[Vision2020] Borden and Universal Health Care Use the Same Business Model

Fri Jan 20 13:17:02 PST 2012

Yes, facts often get in the way of dreams and ideals.   If it weren’t for facts, then we would all be living the dream, right?

I can’t find anything that says that Germany’s average wage for a single earner is $60,000 a year.  I did find this breakdown:

http://en.wikipedia.org/wiki/List_of_countries_by_average_wage  

That’s the basic “how much did you earn and how many hours did it take you to earn it, convert the answer to USD” comparison.

In this, the US ranks first with $52,607 per year.  Germany ranks 13th… with $38,325 per year.

If you want to actually get a more “apples to apples” comparison (which  tries to calculate actual purchasing power of the currency being examined by factoring in costs of living, inflation rates and the like), you can look at this data:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

If you look at the data this way, the US is in 7th place with $48,147, with Germany falling to 17th with $37,935.

If I had to take a guess, I would say that your $25k number includes non-working folks (children/teenagers, retirees).   BUT… without reference, I don’t know.

BUT… again, facts are silly.  So, let’s toss out the crazy things like exchange rates, core currency values, costs of living, WHO is actually working and for HOW LONG… and let’s just use the numbers you tossed out.

If a US citizen is being taxed at an average rate of 15% on an average income of $25k, and a German citizen is taxed 50% on an average income of $60k it means that:

The US Citizen is paying $3750 in taxes.

The German Citizen is paying $30,000 in taxes.

BUT… we want to emulate Germany.  We want their education system… we want their health care system.  We want to emulate whatever Germany has.  Holen sie sich ihren rechner.  

We have to come up with an additional $26,250 in taxes per person.  (That’s the difference between what Germany is collecting in taxes per person, and what the US is collecting in taxes per person).  

According to your numbers.. that’s more than what the average American makes.

Ok… the only way to spend more than you take in is to take on debt.  (Admittedly, the US excels in this department).

So based off your numbers, let’s assume that you don’t want their education system… that you ONLY want their health care.  Germany taxes 15.5% to pay for their health care system.  (It’s split nearly evenly between a personal income tax and a corporate income tax.  But… that’s 15.5% worth of additional taxes necessary to pay for their system).

Let’s keep it simple and just take it out of the personal income tax…. (since the corporate tax change would eventually trickle down in the form of higher prices and wind up affecting a consumer’s post-tax dollar amount anyway)…

So… now you tax an additional $3875 per year to the average family making $25,000 per year.  

That’s a lot of money… and it’s money taken out of the taxpayer’s pocket, even if their annual medical costs are less than $3875 per year. 

Wait… in the same breath, you say families cannot afford $3875 per year?  

Ok… how would you pay for this?  

Answer:  you make it lopsided.  You throw in some progressive income tax making people who make more money PAY more for a health care system that has been flattened to a point where they would get no additional benefit for the additional price tag.

Now… keeping it simple (so you can sell it) means that you try to do some fanciful accounting to hide the problems… and that will allow you to kick the can down the road like we have with Medicaid, Medicare, Social Security, and any other program that our economists (not our lawyers that just took an economics class) continually show is on the road to financial ruin… but our politicians continually stand up and soothe us and reassure us that nothing is wrong… 

Again… this simple math is based upon your own numbers… but I still can’t imagine we’re ever going to agree, regardless of what the “facts” are… 

That’s my .02…. taxed at a capital gains rate of 15%

Jay

From: Donovan Arnold [mailto:donovanjarnold2005 at yahoo.com] 
Sent: Friday, January 20, 2012 10:41 AM
To: Jay Borden; Moscow Cares; keely emerinemix
Cc: vision2020 at moscow.com
Subject: Re: Borden and Universal Health Care Use the Same Business Model

Jay,

Again you are trying to claim the facts are not the facts with semantics, what-ifs, and numbers games to defend an outdated incorrect sociopolitical philosophy long disproved. The standard of living for people outside the top 1% in modern nations with Universal Health Care is way higher. That is fact. 

In terms of taxes and wages; The average wage of a worker in the US is only $25,000 a year. The average in Germany is $60000. So even at a 40-50% taxation, they not only have more money after taxes, they also don't have health care debt, no college loan debt, or have to try and save for retirement, health care, and possible loss of job. And even if they do manage to save, which most cannot do, it can all be wiped out in a single hospital bill. How long do you think your coveted 15% tax rate will last as the cost of heath care and medicaid rises 15% a year and the national debt reaches critical levels? 

As for Social Security, I think it is the most efficiently run government program. 99% of its collections go to payments. A 1% overhead and operations cost beats 99%+ of privately run businesses, and I bet yours too. The major problems with Social Security are directly and indirectly related to the broken health care system of the United States as is the national deficit. 

