Friday, February 1, 2013

Not Abandoned

Well, I see Google lists this as an "old abandoned blog."  Not my intent, since my first ever blog posting is here, but not sure what to do about it.

Monday, January 24, 2011

Waiver Maybe Better Than Repeal

It is interesting to note the waivers being granted to companies and unions to excuse them from lawful requirements of the Patient Protection and Affordable Care Act. The most recent waivers are to three local chapters of SEIU, Service Employees International Union, a big donor to the Obama campaign. Total waivers so far are well over 200. You can see a list here.  I wonder how the decisions are made and whether they meet a reasonable test of fairness.

Maybe granting of the waivers is a case of Government Acting Wisely and is an indication that it would be much easier to just grant the whole country a waiver and put a stop to discussion of repeal.

Monday, September 28, 2009

It's The (Lack of) Competition, Stupid!!!

Some of the health care changes being contemplated in Washington could have significant impact in South Carolina. A front-page story in The State Newspaper yesterday focused on the concerns of the management of Blue Cross Blue Shield of SC (BCBS SC). I sifted through the article looking for some usable information about BCBS SC, which is pretty scarce for this company. Here is what I gleaned:

1. Privately held, for profit, mutual company and therefore does not have to report its profits.
2. Employs more than 11,000, including 9,000 in South Carolina and more than 6,800 in the midlands.
3. Revenue of $5.9B in 2008.
4. Health insurance, about 27% of their business, had 2008 revenues of $1.6B.
5. 2008 profit from the insurance business was $120M.
6. 2.1 M South Carolinians, about half of the population, are insured by BCBS CS or have their plans administered by BCBS SC. (I’d like to know the split here. How many policyholders account for the $120M profit reported in item 5?)
7. Has 32 subsidiaries including some that have government contracts with Medicare and Tricare (for members of military).
8. Processed 785M claims in 2008 including those for their own insurance operations. (I guess this means they also made profits on processing the claims for their own insurance business in addition to the $120M in item 5 above.)
9. They had reserves of $1.3B in 2008.

The complicated structure and lack of public reporting requirements make it very difficult to draw significant conclusions from these numbers. I think South Carolinians can rest assured that BCBS SC management is very competent and will continue to keep the company playing key roles in the US health care system whatever it is. That is good news for South Carolina.

Some superficial conclusions that might be drawn from the above are that if the $120M of profits from their health insurance company were divided up among 2.1M policy holders, it would amount to less than $60 per policy holder. Not going to get much help there in reducing health care costs. If all the rest of their revenue besides the $1.6B from the insurance business was used processing the 785M claims, cost per claim would be about $5.50 per claim. That’s pretty cheap. The $1.3B in reserves would amount to a little over $600 for each of 2.1M policy holders, and that doesn’t seem excessive. I don’t see any ready answers to the problem of high health care costs in any of these figures.

However, buried among the facts and figures was one comment that could provide the key to significant reduction in health care costs. According to Mr. Ed Sellers, CEO of BCBS SC: “Insurance companies pass along rising costs of drugs and other expenses, he said. When a hospital buys a multimillion-dollar piece of equipment, for instance, those prices get passed on, he said.”

Well, no wonder costs keep increasing much faster than for most other products and services! Of course all businesses talk about wanting to pass along their cost increases to their customers, but for those facing competition, such talk is some combination of blarney, baloney, and bravado. It can’t be done unless all the competitors are seeing the same increases at the same time. And, if they talk to each other about such issues, they can be sent to jail.

Here’s the point. The basic cause of escalating health care costs is that health care consumers have been taken out of the negotiating process, and the laws of supply and demand have been replaced with expensive bureaucratic controls managed by government and insurers and employers. We know the bureaucracy is expensive because just this one company, BCBS SC, has 11,000 employees that are part of the health care costs but do not provide health care. (Of course it takes a lot of employees to keep up with the more than 10,000 services covered by the Medicare Physician Fee Schedule discussed here.) In the absence of head-to-head competition, a hospital considering a major capital investment asks not about the market price, demand, and capacity for services provided by such equipment but rather about the reimbursement rate for such services. Costs remain high because they are controlled at managed reimbursement rates and providers are not allowed to compete for market share by adding capacity which, in a free market, would necessarily drive down costs for consumers.

So now we know why health care costs keep rising while costs of computers and MP3 players and cell phones and big screen TV’s and video cameras and LASIK surgery keep coming down. It’s the (lack of) competition, “stupid!”

(For an informative article that includes discussion of how competition has worked in the field of LASIK eye surgery, see

Friday, September 25, 2009

Paying for Marriage - A Welfare Idea

If you have been watching this Blog and have not looked at, please switch over. I just posted an example of government acting stupidly on that blog, and you can read it here.

I expect future postings to all be on the permanentfixes blog.

Thanks, Darryl

Friday, August 21, 2009

Cash for Clunkers Environmental Impact Statement

Looks like Cash for Clunkers is about to come to an end, and I bet no Environmental Impact Statement was ever submitted for it. Allan mentioned it in an email so I searched for one and couldn't find it.

