Category Archives: Taxes

Fixing Healthcare in America

First in a series

To correct healthcare and get costs under control, we must first acknowledge, then change the healthcare industry’s unique and outrageously dysfunctional business model.

  1. Physicians and other practitioners who decide which resources will be used in a hospital are often neither the direct provider, the one who pays, nor the beneficiary of the service. Basic economic rules, therefore do not apply. Medical tests, which are intended to provide information that will in some way impact the patient’s course of treatment, don’t. Many test and other procedures are ordered even when the outcome of the test will in no way affect the treatment of the patient or its results.
  2. Medical products and services are priced without any rationale. Often, prices are set artificially high in order to allow large discounts to insurance companies. This means that patients without insurance can be charged list price; eighty dollars for an aspirin or $100 for a BandAid®. Hospitals, which were once a ministry, stewardship, or public service have changed their priority to the bottom line. Some hospitals now own and operate their own collection agencies augmented by a small army of lawyers to guarantee that they collect what they have billed. This is why it is not uncommon for a small-town hospital to have millions of dollars in the bank—and still retain their not-for-profit status.
  3. And the insurance companies that get those big discounts? The hospital needs a staff of trained bureaucrats to generate the paperwork that is sent to the insurance company in order to receive payment. Payments may not be received for several months (for the MBAs out there—remember the first rule of finance—a bird [dollar] in the hand is worth two in the bush [accounts receivable]). When payment does arrive, administrative staff must reconcile the payments and file additional paperwork as necessary. All this adds to the hospital’s costs without adding any value. The insurance companies, on the other hand, are usually quite profitable, even after spending a lot of money on lobbyists. But just like Don Corleone said, “It’s nothing personal, it’s strictly business.”

So, what do we do?

First, it would be valuable to have the physicians evaluate how tests really affect the outcome for their patients and develop appropriate protocols. Malcolm Gladwell relates an excellent example in his book, Blink. The cardiology staff at Cook County Hospital was able to reduce tests while simultaneously improving patient outcomes.

[Gladwell, Malcolm (2005). Blink: The Power of Thinking Without Thinking. New York: Little, Brown.  ISBN 0-316-17232-4 (Especially the chapter on Cook County Hospital Cardiologists)]

Second, revise medical pricing so that it reflects reality—and that must include adequate margin to offset costs for necessary but expensive services. Emergency rooms are expensive to operate while an intensive care unit for patients suffering from burns is actually cost prohibitive. However, hospitals have an obligation to the community to provide necessary services—either directly or by affiliation—to the community. The community, in turn, must ensure the hospital is resourced to provide a wide range of services. If hospital prices reflected cost plus a reasonable margin to offset other costs, and everyone paid the same price—patient or insurance company, it might lead to more rational decisions—outcomes first, but economics as a consideration. If Grandpa—God love him—is a 96-year-old heavy smoker with high cholesterol and other morbidity factors who was hospitalized because of a stroke, a battery of tests that will not affect his quality of life or his longevity are not appropriate, and the insurer should not be expected to provide carte blanche payments. However, if the prices are realistic, the family may decide that they would be willing to pay for those additional procedures on their own.

Third, emphasize cooperation over competition. Is there any other business, other than hospitals, that would allow someone to work in their facility AND directly compete with it? Radiologists have their competing imaging centers, surgeons may have their private surgery centers, etc. Should specialty practitioners be entitled to benefit from the hospital’s patients and compete with the hospital for those same patients? It should be the practitioners’ choice—one or the other, but not both.

Two excellent resources for these issues are:

Brill, Steven (2015), America’s Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System. New York. Random House. ISBN 978-0812996951

Rosenthal, Dr. Elisabeth (2017). An American Sickness, New York: Penguin Press. ISBN 9781594206757

If you want to fix American healthcare, pass this along to your friends, neighbors, doctor, etc. I’ll get a lot of hate mail, but we need to have the discussion.

More to follow.

THE Interview

Today, an interview with a man who needs no introduction. Good evening sir.

Good evening. It’s a pleasure to be here.

The world today is chaotic, yet in other ways, not so much. It was not that long ago—less than a century—when a number of nations were either at war or threatening war.

It has calmed down a bit, but one never knows when some radical leader will appear, appeal to those who have nothing to lose, and create all kinds of mayhem.

