ObamaCare and Innovation

A couple of days ago I got to tour the 3M Innovation Center. The products this company makes are truly amazing, both in the technologies involved and in the sheer number of different products. The average person in the world (yes, the entire world) interacts with 31 different 3M products each day of their lives! Do you have a cell phone with a display? 3M product. You see over 21 roadsigns each day that use 3M reflection technology. EVERY semi truck trailer in the U.S. with those red/white blocks along the bottom is 3M technology. Your car uses 3M adhesives as do most planes in the air. If you have fillings, crowns, or braces in your mouth they are very likely made by 3M. If you watched the Chilean mine rescue you saw a number of 3M products from the face masks to the coatings on the Oakley sunglasses they were wearing.

Yes, this company goes way beyond post-it notes and Scotchguard.

For the computer geeks (others can skip this paragraph) who want to measure their overclocking in multiples instead of percents, there’s a new chip cooler using 3M’s Flourinert liquid*. They can produce this liquid with just about any boiling point so the cooler is much simpler, much less expensive, smaller, and does a better job of cooling than any existing liquid cooling solution. Basically there’s a liquid container bonded to the chip, a small radiator in the top of the case with a cooling fan, and one tube connecting the two. The Flourinert boils, vabor bubbles up the tube to the radiator, cools, and falls back down the same tube as liquid. They were running an Intel Core i7 980 at 13Ghz with this little rig. It was fun to watch how much the bubbles increased as the CPU worked harder and got hotter.

One product they’re hoping to have FDA approval for later this year is a new micro-needle technology. It’s basically a half-inch round transdermal patch with anywhere from 50 to 1,500 extremely tiny needles (try 50μm in diameter for small!). The needle tips are pre-coated during manufacturing with the vaccine or other medicine. When the patch is applied to your skin these microscopic needles go just below the surface to what is known as the stratum corneum**, the meds dissolve, are absorbed by your capillaries, and conveyed throughout your body.

There are a number of benefits over syringes such as reduced chance of infections and other complications, higher efficacy (eg, more likely to get meds to where they need to go), and use of solid meds rather than liquid so they’ll last longer and not require refrigeration. Since micro-needles generally require less than 1/10th as much med, vaccine supplies cover about ten times as many people which will help eliminate problems such as we’ve recently seen with the scarcity of H1N1 vaccines.

This is all in addition to MUCH LESS PAIN for recipients. I hate getting shots. I’m very much looking forward to these things!

One really huge advantage to micro needles is cost savings. With a typical syringe injection only about 1/16th of the meds injected actually make it to your blood where it does any good, micro-needles deliver over 90%. This can reduce a $30 vaccine to $3. Because the solid meds are more stable and don’t require refrigeration there is also less waste (an estimated 15% of injectable meds are thrown out each year). And if they can be easily and safely self-administered there are potential savings in doctors office visits.

Now, let’s get down to brass tacks. 3M invested years and hundreds of millions of dollars developing this technology – for one reason – profits. They know, that if they are successful, privately run medical clinics will beat a path to their door. This product represents a lot of cost savings to the clinics as well as a benefit to attract new customers.

Without the profit potential, companies like 3M will not take the risks and make the investments to develop new technologies like this. Competition among medical clinics, drives competition in medical products, that drives 3M to do what it does.

If the U.S. medical care system were like the NIH in the UK, 3M and other companies would not invest in such risky new technologies. There is simply not enough of a payoff.

So, the next time you get a shot, think about it. They are injecting about 16 times as much med in you as needed. Overall this shot is costing about 10 times as much as it will when micro-needles are available. Under Obamacare there will be many fewer technology advances and products such as micro-needles will likely never be developed.

The more government involvement - the less competition. The less competition – the less innovation. And personally, I really like innovation that takes away real pain – like SHOTS!


* Flourinert has been around for about 40 years. It’s none electrical conducting so you can drop entire circuit boards in it. In fact one of it’s first uses was to help cool a Cray Supercomputer (and these always had clear plexi-glass side panels and bubblers in the bottom, purely for effect – very cool).

** Lightly scratch yourself with your fingernail. You may have reached as deep as the stratum corneum.

Impact of ObamaCare

A friend of mine runs a local company and made some comments yesterday regarding ObamaCare that I thought interesting.

They are taking an immediate write-off of about $90 million due to the loss of deductibility of retiree health benefits. This comes right off their bottom line and will impact their ability to hire new employees and increase the costs of their products.

