How to prepare for the worst

Here in Texas, and in my company in particular, we had to prepare for the imminent arrival of hurricane Rita. We were fortunate that the hurricane had pretty much run its course by the time it arrived here in my part of East Texas earlier today. Others were not so lucky, and I wish them well. Here's what us "peanuts" learned in preparing for the storm.

It is never to early to prepare. We run a small telephone company here in East Texas, so continuing to provide service during and immediately after the hurricane was very important. We began formulating plans early in the week assuming the worst would happen. We decided what supplies we would need, and who would be in charge of what portions of the preparation. By identifying all of the necessary tasks early on, and who needed to do them, we had the luxury of time preparing for Rita. Planning early meant that when we rented equipment and bought supplies, they were still available. Our early planning also allowed us a chance to continuously review our preparedness and make alternate arrangements as necessary.

If you fail to plan, plan to fail. Without a plan, it is difficult to prioritize needs and determine what contingencies to account for. We implemented a planning team on Monday and went through several disaster scenarios. This helped focus our team on the most critical components of our business, and the most likely problems we would encounter. It led us to buy things like high velocity cooling fans to protect our electronics, rent a second back-up generator, buy extra fuel cans, update contact lists for all of our employees, contractors and vendors, and so on. Without this plan I am sure we would have left some bases uncovered.

You always need fuel and water. Even though this part of Texas was scheduled to receive a glancing blow based on the late week forecasts, by Friday it was difficult to find bottled water, and gas stations were running out of fuel. What happened? The highways from Houston to Dallas were jammed, and miles and miles of traffic diverted via alternate routes through our town. Guess what everyone stopped to buy? We filled up all our vehicles and generators on Wednesday and avoided the rush, shortages and price hikes.

Follow up on the plan. One of the most interesting things we learned through this planning process was what we needed to do after the hurricane to make us better prepared for next time. We now have a follow-up plan to acquire additional equipment, make changes to our facilities and get higher on our suppliers and partners priority restoral lists. We will be in a better position for the next potential disaster.

Many times in life we are blindsided by one kind of a problem or another. In these situations, we do the best we can to get by. Sometimes, however, we are given ample warning of an impending potential disaster. In this case it is best to use all the time allotted to make sure you can survive.

A Victory for Medical Consumers in Wisconsin

The headline in Sunday's Milwaukee (Wisconsin) Journal read "Exposing hospital costs". It turns out a local suburban Milwaukee company HealthCare Direct LLC, has signed a deal with two large Milwaukee area medical providers who have agreed to provide 26 medical procedures at a guaranteed flat rate. The Journal published some of these negotiated flat rates. I'll bet you "peanuts" would like to know how your costs in Milwaukee (and probably everywhere else for that matter) stack up once the veil of secrecy is partially lifted.

The Journal compared the flat rate costs HealthCare was able to negotiate and the prices for the same procedures at several other Milwaukee area providers. Guess what, there was a difference of up to 112% in some of the costs - for exactly the same procedure. This result should not be a surprise in a system where prices and costs are allowed to be a mystery shrouded in an enigma. I wonder how long it will take for the prices charged by the other providers to gravitate towards the HealthCare negotiated prices. I'll bet it isn't long.

I think the Milwaukee example is a good start towards holding the medical industry accountable. It needs to go much farther, however. For one, outpatient procedure costs are not part of the disclosure. Neither are the costs local doctors charge for routine examinations and things like reading an xray. If we as consumers are expected to shoulder the burden of higher out of pocket medical costs, we need far more transparency from the medical community.

I think all of us can make our voices heard (and make a difference) in this debate by doing the following:

Become an educated consumer. Check out prices on state web sites. Always ask for an estimate up front for routine procedures. If the hospital cannot give you one, go somewhere else, and let them know you are doing so.

Become an activist. It's your money - if you do not protect it who will? Write your lawmakers. If they saw fit to protect you and I from the horrors of the muffler shop down the street, this issue certainly should merit their attention. Tell them to write legislation forcing medical providers to provide binding cost estimates, flat rates for common procedures, and force them into binding arbitration in cases of rate disputes.

