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Sunday, February 25, 2007

The Biggest, Meanest, Dumbest Campaign Ever

It's official. The events of the past week make it clear the 2008 Presidential campaign will be the biggest (most expensive), meanest and dumbest campaign ever. If you ever needed proof America needs to substantially rethink our primary systems and publicly fund campaigns, you have it now in spades.

It started with Oscar week in Hollywood, which has been transformed by a change in the schedule of the California primary from a gaudy display of nutjob celebrities patting themselves on the back for a year of horrible movies to a tacky display of politicians sucking up to nutjob celebrities for campaign dollars.

California's 2000 and 2004 primaries were held in early March as part of "Super Tuesday" with many other states. One would think that would provide enough electoral leverage for California voters to extract a few commitments from candidates in exchange for their donations. However, Californians grew frustrated after the past two Presidential campaigns because their selection of candidates had already been cut by earlier primaries in smaller states. Politicians kept calling for contributions but the winners were already apparent.

For 2008, California moved its primary to February 5, 2008 so California votes had a greater probability of playing the "kingmaker" role in each party. You only have to look at the events of Oscar week to realize this is pure fantasy. By shifting its primary up a month, California didn't give itself access to a wider selection of candidates; it actually narrowed the field without casting a single ballot. Contending in a state as large as California with three large media markets is expected to cost each candidate about $6 million dollars just to show. At least one Democratic candidate, Tom Vilsack, already saw the writing on the wall and bowed out.

So what are the consequences of this broken primary system?

Conversation about the campaign of 2008 centered for the past week on who was entitled to entertainment mogul David Geffen's millions and virtually nothing about policy or strategy. (Psssssst. Hillary -- wake up.. It's David's money, he can do whatever he pleases with it. The fact he gave some to your husband eight years ago because Bill was the lesser of two evils in 1996 doesn't entitle you to his contributions when you decide to run.)

On the February 25, 2007 edition of Meet the Press, approximately 19 minutes of the show were devoted to an interview with Senate Armed Services Chairman Carl Levin. The other 40 minutes were spent analyzing the 2008 presidential campaign / horse race. That's a lot less work for Russert and his talking head guests. The election is twenty one months away, no one knows what will happen, it's impossible to predict so no one will be held accountable for being wrong. Perfect. Roll the ADM ad…

As summarized earlier, the 2008 race will easily be the most expensive presidential campaign ever by a wide margin. The artificially high entry hurdle into the campaign imposed by the schedule will accelerate the withdrawal of candidates who may lack the charisma to charm 121 million voters but may still have ideas worth debating. With the deck cleared of candidates with ideas left undebated, all that money left over will much more likely be spent on attack ads rather than clear communication about what each surviving candidate proposes.

By the time of the election, Americans will be thoroughly disgusted with all of the candidates and will likely know nothing substantive about their ideas or their backgrounds and the flotsam that will float into power with them should they win. The winning candidate will enter into office owing huge favors to special interests and will likely be collecting donations for the 2012 race at the entrance to the Inaugural balls.

The California example proves that attempts to tweak the primary schedule cannot solve the problem. If small states hold their primaries first, it is easier for marginal candidates to get their message heard and receive consideration, but agendas can be skewed by issues important to the early states (like the classic ethanol debate so dear to the heart of Iowa caucus voters.) If large states go first, the agenda can be skewed the other way.

Opponents of campaign finance reform would argue that candidates unable to raise $6 million to play lack the ability to win anyway, so what's the harm? Besides the tunnel vision on ideas and solutions, the other danger of a front-loaded system is that any candidate thinking of running has to spend even more time raising money earlier than ever in order to compete. The pressure is so immense that only about three weeks of focused work were extracted from the new Congress before virtually all attention of the politicians and the press has shifted to the 2008 race. The November 2008 election is TWENTY ONE MONTHS away and the press is using all the oxygen in the room on he said / she said commentary about fundraising issues. More importantly, that's twenty one months of politicians holed up with people with deep pockets, whether they be the movie star variety or corporate variety, rather than talking with the rest of us who just want to know why the Pentagon squandered $10 billion in cash in Iraq or why the Coalition of the Willing has collapsed into the Coalition of the One.

One might also argue that the current schedule of primaries over 6 months acts as a mental fitness test for all candidates so American voters can see the candidate perform under stress in the spotlight for an extended period. This might have more merit if more candidates could afford to stay in the race for the entire six months despite an early setback or two and run the whole race. As it stands, the current system is simply collapsing around the biggest early winners then letting them duck serious debate while hording cash for the attack ads in the general election.

How would publicly funded campaigns help?

Public financing should not prevent individuals from spending as much of their own money getting their message out on any media they choose. That's a limit on free speech and is of zero help or interest. However, providing public financing to candidates meeting certain minimum criteria (signatures of registered voters, public audits of their campaign books to prevent fraud) would allow more candidates to maintain a place on the rostrum before the primary election to avoid the "tunnel vision" effect induced by the current primary schedule. Public financing would also help limit the time candidates need to spend with special interests raising private funds. For candidates already in office, this would give them less reason to choose fundraising over their job and less excuse for some of the votes they cast, some of the meetings they didn't attend, and some of the briefings they didn't read.

I've suggested before that part of this public funding could be provided in the form of an extensive series of mandatory public debates addressing questions raised by citizens, not by the media. Front runners would not be allowed to skip the debate and stonewall their way through the campaign by sitting on piles of cash. They may still have the cash and spend it as they wish, but they would still have to stand in public in an unrehearsed setting and answer questions directly from voters and prove their worth.

