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PonziCare

so... since all the things (economic turmoil) I have been worried about have come to pass.... I have started thinking again about Medicare.  With Bernard Madoff in the news, the term Ponzi scheme gets tossed about so carelessly.  How is Medicare any different that what Madoff has done? 

Working with healthcare individuals, I have noticed a trend over the past few years where Medicare "suddenly" will stop paying claims.  They'll just deny every claim that comes in for a day.. or for a diagnosis ... just hoping that the hospital/doctor will not re-submit or inquire about the unpaid claim.   From what I understand this strategy works.

Apparently 65% of all Medicare claims are denied/rejected for some reason.  Only about half of those claims are actually ever resubmitted.  Ultimately 35% of all Medicare claims are never paid or followed up after their rejection.  How would you like to not be paid for 35% of the work you do for one client?

The first thing I thought was that these billing people for the doctors and hospitals need to get on the ball and harass Medicare.  After a bit of research I found that they do, except that they have a difficult time getting thru to Medicare.  Often the recording says that everyone is "unavailable due to training" .... but what is far more worrisome is that there was a survey a few years ago to see how often the answers a physician/hospital billing person will get from a Medicare employee are correct.  The answer was 4%.  The answers as to why the claims were rejected were only correct 4% of the time.  FOUR PERCENT???!?!?!?!?!    So 96% of the time when the billing person follows the advice of the Medicare employee, the claim is rejected again.

Medicare was allegedly also alarmed at this stat so they have worked to increase their information distribution and are apparently now satisfied with the 17% correct response you get today. 

One billing person told me that when she went to work for a major group her billing manager told her that if she had a question about a Medicare claim that she should call, document the answer (once she got thru) and then hang up and call again.  And once she had done this four times to consult with her colleagues and assess what the correct answer was from the four responses.  She thought this was a bit ridiculous at first, but realized later that four times may not be enough.  Sad, but true.

With these types of convulted responses, how is Medicare anything BUT a Ponzi scheme? 

anyone? 

Bueller? 

anyone?

how flat is the world....


the last two weeks have been quite interesting to me.  I'm not sure what to do with myself  because it's finally here.  The thing I didn't count on is how quickly the world seems to be unraveling. (did you hear how pakistan is about to go to civil war because they can't afford food? and how water is so scarce in Australia that they've factored the price into the food and lest we not forget OPEC cutting down production, etc)

I'm sure you heard Roubini aka Dr Doom chatting up the airways on Friday and today. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ4TTEocITV0&refer=home)  I have been a fan of his for a while and mostly agree with his views... probably more so than any other economist.   http://business.timesonline.co.uk/tol/business/economics/article5014463.ece

Meanwhile you have Pollyanna Buffett saying buy buy buy http://online.wsj.com/article/SB122505491972169957.html?mod=googlenews_wsj

I think he's wrong.  And I don't think just because he's been right before that he'll be right now.  I think he's out of touch.  How can you be "in touch" as a billionaire? But it does give me pause.  Is this the time that I can buy buy buy like Morgan and Rockfeller and whoever and become a trillionaire 20 years from now? What.If.He.Is.Right? 

What has surprised me is how quickly and how globally the economy has fell apart and just how flat our world has become.  And I mean Flat in a Thomas Friedman way, of course.  

I am surprised as what the USD/EUR has done.  I am VERY surprised at CHF in general.  And I am, unfortunately not surprised that no one learned from Japan's problems in the 90s as it seems like we're ready to repeat their mistakes.  Haven't they been suppressed for like 20 years?  I have no idea what to think about the suggestion that Bush go ahead and make the recommendation for the next Treasury Secretary.  And, who should it be?  Buffett? please please no. haha Greenspan?  scary.

Anyway I'm disappointed that I was not more on top of things with the few companies I chose to keep.  I thought that a strong company could withstand the market fluctuations and, man, was I wrong.  But I'm still not selling. I wasn't planning on selling til 2011 anyway so I'm just hanging on.   I totally underestimated how fragile a flat world is.  

