Guess this qualifies as an old fool’s rant. . .
From Bloomberg News
Guess this qualifies as an old fool’s rant. . .
From Bloomberg News
Just to be clear — I’m not embarrassed, I’m MAD.
More controversial research from those scientists at the University of Washington,from the Washington Post <https://www.washingtonpost.com/news/to-your-health/wp/2017/05/18/an-embarrassment-u-s-health-care-far-from-the-top-in-global-study/?utm_term=.167e609e8339>
Americans grumble all the time about the quality of our health-care system, but when we’re dealing with serious issues, such as injuries from an auto accident or cancer, we often count our blessings that we live in a wealthy country that has well-trained doctors with access to the latest medical technology.
Yet those factors don’t always correlate with staying alive. That’s the distressing finding from a global study of what researchers call “amenable mortality,” or deaths that theoretically could have been avoided by timely and effective medical care.
Christopher Murray, a researcher at the University of Washington, and his collaborators looked at 32 causes of death in 195 countries from 1990 to 2015 to create a health-care quality index they used for rankings. Murray described the findings as “disturbing.”
“Having a strong economy does not guarantee good health care,” he said. “Having great medical technology doesn’t, either. We know this because people are not getting the care that should be expected for diseases with established treatments.”
The top country on their list is Andorra, the microstate in the Pyrenees mountains with a population of about 85,000 and an economy is based on tourism. The lowest is the Central African Republic, the landlocked country in the middle of the continent where violence by armed groups against the civilian population has broken out in recent days.
As might be expected, many highly developed nations, such as Norway, Australia and Canada, scored well. Those in more-remote areas in sub-Saharan Africa, South Asia, Latin America and the Caribbean scored poorly. In the map below, the higher the health-care quality index, or HAQ, the better the level of care, according to the study.
The world’s superpower doesn’t rank where you might expect it to. The United States scores an 80 on the index, which is at the bottom of the second decile and puts it on par with Estonia and Montenegro.
The United States measures well for diseases preventable by vaccines, such as diphtheria and measles, but it gets almost failing grades for nine other conditions that can lead to death. These are lower respiratory infections, neonatal disorders, non-melanoma skin cancer, Hodgkin’s lymphoma, ischemic heart disease, hypertensive heart disease, diabetes, chronic kidney disease and the adverse effects of medical treatment itself.
“America’s ranking is an embarrassment,” according to Murray, who noted that U.S. health spending per person — $9,000 annually — is more than that of any other country.
The study, published in the Lancet on Thursday evening, offers some models that the United States might want to consider to take steps to improve. It highlights a long list of countries, including Peru, South Korea, Niger and Jordan, that have had health-care quality climb since 1990, meeting or surpassing levels of other countries with similar development.
This from the Kent County News. If you like this, check the wonderful photo book Working the Water by Jay Fleming
After Hurricane Agnes hit in 1972, though, pollution levels led to a decrease in the Chesapeake Bay’s health and all but ended the “golden age” of the waterman.
In an effort to preserve details about the lifestyle of watermen, Tom McHugh, director emeritus of the Mainstay in Rock Hall, and Ron Fithian, Rock Hall town manager, Kent County Commissioner and former waterman, interviewed 18 watermen and women from Rock Hall and created a documentary.
McHugh and Fithian shared a few clips from their documentary “Those Were the Days: The Golden Age of Rock Hall Watermen” May 10 at the Chestertown branch of the Kent County Public Library.
“The intent is to get down what was different about that period of time compared to this period of time,” McHugh said. “And by watching even a few samples of these men and women talking, you get a sense of what those differences were.”
The full documentary features the 18 interviews conducted with men and women who worked on the water between 1945 and 1972. McHugh and Fithian originally had the idea to start the project after discussing the need to document the lifestyle of watermen before it disappears completely.
“I can remember at the height of the seafood business, that probably I wouldn’t be exaggerating if I said 75 to 80 percent of the people in Rock Hall made their living working on the water,” Fithian said.
McHugh produced the documentary with Fithian conducting the majority of the interviews and the late Clarence Hawkins conducting a few. Fithian’s experience on the water helped facilitate the flow of the interviews.
Their first attempt at obtaining a grant from Eastern Shore Heritage Inc. was unsuccessful, but on their second try, they received the grant and were able to hire a cinematographer and began conducting interviews.
“The story Tom is trying to tell is how much different it is than it was then and as to where it is now,” Fithian said.
In the documentary, those interviewed tell their stories of working on the water including what type of fishing they did and where. The stories vary from the work of oyster shuckers to chasing rockfish up the Bay.
During the presentation, Fithian and McHugh showed a few minutes of interviews with Larry Simns, James “Pork Chop” Manley, Glenwood Thomas, Syriva Johnson and Jean Sisco. Afterward, Fithian spoke about his time on the water and his outlook on if watermen, and the seafood industry on the Bay, can make a comeback.
“When I first got out of school, a lot of kids sit around and talk about how they don’t know what to do, I knew exactly what I was going to do. I was going to go work on the water,” Fithian said.
He also spoke on the ups and downs of the oyster business and if the seafood business in the Bay can eventually return to what it was given conservation efforts.
“So there’s been some real big changes. Will we ever see it come back? I’m not sure about that. I have my doubts to be quite honest with you because it’s changed so much,” Fithian said.
He said it was damage from Hurricane Agnes and the subsequent flooding from the Conowingo Dam after the hurricane that effectively lead to the decline of watermen.
As to how to help the Bay, Fithian said people have a lot to gain from hearing the stories of those who worked on the water and made a living out of it.
“I think that sometimes a little more attention has to be paid to those who lived their life there,” Fithian said.
“Those Were the Days” was shown as part of “The Way We Worked,” the Smithsonian Institution’s traveling exhibit. It is available at all Kent County Public Library locations.
