Ken’s Take: I’m a big fan of the so-called Cadillac tax — not because it hacks off the unions (that’s a lucky strike by-product) — but because it it about the only vehicle being discussed that might contain some healthcare costs. 

In fact, I’m an advocate of putting all company paid premiums on W-2s and then allowing taxpayers reasonable deductions for health insurance premiums (say, $5,000 per person).

And, as a political junkie, I love when WH spokepeople contradict each other, e.g. Summers: recession is over”, Romer: “no, it’s not”.  Here’s another example …

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Excerpted from WSJ: White House v. White House,  Dec.18, 2009 

The ad hoc arguments that WH spokesmen use to put out one healthcare political fire invariably contradict those they’re using to put out another.

Among labor’s complaints is a 40% excise tax on high-cost insurance plans, given that union-negotiated benefits are more generous than average.

So Jason Furman, the deputy economic director, declared that this so-called Cadillac tax “will affect only a small portion of the very highest cost health plans — a total of 3% of premiums in 2013.”

But wait: White House budget director Peter Orszag has been emphasizing the excise tax as critically important in the cost-control stone soup that he’s been trying to sell.

As he put it earlier this month, “You’re creating an incentive for plans for employers to design their plans in such a way that they’re under that threshold. . . . You’re creating an incentive to slow the growth rate in private health costs.”

So a tax that applies to 3% of premiums is going to reshape the entire health-care market? These guys can’t even get their blog posts straight.

The White House brain trust seems to have been placed in a blind trust, and is finding it so hard to make a coherent case.

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Mr. Furman used to advocate policies that really would make a difference, by “helping consumers become more cost conscious about their health-care choices,” as he put it in a 2007 Brookings paper. He estimated that increasing cost-sharing could lower total health spending from 13% to 30%.

Full article:

http://online.wsj.com/article/SB10001424052748704238104574602191760050978.html?mod=djemEditorialPage

Key Takeaway: Looking to find a way to help increase customer interaction with your brand while, at the same time, take advantage of the social media boom?

The secret to answering these crucial questions may be through the use of virtual currency.

The social media crowd, especially women, tend to love the notion of virtual currency that can be used to obtain coupons and promotions, purchase virtual gifts for friends, or simply advance their game progress. Brand managers, if successful, could potentially turn the gift of virtual currency into a real-money transaction.

Take that, Monopoly!

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Excerpted from BrandWeek, “Women Clicking to Earn Virtual Dollars” by Stacy Straczynski, November 10, 2009

Women are jumping at the chance to earn online points and virtual dollars, according to a new report from online marketing firm Q Interactive. The survey, released at this week’s Social Media World Forum, found that 78 percent of women who play social media games clicked on an ad or signed up for a promotion to earn virtual currency.

“One of the primary ways marketers can leverage [social media] interaction is through virtual currency,” said Matt Wise, president Q Interactive. “If you take a look at some of the big game platforms, like Zynga, they comment that a third of their revenue is generated by lead generation, which is advertisers and brands interacting with consumers.”

“It talks to the fact that women are interacting with these games,” said Wise. “If you can create a positive brand experience, it’s an excellent way to weave advertisements into a game because you’ve got the attention of the consumers. . . . It’s a positive experience for the consumer and keeps the consumer engaged in the game by getting more virtual points and ideally playing some more.”

Women mainly attributed their virtual currency usage to advance in their games (37.7 percent) or give virtual gifts (17.3 percent), while many (39.7 percent) use it for both. Recipients claimed that using virtual currency was “fun” and “addictive” (33 percent) and they enjoyed being able to give gifts (25 percent), as well as advance in their games (24 percent). Virtual currency also sparked feelings of competitiveness (8 percent) and personal wealth (8 percent).

Top social media games on Facebook for Nov. 10 were Farmville, Causes, Café World, Mafia Wars and Aquarium, according to AppData.com, which tracks daily metrics and trends for Facebook applications.

Edit by JMZ

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3i8d89a411d4e37fb51572ae37de27a3cf

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You just can’t make this stuff up …

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Blizzard Dumps Snow on Copenhagen as Leaders Battle Warming  Bloomberg, Dec. 17, 2009

World leaders flying into Copenhagen today to discuss a solution to global warming will first face freezing weather as a blizzard dumped 10 centimeters (4 inches) of snow on the Danish capital overnight.

