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AF447_Chronology

AF 447 : a Synopsis of a Synopsis

“I’m sure that Airbus and EADS and the FAA (as well as Thales) are now quietly aware that they each played their part in this accident. How? Well they never studied the possible ramifications of a Thales pitot icing event at high level – and what sort of confusion and control problems it could lead to. They came up with a quite innocuous Service Bulletin and a fatuous homespun procedure for pilots to simply fly “power and attitude” once the speed indication becomes suspect and the ADIRS turns introspective.”

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… now in case of a serious incident related to the pitot probes. In fact, (ref BEA Report Annex 5), in this case, the crew must perform 9 ECAM procedures, 1 procedure and 3 procedures QRH paper, hence the need for a single procedure “BLOCKING PITOT”Les dossiers noirs du transport aérien (Records of Black Aviation)

Blog Citizen Of A Former Captain


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da Folha Online 23/07/2009 – 17h17 (English Translation)

Identified 49 of the 50 recovered bodies of victims of the Air France flight 447

The Secretariat of Social Defense of Pernambuco announced on the afternoon of Thursday that six more bodies of victims of the accident with the aircraft of Air France – which fell into the Atlantic Ocean on May 31 this year, when 447 was the flight from Rio to Paris – were identified.

Therefore, up to 49 the number of bodies identified by the IML (Instituto Médico Legal) from Recife, a total of 50 bodies and rescued by Navy Aeronautics.

According to the Bureau, identified the six victims were male, three Brazilians and three foreigners. Three occupants were identified exclusively from DNA tests and the other three also with the aid of dental examinations.

Only one body has not yet been identified, a male victim. At the request of families, the names of the occupants of the plane of Air France identified are not disclosed. The nationalities of the three foreigners were not informed.

According to [Secretariat of Social Defense of Pernambuco], work to identify the six bodies were completed on the last Tuesday (21), but released only today.

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Crash of flight AF 447 – Published on 25/07/2009 07:56 | File Gil Bousquet

The CEAT has unveiled yesterday the remnants of the returnees Airbus in Toulouse.

The expertise will begin in August

It is in the quiet lobby of the 42 test center near Aviation Balma de Toulouse (CEAT) that are now stored the debris of the Airbus flight Rio-Paris. Yesterday, for the first time, investigators have released the 650 elements of the A330, which arrived by convoy on the outskirts of Toulouse last week for technical expertise. The first work of the investigators is the identification of various debris and the sealing of each of them. The soldiers of the gendarmerie of the air (GTA) who conduct the investigation under the authority of Lieutenant-Colonel Xavier Mulot (see below) are supported by five to eight people in the Investigations Section after the incident or accident CEAT . Also with the help of four including two forensic experts were present at Balma, the dozen investigators begin toulousains expert “in the month of August.”

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Second convoy in August

These experts will analyze the documents carefully to try to understand what happened. The bending, deformation, breaks and cuts from different parts of the aircraft will be investigated through metallurgical tests and then used to develop hypotheses to explain the crash. The experts also looking for possible signs of combustion including electrical circuits. If doubts about traces of explosives appear, leave the room for the criminal research institute in Paris. In their work, investigators have attempted to reconstruct the skeleton of the plane wreck gathered Wednesday Through a serial number inscribed on the coins or their composition, the experts are able to determine what part of the plane corresponds debris.

They are among 650 (recovered by the Brazilian Army) in August which added 450 new pieces collected by the french ship Le Mistral. This second wave of parts arrive at Toulon in August and will be transported to Toulouse by road convoy. The personal items of passengers on the Airbus had already been repatriated at Roissy by diplomatic pouch. But a tiny part of the aircraft was recovered. It is especially lightweight often trade (galleys, seats …) that do not provide a decisive. The building blocks such as landing gear, wings and the nose of the aircraft are based by 3 000 to 5 000 meters deep. This investigation was entrusted to an elite aviation investigators with powerful tools coordinated by the policeman who led the investigation into the crash of the Concorde.

The slopes of the investigation

Without the black boxes (see above, against), experts have unfortunately little elements. In total, 1 100 debris collected represent only 2 to 3% of the A330 damaged at sea, at most. With so few elements, we will do that probabilities can not deduct any reliable scenario, “said Ronan Hubert, Director, Office of Archives of aircraft accidents (BAAA). Messages Accars who reported 24 outages in four minutes before losing contact with the Airbus will be very valuable. “It happened something very unusual” says a source close to the investigation. One of the specialties of CEAT is the resistance of the systems and subsystems for various electromagnetic attacks like lightning that could strike the aircraft. The BEA will continue to investigate the pitot probes.

The black boxes

Research continues on the area of the crash of the Airbus. Even if the transponders are no longer the objective of the research teams is to locate the wreckage of the aircraft. Housed in the rear part of the Airbus, the black boxes may be obtained through the submarine Ifremer and its arms. “It is quite feasible, it still must find the wreckage,” says one aviation expert. To find it, we must explore deep and relief using a sonar. Problem: The area to cover supposed to be the impact of aircraft on the water is immense and reaches 16 000 km2. The new grid will last four to six weeks. A sonar survey of the terrain is towed marine cable at the end of 1 500 meters long on the “Why not? “To locate the wreckage.

Air France : anger pilots

Four unions of pilots of Air France Tuesday wrote to the boss of the company to demand action “visible” to improve security in the daily operation of the airline. After the trauma created by the accident of flight AF447 Paris-Rio on June 1 which was 228 dead, Alter, R’Way, SPAF and Unpl believe it is “urgent and precautionary measures visible prior to more profound reform of the functioning of the company. Pilots talk of “failure of the company” on the flight safety and are demanding that the management of flight safety is directly linked to the Chief Executive. “Now it is a sub-fife who has no power” as the leader of one of the unions.

The families of victims

According to a judicial source, the National Federation of victims of disasters (Fenvac) and 36 families of victims have made civil parties in the investigation into the accident of flight AF 447 Rio de Janeiro-Paris.

Lawyers for the families and the Fenvac will have access to file and will be able to make requests for investigative action. Counsel for the first family Civil Party, Me Sophie Bottai, had said in June that “some families of victims felt that the whole truth was not known” and “see a manifest filtering of information” . Since opening on June 5 in Paris of the investigation against X for manslaughter, no request for damages was rejected by one of the judges, Sylvie Zimmerman. The President of the Union of Air France pilots, Gérard Arnoux, who wants to Civil Party, has stated that it “did not believe the unions are welcome in this case” and feared that the trail of “the human error “is preferred.


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Investigators piece together wreckage from doomed Air France jet (Contains Investigation Video)

France 24 – July 25, 2009

The French bureau leading the technical side of the investigation into the crash of Air France flight 447 on June 1 said this month that an initial study of crash debris showed the plane was intact when it hit the Atlantic Ocean. The cause of the crash, however, is still unknown.

The flight’s black boxes have never been found. Over the next few months, four experts will be analyzing all the wreckage, which thus far includes 650 pieces of debris.

According to Lieutenant-Colonel Xavier Mulot, chief investigator for AF flight 447, “We’re expecting a lot from this study because, thanks to the way the debris was broken and traces of burns, it’ll eventually allow us to understand what happened.”

Aeronautical specialists are combing through hundreds of pages of documents, examining everything from flight records to mechanical inspections.

They are also reviewing a map showing where the passengers were seated during the flight, with the seat assignments of the 51 bodies recovered marked in colour.

Since the tragedy occured, investigators have come up with more than 200 documents for their files.

Families of the victims of last month’s crash have registered as civil plaintiffs in the French courts to gain access to the case files, officials said on Thursday.

The head of an association representing families of those killed in the crash of flight 447 had earlier this month accused Air France of keeping relatives in the dark about the accident.


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English Version:  According to Lieutenant-Colonel Xavier Mulot, chief investigator for AF flight 447, “We’re expecting a lot from this study because, thanks to the way the debris was broken and traces of burns, it’ll eventually allow us to understand what happened.”  The video also stated  there were 650 pieces of aircraft and another 450 to arrive in August.

Caution: Most pilot forums have concluded that “Lieutenant-Colonel Xavier Mulot did not say that trace of burn were actually observed, only that he was merely exploring possibilities and… another BEA technical expert was interviewed (on other TV channels) and they were more cautious about this study given the available data.”  Other French TV (France2) channels apparently show a part of the landing gear were also recovered.

French TV (Videos) (JT video appears to be same as France24)(AF 447 begins approx 12-15 in middle of broadcast)

JT de 13h http://jt.france2.fr/player/13h/index-fr.php?jt=20090724&timeStamp=739

JT de 20h http://jt.france2.fr/player/20h/index-fr.php?jt=20090724&timeStamp=663

France 3 http://jt.france3.fr/player/soir3/index-fr.php?jt=20090724

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Disclaimer:  The following information is based on the above France 24 video and is speculative, however most respected pilot forum commenters have concluded based on the assumption the aircraft seated 219 passengers, and 216 passengers were on board, leaving 3 seats vacant:

Seats 29B and 39B are colored white and may have been vacant.

Assuming that 29B and 39B were vacant, the numbers are:

  • forward cabin: 8 of 40 seats is 20.0%
  • midships: 9 of 75 seats is 12.0%
  • aft: 21 of 102 seats is 20.6%
  • Aisles A,B: 8 of 58 seats is 13.8%
  • Aisles J,K 16 of 62 seats is 25.8%
  • Center aisles D,E,F,G: 14 of 97 seats is 14.4%
  • Starboard/Right side: 24 of 108 seats is 22.2%
  • Port/Left side: 14 of 104 seats is 13.5%

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Additional Pilot Forum Questions/Comments:

  • Where was the third vacant seat?
  • The Galley is from further back and not from the 2nd door area as we thought.
  • What I find interesting: “more in the section just rear of doors L3/R3… Which is where a split might occur in a nose up low forward velocity “pancake fall”… but then, maybe just a coincidence.”

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France24 Video Close-up of Identified Passengers/Seating


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AF 447: The crew of Air France had long warned …

Eurocockpit (English Translation)

BEA has launched the press on a siding track conditions of the impact of the plane, we can now avoid to address the conditions that led to the impact of the aircraft. Thus, the consequences of losing control of the aircraft that are preferred to the cause of this loss of control. The management of Air France is beginning to suggest that the crew could not know how to use his radar. The BEA and Air France and converge slowly towards the fault of the crew would have embedded in the huge huge storm, which seems to fix all the world … While Pitot probes have always temporary ban (permanently) to be the cause of the accident … While this fact of the failure of the Pitot is proved (ACARS) and that its consequences are already known, seems to be undertaken to be absolutely rejected.

According to the BEA and Air France, Pitot failure would be “a cause” but “not the cause” of the main accident … What would be so then the “other causes” and “THE” original cause another? Nobody said … It is just obviously necessary that there be other causes, or that asserts without evidence that there are others, because if only the Pitot as the main origin of this accident the responsibilities may be overwhelming for many …

We understand much better what obsessive behavior – to exclude any cost Pitot – the crew of Air France had previously warned the company by reporting incident particularly detailed. Clearly, they were not taken into account as they should have been.

These incident reports are called ASR (Air Safety Report) and the regulations are sent to the airline but also on BEA and the Authority (DGCA, EASA). The ASR should enable those entities to identify potential risks that reveal the reported situations and take preventive measures to avoid these risks. In addition, the RAS should be used to prevent the occurrence of similar incidents or accidents which reported the incident could be a precursor …

In retrospect of the occurrence of the AF 447 and given the formal role of these reports of an incident, it is more qu’édifiant to read the ASR previously created and transmitted … obviously for nothing …

Therefore, measuring the willingness to declare that the cause of the accident, allegedly unknown, can not and will never be the failure of the Pitot tube. One thing is certain in this investigation long, complicated and clear: this is not what we do not whether this, or anything but out of pity, not Pitot!

“Chronicles of a reported accident” has tragically been the title of each ASR Eurocockpit which delivers a prime example.

This is a flight of Air France, Paris (CDG) to Antananarivo (TNR) xx/08/2008 on the Airbus A340, registration F-GNIH.

Thus it is forbidden to think, except at the risk of criminalizing Pitot …, the sequence of ACARS messages for this flight – and they reflect failures – is the same as the AF 447 … Also on the flight day, the duration of the incident is about 4 minutes …

The crew was faced with the alarm stall (STALL) – announcing that the flight was driving dangerously affected – but did not appear voluntarily CLB and the power base of 5 ° – Cabrera – provided by the “Actuation of emergency.” Instead of responding as well, the captain brought the aircraft down. Moreover, the crew was fortunate to recover quickly enough indication of correct speed … What may be missed in the middle of the night, with the AF 447.

R is “translated” into plain language or accompanied by comments as to its place when it can facilitate our understanding for lay readers. For a better understanding of the situation, we suggest to all our readers to extinguish the bright lights, putting himself in a night and read the ASR in less than 4 minutes …

IMPORTANT NOTE: it is “in the right circles” that there were actually 10 ASR (not 6) written on the subject. Everyone will understand the exceptional collection of work that the profession must do if we do not want the BEA “forgets” a little too quickly on these issues Pitot probes. It is the honor of the profession, the memory of our colleagues and that of their passengers. If you have written, or if you know a colleague who wrote a RAS on the subject, if you have access to such a document, please contact us. We guarantee the anonymity of our sources, never betrayed a guarantee for 10 years now. crew@eurocockpit.com.


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AIR SAFETY REPORT – 1/6

FGNIH AF908 CDG – TNR – STALL ALARM INFORMATION AND LOSS OF SPEED ON THE PFD

CBD PF in the left seat and OPL XXXXX PNF in the right seat, OPL XXXXX rest.

The captain sits on the left seat, he is the driver function (PF) on this trip, a co-pilot seat is right and responsible tasks of the pilot not in function (PNF), while a other rests.

At FL 370 with a SAT to -51 ° C and a wind from 080 to about 18 Kts on AWY UB612 with an OFFSET 1R, between the OBD and MLK in radio contact with Khartoum, as we were at the edge of cloud with some slight turbulence, I tied PAX. We were at dusk with low brightness.

The aircraft was 000 feet at 37, moved along a nautical mile on the right of the route followed, in accordance with existing regulations in this region to prevent the risk of collision with other aircraft using the same route in reverse . The term “limit layer” means that the flight took place just above a cloud layer.

Then we entered the layer, and soon after we started having a slight burning smell that lasted about twenty seconds and that did not appear to be of volcanic origin (no smell of rotten eggs), but rather electrical smell to me and smell the air conditioning for the OPL. Then the smell has disappeared. The odor was confirmed by the PAX booth and PNC between rows 3 and 14 thereafter.

