Universal Healthcare Affordable?

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setanta14
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Post by setanta14 »

Well, I have experienced two such competitive market surveys in the last four years... Both times saw significant increases in pay for myself and my employees for the sector that we work in... Perhaps the highly unionized automotive industry is much different, but I can only speak from the telecom side.
EvilGenius wrote:
NukeHavoc wrote:Yep, they could do that. And lose their employees, since medical benefits are just another form of compensation, who would promptly move on to companies that did not do something so foolish.
While I do believe that this sort of change would cause many people to seek different jobs, the modern practice of 'market adjustment' is actually counter to the theory of competition.

When I was at Ford I talked to a lot of the branch management and a few corporate executives (I was only beginning to become angry at that point, so I was much more personable, and they let me talk to everyone. :) ). Several times during the three years I worked there, our benefits were reduced. Each time, the managers explained it as a move to 'stay competetive'.

What happens today is that large corporations, say company A, hires a consulting company who is able to provide Company A with a survey of what other companies in their 'direct competetor' list in their area are paying in salary and benefits, and even details what's covered under those benefits and costs associated. And most importantly, the consulting company provides an average of salary and benefits for an industry and a geographic location.

Then Company A looks at the list and says, "hmm. The average salary/benefit is X. We're paying X+5%. So we can reduce benefits by 5% in order to 'stay competetive'."

Now why doesn't the company that's paying X minus 5% increase their salary and benefits? Two main reasons.

First, the reason they're paying lower is because they found people who will accept that rate, and then the company built their cost and profit structures around it. Simply giving everyone a 5% raise would completely throw off profit margins and product pricing. You can't just pass on the huge cost increase to the consumer if your direct competetor is already priced about the same as you are.

Second, management knows that the largest operating cost is employee salary and benefits, not just for their company but for EVERY company. So the managers of all of their direct competitors (who went to the same schools and got the same MBAs) are always looking for ways to cut operating costs in order to increase profitability.

So if Company A is paying 5% less in salary/benefits than Company B and their product price is the same, Company B is going to be feeling internal and external pressure to reduce costs, and looking to emulate Company A's model; ie. Company B is going to come to the conclusion that their direct competitor, Company A, spends less money on salary/benefits and charges the same for a similar product. Therefore Company A is the 'stronger' company. Competition dictates that Company B will try to reduce their own operating costs, most likely salary/benefits, in order to match Company A's profit margin.

If Company B does NOT reduce operating costs in order to 'stay competetive', Company A will eventually make much more $ than Company B and Company B may go out of business.

This is not speculation or accusation on my part. This is how the mid-level executives of a Fortune 500 company explained their operating model to me.

What that means though, is that instead of companies competing to attract or keep 'line employees', they quasi-collude to keep salary and benefits down. Where they actually compete for employees is more at the executive level, although some similar cost balancing must occur at all orgainizational levels.

What this means to the general 'bottom of the totem pole' employees is that most of the employers in their field pay roughly the same, with very similar benefits.

So the prospect of 'go get a different job' is more of an option on paper than in the real world.
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NukeHavoc
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Post by NukeHavoc »

There's a great quote from "The Moon is a Harsh Mistress" today in this WSJ opinion piece about Heinlein that sums up why nationalized healthcare bothers me so much.
The core of this book, which keeps it near the top of the libertarians' reading lists, is the speech by an old professor, Bernardo de la Paz, to the rebels' constitutional convention: "...like fire and fusion, government is a dangerous servant and a terrible master. You now have your freedom -- if you can keep it. But do remember that you can lose this freedom more quickly to yourselves than to any other tyrant."

The professor explains: "The power to tax, once conceded, has no limits; it contains until it destroys. I was not joking when I told them to dig into their own pouches. It may not be possible to do away with government -- sometimes I think that it is an inescapable disease of human beings. But it may be possible to keep it small and starved and inoffensive -- and can you think of a better way than by requiring the governors themselves to pay the costs of their antisocial hobby."
True when Heinlein wrote it, true now.
"Oh, I'm so sorry. Forgive me. I'll try and be a tad more quiet as I desperately struggle to break free -- and save all creation!" -- Doctor Strange
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erilar
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Post by erilar »

Such a great character in such a great book. I just read it via audiobook earlier this year and loved it.

TANSTAAFL, baby.
"This enemy you cannot kill. You can only drive it back damaged into the depths, and teach your children to watch the waves for its return." - Quellcrist Falconer
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EvilGenius
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Post by EvilGenius »

setanta14 wrote:Well, I have experienced two such competitive market surveys in the last four years... Both times saw significant increases in pay for myself and my employees for the sector that we work in... Perhaps the highly unionized automotive industry is much different, but I can only speak from the telecom side.
I didn't work for the unionized side and our business wasn't covered under union rules at Ford, but yes, that would probably make a pretty big difference. :)

Out of curiosity, how many people did your pay increases effect? It certainly wasn't the whole call center, right? I didn't get two significant increases in pay due to market readjustment.
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NukeHavoc
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Post by NukeHavoc »

EvilGenius wrote:I didn't work for the unionized side and our business wasn't covered under union rules at Ford, but yes, that would probably make a pretty big difference. :)
All of the big American auto companies are struggling with the legacy healthcare and pension costs from the aforementioned golden age of company care, so it doesn't surprise me that they'd do whatever they could to reduce costs like that. Every industry and company is going to be different though.

