Saturday, June 07, 2008

The great "can kicking" comparison - West Virginia vs. Ohio

From John Curry, June 7, 2008
Subject: The great "can kicking" comparison - West Virginia vs. Ohio
West Virginia Gazette June 7, 2008
Year after year, governors and Legislatures promised teachers more in pensions than they laid aside to pay for those pensions. They kept kicking the can down the road. NEARLY 15,000 teachers voted to convert their defined-contribution retirement plans to the more lucrative defined-benefit plan, which guarantees teachers a set monthly pension when they retire.
They will turn in their 401(k) plans for the Teachers Retirement System. They likely made a wise financial decision.
But this switch will affect taxpayers. The old fund is only 51 percent funded, according to the most recent report, which will be updated in July. The unfunded liability now stands at $3.5 billion.
That is a vast improvement from years ago, however, when the Teachers Retirement System was less than 20 percent funded.
Year after year, governors and Legislatures promised teachers more in pensions than they laid aside to pay for those pensions. They kept kicking the can down the road.
To his credit, Gov. Joe Manchin has stopped the game of Kick the Can.
West Virginia legislators weren't the only ones kicking the can down the road. We have some Ohio legislators who are pretty good at kicking the can down the road also...try house Majority Leader Jon Husted and the F.I.R.E.S. House committee where House Bill 315 still sits collecting dust after a year on the shelf! This IS an election year and THEY certainly don't want to put anything before a vote of the Ohio House that involves additional monies going toward healthcare coverage for Ohio's retired educators who are victims themselves of former STRS Board members and former STRS administrators who played an excellent game of "kicking the healthcare planning can" down the road back in the early years of the 21st Century when they could have.
Of course, Ohio legislators retire in a retirement system (OPERS) which didn't allow the game of can kicking to occur, did they? They don't have the political courage to stop the game of can kicking, do they? Anybody out there ready to play a quick game of "kick the retiree and his/her spouse?" The winner gets a month's (2009) STRS healthcare premium of $960...the loser gets a month's OPERS healthcare premium of equal coverage for just $80! Or...if you are just too old to play you can just sit on the sidelines and watch. Heck, can even volunteer yourself to be the can, can't you? If you stand silent on this deserve to be the can! Isn't it about time to become vocal and open up a can for your friendly local legislator who just doesn't want to talk about HB 315?

Friday, June 06, 2008

Status of HB 315

From John Curry, June 5, 2008
Subject: ...the latest on HB 315....?
From:, June 4, 2008
Subject: [Champions] June Message to Health Care Champions
In April 2008, Rep. Scott Oelslager hosted a meeting of the various stakeholders in House Bill 315. His goal was to get each group to share its position on the bill and to determine if there is common ground upon which to build a consensus. As in previous discussions, the perceived cost to employers remains a major stumbling block for some of the groups -- especially the Ohio School Boards Association and the Ohio Association of School Business Officials. Rep. Oelslager will be calling the group together again this summer to find common ground that can move the legislation forward. It remains to be seen if any hearings on the bill will be held during the lame-duck session after the fall election -- or if this will occur under a new bill number and a new General Assembly session.
While discussions continue at this level, the need for H.B. 315 is also being communicated in the more public arena of campaigns for November's election. STRS Ohio and the Health Care Advocates for STRS have sent letters to both incumbents and those aspiring to seats in the General Assembly about the legislation, explaining the need for this ongoing, dedicated revenue stream. In addition, the Ohio Education Association and the Ohio Federation of Teachers are asking candidates about H.B. 315 as part of their screening process for organization endorsements.
Health Care Champions can play an important role at this time by also talking to candidates this summer and fall about the importance of this legislation to Ohio's public educators. Your work has been critical to keeping this topic at the forefront -- where it must remain if a workable solution is to be passed. By talking to candidates in these coming months, you pave the way for more constructive and fruitful conversations when these legislators take their seats in January.
Other news you may find helpful:
(1) There has been another change to the composition of the Financial Institutions, Real Estate and Securities (FIRES) Committee. Rep. Bill Healy was replaced by Rep. Stephen Slesnick.
(2) Outreach to school boards continues, thanks to the hard work of several Health Care Champions who have been able to get representatives from STRS Ohio and the Health Care Advocates for STRS on board meeting agendas. During the past few months, we have made presentations to Northmor Local Schools, Perry Local Schools, Clear Fork Valley Local Schools and Mentor Exempted Village Schools. Also on the schedule are the Madison Local Schools (Lake County) and Mapleton Local Schools. If you know a board member or have a good working relationship with your board, we hope that you will ask them if we can make a personal visit to talk about H.B. 315 at one of their meetings. We have found these discussions to be extremely beneficial, as they have given us an opportunity to talk about retiree health care in a broader sense than just the aspect of cost.
(3) Many county chapters of ORTA also meet in the spring and gave STRS Ohio associates an opportunity to speak at their luncheon meetings, including Marion City/County RTA, Wood County RTA/BGSU Retirees Association, Clinton County RTA, Jefferson County RTA, Champaign County RTA, Franklin County RTA, Licking County RTA and Carroll County RTA. STRS Ohio also was given a spot on the agenda at each of the four ORTA Spring Conference meetings held in Athens, Canton, Findlay and Wilmington. Opportunities to talk face-to-face with members about H.B.
315 and other STRS Ohio issues are greatly appreciated!
(4) Earlier this year, in February and March, STRS Ohio conducted its annual telephone surveys of 300 active members and 300 retired members. All participants were randomly selected. The survey results show that majority support for H.B. 315 continues among both groups. Additional survey results will be shared in the next STRS Ohio newsletters.
(5) Each month, STRS Ohio's Governmental Relations staff publishes Legislative News, highlighting bills and events at both the Ohio Statehouse and in Washington, D.C., that may be of interest to STRS Ohio members. You can access copies of this newsletter via STRS Ohio's Web site under "Quick Links" on the right-hand side of the home page
( If you prefer to receive a print copy in the mail, contact STRS Ohio's Governmental Relations office at (614) 227-2913.
Many Health Care Champions continue to share news via e-mails, phone calls and feedback forms regarding their activities on behalf of H.B. 315. This input is valuable and greatly appreciated. Please remember that STRS Ohio staff and members of the HCA are here to assist you and to provide any needed materials. You can contact us by sending an e-mail to or by calling toll-free 1-888-227-7877 and asking for extension 4077.