The aircraft did not change altitude, entering the cloud layer due to the diffuse and irregular aspect thereof, parts of which are higher than others.

We had the weather radar in motion on calibrated without echoes still apparent in the layer and approximately one minute after the smell of burning, we had severe turbulence. I did the message “Here the cockpit sitting PNC Attached turbulence. I reduced the speed of Mach 0.80 (a little over green dot).

The weather radar was no storm. When the aircraft entered a zone turbulence, the captain made the announcement for the rest of the crew sit and focus, the passengers having been preventively the same record in lighting of the light signal. The captain then slightly reduced speed (Mach) of the aircraft to bring it below the maximum recommended speed in turbulence. The captain pointed out that this reduction in speed brought the aircraft to fly with a low margin of speed over the speed called “green dot” corresponding to the minimum speed to meet operating and calculated according to a report to stall speed “down”.

A few seconds after the indication of speed on the PFD passes abruptly OPL 280 Kts to 100 Kts in the red band and it lasted for many seconds. At the same time on the PFD variation CBD high speed with speed 15Kts green dot less speed and a trend at least 50 Kts.

The speed shown on the screen of the first moves suddenly and abruptly from 280 knots (518 km / h) at 100 knots (185 km / h) and remains at this value for many seconds. At the same time on the screen of the Commander, the speed begins to vary with a very high amplitude, reaching a value of less than 15 knots at the minimum speed “green dot”. The display of the speed trend “(indication of the trend calculations speed) is below 50 knots, which means that the speed will be lower than 50 knots within 10 seconds if the force of acceleration (which is ie a deceleration) remains constant.

At the same time (it was 15:10 GMT) Red Alarm A / P OFF and then in the wake alarm amber ADR Disagree, IAS DISCREPENCY, ALTN LAW LOST PROT, W REAC / S FAULT DET.

15h11 monitoring of the alarm RUD TRV LIM amber FAULT.

At the same time, at 15.10 UTC, the autopilot disconnects and multiple alarms appear on the central screen. Editor’s note: These alarms are also messages on ACARS flight AF 447 …

Followed immediately by the alarm STALL STALL STALL (without the associated alarm cricket) with TOGA LK. As I always speed trend within 50 Kts, I steered the plane manually, with a call for light downhill and turn right to exit the AWY. The aircraft responding very weakly with the CBD several regressions PFD speed in the lower red stripe. At the same time I asked the OPL to send a MAYDAY. During the descent noise impact (hail?) Heard in the cockpit.

The stall alarm “STALL” immediately sounds and a message appears indicating that the engine thrust is fixed to the value of maximum thrust (TOGA). The captain pilot in the aircraft manual and the aircraft is descending into account the loss of speed which, if true, would only stall. In this logic, it must be down to try and retrieve speed. It also urges a turn to leave the route and avoid the risk of collision with a device located in a lower flight level on the same road.

Descent to FL 340. The aircraft speed is correct again I disconnected the ATHR out of TOGA LK. The rate is similar side CBD and OPL, but down 2 on the PFD speed scale indication SPD LIM red remained until the end of the flight.

Descent to FL 340. The aircraft speed is correct again I disconnected the ATHR out of TOGA LK. The rate is similar side CBD and OPL, but down 2 on the PFD speed scale indication SPD LIM red remained until the end of the flight.

After being in the emergency management of the aircraft, the crew focuses on the “IAS DOUBTFUL. Then, the speed seemed again consistent Commander rehire mechanics.

At no time have we had ice detection alarm.

I woke up the second OPL was at rest, then we addressed the ECAM checklist.

Descent to FL 330 and then cancel the MAYDAY and continued flight at this level.

The aircraft fell in ALT LAW (MAX IAS 330Kts/M.82) I have a favorite beach area expanded flight and continued the flight at Mach 0.80.

The deterioration of the Steering Law (Alternate Law) and the resulting loss of protection caused by this event led the Commander to increase its speed margin in relation to stall high and low. He therefore decided to continue the flight at a lower altitude (33 000 feet instead of 37 000 feet at the time of the incident) and at a speed of Mach 0.80.

At the balance sheet:

ALT LAW aircraft confirmed by the status and crosses on the PFD amber;

  • REAC W/S DET FAULT;
  • ALT LAW PROT LOST;
  • ADR DISAGREE et F/CTL RUD TRV LIM FAULT (2 NOGO);
  • FOR LDG USE FLAP 3.

The messages of failure and the aircraft configuration match what the messages reveal ACARS flight AF 477

It is important to note that the indication on the circuit of the screen SD of RUDDER TRAVEL LIMITER was amber, but halfway between neutral and full deflection rudder. Contact with the CCP for what was the state of the cabin and PAX. Only the strong turbulence was felt by PAX. I called SAT COM maintenance to further research the issues and their subsequent recommendations we reset all the computers VOL PRIM and SEC without any result. (at that time we had the fuel for a return to NCE or FCO).

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.  New call SAT COM QB who has not found any additional explanation on the difference in steering component, then the CCO to see them for the theft and troubleshooting of the aircraft, the return to Europe n ‘as much as possible with the remaining fuel, the problem then the decision to continue on TNR or divert to RUN. Decision to continue on TNR with a request for me to postpone the revival of colleagues who had to return the aircraft in view of CDG 05h00 minimum fault-finding to TNR.

The crew finds a contradiction between two checklists to be applied (Editor’s note: one more!), One seeking to land with the flaps in position 2 and the other with the flaps in position 3 (robberies involving different speeds and distances different landing …). Contacts with maintenance services (QB) do not provide an explanation. Editor’s note: The crew will have to “cope”. It provides a diversion to La Reunion (RUN) and decides to continue on Antananarivo.’’

We have continued the flight with the pitot heat on and on radar calibration MAX.

Is doubt as to the origin of the problem, but apparently in suspecting the Pitot …, the crew continued the flight with starting the manual heating Pitot probes, to overcome any possible malfunctioning of automatic heating and using the radar on the maximum sensitivity, to overcome a possible malfunction of the radar gain setting “calibrated”.

Is important to note that the indication on the circuit of the screen SD of RUDDER TRAVEL LIMITER was amber, but halfway between neutral and full deflection rudder. Contact with the CCP for what was the state of the cabin and PAX. Only the strong turbulence was felt by PAX. I called SAT COM maintenance to further research the issues and their subsequent recommendations we reset all the computers VOL PRIM and SEC without any result. (at that time we had the fuel for a return to NCE or FCO).

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.

On the checklist developed for F / CTL ALTN LAW (PROT LOST) could be read to APPR PROC FOR USE LDG FLAP 3. (There is no indication in the QRH on the table of correction after failure) by the developed against the F / CTL RUD TRV LIM in APPR PROC FAULT FOR USE LDG FLAP 2, which is confirmed by the QRH in the table of correction fail. As it appeared that discrepancies between the QRH requesting arise part 2 and the status which requires us to ask strands 3 and it was therefore necessary to conduct further research and therefore the decision of a later call to QB. New call SAT COM QB who has not found any additional explanation on the difference in steering component, then the CCO to see them for the theft and troubleshooting of the aircraft, the return to Europe n ‘as much as possible with the remaining fuel, the problem then the decision to continue on TNR or divert to RUN. Decision to continue on TNR with a request for me to postpone the revival of colleagues who had to return the aircraft in view of CDG 05h00 minimum fault-finding to TNR.

The crew finds a contradiction between two checklists to be applied (Editor’s note: one more!), One seeking to land with the flaps in position 2 and the other with the flaps in position 3 (robberies involving different speeds and distances different landing …). Contacts with maintenance services (QB) do not provide an explanation. Editor’s note: The crew will have to “cope”. It provides a diversion to La Reunion (RUN) and decides to continue on Antananarivo.

We continued the flight with the pitot heat on and on radar calibration MAX.

In doubt as to the origin of the problem, but apparently in suspecting the Pitot …, the crew continued the flight with starting the manual heating Pitot probes, to overcome any possible malfunctioning of automatic heating and using the radar on the maximum sensitivity, to overcome a possible malfunction of the radar gain setting “calibrated”.

It should be noted that throughout the down ALT LAW, the aircraft was not responding to my request regression speed via the control of the FCU SPD (we were in the Open), and I therefore disengage the AP for reducing speed. Piloting the plane gave me the impression of an airplane flying very soft, which was not the feeling of flying during takeoff and climb. Because of the difference between the QRH and status, so I followed the status and we laid 3 strands.

During the final descent to Madagascar, the pilot of the aircraft had to be manually taken in light of the failure modes as a result of the degradation of the Act Steering Alternate Law. The captain reported a feeling of a lack of response from the aircraft to the stresses on the flight.

Looking ACMS we saw indications of Pitot 1 & 2, 2 and 3 & 1 & 3 to 15h10TU fault.

A post-flight, reading the ACMS system of the aircraft (Aircraft Condition Monitoring System = system that monitors and records the malfunction of the plane), reveals the primary failure, one that has triggered first at 15.10 UTC PITOT 1 & 2, 2 & 3, 1 & 3 FAULT. Editor’s note: this is the primary message was transmitted ACARS flight AF447 …

In post flight report

  • 15h07 : BMC 3
  • 15h10 : AUTO FLIGHT AP OFF REAC W/S DET FAULT
  • IAS DISCREPENCY
  • NAV ADR DISAGREE
  • 15H11 : F/CTL RUD TRV LIM FAULT

Editor’s note: the message PFR (Post Flight Report) reports the same messages of alarms that were sent successively by ACARS flight AF447 in CFR (Current Flight Report).

I did the tour of the aircraft with one of the OPL and both the radome pitot that appeared intact. Only the side impact sensor OPL was heavily tilted nearly vertical. There was no evidence of impact or scratches on the paint of the radome and on the windshields. I did, after meeting all the crew (TFN / PNC) a debriefing to explain what we had lived and reassure everyone and answer questions.

In matters of the DM

Flight to FL 370 not experienced wind shear (wind 080/18Kts) wind was stable for more than a half hour in strength and direction. Flight at mach 0.80 as slight turbulence (PAX Attached) No audible presence of hail in the early incidents (but we have heard during the descent of noise impacts to the cockpit (hail ???). SAT Temperature -51 ° C (we have never had ice detection alarm). No thunderstorms phenomenon (no weather radar was not calibrated and a flash of lightning visible). Top of strong turbulence to 15h09 followed alarms cited above and 15h11 to 15h10 GMT the speedometer OPL later rose from 280 to 100 Kts Kts in the red band and remained in as many seconds.

CBD side the speed is increased from green dot – 15 Kts with a speed trend to -50 Kts. STALL alarm (no alarm cricket) series with several incursions of speed shown in the lower red stripe. Stabilization aircraft at FL340 and continued flight to FL 330. Duration estimated 3 to 5 minutes.

Duration estimated 3 to 5 minutes.

Commander summarizes the conditions under which the incident that he is analyzed retrospectively by the Company – including maintenance services – for the Authority (DGAC / EASA) and the BEA . The ASR, like RAS, was used as feedback to generate a study of risks and prevent the occurrence of a new incident of same type, even a possible accident for which the incident could be harbinger …

Unfortunately, it did not happen …

published on 2009-07-19 17:59 by EuroCockpit.


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Family Website Portuguese (Under Construction) Informações no e-mail.: Info@afvv447.org


Updated Close-up pics (Landing Gear France3 — Hydraulics France24)

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PFD Special characters (Restrictions) are replaced by Orange Crosses!

Andrea Tantaros — Telegraph — Business Group Letter — Politico — CBO Letter


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It has been a really bad week for the President.  He has just about pissed off the entire country except for the people that would vote for him even if he was born on Mars.  Was Jim DeMint right about this being the President’s Waterloo?

I’m beginning to really believe the President has surrounded himself with idiots.  After six months in office, his administration is starting to look like the “Bad News Bears”.  Is this the beginning of the “Seventh Coalition” against OBamaCare? The Liberals are so mad they can’t even spell.  The liberals will also soon learn about “Tea Parties“.

Last week, in a conference call with something called the “Natiional Tea Party Patriots,” Sen. Jim DeMint told the patriots that if they could defeat health care reform, it would “break” Pres. Obama and be his “Waterloo.” Liberty Street Blog


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Obama’s Healthcare Fiasco Making Him Sick

…Say what you want about George Bush, the guy got things done in his first term and lead. From education reform to Medicare Part D to his tax cuts, Bush signed his agenda into law despite congressional gridlock. Agree or disagree, that’s not a weak Commander-in-Chief.

Obama is just the opposite.

The President has showcased an appalling lack of leadership. He has sent no bill to the Hill. He takes no specific positions on the five bills in the House and Senate. All he has done thus far is give flowery calls to action. Either he thinks he is still a Senator or he is Chauncey Gardner.

What the President lacks in leadership he makes up for in arrogance. For the President to think that he can bully Congress and the American people into rolling over in a mere matter of weeks as he seeks to completely overhaul 20 percent of our entire economy is most disgustingly presumptuous. It is this arrogance that is preventing him from recognizing the potential fallout with Americans as portrayed thru moderate Democrats. He is bowing to the far left, and this will cost him. If he passes universal healthcare he will alienate moderate America and eventually suffer because of what it will ensue. It he doesn’t pass it, he’ll appear a failure, specifically with him base…


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Barack Obama’s oratory loses its oomph

The President’s eloquent yet vague rhetoric is not enough to drive through difficult health care reform – and there is a lesson here for David Cameron, says Janet Daley.

America is discovering the truth about universal health care: it isn’t cheap. And Barack Obama is discovering the truth about the power of oratory: it can only get you so far. There is a lesson here for us all.

Opposition to the president’s health care reform is gathering a startling head of steam that threatens to engulf his presidency in early onset disillusionment. Health care is now being described as a potential “Waterloo” for the administration, and Mr Obama’s personal poll ratings are dropping in tandem with the declining popularity of his health care policy.

The momentum of this resistance is not a simple partisan matter, although to hear Mr Obama tell it at town hall meetings, you would think that his proposal was being sabotaged purely by Republican wreckers. In fact, the most trenchant and indefatigable critics are within his own party: the “Blue Dog” Democrats who come from states where working people resent increased taxes and federal interference as much as they fear being caught without health insurance.

What the Democratic congressmen have been demanding more and more vociferously is “clarity” about how the public (state-funded) option of Obama health care is to be paid for: which is to say, who is going to do the paying.

Thus far, Mr Obama’s response has been judged rather unsatisfactory: the approach he has taken is the one that worked so well for him during the presidential campaign. He makes yet another eloquent speech that is long on general principle and short on concrete detail. He gives another prime-time press conference – he has held four of these in the six months he has been in the White House, which is as many as George W Bush held in eight years – in which his answers are emotionally engaging, articulate and vague…


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Business groups blast healthcare reform

By Eric Zimmermann

A coalition of business groups released a letter today panning the healthcare reform legislation pending in Congress.

