How dare you.
PwC is one of our most trusted accounting firms…oh, never mind.

Fun article for you firepups over here.

http://www.startribune.com/nation/64025687.html?elr=KArks:DCiUHc3E7_V_nDaycUiacyKU7DYaGEP7vDEh7P:DiUX

Why did PwC do this “report?” It’s called “billable hours.” PwC had folks sitting around on overhead without a direct client to bill their hours to.

Really simple actually.

we need to consider tactical triangulation between healthcare reform and the new Leahy legislation (partial repeal of McCarran-Ferguson). I have to believe that the insurers are far more afraid of McCarran reform than they are of a strong PO, but they don’t think Leahy’s bill (and its equivalent in the House, introduced by Conyers on September 19) has any legs. We have to give it legs, and more than that, push to have it expanded to full McCarran repeal (as opposed to just the anti-trust immunity provisions), and triangulate with it back to healthcare reform to get what we want there. The message to them has to be, ‘back off on your opposition to real healthcare reform and profit protection, or we’ll suspend our push for healthcare reform for the moment and, instead, declare war on you.’

I think we should consider linking the two bills on the following basis –

1. if we do not have an acceptable healthcare reform bill by the time we get to a floor vote (whether reconcilation or cloture and assuming this doesn’t fail in Finance today), then we will move to kill that bill AND throw our weight behind Leahy’s bill (the Healthcare Insurance Industry Antitrust Enforcement Act of of 2009). We will make McCarran reform our priority before revisiting healthcare reform, effectively threatening to lobotomize the insurance industry and forcing their CEOs to contemplate their future in orange jumpsuits. Once we finish them off, then we’ll come back to doing healthcare reform in a year or two.

2. if we get acceptable healthcare reform done, then we’ll back off on pushing for Leahy’s bill and they can keep on doing whatever crime they do, for the moment.

This will take away the insurance industry’s incentive to misbehave with more PwC reports and otherwise subvert the process by making real healthcare reform a lose or lose-more proposition. It’s time to take away the carrot.

http://leahy.senate.gov/press/200909/091709a.html#statement

Link to the Leahy McCarran reform bill.

This could just be CYA by PWC. They put out a bogus report on Monday that gets a lot of coverage of the primary flawed conclusion and it gets passed around the Finance committee. Tuesday, they put out an oopsie and back off the flawed conclusion which gets no coverage and is not passed around the committee. That way, they get the bull puckey into the information stream, but they can still cover themselves if they get called on it later.

I’m working on a story on the Leahy/Conyers McCarran reform bill for today or tomorrow.
d

Well, I’M trying to cover the oopsie :)

what’s your take?

Citizen Blub:

This is great analysis and it gives light to efforts beyond the center ring of the circus to address the systemic economic problems that have killed our entire economy, namely the slow murder of the whole concept of federal anti-trust legislation over the last 50 years.

But we can do more than 2 things at once if we can get the progressive Democrats to work together and advance a coherent economic vision that begins by blowin’ up the ponzi investment bankin system and puttin some bright lines down between real banking and legalized gambling.

But let’s keep the main focus on public healthcare that’s our entry to bringin’ down the entire dinosauer

America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.An excise tax on employer-sponsored high value health plans.
Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
New taxes on health sector entities

in other words;

“we need you to find a method to say these things would cost the consumers money”

this is not a study of any kind, it is clearly a hit piece and price gets away from it as fast as they can with this announcement

What do you wanna bet that PWC didn’t distance themselves from their billing statements? The large accounting firms are a large joke.

And speaking of that (and slightly o/t): Anyone seen the bullshit ad for “BDO” running on cable? “The partner’s already on it.” Nausea was my initial response…

David, do you have a link to the full PWC “statement”?

Does the AHIP represent people whose values are no better than were those of the Nazis or other genocidal murderers?

I think the values of these people are no better.

No one who now defends the excessive profits and astronomical compensation packages of private insurance companies’ executives rather than defend the lives of tens of thousands of Americans who die each year, human beings who die, who lose their lives when they get sick or are injured, for no other reason than because they do not have enough money, will be able to explain later to their children or their children’s children, after this travesty against humanity is finally stopped, why they sided with such inhumanity.

Of course it’s CYA by PwC.

Someone at AHIP knew someone at PwC and called and talked:
AHIP: “Hey, can you guys do a quick “study” of these four aspects of the Baucus Plan?”
PwC: “Sure. When do you need it?”
AHIP: “It would be great if we could get it before the FinCom vote.”
PwC: “No problem. Of course, we will have to bill a higher rate for the speed?”
AHIP: “Not to worry. You’re covered.”

