Healthcare Daily Digest for Thursday, 4 April: Wells Fargo Bank in Dutch Over Medical Capital Holdings Financial Mix-Up

What I’m not going to do is quote lyrics from The Music Man, speicifically “The Wells Fargo Wagon,” one of the bleakest songs about incipient depression and loneliness ever committed to paper. But we are going to talk about Wells Fargo, and how they’re kinda in dutch over some mishigas with Medical Capital Holdings Inc.

The relationship between Wells Fargo and Medcial Capital Holding was supposed to be: Wells Fargo would disburse money to Medical Capital; Medical Capital would then offer financing to medical care providers by purchasing their outstanding receivables.

This would make investors happy, because it takes money and turns it into even more money, and you, if you were the investor, didn’t have to do anything but deal with those awful E-Trade commercials with the talking babies.

However, as it turns out, investors are claiming that ” the bank failed to stop Medical Capital from diverting their money to such things as non-medical projects and excessive administrative fees.” Those are things that take money and don’t turn it into more money. And you would have sat through those baby commercials for nothing.

So, where we are now: “A federal judge has rejected a bid by Wells Fargo & Co to dismiss a lawsuit by investors who said it failed in its role as trustee for debt issued by a financing company that collapsed in 2009 in an estimated billion-dollar fraud.”

As it turns out, to even exist, Medical Capital needed that money for things like expensive overhead and non-medical projects. And even with that cash, they weren’t able to make a go of it. This made the investors very sad.

“It is a tremendous result for us to be able to go forward on claims that could total hundreds of millions of dollars.” That’s Mark Molumphy, a lawyer at Cotchett Pitre & McCarthy who represents the investors, in a Wednesday phone interview with Reuters. To be clear, while that “tremendous results for us” may sound like Molumphy is excited about this on behalf of his clients, the investors — it’s actually “tremendous for us” as in: his firm, which will be making a tidy profit should things go in their favor.

Thursday’s headlines:

The Question: Will Health Care Reform Raise Insurance Premiums?: The answer? Maybe? Maybe not? Who knows. Maybe David Murphy from MSNBC can tell us.

Letters to the Editor: These letters are in response to a Los Angeles Times article titled “The Starbucks syndrome in healthcare.”

Wells Fargo Isn’t the Only One Facing Financial Repercussions: “Utah’s largest hospital chain, Intermountain Healthcare, agreed to pay the federal government $25.5 million after admitting that, over a decade, it illegally paid more than 200 of its referring physicians.”

Health Advice From a Purveyor of Fried Chicken: “Popeyes’ president claims that Obamacare won’t affect the company’s bottom line because most employees won’t be able to afford the company’s health care plan & will instead pay a penalty. How will hourly workers get the coverage they need?”

Who’s To Blame For Our Rising Healthcare Costs?: UGH. If I just say, “Me! It’s Me! I’m to blame! Blame me!” can we stop pointing fingers and just, you know, FIX IT?