Doing the Math

Okay, here's the scenario:

Freewheeling Fred Freeman is 36 years old. He pulls in $36,000 per year, but he's single, has no dependents and has no health care coverage at work. He's been relatively healthy all his life and, having rarely needed to see a doctor, carries no health insurance.

Under the new health care bill, he must pay a no-insurance-coverage fine, which he does. Fred pays federal fines of $695 per year for 10 years, a total payment in fines of $6,950. At age 46, Fred discovers he has cancer and, since he cannot be denied coverage for his pre-existing condition, obtains health care insurance under the government's public option. Fred undergoes multiple surgeries and repeated cycles of radiation treatments. His medical bills total out at over $180,000.

Assignment: Explain exactly how this reduces the cost of government and provides a benefit to the American taxpayer.

Parkinson’s Law

In mid-century last, a man named Cyril Parkinson wrote an essay, the thesis of which was that “Work expands so as to fill the time available for its completion.” It was written as a humorous reflection on an observable phenomenon: People tend to take as much, or as little, time to complete a task as the time available to perform it.

This adage was later quantified as a mathematical equation to explain the rate of bureaucratic expansion over time. This expansion is characterized as two-fold: 1.) “An official wants to multiply subordinates, not rivals” and 2.) “Officials make work for each other.” The result is that the number of employees working in a bureaucracy increased at a yearly rate of 5-7% “irrespective of any variation in the amount of work (if any) to be done.” This expansion is observed in “required” federal budget annual increases.

A corollary to Parkinson’s Law is, “The demand upon a resource tends to expand to match the supply of the resource.”

If this corollary is correct, the more available health care services become, the more health care services will be utilized. If the rate of utilization keeps increasing, say at a 5-7% rate per year, the budget required to provide the services will also increase at that rate. It’s not hard to see how the cost of funding the health care bill could double in 10 to 12 years.

While it’s not hard to see the call for tax increases to pay for the increased future cost of health care, it’s somewhat more difficult to see incomes increasing at the same rate.

Where do you suppose the money to pay for the bill will come from?

Health Care Twins

It used to be said of couples that after being married together for many years they start to look like each other. It could just be my imagination but, does it strike anyone else how much the leader of the majority party of the House and the leader of the majority party of the Senate resemble each the other? Put some glasses on Nan and add some Adam Lambert hair to Harry and they'd be hard to tell apart from 20 feet away. At least in my sight. Without glasses.

Makes you wonder how much time these two had to spend together to craft their health-care bills.

One other thing they have in common - extremely low favorability ratings. A CBS poll released yesterday reported a favorability rating of a whopping 11% for Nancy with Harry topping out at 8%.

Thanks to Baby Girl for the help with Photoshop

Health Care Reform of the Cabrini-Green Variety?

Nearly 39 years ago, I began matriculation as a student at a large Midwestern university in the Urban Planning program. At the introductory lecture of one of my classes, our professor introduced us to the thesis: There is No Free Lunch.

Since most of us freshmen previously had only lived in our parents’ homes and survived largely through their financial support, this was a concept that had never occurred to us. Our professor gave example after example of attempts, under various governing authorities, whereby, usually well-intentioned, planning programs had wrought outcomes with various measures of unplanned, adverse consequences.

His warning to us, as potential future urban planners, was that we must recognize that imposed solutions to problems, whether social or infrastructure-related, would most likely result in unforeseen problems and costs to someone or something.

The most memorable example of failed social planning was the Cabrini-Green housing project in Chicago. In attempting to create post-war, urban renewal, large numbers of poor people were relocated from dilapidated lower-density neighborhood housing into a mega-complex of government subsidized, high-density, mostly high-rise buildings. At its peak, about 15,000 poorer people lived in the housing complex.

Obviously, increasing housing density is a logical, cost-efficient use of land and materials. The thinking was that newer, cleaner, cheaper-to-build, albeit, elevated, housing would produce better living conditions for the poor. I suppose you could say the plan was to bring about hope and change.

Contrarily, people lost their sense of neighborhood and social connectedness. High unemployment was characteristic of the complex. The city found it too costly to provide adequate city services, including the necessary police patrol. Conditions deteriorated and drug-fueled, gang-perpetrated crime skyrocketed. Many residents lived in isolation, fear and increased hopelessness. Some years ago, much of the complex was demolished.

Does the same kind of hubristic thinking that created Cabrini-Green underlie the belief that government control of health care will increases it’s efficiency and economy by administration through a distant and faceless bureaucracy?

Personally, I suspect so, and that a similar fate awaits the public under government-imposed health-care reform. Undoubtedly some parties will benefit. Who they will be will become more evident with time. So will the many of whom new costs and sacrifices must be borne. Regardless of the nobility of motive, or lack thereof, of what anyone chooses to do, build or buy, the cost must be paid for by someone.

There is no free lunch.

Wearin' of the Green, Drinkin' of the Whiskey

Today is Saint Patrick's Day. For most people, I suspect it has as much personal significance as National Barbed Wire Appreciation Day (use your imagination to think of the responses to Jay Leno asking people on the sidewalks of New York who St. Patrick was).

For years and years, St. Patrick's Day seemed to stand head and shoulders above any other holiday whose celebration represented little more than a shallow pretext for questionable behavior. Mardi Gras could be considered a regional challenger, I suppose, as would specific home cities on the night their teams win an NHL or NBA championship game. But what other day across this great nation of ours produces such a consensus on the appropriateness of consuming too much alcohol? New Year's Eve? Maybe, but how many people use St. Patrick's Day to resolve to improve themselves?