Thursday, June 05, 2008 much did the average Rx coverage rise from last much did yours??

From John Curry, June 5, 2008
Subject: much did the average Rx coverage rise from last much did yours??
From: Frank Kaiser, June 05, 2008
Subject: [SeniorNews] MEDICARE DRUG COVERAGE IS COSTING MOST SENIORS MORE - News from Suddenly Senior

Premiums for the top 10 prescription plans are up an average of 16% from last year, a new study finds -- a hardship for many people.
By Ricardo Alonso-Zaldivar
Los Angeles Times Staff Writer
June 5, 2008
WASHINGTON -- As if escalating prices for food and gas weren't enough of a worry, most seniors in Medicare's prescription-drug program are paying considerably higher monthly premiums for coverage this year, according to a study to be released today.
Those in the 10 largest plans -- which account for nearly three-fourths of seniors signed up for drug coverage -- are paying an average of $26.39 a month, or 16% more than last year, according to the analysis by Avalere Health, an information company serving the healthcare industry.
The rise is modest in dollar terms, and some of the top plans actually lowered their premiums for 2008. But on average, the percentage increase for the drug plan is greater than the change in Medicare's Part B premium for outpatient care, which rose only 3% in 2008.
"A 16% increase is significant in and of itself, because premiums are rising rapidly at a time when Medicare beneficiaries are finding it harder to afford it," said Dan Mendelson, president of Avalere. "These are individuals on a fixed income who are facing rapidly rising prices elsewhere in the economy."
Indeed, he added, premiums for many seniors appear to be going up faster than the cost of coverage for commercial insurance plans that serve workers and their families. Data from Mercer, a benefits consulting firm, show that drug-benefit costs rose a little more than 9% last year for large employers. Both kinds of coverage are delivered by private insurers, but because the Medicare plan is heavily subsidized by taxpayers, a precise comparison is difficult.
Although seniors are one of the most important groups of voters, Medicare has not been a major issue so far in this year's election. But the rise in prescription premiums may boost Democratic proposals to authorize Medicare to negotiate prices with the pharmaceutical industry.
On the Republican side, presumptive presidential candidate John McCain supports giving Americans the right to import lower-cost medications from countries, such as Canada, where governments set prices.
The next president will face a difficult challenge just to maintain Medicare benefits at current levels, let alone make them more generous, since the program faces a serious long-term funding shortfall.
Medicare officials say the prescription program, with more than 25 million beneficiaries, is a successful example of how private companies can improve the delivery of government benefits. They point out that in many cases, monthly premiums are lower than estimated at the program's inception, and they credit that to competition among private plans.
But independent experts say the initial estimates may have been too high for several reasons, including the fact that the government had no previous experience with such a program.
Because the Avalere study factored in the latest enrollment figures released by Medicare, the analysis represents an average of what seniors are paying, not just of the premiums quoted by drug plans.
Of the top 10 plans, six raised their premiums, and four reduced them.
Average premiums for the most popular plan, AARP MedicareRx Preferred, rose by 15% to $32.08 a month, the study found. The plan, offered by UnitedHealth Group, has more than 2.7 million members.
Premiums also rose for the next two most popular plans, Humana PDP Standard and Humana PDP Enhanced, by 69% and 6%, respectively.
Medicare officials said seniors can find better deals if they shop around for coverage during the annual open enrollment period, which runs from Nov. 15 through Dec. 31. The Avalere study found some indication that seniors are doing just that. For example, 2008 enrollment in the leading plan -- AARP Preferred -- dropped by about 300,000 from 2007.
But most seniors don't switch.
"The tendency for many people is to stick with the plan they have from year to year," said Patricia Neuman, a Medicare expert with the Kaiser Family Foundation.
Since the cost of various Medicare premiums already accounts for almost one-third of the typical monthly Social Security check, "the additional dollars here and there add up and can take a toll," Neuman said.

