Healthcare

On Sunday, the House passed a bill to overhaul the US healthcare system. It will go through some modifications in the Senate and Obama will sign it into law. Then, the devil really will be in the details, and while no one is  quite sure what the ultimate impact will be, there are a few big picture items that have been mentioned.

For starters, the bill aims to increase coverage for roughly 30-35 million Americans, still shy of universal coverage, but it certainly sounds like its a move towards it. The people who are currently not insured, but can afford it, will be forced to buy insurance (good for insurance companies?) or be penalized (taxed). All the parties seem happy:

• The Democrats can say they passed a watershed healthcare bill, as promised.
• The drug companies will have that many more people buying drugs.
• The unions were able to obtain an exemption for being taxed on their Cadillac plans.
• Medicare costs are supposedly going to be cut.
• More people will be covered, many of them young and healthy, making the insured pool larger and healthier.

So who loses?

• Doctors will see payments cut, discussions now are around the 20% marker. The thinking was that cut reimbursements by 20% and doctors will just have to deal with 20% less. However, anyone who has actually run any PNL statement or business knows that this is not how things work. By cutting reimbursement rates for offices by 20%, the bill will kill any profit margin the offices had. (This is obvious since leases won’t go down 20%, staff won’t take a 20% pay cut [think nurses, billers, etc.], etc.) I have already spoken to a number of doctors/practice owners and if this reduction does indeed go into effect, they will be forced to shut down their offices. Clearly, it is a pro large institution move. Hospitals and large doctor practices will be net beneficiaries, but the vast majority of doctors will lose. Not really sure what will happen to them.
• Taxpayers will have to bail out the system because politicians do not know how to budget. Medicare was never supposed to be the largest government expenditure. Social Security was never supposed to go bankrupt. All government estimates – I would venture, in the history of mankind – are wrong. So why do people believe these?
• Insurance companies will ultimately be hurt. This bill moves the US one [huge] step closer to a single payer system – and that single payer isn’t a for-profit insurance company. Government options will be more attractive to employers (less liability) and young families (will end up being cheaper).

Let’s stop there for now. For a full description of the bill, click here. Another step in the absolutely wrong direction.

Healthcare – This is important!!

I didn’t write any posting yesterday – but I have a good reason. As long-time readers know, I have been following, writing about, and (in small ways) trying to convince and push people toward a more equitable system where there is a more direct link between the people performing the procedures, the people receiving the procedures, and the parties paying for the procedures.

Anyway, yesterday the Senate failed to stop a 21% reduction in reimbursements to doctors. As an initial step, Medicare will withhold payments for 10 days to participating physicians. Since most insurance carriers base their reimbursements off of Medicare, we can expect the reduction to occur across the board. If the reduction sticks, let’s think through the consequences. Assuming most doctors offices face the same dynamics as other service-oriented small businesses (probably with slightly lower margins), we can assume that these 3-10 doctor practices have a 20-25% margin. The physicians that are not partners, will still expect the same pay (as employees, it’s tough to cut their pay based on fickle reimbursements) and so, this reduction will essentially eat at the margins of all the small business owners (who are also physicians). In turn, they will be forced to limit services, sell their practices, or just shut down completely. Seriously. That’s why I didn’t post yesterday – we’re doing some scenario forecasting with different physician groups. And the trend doesn’t look good for the small practices.

So the next time someone talks about cost-controls or the implications of a single-payer system, feel ask them to contact us so that we could walk them through the actual economics of medicine.

Read the full story (which WASN”T MENTIONED ANYWHERE!!!) here.

Connecting the dots 2-25-2010

Or at least trying to keep track of everything…

I want to first give you an insight into what I’ve been reading this morning, then we’ll see where it leads us.

