Healthcare Matters

A week ago, I was going through my files to find a form I needed in order to fax a prescription over to an online pharmacy when I stumbled upon a stack of monthly health insurance bills starting in May 2001 when I first obtained an Individual HMO plan with Empire Blue Cross Blue Shield.  I became self-employed at about that time. 

Before I go further, it is important for me to state that I am a healthy individual.  I don’t smoke and I don’t drink, except for maybe a glass of wine about once a week.  I live a healthy lifestyle, I am physically active and I don’t consume sweetened beverages and I avoid foods that are loaded with sugar.  Apart from the seasonal allergies I get in Spring, I am hardly ever sick (my health records will attest to that) and the only times I have ever been hospitalized was once when I broke an arm back when I was a young 7 year old and a second time when I had my appendix taken out when I was still in my teens.  I probably see my Primary Care physician once a year when I have an annual physical check-up to be sure I’m doing OK and nothing is out of the ordinary.

That first month back in May 2001, my premium was $337.65 which worked out to be $4,051.80 per year.  I flipped over the stack of bills to August 2006 – the last month for which I remained on that plan - and the premium for that same coverage had gone up to $616.82 or an annualized $7,401.84, a whopping 183% of what I was paying back in May 2001.

Out of curiosity, I went online to get a quote for the same plan today and the premium has shot up to $1,549.30 a month or $18,591.60 annualized.  That works out to 251% of what I paid back in 2006 (less than 4 years ago) or 459% of what I paid back in 2001.

If the premiums keep increasing at that pace, the monthly premium for an Individual HMO plan would cost about $7,800 in another 10 years time when I will qualify Medicare.  I know I can’t afford that in-between period – I don’t think any self-employed or unemployed individual can.

As unemployment soared and as the duration of people staying unemployed increased with the latest recession, it has become abundantly clear that an employment-linked health insurance is not the solution.  COBRA has its limitations and is more costly for the individual as the former employer no longer picks up any part of the premium.

Even if one is fortunate enough to remain employed or is able to get a new job thanks to the job stimulus bill that was recently passed, rising health insurance premiums would force employers to shift more of the burden of healthcare plans over to their employees. 

The claim that “we have the best healthcare system in the world” is misleading – it confuses availability with affordability.

We need healthcare reform AND MORE. We need a “medical tort reform”, defining what is the standard of care that should be expected so that doctors are not over-prescribing tests and treatments that serve only to enrich the pharmaceutical companies and medical equipment companies.  We need a “prescription drug reform”, making medications more affordable – there should be no reason why Americans pay more for the same drugs than in other countries.  We need reforms that encourage healthy lifestyles and more physical activity for both the young and the old.

We need to continue the debate about what healthcare should or should not be but not let it hold us back from enacting what should be the first of all the necessary reforms.  As we gain experience from the present reforms, we need to refine those provisions that prove to be less than satisfactory.  Nothing will be perfect from the get-go and we need to be mature enough to keep working at it and make it better.

Bringing Jobs Back

Despite a drop in the number of newly unemployed, the dismal real unemployment numbers in the US point to a need for drastic measures that will help stimulate job creation.  The Obama Administration recently held a Jobs and Economic Growth Forum to garner ideas that would help kick start a new phase of economic growth.  That effort is to be applauded and given full support by every concerned citizen.  However, grand schemes and efforts to reverse job losses stemming from the years of relentless exporting of manufacturing and all kinds of back office work to lower cost offshore centers will take time.  Congress will need to put aside partisan politics and dig deep for the courage and good sense necessary to pass laws and investment incentives that will smooth the passage for recovery without jeopardizing the future. 

In the meantime, we cannot just sit by and hope that things will change.  We cannot wait another year to replace ineffective members of Congress and put new ones in there that will do the will of the People who elected them rather than the will of the lobbyists and the people that employ them for their own selfish gains.  We cannot wait another year and see continuing job losses, even if it is at a reduced pace.  Clearly, those who have lost jobs since 2007 and are still unemployed or underemployed cannot wait another year, hoping that their unemployment checks (if they are collecting one – most self employed people do not even have that luxury) will continue and fearing the worst should any unexpected illness befall them as they lose their health insurance coverage.

