Mayor Bloomberg boils down the healthcare bill … in 2 sentences !

Key Point: NYC Mayor Michael Bloomberg — a supporter of healthcare reform — criticizes the bill’s lack of transparency, sensibility, and consequences

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Many who have long touted health care reform are turning up their noses at the final product.

Michael Bloomberg, New York’s independent mayor, told “Meet the Press” over the weekend:

“I have asked congressperson after congressperson. Not one can explain to me what’s in the bill, even in the House version … And so for them to vote on a bill that they don’t understand whatsoever, really, you’ve got to question how — what kind of government we have.”

The mammoth 2,100-page health care bill passed by the Senate “makes no sense whatsoever — not to conservatives, not to liberals, not to anyone.”

“Rather than reform a system that everyone agrees is a failure, it will subsidize that system and compel participation in it.”  

Mr. Bloomberg added that his own reading of the Senate bill led him to conclude that it would blow a hole in the New York State budget and force closure of perhaps 100 health clinics.

Excerpted from WSJ: Like Mushrooms, Health Care ‘Reform’ Flourishes in the Dark, Dec. 28, 2009
http://online.wsj.com/article/SB10001424052748703278604574624230633163104.html?mod=djemEditorialPage

Nelson's political right-to-life threatened by a Cornhusker Rebellion …

Everybody in earth orbit knows that Sen Ben Nelson of Nebraska sold his right-to-life principles for a couple of hundred million dollars and cast the deciding vote for ObamaCare.  Apparently, he expected Nebraskans to savor the Medicaid bribe he took on their behalf.  Oops.

It looks like the Nebraska senator’s health-care vote may have killed him politically.

A new Rasmussen Reports poll — the first state-wide poll since the controversial deal he cut in exchange for his deciding vote on the Senate health care bill –shows that if he were running for re-election today, Mr. Nelson would lose to Nebraska’s GOP Governor David Heineman by a stunning 61% to 30%.

Only three years ago, Mr. Nelson won his current term with a solid 64% of the vote.

Clearly, the senator’s fall in public esteem is a direct reaction to his having voted for the health care bill as part of a deal in which Nebraska was exempted from the costs of new federal Medicaid mandates.

The ObamaCare bill was already unpopular enough in Nebraska but became even more so when state residents discovered they would be saddled with it anyway, plus exposed to national ridicule over Mr. Nelson’s sweetheart deal.

Now 53% strongly oppose the bill, while another 11% somewhat oppose it.

Only 17% favor the deal that Mr. Nelson struck in order to vote for the bill.

But the poll also shows a path to redemption.

Asked how they would vote in the 2012 election if Senator Nelson changed his vote and prevented the health care bill from becoming law, Nebraska voters give Governor Heineman a lead of only 47% to 37% … that simply reversing his health-care vote immediately reduces Mr. Nelson’s deficit by two-thirds.

“The poll suggests the anger of Nebraska voters is deep and unusually intense, and not likely to dissipate quickly.”

No doubt it was precisely his concern about the unpopularity of the bill back home that prompted Mr. Nelson to hedge his bets when he announced he would support it — he made clear at the time he might not vote for it again if the final compromise between House and Senate versions tilts too far to the left.

Given the shocking slump in his standing back home, Mr. Nelson might like to keep those remarks handy during the coming weeks as the two bills are hammered together.

Source: WSJ, Ben Nelson’s Purgatory, Dec. 30, 2009
http://online.wsj.com/article/SB10001424052748704152804574628591826272498.html?mod=djemEditorialPage

Ken’s Bet: Nebraska voters are just teasing Nelson with the ray of hope if he changes his vote.  The voters seem more principled than the Senator and smart enough to know that if he betrayed their trust once, he’ll do it again.  In 2013, Nelson will be a high paid lobbyist or Obama’s Ag Secretary.

If you're unhappy, move to a state with lower taxes …

Punch line: States with the highest taxes also rank as the unhappiest.

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WSJ: Are Taxes the Root of Unhappiness?, Dec. 29, 2009

Does living in a blue state make people blue?

It seems so, according to a new study in Science magazine  … New Yorkers — with high taxes, traffic congestion, cold weather, and poor schools — are the unhappiest people in America and their neighbors in Connecticut come in a close second, followed by Michigan, Indiana, New Jersey, California, and Illinois.