The catastrophe struck Wanda Wickizer on Christmas Day 2013. A generally healthy, energetic 51-year-old, she suddenly found herself vomiting all day, racked with debilitating headaches. When her alarmed teenage son called an ambulance, the paramedics thought that she had food poisoning and didn’t take her to the emergency room. Later, when she became confused and groggy at 3 a.m., her boyfriend raced her to Sentara Norfolk General Hospital in coastal Virginia, where a scan showed she was suffering from a subarachnoid hemorrhage. A vessel had burst, and blood was leaking into the narrow space between the skull and the brain.
During a subarachnoid hemorrhage, if the pressure in the head isn’t relieved, blood accumulates in that narrow space and can push the brain down toward the neck. Vital nerves that control breathing and vision are compressed. Death is imminent. Wickizer was whisked by helicopter ambulance to the University of Virginia Medical Center in Charlottesville, 160 miles away, for an emergency procedure to halt the bleeding.
After spending days in a semi-comatose state, Wickizer slowly recovered and left the hospital three weeks after the hemorrhage, grateful to be alive. But soon after she returned home to her two teenage children, she found herself confronted with a different kind of catastrophe. Wickizer had had health insurance for most of her adult life: Her husband, who died in 2006, worked for the city of Norfolk, which insured their family while he was alive and for three years beyond. After his death, Wickizer worked in a series of low-wage jobs, but none provided health insurance. A minor pre-existing condition — she was taking Lexapro, a common medicine for depression — meant that her only insurance option was to be funneled into the “high-risk pool” (a type of costly insurance option that was essentially rendered obsolete by the Affordable Care Act and now figures in some of the G.O.P. plans to replace it). She would need to pay more than $800 per month for a policy with a $5,000 deductible, and her medical procedures would then be reimbursed at 80 percent. She felt she couldn’t afford that. In 2011, she decided to temporarily stop working to tend to her children, which qualified them for Medicaid; with trepidation, she left herself uninsured.
And so in early 2014, without an insurer or employer or government agency to run interference between her and the hospital, she began receiving bills: $16,000 from Sentara Norfolk (not including the scan or the E.R. doctor), $50,000 for the air ambulance. By the end of January, there was also one for $24,000 from the University of Virginia Physicians’ Group: charges for some of the doctors at the medical center. “I thought, O.K., that’s not so bad,” Wickizer recalls. A month later, a bill for $54,000 arrived from the same physicians’ group, which included further charges and late fees. Then a separate bill came just for the hospital’s charges, containing a demand for $356,884.42 but little in the way of comprehensible explanation.
In other countries, when patients recover from a terrifying brain bleed — or, for that matter, when they battle cancer, or heal from a serious accident, or face down any other life-threatening health condition — they are allowed to spend their days focusing on getting better. Only in America do medical treatment and recovery coexist with a peculiar national dread: the struggle to figure out from the mounting pile of bills what portion of the fantastical charges you actually must pay. It is the sickness that eventually afflicts most every American.
What’s less understood is the extent to which our current medical-billing system itself is responsible for the high prices patients are charged. There are, of course, many factors that have led to the United States’ record-breaking $3 trillion health care bill: runaway drug prices, excessive testing and sky-high charges for even the most basic medical interventions. But all of those individual price increases have been enabled — indeed, aided and abetted — by the complex system of billing and coding that underlies bills like those sent to Wickizer. That system, with its lines of alphanumeric codes and arcane medical abbreviations, has given birth to a gigantic new industry of consultants, armies of back-room experts whom medical providers and insurance companies deploy against each other in an endless war over which medical procedures were undertaken and how much to pay for them. Caught in the crossfire are Americans like Wanda Wickizer, left with huge bills and indecipherable explanations in languages they cannot possibly understand.
Disease-classification systems originated during an outbreak of the bubonic plague in 17th-century London — epidemiologic constructs to classify and track causes of death and prevent the spread of infections among populations that spoke different languages. In the 1890s, the French physician and statistician Jacques Bertillon further systematized death reporting by introducing the Bertillon Classification of Causes of Death, the first medical-coding system, which was adopted and modified in many countries. It became an official global effort, which was periodically revised by an international commission. During the first half of the 20th century, the number of entries naturally increased with improved understanding of science, and many countries began tabulating not just causes of deaths but also the incidence of diseases.
In the 1940s, the World Health Organization took over stewardship of Bertillon’s system and renamed it to reflect a new, broader focus: the International Statistical Classification of Diseases, Injuries and Causes of Death (ICD). The codes became an invaluable tool, a common language for epidemiologists and statisticians to track the world’s afflictions. But over the last several decades in the United States, codes gradually took on a bedrock financial function as the basis for medical billing. In 1979, the government decided to use what by then were called ICD-9 codes — which specify the patient’s diagnosis — in adjudicating Medicare and Medicaid claims, with some modifications added specifically for that purpose; the United States version was called ICD-9-CM. (The country has recently moved to a new iteration, ICD-10-CM.) For its beneficiaries, Medicare pays a fixed fee for inpatient hospitalization based primarily on the ICD-CM code, which is translated into a DRG (diagnosis-related group) code — which is the immediate basis for reimbursement.
Other insurers followed in making codes the basis for billing. Coding systems begot new coding systems, because few hospitals wanted to be paid according to Medicare’s relatively low DRG standards. And because strategic coding meant increased payment, that begot coding specialists and coding courses and coding degrees. There are now different increasingly complex coding languages that define payment for different kinds of services: CPT codes, for office visits delivered by doctors, as well as HCPCS, ICD-PCS-CM and DRG, for charges that are incurred in the hospital. There are tens of thousands of codes in each lexicon that have become increasingly specific. For example, there are different codes for in-office earwax removal depending on the method used (irrigation or instruments), different codes for delivering different vaccinations and a code for each injection delivered in the hospital. Different insurers also use different coding systems. While Medicare would have most likely considered Wickizer’s brain bleed as DRG 021, if billed to a commercial insurer, it could result in more than a dozen ICD codes and hundreds of HCPCS entries.
