patrick.net

If there is any redeeming feature from the former British Empire, it is its NHS system. Many Asian countries' healthy system models after NHS.

After living through NHS, it is just appalling to see how screwed up the so-called "socialized healthcare" in the US is. Lots of abuse, skyrocketing cost, boondoggle, user confusion, it is really a miracle that Medicare has even survived this long. The whole point about socialized medical care is to keep it cheap so that everyone can afford it, it is not about letting the cost go sky high that it will be assured of bankruptcy.

Patrick, your parents are lucky to be able to take advantage of Medicare during its last heydays as no cost control is put in place at all. Medicare operation as it is currently run WILL NOT survive, there will be no Medicare left for us when we are old.

But socialized medicine is already here. We are already paying for it yet most here cannot participate for free. Hopefully, Obama can consolidate the system so that we will pay less for the new system.

TOB,

the problem is NOT the doctors.

I have looked at the American doctor bills and the Australian doctor bills, they don't differ that much (negotiated rate of American doctors). I actually think the American doctors are underpaid given how hefty the whole medical bill is. In fact, in some circumstances, my doctor bill in the US at the negotiated insurance rate is LOWER than the doctor bill in other countries. My family doctor can only charge the insurance $65 per visit while in Australia, my dad's doctor charges $85 per visit. I see nothing wrong with the American doctors, they are the victims in the current medical system too, because American doctors have to take on $200K student loan to get through our medical school here, while in UK system, you can study medicine from undergrad level, at almost no cost to you.

The problem is with the hospitals! That is where the costs diverge so much, the divergence are so huge that sometimes for the same operating theater or "supplies", our hospitals easily charge 10x of what overseas hospitals do.

It is the liability lawsuits! Limit payouts now!

TOB,

I have seen enough doctor bills here in the US vs. other developed countries, and I can tell you the difference is minimal. Except for the surgeons, most doctors in the family practices make about the same amount of money everywhere in the world.

I do not see doctors living a high life. Surgeons in his top earning capacity (age 35-50) probably can make $500K a year, if he is good. Most family practice doctors are making less than the county government employees or firefighters. I don't know where you get this idea of doctors living the lifestyle of the rich and famous, most doctors I know are making $200K max, that is nothing rich and famous about.

The cost of med school is that way because the Doctors collectively want to keep the bar to their profession relatively high.

You mean the older doctors?

It is always about "I've got mine so screw you."

So...

Doctors do not want more cheap new doctors.
Lawyers want ever escalating litigation amounts.
Accountants want ever more complicated tax code.

We are screwed.

Reading all of the above interesting comments on health care, I have to say that the first item that comes to mind is TRANSPARENCY. Without transparency there can be no competition.

For health care to be affordable, it is absolutely essential that all doctors and hospitals are required to make their their rates public, preferably on the web.

Rates for room, board, doctors, nurses, overhead, surgeons, supplies, medicines. Everything.

And when you go in for a procedure, they should offer a *package* of services, including follow-up, at a fixed pre-determined price.

On the topic of medical bills: I have barely any experience with seeing a "real" medical bill as describes by Malcolm, OO and others.

What are the conditions under which the patient is exposed to the inner workings of the system?

TOB,

I don't necessarily disagree with you. But I do find it illustrative that law and medicine are among the few professions where the client or patient does not get a price quotation on the work about to be ordered, and ahead of time.

It is clear that we do not want a doctor to spend much time on negotiating deals with the patients. But that does not preclude a larger element of transparency. In reality, I think that it is COMPETITION that the HC and medical industries do not want.

I really like the idea of transparency, just so that patients can make an informed choice before committing. Right now, it's "charge me whatever you think you can get away with."

There was a great article in the NYT maybe 1 year ago, showing via graphs that more than 50% of US health costs go to pay insurance company overhead and profit.

Could the government manage to waste 50% on overhead? Probably, but it wouldn't be any worse than our current system.

FuzzyMath Says:
I think Duke was alluding to people who took out loans that they had the means and intentions of paying back

Merely having means and intentions is a necessary but insufficient condition.

Even if you _can_ afford the payment (based on employment at that time), taking out a loan to buy a house in 2005, is not what I would consider very GARPy behavior.

By your definition, there are like 50 garps in the US.