As many of you know, I’m a believer that excess profits flow through to the real estate sector and have referred to Fred Harrison’s book on the subject often (http://www.amazon.com/Boom-Bust-Prices-Banking-Depression/dp/0856832545/ref=sr_1_1?ie=UTF8&s=books&qid=1267115867&sr=8-1 – it’s a must read). The essence of the logic is that a profits increase, real estate owners will charge higher rents, thus limiting growth in profits. This increased rent leads to higher real estate valuations. On the downside, the same is true. Combined with 4 to 1 or more leverage, the moves have large implications for the economy, investments, etc. Thus, I was encouraged to read one of my favorites (Calculated Risk) write about exactly this topic: Housing: The Best Leading Indicator for the Economy. I wasn’t surprised that the conclusion was that our best case scenario is that “these leading indicators suggest any growth will be sluggish and choppy.” I will actually take it further to note that these figures don’t even account for the shadow inventory of homes (foreclosures at different stages, and people who have held off selling due to climate) and they do not account for the coming pressure on margins at each level of the chain. So I am even more concerned.The above post refers to an academic article, which you can download here. From that paper we can see the importance of being proactive when trying to contain a real estate bubble and the danger of powering it with easier and easier monetary policies.

Then, in the same breath, I read that mortgage rates are going over 5%. Read the full article here. They are still insanely cheap, but from a psychological perspective, or from a rate of change perspective, this doesn’t bode well, especially considering that the governments MBS buying program is supposed to end soon.

Gold is a favorite topic for readers, and I think discussions of gold end up leading to some interesting additional investment implications (we own gold in client accounts, along with other metals and mining shares). Well, I’m a bit confused. On the one hand, ft.com reported on Feb 18th that:

“For China, directly buying IMF gold has become far too sensitive an issue because it would send such a strong negative signal about the dollar and that would be extremely dangerous for their own holdings of US Treasuries,” says one senior dealer. “The publicity generated by India’s decision to buy gold from the IMF last year could have scared off other central banks.”

Read full article here.

Then, this morning, I read the following headline: Confirmation Of Chinese IMF Gold Purchasing Intentions? on zerohedge.com. And at the same time, Treasuries are rallying. So either the Chinese are not purchasing the gold or they are. If they are, it is not (not yet?) sending any negative message to the market about Treasuries. Should it? I thought so.

In the meantime, California canceled it’s $2 billion GO bond offering. Obviously. The state is on the verge of bankruptcy, so who wants to bid?

Separately, some of you may be following the double-standards and moral questions being faced by Apple over it’s wishy-washy policies over sexually explicit content on its apps. The main hypocrisy is that large firms, like Playboy and SportIllustrated’s swimsuit pictures and apps are OK, while smaller developers are getting censored, even when they’re not promoting sex. As a further insult, any user can go to safari and surf for porn directly, so it’s the app programmers getting squeezed. Anyway, I don’t really want to discuss the hypocrisy of our society’s view of porn, but something did catch my eye today: Wal-Mart bought Vudu, and online purveyor of movies. Now, Wal-Mart never pretends to be open minded like Apple, so it was without much fanfare that they decided to shut down Vudu’s adult section (Hot And Bothered: Walmart Shutting Down Vudu’s Adult Section). What is interesting here for me is whether Vudu will be as profitable for WMT without that section. I know nothing about Vudu’s financials, but I just have to assume not.

In the meantime, we have the healthcare summit, struggling markets, and weaker euro. We’ll have more on these later.

Obama keeps going on healthcare

The broad strokes are in, but I will withhold judgment until it’s all in. For now, here’s a brief summary:

• Expands coverage to 31 million Americans
• Increases tax credits to buy insurance
• Sets up entity that could block big rate increases
• Imposes 2.9% Medicare tax on unearned income
• Cuts the deficit by $100 billion over 10 years

For the full summary click here.

I just read Ezekiel J. Emanuel‘s book Healthcare Guaranteed. The author is Rahm’s brother, so it might be worth listening since he might have some influence on the debate. Emanuel (the doctor) goes through and criticizes the piecemeal attempt to fix healthcare. For starters, he is against an employer based plan. He goes on to show how having a “means-test” is expensive to implement. He shows how medical insurance premiums and fear of lawsuits plague the system. He highlights the incentives to cheat the system. And on and on and on. His solution – a voucher system for a minimum plan, that is equivalent to what Congress receives, with the ability to purchase additional insurance on top of it. To pay for it, he proposes a VAT of roughly 10%.

Admirable. I agree with his assessment of the problems, and I agree that the employer-based system is unfair and expensive to administer, especially for smaller firms. Now, I’m not sure I agree with the voucher system, not am I sure about the regressive VAT tax (yes, VAT sounds good, but it hits lower and middle income families harder than higher earners). But at least it sounds like he’s on the right track. I can’t help but not see any of his analysis in the current administration’s plan.