They estimate that if they continue with their current level of health benefits that their annual costs will increase by a minimum of 11% or $25 million per year. One really big unknown, and that is not included in the $25 million, is how the elimination of lifetime limits will impact them. Genomics and other massively expensive new procedures and tests could bankrupt them without some form of cap on lifetime expenditures. A cap that under ObamaCare will now be illegal. According to ObamaCare, if you provide health benefits to your employees, it’s all or nothing. A completely open-ended, unlimited expense is impossible for any company.

Within the next year they will need to make a decision about any continued health benefits. Though he didn’t say it, the implied message is that it would be financially irresponsible to continue providing any health benefits after ObamaCare is implemented. Doing so would put the company itself at risk of bankruptcy. Their only choice will be to discontinue all healthcare benefits and have employees obtain healthcare from the government.


Government Healthcare – British Style

He grew up in Britain and provided some insight on the British system that the Democrats want to convert us to. Britain had no real medical system prior to the late 1940’s. Before then extremely few people in Britain, likely less than 5%, EVER saw or talked to a doctor or any other medical person. Without the free enterprise system that the U.S. has Britons tended to wait on the government to do something rather than do it themselves. For Brits the introduction of a government healthcare system in 1948 was a huge improvement over what they didn’t have prior and, without knowing a comparative system, still consider pretty good.

Contrast this with our current healthcare system in the U.S. that is the envy of the entire world. Many Brits come to the U.S. every year for healthcare. I don’t hear of any U.S. folk going to Britain for their better healthcare.

British doctors are paid £60,000 per year (about $100,000) by the NHS (National Health Service). This, they have found, is not enough to encourage people to go through medical school. Due to a shortage of medical students Britain has been importing doctors from India, Morocco, and other countries. The NHS is under serious financial strain and cannot afford to increase pay to doctors so the government are considering other options such as a much shortened medical school regimen that will produce something akin to a jr. doctor who would receive pay of about £50,000 per year.

For most Britons, if they want to see a doctor, they must call their local NHS first thing in the morning and hope to get an appointment that day. If they can’t get one that day then they wait and call again the next morning.

Waxman: Reality conflicts with what I expected…

Since ObamaCare was signed in to law a number of companies have begun doing exactly what they said they would be forced to do and what I mentioned, almost 3 weeks ago, they would do (in Theory, Practice, Smoke, and Mirrors). They’re announcing hits on earnings, delaying the hiring of new employees, laying off employees, and reducing benefits.

But, according to Obama’s economists, ObamaCare was supposed to make things better not worse. Why are these companies doing this?

Businesses are getting hit with a number of things, complements of ObamaCare. First up is that providing prescription drug benefits to retirees is no longer tax deductible. This will cost the average Fortune 500 company that chooses to continue this benefit about $112 million per year in extra taxes. This may be chump change to economists playing with numbers in a spreadsheet or Congressfolk spending other people’s money, but it is very real to people running real businesses that need this money to pay employees.

It’s real money that has to come from somewhere. Real businesses can’t simply raise taxes to cover it or change a number in a spreadsheet. They either need to increase the cost of their products (which lowers sales so doesn’t help) or they need to reduce costs which is often best accomplished through reductions in the number of employees or the costs per employee (eg, reduce pay and benefits). Unfortunately other cost savings options either don’t exist or take several years to begin offering any savings.

And Henry Waxman is acting all confused over this. According to Byron York, writing for the Washington Examiner, Waxman sent a letter to CEO’s of several of the companies who have said that ObamaCare will cost them hundreds of millions of dollars and result in reductions in benefits, layoffs, etc. He wants them to come before Congress on April 21st to defend their actions. York wrote:

Waxman's letter suggests he does not accept the company's decision. "The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern," Waxman wrote to Stephenson, in addition to letters to Verizon CEO Ivan Seidenberg, Caterpillar CEO James Owens, and Deere & Company CEO Samuel Allen. The companies' decisions, Waxman wrote, "appear to conflict with independent analyses."

Well, no surprise here that they conflict. And just who did these ‘independent analyses’? Business people who run real businesses that employ people and contribute to our economy?

Government is good and we need government, but let’s remember that government doesn’t make anything (OK, except I suppose it now makes unprofitable GM cars). It doesn’t contribute to the economy. Every single government employee, every dollar paid out by the government for healthcare, is paid for by people and businesses who do make things. It’s the people who grow our food, build our houses, and make our clothes who contribute to the economy and whose efforts pay for every cent spent by the government.

Does Waxman understand this? Is he or Obamaosi really surprised by the actions these businesses are being forced to take? Interestingly, I don’t think they’re surprised. I fear that what we are seeing was their intention. If businesses can no longer afford to provide healthcare benefits to their employees, where will their employees turn? Why, the government of course. We’re not all socialists now, but just wait a few years.