:-) LOL - I may be a bit of an eccentric outlier - I have attained such extreme Garphood that I refused to buy a house during the bubble even though I could have bought for cash. But surely, the number of more reasonable garps must be more than 50! Not everyone ended up rolling the dice - it only feels that way because the ones that did make all the noise...

OO, not so sure. I see the doctors living the high life. Its like going to med school is a ticket to lifestyles of the rich and famous. It can’t last forever.

I can verify this is true. At our uni medical center, there are about 1,000 doctors making more than our (meaning the campus) president.

Health care costs need to come down. We need to create a 'health engineer' type job class that can be attained via a low-cost 2 or 4 year program.

We need more WalMart healthcare, not Neiman-Marcus.

We should also tax the crap out of unhealthy and risky consumer foods/goods to subsidize health care.

There was a great article in the NYT maybe 1 year ago, showing via graphs that more than 50% of US health costs go to pay insurance company overhead and profit.

I'll tell you, Insurance is one of the biggest scams in this country. There will not be any accountability if patient is not the one paying for the service.

Yes, healthcare costs need to come down.

We should also tax the crap out of unhealthy and risky consumer foods/goods to subsidize health care.

Average family pays $12500 for medical insurance, lets put $1000 for healthclub and make everybody put in some minimum hours in gym. If they don't like to do it, let them pay higher premiums. I do not even like insurance idea, we should only have insurance for unforseen complications above a particular amount. I am positive most healthy families would save $5000/year.

We need to create a ‘health engineer’ type job class that can be attained via a low-cost 2 or 4 year program.

I agree, 4-5 years would be preferable.

If they don’t like to do it, let them pay higher premiums. I do not even like insurance idea, we should only have insurance for unforseen complications above a particular amount. I am positive most healthy families would save $5000/year.

Indeed.

I love Coca-Cola. A frosty Coke and some pizza is my favorite thing in the world.

However, I was also diagnosed with metabolic syndrome (basically pre-diabetes) two years ago, so the soda pop had to go. I really miss it. :(

So why on earth should I have to pay health care premiums to subsidize obese people that drink a two liter of sugar water a day?

We need to create a ‘health engineer’ type job class that can be attained via a low-cost 2 or 4 year program.

They're called "nurses".

They’re called “nurses”.

I know! We should think of a less loaded name for them and let them treat basic health issues at cheap neighborhood clinics without even having MD/GP's involved.

Just take your medication and chug a liter of coke every day.

You know, its funny.

I don't expose myself to any advertising. I block all online ads, I skip TV commercials with my DVR and I take a bus to work and keep my nose in a book the whole time. I don't read print magazines or newspapers.

So, when I'm over at someones house or a sports bar, I'm somewhat cynical and perceptive when I'm actually exposed to advertising.

People used to talk about the military-industrial complex.

I think these days we have a junk food-prescription drug complex.

Half the ads on TV seem to be for poisonous food/beverage products that make you sick, depressed and/or impotent. The other half of the ads are for drugs to treat these afflictions.

You don't need any special experience to be exposed to the healthcare insider system. All you need to do is to USE the system once or twice.

Most people don't care because they only pay the $200 deductible and $300 co-pay and be done with it. Then if you have a billing mess-up like my wife had, you started to realize how deep the rabbit hole is.

Just to give an illustration, a small procedure that would have cost my wifeless than $700 in Australia ended up billing her for $5200 in the US. I know this because my sister-in-law did the same day procedure down under. Now the plot gets even thicker. My insurance allows $1900 of that procedure and so we have to pay 15% of that, which becomes $285. Her insurance allows $900 (!!!) and pays 10% of that, which becomes $90.

So where did the hospital pull $5200 out of its ass? If its negotiated rate with insurance company is only $900, how does it make any profit?

I personally think this is the most important issue for the next few years, because we are going to have massive, massive job losses, and most people's medical insurance is tied to their jobs, no jobs no insurance. The rejection rate of individual insurance has shot up lately, so lots of people who are out of jobs for over 6 months will be left without ANY insurance. On top of that, COBRA is NOT cheap, so I doubt how many people can even afford COBRA.

We have plenty of land, plenty of housing, plenty of food, but healthcare is one "little" area that may just strangle the nation completely.

Those doctors employed by the government get the best deal. People in private practice make less.

Do you know that a psychiatrist at a correction facility could be making $300K? No way can private practice make even close that amount.

