Monday, August 31, 2015

Many, many sides to every story (SEIU-UHW vs. Prime Healthcare revisited)

A year ago, I wrote a post about a conflict between the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) and Prime Healthcare. The issue, as SEIU-UHW saw it:

Prime has a shameful history of buying struggling hospitals, then laying off large numbers of staff and reducing patient services in order to increase profits. Prime’s business model has been bad for patients, bad for taxpayers, and bad for workers.

Prime, of course, has a different take on the matter.

But as I followed up on some of the bits of the story, it's clear that this isn't a two-sided issue...because there are more than two parties involved.

One of those partners is the Daughters of Charity Health System (DCHS), which could be characterized as a group of "struggling hospitals" (in SEIU-UHW terms). When you're running a struggling health system, you want to become UN-struggling, and DOCHS figured that a sale to Prime would accomplish that.

Enter another party - California Attorney General Kamala Harris. Harris holds statewide office in California, which in recent years pretty much means that you're a Democrat. (Even the last Republican to hold statewide office, Arnold Schwarzenegger, used to be married into a Democratic family, and many California Republicans think he's a danged Commie anyway.) While Harris approved the acquisition, she included some tough conditions:

[S]he made the decision with conditions Harris called "strong" and the hospital systems are likely to consider onerous, including a requirement that five of the six facilities stay open for at least 10 years. Earlier, the seller said such conditions could potentially scuttle deal.

Within this backdrop, a few days later DCHS sued SEIU-UHW. (You'll recall from my previous post that Prime Healthcare had already sued the union.)

“By using extortionist threats and bid-chilling tactics to frustrate this sale as leverage for other commercial gains they seek, the defendants have cost DCHS at a minimum tens of millions of dollars in continuing operational losses and professional fees,” Daughters wrote in the suit filed in Superior Court in Santa Clara County. “DCHS continues to face the possibility that the sale will not close, with potentially catastrophic consequences for DCHS' six California hospitals, thousands of employees and retirees of those hospitals, and the patients and communities whom the hospitals serve.”

As the backdrop got dustier and dustier, a new announcement was issued a few weeks later:

Prime Healthcare Services, the for-profit system seen by many as the deep-pocketed savior of the financially ailing Daughters of Charity Health System, has pulled the plug on the $843 million deal.

Prime told the Daughters of Charity system late yesterday it has decided not to pursue the deal, after California's attorney general attached tough conditions to the deal late last month.

The next party to speak was DCHS itself - and it wasn't happy:

We are disappointed that Prime Healthcare has decided not to go forward with the purchase of our hospitals. We strongly disagree with Prime’s position on the Attorney General conditions. We are confident that Prime could successfully turn around the DCHS hospitals.

And SEIU-UHW weighed in also, saying the DCHS should get it right this time.

Healthcare workers today urged Daughters of Charity Health System to immediately designate another buyer for its six financially ailing hospitals now that Prime Healthcare has opted out of purchasing the facilities in the Bay Area and Los Angeles.

According to SEIU-UHW, there were a number of entities that were willing to buy individual hospitals in the chain, and one company prepared to buy the whole thing.

So we have a bunch of parties involved: Prime Healthcare, the SEIU-UHW, the DOCHS itself, the California Attorney General, and these various other purchasing entities. (And I'm not even getting into the whole Blue Wolf Capital Partners thing, an alleged ally of SEIU-UHW that was also sued by DOCHS.)

A month later, one other party became very interested in this whole affair - 280 DCHS employees.

The Daughters of Charity Health System, which saw its proposed sale of six hospitals to Prime Healthcare fall apart early last month, is slashing 4 percent of its workforce, officials told me Tuesday morning.

That works out to approximately 280 jobs out of about 7,000 at the Catholic hospital system, based in Los Altos Hills, said spokeswoman Beth Nikels. Some of the jobs have already been eliminated, she said, while others will be eliminated over the next few months.

The workforce reductions are part of an effort to reduce expenses, stabilize finances "and better position our hospitals while we search for a new buyer," officials said April 21 in a statement to the Business Times.

Now perhaps those 280 people would have been laid off anyway if Prime Healthcare had come in. But that was small comfort for the people who were being laid off.

I checked the SEIU-UHW's archive for reaction to this turn of events - and found none. But the California Department of Managed Care reacted to the entire situation:

Meanwhile, the California Department of Managed Care has filed a cease and desist order requiring 10 insurers to stop sending new patients to Daughter’s affiliated physician group. Regulators are concerned that the DCHS Medical Foundation is not meeting minimum solvency standards for partial-risk contracts with HMOs for about 20,000 patients.

