This action might not be possible to undo. Are you sure you want to continue?
org> Cc: John Garcia <email@example.com> Subject: Follow Up with John Garcia Dear Mr. Halvorson: Mr. Garcia and I spoke a few hours ago. He said that he speaks on your behalf, but he could not provide answers. We have learned with other very large corporations that telephone communication often gets lost or misconstrued, so I summarize here my recollection of our conversation. Since Mr.Garcia said he'd have to check with lots of people before responding to straightforward questions, I address this to you directly, as the Chief Executive Officer. In the interests of fostering a dialogue, Courage Campaign invites you to participate in an open forum conference call to advance the understanding of our 700,000 members and the general public as to the following. 1. Kaiser is a not-for-profit company that I and all California and US taxpayers subsidize. As such, it must operate in the public interest. Why should Kaiser enjoy that status if it uses taxpayer subsidy dollars to "lobby" the legislature and the governor to the tune of $700,000 (this year, as I understand) in opposition to regulation? How does your opposition to public input and regulation further my subsidy of you? 2. Kaiser has made over $5 billion in profits since the beginning of 2009. It has made $921 million in profit in the first quarter of 2011, more than $10 million per day. Kaiser pays no federal, state, or local taxes on that profit. As example, to address only one portion of Kaiser's potential tax liability, if Kaiser simply paid state corporate income taxes at the same rate as other California for-profit service providers, our state would have received nearly $450 million in tax revenues for the period between January 1, 2009 and March 30, 2011. Yet even though all Californians subsidize you, you refuse to allow us to participate in how you charge your policy holders and what you do with money that is given to you as part of the public trust. Why is that appropriate or fair? 3. You are compensated nearly $8 million per year, which is greater than the median compensation for Fortune 500 CEOs, yet your company also benefits from a taxpayer subsidy and from lack of regulation. Why is your compensation as head of a not-for-profit public trust appropriate or fair to the taxpayers and your policy holders? 4. You have refused to negotiate in good faith with 4,000 professionals for over a year. They state that your lack of willingness to enter into good faith negotiations harms policy holder safety. How is your unwillingness to compensate these employees fairly, with at least one pension plan when you and your colleagues benefit from as many as eight different plans, good for tax payers, policy holders and the community at large? Do you believe that you are infinitely more valuable than say a respiration therapist or nurse, such that you benefit from multiple pension plans while that healthcare professional, who makes life and death decisions every day, receives no pension plan?
5. Mr. Garcia said that Kaiser does not believe that politicians have enough of a long-term view to determine appropriate rates. He said that Kaiser alone has that ability. While arrogant, this assertion might be taken slightly more seriously if you did not enjoy a taxpayer subsidy. At least Mr. Garcia could say with a straight face that a for-profit Kaiser must make money for its shareholders, so it opposes regulation which could make less money for shareholders. But you are a not-for-profit. You operate with my money and that of 36 million other Californians and indeed all Americans. How is it even conceivable to suggest that the people we elect to public office, who are accountable to all of us in elections, have a lesser interest in the public good than Kaiser? 6. Mr. Garcia said that Kaiser provides excellent service to its patients and rate payers. I hope that is true. How do you decide the appropriate amount of money to charge your customers, particularly given your immense profits and executive compensation packages? Is it good for more than 300,000 California policy holders for you to raise rates on them by as much as 23% in 2011, even while your company makes so much money? Why do you distrust public officials to have a role in determining what is fair and just? 7. Mr. Garcia said that Kaiser does "all sorts of things" in the community that make Kaiser popular. Those "things," according to Mr. Garcia, include charitable donations. That's great. Do more. As I told Mr. Garcia, Exxon also does those "things" and, in fact, multiple studies suggest that for-profit healthcare providers actually match or even exceed the "community benefits" provided by their not-for-profit competitors. At least Exxon and for-profit healthcare providers do those "things" without legally taking money out of my pocket. Warren Buffett, the CEO of Berkshire Hathaway, opposes corporate donations because he says that shareholders should make money and give as they wish. In his view, corporations should not be in the business of determining the use of shareholder money other than to make money. As a not-for-profit, Kaiser determines the use of taxpayers' and rate payers' money without the burden of shareholder accountability or various financial disclosure requirements that are in fact greater for publicly traded for-profit corporations than for non-profits (as limited as requirements for publicly traded corporations are themselves). To the extent that taxpayers, by virtue of Kaiser's tax exemptions, are stakeholders in Kaiser's activities, why should we believe that Kaiser is a better allocator of resources for our good than school districts, county departments of public health, or other public service providers that are currently being starved to death for lack of revenue? 8. Mr. Garcia said that Kaiser enjoys a good public image. I am sure that is true. And that is part of the problem. Kaiser is using goodwill it has established over the years to evade public scrutiny, deny the public's right to regulate rate increases and to determine on its own what it will do with its enormous profits. In short, Kaiser is unaccountable and uses its considerable lobbying budget to keep it that way. The $700,000 Kaiser has spent this year on lobbying against AB 52 and for legislation that helps you remain above state lawmakers and the public is itself publicly subsidized. How can you justify that? As a courtesy and sign of respect, I ask that you not respond to me and Courage's members through a phalanx of PR flacks, of which you no doubt have many. Since AB 52 will be considered by the Senate committee next week, time is of the essence. Therefore, we look forward to a reply not later than 4:00PM on Friday. Delays in response will make clear that you do not take our members or frankly California taxpayers seriously.
We look forward to hearing from you. Enjoy your travels. Cordially, Richard D. Jacobs -----Richard Jacobs Chair and Founder Courage Campaign/Courage Campaign Institute 7119 West Sunset Boulevard, No. 195 Los Angeles, California 90046 323-969-0160V 323-969-0157 F http://couragecampaign.org Rick@couragecampaign.org twitter: rickjacobs