Failure to Thrive

Last January I pulled a report from the St. Louis Federal Reserve and repeated that post today to see how things have changed. Each quarter in which Real GDP falls below the potential of the economy, costs about $5.3 Billion of forgone economic activity each quarter. There is something materially different going on here, so what is it?

5 Year Potential GDP and Real GDP, through Q1, 2013

5 Year Potential GDP and Real GDP, through Q1, 2013

By way of comparison, I’ve included a historical view of the same graph beginning in 1970.

 

1970 to present, Real & Potential GDP

1970 to present, Real & Potential GDP

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SLP Labor Productivity, The Facts

Labor productivity is a complicated issue for healthcare which if there is interest I’d be pleased to explain. For our purpose I’ll speak to productivity for  SLP’s which though simple, are often wrongly done and misleading.

For SLP’s it breaks down to capturing the data correctly and completely, followed by doing the right math. By way of clarification, that which is often referred to as “Productivity” of SLP’s is actually revenue productivity. That is, billable minutes divided by total minutes on the job.  If this makes you feel like an ATM, you’re probably spot on, more about this another time.  This is about doing the math correctly.

First by way of comparison, a very highly efficient manufacturing process will have a labor efficiency of about 65%. To achieve efficiency percentages this high, the business needs to be able to predict and manage inputs, outputs, tightly manage internal processes, complicated supply chains and much more. In healthcare much of what drives efficiency is institutional and well out of control of an individual employee.  Per worker employee is much lower than in other industries and very difficult to capture and calculate accurately, which is why the Bureau of Labor Statistics doesn’t. (Again I’d gladly explain but don’t want to bore you needlessly) It is sufficient to say that if you’re regularly showing productivity percentages above 70%, something’s wrong.  Typically this means clinicians work after you have clocked out, before you clock in or during lunch; additionally you are seldom properly credited for work breaks as required by local statutory law and the time required to move from patient to patient.

If your facility is turning a blind eye toward people working “off the clock” so to meet unrealistic productivity metrics aimed at impressing people who don’t know what it means in the first place,  they need to rethink things quickly. Your manager may look good, but your CEO and CFO are exposed to legal claw-back of all uncompensated labor going back several years, not to mention the penalties which can be a multiple of total uncompensated labor. Such activities are arguably a Sarbanes Oxley violation whereby the true cost of running an operation is being understating, potentially overstating profitability. In California there are many law practices eagerly looking for such activity because they are very easy to prosecute and profitable. This is not trivial.

Here are two Excel worksheets, 2010 version and a 2003-2007 version for your use.  Let me know what you think and if you have any questions either here or on LinkedIn.  Some people may have thoughts they don’t want to air publically, nothing discussed here will. My Wife, as you may know, is an SLP and I recall all she put into her training and frankly it breaks my heart to hear what she and others are going through.  Y’all deserve better.

SLP Productivity Calculator. Excel 2010 version

SLP Productivity Calculator. Excel 97-2003 version

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Doing What Is Necessary

If through all you hear in the news is about the government needing money, I found it.  It’s in our under performing economy.

The economy is grossly under performing (red line = real GDP) below our potential (Blue line = Potential GDP) to the tune of over $288 billion a month of forgone business activity. Each month we continue on this path, the national government looses over $57 billion in forgone tax revenue, while expenses continue to escalate. Obama would like you to believe that he can turn to richer individuals in other states, but that is not what Americans are about.

The fourth quarter GDP numbers offer no inspiration that the red line will soon be heading north and that’s a problem. This means continued forgone non-production, non-consumption of resources, and for the government, continued struggles with income.

There is nothing about this that is complicated or beyond our understanding. The economy doesn’t like what it’s hearing and it’s behaving accordingly. No one individual is making this decision on behalf of the economy, it’s the product of lots of small decisions in which all of us participate.  This is sad, and entirely unnecessary.

 

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Obama Disqualified

As years have passed, now over 58, I’ve become increasingly respectful of how little I know in comparison to all that is knowable. I have found it high beneficial to give an earnest ear to all, especially those with whom I disagree so that I might learn, be better informed and make better decisions for me and my family. Additionally I have found it far more effective to assess individuals by what they do rather than what they say, and as such found that they are rarely the same. I’m not alone in this. Americans are a considerate lot and we ask a lot of questions.

This American characteristic goes back to the revolutionary war. The French General LaFayette in helping the American revolutionaries noticed that unlike the soldiers in Europe of the time, you couldn’t just tell American Soldiers what to do, you also had to tell them why.  This is who we are.

Obama said in his speech this week that he listens to the opposition, but this is simply not supported by his actions or the evidence. True American leadership, for example, would have told then Speaker Nancy Pilosi while pursuing his healthcare bill: “We may not agree with the Republicans but they are not idiots or uncaring of the best interests of the United States, they are Americans as are we.  I need you to bring me a healthcare bill that is supported by at least 10% of Republicans or I will not sign it.” We did not hear this because Obama doesn’t believe it.

Obama’s belief in his own anointing is so strong, so complete that no such consensus is considered let alone required. This vision of Obama’s own anointing immediately and unequivocally makes him unqualified for another term.  Anyone who summarily disregards half of the electorate as casually as Obama has done, will not be successful and is himself the most dangerous threat to our ever evolving More Perfect Union.

 

 

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Professor Harold Hill Obama

Reflecting upon the Obama Presidency, haven’t we seen this play before?

In the Broadway Musical “The Music Man”, the very charismatic, handsome and articulate Professor Harold Hill (a traveling salesman) lands in River City Indiana for the purpose of selling to the community musical  instruments and uniforms for a Boy’s Band. In order for him to succeed, however, Professor Hill first had to create a need by way of a small crisis for which a boys band would be the perfect solution. Hill focuses on the fear of corruption and debauchery of boys that would certainly result from a pool table being installed at the local town billiard parlor.

“Oh, we’ve got trouble, right here in River City, with a capital T that rhymes with P that stands for Pool”.  Sure enough Professor Hill successfully creates a non-problem which his boys band would cure.  The only challenge was that he wasn’t a “Professor” and couldn’t read a note of music. Instead he taught the “Think Method”, hum the Minuet in G over and over again, and you’ll be able to play it on any instrument, as if by magic; that is he sold hope.

Indeed, Mr. Obama is the perfect Harold Hill,  proclaimed by many to be the smartest we’ve seen, even a  Constitutional scholar, but wait a minute, is it true or is he just another traveling salesman?  My layman’s reading the Supreme Court transcripts on the Affordable Care Act sounds to be the real life analog to “playing the minuet in G by the Think Method”.  Despite very knowledgeable and sophisticated discussion by well meaning individuals over three days, the Affordable Care Act it still sounds like noise; it is confusing, contradictory, incomplete, complicated, wasteful, and un-affordable.  This is Obama’s cure for a problem he does not understand.

So just where do the skills, knowledge an expertise of Barack Obama differ from those of Professor Harold Hill? How is Obama’s strategy of “Hope” different from playing a musical instrument by the Think Method?  On what evidence do we believe future outcomes can possibly be any different than what we’ve seen?

Finally this little gem from The Music Man courtesy of my brother.  Professor Hill as asked by his friend: “Are you still selling steam automobiles?”, to which Hill replies: “No, someone actually invented one”.

Tom

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