A solution for the pre-existing conditions problem?

When challenged about the unprecedented, and very likely un-Constitutional, federal mandate that every person in the U.S. purchase health insurance, Democrats common retort is that without the mandate we cannot address the problem of insurance companies turning people down for pre-existing conditions. Not.

Their rationale is that without the mandate, but with a requirement that insurance companies not discriminate based on pre-existing conditions, people will just wait to purchase insurance until they have a need for it. If true this would indeed violate the very essence of insurance which is to spread out the risk of unpredictable expenses.

There is perhaps another option. Insurance companies can be required to not discriminate on pre-existing conditions when someone is transferring from one insurer to another. In other words, nobody is required to purchase health insurance. There is no un-Constitutional federal mandate. If you already have insurance though and simply need to transfer from one insurance company to another then the company you are transferring to must accept you, pre-existing medical conditions and all.

If you choose not to purchase insurance then you will be on your own for most medical expenses. But once you are in the insurance pool, and as long as you stay in it, then you’ll have no problems transferring. This eliminates the pre-existing conditions problem, protects the integrity of the insurance companies, and doesn’t violate our Constitution.

The End ?

"When the people find they can vote themselves money, that will herald the end of the republic"

- Benjamin Franklin*.

Yesterday we took our biggest step yet towards socialism in the U.S. and also witnessed perhaps the most tyrannical action in 200 years. We haven’t witnessed the end of the republic, but we have witnessed the potential beginning of the end.

Our great country hasn’t come to an apocalyptic end with the passage of Social Security or Medicare nor by the incremental creep of increasing taxpayer funded welfare programs. It won’t from ObamaCare either.

Sadly, if ObamaCare is implemented it will be the middle-class who suffers the most.

Today we ALL share the same great healthcare system. The approximate 87% who have insurance all see the same doctors in the same clinics and hospitals and receive the same high level of care. The waiting room in my doctors office is always representative of a cross-section of our country. Whites, Blacks, Hispanics, young, old, rich and poor. I’ve seen well-known wealthy waiting the same as union laborers waiting the same as people on government assistance. Even the 13% uninsured have access to the exact same hospitals and emergency rooms.

The future will likely include a split healthcare system similar to Canada and the U.K.. A private one for the top 15-20% of wage earners, the wealthy and upper middle class, and a public one for everyone else. The private system will be largely identical to what we all share today. We’ve actually started to see this already. Many doctors and clinics will not see Medicare patients because they can’t afford to provide care for what the government pays. In New York and other heavily regulated states an increasing number of doctors no longer even accept insurance and only see those who can pay out of pocket.

The system for the other 80%? It will still have some great and caring doctors, nurses, and other caregivers. But it will not be able to provide today’s level of care to all comers. It will not be able to afford it nor will enough people choose to work in this lower pay system. Waits for care will increase just as in Canada and the U.K. With scarce resources we’ll begin to see prioritization, likely along the lines of future contributions to society (EG, younger workers will receive priority over those who can’t or don’t work – the older, etc.).

But all is not so gloomy.

The Good

There could be some good from this.

Foremost, we might finally see some practical limits placed on the commerce clause of our U.S. Constitution along with some re-assertion of the state’s rights that our founders intended. More on this later.

Second, we may see an awakening of a populace who have become complacent about our creep towards socialism.

Yesterday was a sad day for our country. But I’m still optimistic.

* Widely attributed to Benjamin Franklin though not absolutely confirmed.

Theory, Practice, Smoke, and Mirrors

Note: I’m just beginning to look in to this. The following may be way way way off base. More to come when/if I have more time. Stop by if you find anything supporting or contradicting (though I won’t be around this week)…

It’s fascinating to read the opinions and testimony of various economists regarding Obama’s healthcare plan. A long and distinguished list have weighed in on numerous aspects, in particular, the money saving features.

A big chunk of the ‘savings’, as much as 3/4’s, is described thus.

Under the plan companies will, according to economists, do one of 3 things:

1 – Larger companies, those with more than about 250 employees, will hold the value of ‘Cadillac plans’ (the health plans provided to nearly all employees, including union employees in large companies qualify as ‘Cadillac plans’) to just below the level that triggers the proposed excise tax. In other words they will reduce coverage. Initially this tax will be triggered on any amount spent on healthcare and insurance in excess of $10,200*. The difference, approximately $4,200 per employee will be paid in additional salary to the employees.

2 – Many smaller companies will cease providing health insurance, encourage employees to purchase insurance through the government marketplace, and elect to pay the proposed $2,000 fine. The difference between what they are currently spending (approx $7,000) and the $2,000 fine will be paid to employees as additional salary.

