David Hess, PMP
Best Consulting Specialists Inc.
Feb. 15, 2019
In today’s politically charged climate, these two terms can conjure up negative connotations. In business, however, they are your best friends. Whether it be in Quality, Reliability, Production, Logistics, Suppliers, Projects, Sales,,, managers will establish metrics to support goals and objectives. The manager’s job in creating those metrics is not complete without also developing Monitor and Control plans. Without these, success of achieving the metric is not guaranteed. Rather, failure is imminent.
Monitoring consists of the processes and procedures for comparing actual performance to a predetermined set of metrics. The purpose of monitoring is to highlight variances or deviations from those metrics. Monitoring is a continuous process. It functions to continuously verify performance to those metrics and to detect noteworthy deviations if and when they occur. It starts when the metrics are created by determining what to monitor, when to monitor, and how to monitor. It ends when those metrics expire or are reset.
Controlling is the resulting series of investigations, analyses, and actions taken to determine, and correct, the root cause of a highlighted deviation. Controlling is a finite process that only occurs if there is a deviation. Its starting point is the flagged deviation and its ending point is the implemented action to address that deviation. Once an action is implemented, the Monitoring function resumes to verify the action has corrected the deviation.
Start by deciding What, How, and When to monitor and be specific. Next, move into establishing a Monitoring method. The method is determined by the metric. Establish a reporting process and procedures for reviewing them. These could be routine meetings with suppliers to review quality or delivery performance, or in the case of a budget, they could be automated alerts when deviation limits are exceeded. The more automated the monitoring method can be made, the more likely you are to stay true to the plan because, it is human behavior that during an extended period when things have been going well, we will get complacent in monitoring performance.
The Control Plan consists of a proactively defined series of actions you will take when a deviation has been detected. The goal is to determine and correct the root cause. Those actions are analogous to a toolbox of tools. Among others, the tools could consist of variance analysis, horizontal analysis, Ishikawa, or Five Why. Which one to use depends upon the metric but the key to finding and correcting the root cause is to stay true to the process. Once a likely cause has been identified, it needs to be validated and a solution needs to be created to correct it. That solution must to be tested BEFORE it is implemented. This step is critical to ensure not only that the solution provides the desired result, but to also insure the it does not break something elsewhere. After these steps, the solution is implemented and then monitored.
These may seem like intuitive steps but in the rush to implement a metric, or to implement a solution, steps get skipped and result in potentially disastrous outcomes. One need not look far into the recent past to find examples such as, Apple’s Antennae issue, or when KFC ran out of chicken in the UK. Monitoring and Controlling are a Business’ best friend.
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Great speeches and slogans that articulate a vision may get a Politician elected or a Business Leader appointed to the board, but they will lose support and be cast aside if people perceive a lack of integrity. It is integrity, demonstrated by the behavior of the person behind the title, that is the backbone of the ability to lead. Like the human backbone, integrity supports and provides a common cord connecting all other leadership qualities. Like the human backbone, integrity provides for the range, and limits, of allowable motion for all other leadership functions. Without integrity titles are meaningless words and people, eventually, stop following words. People never stop following leaders.
One of the ironies in life is that people have a hard time describing what it is that makes someone a leader but, they generally can describe what it is that discounts someone from being a leader. Visionary is a word often used to describe a leader and, no doubt, leaders are Visionary. The late Steve Jobs, Founder of Apple, was the epitome of a Visionary. He once said, “people don't know what they want until you show it to them” and he had the vision to create products that revolutionized the consumer electronics market. Great communicators, such as was used to describe the 40th President of the United States, Ronald Reagan, is another phrase associated with leadership. Truly, leaders are skilled communicators who clearly articulate their Vision, build Relationships, and Influence outcomes to make the Vision a reality. Then again, though Hitler was an excellent orator and had a Vision for Germany to rule the world, he was not an excellent leader. Some say Leaders are good Managers and absolutely, a leader must possess the ability to Execute a plan in support of the Vision. Jeff Bezos Vision for Amazon, "Our vision is to be the world's most consumer-centric company, where customers can come to find anything they want to buy online”, has become a reality because he created and executed to a business plan he created while driving to Seattle to start the company. Yet, not all managers are good leaders.
What, then, is missing? Integrity! All these descriptions and traits must be built around a backbone of Integrity. Without regard to title of position, a loss of integrity will cause followers to lose confidence. What is integrity? Integrity is the personal compass that incorruptibly guides the qualities of being trustworthy.
Doubt this? Look at Harvey Weinstein. The founder of Miramax and a leader in the entertainment industry, was brought down because of his lack of integrity as highlighted in the sexual abuse cases. Then there is the example of the President of the United States. I’m not speaking of Ronald Trump but rather the 37th President of the United States, Richard Nixon. His accomplishments as President are overshadowed by his demonstrated lack of integrity. For those too young to recall, President Nixon resigned rather than be impeached for his role in, and subsequent cover-up of, the burglary of the Democratic National Committee.
So, what do President, CEO, Vice President, Manager, and Congresswoman all have in common? They are titles used to describe a leadership position and these titles are more than just words. They carry with them the expectation that the person holding the title not only possesses certain job skills, but that they are experienced and experts in using those skills. They must be knowledgeable in their field, be excellent communicators, negotiators, collaborators, influencers, and be great managers. Nonetheless, these skills are not enough. As J.C. Maxwell wrote in his book, Irrefutable Truths of Leadership “…your knowledge may have gotten you the management job but that does not make you a leader.” Hence, skills are not the backbone of leadership. Integrity is the backbone of leadership. Integrity demonstrated through the behavior of the person behind the title. Without this, a title becomes a meaningless word and people do not follow a word. People follow leaders.
