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My Minivan Is My.....?

Last week Pope Francis presided over a Mass to mark the end of the Year for Consecrated Life.  Robert Mickens reported here that the Holy Father also gave a short talk to men and women religious at an audience prior to the Mass.  “Why has the womb of religious life become so sterile?” he asked.  

The answers to that question are complex and manifold.  A small share of an answer may be linked to how many of our parishes and dioceses chose to celebrate the Year itself.  For the most part, it was seen as an opportunity to say a much deserved word of thanks to men and women religious for their service and their lives of witness.  Those words, while sincere, often had the tone of an elegy, an acknowledgment that many religious communities may have reached the point of irreversible decline.

What I generally did not hear from the pulpit or the episcopal chair was any sustained argument aimed at the Catholic laity for why religious life--a life dedicated to the “perfection of charity” through the practice of the evangelical counsels of poverty, chastity, and obedience--remains integral to Christian witness in the modern world.   This way of life, rooted in the example of Jesus himself, has been part of the Church from the very beginning.  To use an overworked metaphor, a Church without communities committed to the practice of the counsels is a Church breathing with only one lung.

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Pope Francis & Patriarch Kirill: Diplomatic 'Controversies,' Ecumenical Concerns

The announcement of the two-hour meeting to be held between Pope Francis and Patriarch of Moscow Kirill on Friday in Cuba has brought a lot of excitement—along with some criticism over Francis’s decision to have the meeting at all. There are three basic lines of critique.

First, there’s the political-diplomatic dimension of the meeting. The pope is going to meet the leader of a church that is seen more and more as part of the authoritarian regime of Vladimir Putin and an ideological support for his neo-imperial foreign policy. This criticism stresses the risks to Francis’s credibility, especially if considering the role of the Russian Orthodox Church in supporting Putin’s military actions in Syria and in Ukraine. (Kirill was, however, more cautious about Ukraine, given the potential consequences of the loss of Crimea and the war in eastern Ukraine for inter-Orthodox relations between Moscow and Kiev).

Second, there’s the internal politics of the Orthodox churches, in light not only of the historical rivalries between Moscow and Constantinople for supremacy within Eastern Orthodoxy, but also of the upcoming Great Synod of the Orthodox Churches on the Greek island of Crete in June. Some see Francis as naïve in regard as to how the patriarchate of Moscow could use the meeting to assert a new supremacy at a critical time for the future of the Orthodox churches. Here too the war in Ukraine factors into the equation.

Third, there’s the ecumenical dimension of the meeting. The Russian Orthodox Church has been far less engaged in ecumenical dialogue with the Catholic Church than the patriarch of Constantinople has; in agreeing to meet with Kirill, Francis is accused of sitting at the table with a leader who has not shown the minimum amount of ecumenical spirit required to start a conversation with the pope.

Francis is a risk-taker, and this meeting certainly involves risks.

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Marco Rubio: In Your Heart You Know He's Trite

For some time now I've found myself resistant to the charms of Marco Rubio. At a certain level of abstraction, of course, I can grasp the possibility of a young Hispanic from an electorally significant state being the great Republican hope. In the age of Trump, Rubio can even offer the appearance of moderation – he strikes a pose of optimism more than anger, backed up by an “inspiring” biography. And after all, didn't he once support a relatively compassionate approach to immigration reform?

In reality, Rubio is a fanatical rightwinger: an unreconstructed neoconservative in foreign policy – his presidential campaign even adopted the shopworn “new American century” line once peddled by Bill Kristol – who pledges to repeal Obamacare while also proposing massive, irresponsible tax cuts three times the size of George W. Bush’s. His rhetoric about Muslims, as Max Fischer put it, includes “dog-whistling of breathtaking and Trump-level proportions.” Which is of a piece with his litany of nasty accusations about President Obama. (For a helpful rundown of Rubio’s hard right agenda, see Damon Linker’s helpful column here.)