At any rate, I know I'm all over the place. just haven't had time to think much lately as things just keep happening.  When do you digest?

 

Basically I'm trying to absorb information and talking to as many as my sources as I can so that I can be prepared to pounce when the time is right....
 

 

Conservative Chic

I have been thinking a lot about the Paulson Plan, of course, who hasn't?  Even my most fiscally unaware friends are starting to fret a bit.  Seemingly it's in the forefront of everyone's minds.  Which has got me wondering...  who is FOR this plan and who is AGAINST it...

I'm sure, by now, everyone has seen the Mac commercials.  "I'm a PC" and "I'm a Mac" ... and the PC is the "uncool" one... in the boring brown business suit, a little chubby, hair a bit thinning, etc.  And the Mac is the younger guy, thin, hip.  Traditionally the "PC people" are the business people, the productive people, the movers and shakers... and the "Mac people" are the creative types, the ones you're likely to see at Starbucks in the middle of the day, the people who think outside the box.  

Well, recently, I saw a "I AM WINDOWS" commercial.  They weren't dissing Mac, but instead they were just showing all the types of people who use PCs - not just he business people or older people but everyone.   This struck me as very interesting.  It seems like our country is dividing into three groups of people...  I say three because there is a group that's just apathetic.  They're not gonna vote.  They're not gonna bring this topic up at the dinner table.  They're not going to make any more or any less progress than they did last year and they're just going to coast along until something forces them not to...so we'll just put that group aside.  But you can't forget about them... there is a big group that just doesn't care.

So now we've got two other groups.... the ones that are for the Paulson Plan and the ones that aren't and I'm not sure that this is democrat vs republican.  No, it seems much more like we're splitting into the people who want to look ahead and ones that are focused on the here and now. 

Keith Code, owner and instructor of the California Superbike School teaches racers to think of your attention span as $1.  You only have $1 to spend and where you spend it can not only mean the difference between winning and losing but sometimes life and death.  He says you can spend $1 of attention focused solely on passing the rider in front of you, or you can choose to spend $0.10 there and $0.10 on the pothole in the road and $0.10 on that tight turn about to come up and so and so forth so that you can save some attention for an emergency.  I'm paraphrasing, but you get the idea.  It's not just about not putting all your eggs in one basket but also holding on to some eggs in case you're starving later.  I feel that this is what the bailout is like.  We're not only spending our $1 but we're expecting to have more than $1 later... well, I got news for you.  not only are we out of eggs, we're out of baskets.  There is a group of people that are looking ahead... but most everyone seems to be too focused on change for change's sake and looking at the here and now instead of tomorrow and it's really pretty scary.

How is $700 billion dollars going to fix our troubled economy?  How does it help you and me?  If the US had $700 "extra" billion dollars, why aren't we putting into Medicare or helping out the old folks on Part D or building schools or hospitals or paying for healthcare so that we could compete with our foreign competitors who don't have to pass on the cost of employee healthcare into all its products?   Nyah, I think the $700 billion isn't going to restore confidence... I think just the opposite.  I think the $700 billion is FOR New York.  It's not for the rest of the nation. And, as much as I love New York and I don't want the financial industry to tank -- there has got to be a better answer than throwing good money after bad.

The other day a Simpson's episode showed Springfield being broke.  At the town hall meeting everyone was contemplating what they could do to change their status, to somehow get more money.. ultimately the whole town decided to fake a disaster and get money from FEMA.  

hahaha.  hilarious, right?  Or is it a tragedy that they're making light of people who really need FEMA.  The whole point of FEMA is to bailout people who are really really down on the their luck for circumstances completely out of their control... and this is when a bailout makes sense.  So how is giving FEMA-money to people who faked a disaster any worse/different than giving money to a bunch of bankers who were just trying to take bigger risks to make bigger rewards?  If the Paulson Plan goes thru, we're going to be "enabling" people who never have had to show any accountability ... and they're going to do it again and again and again....

... for those of you who didn't see the Simpson's episode... any true form, the people of Springfield, faked a disaster, destroying their town in hopes to get money from FEMA.  A fake FEMA representative showed up and bilked the town out of an additional $2500 and then the town was worse off than when they started.  Ultimately everyone had to pay more taxes.

