This story is a tad long, but it is chock-filled with a wealth of twists, turns, personalities, politicians, and much more. I strongly recommend.
Politics is clearly a contact sport. No doubt not all of the punches are above the belt.
I first referenced the Obama White House use of intimidation in the case of Tom Lauria, then lawyer for a group of Chrysler creditors. I wrote in early May 2009, Is Barack Obama Going Tony Soprano? How uncanny that the same reference is utilized today in an article centered on the impact of ObamaCare and the pending sale of three Scranton-area Catholic hospitals. American Spectator writes in regard to ObamaCare:
….the White House is confronted with a rapidly accelerating set of unintended consequences spreading across the country. As listed by theWall Street Journal, those unintended consequences included 2011 premium increases shooting up as high as 9%; “multibillion-dollar corporate writedowns by Verizon, AT&T, Caterpillar and others”; the disruption of insurance markets, a show-down with McDonald’s, the imposition of price controls on premiums, insurers withdrawing from Medicare Advantage.
In what appears to have become a pattern, the response from the Obama Administration has been repeatedly swift and harsh –compared by one critic as an episode straight out of the Sopranos, the famous HBO mobster series.
While the reference to intimidation tactics by the White House in a commentary may grab attention, the simple ‘sense on cents’ embodied in this story has to do with the implication of lessened revenues for hospitals as a result of Obamacare leading to their sale. That reality is absolutely referenced as a primary reason for the sale of three Mercy County, PA hospitals by CEO Kevin Cook.
While the attached story is lengthy, I strongly encourage people to read it because it has major implications for your health care going forward. It also shines a light into the rough and tumble world of national politics. I have no problem with playing hard. I have major problems with those who may look to stifle freedom of speech. This commentary may take ten minutes. Might a version soon be coming to a hospital near you? Read on as American Spectator writes, The President’s Nun: Obamacare Scranton Scandal Explodes:
Can you say “October Surprise”?
A mushrooming political battle over ObamaCare involving the White House, two incumbent Pennsylvania congressmen, three Catholic hospitals and a nun has just exploded in, of all places, Scranton, Pennsylvania. Charges from the Scranton medical community of intimidation by the Obama White House and its allies are filling the air.
All of this just as Vice President Joe Biden arrives in Scranton today to raise money for one of the participants.
There are two issues at the core of the controversy.
1. ObamaCare and the sale of three Scranton-area Catholic hospitals.
2. The re-election prospects of the two House members, Democrats Paul Kanjorski and Chris Carney, both of whom cast key votes to pass ObamaCare.
Here’s the list of players — major and minor — so far.
• The President of the United States.
• The Vice President of the United States.
• Three Scranton-area Catholic hospitals suddenly for sale.
• The CEO of the three Scranton-area Catholic hospitals for sale.
• ObamaCare, otherwise known as “health care reform” or the “Affordable Care Act.”
• A Catholic nun.
• Michigan Congressman Bart Stupak.
• A pen.
• Victoria Reggie Kennedy, widow of the late Senator Ted Kennedy.
• Time magazine.
• The Scranton Times
• The two Scranton-area House members Kanjorski and Carney, both losing in the polls.
• U.S. Senator Bob Casey, Jr., a native and resident of Scranton.
• Congressman Joe Sestak, the Democrats’ nominee for the Pennsylvania U.S. Senate seat.
Where to start? That would be….
March 22, 2010: President Obama signs the Affordable Care Act (aka “ObamaCare”) into law in front of live television cameras and a packed East Room of the White House. According to news accounts, the President uses 21 different pens to sign his name, the highly prized souvenirs of the historic moment given to Vice President Joe Biden, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and Victoria Reggie Kennedy, the wife of the late Senator Ted Kennedy along with a very select handful of others.
The President, after being introduced by an exuberant Vice President Biden (who whispers “this is a big f…g deal” into the President’s ear and is picked up by a live microphone) says:
“I heard one of the Republican leaders say this was going to be Armageddon. Well, two months from now, six months from now, you can check it out. We’ll look around and we’ll see.”