Seemingly subtle choices about which code to use can have large financial consequences. If after reviewing a hospital chart of, say, a patient who has just had a problem with his heart, a hospital coder indicates the diagnosis code for “heart failure” (ICD-9-CM Code 428) instead of the one for “acute systolic heart failure” (Code 428.21), the difference could mean thousands of dollars. “In order to code for the more lucrative code, you have to know how it is defined and make sure the care described in the chart meets the criterion, the definition, for that higher number,” says one experienced coder in Florida, who helped with Wickizer’s case and declined to be identified because she works for another major hospital. In order to code for “acute systolic heart failure,” the patient’s chart ought to include supporting documentation, for example, that the heart was pumping out less than 25 percent of its blood with each beat and that he was given an echocardiogram and a diuretic to lower blood pressure. Submitting a bill using the higher code without meeting criteria could constitute fraud.
Each billing decision, then, can be seen as a battle of coder versus coder. The coders who work for hospitals and doctors strive to bring in as much revenue as possible from each service, while coders employed by insurers try to deny claims as overreaching. Coders who audit Medicare charts look for abuse to reclaim money or fraud that needs to be punished with fines. Hospital coders teach doctors — and doctors pay to take courses — to learn how they can “upcode” their charts to a more lucrative level with minimal effort. In a doctor’s office, a Level 3 visit (paid, say, at $175) might be legally transformed into a Level 4 (say, $225) by performing one extra maneuver, like weighing the patient or listening to the lungs, whether the patient’s illness required that or not.
While most hospitals and insurers set their own rates for each level of care, adding a step when interacting with a patient can also bring windfalls. E.R. doctors, for example, learned that insurers might accept a higher-reimbursed code for the examination and treatment of a patient with a finger fracture (usually 99282) if — in addition to needed interventions — a narcotic painkiller was also prescribed (a plausible bump up to 99283), indicating a more serious condition.
Toward the end of the 20th century and into the next, as strategic coding increased, a new industry thrived. For-profit colleges offered medical-coding degrees, and internships soon followed. Because alphanumeric coding languages are as distinct from one another as Chinese is from Russian, different degree tracks are necessary, along with distinct professional organizations that offer their own particular professional exams, certifications and licensing. Hospital systems and insurers — which have become huge, Hydra-like enterprises — now all employ roomfuls of coding-program graduates to perform these tasks. Membership in the American Academy of Professional Coders has risen to more than 170,000 today from roughly 70,000 in 2008.
Individual doctors have complained bitterly about the increasing complexity of coding and the expensive necessity of hiring their own professional coders and billers — or paying a billing consultant. But they have received little support from the medical establishment, which has largely ignored the protests. And perhaps for good reason: The American Medical Association owns the copyright to CPT, the code used by doctors. It publishes coding books and dictionaries. It also creates new codes when doctors want to charge for a new procedure. It levies a licensing fee on billing companies for using CPT codes on bills. Royalties for CPT codes, along with revenues from other products, are the association’s biggest single source of income.
Patients with good health insurance are often blissfully unaware and mostly unaffected by the jockeying that goes on over how to code their bills. But uninsured patients like Wickizer, or (increasingly) those with high deductibles, are stuck with no insurer to argue on their behalf. Her experience with the University of Virginia Medical Center is not unique: Studies have shown that hospitals charge patients who are uninsured or self-pay 2.5 times more than they charge those covered by health insurance (who are billed negotiated rates) and three times more than the amount allowed by Medicare. That gap has grown considerably since the 1980s.
When Wickizer arrived home from the hospital in January 2014, she had trouble concentrating and finding words; she spoke deliberately, slowly. She remembers nothing before February, she says, but relied on help from her parents, who live nearby, and her boyfriend, who is retired from the Navy. She did her best to address the onslaught of bills that began appearing in her mailbox.
First, she took stock of her finances. She paid the rent for the Norfolk apartment that she and her children lived in by renting out a townhouse that she and her deceased husband had bought in Virginia Beach; after paying property tax, insurance and maintenance on the townhouse, she just broke even. She also received about $2,000 a month in Social Security survivor benefits because of her husband’s death. In addition, she had about $100,000 from her husband’s life insurance in a retirement account, which she was also hoping would help pay for her children’s college. With medical bills totaling nearly $500,000 and no health insurance, the numbers didn’t add up. “My dad said: ‘They’ll never expect you to pay that,’ ” Wickizer told me. “But they did.”
As a sign of good faith, she quickly paid $1,500 to the hospital and $1,000 to the doctors and sought to make sense of the bills. Patients today are told to be good medical consumers, but they are asked to write checks for thousands of dollars — in this case hundreds of thousands — with little explanation of what they’re for. Wickizer did what she would have done with a credit-card statement: She contacted the hospital and requested an itemized bill. Her idea was that if she could understand how much she was being charged for each procedure, she could compare the fees with the reimbursements that Medicare or another insurer would pay for those services and begin some kind of negotiation.
A month later, on March 19, the hospital finally sent a list of charges, using medical abbreviations and terminology but not revealing the all-important alphanumeric codes. Despite being 60 pages long, the tally seemed incomplete, leaving out doctor’s charges and including other fees that seemed incidental, like charges for catheters, wires and oxygen. Room charges were vastly different on different days.
Nearly simultaneously, she received a one-page bill for the hospital portion of her care, broken down only into the broadest categories, including $111,162 in room charges, $34,755.75 for pharmacy, $19,653 for labs, $8,640 for the operating room, $8,325 for anesthesia, $1,143 for the recovery room, $44,524 for medical supplies and $40,489 for radiology services, totaling $356,884.42. The bill informed her that the medical center was prepared to offer her its standard 20 percent discount for patients who are uninsured, leaving a “what you owe now” fee of $285,507.58. It noted that the hospital could offer some additional financial assistance, but only if her household of three had assets of less than $3,100 (“such as bank or retirement accounts”), which disqualified Wickizer and very likely most Americans who have ever held a job.
