Healthcare: Don't fear the Reaper...

There are two truisms that will not go away when it comes to healthcare reform. The first is we are all going to die, no getting around that. The second is that the demand for intervention that may delay the day of reckoning will always outstrip the supply.

I pose the following questions: Is it better to spend the $10,000 to save the life of a child? Of course, $100,000, yes. $1,000,000?

How about this: Is it better to spend $1,000,000 to prolong a terminally ill patient’s painful life by a few days? A week? A month?

While the questions are valid, the answers to them are beyond me. It is not a burden I hope to shoulder any time in my life. However, that is a reality to some people and I can understand the anguish they must go through.

When it comes to healthcare reform, we know that those with the most to gain are the 15% of the population who are uninsured but it will be at a cost to the other 85% and I am not adverse to this because I believe part of the role of government is to protect the citizenry. If that protection comes in the form of medical care, then so be it.

Nevertheless, reform can take many avenues. In earlier entries, I mentioned pharmaceutical price rollbacks, and reducing patent lockouts. We should also look at malpractice reform. Physician’s insurance rates are among the highest anywhere. The system itself is riddled with waste; no one seems to deny that. Therefore, I think the best approach to overall healthcare is to tackle chunks that are manageable and not subject to the buffoonery that we see on the daily news. I honestly thought I would never see the day where we would show an armed protestor near a presidential gathering. Somewhere somebody is laughing at us and we deserve it.

I welcome your feedback.

Baker's Marinated Chicken Wings

This is one of my favorite recipes. I hope you enjoy!


2 tablespoons cooking oil
1 medium onion, chopped
2 cloves garlic, minced
4 lbs. chicken wings1 carrot, peeled and quartered
1 parsnip, peeled and quartered
1 teaspoon dried thyme leaves
3/4 teaspoon salt
1/2 teaspoon black pepper
3/4 cup of Guinness - you can also use Murphy's or Murphy's Red

In a large skillet, heat oil over medium heat. Add onion and garlic and sauté for about 3 minutes. Remove vegetables with a slotted spoon. Add the chicken wings and cook about 5 minutes on each side, until lightly browned.

Add the onion, garlic, carrot, parsnip and spices to the pan. Pour Guinness over chicken and vegetables and bring to a boil over high heat. Reduce heat to low and simmer 30 minutes. Uncover and cook for 10 minutes until sauce reduces by half. Discard carrot and parsnip (or eat them if you want to).

Place chicken wings on a baking sheet and brush with remaining sauce. With the broiler on low, broil for about 5 to 7 minutes on each side, basting the other side when you turn them. Remove from pan, place on a platter and serve hot.

These make a great appetizer for your next party.

Healthcare Reform - Some More Thoughts...

From all I have read and seen there does not appear to be any doubt that reform is needed. However, reform takes many shapes and can be achieved in many ways. For example, we need to look at the level of care provided and ask the question, based on the perspective that we each deserve 100% of the care available to us under whatever plan (either private or public) is available: Are there groups among us who get more than their fair share of coverage? The answer invariably is yes. Two prime examples of this are our Congressman and women and some (not all) labor unions. I think we need to examine the health plans that are out there and look towards establishing some equilibrium with accompanying cost control measures in place.

Reform should also look at the price mechanisms in place for pharmaceuticals. From what I have read, the Pharmaceutical lobby has offered $80 billion in price cuts on medications used by pensioners over the next ten years. This will be a good thing if they do not seek to make up the price cut through purchases by those not retired. It also goes to show that there is leeway in the pricing of these medications.

In addition to the price cuts in pharmaceuticals the Hospital lobby also added a $150 billion price cuts in the rates charged the government over the next ten years. Between the two, that totals $230 billion dollars or $23 billion per year.

But is that enough? No. One of the reasons these price cuts were offered up in the first place was that these industries feared that they would be asked / required to offer up more. The one thing capitalists fear the most, in an environment where demand exists, is price controls. Right now, the government pays just over half of the revenue stream at an average hospital. Some would say that the government underpays while some would say that the rates charged are too high. However, when you factor in the tax status of most of the hospitals, you will find that a majority of them are tax exempt, non-profit entities – no property tax, no income tax. Therefore, I do not necessarily buy the argument that these hospitals will be squeezed too hard and should be able to reduce their rates further. They need to question everything up to and including the pay scales (I know that will inflame some folks). Some will say that these non-profit hospitals perform charitable services to the poor and they I would agree. However, I would also look at it from the perspective of a recent IRS study that suggested that these non-profits provide very little charitable services while paying enormous salaries or going on acquisition sprees.

