Follow the Money…..

MIHSThe recent mental health contract awarded by the state to Maricopa County Integrated Health System or MIHS is raising eyebrows. MIHS, a government funded and owned entity, is on the cusp of receiving a 3-year contract that is potentially worth $3 billion dollars.

Any $3 billion dollar deal should be viewed as suspect by watchdog groups and taxpayers, but what makes this deal special is that MIHS is a government owned, property tax levying entity bidding against private providers.  In fact, MIHS currently collects nearly $60 million dollars in property taxes each year.  MIHS is even allowed to go into debt with revenue bonds that can be paid for through the district’s operating property tax levy without voter approval.

To secure the lucrative contract, MIHS teamed up with Aetna-owned Schaller Anderson, Medicaid provider Mercy Care Plan, Carondelet Health Network and Dignity Health.  Not surprisingly, private providers Magellan Health Services and UnitedHealthcare (both of whom bid on the same contract) have filed formal protests against MIHS and MIHS CEO Betsey Bayless.

MagellanWhy would the state award the largest contract its ever offered to another government entity in what appears to be a clear violation of the Arizona Constitution’s “gift clause?”  When you pull the thread and follow the money trail, it’s hard to not suspect corruption, cronyism, and a healthy dose of conspiracy.

MIHS was created by Proposition 414 in 2003 after voters approved the measure in a special election by a margin of 58% to 42%.  At the time, AZ Republic columnist Robert Robb called the establishment of a property-tax-supported hospital district “unnecessary and unwise.”  Robb even warned voters that “…special tax districts, focused on only a single service with independently elected boards, are bad fiscal policy.  Hard choices are good for taxpayers and make for more efficient government.”

Robb even called the publicity pamphlet and ballot question used to promote the measure “the most blatant case of government propagandizing I’ve seen in over a quarter century of Arizona elections.”  Bold statement for a columnist who typically calls it as he sees it.

The lobbying firm responsible for the passage of the ballot referral legislation at the Capitol also ran the ballot campaign.  Phoenix-based HighGround public affairs is run by consultant Chuck Coughlin, Brewer’s campaign advisor and a man who has been referred to as Arizona’s “shadow governor.”   According to their website:

“Our team was the principal public affairs and lobbying team for the legislation that authorized the creation of the new Maricopa County Hospital District on behalf of Maricopa County.  Following the successful passage of the legislation, HighGround was retained as the principal campaign consultant for the Yes on 414 Committee.”

Fast forward to 2008.  HighGround is once again rewarded for their work and is retained by MIHS with their first lobbying contract.  Today, HighGround works hand-in-hand with Betsey Bayless who was hired as MIHS’ CEO in September 2005.

BaylessIn February 2013, Bayless was given a 33% pay raise, an extra $125,000 per year, bringing her annual taxpayer-funded salary to a whopping $500,000.  This despite a poor rating issued by a national accrediting group, the Joint Commission, which found widespread record-keeping problems and other flaws that posed risks to patients’ safety.  This even despite the fact that Bayless has already announced she’s leaving her position at the end of 2013.  Two of MIHS’ board members even voted against the pay raise, saying they opposed raising the pay of a CEO who is leaving in less than a year and working for a public hospital.

“It really rubs me the wrong way that we’re spending this type of money,” board member Elbert Bicknell said. “Don’t get me wrong. Betsey is a smart … woman, and she’s done a hell of a job from 2005 to now. But a ($125,000) raise in a year when we give our janitors maybe a 1 percent raise or lay off people? It just doesn’t make sense.”  Dissenting board member Sue Gerard commented: “I think having that kind of salary is totally inappropriate.”

Could the pay raise have anything to do with the fact that it was widely speculated that MIHS was going to be awarded the enormous mental health contract?  Was this Betsey’s “swan song” on her way out the door?  Possibly.

