Saturday, April 18, 2009

After our health insurance agent, explaining Empire Blue Cross' "need" to impose a more than 24 percent premium increase this year, said the company's operating margin was 16 percent after premiums and taxes — meaning only 16 percent of its revenues are available to pay operating expenses — I decided to do a little research.

I was reminded of how Empire Blue Cross, like other health insurance giants, converted from a non-profit company to a publicly traded, for-profit company earlier this decade.

In a secret back-room deal struck by Gov. George Pataki, Senate Majority Leader Joe Bruno and Assembly Speaker Sheldon Silver in 2002, the "three men in a room" and the nonprofit health care giant brokered to have the nonprofit's "social assets" (some $2 billion worth) funneled into the state treasury to fund wage increases for the powerful 1199 healthcare workers union. Surprise, surprise, this Democratic stalwart labor union, long a great friend of Assembly Democrats, subsequently endorsed Republican-Conservative Pataki in his 2002 re-election bid. The deal is explored and analyzed in this excellent article, "The Curious Conversion of Empire Blue Cross: In New York, it's all politics, all the time," by economist James C. Robinson in the journal Health Affairs (July/August 2003).

The new for-profit company that took over New York's Empire Blue, WellChoice, was subsequently purchased by WellPoint, a publicly traded for-profit California-based company. Wellpoint is one of the biggest health insurance companies in the nation.

Wellpoint's 2008 annual report shows that, while the company took it on the chin a bit in 2008 — what with the global financial meltdown and all — it still turned a profit of $2.5 BILLION on revenues of $61.3 BILLION for the year. That translated into net income per share of $4.79.

How does that stack up to other publicly traded companies? While Google ($15.80 net income per share) and big oil (ExxonMobil $8.69 per share) eclipsed most other companies' performance, Wellpoint's $4.79 net income per share was higher than any other publicly traded health insurance company I found by searching Google Finance. Other health insurer's net income per share stats: Coventry $2.54; Humana $4.26; United Health Group $2.40; Cigna $1.25; Molina $.58; Aetna $.46; Health Net $.34.

I have nothing against Wellpoint's shareholders. For all I know, I may — indirectly, at least — be among them, if one of our company's 401k mutual funds might hold shares in the corporation. But something is wrong with a health care system that allows private for-profit companies to turn a profit of $2.5 BILLION on the year and still hit its policy holders with 25 percent increases. Especially when the policy holders are already paying outrageous premiums. With that kind of an increase, our plan's family coverage premium will shoot up to more than $17,000 a year. And our company's contribution towards that premium — shrinking, proportionate to the total premium every year, because we can't keep pace with these kinds of increases and stay in business — is TAXED by the state as income to employees.

Our healthcare system is sick. And it's killing US.

Thursday, April 16, 2009

There's something in the water

Sometimes, some things in Southold are hard to understand. Like how the Town Board can discuss something for an hour and the only resolution it reaches is to have another meeting to discuss it some more.

Last week's Town Board work session left me rather perplexed, which is, sorry to say, not a terribly unusual occurrence.

I don't understand how board members could in good conscience refuse to allow good drinking water to be supplied to residents in need.

I'm talking about residents of Aldrich Lane in Laurel who are forced to use bottled water because they can't sink good wells on their property. Some of them have drilled multiple wells to no avail. Some have been using bottled water for more than 15 years.

The Suffolk County Water Authority wants to run a transmission main down Aldrich Lane to provide the residents there with safe drinking water.

But Aldrich Lane isn't on the town's water map. And the board is hesitant to amend the map to add Aldrich Lane to it -- to provide the folks who live there with good drinking water. The board is so hesitant, in fact, that it didn't even bother to answer SCWA CEO Steve Jones' letter about the Aldrich Lane problem -- sent last August. And when he came to last week's work session to solicit an answer from the board, he still didn't get one. All he left with was a request to resubmit the well test data he provided last year, which some board members said they'd misplaced. And, for good measure, he left with some snide comments about not trusting the county health department's water analysis reports because the health department, as an arm of county government, isn't "independent" of the county water authority. They're both affiliated with the county, he was told, so they're probably in cahoots.

Mr. Jones seemed understandably exasperated.

Town government is charged with protecting the health, safety and welfare of town residents. That's its top job as a municipality. Why wouldn't they want to provide residents whose wells are contaminated with nasty chemicals with safe drinking water? What is really going on here?

I mean, I get it. I understand that the board is using the town's water map as a shield against development, hoping to accomplish by hiding behind the map what it ought to accomplish by good planning and zoning. The reasoning goes something like this: since approval of development proposals depends on a good supply of potable water, and since potable water from private wells is very hard to come by on the North Fork, development on the North Fork can be held in abeyance if public water isn't made available to developable land.