It is not a lopsided model when the majority of people live the greatest standard of living the world has even know. And not to just work for the sake of making the top 1% the biggest glutens the world have ever known. The People should work for sake of themselves, not the sake of someone else. There is no motivation to work and save for most Americans when it is all taken away from them by medical and law offices. 

Donovan Arnold

From: Jay Borden <jborden at datawedge.com>
To: Donovan Arnold <donovanjarnold2005 at yahoo.com>; Moscow Cares <moscowcares at moscow.com>; keely emerinemix <kjajmix1 at msn.com> 
Cc: vision2020 at moscow.com 
Sent: Thursday, January 19, 2012 11:18 PM
Subject: RE: Borden and Universal Health Care Use the Same Business Model

With the exception of Japan, every nation you listed has a higher average personal income tax rate than the United States.  (Japan makes up for it with their corporate income tax rate).  France, Germany are over 50%.  Sweden is almost there with just under 50%.  

If it’s not a lopsided model, then why does it require lopsided funding and the participation of an entire population to keep it floating?

Would you say that Social Security is working?  It’s a program that has required participation by every tax payer, has guaranteed payouts when you need them.  For all practical purposes… it’s a universal insurance policy.     

(The relative strength of Canada’s dollar to our own has less to do with the strength of their economy, and more to do with the weakness of ours).

Jay

From: Donovan Arnold [mailto:donovanjarnold2005 at yahoo.com] 
Sent: Thursday, January 19, 2012 9:30 PM
To: Jay Borden; Moscow Cares; keely emerinemix
Cc: vision2020 at moscow.com
Subject: Re: Borden and Universal Health Care Use the Same Business Model

Jay,

The problem is not that it is a lopsided model. The problem is that some people are unwilling to let go of incorrect thinking that Universal Health Care cannot work. 

You stated,  "Sorry… I don’t see it… you go down this path and you have yet another program that gets upside down very quickly, and is subject to massive amounts of corruption and fraud, directly proportional to the volume of red-tape and bureaucracy."

Well, if you want to see it, all you have to do is go to Canada, England, Japan, Germany, France, Norway, Sweden, and many more. One place you will not see a working health care is the United States. If you don't want to do something because of fraud or red tape, you won't ever be doing anything. That exists everywhere man does. 

Your arguments and reasons why the Universal Health Care system won't work are invalid precisely because it is working, all over the world. You might as well be arguing that "Man cannot learn to fly". It has been done, and is being done many, many, times, every day with great success. 

Just keep this in mind too. Canada with a Universal Health Care system, now has a stronger dollar than the US. 

Donovan Arnold 

From: Jay Borden <jborden at datawedge.com>
To: Donovan Arnold <donovanjarnold2005 at yahoo.com>; Moscow Cares <moscowcares at moscow.com>; keely emerinemix <kjajmix1 at msn.com> 
Cc: vision2020 at moscow.com 
Sent: Thursday, January 19, 2012 7:37 PM
Subject: RE: Borden and Universal Health Care Use the Same Business Model

No, I get it.  You want to essentially create a gigantic government-run HMO… you want to charge membership fees and spread them out in order to try to keep costs down.

The problem is that this model is lopsided… it winds up attracting the people that gain the most financial benefit (folks that wind up getting $190 worth of medication for $80), while NOT attracting folks that don’t need this benefit (people that are paying a $55 membership fee to gain access to medication they don’t need).

So… the next [logical] answer is to simply FORCE everyone to become a member.  (What doesn’t work on a smaller scale must work on a larger scale, right?).   

Sorry… I don’t see it… you go down this path and you have yet another program that gets upside down very quickly, and is subject to massive amounts of corruption and fraud, directly proportional to the volume of red-tape and bureaucracy.  (Yielding yet another government program crying for capital and resources, demanding that they can simply cut waste if they ONLY had yet another oversight committee and more consolidation of power).

Jay

From: Donovan Arnold [mailto:donovanjarnold2005 at yahoo.com] 
Sent: Thursday, January 19, 2012 4:49 PM
To: Jay Borden; Moscow Cares; keely emerinemix
Cc: vision2020 at moscow.com
Subject: Re: Borden and Universal Health Care Use the Same Business Model

Jay,

I am glad we can have a productive conversation despite our differences. 

You wrote,

"The missing piece in your analogy (of my analogy) is that I didn’t turn around and offer free widgets to everyone, and then turn around and only bill the people that can afford it. On the contrary, when they want a new widget, they’ll have to pay for it. And because they suddenly had to pay for it, they were much more scrutinizing of how the widget was used."

I could not agree more that this is the crux of our inability to see our different perspectives. You are absolutely correct that if people were not charged for each item they selected and people were only charged by ability to pay the system would bankrupt everyone and collapse. 