W. Va. Educators realize the benefits of a Defined BENEFITS retirement vs. a defined contributions retirement

From John Curry, June 5, 2008
Subject: W. Va. Educators realize the benefits of a Defined BENEFITS retirement vs. a defined contributions retirement‏
Charleston Daily Mail,June 5, 2008
Teachers relieved at pension results
"I was very pleased that I'm going to be able to retire," teacher says
by Kelly Holleran
Daily Mail staff
Teachers gave each other high fives as they walked through the hallways at Cheat Lake Middle School in Morgantown after they discovered they could switch back into the state's old Teachers Retirement System.
Judy Wagoner (photo by Tom Hindman), a teacher at Hayes Middle School, was relieved to hear that she could switch back to the Teachers Retirement System. She was in the Defined Contribution system and was worried about her ability to retire. But now she knows she will be able to retire in a timely fashion."It was really big news," said Sam Brunett, an art teacher at the school.
A school nurse passing Brunett in the hallway jumped off her feet and gave him a high five, he said with a chuckle.
Almost 15,000 West Virginia school employees elected to switch from the new Teachers Defined Contribution system, a 401(k)-type retirement savings program, into the TRS, a program that guarantees a pension benefit based on final salaries and total years of service.
The average teacher had saved just $33,944 in his or her TDC retirement account, according to state data. Of the 1,100 enrollees age 60 or older, only 23 had more than $100,000. None had more than $157,000.
For people like Brunett, who has been teaching for 15 years, the news came as a big relief.
"In the new system, I had less than $75,000 in my retirement," he said. "Even had I waited it out, I probably still would have had less than $150,000 to live out the rest of my life on. I probably would have died in the chair I was teaching in. I was very pleased that I'm going to be able to (retire)."
Judy Wagoner, a teacher at Hayes Middle School in St. Albans, said she will no longer have to worry about how to spend her money.
"Those of us who have been in the new plan and realized how important it was for us to switch back into the old plan, our lives have been on hold," she said. "You don't know where to put your money. You hesitated every purchase you made. Now I know how much money I'm going to make when I retire. I'm just thrilled that it passed."
For school employees to have been allowed to switch to the old retired plan, at least 65 percent had to vote by May 12 in favor of transferring. An astounding 78.3 percent, or 14,871, employees voted in favor of the switch.
In the defined contribution plan, teachers were only required to contribute 4.5 percent of their earnings, while those in the retirement system were required to contribute 6 percent. Therefore, those who opt to switch back into the TRS must 1.5 percent of their salary for every year they've worked, plus a four percent interest rate.
That is a substantially lower cost than what they would have been forced to pay had less than 75 percent of employees voted in favor of switching into the TRS, which would have cost employees tens of thousands of dollars more.
Employees want to switch back to the TRS but can't afford to may elect to receive only 75 percent of their normal TRS benefits without paying the buy-in costs.
Brunett was elated when he found out so many were in favor of switching.
He would have had to pay about $36,000 in order to switch into the old system if less than 75 percent had voted in favor of the change, but now he is only required to pay $8,000.
"Had it passed less than 75 (percent), I would have had to take only the 75 percent retirement," he said. "At least now I can get a loan and pay off my loan."
Debra Elmore, a third-grade teacher at Anstead Elementary in Fayette County, was equally excited when she heard just how many of her co-workers voted in favor of the switch. Like Brunett, that will save her a lot of money -- about $15,000.
Elmore has been teaching for 17 years and will not be able to retire for a while, but that didn't stop her from breathing a huge sigh of relief.
"To retire with full benefits, it'll be a while," she said. "It's just nice knowing that when I do, I'll have the money to do it."
Elmore was one of many teachers who said they felt tricked into entering the defined contribution plan.
"Many of us were deceived when we were told we had to go into the TDC system because the TRS system was going bankrupt," she said. "I'm just glad the problem is fixed."
The Legislature tried to solve the problem in 2005 by letting school workers vote on whether to return to the traditional retirement system, but they required that if the majority voted to, all would be required to do so.
That didn't go over well with many teachers.
The law was later overturned in Kanawha Circuit Court after some participants argued that the state illegally took money away from people who wanted to stay in the defined contribution plan.
"For two and a half years, we've been in limbo," Elmore said. "I just appreciate the work the House of Delegates did to get this through. I'm glad that we have an answer to the problem."
But Wagoner, who has been teaching for 22 years, is worried that many people were still misled about not returning to the TRS.
"A lot of people encouraged them to stay in plan and promised them a 13 percent return on their investments," she said. "I'm really concerned about those people."
She is appreciative for those who helped pass the most recent legislation.
"I have so many feelings about it," she said. "By the time we recognized it, we were so far into it. WVEA and teacher's unions have been very supportive. They have fought for us."
It's still not clear, however, exactly how much extra teachers will make in their retirement.
Brunett is not quite sure how much extra he will earn by switching to the TRS. He said his investment in the defined contribution plan was difficult to gauge.
"Now I'll be receiving the full retirement benefit," he said. "I feel it's going to be a significant amount more, especially when I only have $75,000 in my retirement account now. You can see how that would have been a major burden on my family and I."
Elmore estimates she will make at least $500 more per month by switching systems.
Under the TDC, she probably would have made less than $2,000 per month, but now will make about $2,500 per month.
Still, the loan Brunett will have to take out in order to switch is significant and probably will be for many of his fellow teachers, too.
"An $8,000 loan is a pretty big loan to somebody who is only making $40,000 a year," he said. "We've won a great battle, but I really don't feel like the war is over yet."