This is yet further evidence of my contention that "Big Brother" will never happen because government agencies are at war with each other - in this case, the Attorney General's office and the Department of Managed Care. While you may disagree with her tactics, the Attorney General pursued polices that she believed would continue to provide health care to as many people as possible. Meanwhile, the Department of Managed Care was moving in the opposite direction. In both cases, DCHS was the victim.

Until a few months later, in July, when a new announcement was made.

The Daughters of Charity Health System (DCHS) Board of Directors has selected BlueMountain Capital Management (BlueMountain), a private investment firm to recapitalize its operations. BlueMountain is contributing over $250 million of capital and is sponsoring Integrity Healthcare to manage and operate the six California hospitals and medical foundation, thus assuring the communities served by the hospitals a continuance of care.

The SEIU-UHW's reaction?

SEIU-UHW health and legal experts will analyze the agreement as soon as possible to understand its effect on staff and quality care in our facilities.

We will be meeting directly with BlueMountain as quickly as possible to make sure members jobs and benefits are fully protected.

Our early analysis indicates that BlueMountain is a much better fit with Daughters than the previous bidder, Prime Healthcare.

However, the San Jose Mercury News claims that this deal may also be scuttled, since it appears to be the same as the deal that Attorney General Harris didn't like:

Desperate for a deal to save its beleaguered hospitals, Bay Area-based Daughters of Charity Health System was left at the altar this spring when California's Attorney General told its prospective new owner it must keep most of the hospitals open for at least 10 years.

Yet, newly released documents show, the New York City hedge fund that is the nonprofit chain's latest suitor is guaranteeing to keep the hospitals open for half that time. That five-year promise is exactly what Southern California-based Prime Healthcare Services offered last year in a highly controversial $843 million deal rebuffed by Attorney General Kamala Harris, whose office must approve hospital sales....

Whether or not Harris will impose similar 10-year requirements on the latest proposal by BlueMountain Capital Management is unknown. Her staff declined to comment

But DCHS did comment:

"None of us can do anything to derail this process, including the SEIU. Failure is not an option."

That could be posturing, since Harris could impose the ten-year condition, in which case BlueMountain may or may not pull out - or Harris could refuse to impose the ten-year condition, in which case Prime Healthcare may complain about unfairness.

At least the lawyers are making money over this whole deal.

But the most amazing thing about this - I have just completed a long-winded post in healthcare that does NOT involve Barack Obama.

Friday, August 21, 2015

On background checks, taxis, and Uber/Lyft


As of the city of Los Angeles and other cities go back and forth regarding the legality of Uber, Lyft, and similar companies, I became interested in the whole "background check" part of the deal. The DISCLOSURE at the top of the post gives you a clue regarding my personal interest in this matter.

A couple of points need to be made at the outset. First, as far as they are concerned, Uber and Lyft are not taxi companies. They are rideshare companies which just happen to have a lot of people who "share" rides rather than hailing taxis. While some of us say that if it looks like a taxi and (gag) smells like a taxi, it's a taxi, Uber and Lyft maintain differently. (Perhaps with reason: I could fly to Las Vegas, or drive to Las Vegas. If I drive to Las Vegas, I do not go through a TSA security process. Isn't that unfair?)

The second point: obviously my interest is in Live Scans. But a Live Scan is just a tool - and, as we will see, the use of this particular tool is not the most important difference between taxi background checks and Uber/Lyft background checks.

For my comparison of the background checks performed by taxi companies vs. the background checks performed by Uber and Lyft, I relied upon a December 2014 GigaOM post. Author Carmel DeAmicis researched this thoroughly, and outlined the differences between the background checks. DeAmicis started by stating the following:

Background checks come in all shapes and sizes. You can pay a private investigator more than $1,000 to dig into every aspect of a person’s life. You could drop $15 on a dirt-cheap consumer agency that gathers their records from the internet. Or you could spend $60-$90 on Live Scans, which go through official Department of Justice and FBI databases.

If you are a taxi driver, and your local jurisdiction requires you to perform a fingerprint-based background check, you go to a service provider, pay a fee, and have your fingerprints collected. Those fingerprints are then forwarded to the Department of Justice. Yes, this allows your fingerprints to be compared against criminal fingerprints to make sure that you're not Charles Manson. If the FBI has a criminal record for someone, and your fingerprints match that someone, then you've been caught - and depending upon the charges, your career as a taxi driver is over before it starts.

What does Uber do? Well, in California, Uber drivers aren't taxi drivers, so they don't have to do the fingerprint check.