Almost immediately — it didn’t take two months much less six — the White House is confronted with a rapidly accelerating set of unintended consequences spreading across the country. As listed by theWall Street Journal, those unintended consequences included 2011 premium increases shooting up as high as 9%; “multibillion-dollar corporate writedowns by Verizon, AT&T, Caterpillar and others”; the disruption of insurance markets, a show-down with McDonald’s, the imposition of price controls on premiums, insurers withdrawing from Medicare Advantage.
In what appears to have become a pattern, the response from the Obama Administration has been repeatedly swift and harsh –compared by one critic as an episode straight out of the Sopranos, the famous HBO mobster series.
The corporate writedowns — done in compliance with federal law — resulted in angry phone calls from then-Obama White House chief of staff Rahm Emanuel and colleague Valerie Jarrett to corporate CEO’s and the heads of the Washington corporate offices of those involved. Congressman Henry Waxman threatened a congressional investigation into those companies whose obedience to the law put them at odds with the actual results of ObamaCare. Notification by insurers that rates were being forced up by ObamaCare resulted in a threatening letter from Health and Human Services Secretary Kathleen Sebelius to insurers warning that such candor would not be tolerated — at risk of not being allowed to participate in a future government-run health care exchange for insurers.
Then, suddenly, on October 6 — five days ago — the fuse to what is becoming a huge political explosion was lit.
In the unlikely location of Scranton, Pennsylvania.
IN THE MIDDLE OF THESE two hotly contested re-election races for a pair of Pennsylvania Democratic congressmen, the controversy first erupted over the suddenly announced sale of three Catholic Hospitals spread out between Paul Kanjorski’s and Chris Carney’s two adjoining congressional districts.
The initial announcement was made by Mercy Health Partners CEO Kevin Cook.
Cook is based in Scranton, while Mercy Partners and the three hospitals up for sale are in fact a subsidiary of the larger Catholic Healthcare Partners (CHP) based in Cincinnati, Ohio.
The three Catholic hospitals involved are: Mercy Hospital in Scranton; Mercy Special Care Hospital in Nanticoke, both in Kanjorski’s 11th District. And the Mercy Tyler Hospital in Tunkhannock, located in Carney’s adjacent 10th District.
The Cook announcement was big news in Northeastern Pennsylvania. The Sisters of Mercy had opened Mercy Hospital in Scranton, a major facility for the city, in 1917 — 93 years earlier. Inevitably it drew media attention. Which is where the plot thickens.
WNEP TV (Channel 16) reporter Jon Meyer filed a story about the sale at 4:40 pm. that afternoon. WNEP TV anchor Paula Giangiacomo led the story on the air by saying that “one big” reason for the sale “is the health care reform bill signed into law this year.” Mercy Health Partners CEO Cook was interviewed on camera along with Sister Marie Parker. When Meyer asked Cook if ObamaCare had anything at all to do with the sale, the CEO replied:
“Health care reform is absolutely playing a role. Was it the precipitating factor in this decision? No, but was it a factor in our planning over the next five years? Absolutely.”
Notice the use — twice — of the word “absolutely” by Cook, leaving no doubt with viewers that while ObamaCare wasn’t the “precipitating factor” it was “absolutely playing a role…Absolutely” in the decision by Mercy Health Care Partners to put the three hospitals up for sale.
Then, on Friday October 8, only 48 hours after the story hit the local news on WNEP, the executive changed his story. Sort of. A second statement came out over Mr. Cook’s name as CEO. Headlined on the PR Newswire-US Newswire services, the statement was headed: “Mercy Reiterates Rationale for Sale Exploration.”