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One by one, the gridiron gods of my youth are proving terribly mortal. It is not just that a lot of ex-football players are dying. It is how they are dying. Their brains, to put it non-technically, have been turned to mush by the game they love. What’s taking these heroes out is not the silent artillery of time, but the loud cacophony of shoulder pads, helmets and human bodies.

Every week, it seems, the ranks of pro football players lost to chronic traumatic encephalopathy acquires a new victim.  This Super Bowl week it was Ken “The Snake” Stabler, the former Raiders QB, who died last summer and whose family offered up his brain for study. And many of those still living are sunk in hopeless dementia -- like Willie Wood, the superlative defensive back for the Packers of the Lombardi glory years, who can no longer recall the stellar interception he made in the first Super Bowl fifty years ago. Or anything else, for that matter.

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Last Night's Democratic Debate: A Narrow Win for Sanders

Last night's Democratic debate in New Hampshire was the most sharply-drawn, heated contest of the primary season. With only Bernie Sanders and Hillary Clinton on the stage, the debate offered little chance for either candidate to evade pointed criticisms or simply fade into the background for a few minutes. Other candidates weren't there to interrupt the Sanders-Clinton exchanges, change the subject, or plead for more time. It was one of the most absorbing primary debates I can remember watching. Sanders and Clinton deserve credit for this, of course, but so do the moderators: Rachel Maddow and Chuck Todd asked tough questions but never drew undue attention to themselves. 

Here's why the debate was a narrow win for Sanders.

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Memento Mori

We took an uncharacteristic winter break: seven days in Florida. New England weather has been mild, but today a winter storm is filling up the path to the house and the garden with wet, heavy snow. The air is white with it. Thirty-six hours ago we sat in eighty degree weather listening to the carillon at Bok Tower Gardens in Lake Wells, a nature retreat given to the nation by a publishing magnate.  The Spanish  Moss on the live oaks filtered the sun, palm trees and magnolias added to the canopy, and what are for us summer bedding plants bloomed in the borders. A garden Idyll. We went South not primarily for the weather but to stay with friends we had not seen in some time. They, of course, are displaced from here to there, from the North to the South, from the Winter to the perpetual – what? Semi-tropical cycle, one that is kind to old bones and poor circulation.

The farther south and west we travelled along the Gulf coast, the more of us there were, retired people happy in the warmth, the air conditioned cars, golf courses, and planned communities. And as the streets broadened, lined by palm trees and tidy grass verges, the screening walls grew longer, and the security gates became stately, almost elegant. If security is allied to uniformity, then the odd-one-out is by definition not uniform:  the pressure to fit-in is the atmosphere. 

A designed development seems a massive civil engineering effort. In a flat land of high water tables any community that offers water features, golf courses, and a landscape design that gives way to views if not vistas that always hint of water, how are anomalous flooding storms controlled? The uniformity of the houses surrounded by restrictions on plantings (as well as by the restricting size of the lots) makes for a comparative sameness, a leveling uniformity.  How does one achieve distinction within limitation? Identity comes by way of comparison of small things. The landscape alters with the progress of the phases of development; apparent waste land is marked by the uprights of utility connections, green sewer links, and surveyors’ stakes. This land is my land, this land will be their land, if they can raise the money for the lot.

A crystalized moment: a shining, late model sedan, the passenger rear door framing a carefully dressed older woman wearing a cardigan that offset her pearls and her short white hair. Her gaze was distantly eager, clearly a spectator of the world opened to her by her window. I thought the foursome of which she formed one member was on the way to lunch, driving retirement to its leisurely rewards, and intent on joining or recognizing the many other foursomes in similar cars driving to inevitably similar destinations - All of them, us, happy in the end-of-days’ sun.

Memento mori. The irony of Florida is that every retirement community exists in a necessary denial, perhaps aided by the constant summer of the seasons. The December of life requires sun block. The reflecting mirror of the swimming pool had me fleeing from my image repeated again on the pool deck in the persons of so many others. We came home. The snow knows its own.