The letter, addressed to members of Congress, was signed by seemingly hundreds of business groups across the country, including the U.S. Chamber of Commerce. (The letter is one page; the list of signatories is 35 pages long.)

“Collectively, we are dedicated to improving our nation’s health care system, especially in terms of lowering health care costs, improving the quality of care, and making sure every American has access to affordable coverage,” the letter says. “However, we believe that the legislation currently being considered would not improve the system, but jeopardize the parts of the system that currently work.”

Specifically, the business groups cited the employer mandate as a cause for concern.

“This ‘pay or play’ mandate is especially bad because employers are also required to pay the majority of employee premiums,” the letter reads. “Even with some exemptions, this provision will kill many jobs.”

Read the whole letter here. (pdf)

National Organizations

American Bakers Association
American Benefits Council
American Farm Bureau Federation
American Hotel & Lodging Association
American Petroleum Institute
American Rental Association
American Trucking Associations, Inc.
Associated Builders and Contractors, Inc.
Associated General Contractors
Associated Wire Rope Fabricators
Business Roundtable
Corporate Health Care Coalition
Direct Marketing Association
ERISA Industry Committee
HR Policy Association
Independent Electrical Contractors
Industrial Minerals Association- North America
International Dairy Foods Association (IDFA)
International Foodservice Distributors Association
International Franchise Association
Motor & Equipment Manufacturers Association
National Association for Surface Finishing
National Association of Convenience Stores
National Association of Health Underwriters
National Association of Home Builders
National Association of Manufacturers
National Association of Wholesaler-Distributors
National Coalition on Benefits
National Council of Textile Organizations (NCTO)
National Federation of Independent Business
National Franchisee Association
National Grain and Feed Association
National Retail Federation
National Roofing Contractors Association
National Stone and Gravel Association
Printing Industries of America
Retail Industry Leaders Association
Society for Human Resource Management
U.S. Chamber of Commerce


POLITICO_logo

CBO deals new blow to health plan

By CHRIS FRATES

For the second time this month, congressional budget analysts have dealt a blow to the Democrat’s health reform efforts, this time by saying a plan touted by the White House as crucial to paying for the bill would actually save almost no money over 10 years.

A key House chairman and moderate House Democrats on Tuesday agreed to a White House-backed proposal that would give an outside panel the power to make cuts to government-financed health care programs. White House budget director Peter Orszag declared the plan “probably the most important piece that can be added” to the House’s health care reform legislation.

But on Saturday, the Congressional Budget Office said the proposal to give an independent panel the power to keep Medicare spending in check would only save about $2 billion over 10 years- a drop in the bucket compared to the bill’s $1 trillion price tag.

“In CBO’s judgment, the probability is high that no savings would be realized … but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis,” CBO Director Douglas Elmendorf wrote in a letter to House Majority Leader Steny Hoyer on Saturday.

The proposal’s meager savings are a blow to Democrats working furiously to bring down costs in order to win support from their party’s fiscally conservative Blue Dogs, who have threatened to vote against the bill without significant changes. The proposal was heralded as a breakthrough on Tuesday after Blue Dogs and House Energy and Commerce Chairman Henry Waxman emerged from the White House with agreement on giving the independent panel, rather than Congress, the ability to rein in Medicare spending.

Saturday’s CBO analysis caps a tough week of blown deadlines, partisan bickering and fierce intra-party fighting among Democrats. On Friday, the tension between the Blue Dogs and Waxman exploded when Waxman threatened to bypass his committee and bring the reform bill straight to the House floor without a vote. The move infuriated Blue Dogs who have used their crucial committee votes to leverage changes to the bill.

But by late Friday, Waxman said their colleagues had pulled the two groups “back from the brink” and back to the negotiating table.

Still, Hoyer said there was little chance that that the House would pass a health reform legislation before Friday when lawmakers are expected to leave Washington for summer recess.

Prussian_Attack_Plancenoit_by_Adolf_Northern


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CONGRESSIONAL BUDGET OFFICE                                                                                                         Douglas W. Elmendorf, Director
U.S. Congress
Washington, DC 20515

July 25, 2009

Honorable Steny H. Hoyer
Majority Leader
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Leader:

As you requested, the Congressional Budget Office (CBO) has analyzed some possible approaches for giving the President broad authority to make changes in the Medicare program. Under those approaches, any changes the President decided to implement would be based on recommendations from an advisory council and subject to Congressional disapproval.

Expanding the authority of the President to effect change in the Medicare program might lead to significant long-term savings in federal spending on health care. The available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. Therefore, experts generally agree that changes in government policy have the potential to significantly reduce health care spending—for the nation as a whole and for the federal government in particular—without harming people’s health. However, achieving large reductions in projected spending would require fundamental changes in the financing and delivery of health care.

Considerable consensus exists among experts about the types of changes that are likely to make the health sector more efficient: moving away from a fee-for service system toward one that pays providers for value, perhaps through fixed payments per patient, bonuses based on performance, or penalties for substandard care; providing stronger incentives for both providers and patients to control costs, through higher cost-sharing requirements or tighter management of benefits; and facilitating good decisionmaking on the part of providers and patients by equipping them with more information about the effectiveness of different treatments and the quality of care delivered by different providers. Those changes in the flow of money and information would spur and facilitate other changes in the organization and delivery of health care.

To ensure that current legislation puts the federal budget on a more sustainable path will probably require creating a framework for federal health care spending that imposes ongoing pressure to increase efficiency over time—particularly, but not exclusively, in the case of providers. Such pressure could be imposed in several ways, including reducing Medicare’s payment updates automatically to take into account expected productivity gains; reducing Medicare payments in areas of the country with higher spending; giving an official in the executive branch broad discretion to change Medicare to produce savings (especially if there was also an across-the-board reduction in payments to providers if savings are not achieved in other ways); and limiting the growth of Medicare’s implicit subsidy of premiums. (CBO discussed a number of such approaches in a June 16 letter to Senators Conrad and Gregg.)

This letter focuses on proposals to give the President broad authority to make changes in the Medicare program, subject to Congressional disapproval. Such proposals could enhance the prospects for additional long-term cost control, but they would also entail shifting some power from the Congress to the executive branch.

Ewart_WaterlooIn particular, CBO reviewed draft legislation transmitted to the Congress by the Administration on July 17, 2009, titled the Independent Medicare Advisory Council Act of 2009. CBO estimates that enacting the proposal, as drafted, would yield savings of $2 billion over the 2010–2019 period (with all of the savings realized in fiscal years 2016 through 2019) if the proposal was added to H.R. 3200, the America’s Affordable Health Choices Act of 2009, as introduced in the House of Representatives. This estimate represents the expected value of the 10-year savings from the proposal: In CBO’s judgment, the probability is high that no savings would be realized, for reasons discussed below, but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis.

This letter describes the considerations that underlie CBO’s estimate and identifies ways in which such proposals could be structured to garner significantly more savings—especially in the years beyond 2019. In particular, if legislation were to provide an independent advisory council with broad authority, establish ambitious but feasible savings targets, and create a clear fall-back mechanism for instituting across-the-board reductions in net Medicare outlays, CBO believes such a council would identify steps that could eventually achieve annual savings equivalent to several percent of total spending on Medicare. Achieving such savings, in addition to those estimated to result from the provisions in H.R. 3200 that govern Medicare’s payment rates, would probably require significant changes in the program’s coverage, benefit design, and payment and delivery systems—and a council with the clear mandate, independence, and resources to propose such changes.

The Proposed Independent Medicare Advisory Council

The Administration’s proposal calls for an Independent Medicare Advisory Council (IMAC) consisting of five members who are either physicians or have specialized expertise in medicine or health care policy. Those individuals would be appointed by the President and subject to confirmation by the Senate.

Beginning with fiscal year 2015, IMAC would be charged with making annual recommendations to the President for changing federal payments for various services covered by Medicare. Under the Administration’s proposal, each annual package of recommendations would have to be designed so that implementation would not be expected to increase aggregate Medicare spending over the subsequent 10-year period, as compared with expected spending in the absence of those proposed changes. Determination of the effect of the council’s recommendations on net Medicare spending would be made by the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS). In addition, the council could make recommendations for reform of the Medicare delivery system (but those recommendations would not have to be provided annually).

The President would have to approve or disapprove the council’s recommendations as a package. If the President approved a set of recommendations, implementation would commence no sooner than 30 days after that approval unless the Congress enacted a joint resolution to disapprove the package of recommendations. (It would generally take far longer than 30 days to fully implement the council’s recommendations.) Under the proposed legislation, the first potential reductions in spending would not go into effect until fiscal year 2016.

Estimated Savings

Sunken-road-at-waterlooThe estimated savings of $2 billion over the 2016–2019 period reflect CBO’s assessment of the likely scope of the proposals that the council would make and the probability that its recommendations would be implemented by the President. (The possibility that the Congress might enact future legislation to disapprove those recommendations is not relevant to CBO’s estimate of the savings that would arise from enacting the IMAC proposal into law; instead, the impact of legislation disapproving the recommendations would be reflected in CBO’s cost estimate for that subsequent legislation. See the section “Budgetary Treatment” below.) Under H.R. 3200, as introduced, payment rates for nearly all Medicare services would grow more slowly than anticipated inflation. Thus, CBO considers it unlikely that IMAC would recommend substantial additional savings (relative to savings already expected under H.R. 3200) through further reductions in Medicare payment rates. In addition, several specific features of the legislation in its current form would reduce the likelihood that the council would recommend reductions in payment rates or reforms in the delivery system for Medicare services that would yield much greater budgetary savings:

• The proposed legislation states that IMAC’s recommendations cannot generate increased Medicare expenditures, but it does not explicitly direct the council to reduce such expenditures nor does it establish any target for such reductions.

• As proposed, the composition of the council could be weighted toward medical providers who might not be inclined to recommend cuts in payments to providers or significant changes to the delivery system.

• Some types of fundamental program changes would probably require study and experimentation before they could be implemented, and it is not clear what resources the council would have to develop recommendations involving such changes. Under the proposal, IMAC might have limited access to the resources of CMS and its Office of the Actuary for directing the study of reform ideas that could offer some promise of significant budgetary savings.

• Significant changes in the way payments to providers are made and in the incentives facing beneficiaries would probably be necessary to obtain substantial savings. Outside influence on the council and the President, however, might make it politically difficult to recommend and implement reforms that could be viewed as undesirable by interested parties. Medical providers, beneficiaries, and Members of Congress would probably exert considerable pressure on both IMAC and the President to balance recommendations for savings against beneficiaries’ concerns about the costs and availability of medical services and the interests of those receiving Medicare payments for delivering services.

• Finally, the first year of potential savings under the proposal is 2016. The five-year start-up period (and one-year lag in implementation) called for by the draft legislation would give the council some time to study reform proposals. However, concrete new evidence upon which to base some kinds of large-scale reforms might not be available for some time thereafter.

Waterloo-French_cavalryAs noted earlier, the estimated savings of $2 billion over the latter half of the 2010–2019 period represent a probabilistic assessment of a range of possible outcomes. On the one hand, savings might not be realized at all because the proposal specifies a process without specific goals for savings or a “fall-back” plan for ensuring spending reductions if the combination of annual IMAC recommendations and Presidential approval does not produce hoped-for savings. (A fall-back plan might, for example, specify certain automatic reductions in payment rates and increases in beneficiaries’ premiums or copayments if the process did not otherwise produce a certain amount of projected savings.) On the other hand, there is a small chance, in CBO’s judgment, that the council would propose and the President would approve significant changes to Medicare that would reap substantial savings.

Expected savings from the IMAC proposal would grow after 2019, but many of the above points would still apply, reducing the likelihood of attaining large annual savings. The considerable uncertainty about the amount of savings that might occur within the first 10-year projection period would compound in future decades. Although it is possible that savings would grow significantly after 2019, CBO concludes that the probability of this outcome is low for the proposal as drafted, particularly because there is no fall-back mechanism to ensure some minimum level of spending cuts beyond those already included in H.R. 3200.

Budgetary Treatment

Under this proposal, once the President had approved a set of recommendations, CBO would assume that, in the absence of Congressional action, the Administration would implement those recommendations. Upon that approval, CBO would modify the baseline used for scoring legislation to reflect that assumption. Consequently, for Congressional scorekeeping purposes, a resolution to disapprove those recommendations would be charged with the cost of canceling any expected Medicare savings from a set of IMAC recommendations that had been approved by the President.

French_cuirassiers_vs_Nassauers

Options for Generating Greater Savings

You requested that CBO identify ways in which the IMAC proposal or other similar proposals might be structured to garner significantly more savings. Features that would maximize the likelihood that a new council would recommend changes that would achieve greater reductions in spending for Medicare (and possibly other federal health care programs) include the following:

• Setting explicit and feasible quantitative goals for reducing outlays in the Medicare program.

• Providing clear authority for the council to recommend broad changes in coverage, benefit design, and payment and delivery systems.

• Incorporating an explicit fall-back mechanism (such as an across-the board reduction in payments) if goals for cost reduction are not met.

• Requiring independent verification of the expected reduction in program spending from implementing the recommendations.

• Expanding the direction and authority of the council to include making recommendations for changes to Medicaid and other government health care programs, with specific goals set for each program.

• Expanding the council’s mandate to include making recommendations for changes to the broader health care system. (Some such changes might be implemented through federal regulation, while others might require future legislation.)

• Ensuring that the composition of the council is heavily weighted toward medical and other health policy experts who will actively seek to improve the efficiency of the health care system.

• Ensuring the council’s access to the resources necessary to develop and test ideas for cost reduction. These resources would include access to appropriate program data, the ability to tap technical expertise available through the Department of Health and Human Services (HHS), and explicit authority to coordinate such work with the Secretary of HHS.

• Providing mandatory funding to enhance the independence of the council.

An IMAC-type proposal that incorporated some or all of the features outlined above would generate larger expected savings over the next 10 years than the $2 billion estimate for the proposal as initially drafted. However, the short time frame for action would still limit the likely savings.

Dernier_carre_de_la_Garde_-_gen_Hill

Looking beyond 2019, a much stronger IMAC-type proposal could reap considerably more savings, depending on which specific features identified above were included and how those features were crafted in legislation. In particular, if the legislation were to provide IMAC with broad authority, establish ambitious but feasible savings targets, and create a clear fall-back mechanism for instituting across-the-board reductions in net Medicare outlays, CBO believes the council would identify steps that could eventually achieve annual savings equal to several percent of Medicare spending. In the absence of a fall-back mechanism, CBO expects that the probability that the President would approve recommended changes that would lead to such significant savings would be lower.

