd the U.S. Health Care System is presently. Nearly 7000 dollars is spent on every citizen for health care every year, and that, too, is more than anyone else in the world.
We have around 50 million citizens without any health insurance, which causes about 20 thousand deaths per year. This includes millions of children without health care, which is added to the planned or implemented cuts in the government SCHIP program for children that covers about 7 million kids.
Our children
Nearly half of the states in the U.S. are planning on or have made cuts to Medicaid, which covers about 60 million people, and those on Medicaid are in need of this coverage largely due to unemployment. With these Medicaid cuts, over a million people will lose their health care coverage and benefits.
About 70 percent of citizens have some form of health insurance, and the premiums for their insurance have increased nearly 90 percent in the past 8 years. About 45 percent of health care is provided by our government- which is predicted to experience a severe financial crisis in the near future with some government health care programs, it has been reported. Most doctors want a single payer health care system, which would save about 400 billion dollars a year- about 20 percent less than what we are paying now. The American College of Physicians, second in size only to the American Medical Association, supports a single payer health care system. The AMA, historically opposed to a single payer health care system, has close to half of its members in favor of this system. Less than a third of all physicians are members of the AMA.
Our health care we offer citizens is sort of a hybrid of a national and private health care system that has obviously mutated to a degree that is incapable of being fully functional due to perhaps copious amounts and levels of individual and legal entities.
Half of all patients do not receive proper treatment to restore their health, it has been stated. Medical errors desperately need to be reduced as well, it has been reported. It is estimated that we need about 60 thousand more primary care physicians to satisfy the medical needs of the public health in the United States. And we have some greedy corporations that take advantage of our health care system. Over a billion dollars was recovered for medicare and Medicaid fraud last year through settlements paid to the department of Justice because some organizations ripped off taxpayers. These are the taxpayers in the U.S. who have a fragmented health care system with substantial components and different levels of government- composed of several legal entities and individuals, which has resulted in medical anarchy.
Thanks to various corporations infecting our Health Care System in the United States, the following variables sum up the U.S. Health Care System, which is why the United States National Health Insurance Act (H.R. 676) is the best solution to meet our health care needs as citizens. We would finally have, as with most other countries, a Universal Health Care system that will allow free choice of doctors and hospitals. It should be and likely will be funded by a combination of payroll taxes and general tax revenue:
Access- citizens do not have the right or ability to make use of this system as we should.
Efficiency- this system strives on creating much waste and expense as it possibly can.
Quality- the standard of excellence we deserve as citizens with our health care is missing in action.
Sustainability- We as citizens cannot continue to keep our health care system in existence , or tolerate it as it exists today any longer,
Dan Abshear