Education Disrupted: Inside Silicon Valley’s Playbook for Wooing School Superintendents

BALTIMORE COUNTY, Md. — They call it the “Church Lane Hug.”

That is how educators at Church Lane Elementary Technology, a public school here, describe the protective two-armed way they teach students to carry their school-issued laptops.

Administrators at Baltimore County Public Schools, the 25th-largest public school system in the United States, have embraced the laptops as well, as part of one of the nation’s most ambitious classroom technology makeovers. In 2014, the district committed more than $200 million for HP laptops, and it is spending millions of dollars on math, science and language software. Its vendors visit classrooms. Some schoolchildren have been featured in tech-company promotional videos.

And Silicon Valley has embraced the school district right back.

HP has promoted the district as a model to follow in places as diverse as New York City and Rwanda. Daly Computers, which supplied the HP laptops, donated $30,000 this year to the district’s education foundation. Baltimore County schools’ top officials have traveled widely to industry-funded education events, with travel sometimes paid for by industry-sponsored groups.

Silicon Valley is going all out to own America’s school computer-and-software market, projected to reach $21 billion in sales by 2020. An industry has grown up around courting public-school decision makers, and tech companies are using a sophisticated playbook to reach them, The New York Times has found in a review of thousands of pages of Baltimore County school documents and in interviews with dozens of school officials, researchers, teachers, tech executives and parents.

School leaders have become so central to sales that a few private firms will now, for fees that can climb into the tens of thousands of dollars, arrange meetings for vendors with school officials, on some occasions paying superintendents as consultants. Tech-backed organizations have also flown superintendents to conferences at resorts. And school leaders have evangelized company products to other districts.

These marketing approaches are legal. But there is little rigorous evidence so far to indicate that using computers in class improves educational results. Even so, schools nationwide are convinced enough to have adopted them in hopes of preparing students for the new economy.

In some significant ways, the industry’s efforts to push laptops and apps in schools resemble influence techniques pioneered by drug makers. The pharmaceutical industry has long cultivated physicians as experts and financed organizations, like patient advocacy groups, to promote its products.

Studies have found that strategies like these work, and even a free $20 meal from a drug maker can influence a doctor’s prescribing practices. That is one reason the government today maintains a database of drug maker payments, including meals, to many physicians.

Tech companies have not gone as far as drug companies, which have regularly paid doctors to give speeches. But industry practices, like flying school officials to speak at events and taking school leaders to steak and sushi restaurants, merit examination, some experts say.

“If benefits are flowing in both directions, with payments from schools to vendors,” said Rob Reich, a political-science professor at Stanford University, “and dinner and travel going to the school leaders, it’s a pay-for-play arrangement.”

Close ties between school districts and their tech vendors can be seen nationwide. But the scale of Baltimore County schools’ digital conversion makes the district a case study in industry relationships. Last fall, the district hosted the League of Innovative Schools, a network of tech-friendly superintendents. Dozens of visiting superintendents toured schools together with vendors like Apple, HP and Lego Education, a division of the toy company.

The superintendents’ league is run by Digital Promise, a nonprofit that promotes technology in schools. It charges $25,000 annually for corporate sponsorships that enable the companies to attend the superintendent meetings. Lego, a sponsor of the Baltimore County meeting, gave a 30-minute pitch, handing out little yellow blocks so the superintendents could build palm-size Lego ducks.

Karen Cator, the chief executive of Digital Promise, said it was important for schools and industry to work together. “We want a healthy, void-of-conflict-of-interest relationship between people who create products for education and their customers,” she said. “The reason is so that companies can create the best possible products to meet the needs of schools.”

Several parents said they were troubled by school officials’ getting close to the companies seeking their business. Dr. Cynthia M. Boyd, a practicing geriatrician and professor at Johns Hopkins University School of Medicine with children in district schools, said it reminded her of drug makers’ promoting their medicines in hospitals.

“You don’t have to be paid by Big Pharma, or Big Ed Tech, to be influenced,” Dr. Boyd said. She has raised concerns about the tech initiative at school board meetings.

A Makeover Is Born

Baltimore County’s 173 schools span a 600-square-mile horseshoe around the city of Baltimore, which has a separate school system. Like many districts, the school system struggles to keep facilities up-to-date. Some of its 113,000 students attend spacious new schools. Some older schools, though, are overcrowded, requiring trailers as overflow classrooms. In some, tap water runs brown. And, in budget documents, the district said it lacked the “dedicated resources” for students with disabilities.

In a district riven by disparities, Dallas Dance, the superintendent from 2012 through this past summer, made an appealing argument for a tech makeover. To help students develop new-economy skills, he said, every school must provide an equitable digital learning environment — including giving every student the same device.

“Why does a first grader need to have it?” Mr. Dance said in an interview last year. “In order to break the silos of equity, you’ve got to say that everyone gets it.”

The district wanted a device that would work both for youngsters who couldn’t yet type and for high schoolers. In early 2014, it chose a particularly complex machine, an HP laptop that converts to a tablet. That device ranked third out of four devices the district considered, according to the district’s hardware evaluation forms, which The Times obtained. Over all, the HP device scored 27 on a 46-point scale. A Dell device ranked first at 34.

Document | How One School District Chose Its Laptops The district’s hardware evaluations for HP, Dell, Apple and Lenovo devices. The winning device: HP.

The district ultimately awarded a $205 million, multiyear contract to Daly Computers, a Maryland reseller, to furnish the device, called the Elitebook Revolve.

Mychael Dickerson, a school district spokesman, said, “The device chosen was the one that was closely aligned to what was recommended by stakeholders.” Daly did not respond to inquiries.

With the laptop deal sealed, Silicon Valley kicked into gear.

In September 2014, shortly after the first schools received laptops, HP invited the superintendent to give a keynote speech at a major education conference in New York City. Soon after, Gus Schmedlen, HP’s vice president for worldwide education, described the event at a school board meeting.

“We had to pick one group, one group to present what was the best education technology plan in the world for the last academic year,” Mr. Schmedlen said. “And guess whose it was? Baltimore County Public Schools!”

An HP spokesman said the company did not pay for the trip. He said the company does not provide “compensation, meals, travel or other perks to school administrators or any other public sector officials.”

Interactive Feature | Education Disrupted A series examining how Silicon Valley is gaining influence in public schools.

The superintendent later appeared in an HP video. “We are going to continue needing a thought partner like HP to say what’s working and what’s not working,” he said.

Microsoft, whose Windows software runs the laptops, named the district a Microsoft Showcase school system. Intel, whose chips power the laptops, gave Ryan Imbriale, the executive director of the district’s department of innovative learning, an Intel Education Visionary award.

Recently, parents and teachers have reported problems with the HP devices, including batteries falling out and keyboard tiles becoming detached. HP has discontinued the Elitebook Revolve.

Mr. Dickerson, the district spokesman, said there was not “a widespread issue with damaged devices.”

An HP spokesman said: “While the Revolve is no longer on the market, it would be factually inaccurate to suggest that’s related to product quality.”

Asked what device would eventually replace the Revolve in the schools, the district said it was asking vendors for proposals.

Mr. Dance’s technology makeover is now in the hands of an interim superintendent, Verletta White. In April Mr. Dance announced his resignation, without citing a reason. Ms. White has indicated that she will continue the tech initiative while increasing a focus on literacy.

A Baltimore County school board member, David Uhlfelder, said a representative from the Office of the Maryland State Prosecutor had interviewed him in September about Mr. Dance’s relationship with a former school vendor (a company not in the tech industry).

The prosecutor’s office declined to confirm or deny its interest in Mr. Dance.

Mr. Dance, who discussed the district’s tech initiatives with a Times reporter last year, did not respond to repeated emails and phone calls this week seeking comment.