Unless all 50 states are willing to adopt a single national primary to eliminate the skewed outcomes of a staggered schedule, public financing may be the only way to help level the playing field and eliminate the corrupting influence of the huge amounts of money required to play the current schedule.

Thursday, February 22, 2007

Walter Reed is on 16th Street

http://www.pbs.org/newshour/bb/military/jan-june07/walterreed_02-22.html

BRADY VAN ENGELEN: Walter Reed is on 16th Street. So is the White House. I mean, it's in his backyard. I mean, do you think this stuff isn't happening in Ravenna, Ohio, you know?

I mean, what about the care there? You know, what about the care at other military installations, as well? This stuff happens all across the country. It's not just Walter Reed.


========================

That's the comment of one soldier who recieved treatment at Walter Reed and has talked with other soldiers who have experienced the same neglect at other facilities throughout the country. He was interviewed by Judy Woodruff on The NewsHour on PBS February 22, 2007.

Another soldier interviewed in the story stated he was given a "choice" of inpatient or outpatient treatment six days after arriving at Walter Reed. His ailment? Having a titanium plate inserted in his head after having part of his skull blown off six days earlier in Iraq. Wanting more of a chance to see his family and likely zonked out of his mind on painkillers and thus in no shape to make informed decisions about treatment options on such a serious head injury, he chose outpatient care. The outpatient facility was three blocks away from the inpatient facility. He had to take a CAB. Because the other choice was to WALK to the other facility.

America, is this how we "support the troops"? Tell a soldier 6 days after having PART OF HIS SKULL SHOT OFF to find his own ride to the re-hab center three buildings away?

Given the number of head injuries, amputees and PTSD patients, this is just the tip of the iceberg.

This is an absolute disgrace.

I wish every one of these returning soldiers could come home safely and serve a term in the House or Senate and replace every one of the elected cowards we currently have who play war with other people's sons and daughters but lack the courage to even tell the American public how much this war has already cost us.

Tuesday, February 20, 2007

The Real War on Terror?

The PBS show Frontline is running a four-part series of programs on the changing relationship between the Presidency (the Bush Presidency in particular, obviously) and the press and the relationship between the press and the country as a whole.

Anyone with access to a big enough video library can compile sound bytes that seem to follow a story line. However, it's scary to hear how precisely on-message and choreographed they sound when you hear commentary from the Bush administration and the press at key milestones during the Bush presidency such as the energy task force of 2001, the WMD hysteria leading up to the Iraq invasion in April 2003 and the domestic spying story broken by the NYT.

The Frontline piece makes some pretty basic points:

1) The penchant for secrecy is a function of Bush's personality and of those with whom he surrounded himself, not the war on terror. The Administration began "fogging the lens" (the one we look in through and the one they look out through) the minute they took power. Ashcroft initiated a 180 degree change in policy regarding information sharing that basically changed from "share unless there's a good reason not to" to "unless we're legally required to, DON'T share any information." Bush signed an executive order extending the secrecy over archives of the Reagan administration that were set to be released in 2001.

2) The Bush Administration has been quite willing to essentially terrorize the press to stifle reporting. It threatened to jail reporters over leaks about the Balko baseball drug investigation that in fact came from the defendent's own lawyer. It rattled espionage laws over the head of the publisher of the NYT to try to squelch their reporting on NSA spying mechanisms.

By the time you finish watching this second show, a bitter irony becomes very apparent. Dick Cheney famously complained of the "chilling effect" that disclosure of his "energy task force" membership would have on the ability of the president (any president) to obtain advice in policy making. Essentially, the argument was George Bush -- man of letters, strategic thinker-er extraordinaire --would be hamstrung for creative input in solving our problems by a derth of experts willing to sign the official White House in/out log in exchange for bending his ear.

Uh huh.

Of course, we now know this administration not only did NOT have a variety of opinions coming in, they began erecting barriers from Day One to ENSURE no diverse ideas got in to distract them from their grim, bitterly cynical view of the people they were elected to govern and the world at large.

Kinda makes you rethink the whole scope of the war on terror. From the Bush Administration's perspective, we're all in the crosshairs. We've been there since January 20, 2001.

Sunday, February 18, 2007

Earn Your BS in Corporate Communication

Anyone working in the past ten years has first hand experience with the failure of the American educational system to properly train wage slaves (strike that -- I mean "employees") for productive careers in Corporate America. If you or someone you know is considering incurring tens of thousands of dollars of debt pursuing a college degree in such "fuzzy" fields as medicine, physics, chemistry, computer science or law, you should consider instead study in the field of corporate communications.

Earning your BS in Corporate Communications will provide not only what might be the only skill you need, you'll likely find it’s the only skill Corporate America actually allows employees to practice. Formal study of the discipline is relatively new but millions of subjects have been exposed to field tests involuntarily for at least a decade. The fundamentals of corporate communications are summarized in a useful dictionary format below. However, two caveats are worth mentioning about the list.

First, it's normally bad form to define a buzzword or catchphrase by using other buzzwords or catchphrases in the definition. Of course, that assumes your goal is to clearly communicate meaning. Of course, clear communication is exactly the OPPOSITE goal of most efforts in corporate communications. The goal of corporate communications is to AVOID communicating anything that could come back to haunt anyone while making everyone feel sophisticated about their vocabulary and public speaking skills. The more buzzwords used in a single sentence or paragraph, the better.

