HEALTH REFORM: Our Year In Review

Health Policy -
December 24, 2008 - 10:07am

Before we give this blog (and our bloggers) a holiday break and wish our readers all the best for the New Year, we wanted to take a moment to look back at 2008 and look ahead, with some optimism, to 2009. Amid our challenges are opportunities, and amid those opportunities are the best chance in many years to fix our health care system so that it is both more equitable and more sustainable.

A year ago at this time, we weren't even sure whether health care would emerge as a leading issue in the 2008 primaries, whether it would resonate with voters. To the extent that candidates were talking about health reform, it was to a large extent a squabble among Democrats about mandates that most Americans probably didn't understand. But as the primary season wore on, we heard more and more about health care -- and, as former Arkansas Gov. Mike Huckabee reminded us, about wellness and prevention. Health care, after all, isn't just about payments and insurance and financing (and politics). It's about our health.

To their everlasting credit, candidates in both parties took our nation's health care crisis seriously and voters in both parties spoke up. Headlines may have focused on the disagreements about taxes, money and insurance markets; finding consensus on how best to expand coverage remains challenging. But what also emerged is that policymakers and politicians have an increasingly sophisticated understanding of the way our health care system has become outdated. How it focuses on acute care, when our society is facing an epidemic of chronic disease. How it rewards doctors and hospitals for providing lots of care, whether or not they are providing good care. How one in three dollars we spend on our health has little or no clinical value. An understanding of how we have to both figure out how to insure everyone and how to reinvent our health care delivery system so it makes sense, for our people's physical health and our country's fiscal health. Maybe not all politicians have said this in public yet. Maybe we are not quite at such a tipping point that reform can pass in 100 days. But it's what we here at New America's Health Policy Program have begun calling a "pre-tipping point" that will see major health reforms enacted maybe not in days or weeks, but in a reasonable, workable time frame. And that's progress.

Yes we enter 2009 with trepidation about our nation's economy, about what's ahead. But we also enter the New Year with hope. Inspired in part by the passion of Sen. Kennedy, leaders in both the House and Senate have already begun the hard work that an historic legislative initiative demands. President-elect Obama has made clear that health reform is a priority for his administration, not just a slogan for his campaign. He has shown that he understands that fixing health care is part of fixing our economy. Health care costs are part of what's wrong with Detroit and the auto industry. Part of what's hurting our ability to compete globally. Part of our housing and foreclosure crisis. Part of what's eating away at our small businesses. Part of what's hurting American families. So here's to 2009. Here's to hope.

Thank you and all the best -- Len Nichols, Joanne Kenen and the rest of the New America Health Policy Program.

Queen's bank Coutts accused of giving disastrous investment advice

By Simon Duke
Last updated at 2:59 AM on 20th December 2008

The Queen's bankers have been accused of giving disastrous investment advice to their well-heeled customers.

Coutts allegedly told clients to keep their cash with the American insurer AIG even though the stricken group has had to be rescued by the U.S. government.

Angry patrons, who include the Royal Family and Premiership footballers, are threatening to sue the bank over its financial guidance.
It raises the prospect of some of Britain's richest figures suing a Government guaranteed bank, as the institution is owned by Royal Bank of Scotland.
Coutts clients must have around ?500,000 in liquid assets and the bank offers free services only to those always £10,000 in the black.
Sir Keith Mills, the tycoon behind the Nectar loyalty card, yesterday launched a campaign to shame Coutts into compensating clients who have lost out by investing in the AIG savings bonds.
Sir Keith, a key figure in London's bid for the 2012 Olympics, threatened to sue Coutts if it does not agree to make up the 'several millions of pounds' he has lost.
'Given the advice it gave clients Coutts should guarantee our losses. If it doesn't legal action would be a last resort,' he said.

The entrepreneur made around ?160million after selling the Nectar Card business last year, and is believed to have invested a significant portion of the windfall in AIG.
According to Sir Keith, Coutts recommended the AIG Life Premier Bonds as a safe, but more profitable alternative to leaving his cash in the bank.
Wealthy Britons put almost ?6billion into the fund, which had a minimum investment of ?100,000.

But after the dire financial turmoil of recent months, even the safest AIG investment bonds have plummeted in value.

AIG had to be rescued by a ?100billion U.S. government cash injection in September after running up huge losses on credit insurance business.
Investors who have pulled their money out lost 13 per cent of their investment, even though Coutts assured them the products were very low-risk.
A spokesman for Coutts said: 'At the time of sale it was made clear that the investment was low risk, not risk free, and it was explained that the value of the investment could go up as well as down.'
Coutts was set up by Scotsman John Campbell of Lundie in 1692.
It boasts an illustrious history, counting Charles Dickens, Lord Nelson, Jane Austen and generations of royals among its customers.
In recent years it has started advising sportsmen. Customers are thought to include David and Victoria Beckham.