Courting the Superintendents

In Baltimore County and beyond, the digital makeover of America’s schools has spawned a circuit of conferences, funded by Microsoft, Google, Dell and other tech vendors, that lavish attention on tech-friendly educators.

Mr. Dance’s travel schedule sheds light on that world.

Between March 2014, when the laptop contract was announced, and April 2017, when he announced his resignation, Mr. Dance took at least 65 out-of-state trips related to the district’s tech initiatives or involving industry-funded groups, according to a Times analysis of travel documents obtained under public records laws — nearly two trips per month on average. Those trips cost more than $33,000. The Times counted only trips with local receipts, indicating Mr. Dance set foot in the cities.

At least $13,000 of Mr. Dance’s airline tickets, hotel bills, meals and other fees were paid for by organizations sponsored by tech companies, some of which were school vendors, The Times found. The $13,000 is an incomplete number, because some groups cover superintendents’ costs directly, which means school records may not include them.

Another way tech companies reach superintendents is to pay private businesses that set up conferences or small-group meetings with them. Superintendents nationwide have attended these events.

One prominent provider is the Education Research and Development Institute, or ERDI, which regularly gathers superintendents and other school leaders for conferences where they can network with companies that sell to schools.

ERDI offered several service levels this year, according to a membership rate card obtained by The Times. A $13,000 fee for Bronze membership entitles a company to one confidential meeting, where executives can meet with five school leaders to discuss products and school needs. Diamond members could pay $66,000 for six such meetings.

Document | How Much It Costs to Meet With Superintendents The Education Research and Development Institute, known as ERDI, charges membership fees to school vendors to arrange small-group meetings with superintendents who can provide product feedback.

ERDI has offered superintendents $2,000 per conference as participating consultants, according to a Louisiana Board of Ethics filing. And there are other perks.

“Because we are asking for their time and expertise, we commonly offer to pay the cost of their food, transportation and lodging during their participation,” ERDI’s president, David M. Sundstrom, said in an email.

Mr. Dance’s calendar indicated that he had attended at least five ERDI events.

Mr. Dance received payment last year as an adviser for ERDI, according to his most recent district financial disclosure. It lists Dulle Enterprises, a company that owned ERDI in the past, as an employer from which he earned income.

Last February, at an ERDI conference in New Orleans, Mr. Dance met with Curriculum Associates, which makes reading software, as well as DreamBox Learning, a math platform.

At the time, both companies had contracts with the district. A few months after the event, the school board approved additional money for both companies. Each contract is now worth about $3.2 million.

A DreamBox spokeswoman said there was no connection between the meeting and its contract. “Even the appearance of impropriety is something we take very seriously and take steps to avoid,” she said.

A Curriculum Associates spokeswoman said: “These panels are not sales presentations, but rather focus-group opportunities to solicit feedback on products under development.”

Ms. White, the interim superintendent, has been involved with ERDI since 2013, according to Mr. Dickerson. He said Ms. White used vacation time to attend events, where she “provided guidance to education-related companies on goods, services and products that are in development to benefit student performance.”

Asked whether Ms. White had received ERDI payments, Mr. Dickerson said, “Participation in ERDI is done independently of the school system.” In an email, Ms. White said she found ERDI to be a “beneficial professional learning experience.” She didn’t respond to a question about ERDI compensation.

She added, “I do not believe there are any conflicts of interests” related to the district’s tech initiative.

Mr. Sundstrom, ERDI’s president, said education companies pay a fee to attend events “not to meet school leaders or make a sale,” but to get meaningful feedback on their education products from knowledgeable school leaders. He added that school officials do not make purchases at ERDI sessions and that it is their school boards that approve district purchases.

Baltimore County’s travel rules say, “No travel expenses will be paid by those seeking to do business with the Baltimore County Public Schools prior to obtaining a contract.” Mr. Dickerson explained that applied to companies currently bidding for contracts.

A Foundation’s Big Fund-Raiser

Beneath crystal chandeliers last April, politicians, school leaders, vendors and community members gathered in a banquet hall. The occasion was State of the Schools, an annual fund-raising luncheon arranged by the Education Foundation of Baltimore County Public Schools.

The foundation was created in the early 1990s and raises money for schools. Tech companies have made significant donations, and have directors sitting on the foundation’s board. The directors include employees from Discovery Education, Pearson and Microsoft, all vendors with multimillion-dollar district contracts.

Daly, the laptop provider, was the biggest donor, giving $30,000. McGraw-Hill, Discovery Education, Pearson and Microsoft each donated $1,500 to $15,000. Of the $211,500 in publicly listed donations for the event, tech companies gave about 43 percent.

“You have these huge contracts, and then you donate all this money, and the foundation puts up a banner advertising your company’s name,” said Michael J. Collins, a former Maryland state senator and former school board member. “I just didn’t think that passed the smell test.”

Discovery Education said it trained employees to avoid potential conflicts of interest. Microsoft said its policies followed government gift and ethics rules. Pearson said its donation had been nominal and vetted to prevent conflict of interest. McGraw-Hill said it was committed to integrity and transparency.

Deborah S. Phelps, the foundation’s executive director, said it awarded scholarships and gave schools grants for projects in culture, science, technology and other subjects.

When asked if the foundation had policies governing donations from vendors or potential vendors, Ms. Phelps said no. “‘There’s not necessarily a policy,” she said. There is also no policy prohibiting foundation board members who are vendors from reviewing grants involving their or competitors’ products, she said.

Mr. Dickerson said the focus of Baltimore County Public Schools was on “supporting students, teachers and their learning environments.” He added: “We are unapologetic for engaging with our Education Foundation, business partners and community stakeholders in an effort to close known achievement gaps.”

Mr. Reich of Stanford suggested school districts establish clearer rules governing their relationships with vendors, particularly with tech companies racing to win over the gatekeepers to America’s classrooms. Otherwise, parents could lose trust in the system.

“School leaders should be just as concerned about the perception of corruption as actual corruption,” he said.

Carillion handed lifeline by lenders because it offloads healthcare contracts to Serco

Carillion continues to be handed a lifeline by its lenders after saying yes new debt facilities, while selling a part of its healthcare division to rival Serco.

The organization has agreed £140m of debt with two lenders and can defer some pension contributions and also the repayment of other debt, which as a whole mean it estimates it’s between £170m and £190m best when it comes to its cash position.

Carillion has endured a bruising couple of days that lost around £800m of their market capitalisation among heavy losses along with a huge impairment charge associated with troubled contracts.

Leader Keith Cochrane stated recently there must be a “change of culture” if the organization would return in the edge, and outlined £75m of cost-cutting.

On Tuesday the firm announced it had agreed an offer to market numerous facilities management contracts because of its United kingdom healthcare division to Serco for £50.1m, which is finalised within the next couple of days.

The organization confirmed it meant to dispose of its healthcare business earlier this year, and stated on Tuesday it promises to offload the rest of the contracts the coming year. The division provides facilities management services for that NHS, varying from preparing patient meals to cleaning hospitals.

Shares within the firm leaped around 24.57pc morning to 54.5p.

Mr Cochrane has formerly stated the firm was wishing to create greater than £300m by offloading numerous companies within the next couple of several weeks.

Carillion can also be thinking about selling its Canadian division, even though it stated it had become “evaluating whether a much better result for that group could be achieved by retaining for the time being clear on individuals businesses”.

Mr Cochrane stated: “Today we’re announcing progress on numerous fronts and although our customers and creditors continue being supportive, much remains done.

“We remain centered on executing our disposals and price savings programmes while ongoing our discussions with this lenders along with other stakeholders to understand more about further methods for strengthening Carillion’s balance sheet.”

It highlighted recent contract wins, together with a £200m hire Gigaclear to construct a broadband network in Devon and Somerset, along with a £71m contract to create and make student accommodation for that College of Manchester.

