Many discussions on our country’s current economic situation find the participating individuals taking one extreme or the other with regards to the welfare system. Some will say that it is completely broken and should be abolished while others see no problem with it and/or are in favor of extending qualifications for aid to more of the population. While I do not agree that the system should be abolished completely I do think that it is broken and should be reconstituted in such a way to provide help only to those that are willing to earn it and that does not reward irresponsibility. Here’s what I would propose. Feel free to add suggestions. For the sake of this discussion we’ll only address able-bodied individuals requiring assistance. The qualifications for disability should be similarly revised but would need to have more flexibility and therefore should be considered separately.
Step 1. Welfare increases would no longer be given out for the birth of an additional child. If you are on welfare you will have access to free birth control via an expanded free clinic system and would be expected to use it responsibly. Yes, there are cases where even responsible use of birth control is not effective but those are very rare and should not affect the guidelines.
Step 2. Mandatory drug testing (including alcohol) for all recipients. While I am a believer in personal freedoms and do not have a problem with an individual using substances to alter their state of mind as long as it does not impact others, I do not believe anyone should be allowed to do so when they are dependent on the government for subsistence. If we are to require the general public to give money (that is what taxes do) we should not mandate that they do so for someone who is voluntarily altering their mind in a way which makes them unemployable.
Step 3. In the place of the current check distribution would be grocery centers, direct mailing of rent/utility subsidization to the landlord and utility companies (not to include cable tv but including basic internet access and phone), and clothes programs. A family would be given a set of weekly meal packages with there being variations for size of family and very basic personal preferences (vegetarian, no red meat, etc). Each package would have everything required (including spices) to make healthy, well balanced meals for a week and the system would allow for an additional spice per week (normal cooking spice size to last several months) of the family’s choosing as well as basic cleaning necessities such as laundry power and dish soap. In short, those receiving welfare would have less choice on how the money is spent but would get more out of it and there would be opportunity for the issuing body to realize efficiency through standardization.
The rental subsidization would have a limit placed on it that is equal to no more than the 20th percentile for the area in which the recipient lives. This phase would have limits set for the amount of time a recipient is able to receive assistance over a given period. After the limit is reached there would be a second, reduced level of assistance offered with focus on child care and meals.
Step 4. An education system would be put in place that required anyone receiving welfare to obtain a GED if they do not already have one or a high school diploma. Classes would be available during the day and evening to accommodate job searches and part-time employment. Child care would be provided while classes are being attended. Additional practical application classes would be offered for specific job skills to help qualify individuals for employment.
Step 5. Jobs. There are many tasks for ANY area that do not get accomplished due to lack of funding. As the system progresses these tasks would be completed by recipients in exchange for their assistance. In short, if you want assistance you’ll work for it. The wages for these tasks would be set at minimum wage (as determined by the state in which they live) with some getting an extra premium for type of effort of no more than 10% and would include everything from assisting with trash clean-up to assistance with administrative duties of various government departments as determined by skills tests and recipient’s abilities.
All of the same standards of employment would have to be met as they are for other government jobs (effectiveness, timeliness, proof of ability to work in US, drug testing, etc) and an individual would be given no more than 2 chances (fired twice) to fulfill a job before being excluded from assistance for a period of no less than 5 years. Since this phase does not allow for receipt of assistance without earning it there will be no limits to how long a person may choose to accept the wages in return for the work.
At this point we should see a much lower unemployment rate (jobs program counts as employment) and the tasks being done under the government assistance program would be able to expand to meet local area beautification needs, raising the values of properties, bringing in new businesses, and expanding the job market for a given area. Instead of simply throwing hard-earned tax money at a problem we would be allowing those in need to earn what they need to provide for themselves and/or their family while making the area they live in nicer, learning a new skill, and/or increasing their own marketability for other jobs. I believe that this would ultimately lead to these individuals taking pride in their accomplishments and having a much higher degree of satisfaction with life in general than if the government were to simply hand out checks.