As the leader of the world’s only superpower, you have, in many ways, a responsibility to keep some semblance of order in the world.

That’s much easier to say from the chair you’re sitting in than from my chair. It’s a lot of responsibility to commit our blood and treasure to some fracas in a far-off land. Maintaining a military that can accomplish that is expensive and complex. When we station troops in some trouble spot, we still have to keep them supplied with everything from food to weapons. That supply train itself is expensive. People forget that our troops are stationed around the world—Europe, Asia, Africa.

Not to mention the fact that your primary duty is keeping the people back home happy.

The economy is always a major issue with the citizens. Everyone wants protection, good roads, and plenty of fresh water, but no one likes paying for those services through their taxes.

And then there’s politics—a truly demanding and dangerous game.

Dealing with politicians is different than dealing with any other group—they’re all trying to hang onto their power, and line their purse. I swear, there are senators that would stab me in the back, if given half a chance.

Well, let’s hope that they never get such a chance. I know your time is precious and your schedule full, but I do wish to thank you for taking time today.

The pleasure is mine.

Ladies and gentlemen, let’s have a round of applause for the most powerful man in the world—Julius Caesar.

Air Travel – A Business Model to Behold

Airplane! Need I say more?

Airplane!
Need I say more?

You’ve got to hand it to the airline industry. Their business model must be the envy of every other industry.

  1. No one likes to travel by airline. It is an trial to be endured. You may want to get to Vail or Orlando but the getting there via airline is not any part of the fun. Whenever there is an alternative, most people choose to avoid commercial flight. Unfortunately busses take forever, trains are unreliable and expensive and there’s a limit to how far the average person will drive.
  2. You can’t get there from here—not directly anyway. You have to stop at one or more additional airports, each of which gets landing fees, gate fees, profit and taxes from fuel sales, etc.
  3. Customer service is so abysmal that one might well consider it customer abuse. No leg room—let’s pack seats closer together. Boarding, which according to queuing theory could be handled significantly better, continues to be handled in a manner markedly worse than animals entering a slaughter house. During the flight, cabin attendants hawk the benefits of signing up for the airline’s very own Visa or MasterCard to a captive audience. “Get more points so we can abuse you more often!”
  4. Customers have been trained to accept additional charges for anything and everything. Check a bag? Twenty dollars. Check a second bag? Thirty-five dollars. Want to sit with your spouse and kids? Better dig out the gold credit card.
  5. Of course, the airports and the shops in the airports have jumped on THIS bandwagon. Parking fees are such that buying a beat up car and abandoning it at the airport is cheaper than paying for parking. Then, of course, there is the magnitude increase of prices for sodas, and food prices that Manhattan restaurants can only dream about. (In the Charlotte airport—a major connection hub—there is even an attendant in the men’s restroom with not one, but TWO Plexiglas tip receptacles [complete with padlocks]. I confess, he was entertaining enough, but aren’t airport restrooms supposed to be seedy places where members of congress seek out casual sex?)
  6. Fuel prices have been dropping, but ticket prices haven’t budged, even though they went up when fuel cost more. Why? The planes are full, so there’s no incentive to lower prices. (More customers? We don’t need no more stinking customers!)

Airlines have complained of being unprofitable for many years, but there’s unprofitable as in “Ohmigod we can’t pay our bills,” and then there’s unprofitable as in, “The accountants have figured out how to juggle the numbers even better. (Those of you who live near airline corporate headquarters—have you ever seen a rusted-out five year old compact car routinely parked in the CEO’s reserved parking spot? Didn’t think so.)

“Please remain seated until the aircraft has come to a complete stop—at which time we’ll sit here for a few more minutes before opening the aircraft door—Why? BECAUSE WE CAN! We know you have a choice in airlines, but we’re buying each other as fast as possible to eliminate choice as the last tiny vestige of human dignity. You can attempt to retrieve your baggage, or what’s left of it after we’ve kicked, dropped, crushed and perused the contents of it on the lower level. (We get some really neat stuff this way—as well as finding out some of your more embarrassing secrets). Some of you may be lucky, while the rest of you will have to make the 120 mile drive back to the airport tomorrow because after standing in line for three hours it made your luggage check in late. In any case, just like your luggage, your dignity has been shredded beyond recognition.

Maybe their motto should be, “We love to abuse, and it shows.”