The Rabbi and the Two Pockets

At Tuesday's town forum, Rabbi Spira-Savit, in asking Clinton a question, quoted what turns out to be a Hasidic story of two notes, one in each pocket: "How do you cultivate the ego, the ego that we all know you must have, a person must have to be the leader of the free world, and also the humility to recognize that we know that you can’t be expected to be wise about all the things that the president has to be responsible for?” His question to Hillary elicited a thoughtful answer about balancing ego and humility. It turns out that the rabbi is part of an interfaith clergy group that decided to engage the candidates about moral and spiritual questions. I wonder what they will ask Trump and Cruz. The Forward has an interview with the rabbi.

And speaking of clergy. At the same town-hall forum, there was a clergyman with a Roman collar (could have been Episcopal, but I don't think so). My guess is he was Catholic. He was not applauding when the cameras panned the audience and when Hillary got into her mantra about discrimination against women, workers, minorities, immigrants, and LGBTs [Correction: when Hillary got into her mantra about Planned Parenthood and abortion], he was shaking his head vigorously. I am guessing it was the last in that litany that he might have been objecting to, but since the Forward hasn't interviewed him, it's hard to know.

Finally, last night's debate was robust and got at some heretofore unvoiced issues. Did you notice what they were? The Times's print headline this morning: "Democrats Clash on Money's Role in Bitter Debate"; same story online "Democrats Duel...." Bitter? Not really. Duel? Yes. And a good one.


Capitalism Without Tears

Here is a tiny but very interesting article, especially considering its source.

With capitalism,

...profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode; conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn't continue, something strange is taking place.  

We can discuss this. Regarding the articles I recently wrote about the Obamacare Co-Ops, one of the problems here may be that there has now been so much monopolization in capitalism that new players can simply not afford the costs of entering the market to compete. And what this would mean, of course, is that the "free market" is both disappearing and incapable of being recovered by anything other than political (as opposed to economic) activity.

On a related note, the head of Goldman Sachs has been watching Bernie Sanders and he doesn't like what he sees.

For many, this will count as a ringing endorsement.

On the subject of a President Hillary Clinton, Mr. Blankfein is coy.

Hillary and Bernie: Come to Jesus Moments

Thomas Mann, calm and coherent observer of our political system and Senior Fellow at Brookings, has a succinct overview of the 2016 election, namely the major difference between the Democratic and Republican parties. Though he's focused on tonight's debate (February 4) between Clinton and Sanders, he directs attention to the radicalization of the Republican party and the need for an electable Democrat. In service of electability, he does not hesitate to analyze the strengths and weaknesses of the two Democrats.

"While he caucuses with them in the Senate, Sanders is not a Democrat. His socialist identity, even of the northern European social democratic variety, comes with considerable baggage in an American setting. His views and positions cluster at the liberal extreme in Congress. His rousing call for a “democratic revolution” has a romantic appeal but can be jarring in a country known for its pragmatism, incrementalism, and skepticism of utopias.

"Clinton bears the scars of decades of political attacks and investigations. Years of experience campaigning and governing at the highest levels of government gives her unmatched visibility but familiarity can breed contempt. Public anxiety generated by economic and social dislocation has been channeled by politicians into an inchoate and angry anti-Washington, anti-establishment sentiment that sits uncomfortably with political dynasties."

J.J. Goldberg of the Forward has a brilliant analysis of the Bernie situation: Why Bernie Needs a Come-to-Jesus Moment. (No, it is not a Jews for Jesus ploy.) Why blacks and working-class white might not rally to his candidacy, though for different reasons.