I would prefer not to pay more taxes than I already do.... how about you? 

Gloominess

So much has happened over the past fews weeks that I really am not even sure how to digest it.  Lehman Brothers?  Wow, That's terrible and a "sign of the times" but AIG?????  To me, companies like AIG and GE and the like are firms that just don't go bankrupt.  They're too much part of our country.  AIG, of course, far more unlikely (in my mind) than GE simply because of the nature of their business.  Granted they've had all the problems over the past 3-4 years with fraud and whatnot so I guess we should have seen this coming.  But still -- what's next? Berkshire Hattaway?  hahah J/K

OK. So we bailed out Bear Sterns...but we turn our noses up at Lehman... then we bail out AIG... and then the housing stuff...  what the hell with this $700B bailout for the mortgages?  I don't understand that nor do I understand the Fannie Mae/Freddie Mac bailout.  How can Freddie Mac have a Baa3 raiting?  And if so, is it a good buy?  What about US Treasuries? 

So ... in the past two weeks between UK and US bailouts (lest we forget HBOS) I think there's around $900 billion extra money running around - which has created a little bit of buoyancy in the markets.  But for how long? Is it time to buy or to get outta dodge?

It makes me think about supply/demand versus panic and fears and the markets.  In my mind, economic moves are very similar to poker.  It's based one part on stats (how likely is it the other guy is holding 3 Aces) and one part psychology (maybe I have those Aces).  Yeah, I know this thought is nothing new but it sure is fresh in the minds of some middle Americans,  CNN reports that most of the Nashville area is out of gas for the past 3 days.  Apparently a rumor was started stating Nashville was to run out of gas and everyone flocked to the pumps to hoarde gas thus it became a self-fulfilling prophecy.  Truth be told, although the supply was indeed deterred by both Gustav and Ike, there most likely would have been enough gas had normal fueling trends ensued.   What if something similar happened on a national scale? 

As I understand it the Nashville gas shortage may not have happened, despite the rumor, had the attorney general not stepped in to prevent price gouging.  Apparently some stations chose to turn off their pumps rather than sell at a lesser rate.   What if that had not happened, if all these stations stayed open would panic have depleted the supply?  If stations were allowed to charge whatever they want would citizen simply choose not to fill up? 

It makes me wonder if having a government step in to "fix" things is really a good idea.  What about the 120 day short-selling ban that has been imposed?  Why IS the government bailing out all these failures?  What happens later?   What if AIG doesn't pay back the loan in 2 years?  

When I first heard of the AIG bailout, it was difficult for me to wrap my mind around but later I saw it as a good thing.  Surely now the American Public would see this as an important sign.   But instead it seems that this just got buried along with all the other financial woes and it's just another woe of money troubles with figures so staggering it's not even graspable.

Are we headed to a depression?  I think we have a long way to go before that would happen.  But we're certainly in a sorry state.  Most of America isn't starving (quite the opposite).  Most of America isn't poor (or at least doesn't need to be).  I believe that most of America is experiencing what they consider some type of economic hardship because they have been living beyond their means for so long that it is just catching up with them.  As long as you are sitting in your house with your air conditioning going, watching your cable TV, talking on your cell phone - you're probably doing ok.  The problem is everyone believes they need Prada bags and 7 jeans and the latest iPod.   Maybe consumerism is too blame and not Bush or Greenspan or whoever the favorite scape goat du jour

I don't know -- just a thought...

Standard of Living

I find a lot of my spare time is spent reading economic stats, studying charts and researching the markets.  So in an attempt  to put a bit of diversity into my reading I picked up a fictional novel.  And, sure enough, I was able to bring it back to how it relates to our current fiscal status.  So much of us complain about how "bad" things are... and there was one line in this book I was reading that definitely was good food for thought.   It was spoken by an ex-KGB guy and he said

"You don't worry about happiness and fulfillment when you're starving."

