Tag: insurance

Noah’s Ark Owners Sues Over Rain Damage!

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❝ A gigantic ark gets built with the help of a higher power, a symbolic refuge from the depravity of humankind. It is a huge, grandiose structure constructed out of wood that is perhaps larger than anything comparable in the world. Then heavy rains begin to fall, inundating the earth around it.

And that is when the lawyers are called.

OK. The damage results from how the grounds around the Ark were contoured – and affected by 40 or 50 days of rain in a year. Not quite up to the biblical standard. Still, pretty funny.

Was our healthcare system created to enrich Big Pharma?

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❝ An Irish drugmaker has jacked up the price of a painkiller to nearly $3,000 a bottle. The drug is 22 times more expensive than when the company acquired it in late 2013.

The sticker shock for Horizon Pharma’s Vimovo drug is magnified by the fact that the painkiller’s two main ingredients can be purchased separately — for just $36.

❝ Although patients typically pay just a fraction of the price for Vimovo, the dramatic price increase underlines what critics describe as a murky and wasteful system that ultimately leads to higher health care costs for all Americans.

Everything from corporate taxes to transport to insurance hustles are constructed around optimizing profits for pharmaceutical companies. We shouldn’t call this “healthcare” — it’s “profitcare”!

Left & Right Agree — Trump’s infrastructure order is plain stupid

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Click to enlarge — What downtown Houston might look like or worse

❝ No one likes Trump’s new infrastructure order…The 2015 Federal Risk Management Standard update was supported by conservative and liberal groups alike.

On Tuesday, President Donald Trump signed a new order that rescinded an Obama-era rule requiring federally-funded infrastructure to follow stricter building standards aimed at reducing flood-related damages. The Obama order also required that federally-funded infrastructure built along the coastline take into account future projections for sea-level rise.

❝ Trump’s order has already prompted swift backlash from across the political spectrum, with everyone from environmental groups to free market think-tanks arguing that there was little upside to rescinding a rule aimed at saving taxpayer money and preventing loss of life in flood-prone areas…

Since the Carter Administration, federal agencies have been required to avoid building in floodplains, but until 2015, there was no requirement that agencies that couldn’t — or wouldn’t — avoid building in flood-prone areas take extra steps to make those buildings resilient…Additionally, federal agencies constructing projects along the coastline were instructed to look at sea-level rise projections for the project’s lifetime, and take those into account when siting and building…

It’s called saving money, saving lives, by reasonable – maybe even smart – construction and siting.

❝ …Flood damage cost Americans more than $260 billion between 1980 and 2013, while federal flood insurance claims averaged nearly $2 billion per year between 2006 and 2015. Since 1998, the Federal Emergency Management Agency has spent almost $50 billion in public grants to help communities recover from federally-declared flood disasters…

Flood insurance requires all private development projects meet the guidelines just erased by Trump. Many local building codes echo national and international standards meant to save lives and ensure that residential and business structures will survive the disasters we’ve already survived – and will confront again.

Hey – We Found Where All That Retail Spending Disappeared To

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❝ Retail is in trouble. Sales declined for the second month in a row in the U.S. in March, and there’s talk that perhaps traditional retail has passed a tipping point, with lots of store closings, layoffs and bankruptcies to come.

❝ One obvious reason for retailers’ difficulties is the rise of Amazon.com Inc. and other establishments that the Census Bureau classifies as “nonstore retailers.”…

There have been even bigger shifts over the decades, though, in what we spend our money on, according to the personal consumption expenditures database maintained by the Bureau of Economic Analysis. Increasingly, it’s not tangible stuff that you buy in a store or order online, but services…

❝ Health care is by far the biggest contributor to this move from goods to services — spending on health care services has gone from 3 percent of personal consumption expenditures in 1929 to 17.2 percent last year. Spending on pharmaceuticals made up another 3.8 percent of personal consumption in 2015…

These huge spending gains can be chalked up partly to medical advances, an aging population and rising expectations for health care. But they also can lead a person to wonder to whether there isn’t something terribly inefficient about how the U.S. delivers medical care.

❝ What are we spending less on? The two biggest decliners by far have been groceries and clothing, although the share of spending going to cars and to furniture and home appliances has fallen a lot since the 1950s as well…

❝ Then, once again, there’s all that money going to health care and financial services — $3.1 trillion in 2016. Surely some of that could have been spent on shopping instead.

Validating, once again, US consumers spend more on the whole cost of healthcare for less in return than any other developed industrial nation. The details on insurance company ripoffs are easy. Just compare them to Social Security and Medicare charges. Poisonally, I think most of the rest is simple collusion between major healthcare providers, pharma and those folks in the insurance industry – again. They agree on absurd charges for procedures and prescriptions knowing they get rolled into the insurance bill.

The EpiPen tale illustrates how broadly greed is part of the pharma industry

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❝ The EpiPen pricing controversy is enough to trigger mental anaphylactic shock. First, Mylan raised the list price of EpiPens to more than $600 a pair. When protests predictably erupted, Chief Executive Officer Heather Bresch went on TV to say that if she cut the price of EpiPens, some people wouldn’t be able to get them anymore. Which is weird, because usually a lower price makes things easier to get. Then, on Aug. 29, Mylan announced it will sell a generic version of EpiPens at half the price — but keep selling the identical brand-name version at full price. Because, um, some people will be happy to spend twice as much as everyone else for their EpiPens?

❝ None of this, including the original price hike, makes sense if you think of brand-name pharmaceuticals as normal products whose prices are set by the forces of supply and demand. It does start to make sense if you picture drug pricing as a multisided, Machiavellian, long-running, high-stakes Game of Thrones involving drugmakers, insurance companies, pharmacies, pharmacy benefit managers, Congress, presidential candidates, and somewhere, down there in the smoke and dust, the children with life-threatening allergies who need to bring EpiPens to school this fall.