Of course, it's not just companies. Did you see this story yesterday about the New Jersey's $49 billion tab for its state retirees?

State's tab for retirees' health care is $58B
http://www.nj.com/starledger/stories/in ... xml&coll=1

"The tab for the health insurance benefits New Jersey taxpayers have promised retired schoolteachers and government workers is about $58 billion, a seven-month analysis scheduled to be released today has concluded."

And yes, the Republicans are to blame:

"State officials had been making deposits into an account to cover health costs until 1994, but then-Gov. Christie Whitman discontinued that practice and used the $400 million that had been set aside to help balance her state budget."

TANSTAFL.
"Oh, I'm so sorry. Forgive me. I'll try and be a tad more quiet as I desperately struggle to break free -- and save all creation!" -- Doctor Strange
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EvilGenius
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Post by EvilGenius »

NukeHavoc wrote:There's a great quote from "The Moon is a Harsh Mistress" today in this WSJ opinion piece about Heinlein that sums up why nationalized healthcare bothers me so much.
Yes, in theory I think it would be great to transition to a government which was limited and had only exceedingly limited power to tax and regulate our lives.

I think there are some steps that we need to take between where we are and that goal, however.

The first step is for the citizenry to keep closer tabs on what the government does with all of our money. There's so much waste and corruption at this point that it's frankly staggering. If we could eliminate some of the waste and corruption we could actually all GET something back for our taxes (AND STILL HAVE LOWER TAXES!!) instead of just the warm-fuzzy feeling of knowing we contributed to the corporate welfare system.

Maybe we could take some of the corporate welfare payments away and funnel them into something broadly useful, like basic health insurance for everyone. Maybe it would even be good for the free market if we cut off the corporate welfare and let companies compete on their own merits. You know, like in a free market system.

Maybe we could stop giving the billions in tax breaks we gave to the oil industry which has posted more profits that anyone has EVER in the last few years. Three years ago, the oil industry as a whole posted 6 billion in profits. PROFIT. After everything had been paid for. And that's fine. I really don't like high gas prices, but hey, that's capitalism. What I HATE is that in ADDITION to their regular profits, the government GAVE them an additional 2 billion of OUR money in tax breaks, raising their yearly profit to 8 billion dollars.

Now think about that. The businesses were profitable already. 6 billion in profit after EVERYTHING was paid for. Operating costs? Paid. Depreciation? Paid. Marketing? Paid. Debt servicing? Paid. R&D? Paid. Ridiculous corporate executive salaries? Paid. Health insurance for all of the workers? Paid. Employee salaries? Paid. Quarterly taxes? Paid. 6 billion left over.

Then the Federal Government says, "Hey! Here's 2 billion back to you guys. Enjoy!" That increases the industries profit by 33%. But Social Security is going to bankrupt us in 2040.

Or how about the government subsidies to professional baseball? Shocked that the government subsidizes MLB? Well in the Great Depression, baseball franchises couldn't afford to keep operating and the government gave them some help to keep up national morale. AND THEN NEVER EVER STOPPED GIVING! That's why the federal government was asked to step into the MLB strike about 10 years ago and help settle it. Because the players were striking for more money and the government was ALREADY FOOTING PART OF THE BILL!

Giving a few billion in subsidies to MLB and the NFL and the NBL is just retarded and wasteful. Maybe the teams could run a more efficient business operation and pay some of their crybaby steroid junkies a few million less a year and we could, say, fund our schools a little better.

I do want someday for our society to be in a better place than we are now. And ultimately, I would like for there to be a very small and limited federal government.

But what I'd like in the meantime is for the government we've got, with our money that they've taken by force, to do something responsible and worthwhile with our money.
setanta14
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Post by setanta14 »

The first time was just the fraud department... So 80 people... The second time was a company wide review... The goal was to get starting salaries at the 90% penetration rate for the pay range of the position (100% being the midpoint, regardless of tenure)... Those below it were brought either up to 90%, or above depending on their past performance, and all new hires are brought in at 90% or higher depending on experience... So you start out almost half way through the range instead of at the bottom of the range (or 0% penetration).
EvilGenius wrote:
setanta14 wrote:Well, I have experienced two such competitive market surveys in the last four years... Both times saw significant increases in pay for myself and my employees for the sector that we work in... Perhaps the highly unionized automotive industry is much different, but I can only speak from the telecom side.
I didn't work for the unionized side and our business wasn't covered under union rules at Ford, but yes, that would probably make a pretty big difference. :)

Out of curiosity, how many people did your pay increases effect? It certainly wasn't the whole call center, right? I didn't get two significant increases in pay due to market readjustment.
setanta14
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Post by setanta14 »