However, I think that is your misunderstanding of the Universal Health Care system. It is not communism.  If  countries with Universal Health Care operated in such a fashion as you described, that is exactly what would happen. Thankfully, it doesn't. It operates in the way Costco does. Everyone pays a membership fee. The fee is dispersed amongst the providers in such way as to keep them financially afloat. In exchange for that cash up front, they agree to keep the fees for their services not free, as you think, but affordable for the members. 

So, for a real life example. I pay $55 a year to Costco. Costco gives a portion of the fee to the Pharmacy. In turn, the pharmacy charges me $80 for a 90 day supply of medication vs. Walmart which would charge me no fee, but $190. It would make no sense for me to do as you claim I would, order twice as many medications that I needed for two reasons. One, I am still poor, despite the lower costs, I am limited in resources to keep buying the same medications just because they are cheaper. And second, decreased utility. The extra meds, although still available for less cost, would not do me any good and make me more poor. Most people don't have that kind of money to waste. 

Hope you followed my points. If not, I suggest you take a look at Prof. Gier's articles, as he offered, about Universal Health Care as he is an excellent source. 

Donovan Arnold

From: Jay Borden <jborden at datawedge.com>
To: Donovan Arnold <donovanjarnold2005 at yahoo.com>; Moscow Cares <moscowcares at moscow.com>; keely emerinemix <kjajmix1 at msn.com> 
Cc: vision2020 at moscow.com 
Sent: Thursday, January 19, 2012 12:47 PM
Subject: RE: Borden and Universal Health Care Use the Same Business Model

I appreciate the kudos… but I’m not trying to pat myself on the back, only to demonstrate my view.   

(And you’ve been more than kind in your responses… thank you).

The missing piece in your analogy (of my analogy) is that I didn’t turn around and offer free widgets to everyone, and then turn around and only bill the people that can afford it.   On the contrary, when they want a new widget, they’ll have to pay for it.  And because they suddenly had to pay for it, they were much more scrutinizing of how the widget was used.  

You’re trying to connect the dots of my making customers responsible for their own widgets to Universal healthcare just “spreading the cost” around and tossing widgets into the street for anyone to consume.

(Yes, this analogy is REALLY breaking down…)

Costco’s model works because they tend to both BUY and SELL their inventory in BULK.  They are actually intended/marketed such that they sell to OTHER businesses (B2B), but if you’re an end-customer and want to purchase pianos in a 3-pack, that’s fine too.  (Yes, I know, you can get many merchandise items individually… but generally speaking most of their products are larger in both VOLUME and QUANTITY… I think I bought peanut butter from Costo 3 years ago and haven’t had to go back since…)

If you link that to Universal Health Care and point to savings…. well I don’t know if I would purchase a dozen ER visits at a time, or choose the flu shot with “50% more!”

If you want to make a link to another enterprise and point to savings, might I suggest Walmart.

Walmart (by several other people’s description) is the “single choice” threat moving into any territory.   Walmart succeeds because they undercut competition (private practices) by offering lower prices.  They engage in supplier-specific contracts with individual suppliers to offer products that no one else can touch (semi-price-fixing)… and to sell their products ONLY in their store.

On the flip side, because of Walmart, other retailers (doctors) can’t afford to stay in business.  (How many articles have I read where “someone used to own the local greenhouse/nursery, but now they just work at the Lawn & Garden at the local Walmart?”)

The end result is a place that people hate to go, but have no other real alternative (since the other choices have been destroyed), purchasing inferior products/services that they can’t stand...

Now… today, people are responsible for paying their own bills at Walmart.  That keeps the purchasing in check (minus the Walmart shop-a-holics).

To press the analogy further,  imagine if Walmart suddenly said “all you can take buffet… pay one fee and take whatever you can carry off the shelves”.  

People would start to grab two or three or four of items, even though they wouldn’t need them, because the cost difference is zero.  As a result, Walmart would have to RAISE prices to keep up with the “flat-fee” demand… (and at this point you head on down the slippery slope of starting to charge ONLY the more wealthy folks shopping at Walmart, yada yada yada…)

This is an obvious deadlock debate… I see widgets, you see universal health care, I see Walmart, you see Costco.   I have ZERO argument with anyone who says that the current health care system needs alterations… but I can see ZERO benefit in having the same folks that run the DMV and the IRS suddenly managing my health insurance… I see only disaster.

Jay

From: Donovan Arnold [mailto:donovanjarnold2005 at yahoo.com] 
Sent: Thursday, January 19, 2012 7:30 AM
To: Jay Borden; Moscow Cares; keely emerinemix
Cc: vision2020 at moscow.com
Subject: Borden and Universal Health Care Use the Same Business Model

Jay,

I think it is great that you were able to turn a failing business. Not many people have that gift. I think your example does relate directly to health care, but in a way that gives credence to Universal Health Care and highlights problems with our current system of care.

