One Small Change at a Time

Big holiday weekend, with lots of big events, but I want to write about trading in iPhones. We started this weekend off with two iPhone 4s. Hers was a 16 gigabyte black ATT iPhone 4. Mine was a black 32 gigabyte model.I read that you could trade your iPhone in at the ATT store, so took all of the accessories and her iPhone and went to our local store. The sales associate at ATT had never heard of trading in a phone for a new one, or getting any kind of deal if you left your old phone and took their new one. Knowing that such a thing existed, I asked her to make sure because we would go somewhere else if she couldn’t figure it out. After checking, she found out that if they fill out a form online with a third party (FlipSwap I think) they would take your iPhone, sell you a new one for retail value, and within four weeks you get an ATT store credit for an amount that they don’t reveal to you at the time you are buying the new phone. Somehow I resisted the temptation to take that offer. We decided to just get one new phone and take our chances with the market.Getting the new phone was really simple. Once we got home we just connected it to the iTunes account and restored it from that morning’s backup of the old phone. The only wrinkle was that all of her playlists were there in name, but they were empty folders. We turned off iTunes match and that ended that problem.I put the old iPhone 4 on craigslist, with a simple ad and no picture. I asked for 190, since the 4s we just bought was only 299 and a 16 gb just like the one we were selling would only cost 199, with a two year commitment. Got my first bite within ten minutes. Within and hour eleven people had responded. The first guy came over about an hour later and bought it, no haggling. Im thinking I didn’t ask enough. People are still answering that ad.After that I decided to make sure I was eligible for the upgrade price on the second phone (I was) and if so, I would try the same thing with it. This phone was a 32 gb model and I wasn’t so sure that there would be the same kind of response for it. Since I paid 250 for it refurbished from Apple back when there were a lot of them turned back in due to the antenna issue, I felt like I should as more for it. I made this ad for 290 dollars. Ten minutes later it was sold. How much are these things worth! I immediately pulled that ad down from craigslist, but I still got seven responses.I forgot to back up this phone before I sold it so the transition wasn’t so smooth..Even then it went really well. Since we use iCloud and iTunes match I just had to put my passwords into my email accounts for them to synch. Since Gmail two step authentication is set up on my system setting gmail up on the new phone somehow screwed up the password on my iPad. I had to fiddle with the iPad to get it working again.

Two point five TRILLION dollars spent in the health care ‘system’ in the United States of America in 2009. Almost 6000 thousand dollars per person. Per year. This number is greater than three times more than the closest figure, including every country that covers 100% of all of it’s citizens. We don’t even cover everyone.

According to a study published in the New England Journal of Medicine, total overhead in the system is at 31% That means that health care itself costs the US about 1.5 trillion dollars per year and the extra expenses amount to about 800 billion dollars per year. For comparison, the amount spent on overhead for a ‘wasteful’ government entitlement program like social security, is just 1 percent. That’s not a typo. ONE PERCENT. There is no profit in a government program. There is no CEO making 100 million dollars per year, with ten VPs making 20 million per year. ETC…

I work in an electric utility. We make electricity and it is reliable and the price that we can charge our retail customers is controlled by the state. When we want to raise our prices, we apply to the state to do so. They make us prove to them that we need a rate increase. We have to show what it costs to make electricity. The state controls the price and the reliability of this system.

If we only controlled by the ‘market’ like a health care provider, we would just bill the customer more. We would bill as much as we thought we could get away with. For electricity, that would probably be a pretty high number. Maybe we could raise the cost of it by about twice the rate of inflation. That is what health care providers do year after year. Their increases are never below the rate of overall inflation. To continue the analogy, we wouldn’t actually get that much, because the insurance company has an annual agreement with us about what we can charge. We charge more than that so that next year, when we are deciding what the ‘reasonable and customary’ charge is for our services, it will be a higher number than last year due to us charging more. Its a great racket. We get to raise prices year after year and no one makes us prove that the increases are in any way justified.

Insurance companies in the US, by and large, are run for profit. In other words, they have a responsibility to the owners of the company to make more than they spend. Health care insurance companies make money basically two ways. They take in premiums for promising to pay for your health care, in the unlikely event that you need it. They take these premiums and invest it in various places, think stock market. Of course, the value of stocks and bonds don’t always go up, which is why sometimes when the market goes down you will hear a lot of squalling from insurance customers that their premiums are going up. Ever heard of one of the doctor’s strikes because their malpractice insurance has skyrocketed? Look at what the stock market was doing at the same time.

Insurance company expenses include overhead, like wages and multi-million dollar executive compensation packages, and claims. Cant do anything about wages, but–they can do something about claims. Cancel your policy, deny your claim, stall. They aren’t being evil. They owe it to the stockholder. They can raise your premium and they will. They can deny your coverage, and they will.

If want to see how it could be, look to Switzerland. The land of big bank and big insurance companies. Until 1994 they had a health care system just like ours. In 1994 they had a vote by all the people on keeping what they (we) had or going to another way of paying. They changed. This is what they have now. They still have private insurers paying for health care costs. However, it must be non-profit. If health care costs more this year than they took in then the premium goes up next year. If it costed less, they get to collect less next year. Every Swiss citizen gets a health care smart ID card. When they get health services they present their card. The doctor gets paid. No paperwork. Doctors and hospitals are private. They spend half what we do per person on health care per year.

No way we wouldn’t save money by going to a system such as this. The only system on the planet more costly than ours, is ours –next year.