Emanuel has 7 goals of for healthcare reform:

1. Guaranteed coverage…FOR ALL: the current proposals fail on this front, since roughly 15 million people will still not be covered.
2. Effective cost controls: Emanuel doesn’t give a good solution for this, but it’s a good goal nonetheless. On this front, it looks like the administration is proposing price controls. For those who remember the price controls of the 1970′s on fuel, pork, and wood, you’ll also note that there was big money to be made in the futures markets. If this plan goes through, look for futures markets around healthcare to develop where producers will be able to arbitrage the cash/futures markets.
3. High-Quality, Coordinated Care: Emanuel criticizes the fragmented, fee-for service arrangement and seems to imply that large institutions will be better equipped to deliver coordinated healthcare. Maybe, maybe not. It will be interesting to see how the administration deals with this.
4. Choice: Again, let’s wait for the details.
5. Fair funding: I’m not optimistic, but I’ll give the plan the benefit of the doubt for now, until we find out more about where the funding will come from.
6. Reasonable dispute resolution: Have not heard anyone mention capping malpractice, or dealing with this issue. I have a personal solution: Patients who sue and win can receive some capped amount, with the rest going to the hospital or to research centers to better whatever caused the mistake. Patients will no longer be able to get rich of doctors’ mistakes, and lawyers fees will be capped at fair market value of hours works. Or something along those lines. But no-one asked me.
7. Economic revitalization: Emanuel rightly points out that healthcare benefits put a strain on employer-employee relations, and create friction in moving jobs, starting businesses, hiring, etc. I do not see how the current plans alleviates that, since it maintains the employer based system. Again, that should be the starting point of reform.

Emanuel and I might disagree on the details of delivery, human nature in decision-making, economics, etc. but his fundamental principle that the system needs to be overhauled and that patches will only delay the inevitable collapse are spot on. Obama should read his book before Thursday.

Major elements of Obama’s health-care proposal
Expands coverage to 31 million Americans Increases tax credits to buy insurance Sets up entity that could block big rate increases Imposes 2.9% Medicare tax on unearned income Cuts the deficit by $100 billion over 10 years

Conversations have gotten a lot harder

It might be me, but lately it seems that every conversation veers towards healthcare policy, financial bailouts, Bernanke, debt, and stochastic modeling – well, the last part is probably just me. I’ve been struggling to define, for myself and others, what are the main issues around each topic. Certainly, little ditties about Keynes vs. Hayek are cute:

\”Fear the Boom and Bust\” a Hayek vs. Keynes Rap Anthem

But I’m not sure they inform the debate. On the other side, you have James Galbraith posting in The Guardian about the need for more deficit spending in the US and Europe: http://www.guardian.co.uk/commentisfree/2010/feb/19/keynes-current-crisis.

The articles on both side are endless, and I’ve come to a simpler definition of the two sides. Each side operates under a fundamentally different framework, and it doesn’t matter whether the issue is healthcare or the economy. One framework believes that bureaucracies can generate efficiencies, and that government, can fulfill it’s intentions, which are inherently better than for-profit players, and which are more representative of what the population wants. The other side doesn’t trust bureaucracies, and believes that decisions made by institutions are inherently inefficient, with power plays, political maneuvering, and fiefdoms working against the benefit of the individual. Both sides have their extremists, who do not represent the reality and nuance of the arguments. On one extreme, you have advocates for government spending who do not understand any economics, while on the other side you have advocates for no government intervention and are detached from the realities and complexities of running any organization and thus the benefits of processes.

This administration obviously leans towards a pro-government view of the world. No voter should be surprised. The administration was very honest in its plans from the beginning. They believe that the way to fix healthcare was by consolidating the decision making of health administration in a governmental body. The entire jobs effort is an attempt to have government “create” jobs that weren’t there. It is a continuation of a process that has been happening for decades; it is not Democrat or Repulican, it’s not Bush or Obama. The modern day federal government can trace its roots to the New Deal, social security, medicare, and the cold war.