How Politics Has Divided American Views of Islam

A survey by Pew Research Center has found a disturbingly sharp partisan divide in how Americans view Islam. Some 70 percent of Democrats agreed that the next president should "be careful not to criticize Islam as a whole" when discussing Islamic extremists while only 29 percent of Republicans did. Some two-thirds of the Republicans agreed instead that the next president should "speak bluntly" about Islam even if critical of it as a whole, while just 22 percent of Democrats fell into this group.

That may not surprise you, given the anti-Muslim rhetoric in the Republican presidential primary, which contrasts with a stirring speech President Obama gave today at a Baltimore mosque about Muslims in America. But Pew notes that the last time it looked into this topic, back in 2002, there was little difference in the views of Republicans and Democrats.

Anti-Muslim rhetoric became part of the extreme right's brief against Obama, and the toxin spread through much of the Republican body politic. It's partisan, not ideological: conservative and moderate Democrats largely say (64 percent) that the next president shouldn't criticize Islam as a whole, according to the poll. 

Nationally, 50 percent of those surveyed favor the "not to criticize Islam as a whole" approach -- while 46 percent of Catholics do. Forty percent nationally favor the president who'd "speak bluntly," while 43 percent of Catholics do.

In Baltimore, Obama thanked Muslim Americans for their contributions to America, called for more favorable portrayal of Muslims in entertainment media, and urged that other religious groups extend their concern for religious freedom to protection of Islam. 

"And of course, recently, we’ve heard inexcusable political rhetoric against Muslim Americans that has no place in our country," he said. "No surprise, then, that threats and harassment of Muslim Americans have surged."


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In the Borough of Former Churches

Walk down almost any block in the part of Brooklyn where I live and it’s possible to see a building that once had a religious connection now being used for something else. Arches and spires are obvious indications of former houses of worship, but sometimes a Latin inscription above the lintel or a stone cross on the roof are the only evidence of original purpose. One statistic says twenty Brooklyn churches have been converted into condominiums over the past twenty years, but the scope and pace of redevelopment makes that count seem conservative, or outdated. In the few square blocks around me there are at least five such conversions, of varying degrees of luxury. Some years ago an acquaintance of mine, much bolder than I, confronted a resident leaving one of these buildings. “So how does it feel living in a deconsecrated church?” she demanded. No response was forthcoming—an exhibit of self-restraint, I think now.

I’ve officially lived just over half my life in what is still called the borough of churches, and, full disclosure, my wife and I even once looked at an apartment cantilevered into the sanctuary of a stately stone structure on what realtors still call “a lovely tree-lined street.” We’d just had our first child; we liked the neighborhood; we didn’t want to move to New Jersey. If the place was overpriced then, there’s no way to describe it now. And anyway, how would it have felt to live in a deconsecrated church?

Conversion and reuse is nothing new, obviously, and it’s not just churches—the structure too expensive to maintain, the lot too valuable to hold onto—that have come to function as something else. Parish schools and rectories, convents and hospitals: these also succumb to prevailing demographic and economic pressures, or, depending on your outlook, are made monetizable. People with ties to the community once defined by such places will naturally feel different about this than those who are seeking a home in a coveted neighborhood with good schools; both see it differently from the developer who’s swooped in to tap the financial exponentialities.

Novelist Colm Tóibín has said it was the very sense of the Irish having disappeared from these streets that helped him render so indelibly the environs of 2009’s Brooklyn (the film version of which was released last year)—that and having made himself a regular at a nearby church's 9 a.m. Sunday Mass. Just over a century ago the immediate neighborhood held the largest single concentration of Italians in the country, but by 1998, in the phrasing of the official history of the local parish, “many had left the railroad apartments of South Brooklyn for the lawns and pitched roofs in Long Island, Staten Island, [and] New Jersey.”

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Augustine in Lent Again

As I've done before, I'll be sending during Lent translated excerpts from St. Augustine, most of them from his sermons. Last year I sent a note explaining how I came to do this and providing a very short introduction to Augustine the Preacher, which you can find here.

