Archive | November, 2009

Problem created?

16 Nov

As we rush headlong into health care reform or whatever it is we are doing, one thing is certain.  That is, we will increase the demand for health care services.  If one believes the notion that people with no or inadequate health insurance forsake health care, then it stands to reason that once they obtain such coverage the demand for services will rise (and that in the absence of medical care management and malpractice reform these folks will be subject to the same level of over treatment and defensive medicine as the rest of us). 

Not only does that not bode well for health care costs, who is going to provide that care and will the 255,000,000 Americans already covered find it more difficult to obtain care?  There is already a declining number of physicians accepting Medicare patients, but that is not the real problem, it is the growing shortage of physicians in general. 

docoplerating

Next!

This may well be one of the classic cases of unintended consequences; we rapidly expand coverage to 45 million more people, we lessen the individual concern for the cost of care and in the process will greatly increase the waiting time for health care and perhaps in some cases lower the quality of care as well.

Politicians have a knack for simplistically solving problems, i.e. the insurance companies set too high premiums and abuse the system hence, we will require them to accept all comers, we will approve their premiums and will expand coverage…problem solved!

Sadly, we may all learn that it is more like, problem created.

 

Alternative energy

15 Nov

The earth is warming, the earth is cooling, whatever it is doing is caused by man, or not…who knows the truth or even what we can do about it?

IMG_1971

I thought all I had to worry about was a Tsunami

No matter, alternative energy is here to stay and as we seek to harness the wind, the sun and whatever else is in fashion (and where there is money to be made), we need to keep in mind the aesthetic cost of all this.   Perhaps that means little to many, after all the sky is falling so to speak, but some of us think it may be better to defile smaller portions of environment rather than ruin our views, our skylines and the little beauty we have remaining.   It seems wherever I go I see monster wind generators popping up, the ancient hills of Sicily, all over Southern California, Nantucket Sound (not yet, but in the works) and even on a rapidly disappearing pristine Hawaiian island.  This picture at the right is one of several wind farms to appear on the hills of Maui, gee it fits right in with the palm trees.  On the other hand, our island paradise also needs a K-Mart, Costco and Home Depot, but they no longer grow pineapples commercially, probably to make room for a Wal-Mart, how do you define paradise again?

electric car

Next step is to place the wind generator on the car

Of course, after we generate all this clean energy, we have to use it so now we turn to plugging in our cars, be careful not to trip over the cable when you enter your garage. Fill er up, I’ll be back in a few hours.

Everyone wants to be green, it is politically correct and no doubt part of the CHANGE we (somebody) voted for.  I wonder how many windmills it will take to generate all of our energy needs  watch it, better duck.  I think the ideal place for a wind generator is on Capital Hill, surely there is plenty of wind generated there and even if there isn’t, we would likely be better off if the whole place ran out of power from time to time.

As ugly as wind farms are, they don’t don’t hold a candle to hundreds of acres of solar panels, but at least the panels don’t make noise.  

The best of both worlds

I’m just glad I am not a bird these days, first I get blinded by a field of reflecting panels and then I fly into a wind farm, I may have a better chance with a 737 (assuming the 737 doesn’t fly into a wind farm as the pilot is blinded by the reflecting panels).

sailor_sick_lg_clr
I’m feeling a little green myself

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Medicare cuts in physician payments

14 Nov

Supporters of a bill to stop cuts in Medicare reimbursement to physicians and freeze those rates for the next ten years say unless that is done it will encourage doctors to stop seeing Medicare patients.

“We want to make sure that more doctors take Medicare patients, not less .” said Harry Reid

  Cool it with this stuff Harry, how are we going to explain doctors not taking patients in the public option?

This bill went nowhere in a rare exhibition of common sense, however the attempt will be back no doubt.

But one has to wonder what the proponents of a” robust” public option using Medicare payment rates are thinking.

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A common sense idea

13 Nov

One of the issues within healthcare reform is that of pre-existing conditions. Who wants to write an insurace policy on a house with a fire smoldering in the cellar? Unfortunately we are not talking about houses but people. Congress in it’s infinite wisdom has eliminated virtually all underwriting requirements from health insurance. That’s good for those without coverage and not so good for those with coverage because costs are going up to cover these people.