I wonder if some PwC federal contract agencies got rattled by folks who saw this AHIP report for what it really is: political cover to make Max Baucus’ bill look centrist. “See, AHIP hates our bill!”

Even though the insurers and their minions wrote the damn bill.

I mean, PwC must have business elsewhere in the federal government, right? Perhaps even on Capitol Hill? Wouldn’t want to endanger those relationships with such a blatantly slanted report.

…not the sort of thing most people in the consulting industry worry about. Remember, PwC isn’t Booz Allen much less exclusively a lobbyist firm. They don’t work like a well-oiled lobbying machine. They’re a bunch of reasonably well-paid (but not exceptionalyl well-paid) technocrats hired to write stuff to validate corporate agendas all the time… some principal gets the assignment..they execute it, do what they’re told. They don’t make the big bucks, and they’re not so sophisticated as to worry about their reputation. If there’s damage control to be done later (as is now happening), then senior mgmt jumps in and tries to fix the problem.. which is what’s going on now, but they probably didn’t even know about the assignment at the time it was accepted and carried out. Guys who make what they make don’t worry about stuff like that. They just want to keep their jobs and keep up on their mortgage payments in the less tony suburbs of New Jersey and NOVA.

Bingo!

IOW, The Full Andersen

Mornin’ All

PWC issued an honest report – the scope was laid out on the page one. If AHIP promotes the report as being conclusive about issues not within the scope of the report, that is AHIP’s dishonesty, not PWC’s.

I found it curious that I could not find a name for whoever authored the report… under accounting rules a partner needs to sign off on audits and tax returns. A report like this with no signature is more than a bit curious. While there is no law requiring that a partner needed to sign it, one should never give any weight to an unsigned opinion of accounting any more than one should credit an unsigned legal opinion.

hehe. yep. I’m not sayin’ they’re behaving responsibly.. they’re not if you look at the big picture, but they don’t look at the big picture – that’s not their job.. their behavior is understandable to me. Their’s nothing wrong with their report from what I can see.. it is just being used by others are political cannon fodder.

A comparison of the uninsured with the insured:

Uninsured trauma victims are less likely to be admitted to the hospital, receive the full range of needed services, and are 37% more likely to die of their injuries.

This sounds like more of a health services problem.

firm signs the report.. not an individual.

Abe was a Republican, who freed the Slaves, not enslaved slaves. Have they forgotten history or just brain dead like some dogs painted blue?

You mean corporations….. to avoid, minimize “individual” liability/ accountability for potential wrongdoing while maximizing profit and political clout to influence policy by buying access to policymakers, who write compromised law, which benefits the corporation!

The firm as a whole did? The firm as a whole bears responsibility for the report, sure, but which wise guy at the national office in D.C. (presumably) authored it and felt empowered to put the name and good will of thousands of partners and tens of thousands of staff on the report?

This is a case of a client misrepresenting the scope of the report after it had been published. I suppose what should happen now is for PWC to fire AHIP as a client. I will be curious to see what they do.

(My spouse works at PWC, fwiw. She expects to get an email in the next couple days clarifying whether PWC has a political position on health care reform. I doubt very much that they will take a position.)

I doubt that the report has “backfired.”

The insurance companies are setting themselves up to win either way the health care bill comes out.

If the report or the congressional reaction to it scares enough people and kills health care reform, the insurance companies win.

If Congress modifies the bill to include even more onerous mandates, the health insurance companies win.

If Congress goes ahead and passes the bill as it stands now, the health insurance companies will jack rates up as the report predicts and place the blame on Congress and the President. The insurance company post-passage refrain will be “we told you so.”

From the insurance companies’ perspective, the beauty of the report is that they are in complete control of the outcome of the prediction. In the absence of effective competition – such as a strong publicly-run insurance option – they can set whatever prices they want. Better still, the government picks up the difference for the folks who can’t afford them.

As the report notes “if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the effects we have estimated.”

Sadly, there are no other provisions.

it’s also standard practice. I don’t work on behalf of big companies but I issue all of my own consulting stuff (except for published research) in the name of my employer (a research institution). They get credit for what I do and also take responsibility for my work if I mess up (the most that’ll happen to me is that I’ll get personally fired.

I don’t think I’ve ever seen an individually signed PwC consulting report, though.