Next, she did her best to find out what Medicare or another insurer would have paid for her hospitalization, hoping to offer the hospital that amount from her retirement account. To understand the Medicare codes, she had to learn a bit of coding language. Would her hospitalization count as Medicare DRG 020 or 021? She estimated that in 2013, her subarachnoid hemorrhage (most likely coded, she determined, as “intracranial hemorrhage or cerebral infarction disorders, DRG 021, with procedures and major comorbidities or complications”), would have been reimbursed by Medicare for about $80,000. Had a member of the armed services experienced the same condition, Tricare, the military insurer, might have paid closer to $70,000. But to know how much a commercial insurer would have paid, she would have to figure out what HCPCS codes the hospital used to calculate her bill, and the hospital did not send those. Hospitals tend to treat their billing strategies — codes and their master price list, called a charge master — as trade secrets vital to their business. State laws and judges tend to respect that as proprietary information.
When the billers called insisting on payment of the full $285,507.58, Wickizer explained, “I don’t have this kind of money.” She offered the hospital and its doctors the $100,000 in her retirement account. They declined and suggested that she sign up for a payment plan of $5,000 a month to the hospital — and a second $5,000 plan for the physicians’ group. It was an untenable amount.
In October 2014, a sheriff affixed a summons to Wickizer’s front door, saying that the university was suing her for nonpayment. Eric Swensen, a spokesman for the University of Virginia, declined to answer questions about the case, citing patient privacy, as governed by HIPAA rules. But he noted that the university provides $270 million worth of free care to patients who meet its criterion for assistance and sets up interest-free payment plans for those who don’t.
After receiving the summons, Wickizer resorted to a technique followed by many a frustrated customer: She went on Facebook, posted her story and solicited advice. (The Facebook group Paying Till It Hurts, where she posted her story, was created in 2014 in connection with a New York Times seriesthat I wrote with the same name.) A handful of experts — patient advocates, billing professionals, lawyers and a coder — volunteered their help pro bono to try to get more information from the medical center and translate the coding that yielded the unaffordable figure. (One notable aspect of our commercialized health system is that for every person who is pushing to profit, there is another who is doing his or her best to protect patients.)
In vetting Wickizer’s bill, the experts encountered roadblocks from the medical center at every turn in a contentious battle that lasted for over a year. Multiple legal requests to review Wickizer’s chart and complete bill — with its coding elucidated — were refused. Nora Johnson, a retired hospital bill-compliance auditor from West Virginia who volunteered to help Wickizer, noted that not revealing the billing codes constituted a violation of federal law. No insurer would have paid the bills without seeing them, allowing at least a rational attempt at negotiation. As Wickizer’s team wrote to the University of Virginia in one of their letters: “No Codes = No Pay.” The University of Virginia Physicians’ Group, which independently charged Wickizer $54,000, eventually turned over its billing codes. Wickizer’s experts were able to use the bill fragments they had received in discovery, supplemented by those codes, to get a better idea of what medical procedures Wickizer received during her three-week hospitalization. From there, they tried to extrapolate how the hospital had, perhaps, coded her case. By examining the cost reports the University of Virginia hospital must file with Medicare, which indicate the amount it spends delivering certain types of care, Christine Kraft, another medical-billing expert, estimated that even by its own calculations, the medical center spent less than $60,000 treating Wickizer.
The stealth battle between hospitals and insurers over bills for each hospitalization, office visit, test, piece of equipment and procedure is costly for us all. Twenty-five percent of United States hospital spending — the single most expensive sector in our health care system — is related to administrative costs, “including salaries for staff who handle coding and billing,” according to a study by the Commonwealth Fund. That compares with 16 percent in England and 12 percent in Canada.
That discrepancy comes, in part, from the prolonged negotiations over payment and the huge number of coders, billers and collectors who have to be compensated: Their salaries and loans from those years of training in obscure languages are folded into those high charges and rising premiums. In addition, as is often the case in warfare, the big conventional army can be at a disadvantage: The insurance companies and government seem to be always one step behind the latest guerrilla tactics of providers’ coders.
For years, creative coding has been winning over what the government calls “correct coding,” meaning coding that gives providers their due, but without exaggeration. Indeed, each attempt by the government to control questionable coding to enhance providers’ revenue has seemed to only fuel more attempts. In 1996, for example, Medicare’s National Correct Coding Initiative made it clear that certain codes couldn’t appear on the same bill because they were inherently part of the same procedure. As a rule, an anesthesiologist could not, for example, separately bill for anesthesia and checking your oxygen level during your surgery. But the government created Modifier 59 — a code that could be appended to other codes to allow doctors to take exceptions to that rule in unusual cases. Modifier 59 could be used to allow for two payments in certain situations, such as when an oncology nurse needed to insert two separate IVs for two different purposes — one to administer chemotherapy, say, and another hours later because the patient seemed dehydrated. Such cases were expected to be exceedingly rare.
But just as entrepreneurial corporate tax lawyers search each new tax code for economic advantage, entrepreneurial coders and billers find loopholes to exploit at the edge of the law. An investigation by the Health and Human Services Office of the Inspector General in 2005 found many instances of Modifier 59 abuse. Forty percent of code pairs billed with Modifier 59 in 2003 were not legitimate, resulting in $59 million in overpayment. Similarly, when Medicare announced that it would pay only a set fee for the first hour and a half of a chemotherapy infusion — and a bonus for time thereafter — a raft of infusions clocked in at 91 minutes.
Like nearly every area of medicine, coding science has advanced — though not to the patient’s benefit. Commercial computer “encoder” programs maximize income from coding and make helpful suggestions (“That could be billed for Level 3,” or “Did you forget Code 54150,” indicating a circumcision on a bill for a male newborn). Today many medical centers have coders specializing in particular disciplines — joint replacement or ophthalmology or interventional radiology, for example. Advanced coding consultants advise lesser coders. The Business of Spine, a Texas-based consulting firm with a partner office in Long Island, advises spine surgeons’ billers about what coding Medicare and commercial insurers will tolerate, what’s legal and not, to maximize revenue. The evolution of this mammoth growth enterprise means bigger bills for everyone — whether through increasing premiums and deductibles on insurance policies or, as in Wickizer’s situation, depleting the savings earmarked for children’s college.