For years employers with large plans have covered all employees and all family members upon hire or shortly thereafter regardless of health, but working people have a lower risk than the general population.

The Massachuetts experience shows that by taking all comers even those who have ignored the mandate to carry insurance, costs go up from adverse selection because some people will seek insurance only when they need it…a small fire has started in the basement.

Even Medicare recognizes this risk and charges more for those who do not enroll within a specific period of eligibility.

This move by Congress does not make health care affordable. It would seem reasonable to apply some standard to all this. For example, after an initial open enrollment period, those applying for insurance for the first time would have to meet some insurability standard or pay a surcharge for their delay (just like Medicare).

Contrary to popular opinion in Washington, there is an element of personal responsibility in all this or there should be. Why should responsible Americans pay extra for those who game the system?

More new taxes

12 Nov

Bloomberg is reporting that Sen Reid is considering another new tax to help fund health care legislation (I’m giving up on the reform idea).

“Reid’s proposal, being advanced by Massachusetts Senator John Kerry, would apply Medicare taxes to non-wage income earned from capital gains, dividends, interest, royalties, and partnerships for American couples earning more than $250,000, the aides said. He’s also considering an alternative that would simply increase the 1.45 percent Medicare tax on salaries of couples who earn more than $250,000, one of the aides said.”

Those among us who see no problem soaking the rich should be careful what they ask for because these health care proposals will get out of control cost wise real fast. $250,000 is only the starting point for additional taxes.

What is most disconcerting about this proposal is the connection between new entitlements and existing Medicare. We have yet to deal with the Medicare fiscal crisis and we are tapping that vehicle for other purposes.

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Why we cant fix health care in America

11 Nov

Will will never solve the problem of health care in the US because we don’t understand it; my 47 years designing and managing health benefits tells me that. My equal number of years hearing claim appeals tell me average people have expectations that are both unrealistic and counter to good, affordable health care. Why are oral contraceptives, or an elective vasectomy insurable medical risks any more than a boob job? Why do we insure routine child care and immunizations? When I was raising my four children in the 1970s those items were not covered by insurance and we had to pay 20% of the retail cost of a prescription rather than a $10.00 copay. It was part of the cost of raising children like buying them food and clothing Yet, today anything and everything remotely related to health is expected to be paid by someone else whether it be the employer or insurance company and we can’t figure out why health insurance premiums keep rising. Oh, right, it’s the CEOs pay at least according to the leaders of Congress.

Now that we are about to turn the definition of covered benefits in health care plans over to the Congress, we have created the worst possible scenario for cost management. To see where this is headed simply look at the history of coverage mandates from the states. Our policy makers do not appear to see the connection between benefit coverage and premiums or between the cost of a service and premiums or the frequency or intensity of health care and premiums.

This legislation solves for the uninsured and believes the problem is high insurance premiums. Both of these miss the mark. Further when you see ads decrying anyone coming between you and your doctor you know we don’t understand health care. In fact, you probably do want the right someone coming between you and your doctor on occasion It takes over a decade for a new medical procedure or improved practices to filter through the system with 700,000 physicians and your doctor may just be near the end of the list.

We want more competition and we forget that to get the best discounts an insurer needs to deliver volume to providers so what do we do, we make that more difficult by increasing “competition,” again based on the false assumption that premiums and not the underlying costs are the problem.

Americans actually don’t care what health care costs they just want to be insulated from the true costs so what do we do, we add more subsides for middle class people and further remove a reason to care about costs.

As we move health care further into the
bureaucracy (any organization in which action is obstructed by insistence on unnecessary procedures and red tape), we simply make people more dependent on subsidies. Why in the furture will families seek higher incomes if in the process it means loss of a government health premium subsidy thus causing them to take a step backward in living standard?

Are we helping America toward mediocracy and disincevtive for individual achievement? I suspect Limbaugh and friends see a plot in all this. I prefer to see it as a collective political ignorance trying to solve a very real problem tainted by political opportunism.

The simple truth is we are in the process of perpetuating the worst of health care in America and reinforcing the popular misconceptions of who the bad guys are who and how we should pay for health care ….and in the future we will pay the price.

