Louis Proyect: The Unrepentant Marxist

May 4, 2012

Debt, deadbeats, death, and deliverance

Filed under: health and fitness — louisproyect @ 7:30 pm

A NY Times article caught my eye a few days before I posted my article on debt. Titled “Debt Collector Is Faulted for Tough Tactics in Hospitals“,  it was a reminder of how contemporary America is starting to resemble a Charles Dickens novel.

Employees [of Accretive Inc., a collection agency) were told to stall patients entering the emergency room until they had agreed to pay a previous balance, according to the documents. Employees in the emergency room, for example, were told to ask incoming patients first for a credit card payment. If that failed, employees were told to say, “If you have your checkbook in your car I will be happy to wait for you,” internal documents show.

Employees at Accretive’s client hospitals ask patients to make “point of service” payments before they receive treatment. Until she went to Fairview for her son Maxx’s ear tube surgery in November, Marcia Newton, a stay-at-home mother in Corcoran, Minn., said she had never been asked to pay for care before receiving it. “They were really aggressive about getting that money upfront,” she said in an interview.

Ms. Newton was shocked to learn that the employees were debt collectors. “You really feel hoodwinked,” she said.

My first exposure to the “bottom line” mentality of the medical industry was at Memorial Sloan-Kettering in 1985, where I had taken a job as a database administrator. Ever since I started programming in 1968, every place I worked was in the financial industry. Finally, I felt like I was working for the common good—foolish me.

Memorial Sloan-Kettering is the most prestigious cancer hospital in the United States, founded with money from two General Motors tycoons, Alfred P. Sloan and Charles F. Kettering. Without a trace of irony, the wiki on Sloan-Kettering states:

At the August 8, 1945 announcement about the research institute, Sloan and Kettering emphasized that the dramatic news of the atomic bomb, developed with a US$2 billion research program, was a graphic illustration of what can be accomplished by scientifically organized research as practiced by American industry. If as much money and talented personnel were available as the government had for the atomic bomb, they said, very rapid progress could be made in cancer research.

As head of GM, Sloan did lots of business in Nazi Germany, much of it through Opel, its subsidiary. In a good introduction to the sordid ties titled “Hitler’s Carmaker: The Inside Story of How General Motors Helped Mobilize the Third Reich“, Edwin Black writes:

Within a few years of partnering with the Hitler regime, Opel began to dwarf all competition. By 1937, GM’s subsidiary had grown to triple the size of Daimler-Benz and quadruple that of Ford’s fledgling German operation, known as Ford-Werke. By the end of the 1930s, Opel was valued at $86.7 million, which in 21st-century dollars, translates into roughly $1.1 billion.

In the meantime, GM was responsible for stunning growth in Germany’s economy. As most economists of the day knew, and as Sloan himself bragged, automobile manufacturing created thousands of factory jobs, hundreds of suppliers, numerous dealerships, widespread motorization and an attached oil industry.

Moreover, the growth of the highway network, from local roads to the Autobahn, spurred a construction boom that spawned thousands of additional jobs and necessitated hundreds of additional suppliers. Even GM’s own sponsored expert historian, who decades later examined Hitler-era documentation, concluded: “The auto industry spearheaded the remarkable recovery of the German economy that boosted the popularity of the Nazi regime by virtually eliminating within a few years the mass unemployment that had idled a quarter of the workforce and contributed so importantly to Hitler’s rise.”

For the first year or so at Memorial Sloan-Kettering, I worked on a data model for the hospital that would be used as a platform for applications like patient registration, etc. Back in the mid-80s, “normalization” and “entity relationships” were all the rage in EDP, as if defining the data model would in and of itself guarantee successful systems design and implementation. Today it is all about “object orientation” and just as much of an illusion. Computer software development fails most often because of tyrannical management structures that set target dates arbitrarily and play little attention to the grunts that are actually familiar with the enterprise. In some ways, that is the biggest joke about “Red Plenty”. If automation failed in the USSR, it was not so much about central planning as it was about bureaucratic fiat—the same methods that define American big business with all its EDP Hindenburg crashes.

