The creditfairy.org. It is sand! Take your pouch and scram!

FDIC advertising worries me. ConsumerEd.org saying a car is a big investment makes the Rich Dad in me sigh.

The Economics of Healthcare

I have a couple of observations based on my newly acquired knowledge of the principles of economics. 

First off, HR3200, much like all of its preceding healthcare related legislation does not seem to lend itself to allow for free market efficiency.  It seems this is an attempt to make some people better off (those who aren’t insured or those that can’t get coverage) while making others worse off (those with insurance or those that pay any kind of taxes).  Before I just intuited this was a bad idea, now I *know why* it is a terrible idea.  It goes against a fundamental economic principle!

A lot of this debate has to do with CHOICE, which without, we have no free market economy.  I thought that was interesting, because for a lot of people, especially with healthcare, we’re dealing with limited choice which I suspect is responsible for much of the problems with the market today.  But more on that later.  Other glaring observations have to do with the way markets work and that for instance, when markets fail, government intervention can help an economy... But can is not will or does.  There is an old saying that “Government begets government”, and deregulation is the only real way to reverse that trend.  More regulations and government for a government induced problem is not necessarily an elegant and certainly not an efficient solution.  What happens when the government intervention fails?  What happens when people’s faith in a currency or a set of policies begins to wane?  How can society's welfare improve in spite of a governments best attempts?

Other areas of potentially beneficial intervention that can not otherwise correct themselves in a free market would have to do more with tort reform, risk mitigation (currently the providers, not the payors, take on the lions’ share of risk) and the lopsided market dynamics imposed by Medicare, Medicaid and social security in the first place.  After all, according to Krugman, my understanding of healthcare now is that it is already a command economy because there IS a central governing body setting lowest common denominator qualities of care and pricing.  That is our federal government through the agencies of Social Security, Medicare and Medicaid.

Ever notice the discrepancies in your “EOB” or “Explanation of Benefits” that looks like a bill, smells like a bill, and eventually gets paid or written off like a bill?  They’re all those things that you get in the mail after visiting the doctor or a clinic or having any sort of procedure done.  Ever notice the difference between the “cost”, what your insurance will pay, what you supposedly owe and what gets written off?  That’s a regulated market trying to provide price transparency (albeit after the fact -- WAY after the fact!)  Too bad that couldn’t be done/known in real-time, up front, with the swipe of your healthcare payments device and settled against your plan, coverage, HSA and FSAs before you decide to get that root canal (or not!).

Another problem with this legislation is that there are PLENTY of missed opportunities.  It is not going to reduce administrative costs.

Ever wondered why in a $2.4 Trillion domestic healthcare market when every thing around us has gotten better, faster and cheaper, why healthcare and the Hippocratic oath seems somehow immune?  Since as long as they been keeping statistics for the last 40 years the administrative overhead costs of healthcare have maintained a steady 17% and has just recently began to INCREASE into the 18-24% range? Haven’t drugs, procedures, knowledge and technology all increased during this timeframe?  What has gone wrong?  Government intervention is this writers hypothesis.  But I’m just a beginning student so I’ll have to defer to the wisdom of the crowd on this one, for the moment.  :-)

If you are covered by private insurance, there is a negotiated rate set by the insurer and provider members of the plan.  This is what you see eventually get applied by your insurer as the EOB numbers change.  What you see get written off is tax-based accounting tactics (some say tomfoolery) to account for the providers and insurers inability to actually let the market reach equilibrium on its own.  Unfortunately, this isn’t a free market negotiated rate as the lower end of the price-elasticity is determined by our lovely federal system of care mandated by the above mentioned agencies.

Tort reform, in the form of limitations of risk for providers and insurers – risk being a disincentive, and ACTUAL choice for consumers/patients, providers and insurers/payors would go a long way toward helping make the system a little more open.  Price, schedule and reputation transparency, as well as outcomes transparency would allow more consumer confidence and trust in finding out about their providers and procedures.

