Phil Hauck's TEC Blog

Tuesday, November 25, 2014

From motivational speaker John O’Leary of St. Louis, speaking to a TEC Senior Managers group:

In 1974, at the age of 9, I did something really stupid.  I took an open 5-gallon can of gasoline near a flame … and the resulting explosion rendered me with first- and -third degree burns over 100% of my body.  The photos of me are horrendous, like a charred hulk.  The likelihood of survival was nil.  I lay in the hospital for months.

Two people became very significant to me.
One was Nurse Roy, a strapping black man.  Each morning, each day, Nurse Roy would come to my bed, look at me, and yell, “KID!  KID!  You’re going to walk again.  Here, let’s get up!”  Each morning, each day.  Each morning, each day.  Months later, I walked out of the hospital.

The second was Jack Buck, the revered, Baseball Hall of Fame announcer for my favorite team, the St. Louis Cardinals.  Jack was told about me in the hospital, and visited me.
As a result of the burns, my hands are crippled.  Even today, I can barely grasp anything.  In the hospital, I couldn’t use his hands.  
Knowing that I loved the Cardinals, Jack Buck sent me a baseball, autographed “John, Good Luck!  Ozzie Smith."  Ozzie Smith is the Hall of Fame shortstop for the Cardinals.  With it was a note:  “John, if you’d like a second autographed baseball, write Ozzie a Thank You note.”  
But I couldn’t write.  Or could I.  I did.  I figured out how to write the Thank You note to Ozzie.
Two days later, another baseball, this time autographed by another Cardinal star, arrived … with the same note.  And I struggled, but completed another Thank You note.
And two days later …
In all, I received 60 baseballs … each one coordinated by Jack Buck.
And I learned to get my fingers to write again.

Many years later …
Nurse Roy had left the hospital and moved away.
In 1987, I was a 22-year-old graduating from St. Louis University.  In attendance at the celebration was, 13 years later … Jack Buck, now suffering from Stage 4 cancer that would take his life, but there to co-celebrate what should never have been able to happen … me actually graduating from college! 

Not long ago (John is 49 now), I was invited to an Alabama town to tell my story.  That’s what I do these days.  The sponsor, unknown to me, had hired a private investigator to track down Nurse Roy.  After three weeks, he was found … back living in St. Louis again.  The sponsor flew him to Alabama as a surprise.  And it was!  I thought I would never see the man who had been so persistent in getting me to overcome my apparently hopeless situation.  “Kid!  Kid!  You’re going to walk again.  Here, let’s get up!"
Nurse Roy said he was “shocked” by several things.  One was that I was able to lure as my wife such a beautiful woman as Elizabeth Grace.  And the second was …

                                          “I didn’t realize how much my work actually mattered.”

So:  Think about yourself.  What you do truly matters to others.  You will be remembered and appreciated.  So, get to it.

What Blue Zones Are … and Mean!

On November 13, I traveled to Portland, OR, to attend a Oregon Healthiest State Initiative conference … because my daughter, Katie, put it together.
I’d be happy to talk about that further, but what I want to share with you is that Dan Buettner, the founder of the Blue Zones Project, spoke … and did the best job I’ve heard of explaining what the Blue Zones lessons are … and why they’re important.
As you’d expect, I’ve “written up” his talk; see below.  Please take time to read it, slowly, and embrace its lessons.
The Blue Zones are the five places in the world where people live to be, on average, age 90, and have the highest percentage of centenarians in the world.  “They forgot to die.”
It’s about life style … and Buettner and his researchers found Nine common factors.
You need to know what they are, because …
You’re spending way too much of your family’s income on health insurance and medical expenses … and we all need to change our life styles so we stay much more fit and healthy, and avoid those expenses.
Now, please read ...

