Blogs

(From time to time I stray from border topics. This is one of those times…)

A new report illustrates what people have been saying for years in Galveston and East Texas: if you’ve got no health insurance and you are sick don’t count on hospital charity programs to help you.

A subcommittee of the Cancer Coalition of Galveston County found that despite a law requiring medical providers to provide written policies on their charity and reduced-fee care, they neglect to do so and often their employees tell patients that no “charity care” is available. The surveyors looked at the University of Texas Medical Branch in Galveston, Galveston County’s 4 C’s Clinics and the Mainland Medical Center.

They surveyors in the study repeatedly visited the hospitals and clinics from November 2007 to January 2008 to inquire whether they offered free or reduced care programs. Each time they were told by employees that there was no charity care.

In a September article I outlined how someone who is critically ill and uninsured becomes a hot potato passed from medical facility to medical facility.

On October 2007, a 27-year-old man showed up at the Port Arthur clinic. The young man—because of federal health privacy laws, we’ll call him Sam—had been urinating blood. Sam was diagnosed with a kidney tumor at the local Christus St. Mary’s Hospital ER. Normally, Sam’s kidney would have been removed, and he likely would have survived. Because he didn’t have health insurance, Christus St. Mary’s referred him to UTMB. From there, his case became a classic illustration of how uninsured patients with serious and costly illnesses are bounced from ER to ER—triaged, as required by federal law, then sent on their way with life-threatening conditions.

Doctors at UTMB did some tests and sent Sam back to Port Arthur. He didn’t know where to turn. Several months passed. Sam’s tumor grew to the size of a grapefruit. Finally, at another local ER, he was told about the county’s indigent program. By the time he got to the Port Arthur clinic, the tumor took up half his abdomen.

Updated with TCEQ Statement

A long-awaited decision on the next regional EPA administrator has finally arrived from the Obama administration.

Of the top candidates, the administration went with the one most favored by environmentalists and clean air advocates, Dr. Al Armendariz, an engineering professor at SMU and frequent critic of TCEQ’s laissez-faire policies.

Texas environmentalists I talked to recently thought Ron Curry, the Secretary of the New Mexico Environment Department, would likely get the job. Not a bad choice, they thought. But they’re rejoicing that Armendariz got the nod. “We are thrilled with Dr. Armendariz’s appointment,” said Luke Metzger, Director of Environment Texas in a statement released by various Texas environmental groups. “After eight years of the Bush EPA, it’s a new day for Texas’ environment. Move over polluter lobbyists, science and human health are in charge now.”

Armendariz’s appointment could lead to a significant shift in environmental policy for Texas. He’s been highly critical of the state’s inattention to air pollution problems, especially in the Metroplex. What I especially like is the guy comes into the job with a wealth of applied scientific expertise.

In February, he published a study that showed, contrary to TCEQ’s estimates, natural gas drilling in North Texas produced almost as much pollution as cars and trucks in the Metroplex area.

TCEQ eventually had to concede that Armendariz was correct but declined to do anything about it. That sort of obstinance may come to an end now that Armendariz isn’t an outside critic, but the top environmental official in the region.

“As a scientist, there has never been a more exciting time to be involved in environmental protection,” he said in a news release.

I haven’t seen a statement from TCEQ yet.

Update: Dr. Bryan Shaw, TCEQ chairman, has issued a statement:

“I congratulate Dr. Armendariz on his appointment as Regional Administrator for Region 6. I look forward to working with him on our common goals of protecting the health and environment of the people of Texas. While he has a long history as an environmental activist, I hope Dr. Armendariz recognizes that this position is too important to be used as a podium for environmental activism.  I urge Dr. Armendariz to use sound science in his decisions.”

There’s a growing drumbeat that TXU, the Texas utility giant, may be in deep trouble. Seems that the Wall Street geniuses who took TXU private in a highly-leveraged $45 billion deal almost three years ago made a huge miscalculation about the company’s worth.

Here’s a recent story in the The Wall Street Journal:

It was the biggest leveraged buyout ever and one of the last hurrahs of this decade’s private-equity boom. Two years later, the former TXU, now Energy Future Holdings Corp., is struggling to pare down its debt, like so many other big, overleveraged companies that went private at the peak of the market.

And, like many other LBO’ed companies, this first attempt at restructuring will only nibble away at the problem and postpone the inevitable day of reckoning.

Ultimately, EFH and many other private-equity-backed companies likely will have to sell assets to rationalize their balance sheets before their debt matures.

What went wrong?

To understand the answer you need to know a little bit about how the deregulated Texas electricity market works. The market functions in a way that allows natural gas to set the price of power. When natural gas prices are high, nuclear and coal-fired power plants are extremely profitable. That’s why TXU, in its previous incarnation, was hellbent on building 11 new coal-fired power plants; at that time, coal plants looked like a mint.

The two private equity firms, KKR and Texas Pacific Group, essentially placed an enormous bet on natural gas prices remaining high. Whoops! Gas prices have tumbled and are expected to remain low.

EFH’s balance sheet wasn’t designed for this scenario. It currently has roughly $43 billion in debt. Based on first-half earnings before interest, taxes, depreciation and amortization of $2.3 billion, that equates to leverage of more than nine times. Worse yet, debt has crept up as EFH has husbanded cash by exercising its toggle rights and servicing some of its notes in kind.