The Finger-Pointing at the Finance Firm TIAA

In the treacherous world of finance, where investors confront biased advice, hidden costs and onerous fees, one investment giant seems to stand apart — the Teachers Insurance and Annuity Association, also known as TIAA. Calling itself a “mission-based organization” with a “nonprofit heritage,” TIAA has enjoyed a reputation as a selfless steward of its clients’ assets for almost a century.

“Our values make us a different kind of financial services organization, known for our integrity,” Roger W. Ferguson Jr., TIAA’s president and chief executive, says on the company’s website.

Roger W. Ferguson Jr., TIAA’s president and chief executive officer, in 2014.

Earl Wilson / The New York Times

TIAA’s clients — educators, researchers and public service workers, many inexperienced with finance — consider the company a trusted partner without whom they could not hope to retire comfortably. That many customers revere it is not an overstatement.

Now, TIAA’s image as a benevolent provider of investment advice is in question. Several legal filings — including a lawsuit by TIAA employees with money under the company’s management, and a whistle-blower complaint by a group of former workers — say it pushes customers into products that do not add value and may not be suitable but that generate higher fees. Such practices would violate the legal standard that applies to retirement accounts and securities laws governing investment advisers.

And while TIAA contends that its operations are untainted by conflicts because its 855 financial advisers and consultants do not receive sales commissions, former employees, in interviews and in lawsuits, disagree. They say the company rewards its sales personnel with bonuses when they steer customers into more expensive in-house products and services.

The accusations are notable not only because TIAA tells clients that it puts them first, but also because it is one of the world’s larger money managers, with almost $1 trillion in assets under management. Today, five million people — most of them college professors, nurses, administrators, researchers and government employees — entrust their money to TIAA. (Formerly known as TIAA-CREF, the company changed its name to TIAA last year.)

Pushing customers into investment products to generate higher pay is a tactic as old as investing itself. And many Wall Street firms, JPMorgan Chase and Morgan Stanley among them, have gotten into trouble for aggressive sales practices. TIAA, by contrast, has been seen as a different animal from its Wall Street counterparts.

Asked about the allegations, Chad Peterson, a TIAA spokesman, said the company focuses exclusively on meeting its clients’ long-term financial needs and operates in “a highly transparent and ethical way.” He added that TIAA’s clients had benefited from their association with the firm.

“We’ve paid more than the guaranteed payouts to our fixed annuity holders every year for more than half a century,” Mr. Peterson said. “We’ve paid $394 billion in benefits to retired participants since 1918. Since our founding, our retired participants have never missed a payout from us — through depressions, wars and natural disasters.”

According to interviews with 10 former employees, TIAA management assigned outsize sales quotas to its representatives and directed them to meet the quotas by playing up customers’ fears of not having enough money in retirement and other “pain points.”

These allegations are echoed in a confidential whistle-blower complaint filed against the company with the Securities and Exchange Commission and obtained by The New York Times. The complaint, which is pending, contends that TIAA began conducting a fraudulent scheme in 2011 to convert “unsuspecting retirement plan clients from low-fee, self-managed accounts to TIAA-CREF-managed accounts” that were more costly. Advisers were pushed to sell proprietary mutual funds to clients as well, the complaint says. The more complex a product, the more an employee earned selling it.

Those who questioned management’s directives, the complaint says, were “processed out” of TIAA.

Under the legal standard applied to retirement accounts, these plans must be run solely in the interests of participants and beneficiaries. Fiduciaries are barred from engaging in transactions in the plan that would benefit them or other service providers like TIAA.

Clients must also be told of conflicts. Sales representatives who do not make this clear would violate the rules.

The former TIAA employees spoke on condition of anonymity for fear of retribution. TIAA makes employees sign an unusual agreement when they are hired stating that they will not make disparaging public comments about the company. The agreement, reviewed by The Times, gives TIAA the right to go to court to force compliance with its terms.

TIAA’s claims that it is more honorable than its competitors may have been true decades ago, but they no longer are, the former employees said.

Edward Siedle, founder of Benchmark Financial Services, is a former S.E.C. enforcement lawyer whose firm investigates improprieties at pension funds and recently helped a whistle-blower win the largest award from the S.E.C. after an enforcement action. Mr. Siedle has been briefed on the TIAA whistle-blower complaint and the former employees who brought it. “TIAA’s longstanding reputation as a low-cost provider doing well for educators and not driven by profit seems to be challenged by the revelations about how it’s doing business today,” he said.

A Broad Reach

In the early 1900s, teachers had no access to pensions that would help them live comfortably in retirement. So in 1918, the Carnegie Foundation donated $1 million to create the nonprofit Teachers Insurance and Annuity Association. Its goal was to “ensure that teachers could retire with dignity.”

For decades, TIAA grew by selling mostly insurance products, like annuities that guaranteed a steady stream of retirement income to their holders. Then in 1952, TIAA added the College Retirement Equities Fund, a global stock portfolio, to its offerings. The company, still operating as a nonprofit, became known as TIAA-CREF.

In most cases, clients invest with TIAA because their employers have hired it to administer their workers’ retirement accounts, known as 403(b) plans. Some 15,000 of the nation’s colleges, hospitals and other nonprofit organizations employ TIAA, its website says.

TIAA typically acts as record-keeper to these institutions, administering accounts that allow beneficiaries to choose among an array of mutual funds and annuities. When TIAA is a plan’s record keeper, its in-house funds are typically among the investments offered.

The company earns a record-keeping fee from these institutions, but it can also receive far more revenues when investors buy its mutual funds and annuities. Therein lies the potential for conflict at TIAA.

(I am a trustee of St. Olaf College, an institution that employs TIAA as record keeper on its retirement plans. The college recently asked other companies for information about their costs and offerings to help assess whether TIAA should stay on the job, but I will not be advising or making decisions on that matter.)

In 1997, Congress revoked the company’s nonprofit status as part of a tax reform bill, saying the status gave TIAA an unfair advantage over other companies. This meant TIAA’s costs would rise significantly because it would have to pay taxes.

Still, TIAA’s management said, the change would allow it to pursue investment opportunities it had not been able to engage in as a tax-exempt entity.

Former employees said the company became more aggressive in its sales practices when Herbert M. Allison Jr., a longtime Merrill Lynch executive, took over as TIAA’s chief executive in 2002. Around that time, the company was facing a major problem: Many clients withdrew their money when they retired from their universities or hospitals, moving their accounts to competitors like Vanguard, Charles Schwab and even higher-end brokerages like Merrill Lynch.

Eager to stanch the outflows, TIAA set up a registered investment advisory firm in 2004 that began offering private asset management services. In 2005, it created the Wealth Management Group, providing managed accounts for clients, for a fee.

The costs of these accounts were high compared with TIAA’s basic retirement accounts, and so was the pressure to sell them, according to the whistle-blower lawsuit. It notes that TIAA levied fees of 0.75 percent to 1.15 percent of assets under management. These charges came on top of the often hefty costs associated with TIAA funds or annuities.

“Had the retirement plan clients known of the advisers’ conflict of interest, they certainly would have been more wary and undertaken more investigation to discover the managed accounts the advisers were pushing were subject to substantially higher fees,” the complaint says.

Former employees contend that sales pressures at TIAA increased after it began losing university and other institutional accounts to competitors. Internally, TIAA executives had a name for this problem: Money in Motion. And in the fall of 2014, TIAA was reeling from the loss of the $1.3 billion University of Notre Dame account.

Losing such an account not only means no more record-keeping fees for TIAA, it also means the company will no longer generate money management revenues from participants’ purchases of in-house funds. That’s because TIAA’s funds are rarely offered to participants in plans that do not employ the company as record keeper.

After Notre Dame decided to move to Fidelity, a group of TIAA executives convened a conference call. Topic A: how to stop other accounts from walking out the door.

According to a tape provided by a former employee, one executive reported that the company had lost almost $6.4 billion in assets to competitors so far that year. When clients stopped taking part in a plan by retiring or changing jobs, the executive said, only half kept their money there.