Blue Zones are the five places in the world where people live on average to age 90, and have the highest percentage of centenarians in the world.  Those places are:
•  Loma Linda, CA, USA ... 7th Day Adventists.  Sabbath is Saturday, a de-stress day.  Plant-based diet.
•  Village on island of Sardinia, off Italy’s coast ... High concept of community, zeal for family.  Grandmother involvement yields lower rates of disease and mortality.
•  Ikaria, a Greek island ... The island where people forget to die.  Pure Mediterranean diet.  Almost no dimentia.
•  Okinawa, a Japanese island ... Lots of vegetables, sweet potatoes.  Eat little.  No loneliness.  No word for ‘retirement.”
•  Nicoya Peninsula in Costa Rica ... Main diet is three of the healthiest foods.

We know that longevity is influenced 20% by your genes ... and 80% by your lifestyle behaviors!  So, the biggest predictor of long life is your lifestyle.
Consider these questions:
•  Do you sleep at least 8 hours, five days a week?
•  Do you “move” at least 30 minutes a day?
•  Do you eat three servings of vegetables a day?
•  Do you have three good friends you see frequently?
•  Do you belong to a faith-based community, and show up at least 4 times a month?
•  Have you not smoked at all the past five years?
•  Do you have the capacity and desire to reach 90?  A self-assessment.
If you answered Yes 7 times, you’re likely to live to age 88 if you’re a man, and to 92 if you’re a woman.

I and my researchers went to these five places to analyze why long life resulted, and to find the common factors.  There are NINE of them:
•  Move Naturally:  Walking, pedaling, hiking, climbing, swimming, most of the day
Have the Right Outlook
  •  Lower Stress
  •  Have a Sense of Purpose
Eat Wisely
  •  Plant Slant:  Beans are great!
  •  80% Rule:  Stop eating when you’re 80% full.
  •  Wine at 5:  Red wine, with friends.
  •  Belong to a Faith-Based Community, and meet with them at least 4 times monthly.  (Adds 14 years to life expectancy!)
  •  Families First:  Especially including grandmothers.
  •  Belong to Supportive Groups, ones that support healthy behaviors.

So, how can we get these traits to be replicated in our societies?  None of these people had t-shirts for running a 10K, nor belonged to a fitness club.  Their lifestyle behaviors were influenced/ driven by their ENVIRONMENT!  When you look closely, this approach becomes intuitively obvious.  Obese people aren’t still obese because they choose to.  They’ve tried everything to lose weight ... as individuals!  We’re products of the people and groups we choose to be a part of, whom we’re comfortable with.  If our families and/or friends are chubbier, we’ll tend there.  If they smoke, we’ll tend there.  If they ....., we’ll tend there.
And if we stimulate groups that embrace healthy behaviors, in environments which don’t include bad influences, and have lots of good influences, we can upgrade the health culture significantly.
And we have.

We experimented in 2009 with Albert Lea, Minnesota, which already had some good things going.  It was a “ready community.”  We deployed a five-person, well-trained team.  Their charge was to encourage more of the good things that already existed, getting even more buy-in ... and to work to get leadership groups (mayor, city council, school boards, principals, business leaders) to embrace other good things.
We created lots of activity to emulate a “Perfect Storm.”  We used t-shirts, creative group efforts, classes ... We evaluated grocery stores and restaurants for how “healthy” their offerings were ... and they became “Blue Zone” certified.
We learned that ...
•  We need a big storyline that embraced everything, and increased pride in the community ... and kept telling stories that emulated that brand image.
•  We developed measures, audited by third parties, that could show continuing progress.
•  We institutionalized what we did not as a program ... but as an operating system.
•  We didn’t rest on first year success ... but persisted over several years.  Ingraining these habits would take 3-5 years.
•  We tested different ideas, and when they worked, we scaled them up.
The result:  Within several years, Albert Lea citizens, on average, had adopted behaviors that had extended their lives by 3 years ... not sick years, but healthy years.  And by more as the behaviors deepened, became more consistent.
This has all been extensively documented in the literature, and in National Geographic magazine.

