Names In the News

Kaiser's Bottom Line

In a December 1995 speech to other HMO managers, a Kaiser Permanente executive boasted about putting "the bottom line" first and about a 1995 plan to cut hospital admissions by 30 percent. The executive said the plan was drafted when he and a colleague were drinking whiskey heavily during a delayed flight from San Jose, California to Dallas, Texas.

The transcript of the speech was filed in a Texas lawsuit that Kaiser settled in December 1997 for $5.3 million. In that case, the family of a Texas man claimed his death was due to Kaiser cost-cutting.

In the speech, Vogt revealed that "the first thing that ever comes out of a Kaiser CEO now is 'what's the bottom line.'" He added, "I'm trained to do that now almost automatically."

An important way to cut costs, Vogt said, is to get patients out of the hospital early. But Vogt doesn't like the use of the word "discharge." "We need to get away from this word 'discharge,'" Vogt told his colleagues. "There is no such thing as discharge. We should get rid of the word. You're transitioning the patient into another health care environment."  

The GM Papers

It took the threat of jail time to force attorneys for General Motors to agree to turn over internal documents that are likely to undermine the giant automaker's defense in a Ft. Lauderdale, Florida product liability case.

Broward County Judge Arthur Franza ordered GM to turn over the documents in a lawsuit brought by the parents of 13-year old Shane McGee. Shane was killed in 1991 when the fuel tank in the 1983 Oldsmobile Cutlass station wagon in which he was riding burst into flames after being struck in the rear by another vehicle.

GM fought to keep the documents secret, but at a showdown hearing on February 5, Judge Franza threatened "very severe sanctions" if GM did not obey his order.

On February 9, GM finally produced the documents that it had sought for years to keep secret. After an evidentiary review, Judge Franza ordered a number of them admitted into evidence.

The legal skirmishing centers around a dispute between two General Motors engineers, Edward Ivey and Ronald Elwell.

On June 29, 1973, Ivey, then an engineer at Oldsmobile, prepared a two-page report which calculated that fatalities related to fuel-fed fires were costing GM $2.40 per automobile. Ivey multiplied 500 fatalities times an estimated $200,000 per fatality ($100 million) and divided that by 41 million automobiles. "This cost will be with us until a way of preventing all crash-related fuel-fed fires is developed," Ivey concluded.

The Ivey report, as it is known, has been used by plaintiffs' attorneys against GM in fuel-fed fire cases for almost 10 years. But there has been an ongoing dispute between Ivey and Elwell about why Ivey prepared the report and what he meant by it.

GM and Ivey have denied Elwell's claims that Ivey prepared the report at the request of GM management. 

The February documents tend to support Elwell's version of events. One of the documents is apparently a legal summary of an interview conducted with Ivey on November 3, 1981. In the document, Ivey said he wrote the report "for Oldsmobile management" and engineers to "assist them in 'trying to figure out how much Olds could spend on fuel systems.'"

GM attorneys conclude that "Ivey is not an individual whom we would ever, in any conceivable situation, want to be identified" to plaintiffs' attorneys in fuel-fed fire cases "and the documents he generated are undoubtedly some of the potentially most harmful and most damaging were they ever to be produced."

In a statement, GM said it could not comment on the specifics of the McGee case, but that "any suggestion that GM does not care about occupant and product safety is reprehensible and couldn't be further from the truth."

Assault with Lead Dust

In a landmark environmental crimes prosecution, a Massachusetts metals company and its chief executive officer pled guilty in November 1997 to assault and battery with a dangerous weapon for exposing company employees to high levels of lead dust and other hazardous wastes.

The case represents the first time in Massachusetts history that an individual has been convicted of assault and battery for allegedly ignoring environmental regulations and jeopardizing workers' health.

Sutton, Massachusetts-based Worcester and Consolidated Smelting and Refining Company and its CEO Lowell Fiengold each pled guilty to two counts of assault and battery by means of a dangerous weapon.

State court Judge Daniel Toomey sentenced Fiengold to a suspended one-year sentence, and ordered him to pay a $40,000 fine and serve 300 hours of community service. The corporation, which melted down scrap metal, including lead, for eventual resale, was fined $2,500, the maximum allowable under state law.

Fiengold and his company allowed toxic lead dust and fumes to escape from the plant's metal smelting operations and to infiltrate the building office, where one of the victims worked as a secretary. The other victim conducted smelting work and deliveries for the company from 1993 to 1995.

A federal inspector determined that lead smelting activities resulted in airborne concentrations of lead more than 200 times the federal permissible exposure limit.    

-- Russell Mokhiber