Second, traditionalists might normally argue that any program in language or communication should be categorized as a B.A. degree since there's certainly nothing scientific about this field but after reviewing this helpful introduction, even traditionalists were convinced the B.S. designation was much more appropriate.

The terms are grouped in categories based upon your place in the corporate pecking order.


PROJECT MIS-MANAGEMENT

The terms in this category are essential in following the daily status of work within any large company. These terms are usually spoken with arched eyebrows by those at the worker bee level of a company. When you can say more than a few of these without an arched eyebrow or if you actually beginning seeing meaning in these words, that's a surefire sign you are promotion eligible.

action item -- Action items are the building block upon which all pointless, off-schedule projects are based. The term "action item" was preferred by 8 of 10 project managers over the term "problem" since the very term implies movement and progress, rather than a scenario someone should have considered but no one identified. Some people use the term "action item" and "takeaway" interchangeably. SAMPLE USAGE: Wayne, can you take an action item to talk to the business owner to figure out what they want?

issue -- An issue is an action item looking for an owner. SAMPLE USAGE: Hey, the engineers can't get started with design until the product manager finishes writing the product description, can you run with that issue?

owner -- Owners work action items until they become problems again, at which point requests are made for a change in the scope document. Owners typically become owners of action items by being over-assigned with action items which prevent them from attending meetings to fend off being assigned additional action items. SAMPLE USAGE: All 335 of the action items have owners so the team is making good progress.

scope document -- Novices in the field of corporate communications frequently mistake a scope document as a clear-cut description of the range of work that will be completed by a project. This is an easy rookie mistake. The REAL purpose of a scope document is define reality by defining what ISN'T reality so as to provide air cover when the client discovers the project didn't address the one problem they really wanted solved. If it isn't in the scope document, you're off the hook. Of course, it takes years of experience to grasp the subtle difference between a scope document that describes what a project will address and a statement of work that describes exactly what a project will address. SAMPLE USAGE: I know the CEO is disappointed in the results but we carefully reviewed the scope document for the project and a login page for the system was not explicitly listed as a requirement for any of the phases.

statement of work -- A statement of work is typically an attachment to a contract used to outsource a critical business task to an army of consultants. For outsourced projects, there is perhaps no more important task than nailing down a good statement of work. Experienced professionals know that a properly written SOW can actually produce the finished project if the SOW and the accompanying scope document are left alone in a conference room with the right music and mood lighting. SAMPLE USAGE: The project is off to a great start. We've gained buy-in from the steering committee on the revised statement of work only eight days behind schedule.

deliverables -- Deliverables are perhaps the key difference between a scope document and a statement of work. A deliverable is best defined as a specific description of something on the project that won't be done on time. Deliverables are listed within a statement of work and typically tied to payment terms so both the company and its vendor are clear on why payments under the contract will be late. Skilled vendors often focus on creating artificial deliverables besides an actual working system to ensure they get paid for SOMETHING even if the company decides the actual solution required was outside the scope of work. SAMPLE USAGE: I checked with the steering committee to ensure buy-in on the changes in schedule for the deliverables under phase two of the statement of work.

track / phase / release -- These words are often used interchangeably by project managers and developers to convey a sense of structure to a project that in fact is completely devoid of any plan rooted in reality. Particularly adept practitioners of corporate communications will actually use these words TOGETHER to further nuance the degree of precision on exactly where a project doesn’t stand. These essentially serve the same purpose as mile markers on a highway when you are lost. They don't help identify where you are or even the highway you're on, they simply convey a sense of motion or progress and tell you you're moving farther away from the point at which you last knew where you were. -- SAMPLE USAGE: I think we can more readily achieve the goals of this enhancement if we split the next release into phases and split that first phase into two tracks so we can leverage our resources more effectively.

roadmap -- A roadmap is typically a single piece of paper that serves as the sole "baton" of communication between the project team and the steering committee. Apparently, the purpose of the roadmap is to eliminate enough detail from any communication between these layers to provide each layer plausible deniability that they were given enough insight into what the other was asking so no one is truly at fault when the project fails. A good roadmap boils down all of the tracks, phases and releases into a simple three color red/yellow/green scheme that shows the project miraculously being completed eight months from now despite all interim stages being bright red. SAMPLE USAGE: We'll have to update the project roadmap to reflect the latest change in scope resulting in the annual mid-summer budget fire drill.


SPORTS / MILITARY / ENTERTAINMENT ANALOGIES

A common theory states that the executive ranks are heavily populated with people with backgrounds in athletics or the military because those fields instill leadership and teambuilding skills which prove highly useful in business. That theory SOUNDS good, but perhaps the real reason athletics is such a useful background is that other than the 1972 Miami Dolphins, most sports teams are quite accustomed to losing on a consistent basis and many "star" players quickly seek free agency the minute they're lucky enough to play on a winning team under the delusion they won the entire season themselves.