Too bad the folks that caused this likely won’t be in office when we understand what we have done.

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Indebted to you

11 Nov

If you look in the lower right corner of this page you will find a link to the national debt clock. WARNING viewing this site may have a negative impact on your ability to sleep at night.

We seem to be worried about the debt of banks, insurance companies, auto companies and even people and yet Congress goes merrily about spending a few billion here and there on a daily basis, frequently using some bogus accounting indicating their spending is not adding to the deficit or simply ignoring the deficit altogether as if they could print money…oh, wait they can and do.

I have read some economists view that the deficit is no big deal and that it remains a small part of GDP. We will grow out of it. With Congress on a spending spree that’s all we seem to do is grow, but it’s the debt we are talking about. I wonder if all those jobs saved from some of this spending will generate sufficient new income for the government to pay the interest on this debt, perhaps for an hour or two.

My theory is that any new taxes will likely go to paying the salaries of the jobs created or saved once the stimulus runs out. Let’s think about this, where is the logic in making a commitment to an ongoing expense if you know the funds to pay that expense are a one shot deal? What happens when the money runs out?

Where is the logic in continuing to artificially prop up housing prices or anything else, what is the end game?

Debt is not good, sometimes necessary, but never good. When it is necessary it should be used to the minimum possible with a clear plan to pay it back. We are attempting to solve the economic problems we face like an obese person who is depressed and claims the depressions turns them to food and food leads to more obesity. Congress must be depressed because it can’t stop spending under some rationale that we can spend our way to prosperity once again.

While some Americans have seen the light and embraced saving for the future we set in motion the necessity to raise taxes of all kinds that will eventually thwart that effort.

Budget cuts will wipe us out…or maybe not

10 Nov

Budget cuts are everywhere and I do mean everywhere. Governments are getting down to the very basics. Here us an example from a state park in Hana, Maui. Yikes, and Hawaii has already implemented health care reform. Let’s hope that they are talking only about the days replenishment.

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Five years will come and go

9 Nov

The has been a great deal of debate over the level of government intervention in health care as a result of reform legislation.

Here is but one small example of what is contained in the recently passed House bill, HR 3962 you can decide for yourself:

“(C) USE OF COPAYMENTS- In establishing cost-sharing levels for basic, enhanced, and premium plans under this subsection, the Secretary shall, to the maximum extent possible, use only copayments and not coinsurance.”

Those of us who design and manage health plans have known for years that the move to copayments was a mistake because it is far more difficult to keep up with inflation and to maintain a target level of cost sharing. Prescription drug plans have even moved from copays to coinsurance.

However, when it comes to managing costs for ALL plan participants, including the majority in a plan with little or no expenses in a year, it appears the politicians are smarter than employee benefit professionals.

Keep in mind that while employer plan designs are grandfathered for five years under HR 3962, after that all bets are off. That’s a long time for Congress to act to “improve” the benefits.

Perhaps it is really time to retire.

A deal is a deal

9 Nov

A deal is a deal or is it? Here is a summary of the deal made by the Obama administration for hospitals to help save $155 billion for health care reform. What do you think are the chances that anyone will have any idea of these savings or more important, how does this kind of deal help the average American covered by private health benefits? The answer to the last part is simply ( unless you believe hosptals can give up this revenue with no consequences) the private sector will pick up the slack.

And I have another question, if the insurance company premiums are the cause of our woes as many would have us believe, how is it that hospitals are not critized for over charging based on this deal?

The leading hospital groups – the American Hospital Association, the Federation of American Hospitals, and the Catholic Health Association – agreed to accept $155 billion less in Medicare reimbursements over 10 years. In exchange, Sen. Max Baucus (D) of Montana, the Finance Committee chair, agreed to exempt hospitals from the cost-cutting regime under a proposed new Medicare Commission for its first few years of operation. That deal was not clear until the committee released legislative language on its bill. The Congressional Budget Office, for example, was not aware that hospitals were exempt from cuts when it estimated the bill’s impact on the federal deficit.