Wednesday, June 04, 2008

Arrangements for Paul Boyer

From George Doyle, June 4, 2008
Subject: Arrangements for Paul Boyer
I spoke with Paul's daughter, Cheryl, last evening and the following arrangements have been made: The viewing will be Sunday, June 8 4-8 p.m. at Chiles Shawnee Chapel and the funeral will be Monday, June 9 at 10:00 a.m. at Cable Road Alliance Church. She has requested that any contributions be sent to Cable Road Alliance Church 2264 N. Cable Rd., Lima, OH 45807. I would appreciate it if all of you could spread the word since I do not have all of the e-mails of Paul's friends. Some of you have sent me some really nice quotes to use in the Eulogy, and if you have not and would like to send me some memories of Paul, please do so by this Friday so I can include them. Thank you.

Mr. Tron writes legislators Husted & Jordan re: charter school founder pleading guilty to embezzlement

From Duane Tron, June 4, 2008
Subject: Charter school founder pleads guilty to embezzlement
Dear Jim & Jon,
And another unregulated charter school director bites the dust. Just more of the ongoing corruption in what have been basically unregulated and unsupervised charter schools across America. I think you call this the practical and preferential alternative to public schools. I have spent 36 years serving public education and I can't recount a single incident of theft that is equal to anything we have witnessed with charter schools. In my 36 year career I haven't personally encountered a single public school employee who has been indicted and convicted of theft in public office.
Duane Tron
St. Paris, Ohio 43072
TUESDAY, June 3, 2008
By Dani McClain
School official pleads in embezzling case
A former operator of a Milwaukee public charter school pleaded guilty this morning to embezzling more than $300,000 in public funds intended for the charter school she founded and led from 2003 to 2006.
Rosella Tucker, 55, appeared in federal court Tuesday to confirm the plea agreement she signed late last month.
In 2003, Tucker founded the New Hope Institute of Science and Technology through a charter agreement with MPS.
In court today, she acknowledged unlawfully obtaining about $300,000 in U.S. Department of Education funds and spending about $200,000 of it on personal expenses including cars, funeral arrangements and home improvement. Tucker has argued that the remainder of the money she received was legitimate reimbursement for school-related expenses.
Tucker, who has worked in MPS and taught at Milwaukee Area Technical College, faces a maximum penalty of 10 years in prison and $250,000 in fines. She will also be required to pay MPS $200,000.
Tucker's sentencing hearing is set for September 4, pending recommendations from the U.S. probation office.


Monday, June 02, 2008

Insurance companies playing doctor? You don't say!