Several percent of annual Medicare spending would amount to tens of billions of dollars per year after 2019. By that point, H.R. 3200, as introduced, would already be on track to achieve tens of billions of dollars in Medicare savings each year, primarily as a result of provisions that would reduce payments to Medicare providers relative to those projected in the current-law baseline. (Total federal resources devoted to health care programs would increase under the introduced version of that bill, however, because of the provisions aimed at making health insurance available to more people.) Substantial additional savings from an IMAC-type proposal would probably require significant changes in coverage, benefit design, and payment and delivery systems aimed at reducing the quantity and intensity of services provided. Some of the savings that could be expected from such changes are probably already captured in CBO’s assessment of the long-term savings that would result from provisions of H.R. 3200, but it is difficult to assess the extent of that overlap.

I hope this information is helpful to you. If you have further questions about CBO’s analysis, we would be happy to address them. The CBO staff contacts are Holly Harvey and Tom Bradley.

Sincerely,

Douglas W. Elmendorf
Director

cc: Honorable John Boehner
Minority Leader

Honorable Charles B. Rangel
Chairman
House Committee on Ways and Means

Honorable Dave Camp
Ranking Member
House Committee on Ways and Means

Honorable Henry A. Waxman
Chairman
House Committee on Energy and Commerce

Honorable Joe Barton
Ranking Member
House Committee on Energy and Commerce

Honorable George Miller
Chairman
House Committee on Education and Labor

Honorable John Kline
Ranking Member
House Committee on Education and Labor

Honorable Edward M. Kennedy
Chairman
Senate Committee on Health, Education, Labor, and Pensions

Honorable Michael B. Enzi
Ranking Member
Senate Committee on Health, Education, Labor, and Pensions

Honorable Max Baucus
Chairman
Senate Committee on Finance

Honorable Charles E. Grassley
Ranking Member
Senate Committee on Finance


hotair_getyourfill_large

by Pundette

The Washington Post featured this in today’s paper as one of the better cartoons of the week:

JIM DEMINT

DeMint portrayed as assassin in political cartoon

Is it okay to portray Sen. Jim DeMint (or anyone else) as a sniper? And what, or whom, is he aiming at?

Supposedly the target is “healthcare,” but the cartoon obviously refers to DeMint’s remark about breaking Obama. It’s not much of a jump to believe that the cartoonist intends us to imagine that DeMint’s target is Obama.

Maybe I’m being touchy. It’s just a cartoon and it’s supposed to be edgy. But most Americans are quite sensitive to suggestions of presidential (or other) assassination, and particularly so when it involves a sniper taking aim from a tall building.

The Post showed terrible judgment when they chose to run this.

*Here’s a link to a photo of the tenements mentioned by commenters below, courtesy of a commenter at RedState.


Related Previous Posts:

Mr. President: Get Health Care Reform Right

Obamacare: Either It Is The Red Pill Or The Blue Pill?

Projected US Public/Private Medical Expenditures

AARP: A Big “Donut Hole” With Acorn Sprinkles?

Related Links:

CNN MONEY:  White House hits watchdog on Medicare plan

PJTV:  ObamaCare Yay Or Nay? The Truth About Canada! ***MUST SEE***

Rush Limbaugh: ‘The Press Has Met Their Waterloo and It’s Obama’

Christian Science Monitor: How Jim DeMint did Obama a favor

American Thinker: Useless Eaters

Hot Air (Ed): Joltin’ Joe whiffs on his own curveball & The OMB-CBO throwdown

SF Gate:  Obama shoots from the lip, misses in Gates flap

Freedom’s Lighthouse:  Health Care Advocate Says Senior Citizens to be Biggest Losers in ObamaCare – Video

Dick Morris And Eileen McGann: ELDERLY LEAD OPPOSITION ON OBAMA HEALTHCARE & ELDERLY SWING AGAINST OBAMA PLAN

Washington Post (David Broder):  Our New Medical Judges?


Updates:  Added New Links

END

Forbes — Wash Post — Video: Best Ford Commercial Ever — Motley Fool — 2009 SEC Fillings


ford_not_owned_by_america

Northside Ford - San Antonio, Texas


forbes_logo

Ford Trims Its Losses And Beats Expectations

Joann Muller

More important, the carmaker slowed the rate at which it has been burning cash.

DETROIT — Ford Motor narrowed its operating losses in the second quarter, as it reaped the benefits of cost savings and market share gains at the expense of its domestic rivals.

The Dearborn, Mich.-based automaker beat analysts’ estimates with a loss, excluding one-time items, of $638 million, or 21 cents a share. The consensus had been for a loss of 53 cents per share, according to Reuters Estimates, compared with a loss of 62 cents a year earlier.

Net income was $2.26 billion, or 69 cents a share, on accounting gains related to reducing debt, Ford said Thursday in a statement.

More important, Ford slowed the rate at which it has been burning cash to $1 billion from $3.7 billion in the first three months of the year. It ended the quarter with cash from automotive operations of $21 billion. Revenue fell to $27.2 billion from $38.2 billion.

Ford has done a good job of keeping its eyes on the road during a particularly difficult stretch, even as its domestic rivals veered off into bankruptcy.

In the second quarter, Ford picked up two points of market share, even as it cut the average incentive on its vehicles by about $1,100. It has managed to keep inventories low, too, so while General Motors (GMGMQ.PK news people) and Chrysler were forced to shut down their factories for long stretches in early summer, Ford recently said it is upping production for the first time in two years.

Some analysts are more bullish. Credit Suisse analyst Christopher Ceraso wrote in a note to clients that Ford could post a modest profit in 2010, a year ahead of company guidance. Michael Ward of Soleil Securities says Ford’s North American auto operations could post a pretax profit of $1 billion next year, based on the benefit of cost reductions, improved industry sales, new products and market share gains. Ford’s chief executive, Alan Mulally, is still calling for a return to profitability in 2011.

Ford’s pace of new product introductions is strong and could drive further market share gains at the expense of GM and Chrysler, according to Bank of America/Merrill Lynch, which published its annual “Car Wars” study this week. Among the new models Ford will be rolling out are a new Taurus flagship and two new fuel-efficient small cars designed in Europe, the Fiesta and a revamped Focus…

ford_escape


iwp1_mages

Ford Pushes Into the Black, Snapping Losing Streak

Bolstered by Cost Cuts, Automaker Moves In on Rivals

Washington Post Staff Writer

By Kendra Marr – Friday, July 24, 2009

Ford Motor on Thursday posted a surprise profit of $2.26 billion for the second quarter, ending a streak of four straight quarterly losses.

In recent months, the carmaker has claimed market share from its American rivals, General Motors and Chrysler, while those companies struggled to restructure their operations in bankruptcy court.

Ford executives now say the automaker is on track to return to annual profitability in 2011.

“Despite the challenges, Ford’s underlying business is getting progressively stronger as we launch great new products the customers want and value, while continuing to aggressively restructure our operations,” Ford chief executive Alan R. Mulally said in a conference call with analysts.

Ford’s gains were aided by rapid cost cutting in the second quarter. Ford reduced its debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense. It raised $1.6 billion by issuing common stock. The company said it also cut “structural” costs by $1.8 billion, in part by eliminating 1,000 U.S. hourly jobs through buyouts.

“They’re leaner and meaner than they have been in past,” said George Peterson, president of research firm AutoPacific.

Ford said it is likely to make additional moves to raise cash and reduce debt. It is still looking for a buyer for its Swedish unit Volvo, which lost $231 million in the quarter.

Excluding special items, such as debt reduction, Ford would have lost $424 million in the second quarter. In comparison, the company lost $8.7 billion in the second quarter of 2008, the worst performance year in Ford’s history.

Ford last pulled itself out of the red in the first quarter of 2008, earning $100 million.

Ford shares jumped 9.4 percent Thursday, to close at $6.98.

Under Mulally, Ford appears to be building better cars and trucks, analysts said. The Ford Fiesta, which launches in the United States next year, is now Europe’s second-best-selling car.

“These are not cars built to the lowest common denominator anymore,” Peterson said.

Ford is also shifting its lineup toward smaller, more fuel-efficient vehicles. But some analysts warn that the automaker could face a challenge selling those new models if gas prices do not climb this summer.

“Clearly the road ahead remains challenging,” Mulally told analysts. “While we still expect the economy to begin to improve in the second half of the year, the recovery is likely to be more modest than many of us had hoped.”

ford_mustang



fool_logoTHE MOTLEY FOOL

Is Ford’s Profit for Real?

By John Rosevear – July 23, 2009

Ford (NYSE: F) — yes, that Ford — posted a profit of $2.3 billion for the quarter. That’s $0.69 a share, compared with a loss of $3.89 a share for the same period last year.

Think about that for a second.

If you’ve followed the tribulations of the American automakers over the last year — and unless you’ve been in a Zen monastery, the news has been hard to miss — the idea that one of the Once-Big Three turned a profit is hard to believe.

Should we believe it?

Well, no, not quite
To be fair, Ford’s press release is completely up-front about the fact that that $2.3 billion includes “special items” worth a net total of $2.8 billion. Without these special items — most of which are simply fancy ways of saying that Ford swapped some of its debt for equity and cash and made some one-time cuts — Ford lost $0.21 a share.

That’s not great in absolute terms, but it’s not bad — analysts were expecting a $0.50 per-share loss, and it’s way better than last year’s numbers. Ford has cut costs, gained market share with some great products, and has an impressive pipeline, and management is still predicting a return to (genuine) profitability by 2011.

So it’s a buy, then?
I’m skeptical. The company is a long way from being out of the woods. I think anyone considering an investment in Ford right now, much as I like it as a long-term recovery story, has to ponder a few points:

  • Supplier drama. Any interruptions in Ford’s parts supplies would stop its affected factory lines within hours, and many leading suppliers are in deep trouble. Seatmaker Lear and Ford spinoff Visteon are already in bankruptcy. Tier 1 giants Johnson Controls and Magna (NYSE: MGA) are so far faring better, but there’s drama brewing there as well.
  • Dilution. They’ve got to keep servicing all that debt, and — following the lead of companies from Dow Chemical (NYSE: DOW) to DryShips (Nasdaq: DRYS) — a stock offering may be on the way.
  • The competition. Nissan (Nasdaq: NSANY), Toyota (NYSE: TM), and Honda (NYSE: HMC) are all in better financial shape than Ford, and after their warp-speed trips through bankruptcy court, General Motors and Chrysler arguably are as well.


ford+stock


fool_logoTHE MOTLEY FOOL

3 Reasons to Buy Ford Today

By Dave Mock – July 13, 2009

Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market’s current mess surely qualifies. Few industries — save for possibly the financial sector — have been gored as deeply as the automotive sector, but despite the dismal sales and bankruptcies at Chrysler and GM, some investors see many reasons to consider buying shares of automaker Ford (NYSE: F) today.

In our Motley Fool CAPS community, 7,335 investors have given a bullish or bearish opinion on Ford. Poring through the detailed information packed in pitches and other comments, I’ve dug up three of the top reasons why many members consider the stock a buy today:

1. Gaining market share: Since General Motors and Chrysler have been grinding their way through bankruptcy proceedings, Ford has seen its market share grow, and is even seeing big sales increases in China and Canada. Although auto sales continued to fall in June, Ford had its smallest monthly decline since July of last year and outsold Toyota (NYSE: TM) for the fourth straight month.

2. Boosting production: Ford recently reported tighter inventories, down 38% from a year ago. It plans to increase its third-quarter production after seeing more demand in June, a move companies like Alcoa (NYSE: AA) and AK Steel (NYSE: AKS) like to hear, and is floating the notion that the worst is behind it and that the industry could see modest improvement in the second half of this year.

3. Innovative lineup: The Fusion has recently been making big gains in the car market against rivals Toyota Camry and Honda (NYSE: HMC) Accord, validating Ford’s strategy to shift a larger percentage of sales from SUVs to cars. It plans to invest about $1.5 billion in new small-car facilities in emerging markets like China and India, where Tata Motors (NYSE: TTM) has seen continuing sales increases, and it plans to expand on its already successful Microsoft (Nasdaq: MSFT) Sync technology by launching it in Europe and around the world.

Of course, there’s a lot more devil in the details of these buy-side opinions, which is why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about Ford, just click on over to Motley Fool CAPS and have a look.

More Foolishness:


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FORD CREDIT EARNS $413 MILLION IN THE SECOND QUARTER OF 2009*

Download Full 2Q Financial Release (PDF)

DEARBORN, Mich., July 23, 2009 – Ford Motor Credit Company reported net income of $413 million in the second quarter of 2009, an improvement of $1.8 billion from a net loss of $1.4 billion a year earlier.  On a pre-tax basis, Ford Credit earned $646 million in the second quarter, compared with a loss of $2.4 billion in the previous year.  Excluding the $2.1 billion impairment charge for operating leases in the second quarter of 2008, Ford Credit incurred a pre-tax loss of $294 million in the previous year.  On a pre-tax basis, Ford Credit earned $610 million in the first half of 2009.

The improvement in pre-tax earnings primarily reflected non-recurrence of the second quarter 2008 impairment charge to the North America operating lease portfolio, lower depreciation expense for leased vehicles due to higher auction values, net gains related to unhedged currency exposure from cross-border intercompany lending, a lower provision for credit losses, and lower operating costs.  These factors were offset partially by lower volume and non-recurrence of a gain related to the sale of approximately half of our ownership interest in our Nordic operations.

“We are pleased with our second quarter results as market conditions remain challenging around the world,” Chairman and CEO Mike Bannister said.  “With our solid business fundamentals and our focus on prudent lending, sound risk management and high-quality servicing, we continue to provide valuable support to Ford Motor Company, its dealers and its customers.”

On June 30, 2009, Ford Credit’s on-balance sheet net receivables totaled $99 billion, compared with $116 billion at year-end 2008.  Managed receivables were $100 billion on June 30, 2009, down from $118 billion on December 31, 2008.  The lower receivables primarily reflected lower North America and Europe receivables, mainly due to lower industry volumes, lower dealer stocks, and the transition of Jaguar, Land Rover and Mazda financing to other finance providers.

On June 30, 2009, managed leverage was 8.4 to 1.  During the second quarter of 2009, Ford Credit completed the cash tender offer, commenced in the first quarter of 2009, pursuant to which it purchased $3.4 billion principal amount of Ford Motor Company’s unsecured, nonconvertible debt securities for an aggregate cost of $1.1 billion including transaction costs.  Ford Credit transferred these debt securities to Ford Motor Company in satisfaction of $1.1 billion of tax liabilities to Ford Motor Company.