Changing this dynamic was crucial, the executives agreed. And one urged the group to look at who was at risk of moving money out of TIAA accounts “and target those participants.”

Lawsuits Over Costs

In recent years, lawsuits directed at high-cost providers of retirement account services have shed light on the expenses associated with these arrangements. TIAA’s offerings have been among those drawing scrutiny.

In 2015, TIAA came under attack in a lawsuit brought by its own employees. This past May, TIAA agreed to pay $5 million to settle the plaintiffs’ allegations that the company breached its fiduciary duty by overcharging its workers in their retirement plan.

The plan offered only high-cost TIAA investment products, the lawsuit said. TIAA strongly denied the allegations but agreed to include investment options from outside fund managers in a settlement of the case; TIAA said it settled to avoid the costs and distractions of litigation.

On its website, TIAA says that its investment vehicles carry “some of the lowest costs in the industry.”

According to Morningstar, the average asset-weighted expense ratio on TIAA’s mutual funds was 0.32 percent in 2016. Although lower than the 0.57 percent mutual fund industry average, it is more expensive than a low-cost provider like Vanguard, whose average expense ratio was 0.11 percent in 2016.

TIAA also paid $19.5 million in 2014 to settle a suit brought by faculty members at St. Michael’s College in Vermont. They contended that TIAA failed to pay customers investment gains generated on their money during the time between the clients’ requests to move their funds from TIAA and the actual redemptions. TIAA had to pay $3.3 million in plaintiffs’ legal fees in that case.

TIAA denied liability in this case, saying the processing delays arose from a system upgrade.

Last February, a new lawsuit was brought by Melissa Haley, a participant in the Washington University Retirement Savings Plan. She alleged that TIAA had improperly charged her for loans she took out using her retirement account as collateral.

When a participant borrows against retirement-plan assets, most plan overseers take the loan out of the participant’s account. That way, the interest paid on the loan goes back to the borrower.

TIAA had a different practice, taking a loan from TIAA’s general account. That meant TIAA earned the difference between the interest it charged on the loan and the amount the participant earned on the money invested with TIAA. This enabled the firm “to earn additional income at the expense of retirement plan,” the lawsuit said, estimating that TIAA had generated $50 million a year from this practice nationwide.

Ms. Haley, who works as an administrator in cancer research at Washington University’s School of Medicine, said in an interview that she had been surprised when she learned about TIAA’s loan practices. “We’re all trying to do good things at the university, and you assume that anyone who is affiliated with it would be on the same path,” she said. “TIAA doesn’t have the values I thought it did.”

Mr. Peterson of TIAA said the company denies Ms. Haley’s allegations and will fight her suit vigorously. After the lawsuit was filed, TIAA told some college officials that loans should be funded from a participant’s account, calling that approach “a best practice.”

Incentive Compensation

Even though TIAA stopped being a nonprofit organization in 1997, many of its customers might think it remains one. The company’s website ends in a .org rather than a .com and TIAA repeatedly refers to its “nonprofit heritage.”

Most of TIAA is for-profit. Teachers Advisors, for example, is an investment advisory firm that receives compensation from each in-house mutual fund it manages. Nuveen, a mutual fund company purchased by TIAA in 2014, is also run on a for-profit basis. So is EverBank, a Florida banking institution TIAA acquired in June.

According to TIAA’s 2016 annual statement, it generated $30.8 billion in income; $15 billion of that came from premiums collected on its insurance products. It earned almost $12 billion in investment income for its clients and $221 million in fees associated with TIAA’s investment management, administration and investment contract guarantees.

As these figures show, insurance is by far TIAA’s biggest business. It is a stock life insurance company whose shares are held by TIAA’s board of overseers. Most of the money it generates in its businesses is reinvested in the company or paid out to holders of TIAA annuities, the company says. Last year, it paid $3.8 billion to those holders.

TIAA’s employees were paid almost $1 billion in 2016, its filings show.

TIAA’s executive pay packages are comparable to those on Wall Street. During 2016, Mr. Ferguson, its chief executive officer, received $18.5 million in compensation, $5.1 million more than Michael Corbat, the chief executive of Citigroup, received.

Although TIAA contends that its sales representatives are not paid commissions, it does award bonuses to financial consultants and advisers if they sell in-house products or services. “There is an incentive for consultants to refer you to, or recommend that you open, TIAA accounts, products and services,” one TIAA filing with the S.E.C. said.

TIAA’s financial consultants who deal with institutions also receive bonuses based on their success in keeping clients’ money in house, the filing shows.

The company says in the filing that it addresses these conflicts of interest “by disclosing them to you.” While the lengthy document is sent to TIAA’s clients, they may not read it. The conflicts are not discussed in TIAA’s current private asset management brochure, dated March 2017, which says, “Your team always manages your portfolio according to your best interests.”

But the whistle-blower suit recounted a comment made by an executive at a convention of the company’s advisers in Orlando, Fla., in 2014. At the event, the lawsuit said, Carol Deckbar, then executive vice president and chief operating officer at the company, urged advisers to put more of their clients into in-house mutual funds. “Where do you think you get your bonuses?” the executive asked the crowd, according to the lawsuit.

Ms. Deckbar, now head of institutional investment and endowment products and services at TIAA, declined to comment through the TIAA spokesman. The spokesman also declined to comment.

To receive a bonus, the former employees said, they had to meet a series of production thresholds and qualitative measures. Advisers work against a performance scorecard each year.

According to internal and S.E.C. documents, TIAA advisers receive more money if they put clients into what the company calls complexity products — in-house offerings like annuities and life insurance as well as costlier private asset management accounts and fee-based Portfolio Advisor accounts.

This creates an incentive, former employees said, for sales representatives to push retiring professors or administrators to move money from their institutional plan, with annual costs of around 0.3 percent of assets under management, to managed accounts charging fees of 0.7 percent to 1 percent.

Mr. Peterson, the TIAA spokesman, declined to comment about these allegations. An S.E.C. filing by TIAA said that it has a transaction review process aimed at making sure that recommendations are appropriate for clients.

The employee scorecard represented both carrot and stick. If enough money was not being rolled into managed accounts, representatives’ bonuses could be cut at their supervisor’s discretion, a former sales representative said.

A new federal fiduciary rule, which will require financial advisers working on retirement accounts to put their clients’ interests first, states that firms like TIAA cannot use bonuses or other incentives that would “cause advisers to make recommendations that are not in the best interest of the retirement investor.” Along with many on Wall Street, TIAA argued against the fiduciary rule.

TIAA’s efforts to hold on to client assets and bring in new customers seem to be working. In 2016, the company said, its Institutional Financial Services unit attracted more than 261,000 new individual clients. The business group “beat their targets” in many areas.

But in June, the company changed the message it wanted its sales representatives to tell clients. A training update to wealth management advisers, provided to The Times from a current employee, came as the new fiduciary rule was being finalized.

It told advisers “to avoid accidentally implying that you may be acting as a fiduciary,” when having educational conversations with clients. They should avoid “referencing the participant’s best interest” and “discussions regarding TIAA’s not-for-profit heritage.”

Debt-laden care homes giant Four Seasons makes survival appeal as interest deadline looms

Britain’s greatest care provider makes a sudden attract its lenders to accept radical restructuring of their heavy financial obligations to avert a cash crisis that will cast uncertainty over the way forward for countless nursing facilities nationwide.

Four Seasons Healthcare, owned Terra Firma, the non-public equity firm controlled through the questionable financier Guy Hands, launched the proposals hoping of sealing an offer prior to it being due to create a £26m interest payment in December.

It cautioned that it won’t be capable of making the payment, threatening to breach obligations to bondholders who could then assume control of their estate of 360 nursing facilities because they aim to recover £525m loaned to Four Seasons. This type of move would raise questions for Four Seasons’ 17,000 residents and could be prone to trigger intervention through the Care Quality Commission (CQC).

