Tuesday, August 28, 2012

Will a unionized hospital provide better care for local patients?

A recent news article focused on a possible labor union drive at Bluefield Regional Medical Center, but furnished few details. That’s because neither the hospital nor the union(s) were talking. 

It is difficult to imagine that unionizing any of BRMC’s departments will help its patients, and there is evidence that unionized hospitals not infrequently have serious problems. This cloak of secrecy does nothing to answer the public’s questions about what is going on.

Labor unions are not inherently bad. They were once the major factor in balancing the employee/employer relationship at a time when workers were often treated badly. However, since government stepped in and enacted laws regulating the workplace, there isn’t much for unions to do along those lines. Instead, they now negotiate benefits for workers, like higher wages, shorter hours, and worker-friendly work rules.  

Union members know how to do their jobs, but the unions to which they belong know very little about running the businesses in which they organize workers, or just aren’t concerned about it. They could be valuable partners in those businesses, contributing to the success of the organization so that everyone benefits, but they seldom are. Most often they are adversaries of management, instead. Thus when unions negotiate perks for their members, businesses must make changes to accommodate these perks that inevitably increase the company’s costs and modes of operation, making the business less efficient and less competitive against non-unionized companies.

Some of the most damaging aspects of a union workforce are the work rules unions insist on, many of which defy common sense and good management practices. Some examples:

1) A repair crew that consisted of an electrician, a plumber/pipefitter, a carpenter and a crew leader were controlled by a work rule dictating that if the crew was sent on a job that had an electrical problem, for example, only the electrician could work on it. If he needed help, for even the most basic forms of assistance not requiring specialized knowledge or training, a second repair crew had to be called in, meaning that eight people were on a job that required only one electrician and someone to assist, and perhaps a crew leader.

2) A common problem is that when layoffs become necessary work rules that determine who gets laid off and who doesn’t favor seniority. It’s not about who does the best work, but who’s had the job the longest.

3) One work rule required all members of an 18-person crew to be present before the crew could work. If one person called in sick the crew couldn’t work, but still got paid. This rule allowed – even encouraged – abuse, and crew members set up a revolving schedule to call in sick.

Private sector union membership has fallen dramatically, from 24 percent in 1973 to less than 7 percent in 2011. However, union membership in hospitals has increased by nearly one-third in the last decade. Along with the increased membership is a huge increase in hospital strikes. The Federal Mediation and Conciliation Service reports that from 2009 to 2010 hospital strikes increased by 70 percent and from 2010 to 2011 that number rose by an additional 73 percent, producing an increase in the number of strike days from less than 800 days in 2009 to more than 1,000 days last year.

What does a hospital do when caregivers walk out? It hires temporary caregivers, and these people are unfamiliar not only with current patients, some of whom are critically ill, but also hospital procedures. In the case of a California strike 23,000 hospital workers walked out. Is it possible to hire 23,000 replacement workers on short notice without at the very least a high potential for mistakes? Did all of those replacements have the same or higher skill level as the strikers?

An article by Capital Research Center’s Matthew Vadum reports: “A major 30-year study found that strikes are, in fact, deadly. Jonathan Gruber of MIT and Samuel Kleiner of Carnegie Mellon University studied strikes by New York State nurses between 1984 and 2004. After controlling for factors like patient demographics and disease severity, they found that ‘nurse’s strikes increase in-hospital mortality by 19.4 percent and 30-day readmission by 6.5 percent for patients admitted during a strike.’”

 “Strikes are extremely costly,” he went on to say. “Hospitals must pay replacement nurses and additional security, while losing business, as patients opt for other hospitals. Last year’s strike by 600 D.C. nurses, for example, cost the hospital $6 million.” Commenting on a strike by 12,000 Minnesota nurses, he said it cost “about $46 million for substitute nurses,” almost half of which was for a day of mandatory orientation.

Once ensconced, unions pursue their own narrow goals, while employers are often held hostage to demands that are one-sided and often excessive. In the case of a hospital, this scenario has little potential for a positive result.

At the very least we can expect a successful union drive at BRMC to increase costs, and therefore requests for rate increases.

And if the union drive is successful at BRMC, it is likely that unions will attempt to organize other regional facilities.

