Health Care – Where’s Beef

Joe Gokaho 2009.08.31 1D

There is my understanding of our "health care" system.

Part 1, Part 2, Part 3

Myth and F reek-0-nomics

Health Care - Where's Beef

There is my understanding of our "health care" system.

Part 1, Part 2, Part 3 Myth and F reek-0-nomics

My Understanding of Health Care .. Shortcuts

There are loop holes in my talking point; it’s just like any other government managed shared resource program. But the goal is to make American understand that there is a cost associated with health care, and it’s not free

We budget for food, housing, transportation, but not everyone allocate funding for retirement, education, or our own health care. Our government can’t just continue to escalate the burden on “have” to pay everything for those so calls “not as well off”.

A homeless person, without assets, is already received “free” emergency room care at the tax payers’ expense. Under the reform, when does tax payers money begin to extend100% free health care to individuals – when is one too poor contribute into the basic health care system?

Everyone needs to take responsibility for himself; otherwise, soon or later everyone catches on how the system work - We don’t have to do anything (work, contribute), and government will take care of everything

My Understanding of Health Care (Part 3 of 3)

This is my health care reform “pass-fail” check list:

1. Government needs to fix/make Medicare a viable program first, proving to tax payers that government knows how to direct, manage health care Otherwise, why should we believe we are getting something better, or creating even bigger government funded heath care program.

2. Government health care benefit must be a self-sustaining system, without the aids of other form of taxes. What’s being collected in premium, out of pocket expense shall be the same as the payout for medical service.

3. The “so call minimal heath care” shall be clearly defined. Everyone needs to know “what are we buying” and “how much we are paying”. The definition of “minimal health care” needs to be adjusted yearly according to our ability to pay.
The maximum tax rate burden to fund “minimal health care”, should not exceed 1.45% of the income; it’s an arbitrary number, but it is to keep the definition “minimal health care’ in check.

4 Health care premiums should be same for everyone, regardless of income level. The benefit package should be the same for everyone – everyone’s being created equal. If we collectively want more in benefit, then we will have to pay more. No cheating, no special treatment – everyone must be treated equally.
If special assistance is need to low income earner (progressive tax is implemented), at a minimum of 4 out 5 rate payers (80% rate payers) are set to maximum tax rate. Assistance/progressive rates can only apply to 1 out of 5 rate payers.

Coke, No Ice

2009.08.28

We, as American, all enjoy icy cold soda, either from a chilled soda can, or loaded lots crushed ice. The 90’s plastic bottles are great, it performs well at keeping soda from going flat, but it doesn’t keep the soda cold for very long.


When flying to Europe, I am a bit surprised to learn many of the passengers around me didn't want ice with their soda, I wonder who wants warm soda, that's wired.

Later I learn they were European. They would trade 'cold soda' for "cool soda" for the full flavors. I guess we like the watered down "American Coffee" - as long as it hot to hold in a cold day; and we like our soda served icy cold too.

May be there is another reason – economics. Years ago, I was told to fill the 1/2 of the drink cup with ice before dispensing soda. Ice is cheaper than the carbonated soda & syrup, the restaurateur makes more money that way. May be European are smarter -wanting "full flavor" of the soda, not washed down version because – it’s €4 for a 12oz soda, accompany that €22 3-course dinner at corner café.

I usually finish my “brown bag” lunch in no time; I end up with 1/2 cup full of ice. I am copying European way of ordering drinks now, Coke - no ice please..

Job Titles and Responsibilities, Defined

3 Levels of Competency –

► Newbie – you can’t be a newbie forever
► Average, - You can’t let someone stuck in this level for ever (for too long)
► All Stars – your competency will suffer when you begin to loose he “all stars” from your staff. Build a business, or fine tune your business strategy to maximize the capability of your all stars.

5 Level of Responsibility
► Producing – Value added staff.
► Supervisors (teachers) – A producer and a mentor for the “value added staff”
► Managing – Shall have the technical understanding of how to complete tasks – resource requirement and constraints.
► Directing – Shall have same skill set as managing, but in a collective of similar disciplines (domain of knowledge). He shall also make “wise” adjustments to his resources in anticipation of new projects, or the industry down turns. Example of the “wise” decisions: (a) outsourcing, (2) fine tuning resources, including HR, to match the company core competency.
► Visionary – Shall have a good understanding of competitors, technology innovation, market condition, trend, communicate to others on how to position the company to provide the products and services (target market, competency)

So, where I am on the chart? Where have I been, or where are you on my chart? How long do we stay in each of those boxes?