The regulator stated on Tuesday it didn’t believe services were apt to be disrupted “at this time” which the restructuring proposal was “an important part of securing the lengthy-term financial way forward for this company”.

Underneath the plan, supposed to have been launched in November, Terra Firma would inject several 24 care homes it’s worth £136m into Four Seasons as extra equity.

The holders of £175m of senior notes due for repayment in 2020 would accept swap their notes for brand new bonds worth only £60m along with a 20pc equity be part of the restructured company. The brand new notes would pay less interest less regularly and never be due for repayment until 2022.

Guy Hands’s Terra Firma bought Four Seasons for £825m this year, including £525m of debt

The holders of the further £350m in senior guaranteed notes due in 2019 wouldn’t be requested to create off any debt, but would need to accept slash the eye rate by half, to get less regular payouts and a 2-year repayment delay. As a swap they’d receive additional legal rights over Four Seasons’ assets.

Four Seasons may also seek to renegotiate its £51m annual rent bill with individual landlords. It’s shut lower or offered around 150 homes it believes might be run more lucrative by another provider or redeveloped and hopes remaining landlords will accept rent reductions.

Terra Firma bought Four Seasons this year inside a disastrous £300m bet on development in the concern sector. While the amount of Britons requiring residential care is booming, the general public funding available continues to be squeezed by Government cuts and the amount of care needed continues to be more expensive than Mr Hands predicted.

Profits have reduced to an amount in which the mixture of rent, annual charges close to £55m and maintenance bill of £24m are “unsustainable in comparison to the earnings generated through the business”. Terra Firma has wiped off its entire purchase of Four Seasons, although following the suggested restructuring would still own 80pc of the organization.

Four Seasons is attractive to its lenders for help simultaneously as battling its dominant bondholder within the High Court, however. The organization is trying to possess the legal rights over its assets held by H/2 Capital Partners restricted.

Our Prime Court heard the City law practice Allen & Overy botched a legitimate process this past year and accidentally granted the united states hedge fund, headed by former Lehman Siblings banker Spencer Haber, extra financial security over care homes if Four Seasons does not pay its financial obligations.

The situation is a result of be heared next May. If H/2 Capital doesn’t accept the restructuring meanwhile, Four Seasons stated it’ll default on its financial obligations in December and issue a dead stop notice to understand more about alternative restructuring proposals. At that time the bondholders could choose to assume control from Terra Firma.

Four Seasons chairman Robbie Barr stated: “There won’t be any effect on our operations, including our residents and colleagues, because of this announcement because the proposal ensures there’s appropriate liquidity in position to function our homes and hospitals although a restructuring is implemented.”

H/2 Capital declined to comment.

Chasing millions in State medicaid programs dollars, hospitals buy up nursing facilities

Why Glaring Quality Gaps Among Nursing Facilities Will Probably Grow If State medicaid programs Is Cut]

But advocates of the practice state that even if hospitals get the majority of the money, it’s wisely spent.

Marion County Hospital and Health Corp., the big safety-internet hospital system in Indiana, owns or leases 78 nursing facilities over the condition, greater than every other county hospital.

Sheila Guenin, v . p . of lengthy-term care there, stated a healthcare facility keeps 75 % from the additional State medicaid programs dollars and also the nursing facilities obtain the rest. Still, the extra money has improved care. The change in the license towards the hospital has stored several nursing facilities from closing and elevated staffing rates at many more, she stated.

About 40 % from the county hospital’s nursing facilities have five-star ratings from the us government, up substantially from ten years ago, Guenin stated. One of the enhancements in the nursing facilities were adding electronic health records as well as high-capacity emergency generators to supply power inside a natural disaster.

Still, some patient advocates stated the additional funding is flowing to hospitals and nursing facilities with little public accounting. Ron Flickinger, a regional lengthy-term-care ombudsman in Indiana, stated, “A large amount of extra cash has been spent here, but I am not sure patients have experienced it benefit them.”

The way it started

State medicaid programs, which generally covers about two-thirds of elderly care residents, is jointly financed through the federal and condition governments. States pay a maximum of half the expense, even though the federal match varies with different state’s wealth. In Indiana, the us government pays about 65 % from the costs.

The improved elderly care payments started in 2003 whenever a county-owned Indiana hospital made the decision to benefit from State medicaid programs rules to boost its main point here. Within this situation, a healthcare facility purchased an elderly care facility, then provided the cash for that condition to improve what it really allocated to the house towards the federally permitted maximum.

That increase, consequently, came lower more federal matching funds. Because the federal remittance was bigger compared to hospital’s contribution, a healthcare facility returned its energy production and divided the additional cash with the elderly care.

Other county-owned hospitals in Indiana gradually adopted suit.

Hatcher stated Indiana government leaders accepted the funding arrangement since it allow them to steer clear of the politically difficult step of raising taxes to improve condition funding to enhance care at nursing facilities. “It’s an income generator for that condition and counties,” he stated.

All of the State medicaid programs funding for nursing facilities ought to be likely to individuals homes to look after poor people, not distributed to hospitals for they choose, he stated.

The process, promoted by consultants counseling hospitals and nursing facilities in Indiana, can be used heavily there due to the variety of county-owned hospitals. But the us government is tightening the guidelines about such payments.

Texas has guaranteed State medicaid programs approval for the same strategy beginning this month, but federal officials make the additional funding determined by nursing facilities meeting quality measures for example reducing falls. Oklahoma is thinking of getting federal approval, too.

As well as in a guide released this past year, the government Centers for Medicare and State medicaid programs Services announced it would progressively pressure states to shift to payment systems that tie such reimbursements to quality of care. Michael Grubbs, an Indiana health consultant, stated that rule doesn’t steer clear of the Indiana hospital funding program, but it’s unclear that it’ll last.

Elderly care operators in Indiana repeat the financing arrangement helps them maintain rising costs and improve take care of residents.

Zach Cattell, president from the Indiana Healthcare Association, an elderly care facility trade group, noted that the amount of nursing facilities within the condition earning Medicare’s top, five-star rating has elevated nine percentage points since 2011. He stated the proportion of high-risk residents with pressure ulcers and individuals who’re physically restrained also dropped considerably.

Chance or loophole?

Indiana’s small, county-run ­rural hospitals generally aren’t facing the financial threat that’s more prevalent elsewhere, partly due to the extra State medicaid programs funding acquired from buying nursing facilities, hospital officials say.

“The money has meant a great us,” stated Gregg Malot, director of economic development at Pulaski Memorial Hospital in northern Indiana. “I don’t check this out like a loophole but view it being an chance for small, rural community hospitals to enhance our quality and use of care.”

His hospital is the only person in Pulaski County. The additional Medi­caid revenue from obtaining 10 nursing homes statewide — about $two million annually — helps finance purchasing the hospital’s first MRI machine, so doctors do not have to depend on the mobile unit that accustomed to come two times per week, he stated.

A healthcare facility also spent a few of the money to include a mechanical system to watch patients’ vital signs.

Steve Lengthy, leader of Hancock Regional Hospital in Greenfield, stated his hospital lately built two fitness gyms within the county with the aid of the additional State medicaid programs dollars that resulted from the purchase of Westminster Village.

He rejects the concept additional State medicaid programs money cuts down on the hospital’s incentive to include home- and community-based care locally. He stated new Medicare financing plans, for example accountable care organizations, provide the hospital motivation to obtain the most good ways to take care of patients once they leave a healthcare facility.

But he acknowledged the hospital advantages of seeing more patients visit nursing facilities licensed under its name.

“Welcome to healthcare — it’s an intricate and confusing atmosphere where most of us have different competing incentives,” Lengthy stated.

Kaiser Health News is really a national health policy news service that belongs to the nonpartisan Henry J. Kaiser Family Foundation.

