Business advice


The economics of health care
January 27, 2008, 10:15 pm
Filed under: Business Advice

We all know this country’s health care industry is a mess. We also know that Hilary tried fixing it with her husband during his administration and got no where. Well, the discussion got somewhere, but we don’t have a fix. Most of the lobbying and pushing has been for universal health care. Drew Carey made a comment on it recently, “Do you really want the folks that give us FEMA to give us health care?” Enough said.

We hear the headlines screaming about the problems. We know, for instance, that it costs too much. We all hate higher costs .Let’s starting breaking it down. We pay 75 percent more on health care costs than Canada. While we pay more, we are at the bottom of the list when it comes to quality care. (Stats on such issues change constantly.)

If you ask individual medical practitioners the reason behind this, they are more than likely going to point their fingers at HMOs. In reality, prepaid healthcare has been around since 1920s. It was a way to get cheaper insurance to workers. It didn’t really begin to grow until the Health Care Maintenance Act of 1973. By 1978, there were more than 200 of them. The original idea behind this type of insurance was to get the general masses lower premiums and better health care. The problems began when those involved found out how much paper work it took. If these guys got together and decided to simply their procedures, stop changing the list of approved drugs every week, stop asking for so much paperwork that it slows down most doctors’ offices to a snail pace, the situation would improve dramatically. All that paperwork takes additional staff and cuts down on efficiency. Thirty one percent of all health care cost is lost to administrative tasks.

From the healthcare practitioners’ side, there is the issue of mal practice and its annual premiums. This, along with the other variables, push the costs of running a private doctor’s office to $17k a month. ( http://www.home.austin.rr.com ) Mal practice and its constant threat pushes doctors to take extra precautions to keep from getting sued. All the times you got stuck when you didn’t think it was necessary was the doctor trying to cover his own ass.

We know that mal practice insurance costs a ton. Did you know that nurses also now carry it? We have created an industry where there are so many negatives, it’s a wonder anyone still chooses this profession. Ok, here’s the deal, if employees were allowed to sue for millions when they got hurt on the job, businesses would be closing so fast no one could keep up. If mal practice was based on a percentage of injury or loss as workers’ comp is, we would be on our way to chopping away at problems that are clogging the medical business.

Then, there are the pharmaceutical companies. No one can afford $500 for a bottle of high blood pressure medication. Well, you think the insurance company is covering the cost (and they never reimburse for full price). So, therefore, they are going to look for some way to make up the difference.

Pharmaceutical companies also need to finance their research. (They do get funding from outside sources.) It’s a costly affair. And, they too have problems with liability insurance. This should also be tweaked to image the suggestion for medical practitioners. Before you get excited, remember that the only people who get rich from lawsuits are lawyers.

Baby boomers have a part in increased expenses they probably don’t realize. You can’t walk down the street, listen to the radio, or watch television without being bombarded with ads for products that help with that drat aging process no one want to give into. Pharmaceutical companies aren’t dumb. They keep the push on to find more remedies to help with all problems that come with age, wrinkles, blood pressure, heart disease, etc. There is no way to say that some of this isn’t worthwhile. This incentive fuels more research. This creates more overhead and additional costs trickle down to the little guy.

The government’s overseeing roll in all of this needs to be cut back. In the late 70s, there were big scandals about doctors over billing Medicare, etc. The big regulatory guns came out and they have been interfering with the health care industry ever since. There will always be those who think they can cheat. There aren’t big enough regulatory guns to stop it. The only logical thing is create such a big penalty so the potential doers will think maybe a little harder.

The healthcare industry has so many pieces it is enough to make one’s head spin. Trying to revamp the whole enchilada at once would be one big mistake. It has to be taken one step at a time. Keep in mind that all parties have large and powerful lobbies. Find this troubling, starting writing letters to politicians and editors of major newspapers. Making a loud noise is the only way to get change in a democracy. If concerned citizens don’t take pen to paper, we may end up, with heaven help us, governmental controlled ‘universal health care.’

For more examples of my work: http://www.bellbusinessreport.com

Laura Bell
writer@well.com

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We need to get out of Iraq, the economic view
January 18, 2008, 8:54 am
Filed under: Uncategorized

The economics are killing us……..

Let’s look at the numbers and try to be realistic. Let’s not think about the emotions to begin with. The numbers say that we can never pay for this war. Oh yes, I know we had to do something after 9/11. We had to stand up and take a stand and draw a line in the sand. I am convinced that if President Bush hadn’t attacked Iraq and set up the hunt for Saddam Hussein and Osama Bin Laden, we would have figured a way to drum him out of office. What we now have is a mess, one that is getting worse with every tick of the clock.

Many will tell you that one of the reasons for going there is to protect the oil. Iraq, after all, has the second highest reserve in the world. (That’s according to the stats I found. I am sure there may be different numbers.) The problem is the pipelines are getting attacked on a regular basis. So, oops, we didn’t stop that.

The daily cost of keeping us in Iraq is $275 million. That breaks down to $4,100 per household. These numbers are staggering. Who knows how many generations it will take to pay this off. James Madison is quoted as saying, “Every generation should be made to bear the burden of its own wars.” We’re falling so far behind it’s just plain crazy.

It used to be the prevailing feeling that starting a war created growth in the economy. The idea is if we want more butter on the table, then you give the country a reason to produce more guns. This is such a prevailing thread of explaining the relationship between the military and capitalism, that there is a Wikipedia page on the subject. The page is labeled “the guns versus butter model.” I hunted diligently around the Web trying to come up with some numbers to show that this war has put something back into the economy. I found no such stats. I did hear, however, from a fellow Linkedin member that he felt there was an increase in jobs in the Department of Defense area. He purported, however, that increase would in no way offset the ‘Zillion dollar war,” (the last being his word.) He also included the Intelligence Community also expanded. Yes, all we need is a few more secret agents to make our economy better.