Regardless of the reason for the popularity of these analogies, employees hoping to take it to the next level in their career must demonstrate mastery of all of the following terms. You have ZERO chance of being invited to steering committee meetings on a regular basis if you can't throw these terms around like a pro.

blocking and tackling -- This term is used invariably to describe work that is 1) boring and routine, 2) critical to the business 3) poorly executed within the company for years. In other words, these are the business equivalent of why the Arizona Cardinals have never seen a second NFL playoff game. When beginning an expensive, complicated project that requires lots of blocking and tackling to succeed, it's important to cite that blocking and tackling as a prerequisite. Since the lack of blocking and tackling is a likely reason why a big project is needed, identifying that prerequisite up front is an ideal way to deflect any doubts about whether the project can succeed. -- SAMPLE USAGE: This phase of the project is so incredibly complicated, if we can pull THIS off, getting the project out to the user community is just blocking and tackling.

tee it up -- The most common golf analogy used in business, the phrase "tee it up" is used by golf nuts tired of using the term straw man. Both refer to the process of documenting a problem or proposal (usually something obvious but unaddressed for years) for presentation to senior management but doing it in a way where you don't have to take ownership of the issue until it is clear at least one other person in the company agrees with you. SAMPLE USAGE: (Bob) You know, I've been thinking… Our hold times in the Center of Excellence have skyrocketed over the last year. I know this idea is really thinking outside the box but I think we ought to hire more service representatives to answer the phones." (Bill) Hey, great idea Bob, why don't you tee that up in the next steering committee meeting?

air cover -- In military situations, air cover allows ground troops to focus on terrestrial threats without worrying about being strafed out of nowhere by enemy airplanes. Curiously, in corporate communications, air cover is required almost exclusively to protect ground troops from being strafed by friendly fire from their own senior management. Air cover is an absolute requirement any time surprising information (delays, failures, cost overruns) is to be communicated. -- SAMPLE USAGE: Hey, before we status the steering committee on the delay on phase 2, I'm going to put a call into the SVP to explain the slip and get some air cover. If I go in without that, that could be a real CLM.

bird dog -- When your firm is unwilling to hire enough qualified employees or contractors to complete all of the deliverables in a project's statement of work, your only alternative to get your action items worked is to bird dog the owners to put your work ahead of the twenty other task they have to fill their 60 hour week. In other words, nag. SAMPLE USAGE: The project's only four weeks behind schedule but I think we can still deliver on time if you can just bird dog the remaining issues and get some focus on them.

rock star -- Use of the term rock start has skyrocketed in popularity in recent years. It's intended as a supreme complement to the folks who can be counted on to get things done. Since in fact no rock stars work in corporate America, you can be assured that your "rock stars" ARE useful employees but they are being hampered from achieving true rock star levels of achievement by the rest of the staff around them. It's all relative. In an organization filled with people barely able to pronounce the word "guitar", the one guy you have that knows the chords and first two bars of the guitar solo in Freebird truly is a rock star. SAMPLE USAGE: Did you see those reports Dave generated yesterday? They summed up all the monthly numbers and even broke them down into bar charts. It's like he had a program to do it. That guy is a ROCK STAR, man!


TALKING ABOUT THE COMPANY

If you can't be precise about WHAT isn't getting done, you can at least be more sophisticated when identifying WHO isn't getting the work done.

organization -- Experts in corporate communication use the term organization when referring to groups of employees whose job duties are so poorly defined and ever-changing that the only concise way to identify them is as Joe Blow's organization. This of course gives one no clue as to WHO is actually capable of resolving a question but at least a name can be put on the action item list on the project plan. -- SAMPLE USAGE: That's an important issue, I think we should tee that up with Joe's organization.

enterprise -- When explaining your project's goals to senior management, it's imperative that you are able to explain its cross-functional impacts to the entire enterprise. Use of the word "enterprise" instead of company is intended to convey a complex, carefully designed, well-functioning machine, much like the U.S.S. Enterprise with "go-to" guys you can bank on in the engine room, the sick bay and the bridge. Of course, this description bears no resemblance to YOUR company. -- SAMPLE USAGE: This project provides a lot of cross-functional synergies across multiple organizations within the enterprise.

steering committee -- Any large team working on any large project in any large company can ill afford to operate without at least one steering committee providing buy-in and air-cover to the effort. Particularly common in companies where middle and senior management are at least fifteen years removed from any hands-on familiarity with the project being worked, steering committees not only help but also ensure that when the project falls months behind, the steering committee members have adequate time to be confused about more important issues to explain why the project is farther behind than it was on Day One. Steering committees in business are about as effective as a steering committee on your family's cross-country vacation road trip. -- SAMPLE USAGE: I think we need to take an action item to review the roadmap with the steering committee before committing to the resource plan.

Center of Excellence -- Companies with huge customer bases and poor business processes have adopted this term almost exclusively for use in conjunction with another all time classic corporate oxymoron -- Customer Care. If you're able to say the term "Customer Care" with a straight face in the context of a company that designs all of its systems to avoid allowing customers to speak to humans when trying to spend their money with your company or (heaven forbid...) actually get what they already paid for from your company, it's a very small step to rechristen the actual call centers focusing all of this customer dissatisfaction in one place as "Centers of Excellence." Note that proper usage dictates the capitalization of the term. It's a title only, it's not intended to actually be descriptive. It's still the same call center that lacks the staff to handle the flood of complaints from your customers. -- SAMPLE USAGE: Hey, maybe we should take an action item to assemble some training for the Center of Excellence a few days before we launch the new product?