Ford Credit expects its second half results to be lower than its first half 2009 results.  Ford Credit does not expect the net gains related to unhedged currency exposures or improvements in lease residual losses in the amounts experienced in the second quarter of 2009 to continue.  A continuing decline in receivables will also contribute to lower second half 2009 results.

Ford Motor Credit Company LLC is one of the world’s largest automotive finance companies and has supported the sale of Ford Motor Company products since 1959.  Ford Credit is an indirect, wholly owned subsidiary of Ford.  It provides automotive financing for Ford, Lincoln, Mercury and Volvo dealers and customers.  More information can be found at http://www.fordcredit.com and at Ford Credit’s investor center, http://www.fordcredit.com/investorcenter.

— — — — —

  1. The financial results discussed herein are presented on a preliminary basis; final data will be included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

# # #


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FORD POSTS SECOND QUARTER PRE-TAX OPERATING LOSS OF $424 MILLION+; GAINS MARKET SHARE, REDUCES CASH OUTFLOW++

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  • Reported a pre-tax operating loss of $424 million, excluding special items, for the second quarter of 2009+ and net income of $2.3 billion, or $0.69 per share. Special items totaled a net gain of $2.8 billion, including a $3.4 billion gain related to debt-reduction actions
  • Reduced Automotive structural costs by $1.8 billion, including $1.2 billion in North America+
  • Strong new products drove market share gains in all regions – North America, South America, Europe and Asia Pacific Africa – while achieving further improvements in transaction prices and margins
  • Ford’s customer satisfaction with vehicle quality reached its highest level in North America and now equals Toyota; Ford, Lincoln and Mercury brand vehicles had the fewest “things gone wrong” among all automakers; Ford leads the U.S. industry in Insurance Institute for Highway Safety “Top Safety Pick” awards
  • Ended the second quarter with Automotive gross cash of $21 billion; operating-related cash outflow was $1 billion, an improvement of $2.7 billion from the first quarter of 2009+++
  • Raised $1.6 billion by issuing 345 million new shares of common stock; completed actions to reduce Automotive debt by $10.1 billion
  • Ford Credit reported a pre-tax profit of $646 million, compared with a pre-tax loss of $294 million a year ago+
  • Ford remains on track, based on current planning assumptions, to achieve its key 2011 financial targets
Financial Results Summary

Second Quarter

First Half

2009

O/(U) 2008

2009

O/(U) 2008

Wholesales (000)+

1,172

(390)

2,145

(948)

Revenue (Bils.) +

$ 27.2

$ (11.0)

$      52.0

$    (25.4)

Operating Results +

Automotive Results (Mils.)

$ (1,019)

$    (320)

$ (2,939)

$  (2,862)

Financial Services (Mils.)

595

929

533

803

Pre-Tax Results (Mils.)

$    (424)

$    609

$ (2,406)

$  (2,059)

After-Tax Results (Mils.) ++++

$    (638)

$    768

$ (2,430)

$  (1,501)

Earnings Per Share ++++

$   (0.21)

$    0.42

$   (0.90)

$    (0.48)

Special Items Pre-Tax (Mils.)

$    2,795

$ 10,821

$    3,157

$  11,583

Net Income/(Loss) Attributable to Ford

After-Tax Results (Mils.)

$    2,261

$ 10,958

$      834

$    9,461

Earnings Per Share

$      0.69

$     4.58

$     0.30

$      4.20

Automotive Gross Cash (Bils.) +++

$      21.0

$      (5.6)

$      21.0

$      (5.6)

See end notes on page 10.

DEARBORN, Mich., July 23, 2009 – Ford Motor Company [NYSE: F] today reported a pre-tax operating loss of $424 million in the second quarter of 2009, excluding special items – a $609 million improvement compared with the second quarter of last year – as cost reductions, net pricing, Ford Credit results and market share helped offset the continued impact of the severe global economic downturn. +

On an after-tax basis, excluding special items, Ford posted an operating loss of $638 million in the second quarter, or $0.21 per share, compared with a loss of $1.4 billion, or $0.63 per share, a year ago. +

Ford posted net income of $2.3 billion, or $0.69 per share.  These results compare with a net loss of $8.7 billion, or $3.89 per share, in the second quarter of 2008.†  The results for the second quarter 2009 include a special items net gain totaling $2.8 billion, or $0.90 per share, which includes a $3.4 billion gain related to Ford and Ford Credit’s recent debt-reduction actions.

Ford’s second quarter revenue was $27.2 billion, down $11 billion from the same period a year ago. +

“While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan,” said Ford President and CEO Alan Mulally.  “Our underlying business is growing progressively stronger as we introduce great new products that customers want and value, while continuing to aggressively restructure our business and strengthen our balance sheet.”

In the second quarter, Ford completed several actions to strengthen its overall business, including:

  • Completing a series of transactions that reduced Automotive debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense
  • Raising $1.6 billion through the issuance of 345 million shares of Ford common stock
  • Reducing Automotive structural costs by $1.8 billion, including $1.2 billion in North America
  • Reducing the U.S. hourly work force by approximately 1,000 through a buyout program

Ford reached agreement with the UAW, subject to court and other approvals, to allow Ford the option to fund up to half of its VEBA obligations with Ford common stock at market prices instead of fixed prices in 2009, 2010 and 2011.

Ford finished the second quarter with $21 billion in Automotive gross cash, compared with $21.3 billion at the end of the first quarter of 2009.  Automotive operating-related cash flow was $1 billion negative during the second quarter of 2009, an improvement of $2.7 billion from the first quarter of 2009. Automotive operating-related cash flow was $4.7 billion negative during the first half; on track with Ford’s plan. +++

“Ford delivered a very solid quarter, and our transformation plan remains well on track,” said Lewis Booth, Ford executive vice president and chief financial officer.  “We strengthened our balance sheet, reduced cash outflows and improved our year-over-year financial results despite sharply lower industry volumes.”

The following discussion of second quarter highlights and results are on a pre-tax basis and exclude special items.  See tables following “Safe Harbor/Risk Factors” for the nature and amount of these special items and any necessary reconciliation to U.S. GAAP.  Discussion of Automotive operating cost changes is at constant volume, mix, and exchange, and excludes special items.


mustang-splashimg


SECOND QUARTER HIGHLIGHTS

  • Ford gained market share in all regions compared with the second quarter 2008:
    • U.S. market share rose for Ford, Lincoln and Mercury by two points to 16.4 percent.  Canada and Mexico were both up, with increases of 2.8 and 1.1 points, respectively, helping Ford become Canada’s top-selling brand in June for the first time in 50 years
    • Ford’s share of the South American market improved one point to 10.4 percent
    • In Europe, Ford market share rose a half point to 9.0 percent, its highest second quarter level in the past 10 years
    • In the Asia Pacific Africa region, Ford market share was up one-tenth of a point
  • For the first time in the 28-year history of the Global Quality Research System (GQRS) study, U.S. Ford, Lincoln and Mercury brand vehicles had the fewest number of “things gone wrong” among all automakers.  Customer satisfaction with vehicle quality also continued to improve, reaching its highest level in North America and equaling Toyota
  • The company posted an eighth straight year of improvement in the J.D. Power Initial Quality Study.  Ford and Mercury brands placed among the Top 10 in initial quality
  • All Ford brands improved significantly in the J.D. Power APEAL study of customer satisfaction. The Ford F-150 and Ford Flex led their respective segments and were noted for their fuel efficiency and styling
  • Ford average vehicle transaction prices in the U.S. increased at a rate above the industry average, reflecting that customers are equipping these new products with high levels of content and features
  • Ford announced a $550 million investment to transform its Michigan Assembly Plant to build Ford’s next-generation Focus global small car and new battery-electric Focus
  • A new passenger car plant was launched in Thailand in partnership with Mazda to build Mazda2 and Ford Fiesta models, which will be exported throughout the Southeast Asian market beginning this fall
  • Ford qualified for $5.9 billion in loans from the U.S. Department of Energy for advanced fuel efficient vehicles. Ford plans to invest nearly $14 billion in the U.S. over the next seven years on advanced technology vehicles
  • Ford’s total sales in China were up 39 percent in the second quarter of 2009 aided by the strong launch of the new Ford Fiesta and continued strong sales of the Ford Focus
  • The new Ford Fiesta is now Europe’s No. 2-selling car, with more than 300,000 units sold since its introduction there last fall
  • The company successfully completed the European launches of the new Ford Transit Connect, Ford Ranger and Ford Transit ECOnetic
  • Began production of the 2010 Ford Taurus and the high-performance 2010 Ford Taurus SHO in North America.  Ford’s flagship sedan arrives soon in dealer showrooms
  • Production has begun for the 2010 Ford Transit Connect for North America, a purpose-built van for small businesses, which will debut this summer
  • Production is under way for the 3.5-liter V6 EcoBoost engine, which will be available this year on the Lincoln MKS, Ford Flex, Ford Taurus SHO and Lincoln MKT.  EcoBoost delivers the horsepower of a V8 with the fuel efficiency of a V6
  • The Lincoln MKZ, Ford Focus and Volvo C30 earned the “Top Safety Pick” award from the Insurance Institute for Highway Safety.  Ford has more IIHS “Top Safety Pick” awards than any other automaker

AUTOMOTIVE SECTOR +

Automotive Sector*

Second Quarter

First Half

2009

O/(U) 2008

2009

O/(U) 2008

Wholesales (000)

1,172

(390)

2,145

(948)

Revenue (Bils.)

$      24.0

$    (10.1)

$      45.4

$    (23.7)

Pre-Tax Results (Mils.)

$  (1,019)

$     (320)

$  (2,939)

$  (2,862)

*excludes special items

For the second quarter of 2009, Ford’s worldwide Automotive sector reported a pre-tax operating loss of $1 billion, compared with a pre-tax loss of $699 million a year ago.  The decline reflected lower industry volumes, actions to reduce dealer stocks, higher material costs and unfavorable exchange, largely offset by structural cost reductions, favorable net pricing and improved market share.

Worldwide Automotive revenue in the second quarter was $24 billion, down from $34.1 billion a year ago.  The decrease is primarily explained by lower volumes and unfavorable exchange, partly offset by favorable net pricing.  Total vehicle wholesales in the second quarter were 1,172,000, compared with 1,562,000 units a year ago.

Automotive structural cost reductions in the second quarter totaled $1.8 billion, including $1.2 billion in North America.  Manufacturing and engineering costs were $1.1 billion lower, largely reflecting the continued benefits of personnel actions in North America and Europe.  Overall, Ford reduced Automotive structural costs by $3.6 billion in the first half.

Net pricing was about $1.2 billion favorable, primarily explained by higher pricing in the U.S., reflecting the success of new products, including the Ford F-150, Ford Fusion and Ford Mustang, and the continuation of its disciplined approach on incentives.

North America: For the second quarter, Ford North America reported a pre-tax loss of $851 million, compared with a loss of $1.3 billion a year ago.  The improvement was primarily explained by structural cost reductions, favorable net pricing and improved market share, partly offset by lower U.S. industry volume, a reduction in dealer stocks, higher material cost and unfavorable exchange.  Second quarter revenue was $10.8 billion, down from $14.2 billion a year ago.

South America: For the second quarter, Ford South America reported a pre-tax profit of $86 million, compared with a profit of $388 million a year ago.  The decrease primarily reflects unfavorable exchange, higher commodity costs and lower volumes, partly offset by favorable net pricing and product mix.  Second quarter revenue was $1.9 billion, down from $2.4 billion a year ago.

Europe: For the second quarter, Ford Europe reported a pre-tax profit of $138 million, compared with a profit of $582 million a year ago.  The decline was primarily explained by lower industry volume, dealer stock reductions, higher material cost and unfavorable mix, partly offset by structural cost reductions, favorable net pricing and market share improvement.  European pre-tax results improved by about $700 million in the second quarter as compared to the first quarter of 2009.  This improvement primarily reflects higher industry volumes, a smaller decrease in dealer stocks, lower costs and favorable net pricing.  Second quarter revenue was $7.2 billion, down from $11.5 billion a year ago.

Volvo: Volvo is reported as an ongoing operation. The effects of “held-for-sale” accounting-related adjustments are reported as special items. For the second quarter, Volvo reported a pre-tax loss of $231 million, compared with a loss of $120 million a year ago.  The decline primarily reflected lower volumes, partly offset by continued progress on cost reductions and favorable exchange. Second quarter revenue was $2.9 billion, down from $4.3 billion a year ago.

Asia Pacific and Africa: For the second quarter, Ford Asia Pacific and Africa reported a pre-tax loss of $25 million, compared with a profit of $50 million a year ago.  The decline is more than explained by adverse market mix, partly offset by lower costs.  Second quarter revenue was $1.2 billion, down from $1.7 billion a year ago.

Other Automotive: Other Automotive, which consists primarily of interest and financing-related costs, reported a second quarter pre-tax loss of $136 million.  This included net interest expense of $271 million, partly offset by fair market value adjustments, primarily attributable to our investment in Mazda. †


ford_10_F150


FINANCIAL SERVICES SECTOR+

Financial Services Sector*

Second Quarter

First Half

(in millions)

2009

O/(U) 2008

2009

O/(U) 2008

Ford Credit Pre-Tax Results $      646 $      940 $      610 $      872
Other Financial Services (51) (11) (77) (69)
Financial Services Pre-Tax Results $      595 $      929 $      533 $      803
*excludes special items

For the second quarter, the Financial Services sector reported a pre-tax profit of $595 million, compared with a loss of $334 million a year ago.

Ford Motor Credit Company: Ford Credit reported a pre-tax profit of $646 million in the second quarter, compared with a pre-tax loss of $294 million a year ago.  The improvement primarily reflected lower depreciation expense for leased vehicles due to higher auction values, net gains related to unhedged currency exposures, a lower provision for credit losses and lower operating costs. These factors were partly offset by lower volume and non-recurrence of a gain related to the sale of approximately half of Ford Credit’s ownership interest in its Nordic operations.

Other Financial Services: Other Financial Services reported a loss of $51 million in the second quarter, compared with a pre-tax loss of $40 million a year ago. The decline is more than explained by a loss related to a real estate transaction.

OUTLOOK
Despite the severe global downturn, Ford said it continues to make progress on all four pillars of its plan:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team, leveraging Ford’s global assets

Ford said it remains on track to achieve or exceed all of its 2009 financial targets and most of its operational metrics.

The company said it now expects full-year market share to improve compared to 2008 in the U.S. and Europe, reflecting share increases in the first half and strong reception to new product introductions.