We sent some construction companies to Iraq to help with the rebuilding. I am sure they have made a good amount. There are still ads on the Net for jobs in Iraq. I wonder how much a job should offer you to work in an environment where you may be subject hidden bombs. True, we have to admit these workers sent money home to their families. The families hopefully did more than pay bills and did a little shopping. (Shopping is good for the economy.)

Ok, we were hunting for weapons. We didn’t find any. We didn’t find any when we found Saddam. This should have been the end.

Others commented to me on Linkedin that we were going there with the idea of doing some training. I remember hearing about our troops training the local police force as well as helping some their troops fighting the insurgents There was also talk of training teachers. I learned not too much happened there. We supposedly were also to rebuild K-12 schools. In other words, we were allegedly trying to rebuild the infrastructure before the war was even over. My thought on that is: “how is that working…?”

I am sure if someone could sit down with President Bush and ask him to be honest about the real reason he hasn’t ordered the troops home, it would come down to him hoping that we don’t look bad to the rest of the world for not finishing something we started. My answer to that, would be, “get over it already.” There is an economic principle that is called a cost benefit analysis. It boils down to putting the pros on one side of a page and the cons on the other. I don’t see anything now that could possible go on the pro side.

Economically speaking, we have done damage that may never be fixed. Let’s not sit around so long that we end looking like fools. I am sure there are still some who remember the Americans in Saigon were forced to get the heck out.

We operate this country on an elastic budget. That means that the citizens are usually willing to hold paper for the U.S. government. This happens when citizens agree to buy U.S. Treasury bonds. If this nonsense doesn’t cease, there will be a day that the Fed issues a sell order for T-bills and there are no buyers. If that was to happen, the only other way for the government to raise funds has never changed: taxation and the seizure of property. I know we have the Constitution and all of that. However, if there comes a day where there are no longer funds to run the government just what do you think is going to happen? The fact that you will probably be dead and buried isn’t relevant. Is this what you want to leave for your grandchildren to deal with?

For more examples of my work: http://www.bellbusinessreport.com.

Laura Bell
writer@well.com

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Too much growth can kill a business
January 10, 2008, 1:47 am
Filed under: Uncategorized

Too much business can be just as bad as not enough.

The Small Business Administration still swears most businesses fail in the first five years. I am still swearing by the idea that this usually a lack of planning. The planning, more than likely, leaves out expansion plans.

Let’s look at a few examples. Anyone remember what it was like trying to use America Online in the mid and late 90? You had to hope you were in an area with quite a few lines. Otherwise, it could take quite awhile to log on. This almost did in AOL for awhile. This was before the days of cable and DSL connections. AOL and other providers didn’t have an inkling as to how to get over this hump.

I have heard rumors that Google is having trouble because its infrastructure is weak. Those hired to carry on all their new structures are struggling to keep up. It’s really surprising nothing akin to this happened to Microsoft in the early years. Bill Gates happened to be talented at getting the work done elsewhere.

Here are ways to help you get a better footing for a growth spurt.

People peck at business plans. Some avoid them all together. While others, just let the subject drop after they get busy. Business plans need to be re-evaluated periodically. Do you see a big increase in sales on the horizon? There was a good commercial a few months about a small furniture company. The accountant comes running in to the room asking the head guy to “Look at these numbers.” The account is overwhelmed, “…if this keeps us; we’ll need…” The head guy’s answer is: “Wasn’t that the idea?” That dear reader sums it up. If that owner hadn’t planned what he was gong to do when his business came to this milestone, he would have been more flabbergasted than the accountant.

I know the part where you are suppose to project numbers into the future. Hard to do before you get there, but you have to do the best you can with what you see happening in the market. The next step is outline what kind of financing you will to need to meet this head on.

The time to go out for financing for expansion is not when the customers are banging on the doors and demanding to know where their orders are. If you plan correctly, sales projections and financing, you will be ready when the time comes.

My definition of being ready is an entrepreneur who finds a way to put funds from his own pocket, relatives and friends, into the business account before he opens the door. He has a business plan open on the computer for scanning at least once a week. He has already proved himself in the business world to the credit folks in general. When time for expansion is at the door, there will be someone ready to hand him a loan.

Infrastructure is also a key issue. Basically, do you have good people that are going to finish the orders coming in the door? If you run a big Internet company and have promised there will be an earth shattering application revealed at the next tech show, did you hire the programmers who will get the job done?

When growth comes, and it’s unexpected, that’s the problem. You will need to know before hand how you will expand your labor pool. If you write this into your business plan, then it will only be a small issue.

When I was starting my own public relations firm, my expanded labor pool included members of a writers’ professional group along with my teenagers. The other writers came in when I needed copy written and research. The kids did mailings. If things had gotten any busier, I would have gone to the nearby college for an intern. If you specialize in an area, it is always helpful to be a member of a group(s) who share the same talent.

Also, be careful that you don’t limit your growth with the structure you give your new business. I had a friend who designed specialized software for small companies. He had to come running whenever there was a problem. The only way to bring in more cash he felt was to offer warranty policies. The only problem was that he would have to hire someone else to take the service calls. He didn’t want to do that. I also heard of a bakery owner who blindly only hired non union drivers. They were only allowed to drive within city limits. He didn’t have a clue that his business was stuck in a rut.

You may also need additional capital equipment if you expand beyond your current equipment’s production capabilities. If you producing widgets, or planning on it, best figure out your peak production capabilities before you get there. That way, you can save for the expense.

If you look back over all the points I made, you will realize that they have one component in common. They all require planning. Good planning is the way to keep growth from doing you in.

For more examples of my work: http://www.bellbusinessreport.com

Laura Bell
writer@well.com

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