[Note: In an average Dec.,  Copenhagen gets 2.1 inches of snow]

“Temperatures will stay low at least the next three days,” Henning Gisseloe, an official at Denmark’s Meteorological Institute, said today by telephone, forecasting more snow in coming days. “There’s a good chance of a white Christmas.”

Delegates from 193 countries have been in Copenhagen since Dec. 7 to discuss how to fund global greenhouse gas emission cuts. U.S. President Barack Obama will arrive before the summit is scheduled to end tomorrow.

Denmark has a maritime climate and milder winters than its Scandinavian neighbors.

Copenhagen hasn’t had a white Christmas for 14 years, and only had seven last century.

Temperatures today fell as low as minus 4 Celsius (25 Fahrenheit).

DMI defines a white Christmas as 90 percent of the country being covered by at least 2 centimeters of snow on the afternoon of Dec. 24.
http://www.bloomberg.com/apps/news?pid=email_en&sid=a5wStc0K6jhY

Though the WH claims broad based support for the proposed healthcare plan, the numbers just don’t seem to sync with the pronouncements.

From the newly released NBC /WSJ survey:

From what you have heard about Barack Obama’s health care plan, do you think his plan is a good idea or a bad idea?

32% Good idea
47% Bad idea
17% No opinion

http://www.pollster.com/blogs/us_national_survey_nbcwsj_1211.php

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For the first time, less than half of Americans approved of the job President Barack Obama was doing. 

This marks a steeper first-year fall for this president than his recent predecessors, and a place in history with the worst ratings of any president at the end of his first year.
http://online.wsj.com/article/SB10001424052748704541004574600002289276662.html

50% Feel positively towards Obama in Dec., 68% in March

47% Approve of job Obama is doing, 46% Disapprove

33% Country moving in Right Direction, 55% Wrong Track

Democrats’ Blues Grow Deeper in New Poll, Dec. 17, 2009
http://online.wsj.com/article/SB126100346902694549.html 

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Some miscellaneous results:

22% Approve of job Congress is doing,  68% Disapprove

38% Congressional rep deserves to be reelected, 49% Give new person a chance

55% Support increasing troop levels in Afghanistan, 39% Oppose

23% Global climate change has been established as a serious problem

15% Feel positively towards Tiger Woods, 42% Unfavorably

http://www.pollster.com/blogs/us_national_survey_nbcwsj_1211.php

TakeAway: The problem with health care is not that we can’t afford insurance. The problem is that we can’t afford health care.

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Excerpted from Reason: The Problem is Cost of Care – Understanding America’s dysfunctional health care system, December 10, 2009

The U.S. has the world’s most expensive health care, $8,000 per person per year, eating up 16 percent of our GDP.

There are many ways of paying these costs, of course, ranging from private insurance such as Blue Cross to public insurance such as Medicare. Many people pay out of their pockets, and local and state taxpayers pick up the rest.

The problem is that health care costs have increased at an annual rate double, or more than double, the rate of inflation for the last two decades.

Right now, our attempts at reform are doomed by a law of accounting physics: Insurance can’t cost less than the health care it insures.  That means that subsidizing insurance likely makes the problem worse.  

Consider: I have car insurance. But my insurance doesn’t pay for oil changes.

Instead, I go down to the Happy Lube, without an appointment, get a diagnosis of the needs of my car, and choose services based on a price list published online.

Now, if I fail to get my car’s oil changed, or to perform other needed services, the engine will be damaged. That’s expensive to fix, but my insurance does not cover the costs. I bear the costs, so I care for the engine.

Health care is a little different.

Many of us have “engines,” or other parts, that may not work very well, especially as we grow older.

Things happen that may not be our fault, and even if they are we’d like to be able to buy some insurance against the worst consequences, the catastrophic injuries or illnesses that are part of every human society. The problem is that how we pay affects how much we pay.

Again, compare it to car insurance, for two people.

Imagine neither of us has to pay for our car repairs, from accidents or engine wear. We can go to the garage as often as we like, and get whatever service we want, for free.

The car repair shop can charge our insurance whatever they want, because insurance pays everything. An oil change would bill out at $600; an alignment would bill our insurance $2,200, with another $800 tacked on to pay for micro-digital wheel axis imaging.  

Of course, the services aren’t really free. At the end of every year, we sum the total repair costs for both people, and each of us pays half of that total.  

The cost of that free car care would be enormous, because of all the unnecessary and overly expensive charges. Of course, the government could subsidize the final bill; would that help? The answer is no, for two clear reasons.