More efficient use of resources (like the way manufacturing runs expensive capital equipment for three shifts instead of just 9–5) and more collaborative care options to maximize access to experts and specialists could ease the burden on general practitioners and constrained resources.

The faint of mind can stop here.  The following is of an academic theoretical nature posed as a provocative discourse for the sake of argument:

And lastly, (here comes a sick-twisted conservative rant for shock factor) if we want to use the heavy not-so-invisible hand of government policy to incent more socially (and fiscal!) responsible behavior, how about a bit of Darwinian taxation of genetically misleading, unnecessary or frivolous procedures?  Like taxing elective surgeries (especially “plastic”), implants, lipo, botox, reductions, non-cancerous removals, sports- or “adventure” related injuries, procedures related to accidents or “enhancements”?  Or adding tariffs (or penal-ties) on socially unacceptable treatments for acts of commission, omission, cruelty or stupidity related to sexual (mis)conduct, illegal activities, substance abuse, addictions, obesity or other such strains on our healthcare system?  I’ll bet THAT would change the demand curve (and eventually the supply curve) for THOSE things!  :-)

What do you think?

6ty Sense from MIT

Ah, the good old days of Free Markets…

It wasn’t long into the Preface of my new Economics book that I got a little worried.  I’m not sure of what to think about “The Economics of a Liberal” as the author of my introduction to Economics.  And since Al Gore won a Nobel Peace Prize, I’m not sure what to think of the whole Nobel Laureate moniker anymore.

ECON2105 was the hardest class I’ve ever taken.  To put that in perspective, I LOVED Physics, Computer Science, etc. and done “ok” in Calculus, etc.  But here’s why it was so hard for me.  I actually had to learn to change my responses on the tests in order to “pass”.  Unlike traditional learning where you genuinely understand and believe the right answers to be true, I had to learn a different “way of thinking” to succeed in this class.  Some might call it lying to oneself, while other’s would call it doing what is necessary to achieve the desired results.  I call it sick.

The Nationalization (or Stateism?) of our banks and heavy manufacturing (automotives like GM and Chrysler) flies in the face of our Market Economy.  I learned from the book that when there is a central authority telling people what to produce and where to ship it, picking winners and losers and incentivizing “desired” outcomes, you are not operating in a free market.  Watching what has happened with GM, cash for clunkers and knowing my history about the former soviet union and long lines and product scarcity (that really did happen, right?), I guess we’re NOT the free market economy that I grew up believing we were.  Oddly enough, I remember my social studies/civics classes in the late 80s being titled, EBFE, which stood for Economics, Business and Free Enterprise.   What happened?

IMHO, the banks have been failing over the last quarter century NOT because of fiscal economic policy, but more so as a post-industrial, free market information aggregator response to the lack of value that the banks are providing to the modern prosumer.  (But more on that later!)

I wonder what my three kids are learning.  I hate to think by the time my daughter is in Highschool (thankfully several years from now) she’ll be learning about how wealth distribution is “Good for Everybody” instead of Smith’s Invisible Hand and the teleological “good of the many”.

I frankly prefer the “unplanned chaos” of a free market economy than the results of any “central planning” committee.  Thank GOD for the invisible hand!  I had always kind of intuited that being “enterprising” was a good thing, and know I know it to be true.  I have even found that I need to re-watch a Beautiful Mind to catch what the protagonist (Russell Crowe) was saying in the beginning at the bar when he’s talking about Smith.  BillG always got that.  Not many liked him (or his means) but I think in the final analysis he will go down in history as a net benevolent societal and economic benefactor.

So, when markets fail, government intervention can help an economy.... But what happens when the government fails? How can society's welfare improve in spite?

I specialized at a young age, thus my longer economic track record!