Ford expects 2009 U.S. industry sales will be between 10.5 million and 11 million units, consistent with the outlook previously communicated by the company. Based on first half European industry volume, Ford now expects that Europe’s full-year industry sales will be in the range of 15 million to 15.5 million units, which is higher than the previous outlook.

Ford expects third quarter 2009 production to be up, compared with 2008 and second quarter 2009 production.  This increase is largely due to tightly controlled inventories and higher market demand for our products.

Ford remains on track to exceed its $4 billion Automotive structural cost reduction target for 2009.  Second half cost reductions, however, will be less than the first half, reflecting the significant cost reductions achieved during the third and fourth quarters of 2008.

Ford expects Automotive operating-related cash flows in the second half to improve from first half levels consistent with its current planning assumptions. However, due to substantial improvements in the second quarter, third quarter levels may not improve sequentially.

Ford Credit expects its second half 2009 results to be lower than its first half 2009 results.  Ford Credit does not expect the net gains related to unhedged currency exposures or improvements in lease residual losses in the amounts experienced in the second quarter 2009 to continue.  A continuing decline in receivables will also contribute to lower second half 2009 results.

Based on its current planning assumptions, Ford has sufficient liquidity to fund its product-led transformation plan and provide a cushion against the uncertain global economic environment.  In addition, Ford will continue to pursue actions to improve its balance sheet.

The company remains on track to achieve its key 2011 financial targets, based on current planning assumptions, including overall and North American Automotive pre-tax results being breakeven or better, excluding special items, and Automotive operating-related cash flow being breakeven or better.

“Our product-led transformation is working, and we are pleased with our progress in the second quarter,” Mulally said.  “While the economic environment remains challenging, I am more convinced than ever we are on the right path to create a healthy and profitably growing Ford.”

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Related Articles


mulally-thumb

ALAN MULALLY

Title: President and CEO, Ford Motor Company – Joined Ford 2006

Alan Mulally is president and chief executive officer of Ford Motor Company. He also is a member of the company’s Board of Directors.

Prior to joining Ford in September 2006, Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes.  In that role, he was responsible for all of the company’s commercial airplane programs and related services. Mulally also was a member of the Boeing Executive Council and served as Boeing’s senior executive in the Pacific Northwest.

Mulally was named Boeing’s president of Commercial Airplanes in September 1998. The responsibility of chief executive officer for the business unit was added in March 2001.

Previously, Mulally served as president of Boeing Information, Space & Defense Systems and senior vice president of The Boeing Company. Appointed to that role in February 1997, he was responsible for Boeing’s defense, space and government business.

Beginning in 1994, Mulally was senior vice president of Airplane Development for Boeing Commercial Airplanes Group, responsible for all airplane development activities, flight test operations, certification and government technical liaison.

Earlier, Mulally served as Boeing’s vice president of Engineering, and as vice president and general manager of the 777 program.

Mulally joined Boeing in 1969 and progressed through a number of significant engineering and program-management assignments, including contributions on the 727, 737, 747, 757 and 767 airplanes.

Throughout his career, Mulally has been recognized for his contributions and industry leadership, including being named “Person of the Year” for 2006 by Aviation Week magazine and one of “The Best Leaders of 2005” by BusinessWeek magazine.

Mulally previously served as co-chair of the Washington Competitiveness Council, and sat on the advisory boards of NASA, the University of Washington, the University of Kansas, Massachusetts Institute of Technology and the U.S. Air Force Scientific Advisory Board. He is a member of the United States National Academy of Engineering and a fellow of England’s Royal Academy of Engineering.

He also served as a past president of the American Institute of Aeronautics and Astronautics (AIAA) and is a former president of its Foundation. Additionally, Mulally served as a past chairman of the Board of Governors of the Aerospace Industries Association.

Mulally holds bachelor’s and master’s of science degrees in aeronautical and astronautical engineering from the University of Kansas, and earned a master’s in management from the Massachusetts Institute of Technology as a 1982 Alfred P. Sloan fellow.

A native of Kansas, Mulally is a private pilot and enjoys tennis, golf and reading.


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sec_bannerTitle2009 Ford Motor Company Filings (Edgar Database)
SIC: 3711 – MOTOR VEHICLES & PASSENGER CAR BODIES
State location: MI | State of Inc.: DE | Fiscal Year End: 1231
(Assistant Director Office No 5)
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Filings Format Description Filing Date File/Film Number
8-K [Documents] Current report, items 2.02 and 9.01
Acc-no: 0001140361-09-016804 (34 Act)
2009-07-23 001-03950
09958235
8-K [Documents] Current report, items 5.02 and 9.01
Acc-no: 0000950123-09-023094 (34 Act)
2009-07-17 001-03950
09950196
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-015599 (34 Act)
2009-07-01 001-03950
09922177
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-015392 (34 Act)
2009-06-29 001-03950
09916367
11-K [Documents] Annual report of employee stock purchase, savings and similar plans
Acc-no: 0000950123-09-017895 (34 Act)
2009-06-26 001-03950
09912902
11-K [Documents] Annual report of employee stock purchase, savings and similar plans
Acc-no: 0000950123-09-017886 (34 Act)
2009-06-26 001-03950
09912873
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000070858-09-000248 (34 Act)
2009-06-10 005-30156
09884308
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-029961 2009-06-05
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-013720 (34 Act)
2009-06-02 001-03950
09868349
CORRESP [Documents] [Cover]Correspondence
Acc-no: 0001140361-09-012989
2009-05-21
8-K/A [Documents] [Amend]Current report, item 5.02
Acc-no: 0001362310-09-007967 (34 Act)
2009-05-20 001-03950
09842417
8-K [Documents] Current report, item 8.01
Acc-no: 0000950103-09-001104 (34 Act)
2009-05-14 001-03950
09824032
424B2 [Documents] Prospectus [Rule 424(b)(2)]
Acc-no: 0000950152-09-005168 (33 Act)
2009-05-13 333-151355
09822250
FWP [Documents] Filing under Securities Act Rules 163/433 of free writing prospectuses
Acc-no: 0000950103-09-001095 (34 Act)
2009-05-13 333-151355
09820272
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-011696 (34 Act)
2009-05-11 001-03950
09815438
FWP [Documents] Filing under Securities Act Rules 163/433 of free writing prospectuses
Acc-no: 0000950103-09-001074 (34 Act)
2009-05-11 333-151355
09815385
424B2 [Documents] Prospectus [Rule 424(b)(2)]
Acc-no: 0000950152-09-005081 (33 Act)
2009-05-11 333-151355
09815380
10-Q [Documents] Quarterly report [Sections 13 or 15(d)]
Acc-no: 0001140361-09-011558 (34 Act)
2009-05-08 001-03950
09810754
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-010766 (34 Act)
2009-05-01 001-03950
09788594
8-K [Documents] Current report, items 2.02, 2.06, and 9.01
Acc-no: 0001140361-09-010217 (34 Act)
2009-04-24 001-03950
09767992
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000780 (34 Act)
2009-04-08 005-30156
09739216
8-K [Documents] Current report, items 3.02 and 8.01
Acc-no: 0000950103-09-000779 (34 Act)
2009-04-08 001-03950
09739211
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000756 (34 Act)
2009-04-06 001-03950
09734535
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000755 (34 Act)
2009-04-06 005-30156
09734531
DEF 14A [Documents] Other definitive proxy statements
Acc-no: 0000950152-09-003486 (34 Act)
2009-04-03 001-03950
09730115
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-017176 2009-04-02
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-008566 (34 Act)
2009-04-01 001-03950
09722951
PRER14A [Documents] [Cover]Preliminary Proxy Soliciting materials
Acc-no: 0000950124-09-000086 (34 Act)
2009-03-27 001-03950
09709730
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-015526 2009-03-26
8-K [Documents] Current report, items 5.02 and 9.01
Acc-no: 0001140361-09-007891 (34 Act)
2009-03-25 001-03950
09704453
PRE 14A [Documents] Other preliminary proxy statements
Acc-no: 0000950124-09-000080 (34 Act)
2009-03-24 001-03950
09701442
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000600 (34 Act)
2009-03-23 001-03950
09698607
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000540 (34 Act)
2009-03-13 005-30156
09680839
8-K [Documents] Current report, items 1.01 and 8.01
Acc-no: 0001140361-09-006934 (34 Act)
2009-03-13 001-03950
09679326
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000456 (34 Act)
2009-03-04 001-03950
09656222
SC TO-I [Documents] Tender offer statement by Issuer
Acc-no: 0000950103-09-000455 (34 Act)
2009-03-04 005-30156
09655874
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-005695 (34 Act)
2009-03-03 001-03950
09651497
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-001943 (33 Act)
2009-02-27 333-157584
09643116
10-K [Documents] Annual report [Section 13 and 15(d), not S-K Item 405]
Acc-no: 0001140361-09-005071 (34 Act)
2009-02-26 001-03950
09635521
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000902219-09-000720 (34 Act)
2009-02-17 005-30156
09611293
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0001422848-09-000267 (34 Act)
2009-02-17 005-30156
09605575
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000070858-09-000147 (34 Act)
2009-02-13 005-30156
09602101
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0001144204-09-007350 (34 Act)
2009-02-12 005-30156
09593622
8-K [Documents] Current report, items 2.03, 8.01, and 9.01
Acc-no: 0001140361-09-002613 (34 Act)
2009-02-03 001-03950
09565728
8-K [Documents] Current report, items 2.02 and 9.01
Acc-no: 0001140361-09-002047 (34 Act)
2009-01-29 001-03950
09552857
8-K [Documents] [Financial Viewer] Current report, items 8.01 and 9.01
Acc-no: 0001157523-09-000291 (34 Act)
2009-01-16 001-03950
09530902
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-000142 (33 Act)
2009-01-08 333-156631
09515835
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-000141 (33 Act)
2009-01-08 333-156630
09515784
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-000244 (34 Act)
2009-01-05 001-03950
09503847

Filings & Forms

All companies, foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through EDGAR. Anyone can access and download this information for free. Here you’ll find links to a complete list of filings available through EDGAR and instructions for searching the EDGAR database.

Quick EDGAR Tutorial


Search for Company Filings

Related Links

Bill Ford Tells CNNMoney How We Avoided Bankruptcy

Hot Air:  Shocker: Ford posts a profit

Consumer Reports:  Best and worst used cars

The Daily Crux:  Detroit must “revolt against Komrade Obama” to survive

Economist:  A stony road


END

WSJ (Peggy Noonan) — Kaiser Health News — NPR (PhRMA Lobbying) — HR 2844 IH — HR 3074 IH — S 1249 IS


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Common Sense May Sink ObamaCare

By Peggy Noonan, July 24, 2009

It turns out the president misjudged the nation’s mood.

This is big, what’s happening. President Obama appears to have misstepped on a major initiative and defining issue. He has misjudged the nation’s mood, which itself is news: He rose from nothing to everything with the help of his fine-tuned antennae. Resistance to the Democratic health-care plans is in the air, showing up more now on YouTube than in the polls, but it will be in the polls soon enough. The president, in short, may be facing a real loss. This will be interesting in a number of ways and for a number of reasons, among them that we’ve never seen him publicly defeated before, because he hasn’t been. So we may be entering new territory, with new struggles shaped by new dynamics.

His news conference the other night was bad. He was filibustery and spinny and gave long and largely unfollowable answers that seemed aimed at limiting the number of questions asked and running out the clock. You don’t do that when you’re fully confident. Far more seriously, he didn’t seem to be telling the truth…

The White House misread the national mood. The problem isn’t that they didn’t “bend the curve,” or didn’t sell it right. The problem is that the national mood has changed since the president was elected. Back then the mood was “change is for the good.” But that altered as the full implications of the financial crash seeped in. The crash gave everyone a diminished sense of their own margin for error. It gave them a diminished sense of their country’s margin for error. Americans are not in a chance-taking mood…


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New OBAMACARE SHOCKER: More Hospice and Less Senior Care

Friday, July 24, 2009

n1111599162_3668_8789-2Here’s another example of the lies the American People are being thrown about the Obamacare process, especially the part about receiving the same quality medical attention via Obamacare that one receives now.

Folks its no joke, I know no other way of putting it, the Democratic Party wants to kill your Grandparents. If you are a baby-boomer I would worry because you are a target also.

Its nothing personal, just business.  It makes economic sense, its expensive to keep old people alive. That’s why the plan forces young people, who presently don’t have heath care to purchase it.  Keeping them healthy is cheap, the Democrats need them in the plan to help pay for the seniors they are going to let die.

Not only does the Congressional plan include mandatory classes for Seniors on “dying with dignity”  but they have added funds for additional Hospice care. I just received this email news flash from RedState

BREAKING NEWS UPDATE: A RedState source sat behind a top aide to Rep. Paul Tonko (D-NY) and heard the aide admit that “the increase in Hospice care which will solve the prolonging of life issue.” As you know, Democrats have been open about their desire to push seniors toward euthanasia as a cost savings option. In fact, the Democrats already have in the legislation a provision requiring senior citizens to receive instructions every five years on dying with dignity…


open-letter-to-congress-7-22-09


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Model’ Health Systems Press Case For Medicare Fix In Reform

By Phil Galewitz, Jul 20, 2009

When talking about his vision for the U.S. health care system, President Barack Obama points to places like the Mayo Clinic in Minnesota and Intermountain Healthcare in Utah, which are known for providing high-quality, low-cost care.

“We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere,” he said last month.

But officials at these institutions, called “integrated” because of the close relationships between hospitals and doctors–say the congressional health overhaul bills, at least in their current form, would do little to reward them or encourage others to follow their lead.

They’re pressing lawmakers to move much more aggressively to revamp the way Medicare pays for care to discourage unnecessary services and reward “value” over volume.

“Unless we get the incentives right, nothing else in health reform really matters,” said Greg Poulsen, senior vice president at Intermountain Healthcare, a nonprofit system of hospitals and doctors in Salt Lake City.

Partly at their behest, members of Congress from Minnesota and Wisconsin last month introduced a bill that would create a Medicare “value index” to change the way doctors are paid, but the legislation so far hasn’t been included in any health overhaul bills.

Because of that and other issues, several integrated systems expressed “significant concerns” about the House bill in a letter last week to Rep. Ron Kind, D.-Wis., one of the sponsors of the value-index legislation. They said the legislation doesn’t meet the goal of “compensating for quality rather than quantity.”

Nicholas Papas, spokesman for the Department of Health and Human Services, said the administration is pleased with the legislation and is “confident there will be opportunities to keep working with the committee leadership to refine the proposals that are emerging.”

Other ideas backed by the integrated health systems—such as “bundling” payments to doctors and hospitals together for a patient’s illness to encourage more efficient care—may get backing only as pilot programs. The Senate Finance Committee bill, which may go further, hasn’t been released yet.