Insurers playing doctor, docs say
June 2, 2008
By Suzanne Hoholik
When you are sick or injured, you want your doctor to concentrate on making you better and your health-insurance company to pay for the bulk of the care he or she prescribes.
But physicians say they are spending more time trying to convince insurers that a treatment plan is necessary.
"The insurance companies call all the shots," said Dr. Neal Nesbitt, a general surgeon in Athens. "They decide what they want to pay and what they don't want to pay."
So patients either abide by the health plan's decision and forgo a treatment or spend more of their own money to follow their doctor's advice.
Health-insurance companies say they are trying to control spiraling costs, and questioning doctors' orders is one way to do it. Physicians should have to explain, for example, why they write prescriptions above a recommended dose or order expensive MRIs before prescribing physical therapy.
The number of CT scans performed nationwide increased 13 percent from 2000 to 2005, according to the Center for Studying Health System Change.
"We know there's an overuse of care that costs, but it's a fine line," said Alwyn Cassil, spokeswoman for the center. "You have to balance that with individual doctors feeling that their autonomy is being questioned."
Some insurance companies demand that doctors point to evidence, such as a published medical study, to support a change in decision.
"If you want to go over the limits, you have to call us and tell us why," said Debora Spano, a spokeswoman for United Healthcare.
One doctor can see several hundred patients and contract with 30 to 40 insurance companies. That means that a doctor can spend several hours on the phone each week arguing about the care he or she prescribes.
"There's really no uniformity or even a way for the doctors to know what might be covered under your plan versus someone else's plan," said Tim Maglione, spokesman for the Ohio State Medical Association.
For example, this month, United started to strictly follow dosage and quantity recommendations approved by the U.S. Food and Drug Administration for medications to treat schizophrenia and bipolar diseases.
Spano said this is to avoid bad reactions sometimes associated with higher doses.
But physicians say recommendations by drugmakers and the FDA aren't intended to be hard and fast rules, especially in terms of treating mental illness.
"When insurance companies tell a patient they will not permit him or her the quantity of medicines prescribed by their doctor, they're approaching the practice of medicine," said Dr. Alan Levy, a Columbus psychiatrist.
Drugs to treat schizophrenia and bipolar diseases, for example, are expensive, so when a health plan stops paying for a higher dose, the patient has to pay more or go without the pills.
"There's just study after study that shows this is not the way to save money," said Laura Moskow Sigal, executive director of the Mental Health Association of Franklin County.
Not all health plans have this policy.
Cigna Healthcare, for example, is notified when a prescription that exceeds a recommended dose is filled. Then the company calls the doctor.
"We're leaving it to the physician and other health-care professionals to make that call," said Yi Zheng, assistant vice president of clinical programs at Cigna.
He said this happens less than 3 percent of the time.
But for every company that defers to doctors, there seems to be another that denies coverage. Working through these different policies is a growing frustration among physicians.
"I hardly appeal anymore because it just goes nowhere," Nesbitt said. "It de-professionalizes the entire profession, and it puts all our patients in a medical straitjacket."

PBM 101, 102,103, &.....yes, STRS retirees, you already know what the majority of 200 million other Americans don't!

From John Curry, June 2, 2008
PBM 101, 102,103, &.....yes, STRS retirees, you already know what the majority of 200 million other Americans don't!

Q. What's the difference between a used-car salesman and a Pharmacy Benefits Manager
A. In Ohio(and many other states), used-car salesmen are regulated...PBM's are not! To see a list of those states who have laws on the books or proposed legislation "in the hopper" (29 states) to regulate Pharmacy Benefits Managers just click on this link and scroll down to table A-1. Ohio IS CONSPICUOUSLY MISSING!!!!! I wonder why???

"The settlement with Express Scripts, the third-biggest prescription benefit manager, followed a $38.5-million settlement this year with rival CVS Caremark Corp. and a $29.3-million settlement with Medco Health Solutions Inc. in 2004. The three companies collectively administer prescriptions for more than 200 million people."

"Each company denied any wrongdoing."
Note from John...don't you think it's about time that Ohio's 5 public retirement systems really get serious about forming their own PBM? It has been bandied about is cheap, action is hard to come by!

From the Los Angeles Times

Weak medicine for an unhealthy system

David Lazarus
Consumer Confidential
June 1, 2008

Some of the most influential players in our healthcare system are three companies you may never have heard of.

They're called prescription benefit managers, and they oversee the prescription-drug insurance plans offered by businesses, governments and other organizations.

And, if the attorneys general of California and 27 other states are correct, they've been pocketing money from pharmaceutical companies to steer patients into name-brand drugs.

The attorneys general announced a $9.5-million settlement last week with Express Scripts Inc., which handles the drug benefits of about 50 million workers.

The settlement with Express Scripts, the third-biggest prescription benefit manager, followed a $38.5-million settlement this year with rival CVS Caremark Corp. and a $29.3-million settlement with Medco Health Solutions Inc. in 2004. The three companies collectively administer prescriptions for more than 200 million people.

Each company denied any wrongdoing.

"We have not been doing what they claim we've been doing," said Steve Littlejohn, an Express Scripts spokesman.

He said the company agreed to the settlement to put the matter behind it and avoid further legal costs.

"Now we can focus on what we do best," he said. "Our whole thrust is to work to drive down costs."

The settlements followed allegations from state officials that the companies enjoyed too-cozy relationships with drug makers that resulted in money changing hands to push favored medicines.

"What we found is that, very often, they would get rebates from the manufacturers but wouldn't pass it along to the plans," said Al Shelden, a senior official in California Atty. Gen. Jerry Brown's office.

He was unable to provide a precise dollar amount involved but said it ran in the "multimillions."

Along with administering drug insurance plans, prescription benefit managers run their own mail-order pharmacies. This lets them buy in bulk from drug makers and offer medicine at lower prices than conventional drugstores -- basically the same way Costco can undercut your local grocery store.

Prescription benefit managers keep lists of "preferred" drugs for which people will pay less than for non-preferred drugs. Typically, a drug will be preferred if a pharmaceutical maker cuts the wholesale price in return for greater access to a prescription benefit manager's patients.