As good as tax credits and new hiring incentives sound, they won’t immediately create or bring back jobs.  Corporations and businesses will not hire unless there is a demand for their products and services.  Tax credits are only good if they make a profit – if there is no profit, they won’t be paying taxes in the first place.

As concerned citizens, what can we do that will help turnaround the economy and will do so with an immediacy that the lawmakers can’t?  You might not think that as individuals, you’ll have much influence but you’d be wrong not to take into account the effect of critical mass – if there are enough of us who are prepared and willing to do something about it, WE can help turn the tide.

Starting with this holiday season, think “American” in all the things you buy and in the gifts you are planning for your friends and family.  Here’s a list of gift ideas that have a high American content and will help keep or create more American jobs:

• Tickets to Broadway and Off-Broadway or any local theatrical and orchestral productions.  Attend a “Messiah” concert to get into the holiday spirit and bring a friend with you.  The Arts are hurting as corporate donors slash costs that do not help with their bottom line and as individual donors are faced with real or possible unemployment.  
• Tickets on domestic airlines to domestic destinations for that winter break.  Airlines are very labor intensive (despite their automated reservation system) and they have the ability to quickly bring back capacity and jobs as demand increases.  Hotels, resorts and theme parks at your destination are also highly labor intensive and your patronage is a key driver.
• Gift baskets filled with domestic products (wines, cheeses, fruits, jellies, crackers, etc.).  It may be chic to have imported gift items but they don’t create American jobs to the same extent.  American products are world class and, in most cases, less expensive than imported ones.
• Gym / Sports Club Memberships.  Register yourself and your friends for a trial membership at a local gym or at a Yoga or Tai-Chi class.  If you like the experience enough (going with a friend always help), you might sign up for a more permanent membership.  These are again service oriented industries and quickly creates employment opportunities as class sizes are normally limited and each new class will require new instructors and support staff.  You’ll do yourself and your friend a world of good and you can work off the extra pounds from the many holiday parties and keep you fit for the challenges in the days and years ahead.  Think of your positive contribution towards reducing healthcare costs as well.
• Sign yourself and a friend up for a class to learn new culinary skills, a new language or pick up defensive driving credits.  You’ll be a better cook and you and your family will eat healthier OR you’ll be better qualified for jobs that look to exporting American goods and services to overseas markets with your new linguistic skills OR you’ll save a few bucks on your car insurance.
• Invite your friends from other countries to come visit America.  It is a beautiful country and there is so much to see and do and they can take advantage of the weaker dollar.  Sales taxes in America are very low compared to the VAT or GST levied in many countries.  Tourism is a big employer of labor and every direct job created has a multiplier effect, creating further (indirect) sales and jobs.

I’ve planted a few easy ideas on what you might do to help turn around the economy.  I’m sure that as you put your mind to it, there will be plenty more you can think of to add to the list.  The important thing is to ACT NOW and THINK AMERICAN.  Focus on the American Content factor (read my previous post) in what you consume and you will be instrumental in bringing jobs back the way your politicians can’t.

As I began to write this blog, I was reminded of a very short rhyme that I learned in grade school:

Little drops of water, little grains of sand

Makes the mighty ocean, and the pleasant land.

YES WE CAN MAKE A DIFFERENCE !!!  

Spread the word – share this blog with your friends.

Reforming Government

It does not surprise me that so much of the negative sentiments over health care reform stems from a general sense of distrust in “Government”. The corruption we see reported in almost every State where elected officials abuse the position of trust and power GIVEN to them by their constituents feeds into that distrust and, over time, it has eroded our confidence that anything labeled as “Government” can be of any value or do any good. As the title of a Tyler Perry movie goes, “I can do bad all by myself” – we certainly don’t need to elect or pay anyone to abuse us.

Things have been so bad in New York that a New York Times editorial (Oct 18. 2009) titled “Fed Up with Albany” recommended voting out every incumbent member of the state’s legislature if nothing is done within one year to clean up the mess (click here to view the NYT editorial). Readers from outside of New York chimed in with their comments and left stinging remarks about the disgraceful and shameful behavior by their own state’s elected officials, voicing their agreement with the idea of voting out every incumbent simply because they are an incumbent.