For estimating one’s career growth (responsibility and competency), I come to think of duration for each of the competency stage is about: Newbie – (1-2 years), Average – (3-7 years)

	Newbie	Average	All Star
Envision	Step 10	Step 11	Step 12
Direct	Step 8	Step 9
Manage	Step 5	Step 6	Step 7
Supervise	Step 3	Step 4
Produce	Step 1	Step 2

Cash Flow / Investment Return on Rental Property

By Joe Gokaho 8.17 1D

What’s the best way to hedge against inflation? Gold? That's I have been hearing on the conservative radio talk shows a lot. In this down economy and our government is borrowing more than ever, and rumor (trending to) of higher taxes – one can only think of the path other countries had taken, they all end up with much high inflation rate.


I don’t want to holding to a bunch of worth "less" US dollars in mutual funds and stocks. I strongly believe that our inflation is likely be long-lasting for the next 15-20 years as we shifting toward European taxing system. Spanish government is struggling with its socialist reform policy – 30 years after the dedicator ruler of Francisco Franco, the unemployment is still among the highest in European Union.

Buy American! It’s not a bad idea, but tot buy what? Real estate is often quoted as one way to hedge against inflation.

http://www.thedigeratilife.com/blog/index.php/2007/09/18/12-ways-to-beat-inflation-dont-let-rising-prices-get-you-down/

In this down economy may not be a good idea to buy more properties. I just learned that a tenant inform a close friend that that they can’t pay the rent anymore – because of their business income has dropped.

Wow – they are facing to loose rent income for at least 3 months, and lots of legal fees to evict tenants. I wonder how “real estate investment” is really doing to hedge against inflation. Their current year return on the rental property is a whopping negative #@#$@.- its worse than inflation.

My Understanding of Health Care (Part 2 of 3)

By Joe Gokaho/2009.08.010 D1

Medicare – works great?
======================

On average, the government pays out over $700 a month per person to private insurance company for the Medicare Advantage Program. Medicare Part B demands another $90 month on the premium, totaling $10,000 a year (directly and in-directly) per person.

To avoid the pitfall of co-pays and out of pocket expenses in Medicare, people general purchase “Medicare Gap” insurance to cover that. People can’t afford the insurance are running a risk of “IOU” to our medical systems.

If there is no consequences for not paying the medical bill (people have limited assets, or had diverted assets to their charities, children already), then why buy the “Medicare Gap” insurance?

In my life time, (say working from age 20 through 65 - $50,000 year @ 1.45% tax rate) , all my FICA contributions had earned 3% in return-keeping up with inflation, my personal "FICA account" doesn’t even come close to the fund my $10,000 a year/medical bill for the next 15 years. Where do we find the extra money in my "FICA fund" to support Medicaid?

American life – worth more than anywhere else
==================================

Everywhere else in the world, everyone is aware a “value” associated with human life. Only in the America, a human life is priceless – we will devote endless resources to save one’s life, improve one’s quality of life. Outside of America, only the wealthy appreciates the concept of “prices less Medicare”, maybe that’s why only American are creating new, real practical life saving health care technology.

Being Americans, we are not in tuned with ‘cost’ associated delivery of health care. Because rich and poor all get quality care in emergency situation, regardless your ability to pay.
In European system, like Spain, the social security benefit tax rate is (30.5%), twice of American tax rate. And everyone pays into the systems.

Will we embrace European systems, doubling our current FICA tax rate of (15.3%) to (30.5%) to fund the “universal health care plan”?

Will you be happy to have your salary reduced from $100,000 a year salary down to $85,000 a year? For $15,000 a year, I can buy up a lot of insurance on my own.

Will you be happy to give up part of your $40,000 job to have medical insurance? May be, I am sick with pre-existing medical condition. If I am healthy, giving up $6,000 year of pay, it seems like a dumb trade-off.

Rewiring TV, Entertainment Systems

Our 3 and ½ years old plasmas tv received an update wiring last weekend. I had the TV hookup with mixed new and old technologies couple years ago. Once was new technology is now pretty much obsolete, superseded with newer technology.

It had a HDMI (video only) port; the technology was so new 3-4 years ago, the $2500 Panasonic Plasma offered only 1 hookup, Today’s Panasonic succession model offers 3. It old TV didn’t even offer digital NTSC tuner either back then.

