Tuesday, December 29, 2009

The Last Cavalcade of Risk for This Decade.

Welcome, Cavalcade of Risk readers, to the Disease Management Care Blog. It's dedicated to addressing the medical and financial dimensions of health care for populations. That can include care management approaches for groups of persons with chronic illness (like diabetes or high cholesterol), as well as the merits of wellness and prevention. It also likes to write about managing their risks, with a special focus on financing, economics, health insurance and value.

It is the DMCB's pleasure to host the latest Cavalcade. Not only is this 'Cav' the last one of this decade, this week marks two full years that the DMCB has been in existence with posts every work day 52 weeks a year. What better way to celebrate this achievement?

Like other Cavalcades, this is a summary of the better blog postings that focus on risk. Submissions were invited and many other gems were discovered. As usual, they will not disappoint. While the DMCB generally favors health-related postings, it and its readers will get to delight in the related topics of enterprise risk management, banking, checking, life as well as homeowner's insurance, starting a business and asset management

So, onto the Decade's Last Cavalcade of Risk.....

Risk In Health Care

Louise at the Colorado Health Insurance Insider teaches us about the risk of not keeping several months' worth of liquid cash on hand. Pricey emergencies can crop up anytime, and if it's a medical situation, dead presidents can fly out the door faster than Ms. Napolitano can say 'the system worked!' One risk-mitigating way to handle that is with a tax-sheltered health savings account (HSA). Learn all about it thanks to Louise's very smartly written summary here.

Jason Shafrin of the Healthcare Economist provocatively examines this article on European-style health care. While many of my academic colleagues would argue that we'd really all be better off if we all wore berets and drove motor scooters to our doctor appointments, Jason asks if European-style health care really deserves such accolades? In this well written and compact post, we find out that social insurance doesn't necessarily translate to uniform doctor wait times across all socioeconomic classes. Jason offers up some explanations that wouldn't necessarily come to mind. They include spillovers, the impact of political donations, 'tiebout sorting,' personal connections, complaint thresholds and bribes. He asks for others and the DMCB offers up this one: lacking the appropriate incentives, physicians prefer to see persons with fewer healthcare problems earlier in their course, which is more likely in socioeconomically advantaged groups. You may want to add your thoughts to his excellent post.

Brains are very important. In fact, to paraphrase Woody Allen, it's the DMCB's second favorite organ. So minimizing the risk of brain damage is important. In this post, Ed Kent recounts his personal experiences to compare and contrast rugby and football. While he speculates about the merits of any outright ban of trauma-prone sports, the brainy DMCB points out that, when it comes to pro football, the topic may need more research. What's more, there is no evidence of short-term problems from concussions in high school and university sports settings, and the risk of long term problems appears to be significantly influenced by the testing that is used as well as age and gender. One thing however - assuming there is a link to brain damage - becomes clearer: if politics, as former President Clinton remarked, truly is a contact sport, we may finally have an explanation for Congress' approach to health reform.

Have you, do you or will you deal with impulsive, oppositional, secretive, lying, brutish, moody and risk-taking adolescents? The DMCB has, bears the scars to prove it and is proud that three of them made it to adulthood alive. If your standards are higher, however, you may want to adopt more modern approaches like 'responsible worry,' thanks to this online Psychology Today article aptly titled Risk Prevention in Adolescence by Ph.D Carl Pickardt. Note to our political class: this post may help you better deal with the impulsive, oppositional, secretive, lying, brutish and moody nutjobs at the fringes of our Republican and Democratic parties.

Risk Management

Like Top Ten Lists about as much as the folks over at America's Health Insurance Plans like Ms. Pelosi? You may change your mind after reading Nancy Germond's superb Top Ten Risk Management Lessons and Trends from 2009 posted over at AllBusiness. Like social networking run amok at your work site, buying 'cyber' insurance, workforce 'knowledge gap mapping,' OSHA, State government outsourcing, one-person entrepreneurs snapping at your heels, the potential melt-down of worker's comp insurance, the interplay of health insurance frequency and severity, grumpy suit-prone employees and a new form of insurance coverage made necessary by libidinal golfers. Take notes and bring even one topic up at your next leadership meeting: you will sound very smart.


Jason at BankShout knows all about the risks of banking, like letting your checking account be overdrawn and being socked with those $15-$30 overdraft fees. Read it if you want to learn some of the basics that that Mr. Geithner et al may want to also think about, like keeping a register, buying overdraft insurance, linking to a savings account and keeping your debit card usage to a minimum. The DMCB wonders why another option wasn't mentioned: get married to a tightfisted spouse.