What you did to the failing widgets company is exactly what Universal Health Care does all over the world. Our health care system is like a business that is going broke, with unsatisfied customers because the way it is doing business. What kind of business lasts with 13% increases in costs annually and just keeps passing the cost to the customers? That didn't work for your predecessor, and it isn't working for health care either. 

The steps you took, are the ones Universal Health Care makes. First, you lowered costs of the widget so everyone that needed one could afford it. Universal Health Care does it the same way. It is the bulk of sales, not the high price per unit that makes it work financially, as you well know. The Costco model works better than the local jewelry model for high demand products and services. 

Second, you took steps to reduce costly replacements by prevention through education. Universal Health Care also works on this business model. By giving people the access to education on health and behavior and proper use of medications and treatments, the cost of repairs are greatly reduced because the damage never occurs in the first place. 

Finally, Universal Health Care works on the business principles you adopted of a fair contract that holds both parties accountable. Both you and Universal Health Care pay for about 100% of damage that is not the fault of the client. However, if the person is neglectful or uses it not as intended they are not completely covered, but you don't make the costs of fixing the problem beyond their ability to pay. 

I really don't see the difference between what you did with a widgets company and what Universal Health Care does for health care. Jay, I don't see why the taxpayers should have to use the broken business model you had to fix than the proper working one you have now. Do you? 

Donovan Arnold

From: Jay Borden <jborden at datawedge.com>
To: Moscow Cares <moscowcares at moscow.com>; keely emerinemix <kjajmix1 at msn.com> 
Cc: vision2020 at moscow.com 
Sent: Wednesday, January 18, 2012 4:30 PM
Subject: Re: [Vision2020] More Proof Preventative Health Care Saves

Yes, that’s the decision that the previous business owner made.    (Whose name didn’t sound anything like “Bay Jorden”).  

While he thought he was doing good, he was ruining his company (and thus his ability to continue servicing his customers with the product).

You can ridicule the specifics all you want, the only relevance that translates to my point is one of human nature.  I believe (and I have experienced the trend) that people care less when they are not directly tied to finances.

Is there anyone on this list that rents out residential property?  Would you say that people take more care of the apartment/house when a security deposit is on the line?  Or would you say that people generally take care of the facilities regardless?

Jay

From: Moscow Cares [mailto:moscowcares at moscow.com] 
Sent: Wednesday, January 18, 2012 1:26 PM
To: keely emerinemix
Cc: Jay Borden; vision2020 at moscow.com
Subject: Re: [Vision2020] More Proof Preventative Health Care Saves

According to Jay Borden:

"Turns out the problem had nothing to do with design… it was customers not bothering to read or learn anything about proper use of the widgets, or trying to use the widgets for a completely different purpose altogether. 

Tack on a free replacement guarantee, and customers didn’t bother to self-educate… they just let the company “fix the problem” with the warranty."

So, what you are telling us, Mr. Borden, is . . .

Although the customers clearly violated a product's warranty by " . . . trying to use the widgets for a completely different purpose altogether . . . ", the company honored the warranty and replaced the product.

That's right up there with . . .

John Smith was going into the widget business.  He would go to the widget manufacturer, load up his truck with widgets (at $10 each), take them back to his store, and sell them at $9 each.  This went on for a couple months.  He was wondering why he was losing money on what he considered to be a sound business venture.  He sought advice on what he should do from a business advisor; let's call him Bay Jorden.  Bay Jorden, after weeks of meticulous research into John Smith's business practices, came up with what he considered a sure-win solution.  He suggested to John Smith that what he needs is a . . . larger truck.

Sidebar to Mr. Borden:  Do you know if this guy is selling cars?  I have a friend that can certainly use a new car . . . every year.

Seeya later, Moscow.

Tom Hansen

Post Falls, Idaho

"If not us, who?

If not now, when?"

- Unknown

On Jan 18, 2012, at 12:57 PM, keely emerinemix <kjajmix1 at msn.com> wrote:

	Turns out the problem had nothing to do with design… it was customers not bothering to read or learn anything about proper use of the widgets, or trying to use the widgets for a completely different purpose altogether.  

	Tack on a free replacement guarantee, and customers didn’t bother to self-educate… they just let the company “fix the problem” with the warranty.

=======================================================
List services made available by First Step Internet,
serving the communities of the Palouse since 1994.
              http://www.fsr.net
          mailto:Vision2020 at moscow.com
=======================================================

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/vision2020/attachments/20120120/92f23c67/attachment-0001.html>