Unfortunately, we often have an innate tendency to generalize issues and things and, in doing so, we destroy the good that is overshadowed by the bad. Identifying the real issues and dealing with them may be more time consuming but clearly more civilized and less damaging. In the Biblical story of Sodom and Gomorrah, even an angry God was prepared to spare the lives of the Lot and his family before he rained fire and brimstone upon those cities. We have a duty to separate the good from the bad; the wheat from the chaff.

In fairness to the New York Times, their editorial included a promise to outline the ways that the existing inbred system allows for abuse and what Albany could do to change its ways. I will watch for their recommendations with great interest – New York is the only home I’ve known since coming to the United States.

The purpose of my posting here is to go one step further because “Government” is not simply made up of elected officials sitting in the halls of power inside the Capitol buildings. It includes Public Services that are run by the Government, funded by tax-payers’ dollars. The people employed by these Public Services are often the only faces most of us will see in our dealings with the Government.

Whenever I have had to avail myself of the services they provide, I make it a point to smile and be friendly, hopeful that in doing so, I will make their day a little brighter and in exchange, what I need done will be achieved with some dignity and expediency. Happily, my tactic works better than 50% of the time so it isn’t a wasted effort.

Unfortunately I can also say from experience that often times the faces I see are dour and the attitudes appalling – almost as if by my being there with a need which only they could service, I have become an unwelcomed intruder in their plans for the day. I’ve had employees of public services disappear on me while I was standing at the service counter because it was their lunch time or a personal call came in on their cell-phone and they didn’t want me to listen in on their private conversation. I’ve watched in amazement as they would stop working on my case because colleagues nearby had started a conversation about something outside of work and they felt a need to be part of that conversation. I’ve had to fill in a tri-fold, 4-color pre-printed form simply because it was standard procedure – despite the fact that all information I had to provide is already in their computer system and unchanged – only to see the form tossed into a trash bin moments later. I could go on…

Public Service is where we clearly need reform as well if we want to improve on the image of Government. Standards of efficiency and quality of service must be set and independently audited to ensure compliance and there must be accountability where the standards are not met. Pay increases must be matched by better performance and increased efficiencies so that they are self-funded and no new taxes are required. Public Service employees must be treated as private sector employees are treated – lifetime employment should not be guaranteed and they should be subject to the same possibility of termination for poor performance and for cause. Outside expertise should be brought in to improve work-flow, eliminate unnecessary processes and costs while enabling greater automation and efficiency. Performance of Public Services employees can and should be bench-marked against performance of employees in the private sector and made public so that there is transparency and necessary actions be taken to weed out the inefficiencies.

There is no reason why public services cannot be just as efficient as the private sector. If virtual monopoly exists, find ways to break up that stranglehold. Private schools co-exist and compete with public schools and private parcel delivery companies co-exist and compete with the US Postal Service. Similarly, private transportation services compete with public transportation services.

If politicians, elected officials and public service employees are keen to keep their jobs, they need to do a better one. The nation is suffering from the cumulative and simultaneous effects of the bursting of the housing bubble, the near meltdown of financial services, and technologies and policies that have enabled the relocation of many of the so-called ‘middle-class’ jobs to lower cost countries. Policies of the past no longer serve the needs of the present or the future and changes must be made from the very top to the very bottom of “Government”. Failing that, we should start looking at outsourcing or off-shoring Government jobs.

Venturing into a “No-Fly” Zone

According to The Associated Press, British Airways (BA) announced that with effect from October 7, 2009, it will start charging passengers who want to chose their seats in advance – 10 pounds for an economy class flight within Europe; 20 pounds for a long-haul economy flight and a whopping 50 pounds for an exit row seat. Even business-class passengers are not spared, having to pay 20 to 60 pounds depending on whether it is a short or long haul flight.

I expect BA to reverse its decision soon enough – it is plain dumb and reflects a desperation on its management’s part to raise revenues at all costs, even at the risk of losing customers. It is fascinating (and frightening) that BA’s management should even contemplate that their loyal customers will be happy to part with more of their hard earned money at a time of economic uncertainty, simply for the privilege of flying on BA.

I can understand charging more for seats based on the amount of leg-room or the degree a seat can recline (both clearly class related), even if those seats are in the same economy cabin – that is what most US airlines are already doing - but charging a hefty fee for the “privilege” of picking seats in the less desirable section of the cabin is clearly over-reaching.