Of course, if that fails, just join the folks 'from all walks of life' by closing that bum account and opening up another one at one of the 20% of banks that don't subscribe to 'ChexSystems,' says Nicole over at the appropriately named blog Banks that Do Not Use Chexsystems. This particular blog is festooned with links to said banks, so the DMCB says caveat emptor. However, it's an interesting concept that you may want to read about even more, like here or maybe here. The DMCB wonders if the Chinese know which banks are being used by Uncle Sam for his checks.....

Insights About Other Forms of Insurance

Denise Mancini-Blonda over at GoodFinancial¢ents goes over the risks of dying and walks us through the basics of life insurance. Like insuring for (yikes) ten to twenty times your annual income to make sure you can cover all your debts and expenses for the foreseeable future. The citizen DMCB calculates that if U.S. government keeps it up, its policy would have to be, like, for a gazillion dollars. Good thing our Treasury access to money printing presses.

Speaking of life insurance, Henry Stern over at the InsureBlog discusses how that industry's actuaries may already be calculating the risks associated with the unintended consequences of possible rationing, an increased emphasis on end-of-life-care and a slow-down in medical innovations. Insert a ? in the right place, and could there be a con(?)spiracy afoot? Yo?u be the judge!

And how about home owner's insurance? Check out another Top Ten List of Do's and Don'ts from the 'Silicon Valley' inspired/located Digerati Life, like comparing quotes, maintaining good credit, thinking about coverage levels, toggling the deductible, pondering replacement versus cash values, obtaining discounts, not claiming everything and being aware of a concept called 'insurance standing.' OK, OK, so you're tempted to gloss over this particular entry? Think again, because there are some extraordinary photos of a homeowner's dream being literally smushed by a heavy crane. This makes the DMCB think about the merits of renting, which by the way, despite Federal policy, may not be a bad idea.

Small and Large Business Risk

Then there is the risk of starting your own business. Think that spending big up front will pay dividends with fat contracts and huge cash flows? Think again says The Shark Investor, who offers up some advice about staying small with no office, no employees, no company, no provider fees and no bills by following the adage of borrow when you can, share when can't borrow, rent when you can't share and own only when you absolutely have to. The DMCB agrees with the Shark's logical frugality, which, by the way, also amply demonstrates why blogging is so financially rewarding.

By the way, starting up includes another aspect of entrepreneurial risk that can be managed with a business plan? The Biz-learner has scoured many many sites and found many many resources to help you create one.

Cost control: check. Business plan: check. Business takes off. You'll eventually need to develop policies, along with the people to write those policies, manuals that store those policies, supervisors to enforce those policies and lawyers to review those policies. There is a risk that it could all come to naught, however, for the misstep of not following those policies. The DMCB says good thing there is someone blogging about workplace policies at Lauren Bloom's Blog. Her advice: follow your own rules or change them or expect to be embarrassed and financially beat up in court.

Cost control: check. Business plan: check. Policies in place and followed: check. Business takes off: check. Now you have to deal with all that complicated cash flow, taxes, capital needs, deductions and wot not. It should be obvious that you're going to need an army of accountants who are familiar with the stuff that other accountants are blogging about. Good thing there is a list of all accounting bloggery at Top Fifty Accounting Blogs.

One question you're going to want to eventually ask your accountant (who thanks you for those fees that allow the free time to also blog) about is whether you should park your bundles of cash in Gold ETFs as an additional investment hedge. You can read about that and more at Michael Johnston's The Definitive Guide To Inverse Gold ETF Investing.

Alternatively, you can invest in rental properties in the United Kingdom and fret about the Brits' approach to taxation. Not to worry, TaxFix has this posting titled Tax Return Tips for Landlords. like maxing your deductions, taking advantage of offsets, keeping good records, renting out just a room and managing your capital gains.


H G Stern said...

Outstanding job, Jaan!

Thank you so much for hosting, and Mazel Tov on your 2 year blogiversary!

Nancy Germond said...

GREAT job! You give me inspiration for my next hosting! Thanks!

Anonymous said...

One risk-mitigating way to handle that is with a tax-sheltered health savings account (HSA).

Depending on what Obama's plans are for them, yeah, however, the HR 3200 plans to put a ceiling on how much you can contribute each year, and Obama may do away with them altogether, just like he's wanting to do away with IRAs and 401k plans in favor of his "buy bonds now and buy them frequently or else" retirement plans (he plans on making his bond program the only tax shelter for retirement savings).

FSAs and HSAs have already taken a proposed hit--contributions down to $2500/year from the current $5900/year, and if the public option comes about, they'll disappear altogether.

All our usual and customary tax shelters are disappearing with this administration in its effort to make America a socialized nation. Next, somebody will propose we do away with the mortgage tax deduction to pay for the mortgage bailouts!