3 – Some smaller companies will make no change and will continue with their current health plan.

Nice theory, won’t happen in practice. And I’d think they know it.

Competition, locally and globally, is fierce. Few employees will see any increase in salary as the economists predict. That is simply not reality. This theory though does seem to do a good job of hiding the true costs of Obama’s plan.

Despite theory being wrong, all is perhaps not so bad. One way large employers will reduce the costs of their plans (to keep them under the $10,200 excise tax limit) will be to place employees with risky, and thus more expensive, health behaviors in a separate plan with severely limited coverage. This will include employees who are overweight, smoke, drink heavily or are a drug abuser. If you get a speeding ticket or are otherwise documented as a high health risk you could find yourself in this pool as well. This will allow low risk and healthier employees to have better coverage for the $10,200 companies will be allowed to spend. Theoretically, this will encourage employees to make healthier choices so that they can join the healthy plan that offers better coverage.



* Note that on average these companies spend about $14,400 per employee per year on heathcare and, with few exceptions, every full-time employee from bottom to top receives the same plan (many companies also offer these plans to part-time employees at a pro-rated cost). Glenn Beck and a couple of others have said that government employee healthcare costs are considerably more, perhaps as much as twice. Employee benefits industry reports that I have studied have not supported this.

TSA and what we can look forward to with healthcare

Yesterday I flew in to Chicago O’Hare to connect with a flight to Amsterdam. I had an hour and thirty minute connection which shouldn’t have been a problem…

Well, TSA in terminal 5, the international terminal, was a cluster to behold. I was greeted at the security checkpoint by a mass of about 150 and an estimated 50 minute wait. This just for the passport / boarding card check. Even with a flight that had started boarding and a departure in less than an hour I was told, twice, that I had to stand in the line. After 15 minutes in line and listening to a woman walk up and down the line quietly asking for anyone on SAS flight number something or other I asked about my KLM flight. She looked horrified. Apparently I should have been directed to the rush line earlier. She took me there.

Movie Theatre’s have large LCD displays over the ticket taker indicating what movies are currently seating. Why TSA can’t do the same for flights currently boarding and that thus have priority screening, I don’t know.

Once cleared through the passport check I was to choose among 5 lines for x-ray. About 7 people in each line, shouldn’t be a problem. I made my choice and waited some more. All was OK for a few minutes and then my line ground to a halt. I noticed that every time there was suspected contraband the screener checked the bag, stopping our line dead in its tracks until the screener resolved the problem. I really lucked out, there were 5 people in a row whose carry-on’s required hand searching and re-screening. An average of 4 minutes each.

In 18 of the 20 minutes it took our line to process 5 people, the line next to us got 27 people through. All of them, by the way, folks who had come through the passport check behind me.

I now had less than 10 minutes until my flight was scheduled to depart. I mentioned this to one TSA gal and asked if there was anything she could do. “No, we’re getting everyone through as quickly as possible.” I offered that it might be best if, when they encountered a bag with contraband in it, that it be pulled aside, someone other than the screener deal with it, and allow the screener to continue with those in line (most of whom did not have contraband).

“We don’t need your lip.” Was her reply. “We’re getting everyone through as quickly as possible.”

There was nothing I could do. I had no options. I was stuck.

Is this what we can expect with government run healthcare?

We have what is unquestionably the best healthcare system in the world. World leaders and the rich and famous come to the U.S. for the exact same healthcare as our union workers, CEO’s, bus drivers, unemployed, and even bloggers. Why would we want to turn our health over to the government?

Voting against welfare and healthcare is un-Christian

“Those voting against healthcare are leaving their Christianity in the closet.”

“It’s the Christian thing to do.” – referring to the need to support increased government welfare programs.

“Anyone who votes against government helping the poor and defenseless cannot call themselves a Christian.”

These and similar quotes are heard often from various supporters of increased government social programs.

But, where in the Bible does it tell anyone to take money from someone else (rich or poor) and give it to others (rich or poor)?

As Christians we are indeed called to help the poor. "There will always be poor people in the land. Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your land." Deuteronomy 15:11

There should be no doubt about this and every Christian should help the poor to the extent that they are able. "If anyone has material possessions and sees his brother in need but has no pity on him, how can the love of God be in him? Dear children, let us not love with words or tongue but with actions and in truth." 1 John 3:17-18

However, we are called to do so as relatives, individuals, or churches. Never as governments. It scares me to make assumptions about scriptures and what the writer or God might have meant. But, every time I hear politicians and others talking about how the government needs to do more for the poor, how the government needs to take more from the wealthy in taxes and give more to the poor, I think of this verse:

"They devour widows' houses and for a show make lengthy prayers. Such men will be punished most severely." Mark 12:40

Perhaps more important, God makes it clear that rather than handouts, we are to provide opportunities for the poor and less fortunate to help themselves.