Uber uses a private background check company called Hirease. Without fingerprints, Hirease runs drivers’ social security numbers through the type of records databases held by credit agencies.

Those aren't official government records, however, and are legally prohibited from listing things that happened more than seven years ago. I guess that means that Charles Manson would turn out OK, since he hasn't committed a crime in the last seven years. Of course, he hasn't bought anything in the last seven years either, so his credit probably isn't that good.

So Uber checks are always worse than taxi checks, then? Not exactly. For one thing, not all jurisdictions require taxi drivers to conduct fingerprint-based background checks, a point that DeAmicis notes. In addition, DeAmicis notes that government records themselves aren't always perfect.

Uber argues, and rightly so, that the DOJ and FBI databases are flawed. Counties don’t always regularly report their records to the state, so information gets outdated. Hirease sends runners in person to pull court records of each Uber applicant in the counties they’ve lived in.

In short, you can poke holes in either background check system, and the requirements vary from jurisdiction to jurisdiction, so you can't say that taxi drivers are always checked more thoroughly than Uber/Lyft drivers, or that Uber/Lyft drivers are always checked more thoroughly than taxi drivers.

And even if a taxi driver or ridersharer passed a background check with flying colors, perhaps he or she may decide during YOUR ride that it's time to commit a criminal act for the first time.

No system is 100% secure.

Monday, August 17, 2015

Living wages and government-owned ember coolers

A few weeks ago, I wrote a post entitled Living wages and family-owned tilapia suppliers. It was about a company called Quixotic Farming and its wonderful, environmentally friendly products that you can buy at your local semi-politically correct store chain. Quixotic Farming's wonderful prose, however, never mentioned that fact that their products were provided by people who don't get minimum wage, much less living wage.

Why? Because they're prisoners.

While there are certainly arguments in favor of such programs, Quixotic Farming didn't publicly address them, since it didn't even make an explicit mention of who their quixotic farmers actually are.

Well, I can't stand on my high horse and stick my tongue out at the evil people of Colorado. My own state of California is doing something similar, according to Mother Jones.

Between 30 and 40 percent of California's forest firefighters are state prison inmates.

However, this fact is not hidden; it's publicly known. And you aren't going to see Charles Manson out on the fire lines; the people on the fire lines are low-level felons. (People convicted of arson are obviously excluded from the program.) And Mother Jones notes the positive aspects of the program (as does Governor Jerry Brown):

At its best, the program is a win-win situation: Inmates learn useful skills and spend time outside the normal confines of prison, and the collaboration with Cal Fire saves the state roughly $80 million a year.

We'll return to that savings in a minute. But there are other benefits:

One benefit of the program is that it often breaks down racial barriers: "When people are incarcerated they tend to segregate by race," says Hadar Aviram, a law professor and criminologist at the University of California-Hastings. "The fire camps are not like that. People who do not associate with each other inside a prison are willing to be friends when they're at a fire camp."

However, like any program with specific financial benefits, the money can often skew decisions. There are people who believe that many of these low-level felons shouldn't really be in prison in the first place, but those who would usually champion reduction of sentences - specifically, just about any person who gets elected to statewide office in California - realize that prison reform causes other problems.

The concern was magnified last fall, when lawyers for state Attorney General Kamala Harris argued that extending an early prison-release program to "all minimum custody inmates at this time would severely impact fire camp participation—a dangerous outcome while California is in the middle of a difficult fire season and severe drought."

This is why it's always important to follow the money. If our anticipated El Niño doesn't wipe out our drought this winter, expect firefighters (but not firefighters' unions) to advocate increased low-level felony prison sentences to keep our homes from burning up.

Thursday, August 13, 2015

Why @a_greenberg probably likes (some) bicycles right about now

Businesses are always looking for ways to advance in the market, and one business - Metromile - hit upon the idea of innovating car insurance. Rather than basing car insurance rates on self-reporting of miles driven, Metromile decided to charge on the exact number of miles that a person drove. Of course, Metromile would need precise data to do this, so it sourced a tool for this purpose.

The key to per-mile insurance is the Metromile Pulse, a free small wireless device we send you that plugs into your car’s diagnostic port. Plugging in the Pulse is easy, doesn’t require any tools, and once in place it securely counts your miles with every trip. Per-mile insurance doesn’t consider other driving factors such as how fast you drive, how suddenly you turn, or how hard you brake, just how many miles you drive.

Let's take Metromile at its word and assume that it only records the number of miles that a person drives. Sounds like an innovative idea, right?