Aside from Price Controls, hospitals fear competition. There was a consolidations phase that occurred in the late 90’s after managed healthcare failed. The resultant lack of competition has done little to reduce prices because the choices are few. This opens the door for innovation and that could take the form, as it is now, of retail clinics. Healthcare facilities operated out Wal-Marts (or Walgreen’s, CVS’s or even large chained supermarkets) and staffed by Physicians Assistants and/or Nurse Practitioners – both of which are far less expensive than doctors and hospitals. Imagine “Everyday Pricing” for healthcare at your local Wal-Mart healthcare clinic. So long as realistic boundaries are established in terms of what can be performed without the presence of a doctor then that alone will reduce healthcare costs (as well as increase ancillary spending).

Healthcare Reform - Some Thoughts...

The media is inundating us with stories related to healthcare reform and I am of firm belief that there are agendas being forced upon us by special interest groups on all sides, just look at the recent spate of town hall meetings. There is little, if any, discussion of substance happening and yet, they make for good sound bites by those “bubble headed bleached blondes” on the evening news. Wanna get on national television? Simply show up at a town hall meeting and disrupt the process by either yelling at the Congressman holding the meeting, ask a irrational question using inflammatory words such as “Nazi” or “Socialist”, or simply shout over the speaker so that his or her response or point can not be heard by the rest of the people attending. Within 24 hours, you too can be on Fox News.

I would like to think we are better than that.

The $800 BILLION Dollar Bailout/Stimulus Package

I don't know about you, but I can not fathom $800 billion dollars. I don't what that is, I mean, I understand the number but up until now I could not translate it into anything recognizable. How much does $800 billion dollars buy? I dunno.

Then I thought what would it look like if broken down into chewable bites. So I did a little research and this is what I can up with:

• 2009 (projected) Number of US Households - 113,568,000
• 2008 Median US Household Income - $50,233
• 2008 Median US Household size - 2.6 people

So, if I look at the stimulus cost of $800 billion and break it down it may not look so bad.

• The stimulus cost each US Household $7,044.24
• The stimulus cost each person in the US Household $2,709.32
• Based on the median income of US Households the stimulus cost for each person in the US Household amounted to 7.29 weeks of earnings.

So, now that we have broken it down into more chewable bites we can say that it cost a little less than 8 weeks of earnings to bring us back from the brink of a depression. The likes of which would most likely make "The Great Depression" pale in comparison.

Considering it takes the average employee a little more than 5 months to satisfy all federal, state and local taxes what's another 7 1/3 weeks added to the mix?

A friend of mine, who is not a big supporter of the current policy, said we are going the wrong way. I believe, when looked at it from this perspective, that such may not be the case.

Pretirement - What if?

Throughout my career I spent a lot of time asking the questions “Why?” and “What if..?” and I have to admit, by a repeatedly asking these questions (sometime to the point of nausea) I have been able to find better ways of achieving whatever goal I was after. This was especially useful in my position as Ops Manager of the branch I was working at and more recently all of operations for the company I work for.

So, it happened that I was looking at our 401K’s (rather sadly, I might say) and our last Social Security Statements knowing full well that I will be working until I am at a ripe old age, and was wondering what if (there’s that question again) retirement were reversed? As it stands now we are living longer and longer as each decade goes by and with retirement now at 70 years (up from 65).

What if, as a society, we subsidized our youth instead of our old age? Could we create a program that would pay us up to the age of say, 32 (an arbitrary age) and then enter the workforce? Entrance could be at the conclusion of high school or at the end of a military stint. Of course, this wouldn’t be mandatory. Either one could opt out after high school or before – it would be the individual’s choice.

To enter this program one would have to a high school diploma and commit to 2 years of community/military service through a more structured Americorp State or National Program. This way the community receives low cost services that address unmet community needs in area such as education, construction, the environment and public safety. While the participants receive guidance in responsibility, leadership, gain a sense of community belonging, discover untapped strengths and earn credit towards a college education and continued “pretirement”. While in the program the participant receives a small stipend to cover living expenses (on base housing) as well as free healthcare, childcare, pre-college education, and if there is a need in another region that calls for the relocation of the participant, then shelter allowance in off-base housing. In addition, one year of non-competitive status in a federal or state job after the completion of one’s service should they decide to opt out of “pretirement”.

At the conclusion of the two years of community service, the participant is now eligible to enter “pretirement”. This would involve an increase of the monthly stipend but with the requirement that the participant enter and successfully complete a five year, work-study based college program at an accredited state school or university. During this time, the “pretiree” would prepare, via study and internships, for the profession they wish to enter. They could take this time to marry, start a family, travel, and give full-time care to children. All with a monthly stipend, free healthcare and childcare (including Head Start). In order to remain in the program one would have to maintain a 2.7 (or better) GPA. Incentives could be granted of areas of specialized study based on national need. This program would last no more than ten years (enough time to attend a five year school and opt to attend graduate school) and allow time to enter the working world. Where one will work until they either can live without any government assistance (savings and investment), are incapacitated or have passed on.