All is well if enough passengers are prepared to fork out the extra dough to pick their own seats in advance, but what if that scenario does not play out? Imagine the anguish and the anger when a family with an infant are assigned seats that are spread around the cabin – who will tend to the child when he/she cries?. Imagine the annoyance when a couple leaving on a honeymoon are assigned seats that are far apart – great way to begin a life of togetherness. Imagine an elderly person susceptible to incontinence being assigned to a seat away from the aisle and the bathrooms.

Oh, sure, the gate-agents can reassign seats to accommodate those with special needs but should there be enough cases of those same special needs on a single flight, it will be a nightmare for the gate agents as each seat reassigned may raise a whole new set of problems and consequences. Expect take-off delays or having to arrive at the airport hours in advance to beg or fight for seat reassignments.

Thanks to the Internet, Airlines were able to push the task of seat selection to the consumers thereby cut down staffing at the gate and saving millions in payroll costs. By allowing passengers to pick their own seats, they also end up with customers who are generally happier, especially on flights that are not filled to the capacity. Passengers will almost always chose to spread themselves out (leaving the middle seats empty, etc) and their overall flying experience is enhanced with no further effort by the airline.

BA’s decision effectively reverses that and it will be interesting to watch what happens. I would very much doubt that they would be able to greatly raise their revenues because of that decision, especially on the short-haul flights and as long as there is stiff competition from other airlines. Without a doubt, BA’s competitors will use BA’s newly announced seat-selection-charge as a leverage to snap up all the disgruntled BA customers.

Clearly, the latest business decision by BA is questionable at best and destructive to its customer base and loyalty at worst. It is venturing into a “no-fly” zone as far as customer tolerance is concerned. Airline passengers are already bullied into cramped seats, checked baggage charges and no free-meal service on board. What’s next, charging for the ‘privilege’ of being able to breath on board a flight?

Go American

“Caveat Emptor” was one of the first Latin phrases I learned in law.  Quite simply, it means “let the buyer beware” – the purchaser has to take a certain degree of responsibility for ensuring that the property he/she is purchasing is fit for the purpose it was intended before closing on the deal.  As an example, home buyers will have their lawyers conduct a search on the property’s title, purchase title insurance, and hire an engineer to inspect the condition of the home before closing on the transaction. 

The “Caveat Emptor” doctrine works well with big ticket items (as in the example of the home purchase) but is more cumbersome and off-putting for the lower cost consumer items.  Hence most stores will have consumer friendly return policies that allow a hassle free return of items that are defective or do not meet the consumer’s requirement within a reasonable time after the date of purchase.

Because of the ease of buying and returning such consumer items, most of us do not think twice before acting on our urge to buy something.  We wanted it (because some clever advertisement or a ‘cool’ friend convinced us we “need'” it) and we went out and bought it because we could afford it.  Simple.  We rarely, if ever, think of the social and economic impact of our actions beforehand.

Yet everything we buy has an impact.  The stores make a profit; the sales person makes a commission; the truckers bringing the goods to the store were paid for their services; and so on.  In turn, we have to go to work daily so that we have an income to pay for the things and services that we consume. 

In short, our consumption creates jobs and, conversely, we can consume because we have jobs.  It is a dependency that has grave consequences should the link be broken. 

This recession is especially severe because job losses started in those industries that have a high degree American labor or content – housing, finance and auto-manufacturing.  Each job loss has a multiplier or cascading effect.  When those workers lost their jobs, their consumption pattern suddenly ceased and retail and sales of non-essential consumer products dropped precipitously, sending more workers to the unemployment lines.

The lessons learned from this downturn have to be put to good use if we want to recover from it and protect ourselves from yet another economic disaster of a similar magnitude.  Like the green-movement or awakening that brought ecological-consciousness to the forefront, we need a second green-movement that will bring economic-consciousness into every US Citizen’s thinking. 

Here are a few starter thoughts:

1.  Go American

Buy products that are high in American content.  Start with buying local produce:- fruits, vegetables, wines, cheeses, meats, processed foods that are locally produced.  Shop at your local farmers’ market.  Write to your local grocery store / chain and ask for more local products and dedicated American product aisles.  American produce is world-class and competitively priced - there is no reason to buy foreign. 