The debate about Medicare, the federal health program for the elderly, is taking on new urgency amid growing questions about whether the health overhaul legislation would meet Obama’s goal of slowing costs, or “bending the curve.” Last week, Douglas Elmendorf, director of the Congressional Budget Office, said that the legislation would add to the federal deficit.

Obama, in his weekly address on Saturday, countered that by improving quality and efficiency, “the reforms we make will help bring our deficits under control in the long term.” And the White House renewed its push for shifting control of Medicare spending from Congress to a proposed independent commission—something it said would restrain costs over time.

Other Hospitals Worry

Medicare accounts for 22 percent of all U.S. health care spending and is often emulated by private insurers. It has enormous influence over how health care is paid for in the U.S.

But it’s unlikely that Congress will restructure its payment system any time soon, experts say. One reason is that the integrated health systems pushing for a rejiggering make up just a sliver of all the nation’s hospitals. Another is that most institutions aren’t ready to be more financially tied to their doctors or fear a payment change would hurt them.

About two-thirds of hospitals lose money on Medicare patients and many hospitals worry “they’ll lose even more money under payment reform,” said Len Nichols, director of the Health Policy Program at the New America Foundation, a Washington think tank.

In most communities, doctors work independently of their local hospitals and are paid by Medicare and most private insurers under fee-for-service arrangements. Hospitals, meanwhile, are typically reimbursed based on patients’ diagnoses, so they get paid for doing less for each patient. The incentives are sometimes at cross purposes, and aren’t based on how well patients do.

By contrast, Mayo doctors are paid salaries, and don’t get paid more for providing more care. And they take a team approach to coordinating care, working to reduce unnecessary tests and office visits and using electronic health records to monitor patients’ outcomes. These steps save money, but Mayo itself doesn’t benefit financially.

Based on their experience, Mayo and others say that “global” or “bundled” payments would prod all hospitals and doctors to improve and streamline their care. Under this idea, providers get a flat fee for treating a patient’s illness or handling a patient’s condition over time. For example, the government would pay a single fee for a patient’s hip replacement to cover the hospital stay, surgery and rehabilitation at home or in a nursing home. The fee would be higher for providers who delivered better care at lower cost.

“By having Medicare make a single payment to a team of providers, you change the culture and changing the culture is what allows the hospital and multiple doctors to act as a team as opposed to acting independently,” said Poulsen of Intermountain Healthcare.

Many hospitals are worried about proposals to “bundle” payments because of the possibility that managed care companies would end up controlling Medicare dollars previously paid directly to them. “Who gets the bundle is the key question,” said Linda Quick, president of the South Florida Hospital and Healthcare Association, which is based in Hollywood, Fla. and represents about 50 hospitals.

Overhaul proposals by the House Democrats and the Senate Health Education, Labor and Pensions Committee call for pilot programs to test new Medicare payment systems, including a new type of provider arrangement called “accountable health organizations,” groups of hospitals and doctors that get paid based on how well they meet cost and quality targets. But the programs don’t go far enough fast enough, the officials from integrated health systems say.

“There is not sufficient attention being paid to the fundamental problem of reforming Medicare,” said Oliver Henkel, chief government relations officer at the Cleveland Clinic. “We don’t yet see enough meat on the bones of Medicare payment reform.”

Payment Changes Lag

The last major Medicare payment change for hospitals was in 1983, when Medicare switched from paying hospitals a fee for each service to a fee based on a patient’s diagnosis, said Poulsen of Intermountain Healthcare. “That was a great first step, but we’ve yet to make a second,” he said.

Integrated health systems also are taking aim at the tremendous regional variation in Medicare spending. The program spends about $6,600 a year per enrollee in Minnesota compared to about $15,000 in southern Florida. The integrated systems, a number of which are in the Upper Midwest, want those disparities reduced, but such a change would likely draw strong opposition if it came at the expense of high-cost areas like New York and California.

Quick of the Florida hospital group said that her member hospitals expect to get paid less after a health care overhaul, but that she doesn’t expect “at the end of the day anyone will get paid more.”

Both the American Medical Association and the American Hospital Association say they favor additional study of new payment strategies, rather than any major revamping now.

That’s the approach Congress seems to be pursuing. In addition, lawmakers are on track to approve across-the-board federal payment reductions of $155 billion over 10 years for hospitals, reflecting a deal reached recently by major hospital groups, the White House and Senate Democrats. That agreement assumes that the hospitals will see increased revenues as reform legislation results in fewer uninsured Americans, whose care is now a financial burden.

Mayo and similar health systems object to the sweeping cuts. “Across-the-board cuts will be harmful to everyone and we think it is particularly bad to penalize the high-value organizations,” said Jeff Korsmo, executive director of the Mayo Clinic Health Policy Center. “We will have to violate our values in order to stay in business and reduce our access to government patients.”

As a result of low reimbursement rates, Mayo’s Arizona operations in 2007 stopped accepting new Medicare patients seeking primary care. About half of Mayo’s patients are on Medicare. Last year, Mayo said it lost about $840 million by treating Medicare patients, money it had to make up by treating privately insured patients.


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Drug Firms Pour $40 Million Into Health Care Debate

by Andrea Seabrook and Peter Overby

All Things Considered, July 23, 2009

One of the most powerful players in health care is a group called the Pharmaceutical Research and Manufacturers of America, or PhRMA. It represents just 32 brand-name drug companies, but it has so much influence that when Congress passes a bill, PhRMA almost always gets its way. One big reason why: PhRMA and its members have spent millions of dollars lobbying Congress as lawmakers work to overhaul health care.

$40 Million In Lobbying

Any firm that spends significant money lobbying Congress has to file a quarterly report. Monday was the deadline for the second quarter, providing a chance to peer into three critical months in the health care debate: April, May and June. That’s when Congress really got down to business with health care.

In those three months, PhRMA spent just over $6 million, which breaks down to about $2 million a month.

But the reports filed by the companies that belong to PhRMA reveal that during this same period, all but a few of them were running their own lobby shops as well. The drugmaker Pfizer alone spent $5.5 million. Amgen, Eli Lilly and GlaxoSmithKline spent about $3 million each.

Add it all up and you get this: In those three critical months, PhRMA and its member companies spent $40 million lobbying Congress. That’s more than $3 million each week.

PhRMA declined to speak to NPR for this story. Four of its biggest members turned down or did not respond to interview requests.

‘Patients Are Our First Concern’

However, PhRMA is speaking to the public — through advertisements.

“We need good coverage people can afford,” says one ad. “A little more cooperation, a little less politics, and we can get the job done this time.”

And PhRMA’s CEO, the former Louisiana congressman Billy Tauzin, has been out there touting the consortium’s support for a health care overhaul.

“We’re working with groups we never worked with before — Families USA, the American Agenda, labor, health care providers — that never stood together on the same platform,” says Tauzin. “We have every business reason to want to see this happen, and we have every moral reason to see this happen, because our patients are our first concern.”

An Effective, Powerful Lobbying Outfit

“Of course they’re supportive — they’re getting exactly what they want,” says Jerry Avorn, a professor at Harvard Medical School. He, for one, is not shocked to hear that brand-name drug companies spent $40 million in three months.

“It’s not surprising to learn this, because the pharmaceutical industry for years has been one of the most effective and powerful lobbying outfits in Washington, and it explains why we have a lot of drug policies in the U.S. that don’t look like drug policies in any other industrialized country,” says Avorn.

Avorn wrote a book about drugs and health care called Powerful Medicines. He compares the current fight to the one in 2003, when Congress last made a major health care change by adding prescription drug coverage to Medicare. Avorn says PhRMA’s lobbying efforts were so vast and so intense that the result is now written into the law.

Today the government is empowered to negotiate how much it pays doctors, hospitals, laboratories — almost anyone who does business with Medicare. Anyone except pharmaceutical companies. Avorn points out that negotiating drug prices is illegal in the United States.

Paying To Remove Issues?

If you want to know what PhRMA is getting this time, Avorn says just look at what’s not on the table during the debate:

Drug re-importation from Canada? Off the table.

Government-negotiated drug prices? Off the table.

“A lot of those seem to have been resolved even before the public discussion begins,” says Avorn. “And usually, as with the other interest groups involved, they seem to have been resolved in favor of the interest groups, rather than in favor of the public.”

More Lobbyists Than Congress Members

There’s something else drug companies bought with that $40 million: people.

PhRMA alone has 29 people lobbying for it. In the graphic on this page, you can dig into the reports, and you’ll find that PhRMA also hired 45 different Washington, D.C., lobbying firms to represent it in those three months of the second quarter.

Most of the drug companies that belong to PhRMA are running their own lobby shops as well, plus the biggest ones have also hired dozens of D.C. lobbying firms.

So think about it this way: There are far more people in Washington representing one party of the debate — the big drug companies — than there are members of Congress working on the health care bill.

This is not to pass judgment on the merits of PhRMA’s arguments, but rather to show just how much money and lobbying it uses to back them up — and the winning streak in Congress that follows.

Related NPR Stories


Brand-Name Drugmakers: A Prescription For Access

More than 300 lobbyists work Washington for the brand-name prescription drug industry. The trade group Pharmaceutical Research and Manufacturers of America alone spent $6.15 million on lobbying in the second quarter, from April 1 to June 30, this year.


[Interactive: Brand-Name Drug Makers: A Prescription For Access]

Data / Links From This Graphic:

NOTE: Not included in this graphic: $35 million spent by PhRMA’s member corporations, and unknown sums spent on grass-roots lobbying and advertising. Source: Lobbying disclosuresCredits: Jessica Deahl, Alyson Hurt and Peter Overby / NPR


Medicare Payment Improvement Act of 2009 (Introduced in House)

HR 2844 IH

111th CONGRESS

1st Session

H. R. 2844

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

IN THE HOUSE OF REPRESENTATIVES

June 12, 2009

Mr. KIND (for himself, Mr. BRALEY of Iowa, Mr. BLUMENAUER, Mr. WALZ, and Mr. INSLEE) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Improvement Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each fee schedule area. The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that fee schedule area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or fee schedule area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account the following:

`(I) Hospital readmission rates.

`(II) Hospital emergency department utilization for ambulatory care-sensitive conditions.

`(III) Hospital admissions for ambulatory care-sensitive conditions.

`(IV) Mortality amenable to health care.

`(V) Other items determined appropriate by the Secretary.

`(iii) ESTABLISHMENT- The quality component for each fee schedule area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a fee schedule area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State fee schedule area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the fee schedule area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among fee schedule areas.

`(ii) ESTABLISHMENT- The cost component for a fee schedule area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subparagraph (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each fee schedule area the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a fee schedule area, is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each fee schedule area available to the public by not later than January 1, 2011.

(d) Effective Date- The amendments made by this section shall apply to the Medicare physician fee schedule for 2012 and each subsequent year.


Medicare Payment Fairness Act of 2009 (Introduced in House)

HR 3074 IH

111th CONGRESS

1st Session

H. R. 3074

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician hospital service and for inpatient hospital services.

IN THE HOUSE OF REPRESENTATIVES

June 26, 2009

Mr. ELLISON introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician hospital service and for inpatient hospital services.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Fairness Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN HOSPITAL SERVICE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each fee schedule area. The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that fee schedule area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or fee schedule area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account the following:

`(I) Hospital readmission rates.

`(II) Hospital emergency department utilization for ambulatory care-sensitive conditions.

`(III) Hospital admissions for ambulatory care-sensitive conditions.

`(IV) Mortality amenable to health care.

`(V) Other items determined appropriate by the Secretary.

`(iii) ESTABLISHMENT- The quality component for each fee schedule area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a fee schedule area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State fee schedule area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the fee schedule area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among fee schedule areas.

`(ii) ESTABLISHMENT- The cost component for a fee schedule area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subparagraph (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each fee schedule area the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a fee schedule area, is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each fee schedule area available to the public by not later than January 1, 2011.

(d) Effective Date- The amendments made by this section shall apply to the Medicare physician hospital service for 2012 and each subsequent year.

SEC. 3. VALUE INDEX UNDER THE INPATIENT HOSPITAL PROSPECTIVE PAYMENT SYSTEM.

(a) In General- Section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) is amended by adding at the end the following new paragraph:

`(14) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each hospital service area. The value index shall be the ratio of the quality component under subparagraph (C) to the cost component under subparagraph (D) for that hospital service area.

`(B) PAYMENT ADJUSTMENT- Notwithstanding any other provision of this title, the payment amount made to a subsection (d) hospital under this subsection or section 1814(b)(3) for discharges during a fiscal year, after all other adjustments and add-ons effected under this title, shall be adjusted by multiplying such amount by the value index determined under subparagraph (A) for the hospital service area in which the discharges occur.

`(C) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or hospital service area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account quality measures reported by hospitals under subsection (b)(3)(B)(viii)(III) and shall, to the extent feasible, add additional measures relating to outcomes in hospitals.

`(iii) ESTABLISHMENT- The quality component for each hospital service area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a hospital service area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State hospital service area shall be the quality component for the entire State.

`(D) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under parts A and B for the hospital service area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among hospital service areas.

`(ii) ESTABLISHMENT- The cost component for a hospital service area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.

`(E) HOSPITAL SERVICE AREA- In this paragraph, the term `hospital service area’ means such an area as the Secretary shall define. In defining such areas, the Secretary shall use a methodology similar to that used in the establishment of the Dartmouth Atlas of Health Care.’.

(b) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1886(d)(14)(B) of the Social Security Act, as added by subsection (a), for each hospital service area available to the public by not later than January 1, 2011.

(c) Effective Date- The amendments made by this section shall apply to the discharges occurring on or after October 1, 2012.


Medicare Payment Improvement Act of 2009 (Introduced in Senate)

S 1249 IS

111th CONGRESS

1st Session

S. 1249

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

IN THE SENATE OF THE UNITED STATES

June 11, 2009

Ms. KLOBUCHAR (for herself, Ms. CANTWELL, and Mr. GREGG) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Improvement Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each hospital referral area (as defined by the Secretary). The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that hospital referral area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or hospital referral area (as so defined) basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) ADVISORY GROUP-

`(I) IN GENERAL- Not later than 60 days after the date of enactment of the Medicare Payment Improvement Act of 2009, the Secretary shall establish a group of experts and stakeholders to make consensus recommendations to the Secretary regarding development of the quality component. The membership of the advisory group shall at least reflect providers, purchasers, health plans, researchers, relevant Federal agencies, and individuals with technical expertise on health care quality.