Gone was any reference to the subject discussed in the WNEP-TV story. ObamaCare playing a role in the sale of the three hospitals? Where would an idea like that ever come from? Not from this second statement. There is not a word of Cook’s videotaped certainty that ObamaCare is responsible in some measure for this proposed sale. Yet curiously, there is no out-and-out retraction of Cook’s comments to WNEP either. The subject of ObamaCare bearing responsibility for this sale in any fashion is disappeared. Completely missing. The second statement just has Mr. Cook saying that sale discussions were being conducted “long before the passage of the Affordable Care Act. The decision was due to many factors.”
But there appears to have been something else at work here behind the scenes that necessitated this second statement from Cook.
Mysteriously, the very same day, came this statement, also released on the PR Newswire services. Out of the blue, suddenly released by Sr. Carol Keehan, DC, president and chief executive officer of the Catholic Health Association (CHA), the headline was sharp and pointed. The headline?
Alarmist News Reports About Catholic Hospitals Are False; CHA Supports Difficult Decision by Mercy Health Partners.
In a fury that fairly leaps from the page, Sister Carol says immediately that “false motives” have been assigned to the proposed sale of the three Mercy hospitals. Says the good Sister: “Reports that health reform is the primary motive behind the sale are completely false, misleading and politically motivated. Deliberations to sell the facilities began well before the Affordable Care Act became law and did not hinge on enactment of the legislation.”
In other words, Mr. Cook — he the CEO of the hospitals who said flatly that ObamaCare was in fact “absolutely” and yet again “absolutely” playing a role in the sale of the three hospitals — was, in the polite language of a Catholic nun, in essence being called a liar.
By Sunday, there was a third Cook statement, this one posted on the website of Mercy Health Partners. Cook statement # 3 was no longer as benign as statement # 2. The third Cook statement used some of the original language from statement #2, but its lead paragraph was now saying something else entirely. I have marked the change in bold print:
Mercy Health Partners recently announced our intention to explore the sale of our facilities in Northeastern Pennsylvania.The rationale for our initiative has been mischaracterized by certain politicized media outlets and severely distorted by some special interest groups.
In other words, Cook statement #3 has picked up a flavor of the statement from Sister Carol. Now saying without saying it that Cook’s original WNEP answer about the role ObamaCare “absolutely…absolutely” played in the decision to sell the hospitals has been “severely distorted.”
Curious, no? Very.
WHY IN THE WORLD would a Catholic nun be so revved up as to denounce in such strong language what Mr. Cook insisted was a fact — that ObamaCare was “absolutely” and yet again “absolutely” playing a role in the hospital sale? Why the hair-trigger fire-breathing response. From a simple Catholic nun named Sister Carol?
And why in the world would Mr. Cook feel compelled to issue not one but two re-statements of the rationale behind the sale of the three Mercy hospitals?
One doctor in Scranton — who was deeply disturbed by the announcement — is certain he knows the answer. That answer? Mr. Cook was absolutely right the very first time he spoke to WNEP on camera. Hospitals, said this doctor — frequently run a debt. “What’s different? Why now?” he said in terms of the rationale for selling the Mercy hospitals. The reason is exactly as CEO Cook originally said it was. ObamaCare cuts in Medicare reimbursement have changed the rules so drastically for hospitals “you [Mercy Health Partners] are in an untenable situation,” said this physician. Most hospitals have accumulating debt because of capital investments, says the doctor. But they can’t deal with that debt if in fact their ability to earn money is cut off or drastically reduced over time.
Alarmingly, the doctor, with a lifetime of practice in hand, says that “hospitals close in clusters where there is decreased income in terms of relatively low Medicare reimbursement…because they are the most vulnerable.” He adds that what is happening in Scranton, Nanticoke, and Tunkhannock with the Mercy hospitals “is just the beginning. It will happen everywhere because reimbursements will be reduced” under ObamaCare. Particularly, he adds, in areas where you have a high elderly population.