Let’s not forget that many folks anticipated that something like this could happen. During the Public Utility Commission review of the buyout, consumer advocates and some large industrial power customers argued that the level of debt was unsustainable and could bring about the collapse of the state’s largest utility.

Yesterday, I called up Geoffrey Gay, an Austin utility attorney who represents cities in rate cases, to get his reaction.

“This was foreseeable,” Gay told me. “The buyout partners were putting a higher value on the company than the company officials themselves.”

As part of the buyout deal, the regulated portion of the company – Oncor, which oversees the electric grid – is supposed to be protected from the risky retail and power generation components of Energy Future Holdings.

Gay says that he doubts the parent company will file for bankruptcy. Still, consumer advocates worry that the equity firms could move to drain EFH of its assets, putting the electric system in danger.

“It’s clear that the wires company is the cash cow,” said Gay, “and it funnels money up to the company, its owners.” In a recent rate case, Gay said the PUC awarded Oncor suspiciously high rates, perhaps in a bid to prop up the parent company. 

“There’s part of me that believes that the financial loads of the parent were a motivating factor in Oncor getting as much relief as they did,” he said.

The silver lining, though, is that the breaking-up of EFH could reduce TXU’s outsized market power. Allegations of market manipulation have dogged the company for years.

Whatever happens I doubt the Wall Street players are going to go without a meal.

A recent New York Post story (“Private equity firms milk ailing buyout”) looked at the fees the attendant firms are paying themselves.

As part of the [debt] restructuring, KKR is seeking an exchange-offer agent fee, while TPG wants an advisory fee and Goldman is eyeing a restructuring fee. The payments, which total $13.5 million, are contingent on the restructuring, sources said.

However, many observers think EFH can ill afford to cough up even that amount of cash.

Nice work if you can get it.

Just before taking office, Barack Obama called on the millions of people involved in his campaign to stay active: “I don’t want them to just sit around and wait for me to do something,” he said. “I want them to be pushing their agendas.”

Well, since he asked for it, let’s shove this agenda forward: Jobs. Middle-class jobs. Jobs with a future and a satisfying purpose. Lots and lots of those jobs.

Obama has talked often about jobs, but he’s put little presidential heft into creating them. Indeed, even as unemployment soars to 10 percent and the number of underemployed Americans almost doubles that percentage, the administration lacks the sense of urgency that ordinary families feel.

Debbie Kransky, 51, who lives in Milwaukee, has been out of work since February despite constantly being on the hunt. Her unemployment benefits have run out, and her life savings have been depleted. As she told The New York Times, “I’ve got October rent. After that, I don’t know. I’ve never lived month to month my entire life. I’m just so scared, I can’t even put it in words.”

There are millions of Debbies, yet Obama doesn’t seem to be in touch with the aching anxiety and growing anger of these people. They saw the unprecedented, multi-trillion-dollar federal bailout to save Wall Street banksters. Now they hear the recession is “over.” Yet there are six unemployed people for every job opening. Obama, however, recently brushed off this reality, saying: “As you know, jobs tend to be a lagging indicator; they come last.”

Hello—jobs are not an “indicator,” they’re the sustainer of families, the lifeblood of our middle-class society. Franklin Roosevelt made jobs first, not last. And so should Obama. Soon. In fact, now would not be too soon.

For more information on Jim Hightower’s work—and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown—visit www.jimhightower.com.

The Big Bend Sentinel has been reporting for some time that the U.S. government plans to ship 700 men a week to the international bridge in Presidio. The Mexican men ages 20 to 60 are being bused from Tucson, Arizona, to the tiny Big Bend border town to “remove the aliens from the smuggling pipeline,” according to Marfa Sector Chief Patrol Agent John Smeitana. The program began November 1. Governor Rick Perry apparently received his telegram a little too late. He sent a letter to Homeland Security on October 31 “expressing his deepest concern” with DHS’ new program. “Turning the Presidio area into a way station for the repatriation of illegal immigrants adds responsibility to local authorities and holds the potential of increasing the strain on local and state infrastructure and resources,” Perry wrote.It also puts a huge strain on impoverished immigrants and will undoubtedly result in more deaths in the Big Bend region. Isabel Garcia, a lawyer in Tucson and co-chair of the nonprofit immigrant rights group Derechos Humanos, says the deportations in Presidio will only put more poor people’s lives in danger.”It’s very maddening to me,” Garcia says. “They are treating immigrants like international criminals without looking at the root causes of the immigration such as abject poverty.”Garcia pointed out that her hometown of Tucson was not a hotbed of illegal immigration until Homeland Security cracked down on other regions of the border pushing immigrants into more dangerous desert crossings. Since 2004, 1,193 people have died in the Arizona desert according to a database run by the Arizona Daily Star. ”These are 15-year old boys, 19-year old girls many of them are desconocidos and will never be identified,” Garcia says. They also saw the number of smuggling operations increase as more people tried to cross the perilous Sonoran desert. Garcia predicts that something similar could occur in Ojinaga, the Mexican town that borders Presidio.”They didn’t sell their homes, borrow money and make the treacherous journey north just to go back,” Garcia says.The ACLU reports in a new study that more than 5,000 people have died since Operation Gatekeeper began in 1994 pushing immigrants into more rural and dangerous border crossings.This is a truly shocking number that illustrates what a terrible humanitarian crisis we have on the U.S.-Mexico border. A crisis that only seems to worsen as both Mexico and the United States ignore the underlying causes of illegal immigration.