Yes, there are many details to iron out but this would be the basic framework (subject to updates and adjustments) on which I would base my attempt to enact welfare reform should I ever get in office. That should pretty much guarantee I’ll never be elected, huh?
Wednesday, September 22, 2010
Friday, September 17, 2010
Marriage
With the recent national focus on how individual states define marriage I think it would be good to give potential voters of the future insight into how I see the issue just to keep the intent of this blog true.
I have absolutely no problem with marriage licenses being issues for same sex marriages and all of the same legal rights and requirements being available as they are for opposite sex couples. There have been arguments posed that allowing same sex couples to attain the same legal status “lessens” the bond of marriage. I consider this to be one of the more ignorant statements I have heard. How does allowing 2 people to express their commitment to one another make your commitment any less valid?
While I can see how some people are not comfortable with the idea of homosexuality I do not believe that they have the right to dictate how others live their lives. Just because one’s belief is that something is wrong does not make it wrong for the rest of the world. I will not address the influence of religious beliefs on legal matters here except to say that they should not.
When I saw a couple getting married on television that had been denied previously the ability to declare legally their intent to remain committed to one another for the rest of their lives I was touched. There is something beautiful about the pure joy of marriage that gives me hope for the future of our country. While I am not myself sexually attracted to someone of the same sex I do understand, from talking to many that are, that the feelings are no less real than for those of us attracted to the opposite sex. The love expressed is no less genuine and the commitment no less authentic.
Many of those opposing same sex marriage use the “traditional family” argument. I’ve yet to hear a reasonable argument explaining how, exactly, the traditional family, which now includes multiple sets of families for many children of divorced parents, is any more loving or stable than a family of same sex parents. I would be interested in someone being able to present an argument that does not invoke religion in support of limiting this legal right just to see if it can be done but it has not yet happened in any discussions I’ve had.
One final thing to close this entry. For those that will circle back around to a religious basis for this argument because you can find no other, why would you not be fighting just as hard to make illegal divorce for opposite sex couples as you are to prevent same sex couples from marrying? It seems to me that the same core set of beliefs is being violated by divorce but it actually has a direct impact on too many of you so gets overlooked. All I want is some consistency in your convictions.
Have a great weekend everyone.
I have absolutely no problem with marriage licenses being issues for same sex marriages and all of the same legal rights and requirements being available as they are for opposite sex couples. There have been arguments posed that allowing same sex couples to attain the same legal status “lessens” the bond of marriage. I consider this to be one of the more ignorant statements I have heard. How does allowing 2 people to express their commitment to one another make your commitment any less valid?
While I can see how some people are not comfortable with the idea of homosexuality I do not believe that they have the right to dictate how others live their lives. Just because one’s belief is that something is wrong does not make it wrong for the rest of the world. I will not address the influence of religious beliefs on legal matters here except to say that they should not.
When I saw a couple getting married on television that had been denied previously the ability to declare legally their intent to remain committed to one another for the rest of their lives I was touched. There is something beautiful about the pure joy of marriage that gives me hope for the future of our country. While I am not myself sexually attracted to someone of the same sex I do understand, from talking to many that are, that the feelings are no less real than for those of us attracted to the opposite sex. The love expressed is no less genuine and the commitment no less authentic.
Many of those opposing same sex marriage use the “traditional family” argument. I’ve yet to hear a reasonable argument explaining how, exactly, the traditional family, which now includes multiple sets of families for many children of divorced parents, is any more loving or stable than a family of same sex parents. I would be interested in someone being able to present an argument that does not invoke religion in support of limiting this legal right just to see if it can be done but it has not yet happened in any discussions I’ve had.
One final thing to close this entry. For those that will circle back around to a religious basis for this argument because you can find no other, why would you not be fighting just as hard to make illegal divorce for opposite sex couples as you are to prevent same sex couples from marrying? It seems to me that the same core set of beliefs is being violated by divorce but it actually has a direct impact on too many of you so gets overlooked. All I want is some consistency in your convictions.