Now, we’ve partnered with Healthways, a Nashville disease management company, to develop teams that can work with other communities.  We’ve completed an effort with three Los Angeles Beach Cities (Redondo, Hermosa and Manhattan) ... with similar results.
Now, we have contracts with both Iowa and Hawaii for “healthiest state” initiatives, and with Fort Worth and, in Florida, Collier County (Naples).  And we’re talking to others.

We know that 84% of medical costs are explained by physical inactivity, food choices and portion size, tobacco and unmanaged stress.  We’re hard-wired to seek fat and sugar, and rest when we can.  That’s how we survived for years in active agricultural and industrial economies, but it works much less well in our sedentary information-based civilization.
We need to adopt a different model!  Not ones initiated by government or hospitals.  All the financial gains are aligned with treating sickness, not health.  It’s the wrong way to look at it.

We need to re-construct ourselves in a culturally appropriate way ... making the healthy choice the easy, indeed unavoidable, choice!

Phil Hauck   Nov. 2014

Is it too late to train Millenials to be leaders?

A 30-something banker friend and I got into discussing his business leader contacts’ frustrations with finding good hires.  They are telling him that it’s tough to get current employees in the Gen Y and Millennial groups to want to take on more responsibility as leaders.  The inference is that taking on that aspiration will result in more time working, and less time for friends, family and fun.  So they don’t.
What are the business leaders doing about it?  Basically, exposing them to what else there is … techniques on better managing and leading, insights into how to run other parts of the business.  These efforts will make them more knowledgeable and broader contributors, and they hope that from the groups of people going through these exposures will emerge a few who are actually anxious to get better at them, and take on more responsibility.

From Marketing guru Steve Yastrow:

“Next time you see a list of all the marketing activities your company conducts, insert a new line at the top of this list labeled 'Conversations That Matter.' Then, consider the relative amount of resources dedicated to the marketing activities and to conversations that matter.  Are you focused enough on conversations that matter?   Your customers are."

Wednesday, August 6, 2014

On Income Inequality and the Middle Class (Ah, Controversy!) ...

Income Inequality Is Over-Stated … by a large degree!
   (And so is the Women’s Wage Gap!)
I’m reading more and more articles making this point.  There is something called the Gini coefficient, named after the man who developed it in the early 1900s, that measures the gap between those with the highest incomes and those with the lowest.  Over the past 40 years or so, the Gini coefficient has actually lowered, not increased.  Most quotes look at the gross incomes of families … but when transfer payments and tax credits are included for our lowest income (housing allowances, food “stamps”, Earned Income Tax Credit, etc.), we are actually doing pretty good.
The studies indicate the keys to progress are NOT minimum wage increases, more government benefits, and the like.  Indeed, when you compare states experiences, those states with the highest minimum wage, highest levels of benefits, etc., actually have the higher Gini coefficients, on balance.  What’s going on is that those policies chase away workers, business and capital.  They aren’t relatively more prosperous economies.
The key, they show, is having aggressive policies that “raise all boats,” which is pretty hard to do these days because increases in regulations, uncertainties, etc., lower the willingness to expand.  But some states have and are doing it.
Note:  Yes, the past several years have shown a divergence in the Gini Coefficient ... increasing inequality.  The 1% that we disparage got that way and stay that way because they earned enough money, after taxes, to SAVE money they could INVEST.  The stock market has been on a tear … so those who have SAVED have increased their INVESTMENT EARNINGS.  Those of us who work for salaries and wages don’t get those kinds of increases (nor the ups and downs of the stock market, either).  
        How do we resurrect the adage of "Pay Yourself First":  Save 10% of your paycheck and invest it, and live off the rest.
Regarding the Women’s Wage Gap:  If you take the gross wages earned of women vs. men, you get the large gap that our president talks about.  Studies that have built in the impact of differences in skill levels, hours worked, results, etc., find that the gap is still there, but it’s 4%, not  the 23% that is often quoted.

