The Supreme Court Rules on Obamacare, You Can't do Anything About It, but You May Be Able to Make Some Money.

"Money, if it does not bring you happiness, will at least help you be miserable in comfort." -

Helen Gurley Brown

The Supreme Court will be making their ruling on Obamacare, possibly as soon as June 1. During the oral arguments, the Justices appeared to have real doubts about key provisions of the bill. If the individual mandate, or any other major components of the bill are overturned, the rest of the legislation will be unenforceable without Congressional action. As our government is hopelessly divided, such a retroactive fix is unlikely. Hence, there is a real possibility the affordable healthcare act will be completely repealed, which will have widespread impact across the political and economic spectrum.

Some industries, and their common stocks will benefit from Obamacare being ruled constitutional or not, and others will suffer. Betting correctly could result in substantial rewards for those brave enough to risk their capital. Unfortunately, without knowing the minds of the Justices, it is impossible to be certain about what is going to happen. My general feeling is that affirming Obamacare will be bad for the stock market and good for hospital and insurance companies, but the market is not always rational. Furthermore, the specter of Europe imploding and other macroeconomic issues may overwhelm any impact of the Supreme Court decision, raising the risk of making a directional bet even greater.

However, there is a potential strategy for the nimble among you that might work under both circumstances.(thanks to Adam Farley for this idea). As word of the impending decision becomes widely known, investors will begin to take positions, hoping to profit from the upcoming news. If someone is an investor that can quickly trade these positions, there is an opportunity to take advantage of this unique event. Healthcare providers, such as Humana(HUM), will attract attention, and their stocks should begin to trade more heavily and increase in price prior to the decision. Savvy investors could buy these stocks on Tuesday, and sell them before Friday before justices make their ruling.

Needless to say, this advice is worth exactly what you have paid for it, but I see it as a relatively low risk method to profit from Obamacare. Taking some financial comfort from the misery of the healthcare system may be the best anyone can do. Good trading.

On Price and Value in Health Insurance

Price is what you pay. Value is what you get.

Warren Buffet

There are innumerable misleading articles about healthcare in the popular press. Many stem from underlying misunderstanding and bias, but most misunderstandings are related to the incomprehensible complexity of our medical system. A recent study from the Rand corporation claims that insurance premiums will actually go up if Obamacare is overturned by the Supreme Court. This conclusion is probably true, at least in the short term, but the study fails to mention other unintended consequences. As is common, the failure to consider the negative outcomes pinpoints the fallacious assumptions and phony “research” that underlie the legislation.

On the surface, their conclusion makes sense. If 50 million new people are insured under Obamacare, then costs should be lowered for the rest of us. Unfortunately, the study makes many “all things being equal” claims that are demonstrably not true. Rand, and the backers of the legislation, presume that these new beneficiaries will go to family doctors, maintain their levels of utilization, and not be sicker than anyone else. All of these assumptions are wrong.

First, there are far too few family doctors to take care of these people. Vast numbers with new insurance will be unable to find primary doctors and be diverted to far more expensive emergency rooms and specialists. Furthermore, there is a real danger of a “swamp out” phenomena, where masses of new patients overwhelm hospitals, emergency departments and operating rooms. New patients, entering the system via emergency rooms, will force out elective patients, rendering care much harder to find and more expensive for all.

Secondly, many of the previously uninsured are afflicted with long neglected chronic conditions including joint pain, back pain, high blood pressure, heart disease and diabetes. Once these people have insurance, the intensity of the care they receive may dramatically increase. Specialists, having a huge new source of insured patients, will look far harder to find previously ignored reimbursable conditions. Doctors have a long history of increasing treatment intensity in the face of decreasing payments, it will happen again.

Finally, the uninsured are frequently poorer, older, fatter and sicker, all of whom use more medical care. Fair or not, the de-facto financial rationing that our healthcare system presently uses lowers costs by denying all but urgent care to the indigent. Once insured, the demand for care may rise dramatically, and the costs as well.

So when an Obamacare advocate says it will bring down the cost of your insurance premiums remember Warren Buffet's words. Your premiums may indeed go down, but if you can't find a doctor, get seen in an emergency room, or book a surgery, the lower premiums won't do you much good.

http://www.businessinsider.com/how-much-will-it-cost-you-to-repeal-obamacare-2012-5

Time to Play By the Rules in the Obamacare Debate

"Every difference of opinion is not a difference of principle. Thomas Jefferson Formal debates have rules. In High School debates the affirmative side must prove two things, first, that a problem exists, and secondly, that they have a way to fix it. The negative side can deny there is a problem, however, they are not required to do so. The negative side can win the debate by proving the affirmative plan will not work, even if they admit that things need to change. In the rancorous debates about Obamacare both sides have forgotten these concepts, and have failed in their obligation to debate by the rules. The “affirmative” argument for Obamacare invokes the very real problems facing American healthcare including lack of coverage, out of control expenses, over-utilization, and inequality of care. These justifications are difficult to question because they are true. Despite the many strengths of American healthcare no reasonable person could deny there are severe shortcomings. However, the advocates of Obamacare have failed to demonstrate the plan they rammed through Congress will actually work. Supporters of the legislation concentrate almost totally on the failures of the present system, but ignore the sad reality that this flawed legislation will almost certainly meet with disaster, and cause a multitude of new problems. Being an advocate for such a monumental transformation of healthcare requires more than recognition of problems and sympathy for the downtrodden, one must have a viable plan of action.