Like many medical centers, the University of Virginia Health System has turned at least some of its billing and debt collection over to professionals, third-party contractors who have no pretense of the charitable mission espoused by the University of Virginia, founded by Thomas Jefferson in 1819 to educate leaders in public service. The collectors are often paid a percentage of the money they recover. They tend not to care whether a procedure was coded well or poorly. Their task is usually to go after the total sum the hospital says it is owed.
In Wickizer’s case, the hospital brought in a law firm that specialized in debt collection, then called Daniel & Hetzel and based in Winchester, Va. For a year and a half, Wickizer’s team of experts dissected the bills and negotiated with the hospital and its representatives at the law firm over its charges and coding strategies — just as insurers do behind the scenes on patients’ behalf. The experts laid out their logic for what might constitute reasonable payment in a detailed report based on what they could discover about Wickizer’s care: how it could be coded and what other hospitals and insurers would have paid. They helped her local lawyer, Kelly Roberts, write motions for discovery and legal letters and made offers of payment between $65,000 and $80,000, which they calculated should provide the hospital a profit on the services rendered to Wickizer.
But the hospital did not accept any of the offers. In a letter, Peter Hetzel, an attorney at the firm, said his client would accept only just over $225,000, saying the University of Virginia Medical Center was “the victim here.” He noted, too, that the small rental property that Wickizer owned — appraised at $90,200 in 2014 — was considered fair game for the hospital to seize as payment. Swensen, the spokesman for the university, said that it decides on a case-by-case basis whether or not to report nonpayment to credit agencies or to pursue civil cases against patients in court. He added: “If we obtain a lien on real estate, we do not seek to sell the property if it is the patient’s primary residence.”
In February 2016, Wickizer received a letter from the state of Virginia saying that the medical center would be dunning money from any tax refund she might get. At one point, in exasperation, Wickizer wrote to her group of experts: “More than likely I am going to have to declare bankruptcy by the time this is all said and done, and I just would like to have everything settled. I want to pay them what I have and what is fair.”
By then, Wickizer was recovering physically and had married her boyfriend. But she was still struggling with stress from the uncertainty of the mammoth bills hanging over her. With court dates scheduled and postponed, motions filed and denied, she and her pro bono lawyer from Chicago, Tom Osran, along with her local lawyer were finally scheduled to face off in court with the University of Virginia Medical Center on April 29, 2016. The day before trial, after Osran was preparing to book his plane ticket to Virginia, and after I called the hospital inquiring about attending the court session, the case was dismissed. The terms of the settlement are sealed.
Nearly a year later, Wickizer remains exhausted by the ordeal. Her speech, which was hesitant when I first spoke with her more than two years ago, sounds fluid now, and she is funny and thoughtful, though she says she still occasionally needs to search to find the right word, a form of a condition known as aphasia. Now working part-time as a clerk in a small store, she would like to go back to her previous work as a bookkeeper, she told me when we spoke in March. But she has failed to secure a job; she worries that her barely noticeable speech problems make her job interviews less than optimal. Or perhaps, she frets, the problem is her credit rating, which (unknown to her at the time) dropped more than 200 points after the doctors who cared for her reported her unpaid bills to credit agencies. That black mark will remain until 2021, even though her legal case is resolved and she now has military health insurance through her husband. And, she notes with a sigh of resignation, “I’m the kind of person who’s always tried to do everything right.”
So the little NGOs get eaten up by the mega-international NGOs like The Nature Conservancy, WWF, etc. . . and THEY get displaced by the international consultants.
. . . . . and everything just keeps getting better and better. . . .
from the print edition of The Economist for May 6 to 12th, 2017: <http://www.economist.com/news/international/21721635-they-need-diversify-growing-share-aid-spent-private-firms-not-charities>
But they need to diversify
“THE gold rush is on!” That is how a cable from the American ambassador to Haiti described the descent of foreign firms upon Port-au-Prince in early 2010. An earthquake had flattened the city and killed hundreds of thousands. But a deluge of aid presented an opportunity. The message, released by WikiLeaks, noted that AshBritt, a Florida-based disaster-recovery firm, was trying to sell a scheme to restore government buildings, and that other firms were also pitching proposals in a “veritable free-for-all”.
During the following two years $6bn in aid flooded into a country of 10m people, for everything from rebuilding homes to supporting pro-American political parties. Of $500m or so in aid contracts from the American agency for international development (USAID), roughly 70% passed through the hands of private companies.
Haiti is one example of a trend. Though not all countries break down aid spending according to the type of contractor used, data from those that do suggest that a growing share of aid is funnelled, not through charities or non-profit foundations, but through consultancies and other private-sector contractors that profit from the work. Nearly a quarter of USAID spending in 2016 went to for-profit firms, a share that was two-thirds higher than in 2008. Britain’s Department for International Development (DfID) counts its spending slightly differently: in 2015-16, 22% of bilateral spending (as opposed to money that it paid to multilateral organisations such as the UN) went to contractors, most of them for-profit companies, up from 12% five years earlier.
Typically, firms win aid contracts at auction, rather than receiving grants, as charities do. Some have become global players. Chemonics, an American firm founded in 1975, is active in 70 countries. In 2015 it won a contract for health-care services with USAID worth up to $10.5bn over eight years. Cardno, an Australian firm, won 17% of the country’s contracts last year, worth A$945m ($709m).
One reason for the shift towards the private sector is the changing nature of aid. A smaller share now is made up of traditional projects, such as building schools or handing out food parcels, and more is “technical assistance”, for example to streamline a country’s tax code and strengthen tax collection, or to set up an insurance scheme to help farmers when crops fail. Private firms may be best-placed to advise on, or even run, these schemes.
Another reason is that even as aid budgets have grown, governments have sought to make aid departments smaller and more nimble. Both USAID and DfID have around the same number of employees now as they did when their budgets were just half as large in real terms. As aid agencies struggle to manage contracts, they have turned to the private sector.