I finally figured out the actual academic "economic" reason I left school the first time! The opportunity cost for me was simply too high! :-)

Bi_cameral representation, 45 czars, the Republic and a Market economy where no central governing body picks where prods are specified to be produced and sold

Latest mobile money research, some new, some old…

Being OCD about research and wanting to always have the latest and greatest info about the Strategy for Winning class, I refreshed my arsenal of factoids relating to the future of electronic money.  Notable net new finds included a bevy of info regarding British Telecom, Deutsche Bank’s deal with Luup, and of course the new deal with Nokia and Obopay for Nokia Money and NTT Docomo’s 10 million user e-wallet.

ECON2105 and Aplia – Macro Economics

I’m pretty stoked to begin in earnest this journey of learning specifically about the global economy in a traditional accredited academic manner.  I’ve got a head start having been an entrepreneur, investor, business owner, franchisor, partner, principal and one-pop shop, as well as a “worker”, consultant, cast, team member or employee of literally hundreds of firms worldwide.  That’s something you just can’t get by being an employee of the same company for 35 years.

Now, I’m clearly no investor with a “Capital I” like Rich Dad, but I’ve been in touch with my inner “Poor Dad” and I can say I’m okay with being a poor dad for a little while longer whilst I clean up my act and get these thoughts out of my head and ascribed to some form worthy of notation or inspection by others.

First up, Macroeconomics, a really cool courseware system called Aplia, a world-class book and the head of the department at CSU… what else could an upstart like me ask for?

Automagic expenses, directed payment philanthropy, Upromise on steroids, subscribable identities, T-scores

Automagic expenses, contextual payment driven philanthropy, payment streams, PIVAS, UPromise on steroids

EPA PerformanceTrack.org, disposable printers and lawnmowers, $3000 Roadside Stimulation

FDIC advertising? When I'm told not to worry is usually when I have to. Plunge Protection Unit? Markets. Rubles, Reals, Euros, OPEC and the price oil/gas

Anonymity, IdentityGuard, lifeLock, myspace, fb, flickr, evites/upcoming, LinkedIN, gaming, markets, transIT, the Tube, ads, reverse auctions, sniping, shipping

Situational payments, temporal payments, relativity, special theory of exformation, DRM, architectural dominance, small business, payment automation, QuickBooks

Auto taxation, Upromise, logistics, cross-border, airports/terminals, tickets, 2012, prosumer persona, rentals, PKI, ID, EVI, fraud, DM, MDM, semantics, profile

EMV/SmartCards, PCI/HIPAA, SAS-70, HL7, ACCORD, XML, V, MC, AXP, Linden, Points, XBOX, Zune/iPod, LunchMoney, biometrics, auto adjudication, auto substantiation

Multi-sided platforms, aggregators, bureaux, thin files, n00bs, youth, ConsumerReports, Google, reviews, localizability, spatiotemporal, context, time-value, FX

Invisible engines, quintuple convergence, microfinance, payment attribution, adressable money, the Internet *IS* the network, m-pos, acceptance, the Zippies, IT

FinViz, GrameenPhone, OxiCash, Contactless, WinMo, Pre, iPhone, BlackBerry, MNO, Cable, 3G, 2G, i-Mode, Multi-purse, supply chain, b2b, EIPP, ebpp, EFT/ACH, EDI

ING Direct, UNbank, Exformation the verb, Exformation Field theory, PNC, RTGS, ISO, SWIFT, SEPA, EU, ChinMobile, PrePaid, Campus, ecash, wired, registry, stream

Ally Bank, Host Hybrid vs. Client Hybrid, Multi-tennancy, apartments, decoupled debit, virtual wallets, rules, experiences, channels, Angie's list, ebay, Amazon

US Domestic Consumer Credit shrank $10B in June

PSH, UPS, Cloud Computing, Healthcare, Identity Management, Loyalty, Incentives, FuturePayments, Brazil, China, Sony, Nintendo, AutoMagic, Reputations, InfoNox

Twitpay, PayPal Adaptive Payments, Amazon FPS, EC3, PIVAS, Google Checkout, Apple, BT, mint.com, wesabe, web2.0, Microsoft Money, Intuit, FDR & BoA, IBM, FedEx