Say a prayer, please. I leave this evening for a Vatican-sponsored seminar on how to increase opportunities and institutions for greater co-responsibility in the Church, a meeting designed to help meet the reform-program of Pope Francis. Oremus.

Bibliophilia... and Phobia

I’m staring at an enticing and intimidating pile of packages on the floor of my study. It’s enticing because those packages contain the sixteen novels that are finalists for an annual fiction contest called The Tournament of Books. It’s intimidating because I have to read those novels – all sixteen of them -- in the next six weeks. That’s the deadline for a ToB discussion I’m joining on Connecticut Public Radio’s Colin McEnroe Show.

I did the show last year (you can listen here), and it was both fun and productive. Inevitably in reading a basket of novels, you encounter writers you haven’t read before, and if you really like one, you gratefully begin that strange, charmed, one-way relationship with a writer whose fiction you fall for: this kindred spirit you know only through his or her words.

I love books; they’re both my profession and my passion. Over the years I’ve written two of them and bought thousands. You know the kind of house where every scrap of wall space hosts a bookshelf? That’s our house. But too much of a good thing can become, well, too much, even for the booklover; and every now and then I feel overwhelmed, not merely by the number of books I have to read, but by the number of books, period. At these moments I’m afflicted by an acute form of bibliophobia.

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Furies on the Loose

Phew! Iowa over. On to New Hampshire. The New York Times's opinionized front-page newsish story has this: "Fury Shakes the Iowa Caucus."

All those Iowans at the celebratory campaign events looked pretty cheerful to me. Is that enthusiasim being called "Fury."

In his "virtual tie" speech, Bernie Sanders extended his critique of Establishment econnomics and politics to include the Media. Right on Bernie! 

The more this election is hyped and "furyiezed" by the media—well, the more money the media will make. Readers and viewers, however you get your news, get something resembling Reality TV.

Political junkies like me are grateful for the coverage (so many debates), but how will this turn out, when the furies have to be put back into their concrete box?

Our Theological Books Issue

Our Theological Books issue is now live. You can read Terrence W. Tilley on Luke Timothy Johnson's The Revelatory Body: Theology as Inductive Art; Maria Bowler on The Good Book, which features thirty-four writers writing about "biblical texts ranging from the whole of the Psalms to a single parable"; Steven Englund on Paul Misner's Catholic Labor Movements in Europe; and Tara Isabella Burton on the "moments of aching spirtuality" to be found in the travel writing of Bruce Chatwin. And more -- which you can find in the full table of contents

Obamacare in Flames - Part Three - The Plague on All Our Houses

The Attacks on both Obamacare in particular and our healthcare system in general are fragmented and hard to talk about in a very systematic manner. People have specific things that they think are great and that they think are terrible. They focus on these to criticize or glorify the whole. I find this infuriating. To fix things, we have to know exactly how things work, and what and what doesn't work well. My response, then, will be broken into parts which I hope will make sense when you put them all together.

The questions are whether Obamacare has been worth it, can it survive, should it be replaced, and what should replace it.  To answer these questions, I think we have to go back to some basic concepts. Hold on. It's going to get ugly.

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The Hillary/Bernie Imaginaries

There is more to elections than the candidate's policies and positions. Nodding off during the last Democratic debate, I had this imaginary: Hillary reminds people of their mothers; if they love/like their mothers, she'll do okay. Bernie reminds people of their grandfathers; and he'll do well with those who admire their grandfathers. 

Another piece of imaginary: why do polls show younger people going for Bernie and older people going for Hillary (this may be giving polls more credence than they deserve).

Peggy Noonan in the WSJ ((1/30/16) speculates that young people have gone through a terrifying economic upheaval (2008 and all that), and they want change; they are not fans of Wall Street, free markets, etc., low taxes and a good business environment. On the other hand, older voters have seen good times come and go and aren't so keen on change that goes by the name of socialism (even democratic socialism). She may be onto something there. Another element in this calculus could be that older voters really did have to cope with change in the 1960s and '70s (Vietnam, Civil Rights, Women's Movement, demonstrations, riots, etc.), and may not be big fans of the kind of change they see Bernie Sanders proposing, even if they sound like good ideas.