ADVANCED CYA

If Eskimos truly have over a thousand words for "snow", they have NOTHING on the corporate world's inventiveness in creating terms in the area of CYA.

buy-in -- Obtaining buy-in for a major project from senior management across the enterprise is crucial for career survival. Solutions to projects that require buy-in are typically about as difficult as the solution to Fermat's Last Theorem and are thus highly prone to failure. When that failure comes, having a list of people who provided buy-in is like a get out of jail free card. If everyone signed on the project, it was clearly a vexing issue immune to simple, inexpensive solutions and since no one was willing to fund the proper complex, expensive solution to the problem, no one can be faulted. See how that works? SAMPLE USAGE: I think we have buy-in from the client organizations about the change in scope on the first phase of the project so we can proceed with the new roadmap.

CLM -- An acronym for "career limiting move", this term has rapidly evolved to being used almost exclusively for situations where a diligent, competent employee reaches a point of peak frustration with the status quo and actually speaks the truth to senior management. Months or years of isolation from the truth weakens executives' natural protections against the real thing so large unexpected doses can sometimes be fatal. If it isn't fatal to the executive, it almost always winds up being fatal for the career of the person delivering the dose. -- SAMPLE USAGE: Hey, did you hear about the steering committee meeting yesterday? Joe actually told the VPs the reason the project is late is because they've changed the goals three times after the statement of work was signed before even the first batch of deliverables could be completed. Talk about a CLM!

straw man -- For managers isolated from reality by years of attending steering committee meetings, throwing out ideas off the top of their head in a meeting with underlings can be potentially embarrassing. Use of the term "straw man" is ideal in these situations because it serves two purposes. First, if someone shoots down the idea, you can avoid divulging the fact that it was the only idea you've proposed in the last five years and that it took you the past three months to formulate, thus avoiding extreme embarrassment. Second, putting an idea out there as a "straw man" is a great way to act like you're a team player, trying to spur "innovation", trying to get people thinking outside the box. -- SAMPLE USAGE: This is just a straw man proposal, but maybe we can address that issue by rewriting the app using a client / server paradigm.

thinking outside the box -- This phrase is frequently used to exhort teams to "think creatively" or avoid ruts of old ideas that produced the current problems facing the organization. Completely lost on the people who use this phrase is the fact that "thinking outside the box" accomplishes very little with people starting with a very small box. -- SAMPLE USAGE: Hey, that new plan to improve customer satisfaction by installing more IVR capacity to avoid talking to customers is really thinking outside the box.

piggy-back -- This phrase is used by cowardly managers to attach additional comments on to larger, more controversial comments made by someone else who is either honest enough or disenchanted enough with the current situation to actually speak the truth in a meeting (see CLM). -- SAMPLE USAGE: Excellent point Joe, our customers DO hate us. Let me piggy back on that by summarizing some market research that we did that indicates that 33 percent of our customers have actually contemplated discharging a firearm while dealing with our "Center of Excellence."

space -- This term first came into popularity during the Internet bubble when marketing professionals challenged with the task of explaining to would-be customers exactly what their product did began leveraging this word to save space in PowerPoint presentations. Whenever you see this word used, it actually translates as "a product with no proven business model aimed at other businesses who themselves have no proven business model". You can see how "space" is so much more compact and friendly on the slide. -- SAMPLE USAGE: I think we're struggling because we haven't chosen a best-of-breed solution in the application management space for use within our enterprise.

problem space -- After witnessing the success of marketing types with the generic term space, many technical types adopted the word when attempting to precisely define problems they were unable to solve. After all, it's clearly preferable to have a more exact picture of the problem if you've determined you can't solve it. -- SAMPLE USAGE: I understand the organization desperately needs that system replaced but my team doesn't have the resources to properly address that problem space.

solution space -- This is a companion term to problem space and is typically used when you DO clearly understand the problem to be solved but also clearly understand you have none of the skills needed to solve it. Describing the problem as something that doesn't fit your solution space sounds so much preferable to saying "my last program was HELOWRLD.BAS in BASIC in 1983 and I have no idea how to create a user satisfaction survey on a web server." -- SAMPLE USAGE: We have a great handle on the design issues but it's not a good fit for our solution space.


PHASE IV TERMS

Due to changing priorities, the following terms were taken out of scope for this project and referred to the steering committee to place on a future roadmap.

take it to the next level

peel the onion

work plan

synergy

cross-functional

resources

problematic

Don't go there

Current state

long pole in the tent

push the envelope

Sunday, February 11, 2007

Healthcare: Right or Wrong?

Members of Congress and virtually every 2008 Presidential hopeful have begun beating the drum for vast changes to healthcare and insurance coverage. Having 536 politicians attempt to solve a $1.9 trillion dollar problem (#1) is worrisome enough. What's worse is all seem bent on solving the wrong problem -- easing the burden of the cost of healthcare via universal coverage or token tax deductions.

Define a problem incorrectly and you're almost guaranteed to come up with the wrong answer. The problems of healthcare quality, availability and cost are related but SEPARATE problems. The debate over ways to address these problems is better served by first considering a few key questions:

#1) Is healthcare a "right"?
#2) What should the real goals around healthcare be?
#3) Does insurance address a need or subsidize a problem?
#4) What's the prescription, then?


Is Healthcare a "Right"?

Barack Obama seems to be the first high profile politician who has explicitly used the "R" word in relation to healthcare. His website clearly states:

…health care should be a right for everyone, not a privilege for the few. (#2)

As of February 2007, others have avoided the "R" word but have proposed (Schwarzenegger in California) or actually enacted (Mitt Romney in Massachusetts) large-scale restructuring of insurance plans at the state or national level, pretty much treating healthcare as a right or at least an irresistible sop to the voting public.