Why Chicago’s soda tax fizzled after two several weeks — and just what this means for that anti-soda movement

What went down when Congress made the decision to tax all soda]

Advocates of this movement — including numerous top public health groups and former New You are able to City mayor Michael Bloomberg — have advanced the required taxes as a way to battle weight problems whilst raising revenue for local jurisdictions.

But critics repeat the collapse from the Prepare County tax is proof the nation’s soda tax movement is losing its momentum.

“It makes no difference should you tax tea or sugar,” stated Commissioner Richard Boykin, who represents free airline Side of Chicago, referencing the run-to the Revolutionary War. “Eventually people say ‘enough is sufficient.’”

Unlike other metropolitan areas and counties which have passed soda taxes recently, Prepare County was perhaps cursed from the beginning.

The county of 5.two million people had been contending with budgetary woes and prevalent voter frustration with condition and native government once the board voted in November 2016 to levy single-cent-per-ounce tax on soda along with other sugary drinks.

The measure was pitched largely as a way to plug a $1.8 billion budget gap, and secondarily as a way to enhance public health by discouraging the intake of beverages associated with weight problems along with other conditions.

Within an March. 5 budget address, Prepare County President Toni Preckwinkle, probably the most stalwart defender from the soda tax, contended that county services — including hospitals, clinics and community intervention programs — would suffer with no tax.

“A election to repeal is really a election to lessen vital community investments,” she stated. A spokesman on her office declined to discuss the likely repeal from the tax.

But there have been early signs the soda tax may not enhance the revenue advocates wished, and definitely this is not on the intended schedule. The policy’s rollout was dogged by implementation errors and legal challenges.

An earlier form of the tax, for example, was targeted at distributors, who’d then pass the price onto consumers. However the county was made to revise that plan if this recognized it will make the soda tax susceptible to yet another florida sales tax, that is illegal in Illinois.

Soon after that, the county suggested making the tax a line item at the purpose of purchase, similar to sales taxes are assessed presently. But local governments aren’t permitted to tax transactions which are compensated for implementing federal diet benefits, which meant the county needed to exempt greater than 870,000 individuals from having to pay the tax — a final-minute change that dented revenue expectations.

Once the tax finally did get into impact on August. 2, carrying out a suit through the Illinois Retail Retailers Association, it had been met with staunch public opposition: Consumers have organized highly visible boycotts, driving to nearby Indiana for groceries, and flooded their representatives with complaints.

Several Prepare County commissioners who switched their votes in support of repeal have reported that outrage.

“I often hear in the people of my district, overwhelmingly,” stated Commissioner John Daley throughout the Tuesday hearing, which extended on for hrs as proponents and opponents from the tax testified towards the board’s finance committee.

The issue now — for soda tax critics and supporters alike — is whether or not Prepare County’s unsuccessful soda tax is an indication of products in the future in other jurisdictions. As the fight was evidently fought against by condition and country groups, it’s well-acknowledged on sides that local soda tax skirmishes are basically proxy wars between your national soda industry and well-monied public health groups.

In Prepare County, the Can the Tax Coalition, an anti-tax group funded through the American Beverage Association, has spent greater than $3.two million on Radio and tv ads. Repeal advocates have compensated constituents of target districts $11 each hour to flow anti-tax petitions.

They also have targeted and lobbied individual commissioners, all whom are up for election the coming year. Coca-Cola and Pepsi have previously donated with a pro-repeal commissioners using a political action committee, stated Sarah Brune, the manager director from the Illinois Campaign for Political Reform.

“[The donations] are unusual with this season, to this point in the election,” stated Brune.

Michael Bloomberg, meanwhile — the previous New You are able to City mayor that has made the soda tax fight their own — is stated to possess spent greater than $ten million on radio and ad campaigns, as well as an unknown amount on lobbyists and mailers. Bloomberg has verbally dedicated to backing commissioners who supported their cause in next year’s elections.

The millionaire seemed to be involved, using the American Heart Association and also the Laura and John Arnold Foundation, within the wave of local soda taxes that taken through six locations in 2016. That established new sugary drink policies in Boulder, Colo., Bay Area and Prepare County.

But where that movement once appeared unstoppable, cracks have started to show. In May, Bloomberg yet others backed a unsuccessful soda tax referendum in Santa Fe, which voters rejected with a wide margin.

Philadelphia’s soda tax, essentially since The month of january, has additionally unsuccessful to create the revenue that backers initially expected. Which has limited the achieve from the pre-K program the tax was set to finance, and it has empowered a few of the policy’s critics.

“The results happen to be shifting as local municipalities, residents and companies find out more about the devastating impact these taxes dress in working families and companies, and just how they are not good budget solutions,” stated David Goldenberg, a spokesman for that industry-funded Can the Tax Coalition.

But it is most likely too soon for giant Soda to gloat, experts caution. An research into the political and demographic climates in metropolitan areas that effectively passed soda taxes, printed within the journal Food Policy this season, figured that as much as 40 % of american citizens reside in metropolitan areas with the proper conditions to pass through their very own taxes. Individuals include exterior financial support and Democratic Party dominance.

Seattle’s City Council passed a tax in June. Massachusetts and Tennessee also have expressed interest, stated Jim O’Hara, the director for health promotion policy in the nonprofit Center for Science within the Public Interest.

Bloomberg, for just one, guaranteed via a spokesman to carry on the battle, whatever the outcome in Prepare County.

“We don’t be prepared to win everywhere,” stated spokesman Howard Wolfson. “We wish to win most places and we’re winning most places. We’ll still move forward and fight the soda industry in jurisdictions that are looking to safeguard the healthiness of their citizens.”

Find out more:

The situation for taxing sugar, not soda

‘We’re losing more and more people towards the sweets rather than the streets’: Why two black pastors are suing Coca-Cola

‘Obesity isn’t an issue’: Why the Indian government is courting foreign junk-food makers

Trump plans executive action to allow insurers sell health plans across condition lines

President Trump stated Wednesday he might take executive action in a few days to permit insurers to market health plans across condition lines making it simpler for individual customers to buy coverage like a group, an insurance policy approach lengthy championed by conservatives.

Trump’s comments, which came on the day that that insurers within three dozen states needed to finalize their federal contracts to provide 2018 coverage underneath the Affordable Care Act, did little to allay their concerns or individuals of condition officials.

“I’ll most likely be signing a really major executive order where individuals will go out, mix condition lines, do many things and purchase their care,” Trump told reporters around the South Lawn. “It’s being finished now. It’s likely to cover lots of territory and lots of people, huge numbers of people.Inches

Trump has frequently emphasized his curiosity about allowing insurers to provide plans across condition lines, which conservatives argue would lower premiums by fostering greater competition. The proposal into consideration in the White-colored House was submit by Sen. Rand Paul (R-Ky.), who balked now at supporting the party’s newest effort to undo the ACA, and administration officials are certain that addressing this problem will make Paul more available to backing health-care legislation.

Paul stated on MSNBC’s “Morning Joe” Wednesday he had spoken multiple occasions to Labor Secretary Alexander Acosta about the possibilities of reinterpreting a provision of ERISA, the government Employment Retirement Earnings Security Act, to permit visitors to buy health plans in another condition. Corporations can already achieve this.

President Trump on Sept. 27 stated Congress will election on the health-care bill “early the coming year,Inches adding he supports ending the legislative filibuster within the Senate. (The Washington Publish)

“Conservatives continue to be fighting free of charge-market reforms towards the healthcare system,” Paul stated inside a statement. “I am excited to become dealing with President Trump about this initiative.”

Under Section 1333 from the ACA, states already be capable of enter compacts to permit insurance to become offered across condition lines — as a minimum of eight did. But insurers happen to be unwilling to participate, partly because creating plans susceptible to different rules in various states could be pricey and time-consuming. Most consumers haven’t much incentive to purchase coverage which includes out-of-condition doctors and hospitals.