The conversation about bailouts and handouts needs to shift, and now is as good a time as any. The conversation needs to shift towards our basic conception of government’s role. Do we, as a society, have faith in our government to give it more decision-making powers over our day to day lives or not? Do we trust our politicians or not? If the answers are “YES”, then solutions seem easy, because they revolve around giving government more control and power. If the answers are “NO”, then the solutions are quite difficult, since we still want some certain basis problems fixed, but we have no guiding authority to make them. Our readers will know where we would err, and it is NOT with giving government more powers. Which means things get messy. It means giving government power to bailout in an emergency, but also putting in place the mechanisms to pull out ASAP. It means feeling a lot of pain as our real estate goes down because government isn’t providing cheap funding to people who shouldn’t get it. It means paying more to borrow. It mean sacrificing a debt-dependent life-style. It means working for your money, and working hard (like on the weekend).

The stuff you read about Keynes and Hayek is only the surface, the manifestation of a much deeper struggle we are experiencing as a society. It will not end quickly and it will probably not end decisively. Yet, at least we should recognize what the debate is about.

Obama & Co. are scrambling: Banks and political games

So Mass. went to the Republican candidate, for the first time in 40 odd years. Brown won Ted Kennedy’s seat and in the process upset Obama’s drive for healthcare reform. Pelosi and Obama will probably not be able to push through any legislation in the next couple of week, so it means that we’re now in a holding pattern. Turns out markets tend to do better when governments are gridlocked, mostly because politicians can’t do as much damage.

So now that he’s been stymied on one end, Obama has to show progress on another, so back comes Volcker. He was marginalized, but now is being made the poster boy in high-stakes political game that might leave Geithner and Bernanke in trouble. The Democrats were sent a message in Mass. and they need to scramble. Bernanke might be made the whipping boy, although Geithner is scared too.

So where does that leave us? In limbo-land. Banking regulations will re-instate some form of Glass-Steagall. They have to. The public is angry that tax payers money went into the pockets of executives and the risk taking behavior is back with a vengeance. So the big banks ROE will be even worse going forward and stocks need to reflect the uncertainty, so for now, why speculate? Not worth it.

On another note, I think all of this posturing, and all these announcements and speeches, and all of these Geithner vs. Volcker games, all of it is part of a game of obfuscation. We are being toyed with, and once again, the issue is government entities. Before Christmas, we wrote that Congress passed (hoping to be unnoticed) legislation that provided more funding to Fannie and Freddie. Now, Fannie and Freddie need to be put on the Fed’s books, increasing the government’s liabilities by a few billion dollars, and no politician wants to be the one to say it and bring it to light. So they’re playing a game of diverting our attention. In reality, Fannie and Freddie are already liabilities of the Fed, but they aren’t being counted. Bringing them onto the Fed’s balance sheet will balloon liabilities and make the government more than the lender of last resort. It will make the Fed responsible for mortgages and servicing. Do you really think politicians will allow Fannie and Freddie to foreclose on homeowners? How will their debt be serviced? Only two options: printing or taxing, since repossessions will be impossible. End game: I don’t even want to theorize, but I’m not a big fan of the GSE bonds.

In a related note, the Swiss are flexing their muscles and standing up to US disclosure requirements. Translation: the rich will still be able to shield money away from the hands of Uncle Sam. Expect to see more assets move offshore if taxes go up. Law of unintended consequences.

Why I rewrote an article

I had an article written on thoughts for the week ahead, which included thoughts about the big direct bidder in the Treasury market (sovereign, PIMCO-like institution, big bank, short covering?), thoughts on PALL and PPLT (I have positions in both), dollar, etc. but I scrapped it because of talk of stabilization.

The market goes through turmoil. People become afraid. Stock market goes down. Stock market rallies. People begin to believe that we’re stabilizing. M&A picks up. Real estate speculators have infomercials on CNBC teaching you (again) how to make millions without working. Etc. WRONG! We have 10% unemployment and it’s not picking up except in specific industries (government and healthcare) that shouldn’t be growing right now, certainly not as a percentage of GDP. Commercial real estate has NOT been marked properly, but will in the next couple of quarters, and when it is, the regional banks that everyone is talking about being great deals, will be hurt badly. Credit is contracting. Interest rates are not going down, and if anything, will rise, certainly on the long end. Now, even if things were improving, valuations are NOT cheap. The market might have 10-20% upside, but the downside is greater.

Volatility seems relatively cheap, which means downside protection is relatively cheap. I just heard on Bloomberg a Citi bull speaking. A big MAYBE at best. Massachusetts is about to vote in a Republican!! What a statement to the Democrats, when MA, the state that lead the way in forced universal healthcare, votes against the Decomocratic Party’s platform and asks for change. Of course healthcare is rallying today.