In my view, a "right" is something you possess simply by being born that imposes no costs on others for you to maintain and provides value to you and others by you continuing to possess it. Life, liberty and the pursuit of happiness are the most obvious and useful examples.

Healthcare definitely does not satisfy this definition at the philosophical level. I was not born knowing how to manufacture blood pressure medicine or perform open heart surgery. No one else was born with these skills either, meaning any person WITH those skills expended their own effort and sacrificed other opportunities to acquire those skills. Therefore, I don't have any "right" to consume a good or service produced by someone else unless they provide it of their own free will.

The flawed logic of treating healthcare and insurance as a "right" is more obvious after considering a simple economic example. Imagine a rare fatal disease that affects 0.01 percent of the population. Imagine a drug that cannot cure the disease but can completely eliminate its symptoms if taken for the rest of the life of the patient. Suppose the drug costs $20,000 per year. Do the patients afflicted with this disease have a "right" to this medication, even if they cannot afford the $20,000 per year for the rest of their life?

Before you answer, imagine an alternate case involving a drug developed to halt the damage done by a disease that helps fifty percent of the population (maybe a drug that lowers cholesterol, prevents heart attacks and blocks adult ears from hearing Britney Spears music). That drug also costs $20,000 per year for the rest of each patient's life.

If the population has 300 million people, the cost of covering drugs for the rare disease would cost $600,000,000 for the 30,000 patients yearly. Six hundred million is a lot of money but for a country with a $12.9 trillion dollar economy and a $2.6 trillion government budget, it's a rounding error on a rounding error. The cost of the drugs for the common disease on the other hand is $3 trillion. Uh oh. That's more than the entire federal government budget.

Is a "right" only a "right" when we can afford it? Clearly, that's not a sound, logical definition of a "right". A "right" that we cannot afford to provide to all citizens isn't a right but a different type of problem requiring a different kind of solution. It's an important problem and one worth solving, but labeling it a "right" is likely to confound the problem rather than clarify it.

What Should the Real Goals Around Healthcare Be?

With a small handful of exceptions that often involve tort law reform, most proposals for "solving" the healthcare crisis jump straight to easing the burden of the final cash cost of care and drugs paid out after care is already needed. While costs are an easily measurable part of the problem, they are primarily an OUTCOME of the underlying problems, not a CAUSE. Any proposals to reduce the size of our healthcare problems should first start by thinking of the GOALS of any proposal. The goals of a revamped healthcare system should be:

1) reducing the need for healthcare
2) improving the quality and timeliness of treatment
3) reducing the inefficiencies of administering insurance benefits

These sound simplistic and obvious but merit explanation.

Reducing the need for healthcare -- Americans don't want really want free heart surgery or free Plavix prescriptions for life. They want health, not healthcare. In many cases, it is far more economical to identify ways of discouraging behavior that harms health than it is to treat problems after the fact. What does it cost to NOT sell children 300 calorie soda every day for six years of middle and high school? What will it cost to treat the problems from skyrocketing levels of adolescent diabetes and obesity?

Improving the quality and timeliness of treatment -- The variety and complexity of modern medicine is simply astounding at both the scientific and practical level. However, so is a modern automotive assembly line or electronics manufacturing plant. Given the share of GNP spent on healthcare, the degree of modernization in hospitals, our main "manufacturing" plants for advanced healthcare, would astound any process design engineer for an auto maker or manufacturing firm. If you talk to any patient or their family in a hospital, you can usually hear of a story of a patient getting left outside a lab room in a hall on a wheelchair or gurney as they wait unattended for their transport tech to arrive to wheel them to their next test or back to their room. Do you think Toyota loses bumpers for Camrys in random locations on the factory floor? If patients get lost between tests, you can be sure test results, doctors' orders, and observations about patient status for shift changes are also getting lost, directly affecting care.

Reducing the inefficiency of administering insurance benefits -- Note that this goal isn't aiming at reducing or capping the cost of actual care provided. Imposing arbitrary caps on the price of services delivered or drugs / devices provided only widens the influence of the two groups least qualified to judge what's appropriate -- the government and big insurance companies -- and is likely to limit supply. Instead, focus should be applied to the mechanics of insurance itself -- applying for it, submitting claims, verifying actual expenditures for claims and handling malpractice suits against doctors and hospitals.

Does Insurance Address a Need or Subsidize a Problem?

Skyrocketing healthcare costs and 50 years of employer-provided insurance have blurred healthcare and healthcare insurance into a single monolithic "good" in the eyes of individuals. Insurance coverage and healthcare are not the same thing. Thinking about them separately allows important issues to be addressed that can improve both areas.

The purpose of insurance is to protect individuals from large financial risks whose occurrence cannot be accurately predicted at the individual level but CAN be accurately predicted over a larger group over a larger period of time over a larger geographic area. When you buy a car, there are costs associated with your purchase that are quite predictable (property taxes every 12 months, $29.99 oil changes every 4000 miles, tires every 40,000 miles or so, timing belts every 60,000 miles or so, etc.). The likelihood of the car being damaged by hail or totaled in an accident is far more difficult to predict at the individual level but can be accurately predicted over a population of one, ten or on hundred million drivers. When you buy a car, no one offers you insurance for oil changes, tires and timing belts because the costs are small, predictable and directly related to the normal use of the car. In situations with predictable and directly related costs, the overhead of formalizing coverage, collecting premiums, analyzing claims and cutting checks greatly exceeds the value of the "protection" so it is cheaper to pay those expenses directly.