 

Okay, Okay, So It’s a New Year

ballAs one granted a special ability to see into the future – at least the next few months, here are my predictions:

  • (10) Three million pounds of paper and the equivalent of two hundred thousand ball point pens will be wasted because people wrote “2014” instead of “2015.”
  • (9) Within ninety-six hours of 12:01 AM this morning, exactly 73.2 percent of all resolutions will have been broken.
  • (8) The National Hurricane Prediction Center will advise us to prepare for a banner year for storm activity; in the meantime, a conservative spokesman will announce from the National Hurricane Center (now thirty feet underwater) that global warming is just hype.
  • (7) Major financial institutions will lobby for federal assistance because the fluctuations in North Korean currency are having a major impact on the national economy.
  • (6) Why fluctuations in North Korean Currency? Because Kim Jong Un will be assassinated by his barber who refused to take responsibility for such a ridiculous haircut.
  • (5) The NSA will miss the events in North Korea because they’re busy monitoring a rather racy phone call between German Chancellor Angela Merkel and a Chippendale Dancer named “Hans.”
  • (4) Vladimir Putin will take decisive action to rescue the economy, and strike a macho pose sans shirt, all for “Mother Russia.”
  • (3) The International Space Station will make a surprise announcement that it is now under the control of the Cayman Islands Space Agency to shelter not only the astronauts but also all support personnel from taxes.
  • (2) Hollywood will specialize in the remake of the sequel of the sequel of the remake of the sequel.
  • (1) With social media, smartphones, tablets, etc. future historians will mark 2015 as the year in which spoken communication became a dying art.

Since I know these things, what are my plans? I’m hoping to sleep until at least 2016.

Thinking Out Loud

balloon

Sometimes ideas in my mind sound totally different when I say them out loud.

Often, I’ll have a great idea when in the shower, and after getting to work I excitedly share it with someone.

But once I say it out loud, it sounds like the stupidest thing I could have ever said.

That’s why I like working as part of a team. Bad ideas can be dispensed with quickly, or better yet, someone will respond with something like, “That’s stupid, but if we turn it sideways and paint it blue, it just might work.” That’s how ideas grow.

Yesterday on my way home from work, I was talking with my father on the telephone. Like everyone else who works for the government, I’m less than enthralled with Congress. As we were talking, I blurted out that even though it was disruptive to be furloughed again, I’m still blessed to have a job when many of my chronological peers are not so blessed.

It’s easy to forget the good stuff.

My advice – Don’t.

The Government is Shutting Down!

You’ve reached the United States Government. We’re closed right now.  If you receive this message during regular working hours, it means that we were not funded. Please try your call later. Thank you.

It’s the lead story on the news, it’s the end of life as we know it! (Details at eleven) And, of course, it’s someone else’s fault.

What will we do? What will we do?

Unless God wills otherwise, tomorrow, the sun will come up.

Most of those with a job will go to work. Children will go to school.

People will eat and sleep. Children will play at recess. Babies will be born. And yes, someone’s grandpa may die.

So what will be different?

If you were planning a luxurious trip to some exotic island, your passport may be delayed.

Your government grant for studying the nocturnal feeding habits of black footed ferrets in the high plains won’t be funded just yet.

Our lives will go on.

And maybe some people will realize that the politicians are neither as important nor as powerful as they’d have us believe.

On the other hand, God is.

Congressional Update

visitingdc.com (And it is a great place to visit)

visitingdc.com
(And it is a great place to visit)

Sources who declined to be identified have provided the following information.

In the hallway of the Capitol Building, several Tea Partiers demanded Harry Reid’s lunch money. This was their 42nd unsuccessful attempt.

Meanwhile, Senator Ted Cruz threatened to hold his breath until he passed out, if they didn’t promise to keep trying.

Speaker John Boehner when asked about the incident, replied, “The devil, I mean Ted Cruz, made me do it. I didn’t want to but he made me!”

Meanwhile, Nancy Pelosi yelled, “Will you all be quiet! I’m still trying to read this Affordable Healthcare Act to see what’s in it!”

Other sources have indicated that President Obama responded with, “As the highest elected official, and the spiffiest dresser since Harry Truman, if I do say so myself, I’d like to say nyaa nyaa nya nyaa nyaa!”

Unfortunately, when Ted Cruz passed out, no one seemed to care.