Old plasma tv also had an optical audio output for home theater/surround sound stereo setup. I am not sure whether my parents had used that feature at all. Today, HDMI version 1.3 replaces that optical interface.

Remember the “smart card” as the cable set top box equivalent for viewing HD program? Well, the optional “cable card” isn’t compatible with the local cable service provider. Now it’s a useless piece of technology.

# # #

We went back to the basics: Don’t have a new Blue-ray DVD player just yet, sticking with old faithful technology. The back panel setup is now configure to

1. Component 1 – DVD
2. Component 2 – Satellite Dish Ku Band (NOT DDS DishNetwork, Direct TV).
3. Composite 1 – VCR
4. Composite 2 – Cable
5. Air – Antenna Local HD
6. HDMI (video)– (open, may a PC video at a later time
7. No more plugs for karaoke LD player. We can’t sing anyway, sure going to miss the $200 mic.

I also notice elderly parents placed a portable boom box next to the stereo rack equipment. I realize the system was too complicated for them to operate; they had resolve to a $50 simpler device. I dump the surround sound Kenwood Home Theater with a nice bookshelf Panasonic stereo I had since 1990’s – I said nice because, there weren’t that may bookshelf systems with separate wiring for cross-over speakers. The system costs $750 in 2009 dollars, it’s not cheap considering it doesn’t even have the surround sound speakers, but it makes up the difference by giving accurate clear sound reproduction, pretty tight bass and easy to use interface.

Removing Curbside Weeds

I am tired of weeds popping out along my curb. In the past, I physically removed weeds with its long well developed roots, I also used herbicides on weeds - they came back years after years.

My next strategy was to patch up, seal up the crack with concrete mix. It seems to work for a season.

Next year, the weeds started to grow again. Instead of "heavy" bushes of weeds, now they are smaller, but still awful to look at when your house is the only one on the block that has weeds

# # #

I think I have figured out how I keep having weeds..

► The paved street, made from mostly asphalt composition, and the curb side, made from mostly concrete mix, They expand and contract differently, leaving a small crack between these two surfaces

► The small crack reduce the moisture evaporation; and the daily over-watering run-off soaks down the cracks.

Lesson learned.

► The crack and the uneven surface allows soil/sand to pool nutrition for weeds to grow.

► 40lb concrete mix doesn't fill many holes

► Standard, concrete mix contains pebbles too big to fill cracks, patching the surface unevenly. Make your own sand/cement mix instead.

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Myth: Make Health Care Affordable

Many people think by pooling small business owners together will be able to make health insurance affordable, rather than trying to buying policy individually. There is some truth to it. The policy premium will be based on the new “collective” accessing health care, rather than just one individual.

Example: If 1 in 5 of the employees received a $80,000 by-pass heart surgery, and no one else used the service, then on average, an individual needs to share $16,000/year per person. Writing a policy for these 5 people can be risky; may be that why the typical premium for individual is not so affordable - unless you're extremely healthy with extremely high deductible policy.

If the same $80,000 can be shared by a group of small businesses, The larger the collective can smooth out (share more) the spike in cost. If there are 20 people in the policy, then writing a policy for these 20 people is less risky, because the average cost shared by everyone on the policy is $4,000/year. A big drop in premium. # # #

The assumption is that the premium will be lower when small business owner get together to buy insurance, but in reality the premium is adjusted every year, base on how the “collective” uses the medical service in the past year.

You may get a favorable rate at year one, then it’s about you and your “risk sharing” policy holders use the service collectively # # #

An auditor told me the story about “unexpected” jump in health care premium on a company facing uncertain future (closure, ran out of money, waiting for a new buyer to take over the company).

As the rumor spread, the employees began to visit doctors more frequently before the anticipated transition (to new owner, or facing closure), getting "taken care off" before losing their jobs and health care insurance.

The anticipated transition didn’t take place; the company limped through another calendar year. The insurance company raised the premium following year by 50%. That’s a policy on a company that has 400 plus employees. The employees had caused the company budget into deeper trouble.

# # #

If you offer a group of people who never had/or had limited health care to join a health care system, knowing they don’t have to paying full direct cost (employee are paying deductibles only), they will use the service to its full extend (freakonomics); Take note small business owners!. The balance of the health care cost (paid by either preminum and insurance) is going to be very high; regardless the number of people had joined the system.

The health care premium is not about number of people; it’s about the how kind of health care we want, and how much we are willing to pay for it.