“The provider network is most likely the greatest factor we consider,” stated Kristine Grow, a spokeswoman for that industry group America’s Medical Health Insurance Plans. “Products are equipped for the condition according to systems within that condition.”

Mike Consedine, president from the National Association of Insurance Commissioners, stated inside a statement that officials would need to evaluate the executive order but noted the association’s lengthy-standing opposition “to any make an effort to reduce and sometimes preempt condition authority or weaken consumer protections.”

Lanhee Chen, an investigation fellow at Stanford University’s Hoover Institution, stated it seems sensible that Trump needs to “move the ball forward on conservative priorities” since health-care legislation has stalled.

Meanwhile, insurers and condition officials are pressing the administration to invest in supplying cost-discussing subsidies its 2018. These payments to insurers help low-earnings ACA consumers afford other coverage expenses, for example co-pays and deductibles.

California, Florida along with other states had directed insurers this spring to file for two teams of premium rates: one which assumed the price-discussing subsidies would continue and something presuming they wouldn’t. However, just days from the November. 1 oncoming of open enrollment, insurers still do not have certainty.

Sens. Lamar Alexander (R-Tenn.) and Wa State (D-Wash.) have been going after a contract on funding the subsidies a minimum of through 2018. They started again individuals talks Wednesday, with Murray saying they’d attempt to strike an offer as quickly as possible.

Trump told reporters that more than the following two several weeks, because he awaits another congressional election on repealing this years health-care overhaul, “I’m also likely to talk with Democrats, and I will find out if I’m able to obtain a health-care plan that’s better still.Inches

But Murray stated that any effort to promote bipartisanship should begin with the administration extending individuals cost-discussing payments. “That will be a concrete key to ensure people’s healthcare doesn’t become unaffordable,” she stated.

Final 2018 rates is going to be set regardless. On Tuesday, Florida announced that rates because of its mid-level “silver” plans is going to be 31 percent greater the coming year, partially due to the insufficient certainty around cost-discussing subsidies.

A spokeswoman for Covered California stated the condition will announce its 2018 marketplace rates next Monday. Insurance Commissioner Dave Johnson cautioned that they’ll be greater unless of course Trump or Congress provide assurance soon the payments continues.

“Unless the Republican-controlled Congress and also the president do their jobs immediately by funding the price-discussing reductions within the ACA for 2018, then medical health insurance premiums which are more popular product within our condition exchange is going to be typically 13 % greater,” Johnson stated inside a statement.

Here are some medical groups opposing the Cassidy-Graham health-care bill

already long odds for its passage.

Amongst other things, the balance would remove protections for preexisting conditions, make deep cuts to Medicaid and finish the Affordable Care Act’s tax credits and price-discussing subsidies.

The internet result, based on a Brookings Institution analysis released Friday? Thirty-2 million more and more people uninsured by 2027, relative to the present baseline.

One element in the bill’s apparent (while not yet certain) demise: Cassidy-Graham has mobilized nearly the entire American health-care community in opposition. Dozens of national advocacy groups representing patients, doctors, insurers and hospitals have issued strongly worded condemnations from the proposal.

The Ama warns it violates doctors’ oath to “first don’ harm.” Kaiser Permanente states that any changes to health-care law should “increase use of high-quality, affordable care and coverage for as many folks as possible” which “the Cassidy-Graham bill doesn’t meet any one of individuals tests.”

In viewing American Hospital Association, “this proposal would erode key protections for patients and consumers and does absolutely nothing to stabilize the insurance coverage market now or perhaps in the lengthy term.” The American Heart Association, March of Dimes and 14 other patient and provider groups advised the Senate to “oppose this legislation.”

Strikingly, The Washington Publish was not able to recognize any medical associations that offer the measure. Some antiabortion groups, like the March for Existence and National To Existence, do offer the bill, but they aren’t mainly medical or health-care-oriented in focus. Knowing associated with a bring in more business that offer the measure, please drop us a line.

We have collected statements by a large number of medical groups below. For inclusion within the list, the particular groups need to have a medical focus, representing patients, providers, insurers or hospitals. The particular groups also need to have a national focus due to the amount, including condition-level medical groups or affiliates of national organizations could be difficult.

Their list is nearly certainly incomplete, because of the huge world of advocacy groups focusing their efforts on problems that sometimes affect only small figures of individuals. However it gives a feeling of the breadth and depth from the medical community’s opposition to Republicans’ latest make an effort to repeal Obamacare.

Pfizer sues Manley &#038 Manley, alleging anticompetitive practices to keep a medication monopoly

approval because of its biosimilar version in April of 2016, J&J tried to “suppress that competition and deny society of individuals benefits … to keep its stranglehold,” based on the suit, filed in U.S. district court in Pennsylvania.

The legal challenge involves the function performed with a new type of drugs, called biosimilars, copycat versions of biologic drugs, large molecule drugs which are typically administered by injection and therefore are produced by living microorganisms.

Biosimilars really are a nascent market within the U.S., having a path for approval which was produced included in the Affordable Care Act. They’re seen as an key safety valve on high drug prices, by offering cheaper competition to some of the very most costly drugs offered today.

The concept was to produce a market, like the generic industry, that will allow competitors to create their very own versions of complex biologic drugs after patent protection expired on brand drugs.

Biologic drugs require a different path since they’re produced by living cells and therefore are more complicated than generics. Biosimilars were forecasted to result in a $44.2 billion reduction in drug spending more than a decade within an analysis through the RAND corporation.

Pfizer was one of the primary companies to launch a biosimilar drug, a copycat of J&J’s Remicade. In 2016, Pfizer won approval because of its drug, Inflectra, and launched it in a 15 % discount off its rival’s list cost at that time (that has since elevated).

Today, Remicade has a sticker cost close to $26,000 each year for many uses, and Inflectra’s cost is about $21,000.

However the lawsuit alleges that J&J launched a “biosimilar readiness plan” and joined into anticompetitive, exclusionary contracts with insurers and hospitals and clinics — that ultimately blocked 70 % of commercially-insured patients and physicians from getting accessibility drug.

“This really is, in our opinion, a bellwether situation — and just what we’re seeking is perfect for J&J to refrain form using these kinds of exclusionary contracting plans with insurers and providers,” stated Laura Chenoweth, deputy general counsel at Pfizer. “Most significantly, you want to create a wide open arena for biosimilars… to create these drugs to some broader number of patients, in a better cost.”

Inside a statement, Manley & Manley stated there wasn’t any merit towards the suit.

“We are effectively competing on value and cost, and also to date Pfizer has unsuccessful to show sufficient value to patients, providers, payers and employers,” Scott White-colored, president of Janssen Biotech, a division of J&J stated inside a statement. “Competition is getting lower the total cost of Remicade, and continuously bring lower costs later on.Inch

The suit draws back the curtain about how competition allegedly plays out behind the curtain  — with Pfizer describing a scenario by which its rival joined into contracts that will punish health insurers, hospitals and clinics financially when they used Inflectra.

For instance, Pfizer alleges the contracts “coerced” insurers to not cover Inflectra by threatening to withhold the rebates they would certainly receive around the cost of Remicade.

“If Pfizer’s allegations are true and J&J is permitted to carry on executing contracts of the type, chances are it will decrease incentives for biosimilar entry moving forward,Inch Rachel Sachs, an affiliate professor of law at Washington College School of Law stated within an e-mail.

Cheaper generic drugs have had the ability to erode brand drug’s share of the market, but biosimilars haven’t yet had similar success, she stated. “This can be as a result of quantity of factors… But if it’s also because of the anticompetitive actions of innovator biologic companies, individuals actions really reduce the prospects legitimate biosimilar competition.”

Find out more:

How good does Due To Jimmy Kimmel comprehend the Republicans health-care bill?