But where this story gets really tangled is when one considers the ramifications of the state adopting Governor Brewer’s Medicaid expansion proposal.  Again, the value of the contract could increase an additional $1 billion dollars if the state accepts federal Medicaid dollars.  Who is running the campaign in Arizona for Medicaid expansion?

If you guessed Chuck Coughlin and HighGround, you’re correct.  Serving as Coughlin’s wingman is Peter Burns, a former Brewer budget advisor.  Perhaps that explains the governor’s complete flip-flop on this issue from less than a year ago.  The Wall Street Journal went as far as to describe the governor’s flip-flop as a “political 540°” and “a case study in the political pressure and fiscal gimmicks designed to get states to succumb.”

The New York Times sums up the magnitude of political forces and financial incentives behind this coordinated effort:

Recently, 40 lobbyists, representing at least 110 groups pushing for the expansion, among them hospitals, health care associations and business organizations, huddled in the executive wing of the State Capitol to update the governor’s advisers on their progress and hone strategies.

The Wall Street Journal goes further, discussing how “Ms. Brewer was nonetheless besieged by health-industry lobbying, especially from hospitals that want more government money and the insurers that administer Medicaid.”

There is something wrong with the State of Arizona climbing into bed with private business to give away billions of dollars in public funds.  When those decisions are tied to the largest health contract the state has ever awarded and possibly the biggest expansion of federal government our state has ever seen, tax-paying citizens are owed an explanation and deserve transparency.

Aside from the arguments of whether accepting federal Medicaid dollars related to the full implementation of Obamacare is good or bad policy, the one thing that is clear is that the consultants, lobbyists, and hospital administrators pushing the plan stand to make millions of dollars in profits.

Money makes people do strange things, indeed.

Dr. Craig Barrett Speaks Out Against Prop 204

FOR IMMEDIATE RELEASE

No New Taxes, No On Prop 204

October 02, 2012

Dr. Craig Barrett Speaks Out Against Prop 204

Former CEO and Chairman of Intel Corp. Shares Why $1 Billion More in Taxes Won’t Reach the Classrooms

PHOENIX – Dr. Craig Barrett has joined Governor Jan Brewer and State Treasurer Doug Ducey in their outspoken opposition to Prop 204. Barrett currently serves as BASIS School Inc.’s President and Chairman of the Board, and as Chairman of the Arizona Ready Education Council.

“If you’re looking to improve education, there are many systemic things we need to change like the introduction of the Arizona Common Core Standards, paying teachers based on their performance in the classroom, and helping failing schools to improve,”   said Dr. Barrett.  “Prop 204 throws money at education and numerous other special interest groups, but doesn’t tie that money to performance improvements. Unless we fix the system, we won’t see any improvement in results.  I also think sales taxes are the most regressive taxes we have; it puts more strain on the middle class and working poor than any other group. Prop 204 is bad for our economy, and if our recent history is any indication, these dollars will not make it to the classroom and lead to any improvement, like we’re always promised they will.”

Dr. Barrett has been committed to true education reform for a number of years. In 2001 he supported Prop 301, which created the Classroom Site Fund. In 2010, he supported Prop 100, which promised a temporary one cent sales tax increase. Prop 204 breaks that promise.

“Real education reform happens inside the classroom,” added Barrett. “Prop 204 doesn’t address the key areas that will make education better in Arizona. Our tax dollars need to be better focused on attracting, training, rewarding and retaining the best teachers in the nation – that’s what will get us the results we’re looking for.”

Craig Barrett joins a number of business organizations opposing the permanent $1 billion annual tax increase, including the Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber of Commerce, North Scottsdale Chamber of Commerce, Tucson Hispanic Chamber of Commerce, Arizona Small Business Association and the Arizona Retailers Association.

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Paid for by No New Taxes, No on 204. Major funding by Americans for Responsible Leadership, Lincoln Heritage Life Insurance Company, the Arizona Free Enterprise Club, and the Arizona Chapter of NAIOP