But that's not what's going on over on Aldrich Lane. There is no developable land there to worry about. The farmland along Aldrich is already protected. And the Water Authority is proposing to run a transmission line, not a distribution line, which means, according to its agreement with the town, only existing homes with existing private wells can tie in. So the proposed Aldrich Lane water main can't possibly induce development. Then why not come to the aid of residents in need?

If I read the board's recalcitrance correctly, the answer is "on principle." If we agree to amend the water map this time, the thinking goes, what happens next time? You give 'em an inch, they'll take a yard. Before you know it, public water will be flowing throughout Southold and then condos will start cropping up all over and, in the blink of an eye, we'll look like Riverhead.

The phrase "opening the floodgates to development" got a lot of air time in Southold Town Hall last week.

The discussion caused one official to wisecrack that the Town Board was "zoning by water." That official was right. The town is attempting to do, with its water map, what it can't find the fortitude to do with its zoning code: limit development by limiting the maximum number of dwelling units that may be built in the town. In a word -- a very dirty word, indeed -- upzone.

Sooner or later this water map gambit is going to be up. A court could change things very quickly.

The Town Board agreed to -- surprise -- discuss the proposal further at a future meeting. In the interim, Aldrich Lane residents must buy expensive bottled water to avoid drinking well water contaminated by Temik, excess nitrates, lead and other toxic chemicals. And that's just not right.

Copyright 2009, Times/Review Newspapers Corp.

Freedom of information, but at what cost?

A funny thing happened in Riverhead Town Hall during "Sunshine Week" last month. Our town government tried to pull the curtains shut. Funny? Not really. Ironic? Yes. Especially when Supervisor Phil Cardinale touts the value of open government and signs e-mails with a quote from Justice Louis Brandeis: "Sunshine is the best disinfectant."

Let me explain.

In researching a story on Gov. David Paterson's plans to cut spending on the state's Empire Zone program, reporter Tim Gannon submitted a Freedom of Information Law request for annual reports filed by businesses receiving Riverhead/Suffolk County Empire Zone credits. The plan announced by the governor would have pumped up the required job creation and investment minimums for these businesses, and we wanted to see where our local Empire Zone beneficiaries stood on these criteria. So Tim filed the FOIL request asking to review the records.

Tim was later told that since the records he requested had the businesses' tax ID number on them, which is "confidential," he couldn't simply look at the records in the town's file. They would have to be copied and "redacted" to remove the tax ID numbers.

Accordingly, the 25-cents-per-page copying fee provided by the state's FOIL law would be charged. Since the reports we wanted to review totaled 522 pages, we'd have to pay copying charges of $130.50. In addition, he was told, we would have to pay for three hours of one employee's wages, plus benefits, for the time it would take to copy the records. That would be an additional $178.49. Grand total to inspect reports required by law to ensure accountability to the taxpaying public: $309.

The person in our town's "open government" conveying this news to Tim was none other than the town's "FOIL appeals officer," deputy town attorney Dan McCormick.

The law is plain: "the fees for copies of records which shall not exceed twenty-five cents per photocopy not in excess of nine inches by fourteen inches, or the actual cost of reproducing any other record" which can include "the hourly salary attributed to the lowest paid agency employee who has the necessary skill required to prepare a copy of the requested record."

Incidentally, the cost of reproducing those "other records" is limited to "salary" and does not include benefits. Not incidentally, if the hourly wage (even with benefits) of "the lowest paid ... employee" at Town Hall "who has the necessary skill required" to run pages through a copier and cross out a tax ID number is 60 bucks an hour ($178.49 divided by three), it's easy to understand why the cost of government is out of control. But that's another column.

Think about it. In order to look at records the very purpose of which is accountability to taxpayers, the government demanded $309 -- misinterpreting a law written to ensure public access to records.

The public shouldn't have to pay one red cent to look at those records and see if Empire Zone businesses are doing what they're supposed to be doing with our tax dollars. Forcing the public to pay more than $130 in copying fees (never mind the illegally demanded $178.49 for staff time to do the copying) is contrary to everything the disclosure laws are supposed to accomplish. What's the point of requiring public disclosure if the government can effectively prevent the public from the information being disclosed by charging exorbitant fees to access the information?

Bob Freeman, the executive director of the state's committee on open government -- a post he's held since its inception more than 30 years ago -- said Riverhead is all wet. The law doesn't require the town to "redact" tax ID numbers for corporations. The public has the right to inspect the reports and shouldn't be forced to pay for copies of them. And if copies are requested by the public, the town has no right to charge staff salary costs to make the copies.

