Stories I’d like to see

1.     Looking at ‘Ratchet, Ratchet and Bingo’:

In his 2006 annual report to shareholders , Warren Buffett had this to say about compensation consultants:

Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement.

Buffett went on to explain how these consultants simply make outsized pay in any industry the norm by ratcheting up the average, so that all executives in a given “peer group” have to get what everyone else gets:

Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish “goodies” are showered upon CEOs simply because of a corporate version of the argument we all used when children: “But, Mom, all the other kids have one.” When comp committees follow this “logic,” yesterday’s most egregious excess becomes today’s baseline.

During his talk a year ago at the Berkshire Hathaway annual shareholders meeting, when Buffett called these compensation consultants prostitutes, his vice chairman Charles Munger objected.  “Prostitution would be a step up for them,” Munger said.

1)   Fiscal cliff Medicare meddling:

According to this report in the New York Times, last-minute negotiations on the fiscal cliff included new congressionally imposed limits on what Medicare will pay for “nonemergency ambulance transportation of kidney dialysis patients” and “would reduce Medicare payments … for stereotactic radiosurgery, complete course of treatment of cranial lesion(s) consisting of one session that is multi-source Cobalt-60 based.’”

Yes, Congress really does get that far down in the weeds when it comes to dictating how Medicare doles out more than $500 billion a year. This includes, for example, overseeing the payments Medicare allows, by state, for designated categories of ambulance rides (“critical,” “emergency,” “air evacuation,” etc.).

There are two obvious stories here: What scandalous overpayments or abuses in those nonemergency kidney dialysis ambulance trips triggered this intervention, and who in Congress pushed for it? Similarly, what’s the story behind those Cobalt-60 treatments?