Morgan Stanley Insured Municipal Bond Trust Adopts Investment Policy Changes

Morgan Stanley Insured Municipal Bond Trust (NYSE: IMC) (the "Trust") has received shareholder approval to adopt the investment policy change, as described below. This change is designed to expand the investment universe in which the Trust can invest, thereby providing the Trust's portfolio management team with important flexibility to respond to ongoing developments in the insured municipal bond market. The Trust seeks to achieve its investment objective by providing income which is exempt from federal income tax. The Trust is not changing its investment objective.

In connection with the recent instability in the marketplace, some of the insurers of municipal obligations have experienced ratings downgrades by the ratings agencies that rate such insurers' claims paying ability. This affects many funds that invest in insured municipal obligations because many of these funds (including the Trust) currently have policies that require such funds to invest 80 percent of their net assets in municipal obligations that are insured by an insurer rated "AAA" at the time of purchase. At a meeting held on December 12, 2008, the Trust's shareholders have approved the following investment policy change:


To allow the Trust to invest, under normal market conditions, at least 80 percent of the Trust's net assets in municipal obligations which are covered by insurance guaranteeing the timely payment of principal and interest thereon and that are rated at least "A" by a nationally recognized statistical rating organization ("NRSRO") or are unrated but judged to be of similar credit quality by the Trust's Investment Adviser, or covered by insurance issued by insurers rated at least "A" by a NRSRO.
The Trust's Management believes that the changed policy allows the Trust to continue to purchase higher quality insured municipal obligations, while acknowledging the changing market and economic conditions. While the market risk and the credit risk of the Trust investing in insured municipal obligations generally should be lower than the risks of a fund investing in similar municipal obligations that are uninsured, insurance does not eliminate the market risk or credit risk of the securities in the Trust's portfolio. A downgrade of an insurer would generally subject the Trust to potential market value declines and increased credit risk on the municipal obligations insured by such insurer.

Morgan Stanley Investment Management, together with its investment advisory affiliates, has nearly 1000 investment professionals around the world and approximately $570 billion in assets under management or supervision as of August 31, 2008. By leveraging its global 'community of boutiques' structure and the strength of Morgan Stanley, MSIM strives to provide outstanding long-term investment performance, service and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 35 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

HSBC announces £1bn fund for UK businesses

HSBC has announced the establishment of a $5 billion (£3.4 billion) global fund to lend money to small and medium-sized businesses affected by the credit crunch.

The banking industry has come under fire for not passing on the full benefit of interest rate cuts to consumers, for charging higher interest rates on loans to businesses and for reducing the savings rates on instant access accounts.

But in a move aimed at stemming such criticism, a total of £1 billion has been kept to assist businesses in the UK.

A spokesperson for the banking giant, which has 9,500 offices around the world, said: "The fund has been designed to help customers with fundamentally sound businesses weather short-term shocks caused by the downturn, by supplying working capital to help businesses with their cash flow needs and support businesses that trade or aspire to trade internationally.

"The fund represents new money and will be funded from HSBC's own resources, allocated on a case-by-case basis using the bank's normal lending criteria."

The bank claims that it has lent more this year than last in spite of the higher costs of lending between banks and also states that 32,000 businesses had moved their business bank accounts to it since the beginning of the year.

Business secretary Peter Mandelson welcomed the move and urged other banks to maintain charges and rates available to small and medium enterprises.

HSBC's move follows the Royal Bank of Scotland's pledge to not begin proceedings to reclaim a person's home until at least six months after a customer falls behind on mortgage payments.

Chancellor Alistair Darling has urged banks to institute a three-month wait before beginning repossession proceedings on lenders who have failed to pay an installment on their mortgage.

Pressure has been increasing on banks to help extend finance to ailing businesses after the government's £37 billion bailout plan saw it take stakes in the Royal Bank of Scotland, HBOS and Lloyds TSB.

Other high street banks were provided with emergency funding and liquidity support as part of the other measures in the bailout.

Barroso backs euro for Britain

Those who matter in Britain are considering a renewed drive to abandon the pound, European Commission president Jose Manuel Barroso has hinted.

His comments have sparked speculation that senior politicians including prime minister Gordon Brown may now be mulling the option over.

"I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me: 'If we had the euro, we would have been better off'," the AFP news agency quoted Mr Barroso as saying on French radio.

"The British have an enormous quality, one of many, that is they are pragmatic," he added. "This crisis has emphasised the importance of the euro, in Britain as well."

Sterling has suffered in recent months because of the credit crunch. Many analysts believe its declining fortunes could reinvigorate the dormant argument over whether Britain should join the eurozone.

Downing Street has refused to comment on the issue. It maintains the five economic tests outlined when Mr Brown was in No 11 still stand – that a referendum will only be held when five economic tests are met.

These include the euro's impact on foreign investment, jobs and financial services, in addition to flexibility and convergence criteria.

Opinion polls have in the past suggested Britons remain opposed to abandoning sterling, as Mr Barroso freely admitted.

He added: "I don't mean this will happen tomorrow, I know that the majority are still opposed, but there is a period of consideration underway and the people who matter in Britain are currently thinking about it."