Have a great weekend everyone.
Wednesday, September 15, 2010
Healthcare costs 101
In recent months we’ve heard much talk about the “cost of healthcare” and how we need to reduce this cost. While the politicians and media have used this term to focus on the amount that patients pay for services received to help gain support for their agenda they have not yet addressed the underlying costs of running a healthcare business (hospitals, doctors’ offices, etc). Since these costs directly impact the end cost to consumers I’d like to open the door to that side of the discussion here.
What most consumers (and almost all politicians involved in the current healthcare “overhaul”) do not realize is that our government’s involvement in the industry is what has driven costs for providers up and up over many years and, as any business would have had to do in order to keep it’s doors open, that cost has been passed to the consumer, right? Well, yes and no. In order to explain this answer let’s start with a brief description of how one might enter the business of healthcare (other than becoming an MD, nurse, or other direct patient care professional).
Healthcare is not an open market industry. New entrants must jump through many hoops if they would like to enter a market area including (in most states) providing proof of public need as determined by a governing body. This process is not as simple as filling out a form and sending it in. It takes anywhere from months to years of preparation, much of which is done with the help of a lawyer that knows the specific body in charge of the market area. This process is not exclusive to those that want to enter a market but also to those that wish to expand there current businesses (build a new building, buy a new piece of equipment, etc). In recent years there has been a government mandate that fewer of these applications be approved. This has caused organizations to spend several thousand dollars on top of actual construction costs to fight for permission to run their businesses. I’m not sure about you but to me this seems likely to limit competition. If I remember my econ 101 class from many moons ago limiting the supply will raise the price of any good or service, but more on that later.
Assume that the application is approved, what now? For our purposes we’ll assume the application is for a new business, not an existing one. You’ll need a building. Of course there are special regulations for any building that will house medical services which do not apply to any other industry. These additional considerations make the construction cost per square foot 2 to 3 times more expensive than a normal industrial building and are largely redundant with current building codes for a given area, just more stringent. Once again a business in the healthcare industry is held to different standards than other business and these standards drive costs.
OK. Now you have an approved application and a building. You’re going to want customers (patients). You can do little to get customers in the door other than marketing and waiting for a need to arise so the next focus is on making repeat customers out of as many as you can. In order to do this you better accept their insurance (in truth, their insurance better accept you). This can actually drive first time customers as well. So how does one go about getting on an insurance company’s providers list? You must negotiate a contract with the insurance company. Contract for what you ask?
Anyone that’s had a medical visit or procedure in the last decade or 2 will remember the difficulty in deciphering the bill you get from the doctor’s office or hospital and the explanation of benefits (EOM) you get from your insurance company. It seems that there is one amount that the doctor’s office charges for a certain procedure yet a different amount that the insurance company allows the doctor to charge you as a member. This is called the allowable. The doctor’s office must reduce the charge to match the amount in the contract. After the charge is adjusted your co-pays, deductibles, etc are applied to come up with the actual amount you owe to the doctor. Some insurance companies have more leverage (insured members) than others and are able to negotiate lower prices and the government (Medicare, Medicaid, etc) has the most leverage of all. In fact, there is no negotiation at all with the Goliath of government. They tell you what they will pay for a given service and define a large number of very specific cumbersome steps that you must follow exactly if you would like to get paid. Virtually no healthcare business aside from very small specialties can afford to go without these customers so they accept the terms and prepare for business.
Not only does the government not give a provider input into what should or should not be covered for a given patient, how much should be charged, etc. but it also can, at any point, institute a new regulation, reporting requirement, etc retroactively and demand the provider return payments on accounts that do not conform even though the services were rendered before the new rule went into place.
Let’s recap. You have to spend tons of money just to be allowed to build an overly expensive building and have your prices dictated to you while always being cognizant that any of the already less-than-cost-of-business payments for services could be taken back if the a governing body thinks up another way to restrict payment. Again, it has been quite a while since I was in school but my 11th grade government class would not classify this as a capitalistic model. If I remember correctly a system in which the government decides who can be in an industry, how they have to go about setting up their business, and what prices they can charge is the first step toward a socialist society. The next step would be the government actually owning and administering the businesses.