First, having the government (meaning taxpayers) subsidize the total would do nothing to reduce the runaway cost increases. Buyers won’t shop around if they don’t know or care about real costs. Subsidies mean I don’t pay if I spend, and I don’t save if I’m frugal.

Second, let’s expand the example from two people (each paying half) to 300 million people getting free care (but paying an equal share of total costs). We have met the public option, and it is us! Once we are all paying ourselves, there is no one else to hit up to help with the costs. We are simply taking each person’s money in taxes, then giving some of it back in subsidies. There is no saving, even to individuals.

The French economist, Frederic Bastiat, diagnosed the problem long ago when he said, “The public option is the conceit that each of us should have free health care at the expense of all of us.”

The solution is out there, but it will require a fundamental change in the way we think.

Competition among insurers, without decreases in underlying medical costs, may actually harm people through bad service and arbitrary denial of claims.

Instead, we need competition among medical providers, just like oil change services now.

LASIK surgery, one of the few areas of medical services open to competition and listed prices, has fallen in cost by 70 percent or more in the last 15 years. And quality has gone up dramatically.

Walk-in clinics and fee-for-service arrangements for check-ups, or simple diagnoses like strep throat or  infected thumbs, are already widely available, cost relatively little, and require no appointment.

Subsidizing insurance is a terrible idea. But that is the main focus of the health care reform bills passed by the House, and now being considered in the Senate.

Why pin all our hopes on an approach that can’t possibly succeed?

Full article:

http://reason.com/archives/2009/12/10/the-problem-is-cost-of-care

Takeaway: Many companies dedicate thoughtful efforts to understanding the voice of their customer, but few successfully convert these insights into actions.

In a back-to-basics move, some companies like Charles Schwab have abandoned their elaborate surveys and complicated research models to place the feedback responsibility on an obvious source – their front line employees.

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Excerpt from Harvard Business Review, “Closing the Customer Feedback Loop,” by Rob Markey, Fred Reichheld, Andreas Dullweber, December 1, 2009.

When Charles Schwab came out of retirement to retake the helm of his firm in 2004, the business was struggling. “We had lost our connection with our clients, and that had to change,” he confessed to shareholders in the annual report. Schwab responded by implementing a new customer feedback system to reestablish the connection with his customers. In 2008, the firm saw its revenues increase by 11% and the scores that customers gave the company jump by 25%. During a time when the financial services industry was being rocked by turbulence, Schwab clients entrusted $113 billion in net new assets to the firm, and the number of new brokerage accounts increased by 10%.

Every day, managers at each of Schwab’s 306 branch offices and five call centers call customers who gave their site a low service rating. Schwab credits this outreach program as an integral part of the company’s new focus on direct customer feedback that was responsible for turning around the company.

Most companies devote a lot of energy to listening to the voice of the customer, but few of them are very happy with the outcome of the effort. Elaborate satisfaction surveys that involve proprietary research models can be expensive to conduct and slow to yield findings. Once delivered, their findings can be difficult to convert into practical actions. Additionally, most customers who end up defecting to another business have declared themselves “satisfied” or “very satisfied” in such surveys not long before jumping ship.

Instead of building elaborate, centralized customer research mechanisms, some firms begin their feedback loop at the front line. Employees working there receive evaluations of their performance from the people best able to render an appraisal—the customers they just served. The employees then follow up with willing customers through one-on-one conversations. The objective is to understand in detail what the customers value and what the front line can do to deliver it better. Over time, companies compile the data into a baseline of the customer experience, which they draw upon to make process and policy refinements.

The strongest feedback loops do more than just connect customers, the front line, and a few decision makers in management. They keep the customer front and center across the entire organization. One approach that works well across a range of industries is the Net Promoter Score (NPS), which immediately categorizes all customers into one of three groups—promoters, passives, and detractors. This allows employees throughout a company to see right away whether a customer experience was a success or a failure, and why.

NPS is generated by asking customers a single question, “How likely would you be to recommend this company or product to a friend or a colleague?” Respondents giving marks of 9 or 10 are promoters, the company’s most devoted customers. Those scoring their experience 7 or 8 are passives, and those scoring it from 0 to 6 are detractors. NPS is the percentage of promoters minus the percentage of detractors. Customers are then asked to describe why they would be likely or unlikely to recommend the company. The insights gathered from their answers enable employees to quickly identify issues that create detractors, and the actions required to address them.