Just around the time that the data model was completed, word came down that the top management at Sloan-Kettering had decided to buy a package from Shared Medical Systems. Although it was not based on a database management system, as most new systems were, it had the best gosh-darned bill collection software you could buy.

My boss Mary Hamilton explained the thinking of top management to me. Someone’s loved one would go into the hospital and get chemo or radiation “therapy” that did nothing to stop the halt of the disease. When death came, often within six months or so, the survivors had no incentive in paying for the huge bills associated with getting poisoned or zapped in small doses. So the hospital had to track the deadbeats down and collect.

When I was working at Sloan-Kettering, I read a terrific book titled “The Cancer Industry” that along with “The Cancer Wars” is essential reading for those with a class analysis. To this day, I remember what the book said about Hubert Humphrey’s stay at Sloan-Kettering. I don’t have the book handy but these paragraphs from a 1990 review should suffice:

Among the horrors stories in The Cancer Industry is the case history of Senator Hubert Humphrey, who was operated on by a team of surgeons at Memorial Sloan-Kettering on October 6, 1976. His surgeon appeared before the press and television cameras to announce that the senator was cured by the operation, but as a preventive measure, to “wipe out any microscopic colonies of cancer cells that may be hidden in the body, treatment would begin with experimental drugs.” Moss describes the aftermath:

“Within about a year, Senator Humphrey was dead. In that short time he had withered from a vigorous middle-aged man to an old, balding and feeble cancer victim. Humphrey himself blamed chemotherapy … calling it `bottled death’ and refusing in the end to return to Memorial Hospital for drug treatment.”

In 2000 Siemens acquired Shared Medical Systems and renamed the package Soarian, whatever the fuck that is supposed to mean. Appropriately enough, Siemens shared GM/Opel’s coziness with the Nazis as wiki relates:

Preceding World War II, Siemens was involved in funding the rise of the Nazi Party and the secret rearmament of Germany. During the Second World War, Siemens supported the Hitler regime, contributed to the war effort and participated in the “Nazification” of the economy. Siemens had many factories in and around notorious concentration camps to build electric switches for military uses. In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the camp, supplying the electricity to the camp.

If you go to the Siemens website, you can read about their bill-collecting prowess:

Soarian MedSuite enables you to minimize operational costs with a comprehensive billing function that captures charges immediately, then quickly generates and issues bills – helping you increase billing accuracy and reduce revenue loss. To improve collections, Soarian MedSuite immediately accounts for all services incurred during a patient’s visit and automatically calculates the total amount due. In addition, the system also supports multi-discounting and multi-payers as well as enables users to view the status of unpaid balances on all patient bills.

After finding out about Sloan-Kettering’s new-found determination to wring every last cent out of the family of poor Uncle Ned, I decided to go to Nicaragua and work for some Sandinista government agency as a volunteer. The technology would have been backward compared to the systems I worked on in the USA, but the values were progressive.

Michael Urmann, the executive director of Tecnica (who I learned died some days ago), said that I would be of more use in New York recruiting other volunteers because I was good at working with people, despite the obnoxious reputation I have earned (probably deservedly so.)

Within a year of my return, I landed a job at Goldman-Sachs. I figured if I was going to work for some scumbag corporation, I might as well go to the top (or bottom, I guess.) Toward the end of my stint there, a new EDP chief came in, a real prick named Rick Adam that I have written about before. I documented his sleazy past at an aircraft company he launched after leaving Goldman but I did not write about his latest venture following its collapse.

Adam is now the CEO of Recondo Technology, described on its website as Automating the Hospital Across the Revenue Cycle—the word revenue should be highlighted. In a link titled Point of Service Collections, there’s this:

Reduce Bad Debt and Write-Offs

Today SurePayHealth is helping hospitals and other providers across the US to verify patient identity and insurance eligibility, and to calculate an accurate patient statement at Point of Service. By ensuring data quality on the front end of the revenue cycle, hospitals can reduce back-office rework as well as full time employees required to manage bad debt and write-offs.

Yes, bad debt. That’s the ticket. Reduce all the bad debt and that which you can’t collect, you turn over to the goons at Accretive.