I couldn't help but think about how many of our complaints are just complaints for the sake of complaining.  That everyone has some sort of cause... and we're all wandering around aimlessly unfulfilled.  And... perhaps much of the reason we're in the financial crisis we're in is that we're just not hungry enough.  We have become passive in our pursuits.  Perhaps we have all gotten so accustomed to a certain standard of living that as soon as we have our electric turned off for non-payment we believe life has come to an end.  

Why are all our jobs being outsourced to China and India?  Because they're hungrier.  Because they are not surrounded by ridiculous wealth.   America seems to have forgotten how to be hungry and competitive. 

There are entire online communities dedicated to getting money without working. ????  I have a friend who is about to have there work truck repo'd and is totally strapped for cash yet he went out and bought a brand new wireless router for his new apartment.  ???    Whole Foods charges alarming prices for organic foods and every day they're packed.  ???   I have never seen some many people walking around with thousand dollar handbags.  ???   We must have a cell phone?  Cable TV?  Broadband? 

Time to get hungry again

 

Un-evil Big Pharma


so I was chatting with a friend today about the economy and he, of course, mentions big bad PHARMA.... citing that it's all Big Pharma's fault that the nation's healthcare crisis has reached the epic portions that it has and that if our drugs were cheap (like supposedly every other country in the entire universe) then suddenly the healthcare crisis would be over and most of our economic problems would magically disappear.

I have a theory about that... my theory is pretty simple.  Stop blaming the Pharmaceutical Companies.  For god's sake, drugs are about the only thing the US still produces.  Get rid of Big Pharma and the pharmaceutical research and all the people who are employed by BIG PHARMA and we will indeed have a crisis. Because Big Pharma actually isn't evil.  I see it as a good thing.  And while there are some drugs out there that may be more about the benjamins than the health benefits, most everything else is good.  

Next year (since this is an election year and all), they're adding more stuff to the Sunshine Act.   There are people in the senate and congress who truly believe that doctors are influenced by pharmaceutical companies when that company gives them a plastic writing pen or a post-it pad to write on.   Next year they're going to outlaw these type of "gifts"... no longer can a pharmaceutical company hand out some exam table paper or facial tissues or free pens... They believe that these things make doctors want to write more of those drugs.   We're not talking about the all-expense-paid-golf "conferences" in Honolulu of yesteryear.  We're talking about things like office supplies.  They want to say that if a doctor accepts table paper from Lipitor, that the doctor will write more Lipitor because of it.  Gimme a break - is that what healthcare is about?

I asked my doctor about this point-blank.  He laughed.  He gave me one of those get-the-hell-outta-here looks and said that if anything is going to influence him it's Medicare formularies.  It's the drug companies that Medicare is in bed with that could influence whether he writes a prescription for Lipitor, Crestor or any of the other cholesterol medications.  I asked him if he thought the Sunshine Act would effect him in anyway and he admitted that it most likely would.  His profit margin is already so low that if he now had to purchase all the items like alcohol swabs or table paper or other items like that he currently gets for free he would either A) layoff 1-2 employees, B) stop taking insurance or C) quit medicine.  (!!!!!)  That's super.   He said that a pediatrician in the same building as him had just left his practice to go work in computer industry after only practicing for 4 years.  He actually makes more money with computers than in medicine.   He also cited an example of another physician who left medicine to go work in sales, stating that he now makes twice the money in half the time.  Since when does my insurance dictate what type of healthcare I should receive - shouldn't that be my doctor's choice?

I am not quite sure how I got off on this rant since it has little to do with the economy, but maybe it's all the little things that make up the big picture.    

So that I can bring us back on track here... I want to provide a link to this great site I was just told about.  Check it  out. http://www.econbrowser.com/archives/2008/08/obamas_acceptan.html

Until next time....


the Billionaires

so I have been thinking about some of Buffett's comments about the US economy.  And my big question is WHY?  We all know Buffett's story.  Richest dude in the world.  Frugal.  Ladden with common sense.  Kinda funny.   Truly he is the Pollyanna of the US Economy.  He is certain that even though we may need to tighten the belt a bit that everything will be A-OK.   And my question again is WHY?