Those opposing Obamacare mistakenly feel they must deny both the justification and the plan itself, which has led to many foolish arguments. Rather than addressing the real intractable problems facing our healthcare system, the ideologues raise issues of capitalism and individual freedom that seem clueless. Denial of our problems just alienates many and reinforces the belief that such advocates are out of touch with reality.

Instead, I suggest opponents of Obamacare accept my stance. I agree that our system faces severe problems, but question the plan itself. The affordable healthcare act is a slipshod, unworkable hodgepodge of political payoffs, written by lobbyists to satisfy unions, large corporations and drug companies. Not only are the cost projections pure fantasy, the negative consequences to Medicaid, inner city hospitals, and the economy through increased taxes may be catastrophic. Terrible legislation that makes problems worse is not better than nothing at all. Thomas Jefferson was right, this is not a matter of principle, but of workability.

Pain, Healthcare Costs, and Personal Responsibilty

Pain is natures way of telling you somethings wrong

song lyrics.

The statistics are truly staggering. The United States makes up only 4.6 percent of the world's population, but consumes 80 percent of its opioids. Surely, the incidence of pain varies little among cultures, so these numbers demand an explanation. More importantly, they reveal one of the key differentiating features about American healthcare, which explains why we spend more than other countries. Americans have transferred the responsibility for pain from the individual to their doctors. This shift of culpability from the individual to the medical system is what differentiates American medicine and society, and augurs poorly for our ability to reduce healthcare costs.

Pain is the ultimate private experience. We might be able to share what others see, smell, taste or touch, but we cannot feel their pain. In most cultures pain is considered a part of life. As pain was mostly untreatable, bearing this burden became a personal responsibility and a measure of character.

However, in our country, a fundamental shift in perception has occurred. Pain is no longer a personal burden to be suffered in silence. Pain can not only be treated, there is now the expectation that someone in the medical system can relieve it. All pain, even that caused by intentional bad behavior, is now responsibility of the doctor, the insurance company, or the government. Furthermore, it has now becomes someone's fault if pain cannot be relieved. Everyone is “entitled” to have their pain removed, with drugs, treatments, or surgery, no matter what the cost or the etiology.

This assumption of personal responsibility by the medical system accounts for a large proportion of the increased medical costs American's face. Unfortunately, this same type of thinking also extends to obesity, smoking, alcohol, violence and aging. These personal choices, inevitable changes, and societal failures are now the obligation of the healthcare system in America, and the source of our increased expenses. Doctor's spend fortunes on these intractable problems because our society expects them to, we leave them no choice. Saying “no” is no longer an option.

The proliferation of pain pills is a symptom of a larger shift in the perception of the role of medical care is America. Medicine no longer just attempts to cure disease, but now must remove our pain, make us thin, cure our addictions and address societal failings. Given these demands, and the burdens medicine has taken on, maybe we are not paying enough for healthcare.

http://abcnews.go.com/US/prescription-painkillers-record-number-americans-pain-medication/story?id=13421828#.T7JhGusePX8

A Bad Week for Healthcare

There are good days, and there are bad days, this is one of them.

Lawrence Welk

My “confidence index” for the future of healthcare went down a few points this week. A news report, a Time magazine opinion, and a presentation by a scientist reinforced the massive hurdles faced by our country. These three unrelated currents in our society all threaten the life and health of Americans, and I am not optimistic about fixing any of them.

Food Safety News reports how 10 children were sickened by raw milk in California, the sixth outbreak this year. Pasteurization has saved millions of lives, and has substantially reduced childhood mortality. Nevertheless, there is a branch of the natural foods movement which is militantly opposed to killing the dangerous bacteria in cows' milk before children drink it. I have found arguments on this subject, even with otherwise intelligent people, are often useless and rapidly degenerate. Somehow when the subject turns to food, vitamins, or “my body”, people are willing to accept the word of unqualified hucksters advocating pseudoscience to a degree equaled only by get rich quick schemes. Sadly, this fraud will costs lives.

Time magazine ran an inexplicably favorable article about the “rebates” from Obamacare. A few hundred million dollars out of the trillions spent will be returned by those insurance companies that don't meet the 80% medical expense requirements(or get waivers from the administration). This totally insignificant, well publicized stunt is little more than political theater shamelessly calculated to buy support for the affordable healthcare act. This program will not lower costs, increase coverage, improve care, or accomplish anything other than employing a few mail room clerks. It represents American political partisanship at its' worst, a cynical attempt to buy people's votes by giving their own money back to them. This one small program speaks volumes about Obamacare and the people who wrote it. For too many politicians “reform” is not about medicine, but getting re-elected.