Obamacare in Flames - Part Two - Mama Don't Want No Market Playing 'Round Here

"We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself" —Stephen Hemsley, CEO, United Healthcare

It's a commonplace in American business that the difference between a brilliant statement and a stupid one usually depends on who is saying it. When Steve Hemsley asked his C-Suite crew why it looked like United Healthcare would be losing half a billion dollars on Obamacare in two years, I doubt anybody said "Gee, boss. I guess the marketplace must not be sustaining itself." Or if someone did, they're certainly not working there anymore.

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Obamacare in Flames - Part One - The Strange Life and Sudden Death of the Co-Ops

"As the camel falls to its knees, more knives are drawn" —Bedouin Proverb.

Despite the fact that the Affordable Care Act (Obamacare) has significantly reduced the number of uninsured in the United States, it has also failed to live up to its promises and has seen a great number of failures. The number of uninsured is still high, premiums are growing, networks are narrowing, insurers are losing money, and the Co-Ops, set up as a significant innovation of the program, are failing and will continue to fail everywhere.

In this hot election season, this has brought out enemies on the Left and the Right. The Left wants Obamacare dumped and replaced with a single payer system. The Right just wants it dumped.  Both sides attack the program with cherry picked examples that are nonsense and half truths. It's like watching a mud wrestling match where you know you hate one of the wrestlers, but you can't tell them apart anymore.

I am going to post three articles where I try to get to the bottom of what is really happening. I find the sniping on the Right and the Left mostly useless, but also infuriating. The system is broken and Obamacare has revealed all of the cracks. In the first article, I will talk about the Co-Ops and why they had to fail given the structure of the current insurance system. In the second, I will discuss what's going on with market risk and how the big insurance players, despite their massive resources and sophistication, also found themselves sucked into the whirlpool. In the third article I will talk about what we can and can't do about it.


The Affordable Care Act contained a provision to establish and fund the creation of 50 statewide non-profit insurance Co-Ops. There were several reasons for this. First, there was the concern that the current commercial insurers would not enter the ACA marketplace in large enough numbers to support millions of newly insured. Second, it was rightly believed that insurance markets in the United States tend to be dominated by one main insurer and the Co-Ops would add badly needed competition. Third, the Co-Ops were a compromise meant to forestall a government run "Medicare" option that might have a potential to move the entire country towards single payer insurance. And last, many people unclear of the concept of not-for-profit and citizen boards of directors in the United States thought that the Co-Ops would be less greedy and more consumer friendly.

Because the funding for this program was prematurely and summarily cut during one of our GOP manufactured budget crises coupled with Red State resistance to the idea itself, only 23 Co-Ops were eventually established. Of these, half have failed outright. Most of the rest are very weak and a significant number of these have been quietly put under some form of direct regulatory control. With the sole exception of the Maine Co-Op, the Co-Op program will fail unless radical measures are taken (which I will outline in article three).

The provision of all that sweet, sweet government money ($1.6 billion) drew into it two kinds of speculators. The first were the normal kind who wanted a crack at The Big Federal Pie. The second consisted of people who wanted the program to succeed for various political and occupational reasons. Most, but not all, were blinded by the fact that the mass establishment of these Co-Ops was probably the riskiest start- up venture in American history. While the insurance risk factors played a part in this (and the risk factors are what people focused on) I will argue that structural factors played a bigger role in creating risk here and I will try to outline these as briefly as I can.

A. Creating a Network

One of the main things that insurance companies do in the United States is obtain discounted rates from providers. These rates and their terms are set by individual private contracts. Insurance companies and providers are always recontracting with each other, hoping to gain an advantage. Any insurance company's contracting staff will be large and well funded with the latest complex modeling software and contract language software. And this will be true of any insurance company that already has a well developed network.