There's concern about the disappearance of the Middle Class.  
       Indeed, one study with a definition of the Middle Class indicated it has shrunk by 10 percentage points over the past 20 years, with 6% moving up and 4% moving down.  The difference was education level.
       Whereas the computer's ability to process data and provide information has eliminated millionss of Middle-Class jobs, it's also true that many formerly manual jobs have become more sophisticated and command higher wages.  That includes many health care jobs, many construction jobs, automotive repair, customer service, some call center, most administrative, teachers, designers ... and the like.  Middle Class jobs are/will be a combination of judgment and use of computer analysis skills ... requiring some training beyond high school, and on-the-job sophistication.  That's the challenge for those who want to be Middle Class.
Others simply won't.  They require much physical work, are easy to learn ... and are in plentiful supply.  They will be worthwhile, but not high-paying, and not family supporting.
Another trend:  A reduction in the costly learning considered a requirement for many "professional" positions ... a reduction to the knowledge necessary, plus on-the-job experience.  Teachers may not need a college degree, attorneys may only need two years of study.  You already see the trend in medical care with the burgeoning of nurse practitioners, hospitalists, and the like.

Microsoft Executive's Insights ...

I had a chance, courtesy of Skyline Technologies at Insight Magazine’s Thinc! conference, to hear Efram Stringfellow, Microsoft’s 18-state regional head, talk about the future of his business. Among his points:
•  Already, more than 2.4 billion people are internet-connected … just one click away from YOUR website.
•  Millennials are interviewing US for jobs.  We used to be interviewing them.
•  Companies aren’t built for change.  We’re built for consistency and order, delivering our current strategy flawlessly. Yet, now we want our people to grab the data they need, interpret it, and react on their own to the customer’s needs as they change!  How to make that transition in our expectations of what each employee should be doing?
•  Our coming workforce is expecting a “rapid response organization, and if you aren’t, they’ll find one that is."  Rapid response comes from “open communication, experimentation, and working as a network.”
•  "Break the paradigms.  Everyone is showing up with somebody’s mobile device, and if we're to have dominant market share, we have to support others' operating systems as well."
•  The Cloud is NOT necessarily cheaper … but what it is is secure and  up-to-date with upgrades.
•  Our aim is to get you out of a system that YOU have to maintain.  You don’t have all the necessary expertises, and we do.
•  We need to provide you a Roadmap of where we think we’re going, so that you can make intelligent decisions regarding risk and cost as to how you want to invest in these new integrative technologies.
•  Two of his four kids are named Xavier and Quentin.  He referred to them as “X” and “Q”.

Of Interest ...

Beer Lovers ...
Okay, Beer Lovers, what’s the largest brewing company owned and headquartered in the U.S.?
(See answer, below.)

New NFL Success Factor?  
A recent article pointed out that the Indianapolis Colts and New England Patriots, two “dynasties” of the past decade or so, are teams loaded with college graduates as measured by players drafted as 5th year seniors. Two of the top three in college graduates met in last year’s Super Bowl (Denver and Seattle); worst was Jacksonville, which went 4-12.

No, not jobs.  "Jobs:  The Movie"  About Steve Jobs
It's not a great film, but what it does do is demonstrate the importance of a Leader CLEARLY and FORCEFULLY expressing the MISSION of the organization.  The CAUSE.  WHY we're doing what we're doing.  He does it in spades ... all the time ... sometimes brutally!
People want to buy in to what you are doing emotionally!  Allow them to do it.