Vacation locally – there are many affordable American vacation products and places to visit.  They create jobs in America.

2.  Demand transparency and accountability

Write to the CEOs of the companies that benefit from your consumer dollars and ask for transparency into their practices – percentage of their jobs and production located in foreign countries; percentage of their product that have foreign content; etc. 

It is important to include the CEOS of foreign producers or importers of foreign products – they can create an impact by increasing the percentage of American content or labor used in their product.

3.  Lobby your representatives

Write to the congressmen representing your district or state and demand that economic-impact reporting become standard in every publicly listed companies annual report and filing. 

Ask about fair trade practices of the countries America deals with – what is the imbalance of trade with each country and how they plan to address that.  We want our creditor nations to be buying American products and services, not just US Treasuries.

I’m not recommending a boycott of any sorts over foreign products – I’m merely pushing for a greater awareness of the need for a higher percentage of American content in the products we buy, and what other countries buy from us in return. 

Yes, just like it has become hip to buy ‘organic’ products, it can become hip to buy ‘American’ products too.  And it will be more expensive to go ‘American’ as it was to go ‘organic’ but the end result will be worth it.

Some of us laughed at the ‘organic’ movement but it has taken root and become a settled part of our social consciousness.  We can make the ‘Go American’ movement work too.  It will take a conscious effort by every American concerned about his/her future or that of the next generation.  Sitting by idly or ignorantly and doing nothing is clearly not a solution.

YOU ARE AN AMERICAN; BE PROUD TO BE AN AMERICAN.

Quality Matters

I’ve been shopping for a vacuum cleaner for my apartment in the city. The Hoover “Futura 390” that I purchased some 16 years ago still works, but parts of the wand have been breaking off due to age and I cannot find replacements – apparently the future in “Futura” has come and gone. The vacuum’s suction is still strong although the noise it generates is close to that of an engine of a jet plane coming in for a landing. It is hard to part with such a loyal worker but I’ve come to the decision that the aggravation I get each time I vacuum is too stressful and it is time to move on.

I made a mental list my requirements (quiet, good suction power, automatic cord rewind, nozzle for hard floors, etc.) and went to Lowes one Saturday morning and toyed around with a few models. I eliminated the big, bulky upright models more suited for cleaning plush carpeted floors. Besides, storage space is always at a premium in a city apartment and I don’t have any to spare. Conversely, I also eliminated the tiny ones that are real space savers but are underpowered and more suited for light work over a small area. I’ve had one of those before – it pretty much stayed in storage till I disposed of it.

Two models from Motorola on display attracted my attention and I decided to do some research on them – to get a sense of how other customers rated the machines and to see how well they compare to those made by other manufacturers. At this point, I was prepared to go for the more expensive $500 model from Motorola if the reviews were good. Unfortunately, what I read (on different websites) was a real put off - warnings of breakdowns and hassles with getting replacements were prominent.

OK, I told myself, let’s try another American manufacturer – why not Hoover – the same maker as the vacuum I have owned for so long? I went browsing and found a Hoover model in the same price range and specs but, sadly, it had the same bad reviews.

Disappointed, I finally decided to look at other brands, including those made by foreign manufacturers and a model by Miele (a German manufacturer of household appliances) stood out with raves and excellent recommendations. For the same $500, I could get it with the deluxe nozzle package with separate specialized nozzles for carpeted and hardwood floors. For $100 less, I could get it with a less sophisticated ‘combo’ nozzle. I’ve used a Miele vacuum before at a friend’s place and I already knew that it was quiet and worked well but I had thought that it would be more expensive, being an European ‘import’.

I have put the word ‘import’ in parentheses because I know most American products are likely imports as well, made in some faraway country where labor is cheap enough to more than compensate for the cost of shipping it all the way back to the US and leave enough margin for the retailers and manufacturer to make a profit. What surprised me though is that, for the same price, a German made product can beat out their American counterparts in terms of quality, reliability and user satisfaction. Isn’t labor not equally or more expensive in Germany? Even if the Germans also outsourced their manufacturing, how did they end up with a better product?

American manufacturers must take responsibility for quality control – simply slapping their name or logo on a product doesn’t automatically make it good. Their name and brand is at stake and to put shoddy, poorly made products on the market is nobody’s fault but their own. Destruction of a brand is very costly and managers cannot lose sight of it. Managers must not sacrifice quality for short term gains – billions of dollars in commercials cannot restore a lost trust in a product.