Edit by BHC

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Full Article
http://hbr.harvardbusiness.org/2009/12/closing-the-customer-feedback-loop/ar/1

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TakeAway: One of the strongest predictors of post-graduation income is the caliber of the schools that reject you.

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Excerpted from WSJ: Weighing the Value of That College Diploma, Dec. 16, 2009

College graduates in general earn at least 60% more than high-school grads on average, both annually and over their lifetimes, and the income gap has been growing over time, says a 2007 report by the College Board.

But, one of the strongest predictors of post-graduation income is the caliber of the schools that reject you.

Researchers found students who applied to several elite schools but didn’t attend them — presumably because many were rejected — are more likely to earn high incomes later than students who actually attended elite schools.

“Evidently, students’ motivation, ambition and desire to learn have a much stronger effect on their subsequent success than average academic ability of their classmates.”

Full article:
http://online.wsj.com/article/SB10001424052748703438404574597952027438622.html

Bottom line: Why not fix what’s broken rather than just creating mayhem ?

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Excerpted from WSJ: Health Care’s ‘Radical Improver’, Dec. 12, 2009

Choice & Rationing

For all the talk about expanding coverage, the real problem is that “You can’t buy what you want.”

(Politicians are) living in this alternate universe where there’s no such thing as a market in health care and they don’t understand why one might be remotely useful.”

The profound problem with U.S. health care is that there’s “no landscape of choices, or choosers.” Due to the complexity of America’s third-party laundromat for health dollars—your doctor’s clerical staff bills your treatment to an insurance company picked by your employer, and it pays him with your money via premiums or foregone wages—”few doctors in America know the actual value of the services they render.”

The government imposes standardized rules and mandates with no concern for how much they will cost or who will bear the burden. Given the choice, consumers might decide on cheaper policies that cover some services but not others, or decide to run more risk.

Another way of putting it is that if the politicians have their way, “everyone will have access to transportation, and it will be a black Escalade, with spinners. That’s it. There’s no Hyundais, no bicycles, no nothing.”

And that’s scandalously unfair. “These poor people who clip the things off the backs of cans to make the tomatoes cheaper are subsidizing the hypochondriac who gets his shoulder done with an arthroscope because it clicks when he serves at tennis.”

Under ObamaCare, Mr. Bush says, “everyone is going to get health care according to the wise-men benefit panel, who will tell you exactly what it is, and then they’ll run out of money, so every year the wise panel will just squish the benefit a little. People will start to say, well, that’s not going to work for me.”

Central health planning won’t have any longevity, and eventually people “will start leaking out into the [private] market once we run out of money.”

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A Digital Revolution ?

Now, most transactions are conducted on paper. Few people really understand how to navigate the dense and bewildering coding rules for dozens of different insurers or the fee schedules for government payers like Medicaid. Claims were denied with no explanation or vaporized in purgatory.

One reason the digital revolution has so far passed over the health sector is sheer bad product. The adoption of EMR in health systems across the country has been dogged by cumbersome interfaces, error propagation and other drawbacks.

Much of the the nearly $47 billion in stimulus cash the White House has budgeted to prime the pump for health IT adoption is going to legacy software companies, with code that was written in the ’70s.  They’re getting federally sponsored life support.

The irony is that … the status quo for all its flaws is capable of organic change and real progress without the blunt-force trauma Congress is likely to inflict. Or in spite of it.

Athena is one of the country’s most innovative health IT firms. Its core business helps doctors manage their practices and get paid, but the larger purpose of the company, is to try to shore up health care’s resemblance to a normal market.

Athena designed a program to digitize records and automate billing. It now colonizes the wilderness of paperwork and habitual financial chaos that defines running a doctors office, and it is also moving into clinical record-keeping for individual patients. Some 15,000 physicians in 43 states use Athena as a virtual office, a number that is growing at an annual 30% clip.

It is a massive logistical undertaking. Athena’s main facility is housed in a decommissioned World War II arsenal on the Charles, where 30,000 pounds of paper is processed every month, most of the tonnage being paper checks.

Incredibly, doctors also receive on average 1,185 faxes each month—mostly lab results—and those are handled too.

State Medicaid programs, by the way, are easily the worst payers. In New York, for instance, claims must be tendered on a dead-tree form instead of electronically and in blue ink—black is grounds for rejection—and then go on to spend a full 161 days, or almost a half year, in accounts receivable.