Area College Tuition, Aid Gaps
A recent Insight magazine article showed this interesting data.  Note:  The Aid amount also includes Loans, which have to be paid back.
Estimated Cost Average Aid Difference
Fox Valley Tech $3,300 N/A ??
UWGB $17,298 $10,711 $6,587
Lawrence  $49,722 $33,730 $15,992
St. Norbert $38,498 $20,341 $18,157

Fragility of the Business Enterprise
1995 was 19 years ago.  Since then, fully half of the that year's Fortune 500 companies then have been replaced.  Lessons:  There is no assurance that mature companies will persist.  Like civilization, the culture and responsiveness to marketplace changes of business organizations is fragile.  Support and development of the business infrastructure needs to be strong state and national government policy ... including encouragement of R&D and new business startups.

Another Sign of the Apocalypse  
We thought we were done when we recognized how poorly school boards and city councils have done with taxpayers money by agreeing to ridiculously expensive union contracts.  Now comes word that the board of the Metropolitan Opera has in the past agreed to union contracts (they deal with 15 unions!) that pay musicians up to $200,000 and choral group members $145,000 to $150,000 … starting with a $100,000 base that includes 9 weeks of paid vacation, and then has add-ons for wearing costumes during breaks, including lunch; using body makeup; costume fittings; any encroachment of the 4.5 hour respite before performances, and for being present more than 7.5 hours a day.  How do organizations survive?
PS:  Green Bay's Symphony didn't ... their 101st year will be their last.

On Regulations ... A Sunset Date!  
We complain (rightly so) about the stifling capability of regulations at every level, but they just keep piling up.  Obviously, most are good for society (as opposed to those that are good for organizations that “paid” to get them created), but ...  An idea I read:  Have an Expiration Date on all regulations, no more than ten years hence, when they must be reviewed as to whether they need to be renewed.

India Turning Around?  
Kitty and I traveled to India back in 2008 as part of a TEC international trip … a country of 1.2 billion people, first-world and third-world (that part living on less than $2/day).  60+ political parties, so virtually impossible to govern.  Gave them low marks for ability to create a vibrant economy.  That may now change:  New prime minister Modi, who uprooted the 30-year rule of the Nehru/Congress party and actually won more than 50% of the vote(!), has a track record in his state of Gujarat, which he led since 2001, of vastly reducing corruption, creating financial and technology parks, expanding infrastructure to support growth, and following successful trade development policies.  Let’s hope.

Taking Business Income Tax Rates To Zero!
I’ve long wondered why businesses are charged any income tax at all.  They are the golden goose, creating jobs that provide incomes for families.  So, why tax them, taking away dollars that would have been used for capital expansion and new product development?  Why not leave that money in the business so it can be used to create more jobs … and thus even more income to tax?
Well, Kansas has taken that step.  Last year, Kansas reduced to zero from 6.45% the income tax on sole proprietorships, LLCs and Sub S Corps.  One result:  2013 had a record year in new business formation.
When will we do this nationally?
Corollary:  Don't tax any income earned by a business overseas.  There is much discussion about our current taxation policy of overseas profits right now (Inversions!), and its result of keeping dollars sequestered overseas rather than repatriated to the U.S. to fund expansion here.  

Beer Lovers Answer ...
Nice try.  MillerCoors is owned by SABMiller, South African-based ... and Anheuser-Busch is owned by InBev, a Belgian concern.
Hard to believe, but the largest brewing company owned and headquartered in the U.S. has only 1.6% market share:  D.G. Yuengling & Son, very strong on the East Coast.  Second, with 1.3%, is Sam Adams.

Thursday, May 1, 2014


•  It costs about $125,000 a year to train a medical resident.  That’s the three years or so after their internship and after their med school.  According to John Raymond, head of Medical College of Wisconsin at a recent St. Norbert CEO B’fast & Strategy session.  When they start the med school at St. Norbert’s, it’s an effort to increase the number of available physicians. Training will be done by many of the local practitioners … and we’ll be able to get a higher share of residents.  He also said that if a person attends both his/her med school and residency in Wisconsin, there’s a 70% likelihood he/she will stay here.  They’re also going to put four years of med school into three, to reduce the student debt level.  This year, they have 7700 applicants for the 204 slots in the beginning med school class in Milwaukee.
         Much of the $125,000 is paid by the federal government, which controls where residents can be trained, and how many can be trained ... which restricts the number of physicians we graduate each year.