Back to your healthcare business. This new business must struggle to expand its market share by providing additional services (each of which requires the proof of public need) and fight with insurance companies to get fair reimbursement for services rendered, not to mention the high costs of trying to collect the monies due from customers. The only industry that provides services before an agreement is made about payment is healthcare. Can you imagine going into an automotive shop, having your engine rebuilt, and them letting you drive off while they decide how to bill you without at least a signed contract saying that you will pay what they charge? Do you think that shop would get the $2,000 they are owed more than 20% of the time? Same goes with healthcare. More is written off as a loss than any other industry in the nation. In order to try and make up for the loss the industry must try to charge as high a price as they can so maybe, just maybe, the cost of providing the service is covered. Even though you may not like the bill you receive it doesn’t mean it’s not a good business practice.
Like anyone I am not thrilled at paying for services that someone next to me had but didn’t pay for. At least at the auto mechanic I know there will be a mark up on parts costs and a labor charge that is associated with the work on my vehicle only. Why can’t we get that type of detail with our healthcare? It’s quite simple in its complexity (or is that complex in its simplicity?). Healthcare is an antiquated industry in its current form and the transition to better, more timely information is only supported when framed around direct patient care. This is why talks around healthcare IT always revolve around the electronic medical record (EMR) but have not broached the subject of detailed healthcare cost accounting standards. Cost accounting, for any other business, is a very important part of decision making. In healthcare it is more of a nuisance. Why? You can’t negotiate prices with your largest client (Medicare/Medicaid) and the negotiations with other clients do not center on actual cost of services provided because you need to make up the lost margin somewhere.
To address the core issue with healthcare costs would lead to true reform of how healthcare is provided in the US. The current plan is to simply move forward with an already inefficient system and expand the governmental influence over the struggling industry. I have had conversations where friends, colleagues, and random people at a party have asked why this matters to the end patient which emphasized to me the complete lack of understanding on the part of some very intelligent people that healthcare is not a guarantee. If you squeeze margins down to a point that hospitals can’t justify being in the business you will start to loose providers. While we may not see quite that extreme of an effect in the next few years you will absolutely see providers unable to maintain margins enough to allow for expansion of services provided, replacement of expensive pieces of medical equipment, etc. Slowly the overall quality of service will begin to deteriorate because you just can’t buy equipment if you aren’t making enough money to cover the costs unless healthcare wants to end up like wall street. I think this is where the average person would start to understand that sometimes you really do get what you pay for.
Understanding the significant costs associated with running a healthcare business is necessary when having a discussion about reducing healthcare costs to the end customer. You wouldn’t tell the tailor or butcher how much their customers should have to pay so why would we, as a capitalistic society, want to reduce competition and mandate pricing for the most important industry to a nations overall happiness? Well, we aren’t talking about retail products. Or are we? Healthcare is such an emotional topic that most loose sight of the fact that the service is just that, a service. It is rendered by a professional that spent years (and money) training for the job no different than the mechanic pays for school that teaches them to fix your car. You may not like how much the service costs but it would cost much more to replace your vehicle or not have that leg set properly.
Recent years have shown that the entry into the healthcare industry, business or direct provider, has slowed significantly due to the tremendous overhead associated with starting up and the continuing high (and rising) costs of business. While reform of the current system is certainly necessary that reform should not forget that inordinate amount of governmental oversight of the industry is one of the main contributing factors to rising healthcare costs. Do we really think that more involvement will solve the problem?
What most consumers (and almost all politicians involved in the current healthcare “overhaul”) do not realize is that our government’s involvement in the industry is what has driven costs for providers up and up over many years and, as any business would have had to do in order to keep it’s doors open, that cost has been passed to the consumer, right? Well, yes and no. In order to explain this answer let’s start with a brief description of how one might enter the business of healthcare (other than becoming an MD, nurse, or other direct patient care professional).