Now, with changing demographics, Cinqo de Mayo is on the ascendancy and may soon surpass St. Patrick's Day as the national day of poorest excuse for personal irresponsibility. We shall see.

The Health Insurance Straw Man

We keep hearing from politicians and reports from the media that the health insurance industry is making intolerably high profits and that therefore we need a government-sponsored plan to bring costs down (like that’s gonna happen).

Newsbusters.org has ranked 53 American industries by profitability. Health Care: Insurance and Managed Care operates at a 2.2% profit (makes 2.2 cents profit per dollar of revenue). This is excessive to our leaders? If so, why are they not going after Public Gas and Electric Utilities at 8.7 % profitability? Wouldn’t the higher rate of return be more highly intolerable?

I’d be interested in seeing a report on the profitability of health-care related litigation services.

Here’s the list:

2008 Industry Rank as % of Revenues
1. Network and Other Communications Equipment 20.4
2. Internet Services and Retailing 19.4
3. Pharmaceuticals 19.3
4. Medical Products and Equipment 16.3
5. Railroads 12.6
6. Financial Data Services 11.7
7. Mining, Crude-Oil Production 11.5
8. Securities 10.7
9. Oil and Gas Equipment, Services 10.2
10. Scientific, Photographic and Control Equipment 9.9
11. Household and Personal Products 8.7
12. Utilities: Gas and Electric 8.7
13. Aerospace and Defense 7.6
14. Food Services 7.1
15. Industrial Machinery 6.9
16. Food Consumer Products 6.7
17. Electronics, Electrical Equipment 6.5
18. Commercial Banks 5.2
19. Telecommunications 5.1
20. Chemicals 5.0
21. Construction and Farm Machinery 5.0
22. Insurance: Life, Health (stock) 4.6
23. Information Technology Services 4.5
24. Computers, Office Equipment 4.3
25. Metals 3.9
26. Wholesalers: Diversified 3.5
27. Insurance: Property and Casualty (stock) 3.3
28. Specialty Retailers 3.2
29. General Merchandisers 3.2
30. Health Care: Pharmacy and Other Services 3.0
31. Packaging, Containers 3.0
32. Beverages 2.9
33. Engineering, Construction 2.7
34. Health Care: Medical Facilities 2.4
35. Health Care: Insurance and Managed Care 2.2
36. Petroleum Refining 2.1
37. Food and Drug Stores 1.5
38. Pipelines 1.5
39. Wholesalers: Health Care 1.3
40. Semiconductors and Other Electronic Components 1.0
41. Energy 0.9
42. Home Equipment, Furnishings 0.7
43. Food Production 0.6
44. Wholesalers: Electronic and Office Equipment -0.3
45. Diversified Financials -0.6
46. Motor Vehicles and Parts -0.7
47. Insurance: Life, Health (mutual) -3.0
48. Hotels, Casinos, Resorts -4.5
49. Automotive Retailing, Services -7.9
50. Forest and paper Products -9.6
51. Entertainment -10.0
52. Real Estate -13.4
53. Airlines -13.5

Advice Giving to Make a Living

After checking demographic trends, a marital advice career may not be a broad enough category to ensure a sufficient supply of clients for my services. Not as many people seem to be getting married as in the past.

Therefore, I’ve decided general relationship advice services would allow me to serve more people, not to mention raise the profitability potential of a new venture. Relationship advice is something I already try to provide here occasionally anyway. It’s been one of my intentions regarding this weblog that any reader who followed for a year or two would receive the virtual equivalency of a mail-order relationship-counseling course. Granted, you probably could get the same thing by just listening to a lot of Tammy Wynette’s old songs. I’m thinking some people would still want the caring empathy that only personal contact can provide, which would be where I would come in.

I would, of course, be taking on clients in spite of my tendency to generally avoid unnecessary contact with people due to the possibility of getting drawn into in their personal problems. Maintaining emotional distance through (non)professional separation would be crucial, I suppose. You can see where I’m going with this, right? If I wake up in the middle of the night and can’t go back to sleep I want it to be from wrestling with my own problems, not somebody else’s.

The focus of my advice would be explaining to men why women are so bleeping hard to understand. I could also explain to women what men are thinking but since that’s generally limited to about 3 things I wouldn’t expect there would be much money to be made there.

I suppose I could delve into a list of exclusions – what men are NOT thinking – that could take some time, and time being money, might be worthwhile. Another possibility would be to try to explain to men what women are feeling and why. The drawback there is that by the time you explain it it’s probably changed anyway, which would necessitate perpetual additional sessions. That could be a plus or a minus depending on whether we’re talking about me or the client. Anyway, here’s my best pitch:

Women: With my keen insights and lifetime of observations I can be your one-stop relationship advice source. No need to waste any more time watching Oprah. Men: No need to…well, you probably never worry about relationship stuff anyway, at least until there’s a crisis. But that’s where I can help - avoid the crisis, take my customized, precautionary advice and get it right the first time.

Payment plans can be made flexible so don’t assume you can’t afford my services – and tell your friends – every paying referral will entitle you to 10% free advice, uncontaminated with the sort of personal musings and speculation that you might get from other advice givers (or, even with those things, if you have the time and money to waste).

You won’t find a better deal anywhere. All information is confidential, assuming your check doesn’t bounce, and even if it does, I usually change the names of people and towns when I recycle advice.

So, if anybody needs relationship advice, remember, I’m here for you, for a fee, because I care, and I could really use the money.