If the doctor is right, and he is not alone in saying this, the proposed sale of the three Mercy hospitals becomes a harbinger of what will happen nationally as a result of ObamaCare slowly tightening its government tentacles over the private health care system. Which means the sale of the three Mercy hospitals has added Scranton to what the Wall Street Journal has already called ObamaCare’s “trail of destruction.”
Ahhhh. But who is Sister Carol Keehan? What’s the big deal here with her? Why would a statement from simple Catholic nun appear to cause so much consternation with Mercy Health Partner CEO Kevin Cook in Scranton, Pennsylvania?
LET’S GO BACK to that presidential signing of the health care reform law. There were 21 very powerful people in that little group who received signing pens from the President. As mentioned that included the Vice President, Harry Reid, Nancy Pelosi, Ted Kennedy’s widow Victoria Reggie Kennedy. And someone else.
That would be Sister Carol Keehan.
Impressive, no? The Catholic News Agency thought so, and prominently noted the story here. It also noted that Sister Carol was receiving her presidential pen from the President himself because she had been “supporting health care despite bishops’ objections.” The story even pictured the pen itself alongside the presidential seal on the box in which it came, with “Barack Obama” clearly visible scrawled along the side. Meaning, Sister Carol had enough clout to take on the Catholic Bishops on the President’s behalf — and win.
Does the name Bart Stupak ring a bell? The much ballyhooed pro-life Democrat Congressman from Michigan? The Catholic Congressman Bart Stupak who was said to be such a sturdy obstacle to passage of ObamaCare because it would allow abortions? In the aftermath of the ObamaCare passage, Slate came forward to note that a letter signed by “representatives” of Catholic nuns finally swayed Stupak to break his staunch anti-abortion pledge and sign on for ObamaCare with a simple promise of an executive order on abortion, executive orders being overturned by successor presidents with the rapidity of rabbits doing the breeding thing. Wait! Stupak was persuaded by Catholic nuns? Isn’t Sister Carol a …nun? How about that? What a coincidence? Yes indeed, the letter in question was signed — solo — by Sister Carol.
In other words, Sister Carol is not just some kindly nun who reminds you of the nun whacking your knuckles in grade school for this or that offense. No, in the world of Washington Sister Carol is a powerhouse lobbyist — make that a liberal social justice lobbyist — with a clear set of political skills and a very, very high-powered set of very elite friends. She is quite decidedly not just the neighborhood nun. Sister Carol is the Washington voice of the Catholic Health Association, once called the Catholic Hospital Association, which means her clout with Catholic hospitals around America — like the Mercy Hospital in Scranton and its siblings in Nanticoke and Tunkhannock, all run by CEO Cook — is considerable. Not to mention her clout with the parent company located in Cincinnati — and not to mention with Congressman Bart Stupak.
Selected as one of Time magazine’s “2010 Time 100” most influential people, Sister Carol’s social justice passions were written up glowingly for Time by one of the other Obama 21 pen-receivers at the health care signing: Victoria Reggie Kennedy. AKA, Mrs. Ted Kennedy. Sister Carol, as demonstrated by her status as the receiver of a presidential signing pen, is clearly the President’s favorite nun.
Thus her abilities to whack Mercy CEO Kevin Cook’s knuckles for speaking out of turn on what in fact he “absolutely” and “absolutely” saw a mere two days earlier as the impact of ObamaCare on his hospitals were considerable. And when the Cook statement #2 didn’t pass muster, he apparently was whacked again. After reining in a sitting Congressman Stupak and getting him to, in the yes of many pro-lifers, abandon his anti-abortion stance and pass ObamaCare, what’s a mere hospital executive like Kevin Cook to Sister Carol? It is safe to say that there are doctors in Scranton, furious at what they are seeing as happening to the local health care system, who believe Sister Carol — or someone else connected to the Obama White House if not the someone inside the White House itself — was behind the knuckle rapping of Kevin Cook.