Hey a double header! Happy Bank Failure Friday everyone.

http://www.fdic.gov/bank/individual/failed/franklinbank.html

On November 7, 2008, Franklin Bank, SSB, Houston, TX was closed by the Texas Department of Savings and Mortgage Lending and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

I love the names "Security"

http://www.fdic.gov/bank/individual/failed/securitypacific.html

On November 7, 2008, Security Pacific Bank, Los Angeles, CA was closed by the California Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

OO,

Thanks for the insight. It illustrates that one of the main benefits of being on a health insurance plan is that the rates are pre-negotiated.

The government clearly can negotiate the rates for us, if there is single payer insurance. The problem with Medicare and Medicaid appears to be that there is too little auditing of the charges that are incurred, and plenty of fraud in the system.

WIkipedia has an interesting article about Medicare.

(CEP News) Toronto - In what fell short of a complete mea culpa, former Federal Reserve chairman Alan Greenspan offered little in the way of taking the blame for the U.S. housing bubble that touched off the global financial meltdown during a speech in Toronto on Friday. Though many experts have criticized him for causing the housing bubble by slashing the Fed's key rate to just 1% in 2001, Greenspan said unforeseen factors were at play.

He said the Fed and other major U.S. institutions considered a regulatory review of rules allowing subprime mortgage lending, but the consensus back then was "better wait and see."

He said that appeared to work, since the earliest stages of the subprime crisis did not really become "toxic" until 2005, years after the rate was cut to 1%.

Greenspan also blamed the current crisis on an unprecedented globalization of the world's financial systems, including huge growth in financial activity in the developing world.

He said a new global market for long-term securities now exists, which no longer makes it possible for rate cuts to stimulate markets as they would in the past.

justme Says:
November 7th, 2008 at 12:36 pm
"On the topic of medical bills: I have barely any experience with seeing a “real” medical bill as describes by Malcolm, OO and others."

The part that sucks, as I've seen corroborated above, is when you don't even see the bill or know what it is going to cost. The example I gave was a dermatologist who said, don't pay now you'll get a bill in the mail for the BC negotiated rate. It was padded to the hilt. I was pissed off. Then I went somewere else and had the same procedure (an ingrown hair on my chin), paid them upfront (it was a fraction of the first place) then months later I get a check back from the second place which charged me less because of the 'maximum charge allowed by BC.' What the fuck?

Clearly, the psychiatrist example shows market efficiency. The free market works well for the elective stuff. Sure the institutional shrink makes more than he could charge boomers who want to get intouch with themselves. Cosmetic surgery, things that you shop around don't seem like they bankrupt people.

Just pray you never get cancer or need an organ transplant, or some other chronic disease. Yikes, Cuba starts looking desireable.

you can’t have a deflationary cycle with a super-low interest rate. Its an impossible scenario.

Missed this.

Not only is it possible, it has a name!

http://en.wikipedia.org/wiki/Liquidity_trap

True poetic justice...

http://biz.yahoo.com/ap/081108/bank_closures_texas_california.html

The bank that invented mortgage backed securities gets crushed by them 20 years later.

Malcolm,

It was a little difficult for me to follow what you said: Let me see if you agree.

Provider1; $5200 total, although you used Blue Cross insurance

Procider2: $1900 total , but you got money back later because they said 1900 > BlueCross

Correct?

I'm also guessing that there is a pattern here, which is that the patient will get too see the bill if and ONLY if there is some *percentage* co-pay involved.

Interesting tidbit from Calculated Risk blog:

From Bloomberg: Bloomberg Sues Fed to Force Disclosure of Collateral

Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.

The lawsuit is based on the U.S. Freedom of Information Act ...

Here's something FED is doing w.r.t Commercial Paper.
AIG repays more of $85 billion Fed loan

Sounds disturbing? companies can keep rolling over their debts using FED facility at a low interest rate. As disturbing as this can be, imagine consequences without this facility. GE has commercial paper of about 550B. I don't want to think about it. Everybody is getting bailed out in some form or the other. All of us have to hold our noses and go about our life and fight for major changes in the way business is done.

Bloomberg Sues Fed to Force Disclosure of Collateral (Update1)

By Mark Pittman

Nov. 7 (Bloomberg) -- Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.

The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn't seek money damages.

``The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,'' said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.

The Fed has lent $1.5 trillion to banks, including Citigroup Inc. and Goldman Sachs Group Inc., through programs such as its discount window, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Collateral is an asset pledged to a lender in the event that a loan payment isn't made.