`(II) DUTIES- In the development of recommendations with respect to the quality component, the group established under subclause (I) shall consider at least the following areas:

`(aa) High variation and high cost per capita utilization of resources, including rates of hospitalizations, number of visits and subspecialty referrals, and number of procedures (as determined by data under this title).

`(bb) Health outcomes and functional status of patients.

`(cc) The continuity, management, and coordination of health care and care transitions, including episodes of care, for patients across the continuum of providers, health care settings, and health plans.

`(dd) Patient, caregiver, and authorized representative experience, quality and relevance of information provided to patients, caregivers, and authorized representatives, and use of information by patients, caregivers, and authorized representatives to inform decision making.

`(ee) The safety, effectiveness, and timeliness of care.

`(ff) The appropriate use of health care resources and services.

`(gg) Other items determined appropriate by the Secretary.

`(iii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall–

`(I) take into account the recommendations of the group established under clause (ii)(I); and

`(II) provide for an open and transparent process for the activities conducted pursuant to the convening of such group with respect to the development of the quality component.

`(iv) ESTABLISHMENT- The quality component for each hospital referral area (as so defined) shall be the ratio of the quality score for such area to the national average quality score.

`(v) QUALITY BASELINE- If the quality component for a hospital referral area (as so defined) does not rank in the top 25th percentile as compared to the national average (as determined by the Secretary) and the amount of reimbursement for services under this section is greater than the amount of reimbursement for such services that would have applied under this section if the amendments made by section 2 of the Medicare Payment Improvement Act of 2009 had not been enacted, this section shall be applied as if such amendments had not been enacted.

`(vi) APPLICATION- In the case of a hospital referral area (as so defined) that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State hospital referral area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the hospital referral area (as so defined). The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among hospital referral areas.

`(ii) ESTABLISHMENT- The cost component for a hospital referral area (as so defined) shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subsection (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each hospital referral area (as defined by the Secretary) the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a hospital referral area (as defined by the Secretary), is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each hospital referral area (as defined by the Secretary) available to the public by not later than July 1, 2011.

(d) Effective Date- Subject to subsection (e), the amendments made by this section shall apply to the Medicare physician fee schedule for 2012 and each subsequent year.

(e) Transition- Notwithstanding the amendments made by the preceding provisions of this section, the Secretary of Health and Human Services shall provide for an appropriate transition to the amendments made by this section. Under such transition, in the case of payments under such fee schedule for services furnished during–

(1) 2012, 25 percent of such payments shall be based on the amount of payment that would have applied to the services if such amendments had not been enacted and 75 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had been fully implemented;

(2) 2013, 50 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had not been enacted and 50 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had been fully implemented; and

(3) 2014 and subsequent years, 100 percent of such payment shall be based on the amount of payment that is applicable under such amendments.


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END

Politico — The Examiner — AP Fact Check — Telegraph Blog — Lessons From The Mayo Clinic


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At big moment, President Obama goes small

By BEN SMITH | 7/23/09

…The president’s remarks on his chosen subject, health care, were cautious and choreographed, hemmed in on one side by the calculations of his professional wordsmiths, on the other by the delicacy of negotiations with two houses of Congress.

He never detailed his own plan or named a single victim of America’s broken system, and he spoke largely in the abstractions of blue pills, red pills and legislative processes. It’s not easy to turn delivery system reform into a rallying cry for change, but at times, it was as if Obama wasn’t even trying…


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Take the red pill, Mr. President

By: David Freddoso

… Last night, President Obama appeared to have taken the blue pill before his press conference. How else could he convince himself, the Congressional Budget Office’s numbers notwithstanding, that his health care reform bill will not increase both health care costs and the federal deficit? How else can he continue to make the argument that a massive expansion of government spending on health care will solve rather than exacerbate the current problems? How can he repeatedly express such absolute certainty that such a measure will easily pay for itself several times over in the long run? Why can he not at least acknowledge the possibility that it will become a costly and useless trillion-dollar boondoggle that follows in the footsteps of his stimulus package?

With his example of the red and blue pills, and another about whether a child’s hypothetical tonsils should be removed, President Obama unwittingly presents the real problem with his plan for reform….

… The Mayo Clinic which President Obama praised in his speech last night is the same Mayo Clinic whose president signed onto a letter to Congress yesterday, expressing fears that a government-option health care plan Obama wants to establish will do more of this cost-shifting. The letter states:

Under the current Medicare system, a majority of doctors and hospitals that care for Medicare patients are paid substantially less than it costs to treat them. Many providers are therefore already approaching a point where they can not afford to see Medicare patients. Expansion of a Medicare-type plan without a method to define, measure, and pay for healthy outcomes for patients will move many doctors and hospitals across this threshold, and ultimately hurt the patients who seek our care. We should not put more Americans into the current unsustainable system.

President Obama brushed off this concern last night near the end of his press conference, citing a hopeful but very vague blog post on Mayo’s website that went up a day before the letter was sent. In addition to ignoring budgetary and medical concerns, he repeated his dubious promise that his plan will not force millions of Americans out of health insurance plans they already have and like. He had no comforting words to convince anyone of the wisdom of creating two new taxes on employers — one of them a tax that punishes small businesses with a higher tax rate if they create more jobs — in the middle of a recession…


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FACT CHECK: Obama’s health care claims adrift?

By CALVIN WOODWARD and JIM KUHNHENN,

OBAMA: “We already have rough agreement” on some aspects of what a health care overhaul should involve, and one is: “It will keep government out of health care decisions, giving you the option to keep your insurance if you’re happy with it.”

THE FACTS: In House legislation, a commission appointed by the government would determine what is and isn’t covered by insurance plans offered in a new purchasing pool, including a plan sponsored by the government. The bill also holds out the possibility that, over time, those standards could be imposed on all private insurance plans, not just the ones in the pool.

Indeed, Obama went on to lay out other principles of reform that plainly show the government making key decisions in health care. He said insurance companies would be barred from dropping coverage when someone gets too sick, limits would be set on out-of-pocket expenses, and preventive care such as checkups and mammograms would be covered.

It’s true that people would not be forced to give up a private plan and go with a public one. The question is whether all of those private plans would still be in place if the government entered the marketplace in a bigger way.

He addressed some of the nuances under questioning. “Can I guarantee that there are going to be no changes in the health care delivery system?” he said. “No. The whole point of this is to try to encourage changes that work for the American people and make them healthier.”

He acknowledged then that the “government already is making some of these decisions.”

___

OBAMA: “I have also pledged that health insurance reform will not add to our deficit over the next decade, and I mean it.”

THE FACTS: The president has said repeatedly that he wants “deficit-neutral” health care legislation, meaning that every dollar increase in cost is met with a dollar of new revenue or a dollar of savings. But some things are more neutral than others. White House Budget Director Peter Orszag told reporters this week that the promise does not apply to proposed spending of about $245 billion over the next decade to increase fees for doctors serving Medicare patients. Democrats and the Obama administration argue that the extra payment, designed to prevent a scheduled cut of about 21 percent in doctor fees, already was part of the administration’s policy, with or without a health care overhaul.

Beyond that, budget experts have warned about various accounting gimmicks that can mask true burdens on the deficit. The bipartisan Committee for a Responsible Federal Budget lists a variety of them, including back-loading the heaviest costs at the end of the 10-year period and beyond.

___

OBAMA: “You haven’t seen me out there blaming the Republicans.”

THE FACTS: Obama did so in his opening statement, saying, “I’ve heard that one Republican strategist told his party that even though they may want to compromise, it’s better politics to ‘go for the kill.’ Another Republican senator said that defeating health reform is about ‘breaking’ me.”

___

OBAMA: “I don’t know, not having been there and not seeing all the facts, what role race played in that. But I think it’s fair to say, number one, any of us would be pretty angry; number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home, and, number three, what I think we know separate and apart from this incident is that there’s a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately.”

THE FACTS: The facts are in dispute between black scholar Henry Louis Gates Jr. and the white police sergeant who arrested him at his Cambridge, Mass., home when officers went there to investigate a reported break-in. But this much is clear: Gates wasn’t arrested for being in his own home, as Obama implies, but for allegedly being belligerent when the sergeant demanded his identification. The president did mention that the professor was charged with disorderly conduct. Charges were dropped.

___

OBAMA: “If we had done nothing, if you had the same old budget as opposed to the changes we made in our budget, you’d have a $9.3 trillion deficit over the next 10 years. Because of the changes we’ve made, it’s going to be $7.1 trillion.”

THE FACTS: Obama’s numbers are based on figures compiled by his own budget office. But they rely on assumptions about economic growth that some economists find too optimistic. The nonpartisan Congressional Budget Office, in its own analysis of the president’s budget numbers, concluded that the cumulative deficit over the next decade would be $9.1 trillion.


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Memo to President Obama: America’s doctors are neither stupid nor dishonest

By Stephanie Gutmann

As I write this the polls are not yet in on how many Americans actually watched President Obama’s press conference on Wednesday night or if the 55-minute exercise helped sell his ideas for health care overhaul. But there’s one group he clearly didn’t help himself with: America’s hardworking, generally honest, generally top-notch doctors.

Already radio talk shows like Bill Bennett’s “Morning in America” report being deluged by calls from doctors who are furious about what they heard. And who can blame them? The president used incredibly condescending language, implying over and over again that there is waste in the system, not because of over-regulation and fear of lawsuits, but because doctors are lazy or informed or – shudder! – “out for profit.”

Asked if Americans are going to have to “give anything up to make this [sweeping overhaul including coverage of the entire population] happen”, the president replied sunnily: “They’re going to have to give up paying for things that don’t make them healthier. And I – speaking as an American – I think that’s the kind of change you want.”


THE HEALTH CARE BLOG

Op-Ed: Healthcare Reform Lessons From Mayo Clinic

By LEONARD L. BERRY and KENT D. SELTMAN

mayoThree goals underscore our nation’s ongoing healthcare reform debate:1) insurance for the uninsured, 2) improved quality, and 3) reduced cost.  Mayo Clinic serves as a model for higher quality healthcare at a lower cost.

President Obama, after referencing Mayo Clinic and Cleveland Clinic, advised, “We should learn from their successes and promote the best practices, not the most expensive ones.”  Atul Gawande writes in The New Yorker, “Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country-$6,688 per enrollee in 2006.”

Two pivotal lessons from our recent in-depth study of Mayo Clinic demonstrate cost efficiency and clinical effectiveness.

1. Patient-first medicine.  Throughout its 140-year history, Mayo Clinic has never put money first but lives its primary value:  the needs of the patient come first.  Mayo doctors, as all employees, are on salary.  No doctor earns more by ordering an extra test or procedure.  No doctor earns less by referring a patient to another Mayo physician with more expertise.

Core values guide organizational behavior, and Mayo Clinic’s patient-first core value guides the more than 43,000 employees.  For instance, the head of transfusion medicine noticed a day-shift technician working at 2:00 a.m. as he dealt with an emergency.  The technician explained that she was redoing a test to correct an earlier mistake.  “Why not repeat it the next day?” she was asked. She replied, “I can’t have patients at Mayo Clinic waiting an extra day in the hospital because I fouled up a test.”

Dr. Robert Waller, who retired as Mayo Clinic CEO in 1999, remembers a conversation with a cardiologist whose patient needed a pacemaker. Option A: a Medicare-approved model requiring relatively involved surgery and several days of postoperative hospitalization.  Option B: a new model that could be implanted more simply with only one day of hospitalization.  Option B was not yet Medicare-approved and meant no
reimbursement to Mayo.  Dr. Waller recalls:  “This was a no-brainer – use the pacemaker that is best for the patient.”

Healthcare is a sacred service.  The patient’s quality of life – and life itself – is at stake.  The needs of the patient must be at the center of healthcare reform. This will require, among other steps, revamping doctors’ compensation to encourage efficient and effective care that truly serves patients.  Until we pay doctors for better care, rather than for more care, we cannot successfully reform healthcare.

2. Team medicine.  Mayo Clinic does not have a monopoly on highly capable doctors and nurses, but it has a competitive advantage because its highly capable clinicians pool their knowledge.  When clinicians truly work together, as at Mayo, the result is more efficiency, less duplication of effort, and a greater likelihood of correctly diagnosing and effectively treating a patient earlier in the process.

Medical care in America is highly fragmented, impeding both efficiency and effectiveness.  Patients with multiple or complex illnesses are often treated by physicians from different medical practices who may not communicate with one another.  Not so at Mayo Clinic, which functions like a medical department store with staff experts for each medical specialty.  Working in an organizational culture that demands teamwork and using tools such as an electronic medical record and a sophisticated communication system, Mayo clinicians collaborate to provide the specific expertise needed by the individual patient.

Consider the case of “Don,” who endured an undiagnosed tumor on the base of his tongue for two years.  Both his dentist and an ENT physician told him the discomfort in his mouth was not clinically significant.  When another ENT doctor diagnosed cancer and recommended immediate surgery (that would end Don’s ability to speak), Don contacted Mayo Clinic.  Two weeks later he met his Mayo team of three physicians (ENT, medical oncology, and radiation oncology specialists).  The team dismissed surgery and recommended radiation and chemotherapy instead.  Today, five years after Don’s initial cancer diagnosis, he is cancer-free and living a normal life.  He still sees his initial physician team at six-month’s check-ups. Don’s story illustrates Mayo Clinic at its best.

Teamwork is vital to improving medical efficiency and effectiveness, and health reform must include bold investments that encourage and enable it.  Encouraging medical practices, financially and otherwise, to coordinate a patient’s healthcare over time (called “patient-centered medical homes”) should be in the health reform blueprint.  So should the transformation from proprietary paper medical records to universal electronic records available as needed by treating clinicians.

A time to learn.  Few organizations survive for more than 100 years, much less thrive like Mayo Clinic. Mayo Clinic is not perfect.  Its integrated, multispecialty medical model works wonderfully — most of the time.  Stories like Don’s occur each day at Mayo, but the Clinic cannot help every patient.  Nor is Mayo Clinic the only medical institution that merits consideration in healthcare reform discussions.

Yet, the way Mayo conducts its business, governs itself, and sustains focus on its core values of patient-first needs and collaborative medicine is deeply instructive.  Never have such lessons been more important to our nation’s healthcare.

Leonard L. Berry and Kent D. Seltman, authors of Management Lessons from Mayo Clinic (McGraw Hill, 2008).  Berry holds the M.B. Zale Chair in Retailing and Marketing Leadership in the Mays Business School, Texas A&M University.  Seltman retired from Mayo Clinic in 2008 after serving as director of marketing from 1992 through 2006.

More on the Mayo Clinic:


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Dick Morris/Eileen McGann: RHETORIC V. REALITY: HEALTH CARE BY ORWELL


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