The full text

9 Nov

If you are interested here is where you can find the full text of health care reform legislation.

http://thomas.loc.gov/

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Just a thought on jobs

8 Nov

I am reading the Sunday New York Times editorial about unemployment and the call for more federal intervention to create jobs.

With the passage of the next stage toward health care reform the federal government is doing it’s part to create a massive bureaucracy and the jobs that go with it.

What about the private sector? Many of the people and organizations who decry government intervention in anything seem to have no trouble cutting jobs when the next quarterly earnings report is in jeopardy of dropping a penny or two.

It is almost as if some corporations are using the economy as an excuse to clean house or cut costs simply for a better short term objective. Listen to me, a conservative at heart criticizing capitalists.

While manufacturing jobs of necessity are in direct proportion to production, many jobs lost do not have such a direct relationship. It is these jobs that corporations can favorably impact. Sure times are tough, but any reasonable person and certainly any sophisticated investor knows that things will improve even if it takes two or three years, or more to the point eight to twelve quarters. A sound, well managed company is not going away simply because of a downturn.

As unemployment rises and stagnates at high levels more and more government action will result with the accompanying increasing debt eventually leading to higher taxes……

So, corporations of America wouldn’t it be better to maintain control, retain your good talent and be better postioned for the recovery by avoiding layoffs even if you have to explain to a bunch of analysts what you are doing and why and that earnings will suffer a bit for a few quarters?

As many observers have noted, favorable earnings reports have been driven by cost cutting, not revenue growth. We all know it’s a big game, what we seem to forget is that it is people (people with long memories) who are the pawns in this game.

In today’s corporate jargon you hear terms like “employee engagement,” “employee alignment,” and the old standby being “on board.” Guess what captains of industry, your corporate communications can’t turn BS into fertilizer. And, take note HR departments as you warmly embrace and believe your own PR about human capital, this is partly your fault and you should be fighting for your workforce not enabling the CFO, and you should be doing it because it is in the long term best interest of your organization.

Just as with health care, you can’t have it all without paying the price, pay now or pay later. Maintain control or gripe about government intervention and taxes (which if I recall accounting 101 also impact net earnings).

Perhaps it can be said much simpler, do the right thing.

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Some real causes of health care costs

8 Nov

Our members of Congress are fond out touting health cost savings. Of course we know that what we are getting in health care reform has no resemblance to a strategy to control costs.

Here is info that explains some of the root causes.

http://money.cnn.com/2009/11/03/news/economy/healthcare_hidden_hazards_costs/

The state of health care reform…just for fun.

7 Nov
Let me get this straight…….

1.     we’re going to pass a health care plan
2.     written by a committee whose head says he doesn’t understand it,
3.     passed by a Congress that hasn’t read it but exempts themselves from it,
4.     signed by a president that also hasn’t read it, and who smokes,
5.     with funding administered by a treasury chief who didn’t  pay his taxes,
6.     overseen by a surgeon general who is obese, and
7.     financed by a country that’s nearly broke.

What possibly could go wrong?

 

health cartoon.jpeg

Can't take credit for this one, but you get the idea

AARP and AMA represent little

7 Nov

The House of Representatives health care reform legislation gained some momentum yesterday when AARP, which represents 40 million seniors, and the American Medical Association each endorsed the measure.

This should tell you something about how effective the legislation will be in managing costs.

Both organizations have more clout among politicians than they have any actual representation of the constituents they claim to represent. The AARP sells stuff, publishes a magazine and sends people cards when they turn 55 or is it 50 now.

The AARP no more represents the senior citizens of the US than the AMA represents the majority of physicians in America. The AARP wants the donut hole for Part D of Medicare closed never mind the cost and the AMA wants no reduction in physician fees under Medicare never mind the cost.

These self serving, irresponsible positions only make the cost of “reform” that much more difficult to deal with for all Americans. One can only speculate how reforming health care became the vehicle for expanding an entitlement that was opposed by Democrats when enacted by the Bush administration. Oh right, seniors vote. Despite the fact that those most in need are young families especially lower income families, we continue to use valuable national resources disproportionally for seniors, oh right, they vote.

Despite the fact Medicare is in big time fiscal trouble with the insertion of text into two thousand pages of new legislation we make the problem worse.

Oh right …………

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