Wednesday, August 22, 2012

A Powerful Movie

By Thomas Sowell


Years, and sometimes decades, pass between my visits to movie theaters. But I drove 30 miles to see the movie "2016," based on Dinesh D'Souza's best-selling book, "The Roots of Obama's Rage." Where I live is so politically correct that such a movie would not even be mentioned, much less shown.

Every seat in the theater was filled, even though there had been an earlier showing that day, and more showings were scheduled for the rest of the afternoon and evening. I had to sit on a staircase in the balcony, but it was worth it.

The audience was riveted. You could barely hear a sound from them, or detect a movement, and certainly not smell popcorn. Yet the movie had no bombast, no violence, no sex and no spectacular visual effects.
The documentary itself was fascinating, as Dinesh D'Souza presented the story of Barack Obama's life and view of the world, in a very conversational sort of way, illustrating it with visits to people and places around the world that played a role in the way Obama's ideas and beliefs evolved.

It was refreshing to see how addressing adults as adults could be effective, in an age when so many parts of the media address the public as if they were children who need a constant whirlwind of sounds and movements to keep them interested.

Dinesh D'Souza's own perspective, as someone born in India who came to America and became an American, provided a special insight into the way people from the Third World often perceive or misperceive the United States and the Western world.

That Third World perspective is Obama's perspective, D'Souza demonstrates in this documentary, as in his book -- and it is a perspective that is very foreign to that of most Americans, which may be why some believe that Obama was born elsewhere.

D'Souza is convinced that the president was born in Hawaii, as he claims, but argues that not only Obama's time living in Indonesia and his emotionally charged visits to his father's home in Africa, have had a deep and impassioned effect on his thinking.

The story of Barack Obama, however, is not just the story of how one man came to be the way he is. It is a much larger story about how millions of Americans came to vote for, and some to idolize, a man whose fundamental beliefs and values are so different from their own.

For every person who sees Obama as somehow foreign there are many others who see him as a mainstream American political figure -- and an inspiring one.

This D'Souza attributes to Barack Obama's great talents in rhetoric, and his ability to project an image that resonates with most Americans, however much that image may differ from, or even flatly contradict, the reality of Obama's own ideological view of the world.

What is that ideological view?

The Third World, or anti-colonial, view is that the rich nations have gotten rich by taking wealth from the poor nations. It is part of a much larger vision, in which the rich in general have gotten rich by taking from the poor, whether in their own country or elsewhere.

Whatever its factual weaknesses, it is an emotionally powerful vision, to which many people have dedicated their lives, and for which some have even risked their lives. Some of these people appear in this documentary movie, as they have appeared throughout the formative phases of Barack Obama's life.

The Reverend Jeremiah Wright is just the most visible and vocal of a long line of such people who played crucial roles in Obama's evolution. When Jeremiah Wright thundered about how "white folks' greed runs a world in need," he captured the essence of the Third World or anti-colonial vision.

But many of the other mentors, allies, family and friends of Barack Obama over the years were of the same mindset, as this documentary demonstrates.

More important, the movie "2016" demonstrates how so many of Obama's actions as President of the United States, which D'Souza had predicted on the basis of his study of Obama's background, are perfectly consistent with that ideology, however inconsistent it is with the rhetoric that gained him the highest office in the land.


Tuesday, August 21, 2012

Like most investments, private equity firms are good for the economy

The purpose of every investment – however ordinary or unusual; however simple or complex – is to make money through earned interest or dividends, or profiting from sales of items, services or businesses.

Whether it is a passbook savings account or a Certificate of Deposit; corporate or municipal bonds or shares of stocks; your employer’s pension plan that grows in value to fund retirement; investing in a business and working to have more revenue than expenses; or investing in a private equity firm that buys existing businesses and hopes to build the value of those businesses, profit is the reason people invest.

Nearly everyone understands and accepts that they should collect earnings from a savings account or a stock purchase, but many of these same people are horrified when business owners sometimes make a good living or private equity firm partners make significant money in their activities.

Some seem to think that the purpose of business is to achieve social goals, and try to impose all sorts of their favored ideals on the business world. While many businesses do support community or charitable programs, these are secondary activities. Making a profit so they can remain in business is their primary purpose.