If you've followed the news lately, you know where this is going. Wired reports that this dongle was (emphasis on "was") capable of being hacked:

[T]he researchers demonstrate their proof-of-concept attacks on a 2013 Corvette, messing with its windshield wipers and both activating and cutting its brakes. Though the researchers say their Corvette brake tricks only worked at low speeds due to limitations in the automated computer functions of the vehicle, they say they could have easily adapted their attack for practically any other modern vehicle and hijacked other critical components like locks, steering or transmission, too.

Yes, you have to worry about what you plug into your car - or, as the recent Jeep hack shows, what comes over the wireless network to the car.

Hmm...Andy Greenberg was the report for both of these stories. If I were Greenberg, I'd quit driving cars and take the bus...provided it's a really old bus.

Or perhaps a bicycle is the, maybe not.

You're connected, why shouldn't your bike be?

Um, scared Luddites can think of a bunch of reasons to keep one's bike off the grid...

Friday, August 7, 2015

On iterative performance reviews

Since everyone's talking about lions lately, let's look at a story from a long time ago about a lion called Scar. Scar wanted to usurp the throne, and this got some hyenas all excited because they thought that there would be no king.

Scar informed the hyenas otherwise.

This has a direct bearing on one of last month's big stories. No, not the one about the dentist and the lion in Zimbabwe. The one from Accenture:

As of September, one of the largest companies in the world will do all of its employees and managers an enormous favor: It will get rid of the annual performance review.

Lillian Cunningham, who wrote this article for the Washington Post, wrote her words with care. She did NOT say that Accenture was getting rid of the performance review.

She said that Accenture was getting rid of the ANNUAL performance review.

It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.

This is only part of what's going on - Accenture is also (theoretically) downplaying the idea that people get slotted into a bell curve - but the iterative nature of review is a significant step. Among other things, it provides more timely and useful information:

[P]erformance management had to change from trying to measure the value of employees’ contribution after the fact. It needed instead to regularly support and position workers to perform better in the future.

At this point, few companies have transitioned from the annual performance review cycle. Has yours?

Thursday, August 6, 2015

On iterative work products

Most of you probably already know this, but here's a so-called secret that writers use when possible - if you write something, try to repurpose it somwhere else.

So I'm going to go back to something that I wrote back in 2010. Back at the time, Red Hat's Jim Whitehurst made some comments about bloated software development cycles.

The main problem, according to Whitehurst, is a commercial development model under which executives, programmers, and marketers get together in an effort to predict what their customers want-and then take five years to build it.

At the time (2010), I weighed in on this, and wondered if iterative cycles could work for everyone.

My initial impression - and please correct me with facts if I'm wrong - is that a more iterative development process works better when your customers are technically savvy, or if the iterations are managed in such a way that the customers are never exposed to them....

But imagine if Microsoft Word were on a more iterative development process, and Microsoft was releasing new versions of Word daily. And let's say that the October 22, 2010 version introduced a new menu item. (Forgive me for my dated references to "menu items," but I use Word 2003 more than I use the later versions of Word.)

What does this mean?

It means that if I walk into a store on November 26 and look at the Word packages available in the store, chances are that I won't know whether the package includes the new menu item or not.

So I go ahead and install it, and I'm asked if I want to get the latest software updates, and I say yes, and the software (and the on-line documentation) is updated. Problem solved?

Well, I need a little more help sometimes, so I go to the Barnes & Noble in Montclair, California (I'm trying to become the mayor, you see) and look at the Microsoft Word books on the shelf. I select the book written by Steven Hodson, which happens to have a publication date of November 2010. What I don't know, however, is that Hodson wrote the book in July, using a beta copy of Word that included some features that made the August 12 release, some that made the August 14 release, and one that was dropped and never released - yet.

After searching in vain for an answer to my menu item question, I do what I should have done in the first place - phone a friend who's more knowledgeable about such things.

Can you tell that I wrote this in 2010? (For one thing, why did people go to these "bookstores" to learn stuff?)

Part of what was going through my head was something that I acknowledged in the 2010 post - I had just completed nearly a decade of product management for a product designed for cops. And the way that I managed the product was to write a marketing requirements document, which was then handed off to people who wrote a technical requirements document, who then handed it off to other people who wrote more detailed documents, and so forth.

Things have changed a bit since 2010.

Now we talk about short stories that evolve as we prepare for short sprints. We're not waiting a year for the next set of features.

And what of the Microsoft Word that I talked about in 2010? Well, that's changed too:

"We have had to change the way we build our software," [Jake] Zborowski says. "Before, we forked our code, packaged in for on-premises, then figured out how to do the changes in the cloud. Now we no longer branch the code – we enhance the live (Office 365) code that people are running on."