While streamlining this disorder frees up time for the company’s clients to treat patients, it also throws off vast data, which are fed in central servers, aggregated and analyzed.

This “athenanet” system is among the few health-tech offerings based on “cloud computing”—in the sense that the applications are accessed on the Web, instead of a computer’s hard drive, allowing constant updates and refinements. If a regulation changes or an insurer adjusts a payment policy, it is reflected on athenanet almost in real time; on the clinical side, the program can adapt at the same rapid pace as medicine itself.

Full article:
http://online.wsj.com/article/SB10001424052748704240504574586260904799386.

Excerpted fron RCP: The Liberals’ Weaselly Panic, by Rich Lowry, December 15, 2009 

President Obama and Harry Reid can rightly claim to be making history.

If he passes health-care reform, they’ll depend on a series of historic “firsts.”

• It’d be the first time Congress had passed a major new entitlement program without bipartisan support;
  [Unless you count the Congressional dude from Louisiana.]
• It’d be the first time it passed such a program without popular support;
  [A CNN poll last week found the public against it by a nearly 2-1 margin.]
• It’d be the first time that such a large-scale program would be passed without anybody knowing (or particularly caring) what’s in it.
  [This is bipartisanship Harry Reid style - nontransparency for everyone. Who needs openness and legislative details when you're remaking one-sixth of the economy?'

Full article:
http://www.realclearpolitics.com/articles/2009/12/15/the_liberals_weaselly_panic_99557.html

Takeaway: A healthy dose of discord may be just what the doctor ordered when it comes to promoting innovation and achieving profitability within an organization.

Companies recruit employees for the diversity of their backgrounds, so why do these recruits so often transform into bobble-head yes-men?

Let’s face it, we all love a good round of Kumbaya, but effective MBAs should aim to be selectively disruptive in order to deliver real value to their employers.

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Excerpt from Harvard Business Review, “How to Pick a Good Fight,” by Saj-nicole A. Joni and Damon Beyer, December 1, 2009.

The effort to eliminate discord at the firm had backfired. Lehman’s board of directors and management team became too agreeable—and too loyal, content to follow even when they knew better. In 2007 and 2008, numerous signals indicated that the firm was heading into a crisis, but insiders who paid attention to them were afraid to point out the elephant in the room. Nobody wanted to disrupt the peace.

The problem is that a peaceful, harmonious workplace can be the worst possible thing for a business, according to consultancy eePulse, which conducts in-depth surveys that measure employee engagement. Complacency, in fact, is the single greatest predictor of poor company performance. The second greatest predictor is an environment in which employees are overwhelmed. In the first case, employees are reluctant to rock the boat. In the second, the level of employee satisfaction is low and the amount of dysfunctional fighting is high. In both situations, low energy levels and fear of political fallout curb action that might address any looming crisis. At Lehman, many alums told us, raising difficult questions could kill your career.

Most leadership experts argue that the best way to manage change is to create alignment, but our research indicates that for large-scale change or innovation initiatives, a healthy dose of dissent is usually just as important. Within an acceptable range of competition and tension, science shows, dissent will fire up more of an individual’s brain, stimulating more pathways and engaging more creative centers. In short, more of what makes people unique, innovative, and passionate is available for use.

Many successful companies are known for their stressful work environments. Microsoft, in its early days, had one of the most contentious, high-strung, and fast-paced corporate cultures in the United States. Bill Gates and Steve Ballmer were famous for yelling at people. Food distributor Sysco, an unusually successful company built on roll-ups and acquisitions, dismisses district managers who don’t meet annual productivity targets—a pretty tough standard for an operating company with thin margins. Market leaders Goldman Sachs and McKinsey are notoriously competitive, hard-driving places to work. Not places you’d go if you were looking for polite and equal regard for all voices.

So it’s time to stop candy-coating what’s taught to executives and their direct reports. It’s time to stop pretending that conflict-free teamwork is the be-all and end-all of organizational life. It’s time to own up to the truth that the right balance of alignment and competition is what pushes individuals and groups to do their best. It’s time to push employees into the right fights.

Let’s be clear—alignment is important. But the purpose of alignment is not harmonious agreement. It is to sustain an organization’s ability to fight for what really matters, and to pull everyone together again once the fight is resolved.

Edit by BHC

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Full Article
http://hbr.harvardbusiness.org/2009/12/how-to-pick-a-good-fight/ar/1

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