With the White House already on record for having senior staff making angry phone calls to CEO’s over corporate writedowns, having the Secretary of HHS send threatening Soprano-style letters to insurers not to blame ObamaCare for premium increases — the question in Scranton is why wouldn’t the same White House enlist the President’s favorite nun to intimidate Mr. Cook and the company he represents?
Protecting ObamaCare turns out to be but one reason — albeit that alone is a big one with national consequences for this White House.
THE OTHER REVOLVES around the struggling campaigns of Representatives Kanjorski and Carney. And the larger political picture in Pennsylvania. U.S. Senator Robert P. Casey Jr. is a Scranton resident. Indeed, one Scranton source pointed out that the Casey home is within walking distance of Mercy Hospital in Scranton. Casey and his father before him have succeeded in part by creating the image of the old-fashioned FDR-JFK working class Democrat whose values are revered in Scranton. This is the city that is the hometown of Vice President Biden. For Scrantonians and their fellow Pennsylvanians in neighboring communities to suddenly see a Catholic hospital that has been a mainstay for 93 years suddenly slip away has caused considerable upset.
And notably, in a town that is heavily Catholic, the realization that three hospitals that did not perform abortions could be sold to owners who would allow the procedure is infuriating.
Both Kanjorski and Carney have been under fire for their ObamaCare votes from GOP opponents Lou Barletta and Tom Marino respectively. The startling news of the Mercy sale was barely 24 hours old when State Republican Chairman Robert P. Gleason picked up on it, issuing statements tying the ObamaCare votes of the pair to the prospective loss of Mercy.
And at that, Sister Carol, presumably not having the comings and goings of Pennsylvania politics on her mind, suddenly launched herself into the Scranton hospital debacle, presumably finally forcing a tougher stance from Mercy’s CEO Cook in statement #3.
The explosion, all recent with its implications of White House pressure and lost Catholic hospitals, is about to bring in media ads from CatholicVote.org. Says Communications Director Joshua Mercer: “Paul Kanjorski and Chris Carney are Catholic and they both voted for ObamaCare.” Citing the sale of the three Mercy hospitals, Mercer says that the pro-ObamaCare votes of the two “has had a real impact on the community.” Mercer added a sentiment voiced as well by the Scranton doctor: “There are a lot of Kevin Cooks across the country…the CEO’s of small Catholic hospitals are all facing the same realities of more [ObamaCare] mandates and regulations.”
Interestingly, a Scranton medical source notes the lack of coverage of the growing Mercy hospital sales controversy in the local Scranton Times. “It’s a Democratic paper,” the source said, mentioning that he listens to talk radio to get a better picture of the news. “I listen to Rush, to Sean, Fox News and local talk radio. But with a Democratic paper you have to listen to national talk radio to get another perspective.”
Today, Vice President Biden arrives in Scranton to campaign for Congressman Carney.
A Capitol Hill aide to a Republican U.S. Senator says of the Scranton controversy the Obama White House is terrified the Mercy Hospital sales story will “get legs” as a national story — further intensifying the anti-Obama vote pollsters are recording in potentially record numbers. And leading to the defeat of not only Kanjorski and Carney but another Pennsylvania Democratic Congressman who voted for ObamaCare: U.S. Senate nominee Joe Sestak. Sestak is trailing his own opponent, conservative anti-ObamaCare GOP nominee Pat Toomey.
With less than a month to go until election day, one thing is certain.
The story of the President’s nun and charges of possible intimidation of a hospital executive over ObamaCare will ensure the Scranton hospital sale isn’t going away anytime soon.
Growing up in an Irish Catholic household and attending a local Catholic school, I am very familiar with getting knuckles rapped. A few of my brothers were even more familiar with that reality than I. That said, we probably deserved it. In fact, we definitely deserved it. Speaking your mind and freedom of speech in America is a prized virtue. That freedom is critically important for the pursuit of real truth, total transparency, and unbridled integrity. I say we absolutely stand up for it. Who’s absolutely with me?
I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.