Anyway, for our readers, if you’re going to discuss stabilization and why I should be buying here, please include some rational arguments that include potential upside, downside, and valuation metrics. Anything else is just speculation.

Following the first week news

Here are a couple of highlights that caught my eye:

• Foreclosures in Dubai? http://www.bloomberg.com/apps/news?pid=20601109&sid=a4TwfiSIfjdM&pos=10 What does it mean for the credit spreads that have come in so rapidly in the past couple of months?
• Silver is starting to get a lot of attention. Specifically, the fact that the Gold:Silver ratio, usually hovering in the mid-high teens is now over 60. Is silver (“the poor man’s gold”) poised to outperform gold or will the spread increase? Is there a structural shift in the ratio due to increased demand from India and China?
• Has Brazil peaked? After almost doubling last year, with huge relative inflows and being all over the news for everything from energy, soy complex, and agriculture and resources to increasing trade flow with China, to positive demographics, etc. I can’t help but think that putting new money to work here feels a bit more speculative.
• Market P/E: we’ll update this after the 4th quarter is announced, but we’re probably trading at at P/E over 20. As always, we have to ask whether bull markets start from these valuations, and I tend to think NOT.
• I have maintained my short treasuries position, but fear that it might come back in for the next short while. Suddenly 3.5-4% yield doesn’t look that bad to a lot of institutions. I’m maintaining my small position for now, but use your judgment.
• Healthcare: let’s see what gets passed. Just started Healthcare Guaranteed by Rahm Emmanuel’s brother. I’ll keep you posted if he says anything groundbreaking.

Just some thoughts to get the year going. Again, personally and for clients, we are maintaining a very defensive stance in this environment.

Healthcare: I can’t look away

This is from The Tax Foundation blog:

Famed Liberal Economist Casts Doubt on Obama’s Health Care Financing

 

by William Ahern

 

Eminent economist and liberal icon Henry Aaron of the Brookings Institution has written in the New England Journal of Medicine that financing universal health care as Pres. Obama and the House have defined it is nigh impossible in this economy.

The current tax proposals to partially fund the health care expansion are two, President Obama’s and Speaker Pelosi’s (HR 3200). They both rely on raising the top two income tax rates from 33 and 35 percent to 36 and 39.6 percent to get some revenue, but then they differ.

President Obama wants to cap the value of itemized deductions at 28 percent. People who pay taxes at the 33 or 35 percent rates (soon to be 36 and 39.6 percent) wouldn’t get the usual deductions on their federal income tax returns when they list their home mortgage interest, their state-local tax deduction, their charitable gifts, etc.

The House bill leaves those deductions intact; in fact, the value of those deductions would increase for high-income people when their tax rates go up. Instead of curtailing deductions, the House would impose surtaxes on top of the higher tax rates, ranging from 1 to 5.4 percent.

Even these ideas don’t fund the public health plans that Democratic lawmakers want, and Aaron dismisses the idea that Senate Democrats can easily push aside Republican ideas and adopt a “go it alone” strategy. He cites one especially daunting obstacle:

The most formidable is the “Byrd rule,” which authorizes any senator to raise a point of order against “extraneous” provisions, which include those that boost deficits during the period of the budget resolution – 5 years for most elements of the 2009 resolution – or in any year thereafter. Any provision that does not affect revenues or mandatory spending is also extraneous. To overcome such points of order requires 60 votes, the same number needed to end a filibuster.

Aaron wistfully mentions the virtue of a value-added tax but quickly acknowledges that it’s a political non-starter:

Even at modest rates, an earmarked VAT could easily pay for health care reform. But no president, including Barack Obama, has embraced this revenue source, and few members of Congress have shown interest in using it.

Finally, he advises Democrats to dial back their wish list because, “The full reform agenda may be beyond immediate political reach.”

Healthcare: From todays WSJ Op-Ed

John Mackey, co-founder and CEO of Whole Foods, wrote an op-ed piece that is worth going through. To summarize:

1. Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

   Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

2. Equalize the tax laws so that that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.
3. Repeal all state laws which prevent insurance companies from competing across state lines.
4. Repeal government mandates regarding what insurance companies must cover.
5. Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.
6. Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?
7. Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.
8. Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

While I’m not sure about all the points, one of the interesting things about his suggestions is that they are in the same vein as the McCain proposals from the campaign (stop government subsidies and get rid of incentives for employer based healthcare, competition across state lines, etc.).