❝ This system has never worked well, but it’s working even less well now because of the profusion of high-deductible health insurance plans. Many ordinary Americans who haven’t reached their deductible limits are being exposed to high list prices that were intended to be no more than a starting point for negotiations between powerful institutional sellers and buyers. In other words, a price that was basically fake has become all too real. This is what Bresch argued in an interview on CNBC on Aug. 25: “It was never intended that a consumer, that the patients, would be paying list price, never. The system wasn’t built for that.”

❝ The EpiPen episode is a small part of the very big problem of high and rising drug prices. But even this small problem is kind of intractable. “Everyone in the system has built their economics and contracts on the list price that exists. It’s incredibly difficult to unwind that structure,” says Pembroke Consulting’s Adam Fein. “I can’t tell you there’s a simple solution. That’s why I’m not a politician.”

If we ever get serious about electing politicians who represent the needs of the great body of American citizens, ordinary folks, we might initiate a revision of the whole process. Put essential economics back into the loop. At least the threat of regulation and oversight might prompt industrywide action, reform.

Poisonally, I trust industry executives – especially the insurance industry – about as far as I can throw them uphill into a heavy wind. I think we’ll end up needing to reform the pharmaceutical industry as much as we need to continue to reform healthcare in general in this land.

Thanks, Barry Ritholtz

Leave your job in crap shape — take your car and chauffeur along!

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❝ Anshu Jain, who stepped down as Deutsche Bank AG co-chief executive officer at the end of June, received 2.2 million euros ($2.5 million) of severance pay and can keep a chauffeured car at the company’s expense until he leads another firm.

The payout comprises “compensation payments for non-competition agreed in the employment contract,” Deutsche Bank said in a statement on Friday. The 53-year-old was also awarded a one-time insurance amount related to pension plan benefits of 1.5 million euros.

❝ “While this may look overly generous, it probably has made it easier for Deutsche Bank to deal with another distraction and get on with the monumental job of getting back on track,” said Christopher Wheeler, a London-based analyst at Atlantic Equities LLP. “It’s clear Deutsche Bank wanted to respect what he had achieved in ensuring the best split possible and avoid a lot of ‘noise’ around the move…”

❝ Jain, who helped build Deutsche Bank into a fixed-income powerhouse in two decades at the company, stepped down in June amid a series of top-level shuffles across European banks. His successor, John Cryan, took over running a lender plagued by billions of euros in legal costs tied to misconduct and doubts over strategy.

So, he screwed up what he did and you’re afraid he may make it worse.

❝ Jain will have use of an office and secretarial support as well as the chauffeur-driven car “to use to a reasonable extent until June 30, 2017, at the latest or until he assumes another position of professional activity in a leadership function,” the bank said. He consulted for Deutsche Bank through 2015.

The lender said it has assumed the 382,000 euros of costs incurred for legal advice provided to Jain in connection with the termination agreement. Any costs incurred for tax advice provided in connection with compensation and benefits resulting from his employment relationship with the bank will be paid until the end of June next year.

The article notes this golden parachute may “send a negative signal to the firm’s employees as they face layoffs and bonus cuts”. NSS. I’d be royally pissed.

Insurance against cyber insecurity

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You’ve heard it before: The cybersecurity world has a problem, or the world has a cybersecurity problem. From the Target and Sony hacks to the Office of Personnel Management breach that compromised data on up to 25 million Americans earlier this year, attacks on both public and private networks have been on the rise in the last several years. Congress, the private sector, and the security research community are trying to find a solution, but, with all due respect, some people are just flat-out missing the proverbial rub.

Much of the debate around cybersecurity, particularly in Congress, would lead you to believe that we face technical challenges that are nearly insurmountable, and that our best bet is to institute some form of better information sharing between the government and the private sector to come up with better guidelines for software vulnerability disclosure…

A report from Verizon earlier this year illuminates the alarming fact that 99.9 percent of cyber incidents involve known, and often patchable, software vulnerabilities. If we know what the problem is, what are the cyber-baddies really exploiting?

Despite the narrative, the crux of our current cyber problem is largely not technical at all, but instead comes down to organizational behavior. Bad security practices and poor investment in OPM’s IT security are largely culpable for that hack, and Sony was compromised via basic social engineering. The humans were the weaknesses in the system that the bad guys sought to exploit…

There are several ways that a free market behavior can influence a human behavior to offset these human vulnerabilities: through legislation…regulation and, in concert with or in lieu of the others, insurance premiums. Legislation and regulation are cumbersome and, once written, slow to change, which is not ideal in an environment as dynamic as cyberspace…Lawsuits are on the rise, but are also a slow lever for change. The final option is a thriving insurance marketplace.

In practice, insurance companies act as regulatory bodies, mandating security standards and behaviors that, if left uncorrected, can void coverage. The problem at this point in time is not coming up with standards and practices, which already exist, but ensuring that they are followed. At the moment, they are not. Widespread insurance coverage could change that, but the market is immature and we’re just not there yet.

Why not?…

If you accept Morgus’ premise – then, read on. As much as I hold a boatload of contempt for the insurance industry, we’re limited by the nature of contemporary capitalism and voters who dare not look beyond what they’re told.

Morgus moves on to suggested legislation about insurance and there’s the real question. Because I don’t see anything vaguely positive being accomplished by Congress in the next decade. The next census has to be performed. Gerrymandering so artfully [and criminally] put in place by bigots and conservatives must be removed. Preferably systematically a la Canada. Hopefully, this process moves us on to more than the two old parties which tie voters into a Mobius loop of footdragging.

Ten years minimum.