Like every other investment, the purpose of putting money at risk by investing in a private equity (PE) firm is to make a profit, and PE firms do that by buying companies and selling them. They don’t buy successful companies because the price of a successful company is already high, and trying to make a successful company even more successful, and therefore more valuable, is mostly a no-win situation.

Instead, they buy companies that are failing or underperforming, because like a house that hasn’t been taken care of and needs a lot of work, these companies can be purchased at a relatively low price.

Perhaps the company needs to upgrade its equipment or processes; maybe management is stagnant, failing to make good decisions or timely decisions; or it spreads production components too thinly over too many products; or sometimes it must reduce employment to save the company. A fresh look by new owners with particular expertise in what the company does may very well turn it into a profitable entity. That is the bet that private equity firms make.

The firm then uses its expertise to recommend steps to improve the operation and performance, and the company most often prospers, grows, and creates jobs. The improved company is naturally more valuable than when it was purchased, thus the selling price is higher, and sometimes much higher. In three to five years the PE firm would sell the company at a profit, making money for its investors.

This isn’t magic. This isn’t criminal. This isn’t greedy. It is purely logical. And, furthermore, it was the intention from the start, along with producing the positive economic benefits it created and the products and services that it produced to satisfy the wants and needs of consumers.

So, the people investing in private equity firms put their money on the line, risking it on the hope that the firm will successfully buy and turn around poorly performing companies, and sell them at a profit.

However, private equity firms do not always succeed in turning around a purchased company, and in such cases the failed company is closed and people lose their jobs, and yes, the investors lose money.

The private equity folks can’t win. They get criticized as greedy when they succeed in turning around a failing company and then selling it for a handsome profit, and when it fails to turn a company around and the company closes and people lose their jobs, they get portrayed as profit-hungry, selfish capitalists.

What many people do not or cannot understand is the fact that the companies PE firms cannot save likely would have shut down had they not stepped in, and likely much sooner if it had not been acquired. And then there are those who use the pain of lost jobs and closed businesses as opportunities to further their political goals.

This is yet another example of how the American public’s abysmal understanding of how the economy works not only impedes the process of implementing favorable policies that will allow the economy to grow, but also arms demagogues with tools to take advantage of us for their selfish purposes.

There are other facts that need to be emphasized. First, if PE firms weren’t successful most of the time, savvy people would not invest in them. And, private equity investors use their own money in these endeavors, rather than taxpayer money, so no public money is lost in the relatively few times that they fail to turn a company around.

In “American Restoration: The Role of Private Equity,” an article on the Heritage Foundation’s website by J.D. Foster, Ph.D., the author explains that private equity firms “don’t always succeed. But their very existence and the [large] profits they reportedly make testify that they succeed far more often than they fail, and a lot of Americans can thank their continued employment to the prowess of these American restorers.”

Comments are invited

Tuesday, August 14, 2012

Odds and ends: Random thoughts on the passing scene

The Center for Immigration Studies released a detailed report that correlates high levels of illegal/legal immigrant poverty as contributing to the increase in welfare programs in the U.S.
A study by the Federation for American Immigration Reform shows that illegal immigration costs U.S. taxpayers about $113 billion a year at the federal, state and local level. About $84 billion is absorbed by state and local governments.

Strong border control by the federal government, and eliminating federal interference with state efforts to control illegal immigration could substantially reduce this wasteful expense.


The Heritage Foundation reported last year that “Texas created 37 percent of all jobs since the beginning of the economic recovery, more than any other state. Excluding New York and Pennsylvania, Texas has created nearly as many jobs as all other states combined.”

According to Richard Fisher, president of the Federal Reserve Bank of Dallas, “Texas is doing so well relative to other states precisely because it has rejected the economic model that now prevails in Washington. … Texas stands out for its free market and business-friendly climate.”

Among other factors, Texas has right-to-work laws, ongoing tort reform, has no state income tax, and has generally been a fiscally responsible state. As a percentage of its economy, the state’s budget is lower than the majority of other states.


“I don’t think Mitt Romney understands what he’s done to people’s lives by closing the plant,” Joe Soptic, a former employee at GST Steel in Kansas City, said in a Democrat PAC TV spot. He says he lost his health care, and then his wife became ill and died shortly after that.