Surprisingly little research has been done on the impact of this shift. That is partly because the oversight of aid is often poor. Think-tanks are still trying to work out where all the Haitian disaster-relief funding ended up, for example. And private-sector involvement can further obscure the picture, because the winners of bids may use a host of subcontractors, or insist that some information is kept confidential for commercial reasons.
What is known, though, is that for-profit and non-profit groups work differently. A non-profit body typically has large bureaus in the countries where it works, or forms long-standing partnerships with local charities that do. It will consider whether a proposed project fits with its charitable purpose, and whether it has suitable in-house expertise; only then will it decide whether to bid. Firms, by contrast, tend to have fewer staff, and to rely on subcontractors and freelance experts who can be flown in for as long as a project lasts. Tim Midgley of Saferworld, a charity, argues that this model means that firms may be less likely to understand local cultures, build relationships with governments and monitor long-term results. But it can also be more flexible, with firms matching expertise and staffing to each contract.
To shed light on the shift towards private-sector aid delivery, The Economist has analysed 4,500 subcontracts from USAID worth more than $25,000 each. (All were granted since 2010. Those for which data were not available were excluded.) A third went to for-profit firms, and the rest to charities, NGOs or other governments. For contracts where a firm was the primary contractor, on average 41% of subcontracts went to other firms; when the primary contractor was a non-profit organisation, just 27% did. Around two-fifths of all subcontractors were based in America, although most aid work is done abroad. And four-fifths of them worked with just one primary contractor, suggesting that aid work is carried out largely by stable consortia, rather than shifting alliances.
Not just aid budgets but contracts are growing bigger, says Raj Kumar of Devex, an aid-focused news organisation. One consequence is that only large bidders can stomach the risks. Together with the high cost of preparing bids—as much as $100,000—this has led to market concentration. In Britain ten firms snap up half of all contracts (or lead consortia that do). The top ten account for around the same share of USAID contracts, a much higher share than for other government departments. In Australia they account for 70%.
The sector is consolidating further, as firms seek to expand the number of countries where they have the expertise to bid for contracts, and to run them. Between 2007 and 2015 Tetra Tech, an American firm, bought ARD and DPK, two aid consultancies; Coffey International, an Australian engineering firm; and a handful of smaller Canadian consultancies. Australia’s GRM International merged with America’s Futures Group and later became part of Palladium International, a permanent consortium of six aid firms.
A smaller firm’s best chance to pick up some of this work is to join a consortium led by a larger firm. But it risks becoming mere “bid candy”, as a recent investigation by a British parliamentary committee into DfID’s use of contractors put it, with its expertise used to win a contract, after which the lead contractor keeps the work in-house. The committee also concluded that DfID focused too much on evaluating bids rather than results.
A specific concern is that, like many firms that rely on government contracts, private aid contractors may be prone to revolving-door hiring. Our analysis of data from LinkedIn, a social network, shows that, at six of America’s ten biggest aid contractors, about 5% of listed staff name USAID as their previous employer, a higher share than for any other former workplace. The agency was one of the most common ex-employers at the other four. No wrongdoing may have resulted. But the risks are evident at Adam Smith International, which turned out to have sought to win bids by using proprietary information shared by a former DfID employee who went on to work for the firm.
Another claim is that private firms may skim too much cream from their contracts. Without access to commercial information this is hard to evaluate; however, private firms do seem to pay higher salaries than charities to their top executives. We compared firms that won USAID contracts in the past eight years with data from USAspending, a state website that lists expenditures and the pay of senior staff at some government contractors. Information about wages was available for 135 for-profit firms. For comparison we looked at figures for 346 similar-sized American charities from CauseIQ, a data company. The bosses of the private firms earn on average more than $500,000 a year—more than twice as much as their non-profit peers.
A separate study published in 2014 by Marieke Huysentruyt, then at the London School of Economics, examined 457 DfID contracts from 1999 to 2003. She found that, when controlling for the type of contract, the total personnel costs proposed by non-profit firms were on average just two-fifths those proposed by private firms. What is more, the contracts won by for-profit outfits were more likely to bust their budgets and miss deadlines.
All this suggests that donor governments should improve their bidding procedures and contract management. In the meantime, aid contractors have responded to bad publicity by lobbying harder. In 2016 a group of British aid contractors set up the Centre for Development Results to represent their views and counter unfavourable headlines. In 2011 American contractors started the Council of International Development Companies, which joined forces with an older group dubbed the “Bombay Club” after the Indian restaurant where it first met. It lobbies federal politicians, arguing against aid dollars being given directly to foreign organisations and governments, which would risk cutting its members out.
A more immediate threat to the sector is that aid budgets might fall. President Donald Trump wants to reduce American aid by 28%. Australia’s government started cutting in 2011. Britain’s government has reaffirmed its commitment to spending 0.7% of gross national income on aid—a target long suggested by the UN which Britain is the first big country to meet. Nonetheless, calls to abandon it are growing ever louder.
One way to keep going during leaner times is to bid not only for contracts, but for grants—that is, to do some aid work at cost, without making a profit from it. When USAID funding reached a plateau in 2008, following years of fast growth, a few firms started bidding for more such grants. Take Abt Associates, a firm set up in 1965 that does research and implements aid programmes in nearly 50 countries. In 2008 17% of its revenue from USAID came in the form of grants; by 2016 that share was 31%.
Another opportunity, says Mr Kumar, is to work directly for the governments of countries that have long been aid recipients. Some have started to fund programmes similar to those paid for by donors, such as improving the way their health-care systems are administered. A third option is to expand into the fledgling “corporate-aid” sector. This strand of development work involves multinationals building capacity in poor countries, not principally for philanthropic reasons, but to benefit their businesses. Starbucks, for instance, is training coffee farmers in Rwanda and Ethiopia. Private aid contractors may be well placed to act as consultants to firms keen on such projects, or as brokers between them and local partners.