As a result of this change, Microsoft has moved from a model of releasing updates once every three or four months to small, incremental updates every day.

So I guess this is another Jim Bakker "I was wrong" moment on my part. I'm getting really good at these.

Wednesday, August 5, 2015

No, the Amazon Raid does not involve drones

My employer is a subsidiary of the French company Safran, and our parent participates in a number of philanthropic activities. Employees get a newsletter on this from time to time, and the cover of one such newsletter confused me in its reference to an "Amazon Raid." I pictured some type of European Union activity against an Amazon warehouse in Europe - or, alternatively, an Amazon activity against someone in which armed drones were used.

I was (yet again) wrong. "Amazon Raid" is a translation of the name of a French reality TV show, which will be based in Bali this fall:

Indonesia will become the host of France’s popular reality show, Raid Amazone, in October this year.

The program -- which is another version of the US travel show Amazing Race, except that all contestants are women -- will take place in Bali.

Our newsletter mentioned this because one of the teams is from Safran:

Toutes les trois salariées Safran, nous avons à cœur de représenter les valeurs de notre Groupe sur le Raid Amazones 2015 !

Notre équipe a reçu le soutien du Mécénat Safran, ainsi que le soutien de nos sociétés respectives, Safran Tech et Aircelle. Nous allons donc porter fièrement les couleurs Safran à l’occasion du Raid Amazone 2015 à Bali, du 6 au 16 Octobre 2015.

Did I mention that Safran is headquartered in France?

Tuesday, August 4, 2015

Is your home computer safer than your local nuclear power plant?

There are times that I think that I may be better off putting my personal things into the cloud than maintaining them on my own hardware. After all, cloud professionals spend all day thinking about security, while it's not always in the front of my own mind.

Then there are times that I'm not so sure.

There are all sizes and types of computer systems that are out there. You can start with something as small (and powerful) as a smartphone, then move up to a laptop or desktop computer, then to a system that consists of several computers, and then move on up to the big iron - the stuff that runs critical functions such as nuclear power plants.

As you move up to the higher end of the spectrum, systems will use Industrial Ethernet Switches. I don't use an Industrial Ethernet Switch on my home computer. The term is meaningless for my smartphone. Yet these serve as the backbone of many an industrial system.

But what if there's a vulnerability in such a system?

Now if a home user has a vulnerability in his or her system, the home user will probably get a notification from Microsoft or Google or Apple or whoever to fix something. Or the home user may not have a choice; the OS provider may just patch that vulnerability without letting the user know until after the fact.

But the security issues at a large industrial site serve to preclude rapid fixes of problems. Patrick Howell O'Neill describes the timeline for an average fix:

Incredibly, it can take up to three years to fully fix any given problem. The process is slow and costly.

First, the researchers notified the federal government or another third party of the vulnerability and then the vendors themselves. Then, it took switch vendors like General Electric eight months and Siemens three months to issue patches that sometimes only fix a portion of the problem. While the patch then exists, research shows that industrial facilities don't actually implement the patches for up to 18 months afterwards.

Implementing a patch on critical hardware like the switch involves jumping through numerous hoops with management and then bringing the entire network down, which can cost thousands or millions of dollars every hour, according to the researchers. For that reason, many of these facilities are almost never patching more than once a year, and the timespan is often much longer.

O'Neill notes that researchers, in addition to figuring out how to patch a particular vulnerability, also have to spend time figuring out what to do for customers who are a couple of years away from implementing any such patch.

To be fair, companies that deal in customer data know that they can't wait years to fix patches, and are therefore more aggressive at it. But your local power plant may not be as aggressive.

And that's your comforting thought for the day.

Monday, August 3, 2015

The allure of the allure of doing nothing

Whenever someone is faced with a purchase decision, there is often an alternative of taking no action at all. For example, someone trying to decide between a 2016 Toyota and a 2016 Ford often has the option of purchasing neither and instead sticking with the 1996 Ford that is still running. One common way to express this alternative is "If it ain't broke, don't fix it." (Of course, if that 1996 Ford is broke, you have to fix it. Or take the bus.)

I read Sales and Marketing Management, and this topic is obviously of concern to that publication. Sales and marketing managers need to overcome resistance from potential customers. SMM discusses this in an article entitled "The Allure of Doing Nothing."

This is an excellent article, by the way.

But it's a really bad title.

You're writing an article to a marketing guy like me, and you're trying to motivate me to perform option A (the good option), and then you describe option B with the word "allure"? The article itself talks about psychology, yet the psychology behind the title itself entices me to pursue the bad option.

I suspect that someone at Sales and Marketing Management came up with the title...and no one was motivated to change it.