The Washington Post reports, however, that Republican candidate Romney left Bain Capital two years before the GST’s 2001 bankruptcy; Politico notes that Ranae Soptic died in 2006, long after the plant closed; and CNN reports that at some points during that time she had insurance through her own employer.


Senator Majority Leader Harry Reid (D-Nev.) said in an interview with the Huffington Post recently that someone had called him to tell him that Mitt Romney didn’t pay taxes for 10 years. "Harry, he didn't pay any taxes for 10 years," Reid recounted the person as saying. "He didn't pay taxes for 10 years! Now, do I know that that's true? Well, I'm not certain," Senator Reid said.

A very good friend of mine who lives and works in Washington, DC, called me after hearing this, and said that “ol' Harry has been seen frequently peeking in Nancy Pelosi's windows and eating at Chick-fil-A.” Well, that’s what he said.

Paraphrasing a popular saying, there are lies, damned lies, and the Obama campaign.


Voter-registration forms being mailed to Virginia residents are addressed to dead relatives, children, family members in other states, non-U.S. citizens, people with similar names, existing registered voters and residents' cats and dogs.

These forms are among tens of thousands being distributed in Virginia by Voter Participation Center, a Washington-based national voter-registration group. The organization pre-populates the documents with key information, including names and addresses of prospective voters. This worries election officials, who say the mailings can create opportunities for voter fraud.

But, of course, Attorney General Eric Holder opposes requiring voters to show proof of their eligibility, saying that doing so would suppress voter participation.


Anyone who has spent much time watching the Olympics likely believes that the success of the remarkable people on the American team is due to a lot of individual dedication and hard work.

However, the success of American Olympic athletes and the success of American small businesses are analogous.

Like business people who didn’t build the roads, and other infrastructure that they used to make their companies successful, the Olympic athletes didn’t build the training facilities or the fields and courts that they utilized to become successful in their sport, and they didn’t start the Olympic Games that they now participate in.

They didn’t earn those medals. Somebody else did that.


Seeking to rally a crucial constituency, President Barack Obama on Wednesday warned women in swing-state Colorado that Mitt Romney and the Republicans “want to take us back to the policies more suited to the 1950s than the 21st century.”

Ah, yes, the 50s, when health care costs were so low you didn’t need health insurance (and it wasn’t even available); where you didn’t call the doctor or go to the hospital unless you were really sick; where doctors made house calls; a day in the hospital cost tens of dollars; healthcare was about 5 percent of GDP; “prospecting” lawsuits didn’t exist ... some things back then were way better than today.

A new Congressional Budget Office report says that under Obamacare, 30 million non-elderly Americans will remain without health insurance in 2022.

Wasn't the whole reason for Obamacare destroying our healthcare system to insure the uninsured?

Comments are invited.

Tuesday, August 07, 2012

President Obama’s policies failing to revive the American economy

More important than the lofty generalities candidate Barack Obama fed his fans about healing the planet, slowing the rise of the oceans, ending political divisions in America, and ushering in an era of hope and change, as President he and his administration gave Americans strong assurances of better things to come.

He promised to create five million new jobs just in the energy sector, and in promoting the $767 billion stimulus plan his economic advisors Christina Romer and Jared Bernstein predicted unemployment would not rise above 8 percent. In the first year of his presidency, Mr. Obama pledged to “cut the deficit we inherited in half by the end of my first term in office,” to “lift two million Americans from poverty,” and “jolt our economy back to life.”

The President told NBC’s Matt Lauer January of 2009, “If I don't have this done in three years, then there's gonna be a one-term proposition.”

Last week’s July jobs numbers show continued misery across the nation, again calling attention to Mr. Obama’s failure to deliver on his economic pledges. Since he didn’t “have this done in three years,” why is he running for re-election?

The unemployment rate ticked up to 8.3 percent, far above the 5.6 percent rate that his economic team predicted for July 2012 if Congress passed the $767 billion stimulus plan.

The Bureau of Labor Statistics (BLS) report for July showed that 195,000 fewer people were working in the U.S. than in June. Further, the BLS figures showed that 150,000 more people became discouraged and dropped out of the labor force.

Nevertheless, Mr. Obama struggled to put a positive spin on these dismal numbers, boasting, “we tried our plan — and it worked.”