And the happiest states? Drum roll, please…Louisiana, Hawaii, Florida, Tennessee, and Arizona.

Eight of the ten happiest states lean right while eight of the ten unhappiest tilt left.

The people who say they’re satisfied with their lives aren’t just delusional or overly optimistic, and people who say they’re unsatisfied aren’t just pessimists. People have legitimate reasons to be happy or unhappy.

And well, high taxes seem to be a big reason—ostensibly an even bigger reason than weather given that California is one of the unhappiest states and inclement Louisiana is the happiest.

According to the Tax Foundation 2008 analysis, three of the top five unhappiest states—New York, Connecticut and New Jersey — have the highest state-local tax burdens.

On the other hand, four of the top five happiest states—Louisiana, Florida, Tennessee and Arizona — are among the states with the lowest state-local tax burdens. True, correlation doesn’t prove causation, and high taxes alone don’t always make people miserable, but there’s something going on here.

In states with high property, income, and sales taxes like New York, people have less money to spend on other things that make them happy. They have less money to spend on vacations, hobbies, home improvements, eating out and child care. Another problem may be that people receive a low return on their tax dollars.

People are least happy in states that impose high taxes but don’t provide matching public benefits (e.g. good highways to relieve congestion and reduce commute times). It’s in states where taxes disproportionately subsidize public employee pensions and entitlement programs, but don’t much improve the general public’s quality of life, that people are most unhappy.

This intuitively makes sense. If you’re paying more than a third of your income in taxes, as many New Yorkers do, then you expect to realize the benefits from your hard-earned tax dollars. You expect quality schools, good roads, low crime rates, and quick commutes. You expect your local and state governments to be responsive to your needs, not to the cash flows of entrenched public employee unions and other special interests.

Many liberal state governments like those in Albany, Trenton and Sacramento are spending more and more on entitlement programs and public employee pensions, racking up more and more debt, and imposing more and more taxes to pay for it all –while ignoring their taxpayers’ needs.

Taxpayers, however, aren’t just getting unhappy. They’re getting out. United Van Lines’ 2009 annual study shows that New York, New Jersey, Michigan and Illinois are among the states with the highest outbound migration while Alabama and Tennessee are among the states with the highest inbound migration.

This doesn’t bode well for high-spending, high-tax states like New York where outbound migrants’ income is 13% greater than that of inbound migrants. In 2006, this differential meant a loss of $4.3 billion in taxpayer income for the state.

Taxes may not be the root of all unhappiness, but they do result in some very sad citizens.

Full article (with stats explanation)
http://online.wsj.com/article/SB10001424052748703278604574624743612652998.html?mod=djemEditorialPage

When you adjust stock gains for inflation … uh-oh !

TakeAway: Adjusted for inflation, the Dow would have to rise 28% just to get back to 1999 levels.

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Excerpted from WSJ: Adjusted for Inflation, Dow’s Gains Are Puny, Dec. 28, 2009

Stock analysts sometimes like to note that the Dow today is worth 27 times its value at its 1929 pre-crash peak, meaning that even if you bought at the worst moment, your stock still would be way up over time. In inflation-adjusted terms, however, the Dow today is only a little over twice its 1929 peak.

Many investors realize that stocks have been among the worst investments of the past decade. But they may not realize quite how bad the decade was, because most people forget about the effects of inflation.

Despite its 2009 rebound, the Dow Jones Industrial Average today stands at just 10520.10, no higher than in 1999. And that is without counting consumer-price inflation.

In 1999 dollars, the Dow is only at about 8200 and would have to rise another 28% or so to return to 1999 levels. Using today’s dollars and starting at 10520.10, the Dow would have to surpass 13460 to get back to its 1999 level in real, inflation-adjusted terms.

All of this might be enough to put investors off stocks entirely, until they consider the long-term alternatives.

Measured over the 1978-2008 period, rather than over just one decade, stock performance in real-real terms actually is better than that of just about any other major investment class: 4.5% a year. Stocks’ ability to keep up with inflation over the very long haul may be their best selling point.

In real-real terms, stocks did better over that period than municipal bonds (2.5% a year), long-term government bonds (2% a year) and corporate bonds (0.2% a year).

Real-real home prices were unchanged over those 30 years.

Both short-term government bonds and commodities suffered losses.