One estimate puts the total value to firms of such “aid-like” work in developing countries at around $20bn a year, a figure that is expected to rise. Having built their businesses on contracts with Western governments, private aid firms may need to diversify if they are to continue to thrive.
Not all Twitter bots are trying to spam, hack or peddle you fake news. Some are works of creativity, programmed to tweet diagrams of imaginary bird migrations or haikus composed of words scavenged from surveys of marine mammals.
I follow Twitter bots for serendipitous notes that take me out of my day, if just fleetingly. There’s comfort in witnessing a narrative take form outside the direct control of humans and oblivious to the breakneck clip of the internet.
Science-themed Twitter bots come in various forms, doling out humor, factual information and galactic perspective. There’s @shark_girls, which casts two geotracked great white sharks as travel writers, quoting from the writings of Virginia Woolf and the poet Hilda Doolittle. There’s @the_ephemerides, which juxtaposes raw images taken by outer planet probes like the Cassini spacecraft with computer-generated poems. There are many more. Below are some of my favorites.
Nicole He programmed this bot to tweet a photo of her fiddle-leaf fig, a common houseplant, at 10:17 every morning. Over time, you can see the plant birth new offshoots and shuffle its leaves ever so slightly.
“It’s striking how often people tweet encouraging, nice things at the plant about how shiny its leaves are or how fast it’s growing,” wrote Ms. He, a programmer and artist, in an email. “I think I’ve discovered that a humbly tweeting plant is actually the secret to world peace (or at least kindness on Twitter).”
This bot tweets descriptions of emergency room visits from a government database that tracks about 100 hospitals across the United States.
Its parent, Keith Collins, a reporter at Quartz, emailed that he didn’t expect to laugh out loud when he first looked at the data. But most of the injuries are minor, he said, and there’s something about the way they’re written in the “pithy style of a rushed E.R. doctor.” Noticing a glut of entries about patients who punched walls, he charted the age distribution of wall-punchers and found that 15-year-olds were most prolific.
Many of the bot’s retweets come with comments like “same” or “it’s me,” he said. It “gives us a chance to laugh at ourselves.”
Each tweet from @birdcolourbot is a bird name followed by a swath of colors resembling a paint chip. Each band’s width is determined by the probability of a given bird of that species being that hue.
“I’m red-green colorblind, so I’m interested in color perception and how different people see birds (or anything really),” emailed David L. Miller, the bot’s creator and a statistician with affiliations at the Woods Hole Oceanographic Institution in Massachusetts and the University of St. Andrews in Scotland.
Also dedicated to winged creatures, this bot tweets make-believe moths of all shapes, sizes, textures and iridescent colors. It’s programmed to generate variations in several anatomical structures of real moths, including antennas, wing shapes and wing markings.
Another program, which splices and recombines real Latin and English moth names, generates monikers for the moths. You can also reply to the account with name suggestions, and it will generate a corresponding moth.
Inspired by naturalist illustrations, such as those of Ernst Haeckel, the programmers designed their bot to create moths stroke by stroke, with each insect composed of tens of thousands of individual strokes. “At its core, the moth generator is a wildly byzantine drawing machine in the shape of a moth,” said Katie Rose Pipkin, an artist at Carnegie Mellon University who created the bot with Loren Schmidt.
“They have discovered a planet. A guinea pig-like creature lives there and creeps through the valleys. It is something of a mystery.” Such are the snapshots offered by Newfound Planets, a bot that tweets about fictional distant worlds.
The human behind it, Charles Bergquist, who directs the public radio program Science Friday, wrote via email that he thinks people enjoy the bot because they yearn to know what it’s like on another planet — “how big it is, might there be water or what might the sunrise look like.”
This bot also tweets about fictional lands, but based on actual erosion science. Martin O’Leary, a glaciologist at Swansea University in Wales, programmed it as part of National Novel Generation Month, a spinoff of National Novel Writing Month that challenges people to write an algorithm that writes a novel (here’s his accompanying novel).
The bot starts with a random initial terrain, then simulates how water would flow over it to create channels, valleys and coastlines. Cities are placed away from each other and near running water, and Dr. O’Leary wrote another program to name the cities.
To him, Twitter bots are a piecemeal form of science outreach. He said a lot of publicly available information about science amounted to, “Look at this amazing thing right now!” But Twitter bots “worm their way into your life, sit there and slowly give you this drip of stuff. They’re gentle.”
Although the hospital was run by the Syrian American Medical Society — a District-based charity that relies on donations — lack of funding wasn’t the issue. And in this case, the brutality of the Syrian regime wasn’t responsible for the supply shortage.
The problem was a U.S. bank.
During the bloody siege, the medical society had tried to wire $80,000 to a vendor in Turkey so its hospitals could stock up on medical supplies. But the U.S.-based bank, in its diligence to ensure the funds weren’t being funneled to overseas terrorists, was holding up the transfer. By the time the money went through six months later, the deadly siege was over.
“Patients on life support cannot be patient,” Moughrabieh said. “They either live or they die.”
The wire transfer delays during last summer’s bloody campaign in Aleppo reflect a broad pattern: At a time of historic humanitarian need, banks are increasingly hesitant to conduct business with charities that work in disaster zones for fear that they could be caught up in funding international terrorism.
Known in charity circles as “derisking,” because banks are seeking to avoid rather than manage risk, the issue has been brewing for about three years, largely as an unintended consequence of stepped-up efforts to counter terrorism financing, charity advocates and finance professionals say.
“The inability to get humanitarian assistance to refugees from political conflicts or natural disasters can result in death from starvation, exposure, and disease,” concluded a 2016 report from the World Bank. “The elderly and the young are particularly hurt by de-risking and are literally dying as a result.”
Two-thirds of all U.S. charities that work abroad are reporting difficulties accessing financial services because of the banking trend, according to one of two new studies that show for the first time the scope of the impact the banking trend has had on aid providers working in catastrophe zones.
“I was surprised,” said Kay Guinane, director of the D.C.-based Charity & Security Network, which represents nonprofit groups working in crisis regions and issued one of the new reports. “I don’t think any of us had any idea how big a problem this really is until we got this data.”