Wisconsin Rises To 14th from 20th in Gallup's Wellness Ratings

         Most of us read in February that Wisconsin improved to 14th from 20th in the last Gallup/Healthways annual ratings of Population Well-Being, but buried within that report are some interesting points.
The ratings are based on phone interviews with 176,000 people (3651 in Wisconsin), and look at six key areas, only one of which is Physical Well-Beiong (Wisconsin was 18th).  The others:  Life Satisfaction (25th), Healthy Lifestyle Habits (19th), Work Environment Satisfaction (primarily treatment by supervisors, 26th), Emotional Health (10th) and Access to Basic Needs (6th).
Iowa was singled out as having the most comprehensive official approach to improving health; they embrace a Blue Zones ( process that was pioneered by Healthways, a disease management organization.  
Among other points regarding how to be successful:
•  You need high ratings in (1) learning new and interesting things daily, which meets an important psychological need, and (2)workers using their strengths, resulting in high physical and emotional health, and (3) safe places to exercise.
•  For the most part, said the research director, well-being goes up with income (especially for the emotional well-being factor).  They hit their peak at about $75,000 a year, and don’t get better after that.  Also impactful, even if incomes arren’t high, are educational attainment and low unemployment.
•  “Be it politicians, executives, clergy, school principals, grocery store managers or community activists, a well-informed and active leadership is crucial to a state’s success at building an institutionalized, embedded, and sustained well-being culture. …. including a shared and uniform definition of well-being, constant and public vigilance in its advocacy, and a clear message that commitment to it … will never, ever go away.”
The top states:  North Dakota, South Dakota, Nebraska, Minnesota and Montana.  The worst:  West Virginia, Kentucky and Mississippi.


Earlier this week, it was reported that employees of Media Matters, a non-profit that is a proponent of labor union issues and was founded to counter-interpret conservative misinformation, want to vote to organize as a union represented by a Services Employees union local, the nation’s largest non-manufacturing union.  However, Media Matters management, while publicly stating  it isn’t “actively opposing” unionization, has hired a high-powered anti-union law firm to work with it.  Media Matters has 51 employees, it’s reported, of which 36 have indicated an interest in unionizing.  Ironically, the SEIU is a top donor to Media Matters.

AND/BUT:  Hypocrisy has no boundaries.  In the past two weeks, the EEOC sued Kaplan, the for-profit learning company, for using credit-checks on applicants, saying there was no need to and it resulted in a “disparate impact” on black people.  The federal judge found that there was a legitimate business need … and indeed, it is the same credit check process that the EEOC uses on its own applicants.

One more thing, on Regulations …
I heard my U.S. Rep. Reid Ribble, who ran the family roofing business with 150 employees for several decades before running for Congress, say that he has a mission to help his fellow Reps understand the impact of every Regulation that they authorize and gets issued:  That every Regulation that applies to that type of business requires someone to analyze whether it applies to it, and if so when, and then to set up up a record-keeping operation around it … and then to assign people to do the things that it requires.  In other words, every Regulation adds costs … at the low end in discretionary time (the person can fit in the analysis), but then when “doing” is required, it becomes costs that are passed on to the customer.
How effective is he?  Four of the five highest years of rule-making/publishing have occurred in the past four years … at around 80,000 pages.  The fifth was in 2008.  These pages publicize both the rules that are proposed, as well as when they are finalized.
Back in 1995, I was a delegate to the White House Conference on Small Business, and I watched Bill Clinton and Al Gore show us on a table a stack of 16,000 pages, which represented regulations that had been repealed.  I guess it didn’t “take."