No one has trouble understanding why car insurance doesn't cover oil changes, but the lesson has been completely forgotten in the world of healthcare insurance. For most policies, insurance attempts to cover virtually ALL expenses after token deductibles. However, the "predictable / directly related" test for insurance should apply equally well to healthcare as it does cars. For example, having a child involves a multitude of very predictable expenses:

* pre-natal doctor's visits ($150 x 5)
* delivery and possibly 3-5 days of hospital stay afterwards ($10,000)
* newborn pediatrician visits from delivery to age 2 ($150 x 12)
* yearly physicals from age 3 to 18 ($150 x 15)
* probably three different child car seats as the child grows ($600)
* immunizations (???)
* routine dental cleanings twice a year for 18 years ($240 x 18)
* yearly routine eye exams for 18 years ($120 x 18)

That's $21,880. And these are just some of the expenses if you have a healthy child that never sprains an ankle, never gets an inner ear infection, and never needs braces or eyeglasses. Although these items are expensive, there's very little "risk" involved with them per se, either in their timing or level of expense. If you have a child, YOU WILL INCUR THESE EXPENSES. However, other than the car seats, most of these costs are covered by insurance plans. Why?

Two reasons. Large businesses spent the last fifty years gradually raising expectations of included care because initially they could afford it and eventually because the practice became institutionalized, both through union contracts and benefit plans for non-union labor. Trends over the last fifteen years have exposed American business to competition from countries with lower costs or non-existent coverage at the same time the variety and cost of covered care has mushroomed. Reversing expectations has proven very difficult, though most Americans are finding employer contributions shrinking each year.

These predictable expenses are also covered because they have become an implicit subsidy for families, much like the child income tax deduction. Obviously, if would-be parents knew they would bear the full cost of each child directly, many might opt to have fewer children or no children at all. For a society and economy that depends upon a growing population, it's certainly likely that the government would pursue policies to enable the desired level of population growth. However, in the case of healthcare, it is apparent that subsidizing the routine portion of medical expenses has worsened the problem.

I've written previously (#3) about a culture of "faux conservatism" that develops when people demand the "freedom" to make bad decisions while the true cost of those bad decisions is essentially subsidized by bad public policy. There is probably no area of policy where us true, rugged, individualistic Americans need to either put up or shut up than healthcare expenses. If you don't want the nanny state limiting your ability to buy cigarettes or eat trans-fat loaded food from restaurants or your grocery store, then why should the nanny state cover any of the cost of your triple bypass you'll need forty years after you begin consuming those products of your own free will?

What's the Prescription?

It's impossible to outline specific solutions to such a vast problem in bullet form but it is possible to identify the key areas on which solutions should focus.

Separate Routine and Emergency Care Models -- The current all or nothing coverage model offered by most insurance companies produces two key problems. If I go to the dentist twice a year ($240) and to the doctor once a year ($150) for a physical, there's no "risk" or uncertainty to those expenses as cash flows to me or my insurance company. In an efficient market for insurance, any company providing "coverage" for those expenses for less than $390 per year would go out of business and any company charging more would lose customers until they lowered their price to $390. Payment for these routine expenses via insurance instead of cash obligates my doctors to spend additional time having nothing to do with care filling out claim forms so a $390 expense becomes more than $390 after paying that extra "insurance inefficiency" tax.

The real problem with including routine expenses in an insurance model is that it clogs an already-inefficient healthcare and insurance system with more work, distracting the system from more efficiently addressing emergency issues more suited to an insurance / risk-mitigation model. This is partly why it costs $5.00 per pill to get an aspirin in a hospital. Even if YOUR stay is going well without surprises or complications, you pay astonishing rates for routine tasks because procedures don't always go well across all patients. This "cross-subsidy" approach is useful in some circumstances but not if the subsidy is masking the true cost of care from being associated with its true cause. A great example would be that $5.00 aspirin helping to defray the cost of using the ER to treat gunshot wounds for uninsured patients who shouldn't have been shot in the first place. Instead of making it easier for me to afford the inflated $5.00 aspirin, that money should instead be targeted at reducing the primary problem (violent crime in this case) instead of a secondary effect (expensive aspirin).

Standardize Healthcare Application / Payment Systems -- The variety of forms and rules used to apply for coverage and process claims combined with hundreds of major insurance companies and tens of thousands of hospitals and practicing physicians results in a grossly inefficient system that adds expense and harms the quality of care by focusing time on claims instead of care. Standardization of forms allows standardization of systems that process those forms which aids competition between insurance providers for customers and competition between vendors designing IT systems handling all of this work. President Bush actually suggested something along these lines in the 2007 State of the Union address. (#4) I also suggested this tactic in 2005. (#5)

Standardization also has the potential to provide other benefits as well. Standardization can help small business by reducing the cost advantage big business gets by buying insurance for thousands at a time instead of tens at a time. The combination of streamlined claim systems with a reduction in routine expenses going through the system may also make it possible to reduce the amount of systematic fraud conducted by hospital chains and nursing homes. Uniform claim processes make it easier to spot unusual patterns and reduced volumes allow closer scrutiny of the claims that are submitted.