Force insurers to disclose the discounts they receive from network providers. How am I supposed to figure out which $300 per month premium is the better deal when I have no idea what kind of discount the insurer negotiated with the health care network. In business we use non disclosure agreements to protect us when we disclose sensitive contract information like rates. Rather than tell us the prices and discounts are a secret, have us sign non disclosures and let us make an informed decision.

There is lots to be done to ensure we get a fair deal from the medical community. This community has lots to lose if they have to come clean on pricing and costs. You and I have lots to gain. How you respond may be the difference between the medical community winning and us consumers winning. I would rather see us win, how about you?

Steve, where is the fair play here?

In the September 19, 2005 issue of Forbes, Steve Forbes thinks the BIG BELLS should be allowed to enter the cable TV business without having to pay all the fees the cable companies (and therefore you and I) have to pay. The Bells think having to pay these fees would be anticompetitive.

I'll tell you what Steve, me and the rest of the "peanuts" have a couple of issues with the BIG BELLS and competition. Maybe you could address these for us.

Give us unbundled DSL. I don't want to have to buy a local line in order to get DSL. Why should I have to pay for a line larded up with ridiculous fees and charges, when all I want is high speed DSL. As Steve Forbes points out in his commentary, we lag the world in high speed Internet access. Well, no wonder. We cannot buy high speed internet without having to buy some other overpriced service to go along with it.

Why should I have to buy a Bell local line when I can get VoIP service for less than half the money. Maybe Steve should ask himself this: If the Bells were truly interested in competition, they should be happy to offer me unbundled DSL with no strings - or in this case copper lines - attached. Maybe this should be the quid pro quo in allowing the Bells into the cable TV business without having to pay franchise fees.

With unbundled DSL I would also get to choose a better local long distance plan. Steve, did you know that a call from the Chicago suburbs to the City of Chicago can cost as much as $.08 per minute. No, this is not a typo. Have you looked at your phone bill lately? How much does it cost you to call New York to LA? How about New York to Canada? How about New York to London? I'll bet these calls aren't much more expensive than calling 30 miles in the Chicago area. If the Bells were interested in fair play they would rectify situations like this and stop blatantly ripping off consumers.

How about it Steve. If paying franchise fees offends you and the BIG BELLS, how about we agree to a deal. The Bells get their cable access, but in the true spirit of free trade and competition, they are required to offer unbundled DSL, so we can all have access to broadband AND get to choose who provides our telephone service.

Phoney Baloney Phone Charges

Did you know that as a customer of one of the BIG phone companies, you pay BIG bucks in phoney baloney charges. Here are a couple of examples, which I am sure that after reading you will agree they are not just "peanuts".

Subscriber Line Charge - aka FCC Charge for Network Access aka Federal Line Cost Charge. Way back in the mid 1980s the local telephone companies were allowed to charge this fee - which can be as much as $6.00 per line per month - to compensate the local telephone companies for long distance companies accessing their local lines. Note the use of the word allowed - it is not a mandatory charge, it is totally discretionary. Back when this charge was first proposed, the local telephone companies, Verizon and SBC are the largest left today, did not offer long distance, so this charge made at least some sense. Now, however, Verizon and SBC offer long distance services, and once the ATT merger with SBC is complete and the MCI merger with Verizon is complete, these two companies will probably control over 50% of the long distance market. Their market share will surely continue to increase. Whose pockets is this subsidy going into? Why SBC and Verizon's, that's whose. These two companies make BILLIONS every year, a nice chunk of which is provided by the many tens or perhaps hundreds of millions of lines they own, multiplied by $6 dollars.

Local Number Portability Charge. The FCC required the telephone companies to make numbers portable, so you and I could switch carriers and keep our original phone numbers. The big phone companies successfully lobbied the FCC to allow them to tack on a charge to everyone's phone bill to compensate them for implementing software to make number portability a reality. Due to the lobbying efforts of the big telephone companies, there is little meaningful telephone competition, so you are paying $.30 to $.40 per phone number per month basically for nothing. If a phone number is truly yours, why should you have to pay for it for years and years.