The other report, released last month by Duke Law’s International Human Rights Clinic and the Netherlands-based Women Peacemakers Program, found that institutional donors such as Western governments and large foundations — as well as banks — are increasingly neglecting human-rights organizations that focus their work on women’s issues and operate in areas such as Syria and Iraq.
One such grass-roots group provides secular education to children in Syria to counteract Islamic State schools.
“Women’s rights and their defenders are really often caught in the crosshairs of these very risk-averse banks and overzealous regulatory authorities,” said Jayne Huckerby, a Duke University law professor and an author of the study.
The world is facing its worst humanitarian crisis since World War II, with the United Nations estimating that 65 million people have been displaced by climate change and war and that 20 million are in danger of starvation.
Drought and famine are plaguing Somalia, Nigeria and South Sudan. A Saudi-led blockade of goods is starving innocents in Yemen. The Syrian government has been blocking aid deliveries to its own people and this month allegedly killed at least 80 civilians in a chemical attack.
The derisking trend also has prompted recent closures of orphanages in Lebanon and Sudan, has cut off relief for persecuted minorities in Burma and has terminated school programs for students in Afghanistan, according to the Charity & Security Network report.
Funded by the Bill and Melinda Gates Foundation, the Charity & Security Network report asserts that it is the first comprehensive empirical study on the impact that bank derisking has had on nonprofit organizations.
The 305 charities surveyed said they experienced delays in wire transfers, requests for unusual additional documentation, increased fees and account closures.
The issue stems from well-intended efforts to tighten controls on terrorism financing in the wake of the Sept. 11, 2001, attacks. Since then, the U.S. Treasury Department has labeled nine U.S. charities as supporters of terrorism and has designated 54 worldwide.
No U.S. charity has been put on a terrorist list since 2009, but the report contends that at least 5,875 of the roughly 8,665 U.S. charities that work overseas have been adversely affected by banking behavior aimed at disrupting terrorism. [But bear in mind that 10’s of thousands of overseas DOMESTIC NGOs — in developing countries — are now also being affected by FATF regulations enforced on them.]
One District-based charity, which works to promote gender equality in sub-Saharan Africa, Latin America, Lebanon and elsewhere, was hit when Citibank froze its accounts on March 10.
“Our checks have started to bounce,” said an executive, who asked that the charity not be publicly identified out of fear of retribution that could further stall its efforts. “We are working for the betterment of people’s lives in the world. We’re not doing arms trade, or something horrible like that. I am almost beside myself with frustration.”
Sue Eckert, lead author of the Charity & Security Network study and an expert on the intersection of economics and national security, said the fundamental nature of terrorist financing is changing in part because of the bank-led crackdown on traditional cash streams.
“It’s by and large not coming through the formal channels now,” she said, noting that Islamic State funds now often “derive from their physical control of territory — from oil, sale of antiquities, and taxation and extortion, including kidnapping for ransom.”
Bank associates acknowledge the problem. Rob Rowe, a vice president at the American Bankers Association, said the chaos wrought by civil war in Somalia, for example, has left bankers feeling blind.
“Unfortunately, banks just can’t send funds,” he said. “They look at it and say, ‘We can’t make the distinction between a charity that’s trying to get money to a starving family versus one that is ready to go out and buy a stockpile of Uzis to fire on civilians. We don’t have enough information, we can’t make that call, and if we make the wrong guess, we’re the ones that are in trouble.”
BNP, as one example, was accused among other things of stripping information from wire transfers so they could pass through the U.S. system without raising red flags.
On occasion, even established charities have had their accounts closed. It happened to the Syrian American Medical Society in early 2015, more than a year before its wire-transfer debacle during the Aleppo siege in summer 2016. In February 2015, Chase Bank closed the society’s account with little explanation. JPMorgan Chase’s media relations department declined to comment,
“During that period of freezing, we weren’t able to wire money; we weren’t able to pay our staff in the U.S.,” said Randa Loutfi, a pediatrician and the organization’s director of programs.
Society officials scrambled to find a new bank. Large financial institutions politely declined, Loutfi said. She believes the word “Syria” in the title of her organization immediately made banks wary.
“We show them the license that we work under from the government,” she said. “Still, many banks were scared. They start the process and then, ‘Sorry, we cannot continue.’ ”
It took months for the organization — which treated roughly 1.4 million Syrians in 2014 alone — to get its finances back in order. The charity wound up splitting its money among three smaller banks from the Midwest.
Another U.S.-based group, Syria Relief & Development, which runs about 30 hospitals in Syria and has a shelter program for Syrian refugees in Jordan, has had its accounts closed by five different banks since 2015. Mais Balkhi, the Kansas-based organization’s advocacy and outreach manager, said dealing with banks has been one of the group’s biggest challenges.
“We’re having more attacks, people are dying, but we are sometimes unable to help because banks are closing accounts and delaying transactions,” Balkhi said.
Much of the focus on charities as potential fronts for terrorism centers on a simple phrase: “Particularly vulnerable.”
Helping to create the mistrust of charities after Sept. 11 was a highly influential but little-known intergovernmental organization called the Financial Action Task Force, an advisory panel that formed in 1989 to combat money laundering. Immediately after the attacks, the purview of the global task force expanded to terrorist-financing concerns and it deemed nonprofit organizations “particularly vulnerable” to terrorist abuse.
In June 2016, recognizing the harm to charities caused by that designation, the Financial Action Task Force removed it. But the manual used by state and federal bank examiners in the United States who investigate banks for ethical and legal lapses still reflects the old standard, charity advocates say.
Bank derisking isn’t always the most pressing problem plaguing aid givers in crisis-ravaged countries, where they are putting their lives on the line to help. In 2016, 14 doctors working with the Syrian American Medical Society were killed in combat zones, mostly when bombs fell on hospitals.
But the banking woes compound the problems.
“It’s silly to add the money issue to all the other challenges,” Loutfi said. “We already have enough challenges.”