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David White
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David White is a software/firmware/marketing professional and a long time investor. He has worked in the networking field, the semiconductor equipment field, the mainframe computer field, and the pharmaceutical/scientific instrumentation field. He has bachelor's degrees in bioresource sciences... More
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  • Obama Is Too Concerned With “One Big Fix” For Health Care

    Obama is trying too hard to get one big fix for health care. He’s finding it is extremely hard to get everyone to agree. One reason they don’t want to is that most “big changes” turn out to be horrifically expensive. Most fail, or they are watered down demonstrably after they have incurred the afore mentioned huge costs. There is no reason Obama cannot approach this problem piece meal. This approach is much more likely to be successful. The fact is there will be less opposition to any one significant change.

    The change with the most bang for the buck is likely a change to the approach to malpractice. If the US Congress made arbitration mandatory as the first step in malpractice suit, this would cut down the costs considerably. An experienced, “malpractice expert” arbitrator could dismiss frivolous lawsuits quickly. Such an arbitrator could make quick, fair decisions. Such an arbitrator would avoid the occasional exorbitant awards that emotional juries can make. This might cut the payouts to a few harmed individuals, but it should still allow them a chance at a fair award. Further it should cut costs simply by cutting the actual time spent in court. Further the approximate expected awards could be specifically called out. The allowable growth of a possible award per year could be called out. Some allowance could be made for the level of the award due of specific types of wrongs. I point out that arbitration has worked well for baseball, etc.

    In order to be consistent with legal precedent, it would have to allow for appeal of the arbitration decision to a higher court. This might be costly. However, the standard for allowing appeals could be set high. The burden of proof of demonstrable wrong doing would also be higher at the appeal court level. These high standards would discourage most from taking this route.

    The obvious problem with this is that it would force some lawyers to change their line of work. The volume of medical malpractice law would obviously go down. The American Bar Association would strongly oppose such an initiative. It would still be hard to pass. However, it would be good for the bulk of society. It would encourage more medical personnel to stay in medicine. Many good ones now leave because they start to feel persecuted by lawyers who are willing to do anything to bring lawsuits (in order to get a settlement or to win). These actions harm the bulk of society. This is a big change that can and should be made. Why does Obama not try to make it as a first step. This would cut the cost of medicine by at least 20%-30%. It would cut the total wards and costs of malpractice (lawyers time is expensive) by at least 50%. The law enacted might have to specify (as well as it could) that savings in malpractice costs would filter directly into lower costs. Otherwise they might be absorbed as profits by health care co.’s, or by medical personnel, etc.

    This change alone would be a big step. It would be hard to get by the ABA. Yet it obviously should be made. For those of you who are fervent believers in Obama’s huge “one big fix” plan, you have to ask yourselves why this change is not being made immediately? It would cut medical costs for businesses and individuals. It would make US businesses more competitive. Why is it not being done? Is the reality that no one wants a change? Is the reality that Obama does not want to specifically alienate the ABA? Are some lobbies/groups so strong that the right thing cannot be done?

    Disclosure: No positions in the stocks mentioned
    Tags: UNH, AET, HUM, ANTM
    Mar 02 6:58 PM | Link | 7 Comments
  • The Aged Will Bankrupt Any Entitlement Health Care System Unless Care Is Limited

    I keep hearing that the issues of the AARP have to be accounted for in any health care bill. My only answer to that is that yes they should be considered as thoroughly as possible. However, the overriding fact is that medicine can prolong life for a long time. The problem is that that prolongation is increasingly expensive in those last few years. Adding 1-5 years to each persons life at an average cost of the previous 15 years of medical care for that person is simply not something the US (or perhaps any country) can afford to do via an entitlement system. Beyond the age of 80, medical costs are as a rule a stop gap measure at best. Virtually everyone dies by 100. The average lifespan in the US is 78.2 years. Older people often suffer from dementia. They require more care. They contribute little to the US economy or even to US societal health. Often they are a huge drag on their families. Does it make sense to prolong this burden on the younger generations (both monetarily and emotionally)? Or does it make more sense just to let the oldest die of natural causes without making terrifically expensive attempts to prolong their lives for a few more years?