A first-time buyer is important. Consumer satisfaction is important. The user’s experience sets the tone for his/her next purchase and any upgrade path is smoother if the experience is an excellent one. I was ready and happy to buy an American branded vacuum to replace my existing one but now that I am armed with more information, it is highly likely that I will not .

Quality matters, especially in the Information Age where the consumers are able to share their experiences, both the bad ones and the good ones. Viral marketing works both ways – good news and bad news travel equally fast and far.

American auto-manufacturers suffered from years of inattention to quality control and some are, at long last, resurfacing and catching up with their Japanese and European counterparts. American industries, whether big or small, from making jetliners to vacuum cleaners, must make quality a first priority if they want to continue their dominance or retake the world. American workers must take pride in the “American” brand.

Climbing Up A Greasy Pole

Historically, stock markets climb ahead of an economic recovery and, applying that logic, the recent climb in the various stock market indices should point towards a recovery in the US economy in the not too distant future. However, hope can trick us into seeing things that are not there – like a mirage of an oasis in the desert.

Remember, all stock markets are pretty much like casinos – calculate your odds, place your bets and hope that you will come out a winner. Investment experts and stock analysts who will tell you anything you want to hear – we get to watch them pitch their thoughts daily on CNBC or Fox Business News – take everything they say with a good pinch of salt. They are masters of using obscure language that could be interpreted to mean different things to different people at different times. If they were such ‘experts’ how did they all (with possibly a few exception) fail to forewarn investors of the near collapse of the financial industry?

Unless the authorities come up with the right solutions, an economic recovery from this downturn will be painful and long, like trying to climb up a greasy pole.

Continuing trends that hamper recovery or indicate that all is not well:

• Oil prices have crept above the $70 mark – we’re halfway back to the peak reached in July 2008, more than double the lows in the mid-$30’s that it hit in December 2008 and again in March of 2009. Consequently, average regular grade gasoline prices nationwide have climbed from under $1.60 a gallon in December 2008 to over $2.60 in June 2009 – that is a 62% increase – while the recession is still deepening. Speculative investors in oil are back and that is bad for recovery.
• Unemployment has continued to climb although the pace appears to show signs of slowing. It will take a solid few months after the trend reverses for consumers to even begin to regain confidence enough to spend on things other than necessities.
• Despite the all-time low interest rates, credit is still tight and consumer patterns are changing as they veer towards a higher rate of savings (if they still have a job) from the glory days of spending what they did not possess or have not earned.
• State, local and regional governments are scrambling to compensate for shortfall in tax revenues by cutting services or increasing tax rates, both of which will hurt the average consumers even more, driving them to spend even less on non-essentials and sometimes cutting into even the essentials.
• Dysfunctional state governments such as those in California and New York (numbers 1 and 3 in terms of the size of their GDP in relation to the overall GDP of the US) will further hamper the speed of recovery as necessary budgets and laws are not passed.
• Five months after its passage in Congress, only a small fraction of the money from the $789 billion stimulus package has hit the ground and promised spending on infrastructure will take a while yet to come on-stream to have any visible impact on the unemployment numbers. As of July 16, only $183 billion has been allocated to state agencies and, of that, only $63 billion has been spent (source: Recovery.gov) - less than 10% of the total stimulus passed.
• To make matters worse, some states will not be getting the stimulus money as Republican governors in those states have rejected the stimulus funds (source: Fox News. com).
• The TARP money that was used for bailing out the failing financial institutions and automotive giants only helped to stabilize the system but will not generate new jobs, income or consumer spending.

The administration has done well to stabilize the situation but it must quickly move towards actions that will stimulate the economy in the right way. Interestingly, a guest on CNBC on the morning of July 7 highlighted the way the Chinese government has succeeded in stimulating its economy and they way they have done it reminded me of the idea I posted on my blog back in December 2008 titled “To B or Not to B”.

The US needs to stimulate consumption but giving away money, whether directly or via tax breaks, is not going to do the trick in the current environment. A more cautious population will simply stash the money away in fear of a deeper and longer recession. Time to focus on ideas and actions that will pull us out of this hole.