Does he know something we don't or is it that he has just played his cards right for so long that he believes continuing to do so will be enough?

I got news for you, most people aren't like Warren Buffet.  And, no, I don't mean most of us aren't billionaires.  I mean, we are not frugal.  We don't have common sense.  We are uber-consumers.  We can't not buy something. 

Or perhaps what Buffett is trying to convey is that the mere fact that we're Americans is enough.  That he is relying on the American psyche to bail the US out.   Like Americans believe they're the best and the US is the world superpower and because we believe it - it's true.  And while that will go along way, I don't really think that's enough.  But it's a theory I'm still trying to flush out.  Like why in an almost Brenton Woods-esque style China and Japan have basically pegged their currencies to ours so that they can continue to get their money low enough so that they can afford to export to us so that we can afford to purchase their stuff.   And, for some reason, it appears that US citizens believe those countries NEED to export to us as much as they used to NEED to borrow from us.  Now we believe they need us to borrow from them.  Without a payback? come on.  How long can that go on? 

Obviously I realize that there isn't a USD/RMB peg but they're definitely trying to keep things cheap for us.  So what's the real question here?  Will the USD value drop and go the way of the ARS,  RUB, THB, IDR, KRW, etc?   That would be bad for a lot of people, not just US citizens but what about all those countries that ARE pegged to the USD?  Bermuda? Caymans? Aruba? Belize? Saudi?  And what about the countries that actually have USD as their official currency such as Ecuador, Turks, BVI or Panama?  In fact, I'm pretty sure that about 65% of all USD in circulation is outside the United States.  So it would be very not good if the USD suddenly became worthless.  So maybe that's what Buffett was talking about, that it's not going to be as bad and as doom/gloom as it could be because there are enough powerful people in the world to not let that happen. 

Time will tell, of course.  But in the meantime the name of the game is diversification.

 

My Economic Platform

Everyday it seems the US public is spending more and earning less. Going into debt for their "basic" living essentials. And, what's worse is that we are going into debt to keep up a standard of living that we feel we deserve. And then, when we're unable to keep up that standard we blame everyone else.

I realize ranting does little, but I decided to create a blog for a) an outlet for my frustrations and b) in the hopes to find other like-minded individuals. I figure if I find enough people who are worried, maybe collectively we can start making changes.

I have just attended the premiere of IOUSA The Movie with a live telecast afterwards featuring Warren Buffet and 4 other prominent panelist. This movie was seemingly tailor-made for me. Finally someone harping about the state of the economy and the out of control spending and rising health care costs.

I was very disappointed with the movie.

Don't get me wrong, I think it's a great documentary. They did a great job of presenting financial stats in a not-boring, easy-to-understand way and if their objective is to educate an uneducated American public, I think they have succeeded. I thought it was a disappointment because it wasn't anything I didn't already know and they didn't really offer any suggestions except to 1 harp on the politicians and 2) to save more money.

)SIGH(

Despite my passion for the economy and how much I worry about everything that's going on with the USD I really don't see myself doing either of those things. I already save my money and I think the government is pretty much useless.

My view of "what's wrong with the US economy" may be a unique one but I really believe if everyone made some changes, we could turn this country around. And, I fear, that if we don't do something drastic that most Americans will no longer be able to afford housing as all of Europe and other countries take advantage of our weak dollar and drive up real estate prices.

I blame the state of the country on ... well... really, on two things: the farm bill/agricultural act and getting off the gold standard. The currency argument is long and arduous and there are far better people than myself to argue it but the farm bill is something I spend a lot of time blaming.

My theory in a nutshell is this: If we did not have subsidies that encouraged the excessive growth of corn, wheat, rice and soy, we may not have so much corn, wheat, rice and soy. None of these items are bad, per se. But the fact that at least one (if not 3 or 4) of each of these items is in literally everything we consume, is just bad. In the large quantities we consume them, corn, wheat and rice make us fat. And the soy? Well it’s lowering the testosterone of the nation's males and a nation of "soy boys" is not a pretty sight.