Why do these big telephone companies continue to bill you for these phoney baloney charges? Because they can. There is no meaningful local competition, and thus no market force out there forcing them to get rational about what they charge you. As monopolists have always done, they will charge as much as they can get away with.

What can all of you in the peanut gallery do? Look at the new internet-based phone companies like Vonage. If you have a high speed cable connection you can add phone service for about $25 per month. That's less than you are paying today, and there won't be any phoney baloney charges artificially increasing your monthly costs.

Now, just don't get me started about the myriad taxes you pay on your phone bill!

Simple Ideas to Reduce Medical Costs

It just galls me that medical costs continue to rise in this country and anyone who can do anything about it just wrings their hands. With most folks having to pay more out of pocket costs, we need some help to keep costs contained. Here's a couple of ideas from the "peanut gallery" which would help reduce the costs YOU pay for medical treatment.

1. Require the medical community to provide a good faith estimate of the costs of a procedure, especially for non-emergency and elective procedures. Right now, the costs you pay when you have a procedure done are a mystery shrouded in an enigma. Don't kid yourselves, hospitals and clinics know exactly what the costs are to perform most of the procedures they do. If they didn't, they would not be able to bill you. I realize that some procedures are more complicated than others, and there are always extenuating circumstances, but at least we should be provided a range of costs. If you take you car in to have a muffler replaced, there are Federal and State requirements that an estimate be given to you in writing before any work can commence. If I am spending thousands on a simple procedure like a colonoscopy, I should be able to price shop. In fact I had this done recently, and found the variance in costs to be as much as 50% between local providers, not that it was easy at all to get this data. Consumers are able to price shop for everything (cars, groceries, gasoline) but are prevented from price shopping for medical attention. I wonder whose interests this serves?

2. Require medical providers to itemize their bills in english. I want to know how much it cost me to have a blanket provided, a drink of water, and a pair of slippers. The way medical invoices read a person would be hard pressed to figure this out. Further, medical providers do not want you to know that a drink of water cost you $25. Such truth in billing is required by nearly every consumer business and lending institution I can think of.

3. Require medical providers to give you a complete copy of your records within a day or two of your request. If you do not have access to your records, it is very difficult to go to another provider without having that provider start all over again with your medical history. This costs money. Your money. Your medical records are yours, not your doctors and certainly not your hospitals.

These are simple, common sense ideas that if implemented would allow us here in the "peanut gallery" to have more control over the costs we pay for medical services, and would force medical providers to be accountable. If you are accountable for your medical costs shouldn't you get the basic information you need to make an informed decision?

Where is the National Energy Policy???

While our elected pols are busy giving away the store up on the hill with their "new energy bill", we are still left with no rational energy policy and billions in give aways. I wonder why the pols don't look at a couple of these "peanut gallery" ideas?

1. Brew one type of gasoline. If California and 50 other large metro areas have to burn reformulated fuel, why not the rest of the country. Many of us have been burning this stuff for years. It consists of 90% gasoline and 10% ethanol. I know, ethanol is more expensive to produce, but at least we are paying US companies and farmers to grow the stuff, plus it reduces the amount of imported oil by up to 10%.

2. Adopt European diesel standards. Something like 40% of all cars sold in Europe are diesel powered. Diesels get better economy, and with the euro blend fuel will meet tough emission requirements. What's the benefit of a diesel? The 2005 VW Jetta diesel is rated at 46 highway mpgs while the gas Jetta is rated at 31. That's a BIG difference. The cost difference is about $3,400. The cost difference in Europe is generally about $1,000. I want more diesel choices, how about you?

If 40% of the cars in the US were diesel powered, we would import 12% less oil. Add up the two simple options above and our oil imports fall as much as 20%. Seems like a better choice than drilling holes all over the artic to me.

Where are our esteemed lawmakers on these two issues? Maybe these solutions are just too simple. Maybe some more "peanut gallery" folks should be making decisions in this country.