Full article:
http://online.wsj.com/article/SB10001424052748703991304574621903850508632.html?mod=WSJ_hps_MIDDLEThirdNews

Just can't seem to get the ball into the end zone …

Ken’s Take: Even “Cash for Caulkers” seems stalled. Imagine what implementation of the complicated healthcare program will be like.  My bet: It won’t be pretty. 

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Excerpted from LA Times: Obama’s ambitions outpace his effectiveness, by Doyle McManus, December 27, 2009

Obama has turned out to be masterful at launching new policies but inconsistent at getting them to work.

His presidency is threatened to fall into a worrisome pattern:

1. The announcement of a lofty goal,
2. The delegation of implementation to second-rank officials,
3. A missed deadline or two,
4. Last-minute intervention by the president to rescue the effort from collapse,
5. And, finally, mixed results …
6. … followed by a statement claiming victory.

Full article:
http://www.latimes.com/news/opinion/commentary/la-oe-mcmanus27-2009dec27,0,3930020.column

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Another Holiday Season Message: The Shameful Decline of Shame

Ken’s Take: Worth reading and internalizing … especially during the holiday season …

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Excerpted from Richmond Times-Dispatch: The Shameful Decline of Shame, by Robin Beres, December 27, 2009

Webster’s New World College Dictionary defines shame as a painful feeling of having lost the respect of others because of the improper behavior, incompetence, etc. of oneself or another; or as a dishonor or disgrace.

Britney Spears, Paris Hilton, and Lindsay Lohan have all gotten rich (or richer) from behaving like tramps. As we are treated to an unending series of newscasts on their panty-free nights out, their homemade sex tapes, and trashy photography shoots, the media glorify these women for being nothing more than what Americans once referred to as sluts.

Gov. Eliot Spitzer was caught fooling around on his wife with a high-priced escort;  Spitzer’s replacement, David Paterson, quickly admitted to numerous affairs — as well as marijuana and cocaine use; when South Carolina governor Mark Sanford’s dalliance with his sultry soul mate became public, he opted to remain as governor; and, oh yeah, how about that Tiger Woods?

It seems that — even outside the steamy world of celebrity sex-capades — shame has become an outmoded concept.

Being judgmental or critical of actions that are immoral or wrong is now considered politically incorrect.

• No longer is there any shame in staying on welfare or having a child out of wedlock.
• There is no shame in being just a mediocre student in school.
• Elbows on the dinner table and interrupting are accepted.
• People rudely talk on their cells and text any time, any place.
• Screaming at someone in public is OK.
• We put up with crude, even filthy, language.
• We teach our kids that self-esteem is something entitled simply because one exists.

Perhaps a little old-fashioned shame could serve us well.

This is not to advocate a return to the harsh judgments of yesteryear. No one wants to see someone tarred and feathered for making poor choices or behaving badly — but perhaps just a wee touch of accountability could have some positive effects.

Edmund Burke wrote: “shame keeps watch so that virtue is not wholly extinguished from the heart.”

Since we don’t have the great number of stern nuns around anymore to chastise our bad behavior, perhaps it is up to us to start acting like grown-ups and demand better behavior from our politicians, our celebrities, and even ourselves.

Full article:
http://www2.timesdispatch.com/rtd/news/opinion/commentary/article/ED-BERES27_20091225-192807/313566/

Christmas 2009 – 45 Lessons in Life

This short slide show was sent to me by a friend. 

It really resonated with me, so I thought I’d share it with you.

Merry Christmas and Happy New Year to all !
 … back with you after the New Year

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click picture or link below to launch
then click to advance slides 
( best with audio on)
 

ttp://kenhoma.files.wordpress.com/2009/12/45lesonsinlife-091118003935-phpapp02.pps

Unintended consequences? About limiting insurance companies to 20% of premiums on admin and comp …

Reid thinks he was really clever with the ObamaCare provision that limits insurance companies to spending 20% or less of premiums collected on SG&A — sales, general & admin costs — including exec comp.

Ken’s Bet: It’ll cause healthcare costs and premiums to go up.  Here’s why …

Assume that Acme Insurance currently collects $7.5 million in premiums — pays out $5.25 million to healthcare providers (docs, hospitals, pharmacies, etc.) — and spends $2.25 million (30%) on SG&A.

Reid thinks his rule will cut premiums by about $1 million — thanks to a roughly $1 million cut in SG&A.