The insurance company will try to get the best terms and steepest discounts and then will aggregate these discounts to find an average discount so that it can begin to design its different benefit packages and price them. (It is also necessary to know in what way its member population uses the providers, but I will discuss this later).

The Co-Ops started out with no networks at all, no contracting staff or infrastructure, and a mandate as THE state Co-Op to be prepared to cover any member in the entire state.

What most Co-Ops did was to create "instant networks" by using what is called a "rental network." A rental network is a broad, usually multi-state network that has a very shallow discount with a large number of providers. They are usually used in cases where a business (typically a hospital) will want to create a quasi-network for its own employees, where these workers will get a steep discount for using their own hospital and hospital owned doctors, but will also get some sort of small discount should they go somewhere else. Rental networks are not meant to be used as full networks by insurance companies, because their discounts are so small that they can't compete with regular insurance companies with their own sets of contracts.

The Co-Ops plan was to start with the rental network in order to establish an "adequate" network per the state regulatory rules of wherever they were located, and then as quickly as possible, recontract the providers within it with their own more deeply discounted contracts on their own terms. If they did this quickly enough, they would have a network that would cover everyone, but they would also be able to eliminate the main rental contracts with their own competitive ones.

In practice, given the magnitude of the task and the fact that they were literally starting with nothing, they had no idea how long it would really take or what Co-Op contracts would actually be in place when the Co-Ops "went live" and actually started taking on new members. So in their business planning, they worked backwards from what they knew to be the average discount in the state to the average discount of the rental network. From this they created a fairy tale business plan and sent this to the regulators for approval. No one at either end of this chain believed the plan, which is why the Co-Ops were expected to lose money for the first one to three years of their existence until they could get a real network together. The vast majority of Co-Ops lost money in the first two years, even those that did not fail, because (in part) they simply could not build the network they needed. They had no market clout and their contracting infrastructure was mostly immature.  

B. Building an Infrastructure

Modern health insurance companies have massive expensive IT infrastructures. It is commonly said in the insurance business that insurance companies are now basically IT companies with insurance companies attached to them.

The core of the infrastructure is the claims payment system. This system has to be able to adjudicate electronically all claims per all the various separate provider contracts that an insurance company has. The claims system also has to be integrated with the member enrollment system, the billing and payment system, the banking system, the accounting system, the hospital contracting system, and the member services system. All of these are separate things. The work of the large insurance companies is to have all of these systems "in house" and seamlessly integrated with each other. For the Co-Ops, all of these separate systems had to be rented from separate vendors. It was the integration of these systems, which were generally not designed to be integrated, that was usually done in house. For many of the Co-Ops, some of the systems weren't even designed to do what the Co-Ops needed them to do, either in their basic functioning or in the volume of transactions that were required. And in some cases, multiple versions of a system were needed. For example, there were cases where a Co-Op needed one enrollment system for individual members and another for employer group members.  Both needed to be integrated with the rest of the system. Against this, the Co-Ops generally had inadequate staffs and had to rely on consultants who themselves were often inadequate, although terribly expensive.

To add to this, the Federal government was building its own enrollment and claims system from scratch (the latter not to pay claims but to do member level claims risk calculations) and required the Co-Ops and anyone else participating in Obamacare to able to integrate with their systems.

As you can imagine, there were massive, expensive, service affecting integration problems within the Co-Ops, within the government (which hit the news), and between the Co-Ops and the government. The Co-Ops did not figure these costs in their start up planning, and why should they have? No one had ever done this before.

