Three Pillars

No Gravatar

Without changing America- dramatically- we have to recognize that the three pillars of our society are going to have to be modified.  We are not going to replace one of those pillars in this generation.  (I would hope we do so within 30 years, however.).  What are those three pillars?  Housing, Manufacturing, and Healthcare.   Given these facts, it’s not surprising that our economy is limping along- despite our stated efforts.

The 3 Pillars of the US Economy

If we don’t fix housing, then our construction workers are not going to be employed and our economy won’t grow quickly.   Real estate construction has dropped to 5% of our GDP (down from 10%).   You can see, immediately, that a big uptick in construction will change our economy dramatically.  Which is going to take some pretty potent medicine (like the writedown of a whole bunch of mortgages that are upside down)- or a return (G0d forbid) to that credit fiasco that led to our meltdown of 2008/2009 (from which we have not yet recovered).   [I do think that ‘Sandy’, which arrived long after I wrote this, and as devastating as it was to the Northeast, will have a tremendous boost effect upon this sector- and our economy- but only for 12 to 14 months, which may be enough.)

In spite of everything you hear, America IS a manufacturing nation.  We produce more than 20% of the manufactured goods in the world, and it still comprises 11.5% of our GDP.   We need to keep developing new products and new methods to produce them- but, even then, folks are going to need to buy them, which means that without increased demand (here and across the globe), there’s not much impetus to increase our manufacturing efforts-

And, then, we come to healthcare.  Which is the big Kahuna- 17% of our GDP.  And, in my opinion (as well as many others), one of our biggest wastes. Because we have not optimized our health care system- anywhere at all.  While Obamacare will make some improvements, the biggest change has to be the elimination of the pay for service model.

We need to change the incentive for physicians, healthcare practitioners, and medical clinics to bill for a specific visit.  Instead of treating the ailment, or working with the individual to keep him/her well, the incentive (i.e., the payment) is based upon charging for each visit.

Our legal system is changing from billing by the hour to providing fixed fee (plus expenses) for a specific issue.  Consultants have been converting to a project based system (albeit with significant fee increases for change orders).  Why not so alter our health care system?

The system has to change or we will continually see our healthcare practitioners order more tests, referring folks to more specialists, and never dealing directly with the patient.  This is why Medicare is changing the reward system now.  They started with dialysis, by providing an annual payment for treatment (with a few incentives), instead of the system that has obtained for nigh 40 years- payment per treatment session (three times a week, 52 weeks a year). Now, they are doing so for other maladies- setting a limit on the total payments over the entire “episode”.

Medicare is also pushing the “Accountable Care Organization”.  These ACOs have a target for their entire membership, and while not totally accountable for each patient’s fees, physicians are incentivized to “live within a budget”.   (Yes, this does sound a lot like the HMO’s of old.  But, in practice seems to be closer to the Kaiser Permanente method, which has served its patients well.)

One should note that Kaiser practitioners seem to be happier with their lot than other physicians- even though they are salaried individuals. Moreover, while Kaiser does employ a budgetary process, physicians work with the patients to determine the optimal choice of treatment.  The same concept would have to apply to hospitals (which generally have been doing so, for their Medicare patients.)

These three issues have to be the primary charge for the next Congress (the biennial session) that starts in 2013.  Let’s hope they keep their promises to make America strong.Roy A. Ackerman, Ph.D., E.A.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
Share

19 thoughts on “Three Pillars”

  1. Over the weekend I met a woman who helps patients process medical claims; not the everyday kind, but the more catastrophic. She was worried that her job would go away once the healthcare reform was in place. We began to talk about her options. What if she could create her own business to help individuals who still have those types of claims to process? How could she coach others in similar situations? The light bulbs began to pop on, the wheels of her mind began to turn, and the fear became possible solutions. After we spoke, she took out her notebook and began writing… a full page of notes were written before I knew it! The Personal Transition Guide struck again with a mission accomplished!!

    1. I fear that wish is not to be fulfilled. The only reason that there still can be undecided voters in America at this late date is the lack of information research effected by said (potential) voter…
      And, let’s hope we can soon say … let the best person win!