Why Senate Republicans are in this hurry this month on healthcare

This story continues to be updated.

After single payer unsuccessful, Vermont starts a large healthcare experiment

Doug Greenwood lifted his shirt to allow his physician probe his belly, damaged from past surgeries, for tender spots. Searing abdominal discomfort had arrived Greenwood within the er a couple of days earlier, and he’d come for any follow-up trip to Cold Hollow Family Practice, a large red barnlike building perched around the fringe of town.

Following the appointment was over and the bloodstream was attracted, Greenwood remained to have an entirely different exam: of his existence. Anne-Marie Lajoie, a nurse care coordinator, started to pre-plan Greenwood’s financial sources, responsibilities, transportation options, food sources and social supports on the piece of paper. Another picture started to emerge from the 58-year-old male patient dealing with diverticulitis: Greenwood had moved home, with no vehicle or steady work, to look after his mother, who endured from dementia. He rested inside a fishing shanty within the yard, having a baby monitor to monitor his mother.

This more expansive checkup belongs to a pioneering effort within this Colonial condition to help keep people healthy while simplifying the normal jumble of public and private insurers that will pay for healthcare.

The actual premise is straightforward: Reward doctors and hospitals financially when people are healthy, not only when they are available in sick.

It’s a concept that’s been percolating with the health-care system recently, based on the Affordable Care Act and changes to how Medicare will pay for some types of care, for example hip and knee replacements.

Vermont is setting an ambitious objective of taking its alternative payment model statewide and putting it on to 70 % of insured condition residents by 2022 which — whether it works — may ultimately result in fundamental alterations in how Americans purchase healthcare.

“You help make your margin from keeping people healthier, rather to do more operations. This drastically changes you, from thinking of doing much more of a particular type of surgery to attempting to prevent them,” stated Stephen Leffler, chief population health insurance and quality officer from the College of Vermont Health Network.

Making lump sum payment payments, rather of having to pay for every X-ray or checkup, changes the financial incentives for doctors. For instance, spurring the state’s largest hospital system to purchase housing. Or making more roles like Lajoie’s, centered on diagnosing issues with housing, transportation, food along with other services affecting people’s well-being.

Critics, however, worry that it’ll produce a effective tier of middlemen billed with administering health-care payments without sufficient oversight. Individuals middlemen account Care Organizations, systems of hospitals and doctors that actually work to coordinate care and may be part of the rewards if providers can save health-care costs, but remain responsible if costs run excessive. In Vermont, the aim would be to limit the development in overall annual healthcare spending to three.five percent every year.

It’ll place a new burden on primary care doctors to help keep people healthy — potentially punishing providers financially for patients’ deep-rooted habits and behaviors. And also the core concept of growing outreach to high-risk patients, though sensible on its surface, might not control health spending one study found the approach was unlikely to yield internet savings.

“I think this sort of model is quite good if it is implemented the proper way. There is a big question on whether it will likely be implemented the proper way,Inches stated Amy Cooper, executive director of HealthFirst, a connection of independent physicians in Vermont.

The present initiative is Vermont’s second make an effort to transform healthcare. It had been the very first condition in the united states to embrace a government-financed universal health-care system but abandoned the program at the end of 2014 due to concerns over costs.

To listen to Al Gobeille, a restaurateur switched Vermont human services secretary, tell it, having to pay for insurance policy is among the large problems facing the American health-care system. Another, difficult the first is lowering the underlying cost — and that’s what Vermont is attempting to tackle.

In 2015, any adverse health insurance policy cost you a family $24,000 in premiums, Gobeille stated, by 2025, that’s forecasted to develop to $42,000.

“There’s likely to be a calamity. No family will probably be in a position to afford that,” Gobeille stated. “So it’s vital that you proceed to a method that aligns more carefully towards the development of our economy.”

This season, 30,000 State medicaid programs patients — like Greenwood — have transitioned in to the experimental model via a pilot operated by the accountable care organization OneCare Vermont. The machine uses software to flag individuals with complex medical needs and chronic health problems and also to coordinate care and support for individuals considered at high-risk. Rather of billing for every overnight stay or medical scan, hospitals get an upfront payment per month to handle the concern for each patient allotted to them, and first care practices receive payments to assist using the outreach work.

“It’s developing a situation in which the physicians and hospital leaders along with other clinicians in Vermont seem like they’ve enough support and structure around them that they’ll essentially pursue alterations in their clinical models as well as their business models,” stated Andrew Garland, v . p . of exterior matters and client relations at BlueCross BlueShield of Vermont. “It has all of us rowing within the same direction.”

Garland stated BlueCross is within discussions to maneuver a segment of their people — including individuals and small companies who buy plans through its Affordable Care Act exchange — in to the new payment model the coming year.

Other states are starting similar efforts to chop health-care spending, on sides from the partisan divide.

Arkansas’ State medicaid programs program has collaborated with private insurers to shift payments around discrete “episodes of care” — for example bronchial asthma and congestive heart failure. “By getting State medicaid programs and Blue Mix on a single page, we’ve got the providers’ attention,” stated William Golden, medical director from the medical services division in the Arkansas Department of Human Services.

In 2014, Maryland began giving hospitals an upfront plan for the entire year, to incentivize providers to help keep patients healthy.

“The real magic here’s when you are getting the payers — Medicare, State medicaid programs and also the commercial payers, saying exactly the same factor towards the delivery system. Vermont is attempting to get it done one of the ways . . . Arkansas is attempting to get it done with increased coordination between State medicaid programs and Blue Mix,” stated Christopher Koller, president from the Milbank Memorial Fund, a basis centered on improving health. “States like Maryland, Vermont are actually looking to get in the underlying cost.”

As Vermont retools the way it will pay for healthcare, the system is already evolving — with a focus on services that fall far outdoors the standard domain of drugs.

Vermont’s major hospital system has set up the cash to permit community partners to purchase and refurbish housing, building off earlier success of purchasing blocks of nights for temporary stays in a motel operated by the Champlain Housing Trust. After 3 years, costs for hospital stays came by $1.six million, supported with a large stop by readmissions.

That brought the College of Vermont Clinic to place in the cash this season to allow the housing trust to purchase and convert a roadside motel in Burlington right into a landing place for patients who don’t have to be inside a hospital, but do not have a appropriate spot to return.

A medical facility-owned family medicine practice in Colchester provides “health-care share” day on Thursdays, when families can select up a box of vegetables prescribed by their loved ones physician.

Kari Potter, 34, stated the farm share has altered how her family eats. She makes her own sauces, she stated, loading a bag of veggies and 2 chickens into her vehicle, and also the weekly delivery helps the children learn how to appreciate healthy snacks, simply thinly sliced cucumbers.

Many of these changes appear sensible, plus they might even improve patient health. The issue is going to be whether or not they cut costs over time. In Vermont, you will find fears that just the greatest hospital systems which have the wiggle room to visualize risk and sustain financial losses can survive.

It’s also unclear how patients will react, because the pilot is expanded beyond State medicaid programs recipients.

Throughout his appointment, Greenwood was firm he didn’t have real complaints about his existence and didn’t think he needed any particular support.

“Any issues with depression or anxiety?” Lajoie requested. Greenwood stated no and Lajoie lightly attempted to prod him to learn more — “meaning it’s not necessary any sadness feelings?”

“No,” Greenwood stated. “If I actually do, they ain’t bad.”

When she requested if his health ever got when it comes to visiting buddies, he chuckled.

“I don’t visit with buddies,” Greenwood responded. “Just watch soap operas.”

Lajoie made notes to revisit his eating tobacco habit and discover if he needed additional support inside a month. The secret for this job is locating the ways that they’ll support people, which might not necessarily be apparent — towards the care coordinator in order to the individual.

“We’re not here to evaluate them or anything. We sometimes don’t know very well what we are able to really enable them to with,” Lajoie stated. “It’s a learning factor, together.”