Harry Dennis passes away

My boss at TEC, Harry Dennis, 70, passed away last Sunday at his winter place in Vero Beach of complications from a decade-long lung deterioration.  He was one of the first employees hired in 1974 (Bob Nourse created TEC I in 1957) and created TEC IV in Madison, which still persists, and became sole owner of TEC Wisconsin-Michigan in 1989;  there are seven different TEC/Vistage organizations, but the dominant one is headquartered in San Diego.  
        More importantly, he embodied, lived and espoused the TEC values around non-commercialized service to our members.  As TEC has grown nationally, and now internationally into 14 countries as Vistage , Harry was the Keeper of the Flame, the person who represented what TEC is all about both nationally and internationally.  That’s important as these seven entities moved through different ownerships and we fight to maintain the original value proposition.
He hired me as a TEC Chair beginning in 1990.
A Chair’s relationship with Harry (we’re actually independent contractors, not employees) could be tumultuous when he very pointedly railed at us for not providing the value he felt we should to members … but if you were ever in stress either personally or professionally, he couldn’t have been more supportive as you moved through it.  That creates loyalty.
We often wondered how come we didn’t “run” TEC as we espoused organizations should be run to our members.  Eventually, we figured it out … that Harry truly treated us like family, with full faith and trust (usually).
He struggled for years on what should happen to TEC Wisconsin-Michigan should anything incapacitate him.  He shared with us many scenarios.  But finally he picked the best one of all:  TEC Wisconsin-Michigan would never be sold.  It would be held within a trust, and operated from within that trust.  The trustees are in Milwaukee, and Priscilla Kemp is our CEO and has been for two years; she’s a 37-year employee of TEC so understands all of our values.
In 2009, he said to us, “I’m hanging around until when Bob Nourse did.  (Note:  Bob Nourse died at age 94.)  That gives me another 25 years of helping this great event with our CEOs continue to grow and unfold …”
We wish he had.

Tuesday, March 11, 2014

Why China Doesn’t Innovate

We read a lot about China’s dynamicism, but listen to this from an article in the Harvard Business Review:  
“The Communist Party requires a representative to be present in every company with more than 50 employees.Every firm with more than 100 employees must have a Party cell, whose leader reports directly to the Party in the municipality or province.”
So, in Chinese companies of any size, who do you think the “real boss” is?

Walmart Vs. Costco: An Inappropriate Comparison

In Green Bay during the past few months, Walmart has wanted to put a store downtown, so we got to hear all the reasons that Walmart is bad ... including the old one that Costco takes care of its employees and Walmart doesn't.  The Costco/Walmart comparison is a very inappropriate one.  They have two completely different business models resulting in different gross margins and earnings percentages.  To understand the business model difference, go to this article:

On Walmart vs Costco

And This on Local Medical System Costs ...

New North BTB Magazine annually uses state hospital association data to look at reported costs of area medical providers on a range of high volume medical services.  We know that the U.S. system costs about 30% more than the next highest, so you'd expect efforts would result in lowering costs.  Not so!  At least not overall.
     Of the seven major services reviewed, every one had an increase in average costs to 2013 from 2012.  Of a total of 78 provider data points, only 16 went down; 62 increased!

More on the Medical System ...