C. Building a Staff

The Co-Ops had several staffing problems right from the beginning. The first was the acquisition of qualified management.  Co-Ops were, by definition, start up companies and risky ones at that. The best executives and managers in the insurance industry could tell how risky they were, if only by listening to their own senior managers panicking about Obamacare. Not many people were willing to leave safe well developed jobs late in their careers to join a Co-Op at any price. This was not only true of the executives but also the middle managers. And even those seasoned executives and managers who did come over had little experience starting an insurance company from scratch. Nor did they have the "turnaround" experience they would need to fix the inevitable mistakes. And there was another problem with capital. While the Co-Ops were relatively well funded, with a Federal capital development fund that was separate from the claims guarantee fund, the manager found problems with how to spend the money. Aside from the fact that at the beginning there did not exist such things as purchasing departments, which meant that that the Co-Ops (having to build up quickly) were screwed by almost everyone they did business with, they had trouble figuring out how to staff up. They couldn't take their time, which caused hiring standards to slip. But they also didn't know if they should staff up quickly against the possibility of small enrollments (and therefore risk spending to much right off the bat) or staff up slowly against the possibility of high enrollments and therefore risk being understaffed and having basic service issues). What usually happened was the worst of all worlds. They didn't anticipate the integration problems, so they didn't staff for them. They tried to forestall permanent staffing, so they outsourced a lot of things they should have taken in-house right away. In some cases, especially in the second year of Obamacare, their membership increased dramatically over the course of a month or two and they found themselves very understaffed against the volume of membership. The IT integration problems, the staffing quality and quantity problems, the in-sourcing of activities and the inevitable initial mistakes all had to be addressed in "real time" as the Co-Ops were providing health services to actual people. And they had to do this while painting rosy pictures to the Boards of Directors (who being appointed from the membership often had no idea how insurance companies worked to begin with) and regulators who were often hostile towards them.

The impossibility (there, I've said it) of constructing an adequate and competitive provider network in the face of major insurance companies, creating a fully integrated claims, enrollment, and financial structure, and a well trained, well organized experienced staff made working conditions at the Co-Ops stressful as they lurched from one catastrophe into another. The level headed leaders who actually thrive in this kind of environment turned out to be rare. So the lights began to go out to a chorus of "I told you so" from politically motivated groups who had their own reasons to want the Co-Ops to fail.

But what about the major established insurance companies with solid networks, infrastructures, and stable well trained staffs? When they entered the Obamacare market, what happened to them?

Here the question of risk enters the picture. With the Co-Ops' basic structural problems, we can look at the questions of pure insurance risk as the coup de grace. But how did the sophisticated risk experts at places like Blue Cross and United Healthcare manage to also shoot themselves in the face?



A Method to His Madness?

Last’s night’s Republican primary debate in Iowa offered a glimpse of what might have been: a nomination contest without Donald Trump. Yes, the candidates still gave the impression that President Obama has turned America into a dystopian hellscape. Yes, Benghazi again was mentioned. Yes, once more you could be forgiven for thinking ISIS was on the verge of conquering the United States. But somehow all this was turned down a few clicks; the tone was more civil, the exchanges geared more toward policy than insults. It was the most substantive GOP debate yet.

With Trump holding his own political rally a few miles away – it was billed as a fundraiser for veterans – the Republican debate took on a different dynamic than we saw over the summer and fall. While Ted Cruz and Marco Rubio’s sparring often dominated the debate, Trump’s absence meant that even candidates with lower polling numbers had a chance to press their distinctives. Without Trump savaging the Iraq War, Rand Paul’s foreign policy restraint stood out. Without having to fend off Trump’s petty personal attacks, Jeb Bush displayed his genuine decency and comparative moderation. Christie’s tough guy act didn’t have to compete with Trump’s. No one but Kasich really appealed to the working class. I suspect voters who haven’t made up their minds will give Paul and Bush another look: both gave their best debate performances of the primary.

Before the debate – especially as news came that a “frantic” Roger Ailes was trying to get Trump to return to the stage – I basically believed that Trump’s antics were another example of him being an “evil genius.” That is, I thought this was a bold stroke that had the possibility of redounding to his benefit just days before the February 1 caucuses.

Now I’m not so sure.

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