Among many similar verses, Leviticus 19:10 says "Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the alien. I am the LORD your God."

This is very wise advice.

Someone who is simply given a handout develops no real appreciation for it. They don’t value it. And the more often they receive something for nothing, the less they value what they’ve received. Besides the intrinsic in this is that people who don’t value something can be more wasteful – of food, healthcare choices. Why be a conscientious consumer if it doesn’t cost you anything?

Someone who is given a handout begins to expect more handouts. The more someone receives from others, the more they expect. It’s human nature. Instead of appreciating what they’ve received from others, they begin to complain when they don’t receive it or if they receive less or if what they’re receiving doesn’t increase. Soon that expectation turns into a right – people have filed lawsuits when the handouts stopped or were reduced!

Someone who receives their livelihood with little or none of their own effort develops low self-esteem.

Someone who receives handouts from a far-off faceless government has no appreciation for what they’ve received and for the fact that behind their handout are people who’ve given something up in their own lives to provide the handout.

Those who receive welfare, be it foodstamps, welfare checks, or free healthcare, have little incentive to improve themselves. They have little or no appreciation for what they are receiving, and do not feel that they are a part of the rest of society.

There are shining exceptions, but unfortunately few and far between.

And on the other side is the animosity that these handouts generate. When people who work hard for their money see a significant chunk of it going towards taxes they become irritated. When they see a lot of these taxes then going to help poor people who do not seem appreciative it, who do not seem to be working towards getting off of welfare or helping themselves, who use foodstamps to buy junkfood while listening to their $300 ipod, who have among the highest obesity rates in the population, …this animosity turns to anger. And then when they hear more and more calls for more and more money to be poured in to social welfare programs…


On the other hand, following what the Bible teaches produces a far different result.

Someone who receives support and assistance from an individual or even their church has a much greater appreciation for what they’ve received. They value it more. They know the person or people who they received it from and they know that these people made sacrifices in their own lives to help others. Besides valuing and appreciating what they have received, they have a sense of being loved and cared for by these people.

Someone who works for what they’ve received may have an even greater appreciation. Aside from appreciation and value though, they’ve put their own effort into it. Their self-esteem is improved because they have earned their livelihood themselves. They feel more a part of normal society.

Receiving assistance from those closer to us, relatives, individuals, and our church, also has the benefit of providing a lot more than just material assistance. Closer support often comes with assistance in better managing our lives and support for making better decisions.

And that animosity people feel toward the unappreciative poor? Here it is replaced by enthusiasm. People, even many grinchy kinds of people, enjoy helping those who are genuinely appreciative and who are working and doing their best to help themselves.

The upshot is that instead of people angry on one side that they’re not getting enough handouts and people angry on the other that they’re being taken advantage of, we have appreciation and enthusiasm. We have people working together.

Now, which sounds better?

"Jesus answered, If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.'" Matthew 19:21

Bad option or no option at all?

Sen. Harry Reid commented this morning that the U.S. is the only nation where people must file for bankruptcy because of healthcare costs. This may or may not be true. What he declined to mention is that in other nations most of these people would not have received the healthcare in the first place.

Healthcare is expensive. There are some areas where we can certainly cut healthcare costs but the reality is that if someone needs major surgery it is going to cost at least thousands and likely tens of thousands and maybe hundreds of thousands of dollars. The costs of the people involved, the equipment, drugs, and hospital facilities are what they are.

No nation can afford to provide full, complete, and unrationed healthcare to all of its citizens. The costs to do so, with today’s technology, would exceed the GDP of any nation.

Some form of rationing is required. There will not be enough to go around. Most countries with socialized medicine use Queuing as their primary method of rationing. You simply wait your turn until whatever you need becomes available. Many surgical procedures, such as a hip replacement, that we consider critical in the U.S. and that are often provided within hours, may involve several month waits in Canada, The UK, and other countries.

Limiting what procedures are available comes next. Many newer or more expensive procedures fairly widely available in the U.S. are not available at all in countries with socialized medicine. Worse, the vast majority of these are developed in the U.S., if we adopt government run healthcare system who will invent even better options?

The final form of rationing is probably best termed Justification. Does this person’s life justify spending limited resources on them? Is it worth spending $20k on a hip replacement to a 90-year-old? How about $40k in chemo therapy for someone with severe mental and physical disabilities?

So yes Harry, some people in the U.S. may go in to debt or even bankruptcy to get medical care . But under the system you want to give us they wouldn’t even have that option.