Rationalize Tort Law and Quality Control -- A common explanation for the high cost of health care is the jackpot mentality of lawyers and plaintiffs attempting to collect outrageous settlements for botched surgeries or just bad outcomes in bad situations. Skyrocketing malpractice insurance rates directly increase the cost of care provided but also indirectly raise it as well by reducing the supply of doctors willing to practice.

One solution frequently proposed involves capping payments for malpractice judgments. This makes a lot of sense with one major caveat. Doctors and HMOs that employ them should not be granted caps against damages caused by malpractice without drastic improvements in the transparency of statistics about basic care provided by individual doctors and hospital facilities. Numerous states have pursued uniform disclosure of infection rates since infections alone account for nearly 90,000 deaths per year. (#6) That's 90,000 people going into a hospital and dying of something unrelated to why they entered the hospital. There are numerous aspects of practicing medicine that do not lend themselves to simplistic time/motion studies like a auto factory but there ARE lessons that can be learned from watching and publicizing outcomes to isolate bad habits or bad doctors. The medical community should get no relief on tort reform without consenting to more open disclosure about outcomes and the competence of individual doctors.

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#1) http://www.nchc.org/facts/cost.shtml

#2) http://obama.senate.gov/issues/

#3) http://watchingtheherd.blogspot.com/2006/07/losing-elections-faux-conservatism.html

#4) http://www.whitehouse.gov/news/releases/2007/01/20070123-2.html

#5) http://watchingtheherd.blogspot.com/2006/05/problems-with-economy-fixes.html

#6) http://www.hospitalinfection.org/infectionfacts.shtml

Thursday, February 08, 2007

A Solution to the Air Pelosi Problem

Ever the problem solver, I have identified a great solution to the entire "Air Pelosi" problem.

If Nancy wants to drop in on the local rotary club or catch her favorite Grateful Dead cover band back in SF, we the tax payers should be more than happy to pay for a first class ticket on the next available "direct flight" from DC to SF and back.

Everyone wins.

No incremental expense for a crew and fuel for a military flight.

The public gets a more useful indicator of the real terror threat level. If Nancy doesn't want to fly, we might not want to either.

Nancy gets more of a chance to meet the public. In the security line for 20 minutes. At the gate waiting an extra fifty minutes for the plane to arrive. On the plane waiting for the jet to sit out a six hour delay after boarding without letting people deplane. Waiting for her bag at baggage claim that will never show up cuz it got shipped to SEA-TAC instead of SF.

Nancy even gets to think she has a direct flight. Until the gate agent provides helpful information to the woman sitting next to her that is boarding the same flight at Reagan International who is getting off at O'Hare because a "direct" flight isn't really a "non-stop" flight. It just means you don't have to switch planes between A and Z.

The whole stink over "Air Pelosi" is a great microcosm of the real problem with government. Our entire system of government was structured to avoid making ANY ONE member indispensable. Politicians, GET OVER YOURSELVES. Though some of you have grown fat enough off shady book deals, speaking engagements and campaign funding shenanigans to produce your own micro-gravity, in the larger social scheme of things, you're just not that important. Especially given how little you accomplish.

Drive your own fat butts to the Hill everyday. Drive to that next campaign appearance in a car or cab and sit in traffic like the rest of us. Book your own flight and suffer through moronic TSA security screenings like the rest of us in steerage and maybe you'd figure out how to do something constructive about energy policy, public transportation and homeland security.

Monday, February 05, 2007

War Detractors Offer No Ideas

http://news.yahoo.com/s/ap/20070205/ap_on_go_co/us_iraq

"I don't think it's appropriate to say that you disapprove of a mission and you don't want to fund it and you don't want it to go, but yet you don't take the action necessary to prevent it," said McCain, top Republican on the Senate Armed Services Committee and a 2008 presidential candidate from Arizona.

(snip)

Bush's new budget on Monday will ask for $100 billion more for military and diplomatic operations in Iraq and Afghanistan this year — on top of $70 billion already approved by Congress for the current year. The budget will call for $145 billion in war spending for 2008.


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1) The policy team that was willing to lie to lead America into war is not likely to suddenly adopt reality and truthfulness as a core strategy component.

2) The policy team that ignored the military and starved the original mission of manpower required to ensure stability after the fall of Saddam is not likely to have learned any tactical lessons if they still have to shop for generals by retiring and reassigning commanders until they find ones which agree with their ideas.

3) Spending billions more to "rebuild" Iraq's infrastructure before eliminating the threat of sabotage produces no improvement in the political situation or security situation. The only thing it produces is more profits for American contractors and consultants who get to "contract" and "consult" for the same project over and over again.

4) No one supporting additional troop deployments can describe exactly how putting more soldiers in the path of roadside bombs and more helicopters in the path of rocket-propelled grenades is weakening the enemy or destroying their ability to wage war. The $363 billion we have spent so far has not demonstrably weakened our original enemy, Al Qaeda or our new enemy within Iraq, militant Shi'a and Sunni fanatics eager to kill each other or kill Americans in the way. How is the next $315 billion for 2007 and 2008 going to produce results different than those produced by the first $363 billion? Is twice the strife our goal?

John McCain's argument that those without a complete strategy for extricating us from the current debacle must stay silent while its original planners worsen the situation is far more cowardly than attempting to apply the brakes through a non-binding resolution.

Continuing to expand our presence is a crass attempt to delay public recognition of the fact that flawed American decision-making lost a war that shouldn't have been waged in the first place.

How about THAT for an idea?