I’m trying to get a handle on how many supporters there are. It’s pretty interesting that Americans United for Change put out an ad that foregrounds the industry’s antitrust exemption. I’m trying to see if there’s actual support in Washington or if it’s being used as a hammer or at all.

Make health “insurance corporations” illegal, as are slave owners and the institution of slavery……

“….the industry’s antitrust exemption….”

Revoke it!

Good point. My familiarity is with the audit and tax consulting end of things, and the firm has not done a substantial amount of consulting in years, since the ‘Monday’ business was sold off.. So maybe this is standard practice for this sort of consulting work. I do find it strange that a savvy consultancy could issue a potentially misused report without any name, address, or phone number behind it. If a journalist wanted to follow up on something, how would he contact the authors of the report? If I doctored up a version of the report and circulated it (say, as an undisclosed draft), how would anyone verify which version was correct?

I don’t have a link directly, but the statement above is the entire statement, as has been reported elsewhere.

Personally I’m surprised that AHIP didn’t include a clause insisting that PWC could not comment on the “study” for a month after AHIP released it. How dare they point out that the study did not include any of the “price-control” provisions!!! I’m shocked!

But perhaps we should take the AHIP study at its word – that the insurers will not voluntarily reduce costs…and add more provisions to compel them to do so…like the public option.

Naughty boys!

No CBO report on premium impacts? Was not the goal of reform to control costs and make health care affordable?

probably not is my guess.. unless we in the grassroots choose to make it an issue.. Leahy’s tried to push this before, without much success.

I think these reports are doctored up and misused quite frequently. Very few consulting firms have decent follow-up to ensure that doesn’t happen, and with margins as low as what they are for what they do, no financial incentive for them to do so (the mantra is stay 100% billable, don’t even breath unless its billable, don’t hit overhead, etc, etc…). So every now and then they’ll have messes like this one that come and (quite fairly) back them on the behind.

The insurance company post-passage refrain will be “we told you so.”

That’s a Pyrrhic victory if there ever was one, as it will just result in less affordable health care and set the stage for less business-friendly reforms down the road.

The big 8 6 ? accounting firms live and die by their reputations — look what happened to Arthur Andersen after Enron.

PWC misjudged their audience (i.e., the degree of scrutiny they hadn’t expected from folks interested in picking it apart), and the optics of what looks like a very public f’up are a lot clearer and bumperstickier than their pointing out that their job didn’t include calculating cost savings.

While this ‘used and tossed aside’ is part of life in the Beltway, this feels a little more like 43’s MO – or maybe I’m just making the R-association jump…

Wouldn’t it be ironic of this report were used down the line to nail down single-payer.

By the way, why don’t we like this report? This report IMO is good for us. It basically says that by assuming no behavioral change on the part of the insurers, they will drastically increase rates with the proposed Baucus Bailout Tax. We’ve been saying exactly that for months now… using many of the same numbers. That we need the strong PO for cost containment.. this report confirms exactly what we’ve been arguing – it proves once again that the insurers are incorrigible and the strong PO is a requirement. I agree wtih Rep. Weiner (D-NY) on this one. Regardless of AHIP’s misguided motivation, the report basically told the truth.. and that truth is that we need the strong PO.

Whoa! curiouser and curiouser………….

I called my Rep and asked for him to support Weiner AND keep the Kucinich amendment

I agree. We need to get in the habit of making multipronged attacks all at once, on a broad front. Otherwise, we see what we are seeing in the healthcare reform circus.

When allowed to tackle a single issue at a time, the politicians and lobbyists get to spin it out, rephrase it, turn it into a slogan, and sell the unrecognizable result back to us with months of doublespeak.

But if we can attack health insurance, insurance-company antitust exemptions, medical malpractice by insurance companies, and press for economic reforms like those Hugh enumerated yesterday, we can, perhaps, gum up the political machine–sort of a distributed demand for service attack, to coin a phrase. The one advantage we have is that there are still more of us than there are lobbyists. So we might just be able to keep them all too busy on too many fronts.

I used to be a manager at PwC. The accounting firms became hired guns back in the 1990s. The partners were upset that they were not becoming gajillionaires during the dot.com boom.

Here is an article about Andersen and their leadership during that time of shift from accounting to advocacy. It is from the Wall Street Journal, and if they are writing about it, it must have really been bad. Believe me, the same thing was going on at PwC and KPMG. I can’t speak firsthand about Deloitte or E&Y.