But the town's FOIL appeals officer doesn't get it. He even argued with Mr. Freeman and insisted to us that it's Freeman who doesn't know what he's talking about. McCormick agreed to waive the staff salary charge "this time" but said he "reserved the right" to impose this charge in the future. He said he would research the matter further.

So editor Michael White took this up with Phil Cardinale, figuring he's got a loose cannon in the town attorney's office and that, believing in open government as much as he says he does, the supervisor would want to straighten him out. Mike asked for assurance that McCormick would be set straight and wouldn't pull this with members of the public seeking access to public documents. Instead of an assurance, the supervisor sent Mike a lawyerly response saying that McCormick "acknowledged" the legal charge was 25 cents per page.

"It has been my intent since I became supervisor to keep town government open and to err on the side of greater openness," Mr. Cardinale wrote in an e-mail.

Now the supervisor needs to make sure his FOIL appeals officer walks the walk. Judging from another citizen's recent experience with Mr. McCormick on a FOIL issue (see Guest Spot, below), I'd say either McCormick still doesn't get the "sunshine is the best disinfectant" stuff -- or Cardinale is saying one thing and doing something else.

If you've experienced difficulty accessing public records in Town Hall, or if you've been told you had to pay copying and salary charges just to see records, I'd like to know.

Send me an e-mail:

Monday, April 13, 2009

Feds sink Broadwater plan

By Denise Civiletti
Times/Review Newspapers
Broadwater Energy’s appeal to the U.S. secretary of commerce has been denied, Commerce Secretary Gary Locke announced this morning.

The commerce secretary’s denial marks the end of the administrative process for Broadwater. The fate of the energy company’s plan to build a natural gas terminal in the middle of L.I. Sound now rests with the courts. Several court actions are already pending and a new one challenging the commerce secretary’s decision today is expected, opponents of the proposal say.

Broadwater Energy, a joint venture of Shell Oil and Transcanada Pipelines, wants to moor a 1,200-foot-long floating natural gas terminal in L.I. Sound, about nine miles off the coast of Wading River. The terminal would receive shipments of liquefied natural gas from oceangoing LNG tankers, heat the LNG to return it to its gaseous state, then supply it to the metropolitan New York area via a new 23-mile subsea pipeline that would connect to an existing gas distribution system.

The Broadwater terminal would supply the region with about 1.3 billion cubic yards of natural gas daily. Proponents of the plan argue that the region needs to increase its natural gas supply, and Broadwater would add consistency and stability to the regional supply, resulting in lower consumer energy costs. Opponents argue that the facility would increase our nation’s dependence on foreign fossil fuel energy sources, industrialize L.I. Sound, disrupt water transportation, harm the commercial and recreational boating and fishing industries and damage the Sound’s ecosystem.

Opposition to the Broadwater plan was swift and widespread upon its announcement in Nov. 2004. Suffolk County, as well as the towns of Riverhead, Southold and East Hampton brought lawsuits attempting to block the proposal. Although the Federal Energy Regulatory Commission approved Broadwater’s permit application in March 2008, it was subject to a ruling by the N.Y. secretary of state that the plan is consistent with the state’s coastal management policy. One year ago, Gov. David Paterson announced the state’s rejection of Broadwater’s proposal. The energy company then appealed to the U.S. commerce secretary to override the state’s objection, as federal law allows.

Opponents hope the secretary’s much-anticipated decision will be the death knell for the Broadwater plan. One leading opponent of the proposal, Adrienne Esposito of Citizens Campaign for the Environment, a Farmingdale-based environmental advocacy group, hailed the decision as a triumph for democracy.

“This truly is David winning over Goliath,” Ms. Esposito said.

Broadwater could appeal the commerce secretary’s decision in federal court. Broadwater senior vice president John Hritcko Jr. could not immediately be reached for comment.

Rep. Tim Bishop (D-Southampton), long an outspoken opponent of Broadwater, said the commerce secretary’s decision was “the final nail in Broadwater’s coffin.”

The Department of Commerce concluded that the project’s adverse coastal impacts outweighed its national interest, Mr. Bishop said in a statement. He said the decision was made in part because the terminal’s location in an undeveloped region of the Sound would “significantly impair its unique scenic and aesthetic character and would undermine decades of federal, state, and local efforts to protect the region.”

“I am delighted and I think we can finally put this behind us and address Long Island’s energy needs in a more acceptable fashion,” said Sid Bail, president of the Wading River Civic Association and a driving force behind the Anti-Broadwater Coalition. “This is great news,” he said. “Christmas has come early on Long Island.”

Copyright 2009 Times/Review Newspapers Corp.