     According to the Harvard Business Review, an hospital system in India plans to open a 2,000(!) bed hospital in the Cayman's with the objective of siphoning off profitable U.S. surgeries and other treatments through its low cost processes. This is amazing! And another wakeup call to the U.S. way of structuring medical care. And they aren't doing it only through low salaries and wages; that's a minority of the cost differences.
     The article says that the main way they create lower costs is a Hub-and-Spoke location system, where the Hub is the large specialty center (either a single specialty or multiple ones) and the Spokes don't have ANY expensive equipment (as U.S. ones frequently do) other than diagnostics, and are primarily a gateway facility. MRIs and labs are provided electronically to the specialists at the Hub for diagnosis and prescription.
     This structure as well as how they define job roles are aimed at cost-effectiveness, not market competitiveness. They try to have people do as many procedures or services at their skill set level as possible, and locate and schedule to that. Much more cost efficient!
     Get this: The cost result, even after increasing the salary/wage levels to U.S. levels, still results in procedure costs that are about one-quarter of the U.S. medians!!!
     The article goes on to illustrate how they go to major lengths to maintain expensive equipment so it lasts longer (or contract with the equipment makers for "pay-for-use" rather than purchase), to re-sterilize all re-usable equipment and supplies for re-use, to provide videos to family members so they can provide post-surgery care at home ... and others. And all staff, including doctors, are informed each morning of the P&L results from the previous DAY!
     And yes, the outcome data is comparable to U.S. and international protocols.
     The importance to US, the PAYERS: The solutions to our cost problems, which also drive our access problems, will come from pressures/influences by US ... not from within the industry (tho they will provide the expertise) or government.
     Just sayin' ...

Complexity/Amount of Regulations Fosters Fraud, Favoritism

Per David Brooks in a recent column:
Steven M. Teles had a mind-altering essay in National Affairs called “Kludgeocracy in America.” While we’ve been having a huge debate about the size of government, the real problem, he writes, is that the growing complexity of government has made it incoherent. The Social Security system was simple. But now we have a maze of saving mechanisms — 401(k)’s, I.R.A.’s, 529 plans and on and on. Health insurance is now so complicated that only 14 percent of beneficiaries could answer basic questions about deductibles and co-pays.
This complexity stymies rational thinking, imposes huge compliance costs, and aids special interests who are capable of manipulating the intricacies. One of the reasons we have such complex structures, Teles argues, is that Americans dislike government philosophically, but like government programs operationally. Rather than supporting straightforward government programs, they support programs in which public action is hidden behind a morass of tax preferences, obscure regulations and intricate litigation.
Also, recently in the New Yorker, in a column on the corruption involved in Sochi Olympics construction:  "The more rules you have, and the more people enforcing them, the more opportunities there are for corruption."

Bogus Inequality

The fact is:  Studies from Columbia University and the Congressional Budget Office and others in the last two years indicate that Inequality has actually lessened ... not increased ... over time because of the impact of government transfer payments to the poor and other benefits they can access.  What most irritates people is that the 1% have been able to stretch their lead even more, especially thru the recent downturn.  
Studies show:
•  From 1993 to 2006, "inequality actually declined 1.8%," according to Ohanian and Hagopian in their Policy Review paper, "Mismeasure of Inequality."
•  Even President Obama says that the percentage of people within the definition of poverty has declined since 1965 to 16% from 26%.
•  When they speak of a "decades-long slide in equality," people are referring to pure "money income," which doesn't include the impact of relative taxes, and such transfer payments as Medicaid, food stamps, Unemployment Comp, the Earned Income Tax Credit, and such.  When those are considered, inequality has declined.  The measure is called the Gini coefficient; look it up.
•  Upward Mobility still exists, according to Treasury Dept. studies which track the same people over time.  In the decade of 1996-2005, roughly half of those defined in poverty in 1996 had moved to a higher quintile by 2005.  This is in sync with what happens in Green Bay; people in poverty strive and move through it.
•  During the higher economic growth years of the 80s and 90s, every quintile of income increased its income at a rate higher than inflation.  To be sure, the top 20% increased more than the next quintile, and that one more than the one lesser than it.  But none got their increase at the expense of another.  They were all able to gain.  The key to increasing the welfare of the poor, studies show, is policies and an environment that fosters job creation.  Growth economies have improved the relative status of the poor more than any other factor.

Conclusion:  IF the goal is to deliver higher family income and better standards of living, then it will best be done via economic growth with opportunities at all wage levels ... not through redistribution of wealth.  To the degree we need to take care of the poorest, those programs have been sufficiently in place for some time.