Healthcare is not an open market industry. New entrants must jump through many hoops if they would like to enter a market area including (in most states) providing proof of public need as determined by a governing body. This process is not as simple as filling out a form and sending it in. It takes anywhere from months to years of preparation, much of which is done with the help of a lawyer that knows the specific body in charge of the market area. This process is not exclusive to those that want to enter a market but also to those that wish to expand there current businesses (build a new building, buy a new piece of equipment, etc). In recent years there has been a government mandate that fewer of these applications be approved. This has caused organizations to spend several thousand dollars on top of actual construction costs to fight for permission to run their businesses. I’m not sure about you but to me this seems likely to limit competition. If I remember my econ 101 class from many moons ago limiting the supply will raise the price of any good or service, but more on that later.
Assume that the application is approved, what now? For our purposes we’ll assume the application is for a new business, not an existing one. You’ll need a building. Of course there are special regulations for any building that will house medical services which do not apply to any other industry. These additional considerations make the construction cost per square foot 2 to 3 times more expensive than a normal industrial building and are largely redundant with current building codes for a given area, just more stringent. Once again a business in the healthcare industry is held to different standards than other business and these standards drive costs.
OK. Now you have an approved application and a building. You’re going to want customers (patients). You can do little to get customers in the door other than marketing and waiting for a need to arise so the next focus is on making repeat customers out of as many as you can. In order to do this you better accept their insurance (in truth, their insurance better accept you). This can actually drive first time customers as well. So how does one go about getting on an insurance company’s providers list? You must negotiate a contract with the insurance company. Contract for what you ask?
Anyone that’s had a medical visit or procedure in the last decade or 2 will remember the difficulty in deciphering the bill you get from the doctor’s office or hospital and the explanation of benefits (EOM) you get from your insurance company. It seems that there is one amount that the doctor’s office charges for a certain procedure yet a different amount that the insurance company allows the doctor to charge you as a member. This is called the allowable. The doctor’s office must reduce the charge to match the amount in the contract. After the charge is adjusted your co-pays, deductibles, etc are applied to come up with the actual amount you owe to the doctor. Some insurance companies have more leverage (insured members) than others and are able to negotiate lower prices and the government (Medicare, Medicaid, etc) has the most leverage of all. In fact, there is no negotiation at all with the Goliath of government. They tell you what they will pay for a given service and define a large number of very specific cumbersome steps that you must follow exactly if you would like to get paid. Virtually no healthcare business aside from very small specialties can afford to go without these customers so they accept the terms and prepare for business.
Not only does the government not give a provider input into what should or should not be covered for a given patient, how much should be charged, etc. but it also can, at any point, institute a new regulation, reporting requirement, etc retroactively and demand the provider return payments on accounts that do not conform even though the services were rendered before the new rule went into place.
Let’s recap. You have to spend tons of money just to be allowed to build an overly expensive building and have your prices dictated to you while always being cognizant that any of the already less-than-cost-of-business payments for services could be taken back if the a governing body thinks up another way to restrict payment. Again, it has been quite a while since I was in school but my 11th grade government class would not classify this as a capitalistic model. If I remember correctly a system in which the government decides who can be in an industry, how they have to go about setting up their business, and what prices they can charge is the first step toward a socialist society. The next step would be the government actually owning and administering the businesses.
Back to your healthcare business. This new business must struggle to expand its market share by providing additional services (each of which requires the proof of public need) and fight with insurance companies to get fair reimbursement for services rendered, not to mention the high costs of trying to collect the monies due from customers. The only industry that provides services before an agreement is made about payment is healthcare. Can you imagine going into an automotive shop, having your engine rebuilt, and them letting you drive off while they decide how to bill you without at least a signed contract saying that you will pay what they charge? Do you think that shop would get the $2,000 they are owed more than 20% of the time? Same goes with healthcare. More is written off as a loss than any other industry in the nation. In order to try and make up for the loss the industry must try to charge as high a price as they can so maybe, just maybe, the cost of providing the service is covered. Even though you may not like the bill you receive it doesn’t mean it’s not a good business practice.