WRONG !

Here’s a more likely outcome:

Acme holds its SG&A constant and simply starts selling more liberal plans (maybe all the way up to the Cadillac limit) to force fit within the 20% limit — for example, Acme charge $11.25 million in premiums to cover $9 million in payouts ( lower co-pays & deductibles, more botox) and allow $2.25 of SG&A (20% of $11.25).

PRESTO!

Rather than healthcare costs coming down and premiums getting reduced, premiums and healthcare expenditures go up by 50% … SG&A stays the same … insurance execs still drive fancy cars.

Ken’s Take: The DC boneheads have zero conception of how businesses run …

Reprise: The looming Medicaid tsunami …

I posted this a couple of weeks ago —  an editorial by the head of Johns Hopkins. 

His view: A vast expansion of the Medicaid program — without adequate risk-adjusted reimbursement rates — will impose unsustainable costs on healthcare providers.

With the Senate bill on its way to passage, it’s worth a re-read — a prediction of what’s to come from somebody who knows.

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Excerpted from WSJ:  Health Reform Could Harm Medicaid Patients, Dec. 4, 2009 

Both the House and Senate health-care reform bills call for a large increase in Medicaid—about 18 million more people will begin enrolling in Medicaid under the House bill starting in 2013.

A flood of new patients will be seeking health services, many of whom have never seen a doctor on more than a sporadic basis. Some will also have multiple and costly chronic conditions. And almost all of them will come from poor or disadvantaged backgrounds.

Johns Hopkins’  Priority Partners handles Medicaid patients under a capitated system — that is, it receives a set payment per individual per month from the state.

Over time, we’ve developed the ability to manage the care of these individuals in a way that is both cost effective and that provides them with quality care. We’ve done it by tapping into our extensive delivery system, which includes four hospitals, a nursing home, the largest community-based primary care group in Maryland, and much more.

We’ve hit above-national benchmarks on all clinical quality measures, reduced monthly costs for patients with substance abuse and highly complex medical needs, and 70% of our patients tell us they’re satisfied with our care.

The key fact is that for years the state did not cover all the costs our Medicaid program incurred. As a result of new patients whose costs were not completely covered by the state, Priority Partners lost $57.2 million from 1997 to 2005.

We stanched the losses by ensuring that the payment from the state was appropriately risk adjusted to match the health conditions of our members, and by investing heavily in primary-care and care-management and disease-management programs.

Yet this past year the losses began again, because the state expanded the program’s eligibility to 116% of the federal poverty level up from 40%.

So we are struggling with a large group of new patients—about 30,000 people. Today, like in the late 1990s, a health-care surge is overwhelming our managed-care system. The capitated rate for the new beneficiaries is not yet risk-adjusted. Priority Partners has lost a devastating $15 million in just nine months.

Congress can help, or at least learn from our experience to use the reform legislation to bend the cost curve if it encourages other states to institute and appropriately fund capitated systems that allow capable providers to adjust payments based on risk. The key is that federal support to states for Medicaid must appropriately adjust rates to match the risk of providing health care to the group of people who are covered by Medicaid.

The Senate bill would increase eligibility for Medicaid to those who make 133% or less of the federal poverty level. The Kaiser Family Foundation reports there are 308,000 people who meet that threshold in Maryland.

Even if only half of those individuals seek Medicaid coverage, such a large expansion would likely have an excruciating impact on the state’s budget.

Without an understanding by policy makers of what a large Medicaid expansion actually means, and without delivery-system reform and adequate risk-adjusted reimbursement the current health-care legislation will have catastrophic effects on those of us who provide society’s health-care safety-net.

In time, those effects will be felt by all of us.

Full article:

http://online.wsj.com/article/SB10001424052748703939404574567981549184844.html?mod=djemEditorialPage

Online marketing from a Hollywood hot shot: just another prank, or a breakthrough for the bottom line?

Takeaway: The latest breakthrough in online innovation has come from a rather unsuspecting source: Hollywood playboy Ashton Kutcher. He’s taken his act to the web, and has lured an entourage of prominent consumer brands along with him.

Kutcher’s new format merges traditional entertainment, advertising, and social networking into a seamless product. The programming has attracted droves of viewers, and companies like Pepsi and Nestlé believe that this format will enable them to drive deeper levels of customer engagement.