The Fed made the loans under 11 programs in response to the biggest financial crisis since the Great Depression. The total doesn't include an additional $700 billion approved by Congress in a bailout package.

Fed's Position

Bloomberg News on May 21 asked the Fed to provide data on the collateral posted between April 4 and May 20. The central bank said on June 19 that it needed until July 3 to search out the documents and determine whether it would make them public. Bloomberg never received a formal response that would enable it to file an appeal. On Oct. 25, Bloomberg filed another request and has yet to receive a reply.

The Fed staff planned to recommend that Bloomberg's request be denied under an exemption protecting ``confidential commercial information,'' according to Alison Thro, the Fed's FOIA Service Center senior counsel. The Fed in Washington has about 30 pages pertaining to the request, Thro said today before the filing of the suit. The bulk of the documents Bloomberg sought are at the Federal Reserve Bank of New York, which she said isn't subject to the freedom of information law.

``This type of information is considered highly sensitive, and it would remain so for some time in the future,'' Thro said.

The Fed didn't give Bloomberg a formal response because ``it got caught in the vortex of the things going on here,'' said Michael O'Rourke, another member of the Fed's FOIA staff.

Thro declined to comment on the lawsuit.

The case is Bloomberg LP v. Federal Reserve, U.S. District Court, Southern District of New York (Manhattan).

AIG is leading the abuse of CP so far. They first received a bailout loan with a steep note - 10% (not as bad as Egland's 12-15%). They next go to the CP facility to get cash for about 1% which they then use to pay down their 10% loan. Using 1 governement program to arbitrage another governement program. Phew. People should be PISSED.

Today I had to fill full tank of my Toyota Land Cruiser with premium. I thought something was wrong when the bill was less than $58. Then I realized gas price as 2.599 ... this is great!

How are Prius owners feeling now?

Perma,

If I was one, I would still be feeling good and doing good, and non-smugly so :-)

On the topic of small cars, I just saw an interview of Rahm Emanuel where he was walking to his little old clunker US-made car and getting in. It looked like a little 4-cylinder number. Way to go, Rahm.

Should I hire a real estate agent to sell my house ? Or should I do it myself ?

Selling on your own house is far less expensive than hiring a real estate agent, says Gerri Willis in her book Home Rich (Ballantine Books, $ 25 ) because you’ll save paying a commission, which can range from 5 percent to 7 percent of your house’s selling price. For example, if you sell your house for $ 165, 000 and you negotiate a sales commission for your agent of 5 percent, his services will cost you $ 8, 500.

The “For Sale by Owner” market is the object of much speculation but little analysis. Even so, it’s clear that some do-it-yourself efforts are more likely to be successful than others. Among them are sellers (with houses in desirable neighborhoods ) who are highly motivated, including those with little equity in the house, and those who find a buyer before they even start marketing the property.

There are downsides. You’ll have to be prepared to market your house on your own, host open houses and negotiate your own deal. For many people, this isn’t feasible — daily schedules and responsibilities may not accommodate these tasks. If you or your partner can’t drop everything at a moment’s notice to attend to a home-selling issue, you probably need to hire an agent.

Perma,

I think the biggest downside is that the local RE mafia will try their best to pretend that your house is not for sale, and otherwise talk sh*t about it if given a chance.

The job market's thriving at Apple, even as iPhone concerns multiply

The Cupertino, California-based company reported 32,000 full-time and 3,100 temporary and contract employees as of September 27. That's up from 21,600 full-time workers and 2,100 temporary or contract staffers in fiscal 2007. Of those new hires, it seems that 8,000 went to work at Apple's retail outlets -- 50 new Apple stores were opened during the course of fiscal 2008.

DOL sues defunct Silicon Valley companies over 401(k) funds

The U.S. Department of Labor said Friday it sued Vigilance Inc. of Sunnyvale and its subsidiary Harmony Software Inc. of San Mateo over their abandoned 401 (k) plans.

The DOL wants independent fiduciaries to manage and distribute approximately $580,565.22 in assets to participants covered by the two companies’ plans.

Separate lawsuits were filed against Vigilance and Harmony in U. S. District Court for the Northern District of California.

Both companies have ceased operations. Vigilance was a supplier of event software and Harmony Software was a business management software company.