A few years after leaving Goldman, I went to work at Columbia University where remained for the next 20 years. That’s nearly 20 times as long as the average tenure at my other EDP jobs. I can’t say that Columbia has much in common with a Sandinista government agency but at least it doesn’t suck as bad as Goldman or Sloan-Kettering.

Now, at the age of 67, with retirement looming ahead, I will finally be relieved of the need to work for “the man” and devote my remaining years on earth to doing the things I really like: reading and writing. As Karl Marx once put it:

…the worker feels himself only when he is not working; when he is working, he does not feel himself. He is at home when he is not working, and not at home when he is working.

–Economic and Philosophical Manuscripts of 1844


  1. Well known that Opel couldn’t supply enough vehicles before the invasion of Bohemia and Moravia and that General Motors, the parent company, were called upon to help.

    Interesting article here; http://andy9279.xanga.com/608154993/ford-gm-ibm-armed-hitler-before-and-during-ww2/ .

    Comment by sanculottist — May 4, 2012 @ 8:17 pm

  2. Another variation of medical industry exploitation concerns the insurance industry “contracted rates for service” whereby a medical procedure is discounted to about 1/2 the published rate (i.e. the price to the uninsured) through the bargaining power of the insurance network.
    The medical provider then sells this inflated debt to a collection agency for fifty cents on the dollar thereby collecting what it would otherwise been paid had the patient been insured. The other fifty cents is well explained by Louis above.

    After seeing Obama campaign in ’08 touting healthcare as a right (thus triggering equal protection) and then see his plan maintain the same privilege
    based on one’s ability to pay or subject to the largesse of the industry reminds me why I consider myself a marxist.

    Comment by Pablo — May 5, 2012 @ 8:10 pm

  3. Something I saw on Flickr. Unrelated to the above – but I think you will agree:
    Dow [worldwide olympic partner]

    Comment by uair01 — May 5, 2012 @ 9:41 pm

  4. The hospitals in my state of Connecticut are not allowed to deny treatment for emergency services based on your ability to pay unless it’s elective. Some other issues that bother me about these institutions is how they extremely inflate charges for services. I was charged $3,764.00 for a bandage removal and that should be illegal. Also, when you go to the ER, you get bills from ten different practices. As a brain injury survivor, it’s impossible to sort through all of these bills. The ER should have one bill from them only with an itemized list of charges.

    Comment by Deborah Jeffries — May 5, 2012 @ 11:59 pm

  5. I would recommend to any disabled or elderly person to seek out a disability advocate or a medicare advocate. They are a public service than can help sort out bills and patient rights. After my brain injury, I literally had hundreds of bills all from different providers. Since I was comatose, I wasn’t even sure I was treated by some of these providers because of short term memory loss which is permanent and why I intend to get a disability advocate for myself. I should’ve done this years ago.

    Comment by Deborah Jeffries — May 6, 2012 @ 1:23 am

  6. […] through the intermediary of a book he wrote titled “The Cancer Industry”. As I noted in a May 2012 article about MSKCC’s purchase of the SMS software, Moss’s book was a good introduction to the slimy […]

    Pingback by Cancer, Politics and Capitalism » CounterPunch: Tells the Facts, Names the Names — August 29, 2014 @ 3:00 pm

  7. […] through the intermediary of a book he wrote titled “The Cancer Industry”. As I noted in a May 2012 article about MSKCC’s purchase of the SMS software, Moss’s book was a good introduction to the slimy […]

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  8. […] through the intermediary of a book he wrote titled “The Cancer Industry”. As I noted in a May 2012 articleabout MSKCC’s purchase of the SMS software, Moss’s book was a good introduction to the slimy […]

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  9. […] through the intermediary of a book he wrote titled “The Cancer Industry”. As I noted in a May 2012 articleabout MSKCC’s purchase of the SMS software, Moss’s book was a good introduction to the slimy […]

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  10. […] escribió titulado The Cancer Industry [“la industria del cáncer”; NdT]. Como señalé en un artículo de mayo de 2012 sobre la compra del programa que hizo el MSKCC a SMS, el libro de Moss era una buena introducción […]

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