Really? Let’s review the results: Forty-two straight months of unemployment above 8 percent; 8.2 million people working part-time who want full-time work; a record 88 million Americans who are not in the labor force; 1.9 percent GDP growth in the past quarter; $5 trillion in new debt; the downgrading of the U.S. credit rating; 38 percent of Americans living paycheck to paycheck; 45 million Americans on food stamps; food prices continuing to increase dramatically; and the poverty level likely to rise to the highest level in nearly fifty years.

If this is what a successful Obama economic policy looks like, let’s go back to the Bush years, where those “top-down” economic policies Mr. Obama so loves to hate created 52 straight months of job creation, and an unemployment rate that never exceeded 6.3 percent following the September 11, 2001 terrorist attacks, despite the attending chaos they caused. Oh, for the good old days.

The continued poor economy and dismal jobs pictures since he won the office he so aggressively sought are precisely what would we should expect from Mr. Obama’s big spending economic philosophy.

On the campaign trail, he said, “You grow an economy from the middle out, and from the bottom up. …When middle-class families have money in their pockets, they go out and buy that new car or that new appliance or the new computer for their kids or they go out to a restaurant – heaven forbid they take a vacation once in a while – and that money goes back into the economy and businesses do well because they’ve got more customers.” That same example applies to wealthy Americans.

The example supports leaving more money in the private economy, which is a point in favor of low income taxes for all. However, it omits a critical element: Before mom and dad can buy a new car or even a toaster, at least one of them has to have a job.

However, if they work in the coal industry or the space industry, or in a related business, thanks to the Obama administration there’s a good chance they either don’t have a job, or soon will lose it.

At a time of dangerously high unemployment, Mr. Obama’s jobs program focuses not on creating jobs, but on killing jobs. The coal industry is dying – or rather is being executed – as extreme air quality goals imposed by the Environmental Protection Agency force coal-fired generators to shut down, meaning consumers could see their electricity bills jump an estimated 40 to 60 percent in the next few years. The decreased demand for American coal shuts down mining and related companies, putting more people on the unemployment line.

His policies have produced high unemployment in Brevard County, Florida, the home of the Kennedy Space Center, which peaked in double digits, but now is about nine percent. That is somewhat lower than it otherwise would be because space industry workers had to leave the County to try to find work after the President scrapped the second manned moon mission in 2010.

In the grand scheme of things the jobs lost in the space and coal industries and in supporting businesses may be only a fraction of the total. But Mr. Obama should be held to account for policies that deliberately kill jobs in a time of already high unemployment.

This callous disregard for American jobs is not among the characteristics that voters should expect to find in their president.

Wednesday, August 01, 2012

Chick-fil-A supporters balk at boycott

Never being a group that believes in tolerance, except for everyone else, the lefties have their panties all in a wad because Chick-fil-A’s owner does not bend to political correctness pressure to accept gay marriage over the traditional definition of marriage that has been around for thousands of years. He values his religious beliefs ahead of society’s fads of the day, and is willing to put his business on the line for his beliefs. That takes courage.

In an effort to intimidate owner Dan Cathy, the lefties tried to mount a boycott of the restaurant chain, but it seems to have backfired, as today people who also don’t accept gay marriage over the traditional form, or who object to the intolerance and thuggish methods of the lefties, flocked by the thousands to have a Chick-fil-A sammich at restaurants nation-wide.

At the local site lines were backed up for 90 minutes most of the day, and reports indicate this was a common circumstance.

Some look at this as a freedom of speech or freedom of religion issue. Others see it “hate,” which is a bizarre and absurd assertion. Not wanting to change thousands of years of traditional marriage hardly constitutes hate.

Personally, I don’t care what two consenting adults do, so long as they don’t hurt someone else in doing it. However, traditional marriage is the basis for not only our culture in the United States, but also of a majority of the nations of the world. Abandoning it, as the U.S. has done over the last few decades, is responsible for much of the devolution of society.

What I object to is redefining something so all-encompassing as marriage and the traditional family to suit a small minority of people. It is dumb in the extreme.

Typical of the left, what they cannot change through reason and persuasion they try to eliminate through force and intimidation. Cowards, all.

I have the feeling that Chick-fil-A will survive this pitiful attack.