Testosterone is what has made this nation great.

It is why people came here in the first place. Americans were hardy people, ready and willing to lead and tame a new country. Fighting in the wild west. Remember the gold rush? Hell, remember the Alamo?

Now we are just a toned down version and I blame it on soy. I blame the obesity on the corn and wheat and rice. All of these items in excess are causing our health problems. And we are getting fatter, weaker and more passive every day.

If we started eating healthy. If we started growing our own gardens and raising livestock based on the highest quality meat to be provided rather than the maximum weight we could pack on and, if we, once again, started actually doing stuff ourselves rather than expecting everyone else to do it for us – we may have a chance.

But we won't. So I'll just try to keep all that to myself. The people that get it – already get it. The people that don’t get it - just don’t care. Which brings me to the topic of healthcare and the rising cost of caring for the collection of obese, sedentary and depressed public that seem to be growing at an alarming rate.

It's time to make a serious change in our health care system and I have an ugly solution that will probably never see the light of day but here it is... Seeing that it is the mentality of the most Americans that it's "not my fault".... we can forget the idea of everyone taking charge of their own health and being responsible. That's just not going to happen. Our spend-happy government is certainly not going to change its tune either and we can't afford Medicare/Medicaid and Social Security as it is – we sure can't afford it when more people are on it who are all living longer and are sick and sicker. Doctors are already pissed off enough with commercial insurance and Medicare so much so that many healthcare professionals have stopped accepting insurance altogether. And don't think for a second that Universal Health Care is going to make everyone happy.

So my proposal is this:

1. Cap the price of drugs. Tell the pharmaceutical companies what they can charge. I know this is a scary idea because Big Pharma is important to the US. Hell, it's practically the only thing the US produces any more. They spend a lot of money in Washington and, are, by and large, coming up with great drugs, but we need to curtail the price of these medications. Maybe the FDA can have a little bit less paperwork for them to keep the R&D costs down a bit, maybe the patents can be longer, but if the prices were cheaper, this would save Medicare a lot of money.

2. Put restrictions on what type of providers can prescribe what types of drugs, who can order certain labs and, by all means, what type of providers can order what types of tests. Yes, that’s right. All those nurse practitioners and physician assistants out there should NOT be ordering MRIs, CTs, nuclear medicine procedures, etc. If the mid-level providers in this country would start doing lower-level things like cough/cold, sore throat, flu, etc. This could potentially save millions of dollars. The Family Practice doctor should stick to being a FP. They should not be running stress tests and sleep studies and injecting Botox "for migraines". This could also potentially save millions of dollars and quite possible save some lives. When a patient is diagnosed with heart disease: see a cardiologist. Sleep apnea? Pulmonologist. Diabetes, osteoporosis, thyroid nodule? Endocrinologist. I honestly believe consulting a specialist in the earliest stages of a problem, even letting them order the workup instead of someone less-qualified performing these tasks, will save billions of dollars. It may put a few radiologists out of work and we may suddenly have too many unemployed MLPs but it will save a lot of dough. Today because patients are not paying for the tests, they just get them, without ever questioning if the provider who orders them is qualified to understand and interpret the results. Quite honestly, if your primary care provider, orders a tests and doesn't know what to do with the results: they should not have ordered the test in the first place. Putting restrictions on who could order/prescribe certain things would save a tremendous amount of money, time, frustration and, likely would encourage doctors to get further education and training. Like I said, this idea will never see the light of day and will probably make a lot of people in the healthcare profession angry but ask any specialist (off the record) what would be cheaper to let a NP/FP try to diagnose and manage a problem or a specialist – they'll give you the same answer.

3. Take prescribing privileges of most drugs away from mid-level providers so as to avoid potentially fatal drug-drug interactions.

So that's my proposal for the health care crisis. It's doable. It's easy to implement. It would improve care. It would encourage doctors to get better training (programs could be put in a place for special certifications for particular common problems like osteoporosis or hyperlipidemia) and we wouldn't have to try to figure out how to save Medicare from going broke.

Anyway, that's the end of my first entry. Stay tuned...