I can speak to the pluses and minuses of this system. I take a drug called Altace to lower my risk of cardiovascular troubles associated with diabetes. At the drugstore, my co-pay for Altace ran about $20 a month. Ordering online through my employer's prescription benefit manager, Caremark, lowered my co-pay to $5.

I'm guessing Caremark moves a whole lot of Altace through its mail-order service, much to the satisfaction of the drug's manufacturer, King Pharmaceuticals Inc.

Meanwhile, Caremark prompted me to switch from a blood-glucose meter I liked to one that I didn't like as much because my meter wasn't "preferred" by the company. My costs are lower with the preferred meter -- a crucial matter in managing a chronic ailment -- but it's not the meter I want.

I wonder if the maker of Caremark's preferred meter, Johnson & Johnson's LifeScan Inc., paid handsomely to go to the head of the class.

The attorneys general alleged that, in certain instances, the three leading prescription benefit managers encouraged patients and their doctors to use preferred medicines but didn't pass along rebates from drug makers in the form of lower co-pays.

Shelden, of the California attorney general's office, also said prescription benefit managers received money from drug companies that wasn't tied to specific medicines.

"Oftentimes the rebates were for the totality of all drugs that a prescription benefit manager gets from a manufacturer," he said.

In other words, the prescription benefit manager had an incentive to switch as many people as possible from pills made by Pfizer, say, to pills made by Merck.

"These would be switches that patients and doctors would be told were being made because they'd cost less," Shelden said. "That was often not true."

Charlie Sewell, senior vice president of the National Community Pharmacists Assn., said the rebate system undermines the integrity of the pharmaceutical business. His group represents about 23,000 independent drugstores.

"Rebates are just another word for kickbacks," he said.

Pharmaceutical Research and Manufacturers of America, the leading drug-industry group, wouldn't comment on the Express Scripts settlement. A spokesman said the organization "does not collect information with respect to individual companies' pricing decisions," and therefore was unaware of rebates for preferential treatment by prescription benefit managers.

Express Scripts said $9.3 million of the $9.5-million settlement will go to the 28 states that investigated it.

The remaining $200,000 will be doled out in the form of $25 checks to each patient who was required to see a doctor to have a prescription changed to a preferred medicine.

Shelden said the settlements would introduce some transparency to how prescription benefit managers operate. But the accords won't necessarily change how the business works.

"The cozy relationships between the prescription benefit managers and the pharmaceutical makers will remain," Shelden said.

Sounds like some stronger medicine is needed.

RH Jones: Female active teachers need HB. 315

From RH Jones, June 2, 2008
Subject: Female active teachers need HB. 315
To all:

The media reports that C-sections can lead to high care (HC) premiums.
Therefore it is absolutely necessary, since women make up the bulk of active and retired public school educators, that you must now have HB. 315 in place in Ohio law at your retirement - You may recall that HB. 315 is the HC income stream increase for the employer/employee for the STRS HC fund.

If HB. 315 does not pass the legislature, the STRS HC funds will soon be depleted.
C-sectioned women teachers will have to seek individual insurance coverage at retirement and those companies will, based on your medical history, make it more expensive for you purchase. If indeed your medical history excludes you altogether! This is clearly discriminatory for those who presently have, or in the past have had, Caesareans. Presently, the HB. 315 is your only choice.

This fact is sad because without motherhood there would be no human race. Folks, HB.315 is about motherhood. Only idiots would
not want their mothers, who may happen to be Ohio teachers, to be protected by HC in their retirement.

My learned opinion,
RHJones, a retired male teacher member of the Ohio STRS

Sunday, June 01, 2008

Duane Tron: The Biggest Scam in History

From Duane Tron, June 1, 2008
Subject: The Biggest Scam In History
If you want to know what the problem is on Wall Street and in this country watch the attached [link below]. You're barking up the wrong tree when it comes to the corrupt entanglements of American finance and our government. The United States Congress has shirked and abrogated its duty to the American people for a very long time and this show sheds light on the root of our problems. You have to allow the Active X control and then scroll down and read the history of the Federal Reserve. I'm sure you have never known any of this and have never read the actual history of the problems facing this country. As an old history teacher I discovered this miserable and dirty little secret about 40 years ago. Very informative reading!


Flashback from five years ago: Teacher pension losses don't stop spending -- Educators and officials question big bonuses for fund employees