Also, I have no idea if the review affected any other department, I can only speak for my own, all I know is that it happened company-wide... if you didn't get an increase, it probably meant that you were already being paid at the 90% penetration rate or higher for the type of work that you were doing... our department has benefited greatly from these reviews because the average salaries of fraud professionals has risen drastically over the past years, mainly due to the incredible rate at which identity theft and fraud in general has risen... also, for what we have access to, a lot of it comes down to paying us enough to keep us honest and reduce the temptation to use what we have access to for causing harm for personal gain... The prime example of this was the leak of personal information from the Lexis/Nexis company because they weren't paying competitive rates (damned french company!!!), and the lure of making a quick buck by selling info to identity thieves became too great for some of their employees.
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Post by NukeHavoc »

EvilGenius wrote:But what I'd like in the meantime is for the government we've got, with our money that they've taken by force, to do something responsible and worthwhile with our money.
If we're talking about taking money from subsidies to corporations (and, oh, let's not forget the billions going to sugar farmers and the like) to fund a single-payer healthcare system for the poor, well, then that's one thing. I may still disagree with the premise, but its funds already slushing around in the belly of the beast.

But that's not what I got from reading the original article -- she was basically saying "hey, we're spending X on healthcare now, and not everyone is covered, so let's just take X, give it to the government, force everyone into some nationalized healthcare plan, and everyone will be covered! And see, it won't cost us a penny more!"

And that's something else entirely.
"Oh, I'm so sorry. Forgive me. I'll try and be a tad more quiet as I desperately struggle to break free -- and save all creation!" -- Doctor Strange
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Lars Porsenna
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Post by Lars Porsenna »

setanta14 wrote:Also, I have no idea if the review affected any other department, I can only speak for my own, all I know is that it happened company-wide... if you didn't get an increase, it probably meant that you were already being paid at the 90% penetration rate or higher for the type of work that you were doing... our department has benefited greatly from these reviews because the average salaries of fraud professionals has risen drastically over the past years, mainly due to the incredible rate at which identity theft and fraud in general has risen... also, for what we have access to, a lot of it comes down to paying us enough to keep us honest and reduce the temptation to use what we have access to for causing harm for personal gain... The prime example of this was the leak of personal information from the Lexis/Nexis company because they weren't paying competitive rates (damned french company!!!), and the lure of making a quick buck by selling info to ident
ity thieves became too great for some of their employees.
I got a $0.56 raise!

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NukeHavoc
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Post by NukeHavoc »

As for the MLB/NFL crap, yeah, it is just that -- crap. We wouldn't have the ridiculous salaries that we do if the government wasn't paying for all these $500 million and $600 million stadiums. And Big Oil shouldn't be getting a dime from the government.

But it's not just baseball. Hell, it's not just Big Business.

How about student grants and loans? We've seen time and time again that the more money the government makes available for grants and loans, the higher tuition goes. The counter-pressure that *should* exist in higher education -- raise tuitions too high, people can't afford it, they don't attend school, prices are forced down -- evaporates in the presence of the government routinely "printing money" in the form of student loans and grants. And that's the case at private AND public schools.

How about FEMA flood/hurricane insurance? The federal government heavily subsidizes these types of insurance in storm-prone areas, and what do you know, people use it to build in those self-same areas! Then they pay them to *rebuild* in those areas! Meanwhile, if it were a truly free market, far fewer people would be able (and willing) to build in these places simply because they couldn't afford it. And of course, all this costs us in the form of taxes.

I understand the impulses behind all these programs. People often have the best of intentions, and I certainly sympathize with them. But it doesn't change the fact that government money, particularly federal money, has a terribly damaging effect on our economy, our republic, and our very lives.

I'm glad baseball still exists. I'd be happier if it had saved itself without the government's help.
"Oh, I'm so sorry. Forgive me. I'll try and be a tad more quiet as I desperately struggle to break free -- and save all creation!" -- Doctor Strange
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EvilGenius
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Post by EvilGenius »

NukeHavoc wrote:If we're talking about taking money from subsidies to corporations (and, oh, let's not forget the billions going to sugar farmers and the like) to fund a single-payer healthcare system for the poor, well, then that's one thing. I may still disagree with the premise, but its funds already slushing around in the belly of the beast.

But that's not what I got from reading the original article -- she was basically saying "hey, we're spending X on healthcare now, and not everyone is covered, so let's just take X, give it to the government, force everyone into some nationalized healthcare plan, and everyone will be covered! And see, it won't cost us a penny more!"

And that's something else entirely.
Yes, I do think they want to supplant the current system. which i think needs to happen, but maybe not with a complete government system.

I'd prefer the government use all of the wasted money to provide a safety net, and then people could purchase additional coverage.


And speaking of farm subsidies, there was a news article the other day about the farm bills paying millions to dead farmers over the last 20 years because no one bothered to audit the accounts or even cross reference the social security numbers to verify if the recipients were even still alive. Awesome.
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