The debate continues…

http://online.wsj.com/article/SB20001424052970204251404574342170072865070-email.html

Cliff Asness on Healthcare – Updated Version

For those of you who saw our previous post, this is an updated version of the Healthcare Mythology piece by Cliff Asness. Again, definitely worth reading!

Health Care Mythology – Updated

Clifford S. Asness on Healthcare

Cliff Asness of AQR is usually one of the more forward thinking, provocative, and insightful writers I have the pleasure of reading. His latest article on the healthcare debate is more important than anything he has written to date. This is one of the key issues facing our country today and Cliff has addressed it better than I could. I have posted my own frustration with the current debate, but he’s just done a much better job of honing in, point by point, on the absurdity of the administration and our Congressional leaders. Please read this through to the end…

Healthcare Mythology by Cliff Asness

House Democrats unveil health care reform plan

This just in . . . our leaders have found the solution to providing health care: forced participation. For starters, individuals and businesses will be required to have healthcare, otherwise, they’ll face a surtax. Then, individuals and families earning over $350,000 will face additional surtaxes. Those living on the coasts (and the predominantly blue states) tend to have higher annual incomes and they will be paying for the medical care of the folks in the red states. How ironic. But no one should be surprised. Obama and Pelosi, throughout the past campaign seasons have stated that this was their high-priority baby. Pushing healthcare reform through fast seems to be more important than thinking through the vast implications implied.

Let’s just think through some:

1. Employers will prefer to hire more independent contractors and not pay them medical expenses. The expenses will thus fall on individuals. While there will be many available in the beginning, one will be the cheapest – the government plan. 
2. Employers will prefer to hire people in regions that do not force them to take on the additional costs per worker. Why is it that European companies don’t like to hire? Because emplyees are too expensive and you can’t fire them.
3. Our current socialized medical system for those over 65 years of age has been a vast experiment that should have shown us that it doesn’t work. To fund Medicare in the near future, we will need to either limit coverage (it will happen and will be unfortunate when it is your parent that is being denied certain coverage with no ability for you to pay for it yourself) and increase taxes (it will happen also). Neither band-aid will actually solve the problem that vast government bureaucracies are inefficient.
4. The cost savings attributed to “electronic medical records” and “prevention” miss the fact that the vast majority of healthcare related costs are in the last five years of life. They will not help solve this problem in th least. 
5. This system will, by its very nature, limit the amount doctors make. So let’s get this straight: tax payers will bail out GS whenever necessary and make sure the executives make hundreds of millions of dollars, but we’re upset that our doctors, with 20 years of training are making an average of $250K? Great, let’s limit their pay. That will surely incentivize our best and our brightest to go to medicine.

I could go on, but I’ll probably get an ulcer and my doctor won’t see me for another 8 months. This plan is completely in the wrong direction. What about canceling employer-dependant health care altogether? Why should entrepreneurs and sole practitioners be penalized? Let’s take the trillion dollars that this plan will cost and instead give people credits to buy their own insurance. What’s happening to our sense of individual choice and responsibility?

http://www.cnn.com/2009/POLITICS/07/14/house.health.care/index.html

This being an investment forum, it’s worth noting some investment implications:

1. Net positive for companies dealing with healthcare technology and record keeping.
2. Net negative for drug companies, insurance companies, and health care providers.
3. Net negative for USD as entitlements will continue to soar beyond their current levels.
4. Net positive for older and sick people since the pool of insured will include many more young people.
5. Net negative for young, healthy people. They’ll be paying into a system, much like social security, from which they’ll never receive any benefits.

Enough for now.

Doctors warn on Australia’s hospitals

FT.com
By Elizabeth Fry in Sydney

Published: November 13 2008 00:47 | Last updated: November 13 2008 00:47

Australia’s public hospital system is teetering on the brink of
collapse and putting lives at risk, according to a report issued by a
national doctors’ group calling for an immediate funding boost.

The Australian Medical Association said public hospitals were so
overcrowded and poorly funded that patient safety was compromised to
the point that 1,500 patients a year died unnecessarily.