From John Curry, June 1, 2008
The Plain Dealer - Cleveland, Ohio
June 8, 2003
Columbus - The State Teachers Retirement System lost 21 percent of its investment assets in the past three years, a total of $12.3 billion
by Stephen Ohlemacher
[Click on photos to enlarge]
Despite the losses, employees of the public pension fund got a total of $14 million in bonuses during the decline.
In 2001, STRS handed out a total of $6.1 million in bonuses to 345 employees, according to STRS documents. One employee's base salary of $164,000 was bumped to $342,880.
It was the same year the fund lost 5.66 percent of its assets, more than any of the four other public employee pension funds in Ohio, according to the Ohio Retirement Study Council, which oversees the funds.
A lot of pension funds lost big money while the stock market plummeted.
But STRS spending practices - and the fallout from lost investments - have sparked outrage among some of the 424,171 teachers and retirees in the system.
The fund now stands at $46.5 billion, after peaking at $58.8 billion in August 2000.
"They are spending in a manner that is completely foreign to their members, and the employers that send them dollars," said Dennis Leone, superintendent of Chillicothe schools in southern Ohio.
Leone has documented many of the STRS board's spending practices and shared them with teachers, retirees and public officials across the state.
The revelations came as retirees learned their health insurance premiums will soon double, and their benefits will be cut.
The spending includes a $94.2 million office building adorned with $869,000 in artwork, generous fringe benefits for STRS employees, and frequent out-of-state travel for pension board members.
The art of renovation
The State Teachers Retirement System spent a total of $869,000 on eight pieces of artwork by Ohio artists for its renovated downtown Columbus office building. The pieces include metal sculptures and wood bas-reliefs.
STRS also is getting criticism from unlikely sources: two public officials who sit on the nine-member board that controls the pension fund.
Ohio Attorney General Jim Petro and Susan Tave Zelman, state superintendent of public instruction, said STRS spending has been excessive.
Both have been on the board for years. Both promised to be more diligent in monitoring the fund in the future.
"At a time when there are shrinking resources, you don't give bonuses," said Zelman, a board member since 1999.
"When times are good people tend not to look at these things," she said. "You can rest assured, now I'm going to be more aggressive in looking for ways to have a more efficient system."
Petro said he is a big supporter of performance bonuses. But, he said, the STRS bonuses appear to be out of line, considering the fund was losing billions of dollars a year.
"If school districts, especially in financially tough times, would have been as extravagant as STRS has been, we'd have spanked them even harder," said Petro, who often criticized the spending policies of school districts when he was state auditor.
"I think there have been occasions when we've been brilliant in our advocacy for accountability, and there's been other occasions where we've probably not been as aggressive as we should be," said Petro, an eight-year member of the STRS board.
A third board member, state Auditor Betty Montgomery, defended STRS spending policies, though she said they should be reviewed.
"If you kept them on public employee salaries alone, you would not be able to attract or keep the quality investment managers that keep our fund growing," said Montgomery, also an eight-year member of the board.
STRS Executive Director Herb Dyer said the pension board is simply trying to recruit and keep good investment staff in a competitive profession that pays well and offers good benefits.
"I appreciate that people who don't do that kind of work for a living might not understand it, but that's the reality of the professionalism involved," Dyer said.
Teachers take a hit
The investment losses, combined with increasing health-care costs, are proving expensive for teachers and retirees. In July, teachers will have to start contributing a larger percentage of their pay to the retirement system, an increase from 9.3 percent to 10 percent. In January, health insurance premiums for retirees are scheduled to double. Insurance co-pays will increase, and benefits will be cut.
Teachers contributed $827 million to the retirement system last year. Their employers - mostly school districts spending taxpayer money - contribute 14 percent of teacher payroll, a total of $1.2 billion last year.
Some teachers complained that STRS spending hasn't reflected the financial problems of the pension fund.
The STRS board completed a $94.2 million expansion of its office building in downtown Columbus in 1999. The seven-story building is decorated with eight pieces of artwork, all by Ohio artists, Dyer said.
The $869,000 art budget follows guidelines for state buildings, but some of the price tags have angered school officials, nonetheless.
One piece, called "A Whole Morning World," is a series of painted metal tubes shaped like birds hanging from the seventh-floor atrium. The cost: $378,500.
Another sculpture, called "Integrity," cost $100,000.
The building also has a child-care center that cost $818,000 and a $426,000 fitness center, according to STRS documents. In 2002, the pension board paid $487,748 to subsidize the child-care center so employees could get discounted rates for their children. Workers with family incomes of up to $66,000 are eligible for subsidies.
"I'm all for working mothers, and I certainly support day care," Zelman said. "But I don't think that STRS finances should be subsidizing STRS child care."
The number of people working at STRS has increased nearly 42 percent since 1998, from 499 to 707. The pension board added 137 new positions in fiscal 2001, including 69 administrators, according to STRS documents.
The lost investments haven't slowed the travel of board members, who have flown to conferences in Hawaii and Alaska, among other places. The STRS board spent an average of nearly $174,000 a year the past three years on travel, according to STRS documents. The biggest spender was board member Hazel Sidaway, a teacher from Canton who spent a total of $61,400 for travel the past three years. Board member Jack Chapman, a teacher from Reynoldsburg, came in second at $52,600.