In the crowded world of webertainment one other characteristic sets this pied piper apart from the other online media moguls – he’s intensely profit-focused.

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Excerpt from Fast Company, “Mr. Social: Ashton Kutcher Plans to Be the Next New-Media Mogul,” by Ellen McGirt, Issue 141, December, 2009.

Ashton Kutcher, best known for his eight seasons as Michael Kelso on That ’70s Show, and on his hit MTV show Punk’d, is using his media company, Katalyst, to pioneer a new kind of business bridging Hollywood, technology, and Madison Avenue.

Kutcher and his partner, Jason Goldberg, spent the better part of two years courting the wizards of Silicon Valley, converting them from teachers and skeptics to friends and allies. For all their pranks, Katalyst can claim one thing most other social-media businesses can’t – profitability.

It’s not just talk. Some 3.9 million people follow Kutcher on Twitter, and he has nearly 3.3 million Facebook fans. Those numbers have helped attract corporate clients including Nestlé, Pepsi, and Kellogg.

Katalyst series, HQ, illuminates what Kutcher’s production company wants to become – not just a home for his television and movie projects but also a go-to source for brands looking to deploy what’s called “influencer marketing,” a hybrid of entertainment content, advertising, and online conversation that finds its audience via video, animation, Twitter, blogs, texts, and mobile. “Entertainment is a dying industry,” says Kutcher. “We’re a balanced social-media studio, with revenue streams from multiple sources” – film, TV, and now digital. “For the brand stuff, we’re not replacing ad agencies but working with everyone to provide content and the monetization strategies to succeed on the Web.”

Kutcher is not exactly the image of a business visionary, but he intends to become the first next-generation media mogul, using his own brand as a springboard.

Still, even if Kutcher turns out to be more style than substance and Katalyst doesn’t become the next big thing, Kutcher’s experiment points toward a new model for the evolving media business.

What the Katalyst team is planning, he says, is simple – make entertaining stuff, give it to people where they already are, let them have some fun with it, and mix in brand messaging. And because of the viral nature of the Web, each new consumer is cheaper to win than the last one. “We know how to gain and activate and retain an audience,” Kutcher says. “We create social networks for brands.”

This is the way things are going, says Netscape founder Marc Andreessen. “Katalyst is way out on the leading edge in terms of thinking this stuff through,” he says. Katalyst steps into the gap left by ad agencies that gave up on the Web after the dotcom bust. “Banner ads aren’t going to cut it,” he says. “And media companies have not been creative or aggressive about making products designed for engagement marketing. Now that’s changing, giving brand advertisers a new way and reason to buy.”

It is Katalyst’s work with Pepsi on something called DEWmocracy that may best illustrate the model Kutcher & Co. is after. The first iteration of DEWmocracy was a reasonably successful promotion – a destination site with an animated film made by actor Forest Whitaker, where fans could pick the next Mountain Dew flavor. For the second iteration, chief marketing officer for Pepsi says, “Katalyst had new ideas about where we could find value in the social-media space and how to mobilize large groups of people.” The campaign, which runs through early 2010, lets people pick not only the flavor, name, color, and label of new sodas but eventually the in-store merchandising and the ad agency, in an online bake-off. Fans can also submit their own ads. “My theory is, you have to engage the constituency and let them be the voice of the brand,” says Kutcher. “I help connect people to the Mountain Dew brand so they can be creative with it.”

Mountain Dew’s Facebook fan page grew fivefold at the launch, but the big win is inside Pepsi. “A lot of senior managers at consumer brands feel like their role is to control the communications around a brand,” a Pepsi executive explains. They are uncomfortable with the transparency of social media because “people will say negative things about you.” What makes him happiest about DEWmocracy, he says, is “the competency we’re building throughout the organization in using these new tools. It’s a symbol of what’s possible within brand marketing at Pepsi.”

Kutcher and Goldberg acknowledge that Katalyst today is still primarily a film-production studio. And not all on that end is going swimmingly. Its most recent Kutcher vehicle, Spread, earned a pathetic $250,000 in the United States. For 2010, Kutcher has two major features coming out, and Katalyst is producing an experimental film that could easily flop. “We’re taking a big risk, but we’re all about learning,” says Goldberg.

Edit by BHC

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Full Article: http://www.fastcompany.com/magazine/141/want-a-piece-of-this.html?#

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