Downtime
Well, my office is all packed up and I will be turning off my Internet service momentarily. We are moving to Ojai, California, and it will likely be a week or more before I have my office and Internet service operational again. In the meantime, I’m sure there will be many challenges directed at small business, so there will be many topics to tackle when I get back online.
Good luck in all your ventures, and I’ll be back soon.
Bob
Small Business—Be Prepared
The National Coalition on Healthcare reports that healthcare expenses in the U.S. for 2008 were $7,900 per person. Compare this with the Veterans Health Administration (VHA) who provides health care to 7.85 million patients at a cost of $5,669 per patient. These are historical numbers, and they are probably fairly accurate.
On the other hand, Congress’s cost “goal” for healthcare reform is around $900 Billion over 10 years, or about $90 Billion per year average, to cover 46 million additional people. This equates to around $1,956 per person, or about 35% of the cost of a VHA patient…and about 25% of current U.S. per capita costs. If we drop individual health costs from $7,900 per person to $1,956 per person—what kind of care will be provided? This amount is nowhere near adequate, so obviously, the $90 Billion ($900 Billion over 10 years) per year number is not realistic.
Yes, (you are saying) but what about all the money that is going to be saved by reducing administrative costs and increasing efficiency of Medicare, and improving the way private insurance is administered? Well, here is what Dr. Ezekiel Emanuel, the President’s Healthcare Czar, had to say about increased efficiencies in the healthcare system:
“Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality are merely ‘lipstick’ cost control, more for show and public relations than for true change.” (Dr. Ezekiel Emanuel, Health Affairs, February 27, 2008)
Apparently, Dr. Emanuel does not believe there is any substantive savings to be realized in the current healthcare delivery systems.
I would think that the 46 million additional insured should get healthcare at least as good as what the VHA offers, shouldn’t they? So, if the cost per additional person covered under the new healthcare plan was only equivalent to the VHA cost of $5,669 per person—not the $7,900 per person of today’s actual cost—wouldn’t the total bill for the additional coverage of 46 million people be somewhere around $261 Billion per year, or $2.6 Trillion over 10 years?
Here’s a recap:
- Current U.S. per capita cost for healthcare is $7,900.
- Veterans Health Administration (VHA) per capita cost is $5,996.
- New proposed healthcare cost for those currently uninsured is $1,956 per person.
- Reduction in healthcare operating costs would only be cosmetic PR steps, with no true change in cost. (Per Dr. Ezekiel Emanuel.)
- To bring the new coverage for the 46 million up to VHA standards would cost the U.S. taxpayers about $2.6 Trillion over the next 10 years.
Leaving out all the politics, lobbying, and high dudgeon at the Town Hall meetings and rallies, it is obvious that the new healthcare bill (whatever it ends up to be) is going to cost every American business, and wage earner, one helluva lot of money. The choice will be to raise taxes or pass the burden onto American businesses. Unfortunately, since small businesses make up over 99% of all U.S. businesses, these are the folks that will take the brunt of the new healthcare costs—so be prepared!
Of course, there is one other possibility—lower the standard of care of currently insured persons to reduce the $7,900 per person cost by two or three thousand dollars, and apply that savings to the cost of healthcare reform. Then we could all have poorer healthcare, even though it would still be expensive.
Any other ideas, or comments?
Paying for New Healthcare Plan
I see that Senator Baucus is about to solve the issue of paying for healthcare reform—he wants to tax the insurance companies! Perhaps he is following the lead of Oregon Governor Kulongoski, who recently signed into law a new tax on health insurance companies operating in Oregon…in order to help pay for the “Oregon Plan.”
Needless to say, the Oregon health insurance companies immediately passed every penny of the new tax onto their insured through increases in premiums. What are these politicians thinking? Don’t they understand that taxing the insurance companies is simply taxing the insured through increased premiums?
This type of thinking is what is driving the small business person crazy—they don’t know what to think, or do, but many of those who have health insurance programs in place for their employees are certain that they will likely be dropping, or reducing, those plans. So, what is the government gaining if they price insurance premiums out of reach of small business?
Hopefully, there are enough people in Washington, who have some sense of reality, to overcome those who are totally out of touch. I know that is a lot to hope for, but maybe I’m just an optimist.
President Obama’s School Speech
With all the furor over the speech our President is about to give to school children, I am wondering if America has lost its way. Between ignorance and the effect of “fomenters,” we have certainly lost the ability to exercise public debate. What a shame.
For anyone interested–here is the text of President Obama’s upcoming speech.
Small Business for Real
If you want to see small business at its finest—check out this video.
(email subscribers, view on my blog)
Notice the passions this business owner has—he loves his business, he loves his customers, he supports other small businesses, he tries to stay away from unhealthy products, he rejects unhealthy packaging, he is passionate about the environment (and points out the hypocrisy of governmental environmental rules)…and on and on. This entrepreneur could be the poster boy for small business.
How well do you fit this standard?
My Book
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