Finally, I saw a research report from a group of scientists with a potential breakthrough treatment for severe infections. What is surprising was the difficulty they were having obtaining funding. Twenty years ago companies would be fighting to get their hands on such a treatment, but in today's world, the expense of this therapy has scared most people away. Any new technology which does not “save” money may be trashed by the secret committees administering Obamacare. Bringing new, expensive, life saving therapies may well be the dream of a past age of American medicine.

Not a good week.

Will Obamacare Save Money? Ask an Expert.

Health insurance might have many benefits, but it’s not going to save money.

Amy Finkelstein PhD, MIT healthcare researcher

Being right does not make you an expert. Therefore, I am quite relieved when I find someone with real credentials that agrees with me. One of my primary criticisms of Obamacare has been that it will not save money, and may raise costs substantially. Dr. Finkelstein, a researcher at MIT, has come to the same conclusion. Having insurance increases utilization, and costs, an inconvenient truth that belies the duplicitous promises and projections used to justify passage of the bill. These negative repercussions are inescapable, and when the American people become aware of them, it will spell the doom for the legislation, and perhaps much else.

My skepticism was based on many years as a Radiologist, performing thousands of “normal” studies. I remember once doing over 100 unremarkable Upper Gastrointestinal barium studies in a row. I used to joke one could simply use the same films over again and save a ton of money. The point is that most complaints people have are minor and resolve spontaneously. Be it belly pain, back pain, headaches or colds, seeing a doctor often has limited benefit, but does increase costs. People without insurance simply ignore these symptoms. However, once someone has coverage, they are far more willing to “go see someone” about their knee pain, cough, breast lump, rash or hundreds of other common annoyances. Sometimes these problems will indeed be significant, but not frequently enough to save any money.

Dr. Finkelstein's research supports my empirical beliefs. People in Oregon spend more on healthcare once they receive insurance. Those with coverage go to physicians for issues that they previously ignored. This research completely negates the President's pronouncements that Obamacare will save money. Even if doctor compensation is cut drastically, the increased utilization driven by the 30 million newly insured will inexorably increase overall costs.

This is not to say that universal coverage is not a laudable goal. Both Dr. Finkelstein and I agree that this is a societal imperative. My point here, and a recurring theme of this blog, is we need to get an honest, unbiased assessment about what universal healthcare will really cost. Our country must make informed decisions about what is worthwhile and what we can afford, and the posturing and deception on both sides of the political spectrum has been deplorable . I have long contended Obamacare was passed by making promises that cannot be kept and guarantees that will be compromised. Now I have and “expert” who agrees with me.

http://articles.boston.com/2012-05-06/ideas/31581200_1_health-care-amitabh-chandra-economic-debate/3

Review of Grouped by Paul Adams - a great and concise book for marketing professionals and business owners

We live in a world of exponentially increasing information which we can't consume anymore. Consequently, we gradually increase our reliance on our social networks to make decisions. In other words, people spend less time interacting with content, and more time communicating with other people.

What role do the social networks, and especially Facebook and Linkedin play in this transformation? How can we leverage them to grow our business?

Paul combines product design experience at Google and Facebook with an outstanding skill to lay out complex topics in a simple and easily understandable language. That unique combination of experience and skill ideally positions him to write a book about social networks and about the best ways to use them for business growth. He makes three key points that have profound implications:

1. The Web is being rebuilt around people and moving away from being built around content.
2. We can now measure social interaction. 
3. Independent small groups of friends determine how people are influenced (not the influencers). 

The application of Paul's points to marketing and advertising are straightforward: Permission-based marketing trumps traditional advertising or interruption-driven marketing. Precise peer-to-peer based advertising is the most effective and efficient advertising. Marketing campaigns need to support conversations instead of merely sharing content. Advertising content must rely on people remembering relationships and not - details. For example, using experts in marketing campaigns can lead to over-promising and under-delivering.

On the other hand, effective permission marketing seeds multiple groups with ideas and avoids targeting a few trendsetters. It focuses on emotional arousal and gaining trust through word-of-mouth endorsement. Marketers need to focus on preparing content that is "shareworthy," customizing data around people's social connections, reinforcing their message by having multiple people within the same group repeat it, and then showing others' behaviour to influence people.

 A separate chapter focuses on helping people change their behaviour:

1. Change people environment: trying new things in a new environment is easier.
2. Minimize cost of change - break it into small manageable tasks making the new behavior easier to perform, and so more likely to be repeated and therefore forming a new habit.
3. Ensure that people observe others doing the desired behavior and then see the rewards

Other ideas focus around choice reduction and helping people to feel that they are getting something for free and now.

 All-in-all, a great and concise book for marketing professionals and business owners looking for modern ways to grow their business.