"When your assets are declining, you don't spend money like that," said Marianna Lijoi, a teacher in Eastlake. "That is not their money to spend frivolously. That money is for teachers' retirement."
Susan Jacoby, a retired teacher from Canton, said, "They have spent our money like it belongs to them."
The STRS board is made up of six members (five teachers and a retiree) elected by the active and retired teachers, and the three state officials who serve as part of their jobs.
The elected members are paid expenses, but not a salary. The public officials designate members of their staffs to attend board meetings.
The board approves STRS policies and votes on an annual budget. The executive director is responsible for the day-to-day operations.
Bonuses defended
The STRS board pays its investment staff and administrators performance-based bonuses each year for meeting certain goals, such as outperforming a stock index. In a down market, the goal for some investors is to not lose as much as a certain index, Dyer said.
The investment staff also is eligible for additional discretionary bonuses distributed from a pool of money generated from investment profits. Dyer said the pool will run out of money after bonuses are paid next month, unless the investment portfolio is profitable this year.
"We did lose some money, obviously, in market value," Dyer said. "But in general, if the staff is able to save you money in a declining period, that's good staff work."
A financial consultant's study of STRS bonuses found that the bonus system is similar to those at other companies. But the 2002 study warned that the system could result in "inappropriate risks" because "there is no downside for under-performing the market."
The study, by Buck Consultants of New York, recommended tying bonuses to the overall performance of the pension fund, rather than investors' individual goals. Dyer said the STRS board plans to adopt some of the consultant's recommendations.
Ohio's four other public employee pension funds offer bonuses to employees, but none are nearly as large as the ones paid by STRS. For example, the Ohio Public Employees Retirement System spent $765,252 on employee bonuses last year, compared with $5.7 million at STRS, according to figures provided by both funds.
The public employees pension fund has more members (797,234), and more assets ($51 billion), than STRS. But it has 168 fewer workers because it contracts with outside managers for more of its investment work. The operating budget for the public employees pension fund was $74.8 million last year, compared with $87.3 million at STRS.
The STRS staff grew in recent years because the pension fund expanded some of its services after it moved into the renovated headquarters, Dyer said. There has been a hiring freeze, except for essential personnel, for 18 months, he said.
Dyer said the building expansion cost more than expected in part because labor and material costs were high in the late 1990s, when the economy was still booming. The building sits on top of a parking garage, which added to the cost, he said.
The Ohio Arts Council has a program called Per Cent for Art, in which the state sets aside 1 percent of the construction budgets of major state projects for artwork. The STRS building did not participate in the program because it was built with money generated by the fund. But the STRS art budget was within the guidelines, Dyer said.
Petro said he had no problem with the art.
"What would ancient Rome have been like without public investment in the arts?" Petro asked.
Scrutiny promised
Deborah Scott, chairwoman of the STRS board, said the board plans to re-examine policies on employee bonuses, but she defended the practice. She also defended board members traveling to out-of-state conferences, noting that all the elected members are either active teachers or retirees who don't have much formal training in investments. Scott spent a total of $40,500 on travel expenses the past three years, according to STRS documents.
"First of all, you learn what's going on at other systems, you learn what type of issues they're dealing with," said Scott, a first- grade teacher in Finneytown local schools near Cincinnati. "We're schoolteachers. We don't have degrees from business schools."
Dyer defended Sidaway's travel expenses, noting that she had served as chairwoman and vice chairwoman of the STRS board in the past three years, and was expected to attend many events.
Nearly 40 percent of her $61,400 in expenses were for travel and lodging for board meetings in Columbus, he said.
Steven Puckett, who is Zelman's designee on the board, said board members need training, but more of it should be done in Ohio.
State Sen. Lynn Wachtmann, chairman of the Ohio Retirement Study Council, said he plans to question STRS officials about their spending practices at an upcoming meeting of the council.
"Maybe they should run things a little leaner and meaner over there and be a little more reflective of their membership," said Wachtmann, a northwest Ohio Republican.
"I'm not saying that what they are doing is wrong, but I'm going to raise the question," he said. "I think we can put political pressure on them if we feel that's appropriate."
PHOTOGRAPHS BY WILL SHILLING SPECIAL TO THE PLAIN DEALER [Since the original photos accompanying the article are no longer available, I'm using some I took in May, 2008. KBB] $94 million: The pension fund completed the expansion of the seven- story office building in 1999. Photo $100,000: "Integrity," a metal sculpture by Stephen Canneto, adorns the area outside the sixth- floor board room. Photo $378,500: "A Whole Morning World" [should be "A Whole World Mourning" KBB] by Larry Kirkland, a series of colorful painted aluminum tubes shaped like birds, hangs from the seventh-floor atrium. [When a breeze comes through the atrium, sometimes some of the pipes strike each other and sound like wind chimes. KBB]

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From the Cleveland Plain Dealer June 8, 2003: See where your money went in bad times

Click on images to enlarge
Some of the figures in the bars (at the bottom) are a little difficult to read. Under Bonuses paid they are:
'00 $4.8 Million
'01 $6.1 Million
'02 $5.7 Million
'03 $2.1 Million
Under STRS market losses they are:
58.8 billion
41.6 billion
46.5 billion

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