The question would be: What is the environmental impact of destroying 700,000 functioning automobiles and manufacturing 700,000 new cars that average 7.5 miles per gallon more than the destroyed cars? They might have had some difficulty getting by the EPA guidelines and explaining away the well publicized EPA slogan, Reduce, Reuse, Recycle.

Even the kids are being properly indoctrinated in Reduce, Reuse, Recycle!

Sunday, August 16, 2009

New Blog

OK, while I really like this piece, Church and State in Avoidable Slow Motion Collision, I have to admit that it does not fit well in the category of Government Acting Stupidly. Hopefully, I will not be able to find many Government Acting Stupidly cases that are as blatantly wasteful as the Cash for Clunkers program which I described early in this blog. Also, I don't want to be focused totally on negative postings. I prefer to think about solutions to problems, what we used to refer to in my working years as Permanent Fixes, a concept promoted by Dr. Joseph M. Juran, famed Total Quality Management consultant. The action recommended in the Church and State piece would qualify as a Permanent Fix.

So, I have established a new blog,, (temporarily at where I will be able to focus more on positive ideas and strategies for improvement. I will post the Church and State item there also and will keep my eyes open for opportunities to add to the governmentactingstupidly postings.

Saturday, August 15, 2009

Church and State in Avoidable Slow Motion Collision

Here is a quote from the website of the US Embassy in Japan:
“If you wish to marry in Japan, you will do so according to Japanese law. Marriage in Japan consists of a civil marriage registration by the couple at a Japanese municipal government office. Only this civil registration constitutes a legal marriage in Japan. Ceremonies performed by religious or fraternal bodies in Japan, while perhaps more meaningful for you, are not legal marriages.”

That may seem strange, but we have a similar situation in The United States. A minister may preside over a beautiful and impressive ceremony with multiple attendants, hundreds of guests, and Holy Communion, but until the paperwork is done and the government authorities receive appropriate documentation, the marriage is not legal. To the religious faithful, these details are trivial distractions from the significance of the religious ceremony and vows. From the legal viewpoint, it is not even necessary to involve a religious organization at all since simple vows and signing of documents in front of a Justice of the Peace are just as valid as a 500 guest church wedding.

The problem here that needs to be corrected is that our government has made religious leaders agents of the state, an authority they should not have and a responsibility they should not bear. As popular public understanding of marriage changes, church and state are colliding as some churches currently prohibited from doing what they believe is the right thing, joining same sex couples, are refusing to perform any wedding ceremonies at all until they can legally perform same-sex ceremonies. For examples, see:$rec=131163

Government has a stake in this issue because income and estate tax laws, for example, have been structured to recognize a once commonly accepted positive value of men and women joining in marriage to “become one” and to live together and share resources and support each other and to give birth to and raise children in such an environment. Whether or not such favorable laws should apply to unions that are not for these traditional purposes is a matter for government to decide. Whether or not any particular religious organization wants to support and encourage and bless such unions is a different matter entirely and each religious organization must have the right to choose whether or not to do so.

There seems to be little doubt that same sex couples will eventually be granted some form of legal union with benefits as a matter of fairness or civil rights. I suggest that in that case, such benefits should also be granted to any two persons who wish to form a civil union for economic or personal benefit. Two life-long single friends, two siblings, or a child and an aging parent for example could well benefit from some of the same provisions and should not be discriminated against once the original reasons for the provisions are abandoned. No such changes, however, whatever their extent, should result in pressures on religious organizations and their leaders, some of whom will choose to bless non-traditional unions and some of whom will choose not to do so. Even among Christians, there is strong disagreement on this issue.

The easy solution is to get clear separation between the responsibilities of government and religious organizations by establishing Legal Civil Unions and Religious Blessings of such as two separate and independent processes. I imagine that a Christian pastor, for example, might make the Civil Marriage a small but essential part of the counseling process leading up to the church Marriage Blessing or Sacrament of Holy Matrimony that can be performed if the requirements of that particular church are met. Instead of the state telling the pastor what must be done to have a legal marriage, the pastor will be telling the couple planning to marry what must be done before the union can be blessed by the church. Other religious leaders may choose to conduct a religious ceremony whether the legal requirements are met or not but with clear recognition that such a ceremony has no legal standing. Theologically, there is no more reason for the state to be involved in the sacrament of marriage than in the sacrament of baptism. Current practice, probably a relic of the Holy Roman Empire, needs to be changed.

For a similar view from someone who thinks churches should get out of the wedding business and leave it up to government, check out

Back to Japan for a last thought. I lived in Japan for a little more than three years and used to carry in my wallet an advertisement for a “faux priest” to conduct Christian style weddings. Check out the BBC news story (link below) on that phenomenon. According to the article, "People like the dress, the kiss and the image. Japanese Christians make up only 1% of the country, but now about 90% of weddings are in the Christian style." It makes me wonder if any of the church weddings in the US are similarly motivated.