Like anyone I am not thrilled at paying for services that someone next to me had but didn’t pay for. At least at the auto mechanic I know there will be a mark up on parts costs and a labor charge that is associated with the work on my vehicle only. Why can’t we get that type of detail with our healthcare? It’s quite simple in its complexity (or is that complex in its simplicity?). Healthcare is an antiquated industry in its current form and the transition to better, more timely information is only supported when framed around direct patient care. This is why talks around healthcare IT always revolve around the electronic medical record (EMR) but have not broached the subject of detailed healthcare cost accounting standards. Cost accounting, for any other business, is a very important part of decision making. In healthcare it is more of a nuisance. Why? You can’t negotiate prices with your largest client (Medicare/Medicaid) and the negotiations with other clients do not center on actual cost of services provided because you need to make up the lost margin somewhere.
To address the core issue with healthcare costs would lead to true reform of how healthcare is provided in the US. The current plan is to simply move forward with an already inefficient system and expand the governmental influence over the struggling industry. I have had conversations where friends, colleagues, and random people at a party have asked why this matters to the end patient which emphasized to me the complete lack of understanding on the part of some very intelligent people that healthcare is not a guarantee. If you squeeze margins down to a point that hospitals can’t justify being in the business you will start to loose providers. While we may not see quite that extreme of an effect in the next few years you will absolutely see providers unable to maintain margins enough to allow for expansion of services provided, replacement of expensive pieces of medical equipment, etc. Slowly the overall quality of service will begin to deteriorate because you just can’t buy equipment if you aren’t making enough money to cover the costs unless healthcare wants to end up like wall street. I think this is where the average person would start to understand that sometimes you really do get what you pay for.
Understanding the significant costs associated with running a healthcare business is necessary when having a discussion about reducing healthcare costs to the end customer. You wouldn’t tell the tailor or butcher how much their customers should have to pay so why would we, as a capitalistic society, want to reduce competition and mandate pricing for the most important industry to a nations overall happiness? Well, we aren’t talking about retail products. Or are we? Healthcare is such an emotional topic that most loose sight of the fact that the service is just that, a service. It is rendered by a professional that spent years (and money) training for the job no different than the mechanic pays for school that teaches them to fix your car. You may not like how much the service costs but it would cost much more to replace your vehicle or not have that leg set properly.
Recent years have shown that the entry into the healthcare industry, business or direct provider, has slowed significantly due to the tremendous overhead associated with starting up and the continuing high (and rising) costs of business. While reform of the current system is certainly necessary that reform should not forget that inordinate amount of governmental oversight of the industry is one of the main contributing factors to rising healthcare costs. Do we really think that more involvement will solve the problem?
Why would I do this???
Some friends have cautioned me against putting my views out there for the world to read with the warning "What if you want to get elected some day?". I figure it would be ideal if all candidates had been posting their thoughts, ideas, concerns, etc for years before you had to decide if they should represent you in government. The chance that I'd ever get elected is slim, not buying into the all-or-nothing 2-party set-up we have right now and all so the concern is minimal. Neither party would have me right now and I wouldn't have them if they did. Unfortunately the lemming mind set of most Americans prevents Independent candidates from having a real chance right now in most areas and certainly no chance at the big office.
That being said, here it goes. I'll start off with a paper I wrote trying to explain why true Healthcare reform is necessary and why the one that is being pushed right now does not qualify as real reform. Might as well start getting flamed as soon as possible.
Enjoy
James
That being said, here it goes. I'll start off with a paper I wrote trying to explain why true Healthcare reform is necessary and why the one that is being pushed right now does not qualify as real reform. Might as well start getting flamed as soon as possible.
Enjoy
James
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