“The Department of Labor is committed to doing everything we can to assist workers whose plans are abandoned,” said Bradford P. Campbell, Assistant Secretary of the Labor Department’s Employee Benefits Security Administration. “This legal action paves the way for the plan’s participants to receive retirement assets due them.”

Start-up companies in Silicon Valley face harsh financial realities as venture capital disapppears

Silicon Valley start-ups must grow up and start making some real money, entrepreneurs, venture capitalists and company chiefs were told at the Web 2.0 Summit this week.

The economic downturn has begun to bite hard and young start-ups looking for the traditional “free” venture capital (VC) money to develop their projects are being turned down. Better-established firms are being told that only the fittest will survive. The tone was set by a sobering analysis by Mary Meeker, a managing director of Morgan Stanley and leader of its global technology research team.

In a series of slides, she showed how America’s GDP had plummeted, the market capitalisation of technology companies in the United States had fallen through the floor and how advertising revenue growth, even online, may go negative.

A further stark illustration of the problems now facing the technology sector was the “layoff tracker” on the authoritative Techcrunch blog. It is not a scientific poll, but the total number of tech job losses announced globally since September stands at more than 44,000. The worst-hit companies have been the small and medium-sized start-ups that began with the traditional plan – that is to say no plan – on how to make money. Normally they would look to billion-dollar IPOs or to sell out to Google for pots of money. Neither is now possible and the VC money to keep going while they wait for the good times to return is not available.

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John Doerr, one of the leading venture capitalists in tech, told the conference that VC investment peaked in 2007 at $37 billion. This year such investment was likely to be about $15 billion or $16 billion and next year it was predicted to be in the order of $5 billion to $10 billion.

Mr Doerr, of Kleiner Perkins Cau-field & Byers, said: “We might not see very much liquidity for the next three or four years. Google is just not going to buy all these or even a lot of the internet-related start-ups. You have to hunker down, take the long view, don’t cut with a meat axe, and focus on your core.”

Companies are going to have to make money for themselves. One of the best recent examples has been Zynga, an online gaming company that is making waves with its applications for social networks. The company raised $29 million in VC funding this year but has yet to touch a cent of it despite having a staff of 80. Its free online games, including Dragon Wars and Scramble, have proved huge hits on both MySpace and Facebook. The company makes money primarily from virtual goods or currencies that are purchased with real credit cards by players who have been drawn in by the games. Its business is said to be doubling every 90 days.

Chris DeWolfe, the co-founder and chief executive of MySpace, who was at the summit to talk about the launch of MySpace Music, said that concentrating on growing a real business was crucial in an economic downturn. For more established companies, diversifying revenue streams was similarly vital. MySpace is attempting to do that with MySpace Music, a joint venture with the four major music labels. The move is a recognition that it is not possible to force people to buy music because there is so much pirated material available. MySpace, which is owned by News Corporation, the parent company of The Times, will make money through advertising and charging for downloads if users want to keep tracks on their computers or MP3 players.

Mr DeWolfe told The Times: “We had to get away from the idea that every media company is stupid and is going to fail and start doing partnerships with them.” He said that consumers had streamed music more than 1 billion times in the first few days and have created 80 million playlists since the launch. Five million bands had uploaded their music to the site.

Earlier in the day another co-founder and chief executive had a little more trouble answering the question of how to make money. Evan Williams, head of the hip microblogging site Twitter, was celebrating a particularly successful US election, which saw traffic and membership soar.

Asked how this was going to be turned into dollars, Mr Williams was able to say only that they were thinking of charging corporate customers to use the site. Advertising, he implied, was not a route he wanted to go down. “It’s still very early for Twitter,” he said. Despite the downturn, hope springs eternal in the Valley.

New secrets of company survival

John Doerr, on the board of Amazon and Google, has developed an 11-point plan on how to survive the downturn:

1 Act now, and act with speed

2 Protect the vital core of the business. Cut once, and cut deeper than you need to

3 Make sure you have 18 months’ worth of cash. Make sure you know where you stand with your investors

4 Do not spend money on facilities or technical infrastructure or even software you do not need to run your business

5 Reevaluate research and development priorities

6 Renegotiate all contracts

7 Make sure everybody in the company, from the receptionist to the engineers, is selling the company’s value proposition

8 Offer people equity instead of a cash bonus

9 Secure your cash reserves

10 Figure out what your lead indicators for revenue are

11 Overcommunicate with all your staff. Make sure employees and their families know where they stand