I can see several advantages to this. First, there would be a lot more people working since the population over 32 is far larger than under 32. More tax revenue is being generated to support this program and budgeting for Social Security could be done with greater clarity. Second, the maturity and education level of the new entrants would be higher. While the healthcare and support needs would of these pretiree’s would be lower. Third, pretiree’s could enjoy the life while at the peak of youthfulness while paying attention, to a greater degree, to the matters of family. Fourth, and this may be the biggest benefit, no more bored elderly looked upon as useless by society. Think about that – here is an opportunity to enjoy retirement during the time of ones youth while at the same time increasing the education level of the population, reducing the healthcare cost and poverty levels while creating a better skilled workforce. Participants would be required to “give-back” to the program by volunteering time – say 10 hours a month – as a mentor to those in the program or those performing their eligibility requirement.

Now, I am no expert in this subject and I am only writing this to explore an idea. I am sure there are a million holes in this concept but it make for a good “what if?”

Managing in a Downturn Economy

With a widespread economic downturn, such as the one we are currently going through, managers, up and down the command chain should be actively prioritizing and seeking ways to reduce cost while eeking out greater levels of production through efficiency.

Most of us have already done the “easy” stuff (reduce/eliminate travel, benefits, staffing, etc) and while those have contributed to the bottom line circumstances call for another look at sustained and dramatic cost reduction going forward.

In my opinion, cuts going forward will need to balance current capability against proposed capability under a growth scenario, without significant increases in resource costs. Simply put do more with the same or less.
One-way for managers (all managers and I would go so far as to say front-line supervisors) to do this is to look at the business unit from a 3-tiered perspective. Those tiers are: Minimize – Optimize – Redesign.

Minimize – First, managers, if they have not already done so, need to look for immediate cost reduction opportunities. One of the most common euphemisms in my profession is “… kill a tree.” We need to continually ask whether an action or a resource, is a “want” or a “need”. If it is a “want” how does the business unit benefit by having it and at what cost and if it is a need, are there alternative ways to satisfy that need? For example, my profession spends an inordinate amount of money on paper costs. We have established, as an ordinary course of business, to have a complete duplicate file of data that is often in electronic form. This could take the shape of forms, files, manuals, policies, procedures and the like. All of which exist, for the most part, electronically. Even if managers have already done this, it deserves another look, perhaps from a fresher perspective in the form of a department or division-wide rewards program.

Such a program would carry with it a minimal cost but has the potential to reap cost reductions far in excess of the cost or reward offered.

As managers, we need to seek out the “hidden” costs that have seeped into our business or areas of responsibility. As an Operations Manager, in a prior life, I had P & L responsibility of a wholesale unit in the Northeast region. One of the things I did was to look for expenditures that have become operating costs that provided with little or no value. I questioned everything (I can say, that while I was respected, I was considered a friend of Accounting) that I could not justifiable identify or support in my unit. As a result, costs were appropriately allocated to their correct cost centers, others were reduced and some of them were eliminated. Managers need to know what it costs to operate their unit and there should be an incentive to seek out efficiencies.

Optimize – One of the best ways to increase operational efficiency is to increase the depth or improve the use of our existing software systems and hardware assets. By doing this we will inevitably begin to identify non-essential systems, assets, processes thereby decreasing our average unit costs, while at the same time begin to make permanent changes in the processes employed. One of the improvements that I initiated was a centralized knowledge management repository that replaced a multitude of physical manuals, P & P’s, QuikPiks and the like. I called it “The Wizard”.

By creating a single repository, increasing search capabilities and creating dynamic content capabilities through enhanced policies, procedures, QuikPiks and P & P alerts. Moreover, by linking vendor sites and lotus notes, I was able to offer our associates the ability to find more content, more quickly as well as provide an avenue to “Ask the Expert” should the content not provide a clear answer to their query. This enabled our associates to spend more time on client-facing activities.

One of the things we should continually look at is the consolidation of our data processing environments to gain, what could be, substantial cost reductions with continual payback in the form of time spent processing data, the quality of said data, the reduction of duplicity and error rates. We need to look at any series of systems that provide essentially the same function and decide to enhance one over the elimination of the others. If there are proprietary accesses that need to be established then sufficient security tools should be implemented.

Redesign – At this point, managers should be able to shift the focus to a more efficient and effective operation by putting into place or embedding structural changes brought on by minimizing and optimizing steps noted above. This will result in several positive outputs: improvements in labor costs, better operating models, uniform processes and procedures (supported by policy), transformational technologies and sourcing strategies.

An example of a transformational technology at work was first identifying the one common system thread that weaved its way through a majority of functions at my company. From there we redesign the screen flow to match the common functions and the way we commonly review the data. Since I work in a company that exists in a regulated environment, I added “pop-ups” or informational user guideposts that provided everything from common reminders to warnings. This allowed the user to work more efficiently in that the guidepost were designed to increase efficiency by reducing the time it took to source regulatory or policy information.

I guess the bottom line here is that cost cutting and process improvement are not mutually exclusive. There is pork in every budget and every P & L and with more people looking at it from their perspectives the more opportunity we have to gain positives through enhancements.