    I am getting older myself, so these questions are no longer purely rhetorical. I am like everyone else. I feel the old should be cared for. Unfortunately, the entitlement health care system cannot afford to do that without bankrupting the system. If families can afford to do this, that is great. Few probably can. That still does not mean the government should assume this burden. It quite simply can’t afford to anymore than most families. For every Warren Buffet, who has remained productive into his late years, there are hundreds or thousands of others who are severe burdens on the system and even on their families. Medical statistics show that long term serious illness of parents can shorten children’s lifetimes by several years. The reality is that the government is not doing those children any favors by extending the torture of their parents deaths. The system has to acknowledge this. The system has to severely limit how much it is willing to spend on those who pass 80 (or even those who pass 70). The AARP has to complain. It has to guilt everyone who opposes them. That does not mean that the AARP’s lobby should win on all of its issues (as it seems to do).

    Instead of acquiescence to the AARP lobby, hard decisions have to be made about this care. Many parents in the past have chosen to die quickly in order to have money left to give their children. They have chosen to forgo expensive medical care. They have realized they were dying soon no matter what happened. They have chosen not to be an excessive burden to their children. If the government alleviates them of this choice by bankrupting its own system, is that a good thing? Can the government afford to do this? Can the kids afford the taxes dictated by this government mandated choice by the parents? Will this force fed choice make the older generation apathetic about spending huge amounts on health care instead of miserly about it? I am in the baby boom generation. My generation is the one that will present a huge burden to those younger. If the course of government entitlements continues, will those younger spend all of their money supporting my generation’s health care? Does that sound fair? I want free health care, but I don’t want to rob those younger of their enjoyment of life. I find myself willing to die if extremely ill at an old age. I believe in preventative health care. I am hoping this will help. Can more be done in this area? Can a rational approach be passed with the strength of the AARP? Few politicians want to alienate this powerful group. Yet it would seem they have to be willing to anger this group in order to pass a rational health care bill.

    Disclosure: no positions in these stocks at this time
    Tags: ANTM, HUM, AET
    Feb 25 11:49 AM | Link | Comment!
  • RIG Falls Hard on Tepid Results

    RIG was down 5.51% today after it reported a 4% decline in Q4 profit year over year. It has pulled many of its shallow water jackup rigs off the depressed market. 28 of 65 are now inactive. Earnings were $2.21 -- well short of the analysts’ estimates of $2.56. Revenue declined 16%. 2010 results are now expected to be about 5% below current analysts’ estimates. The Q4 results were further driven down by a tax dispute with Brazil. This was settled for $142M. The outlook for ultra-deep water rigs is very strong. The outlook for deep water rigs is good. However, the outlook for the shallow water, jackup rigs is still tough. Much of the shallow water work in the Gulf of Mexico has already been done. Some other areas can say the same. Much more work now is in the deep water and ultra-deep water areas. This may pressure RIG’s jackup rig results for quite some time.

    This is a great company, but even its deep water rig performance in 2010 may be in question as 5 of its deep water rigs are becoming available in 2010. RIG expects to find work for these rigs, but doubt persists. It is probably best to stay away from this stock in the short term. Technically it has broken through its 200-day SMA, which is negative. Plus there may be an equalization period of 2-3 weeks in which analysts may come to a lower consensus agreement on performance in 2010. This could result in further downward movement. That being said, 2011 performance should be better than 2010. Oil prices are going up worldwide. China is now the world’s largest new auto market. It will use more and more oil for gasoline. It will use still more oil for manufacturing, heating, etc. India will use more oil. It’s economy is growing quickly even in 2010. As a long term play RIG is still a great buy, even with the above problems. As a shorter term play, you may want to wait for the analysts to gain a consensus agreement. A chart of the stock is below:

    1 year RIG chart:


    NOTE: The Williams %R data in the chart that shows that RIG is over sold in the very near term.

    Disclosure: I have no position in this stock
    Tags: RIG
    Feb 25 12:05 AM | Link | Comment!
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  • The data for Q2 GDP seem likely to come down. Housing is supposed to be slowing. Much of retail has not been strong. Oil down again too.
    about 3 hours ago
  • I didn't hear a lot of complaints about the seasonality being bad before the -0.7% data. Just FUDGING.
    about 3 hours ago
  • The US gov't is embarrassing sometimes. They say they took extra seasonality out of Q1 GDP data to move it from -0.2% to +0.6%. China bad??
    about 3 hours ago
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