    1. Well, David… most of the houses that were built in the early 1950’s need repairs and updates. Many of the corporate structures need major revamps to afford the tenants (or owners) the ability to use newer technologies. More of ALL of these buildings need better power supplies- be they solar for electricity or solar for hot water and heating. Most of the buildings need improved insulation to stave the drain to the environment.
      If manufacturing is to pick up, we will need new or revamped factories to house these new assembly lines, fabrication facilities, etc.
      Of course, we need construction to repair our infrastructure (roads, highways, bridges)
      So, yes, I see that construction will continue.

  2. This is a very thoughtful article Roy. I agree with you about construction in particular. What you replied to David seems right to me. We need to go into the older areas and clean up some of those buildings that were built using asbestos and paint with lead that have old, faulty plumbing. And as you mentioned, rebuilding those homes that were destroyed in the storm. Stimulus money is well used in California retrofitting our overpasses and bridges to bring them up to date with the newest earthquake technology.

    And in Los Angeles we are the beneficiary of Obamacare already. We have a new program called Healthy Way L.A. which is akin to Universal Health Care administered by the county. The doctors love it because they get to be real doctors, spending time with their patients. The patients don’t have to pay for any service or medication and they get the attention they need from their doctor. There are specialists, access to the state of the art hospitals which are UCLA teaching hospitals. If a patient is working and has money, they pay a small co-pay. It seems to be a huge success here. It is based on prevention rather than treatment which is a huge money saver as it’s cheaper to keep people healthy than it is to treat their disease.

    And Peggy has the right idea about helping people see how they can take their current and past work experience and either move in a new direction or create that new direction.
    Julia Neiman recently posted..SO YOU WANT TO GO ONLINE WITH A BUSINESS

    1. Julia:
      Thanks for sharing those great facts. I knew about the highways (after all, the LA Times has been screaming about Carmageddon for a while…)
      I did not know that UCLA was involved in such an endeavor. That is fantastic for the residents. And, it should alleviate the issue with emergency care and unfunded health needs, as well.
      And, yes, that was fantastic about PeggyLee!

      Thanks, again for that valuable information.

  3. One thing I have always believed in is the power of three. The challenge is how people see the three and if people only focus on what they need, they forget that others have needs and the community as a whole has needs and unless we act for the interest of the whole and each other, we will continue down a track that will see western countries with growing communities of indigents and vagrants. One of the saddest statistics in NZ is the number of starving children and yet we can grow our own food nearly 354 days a year.
    I hope America can return to its thriving nationhood. The world needs them too

    1. Roberta…
      Great facts there…
      I remember when I was teaching biochemical engineering that I used a similar concept. In the fermentor, there is plenty of food. Unfortunately, if we don’t provide sufficient agitation, there is no means by which a microbe could find that food- and, therefore, won’t grow as we intended. The same applies to humans. The fact that America (or New Zealand, for that matter) can grow 100% (or 400%, as the case may be) of the food the population demands, it does no good if there is no transportation system to supply the population at large- or at prices beyond what that population can afford to pay.

  4. This election is super interesting to me. I’ve never actually voted before (in Canada) and this is the first time I’m learning about the issues behind choosing a leader for a country. You always clarify the issues so effectively for me. =) In terms of housing, I recently learned that a ridiculously high percentage of Maltese people own property in their country even when real estate prices seem relatively high (almost akin to Vancouver prices). I wonder if bigger countries will ever reach a state like that! =)
    Samantha Bangayan recently posted..Unrecognized Passion

    1. Samantha:
      I’m not sure the answer is for everyone to own their own homes. That may be a concept- but I doubt very much those that reside in Manhattan could afford the prices that obtain. Even the prices in Brooklyn have escalated to the point where only the top 3 or 4% could afford those domains. But, we certainly need to construct affordable housing- be they rentals or purchases, or the population will suffer.
      I’m glad that you feel I can explain these issues- that’s my goal!

      Roy

Comments are closed.