David Hess, PMP
Jan. 08, 2019
Best Consulting Specialists
Yeap. It was supposed to be your shining moment delivering that career making presentation but instead you got nervous, stuttered, couldn't focus, and basically fell flat. You blew it, you knew it, and now what? Umm well, you pick yourself up, stop complaining, stop saying ummm, and solve the problem. Get some public speaking/presentation training because solving problems is what embodies you, not that one fleeting moment.
It's not really that complicated. In creating any presentation, you need to first consider the audience, the setting, the demographics of the audience, the message you want to convey, and the time you have available to do so. Ask yourself, who is the audience? Is it executives or is it a group of peer associates? Knowing the audience lets you know what kind of information they are looking for and sets the tone for how you will deliver it. The setting refers to the place you are delivering the presentation. The preparation and techniques for presenting via online format are quite different than those used when speaking in front of a live audience. We've all seen those online headlines about words or sayings you never hear anymore. In that same note, the demographics of the audience shapes the media and the words you will use to communicate and connect with the audience. Likewise, understanding the audience means you also know what the message is they have come to hear. In the presentation game, you hit a homerun by hitting the message right at the audience; not over their heads. Lastly, who wants to only catch the first part of a concert? You need to deliver the entire message to make the information effective. Hence, like a conductor, you need to set the timing of each part.
After you know these things, you start to build the presentation, however, all presentations have that same four parts; the Intro, the Body, a Conclusion, and a Q&A allotment. The introduction is where you break the ice and establish a connection with the audience. It's where you tell them what they can expect to hear. The body of the presentation is where the bulk of the time is spent and it's where you convey the information. The body is designed around your intended objective or purpose and the audience but there are 3 typical body designs: Categorical, Problem/solution or Cause/effect, and Chronological. The names pretty much describe the format. For example, a project update might best be provided in a categorical format of scope, schedule, and budget while a presentation for a proposal might be best accomplished using a problem/solution format. Regardless, it is never truer than in a presentation that a picture is worth a thousand words so, use graphs to make your point rather than a table of data. At the end of the presentation, you present your conclusions. You restate the important points you want the audience to walk away with. If it is a call to action, tell them what action you want them to take. If it is a request for assistance, tell them exactly what you need. The Q&A is trickier than the rest of the presentation, so you need to think this through. Allowing for Q&A as you go ensures the audience gets the information they need but, it can be disruptive leading to one person dominating the floor. Holding questions until the end, however, may cause the audience to lose interest. The answer to which of these you use goes back to the intended audience; if you think the President of the company is going to wait to ask you a question, you're wrong, and telling her to wait is almost guaranteed to get you a ticket to the unemployment line. Know the audience's expectation and create your presentation accordingly.
Once the presentation has been created, don't wait until game day to practice. Remember the 3 Rs: Review it, Rehearse it, and Rework it before you deliver it. You won't want to come off as scripted but rather as prepared. This is when you think about what questions you might be asked and how you will respond. Maybe in anticipation of a question, you put a link on your slide to a back-up slide. (If you do this, make sure you put a return link so you don't have to scroll around to get back.) Before the presentation, make sure the room and media equipment are set up and working. Nothing will get you off to a bad start worse than a computer or digital connection that won't work correctly.
I will post another blog about delivering the presentation in the future but if you want more details related to this blog, or that one, visit my YouTube Channel. https://youtu.be/OJOl-bOKH5w or check out our lesson index on our website.
As managers, we often hear and use these terms but just as often, I hear them used incorrectly.
An executive asks, “What’s our margin on that product?”
“Its profit margin is 62% “, replies the manager incorrectly.
Why is the term “Profit margin” incorrect, what is it that causes the confusion in the use of these terms and, what’s the difference? The confusion is caused in that while all express profit as a percentage of revenue, the definition of profit is different for each. Our ready reference chart can help.
The key difference between Contribution Margin and the two others is that Contribution Margin is used to look at the profitability of an individual or group of products while Gross and Net Margins are used to evaluate a company’s profitability with all products included. Contribution margin evaluates products while the others evaluate companies.
We use contribution margin to:
These are often expressed as a percentage simply by multiplying each margin by 100 and of course, more is better; a larger percent means more remaining money (mullah, dinero, profit, the green stuff…) after having paid expenses.
So, when an executive asks, “What’s our margin on this product?” or, “What is their margin on that product?”, a savvy manager responds, “The product’s Contribution Margin is ….” And when asked to evaluate a competitor, customer, or supplier company, the manager responds using Gross and/or Net margin.
You can watch FREE videos explaining each of these further, complete with examples on how to use them at any time on our YouTube channel.
Every 8 seconds:
What, you ask, are theses ABCs?
Let’s explore the ABCs a bit more.
communication, problem solving, and work ethic (Source). With just this basic information, anyone
can frame up an opening attribute sentence.
For a College Graduate, it might read something like:
At Columbia State, I am a problem-solving leader who has worked with teams to
deliver award winning results.
Our College student’s attributes are 1) Able to work in a team 2) Leader 3) Problem solving. I
time this opening sentence at out about 7 seconds. Perfect!
The objective from the interview is to get an offer. To get an offer, you must ace the interview. To ace the interview, you need to prepare, practice, and control it. You control the interview by using your interview intro to feed the interviewer the talking points you want them to probe. Don’t slide into a boring, monotonous dialogue that is just a recital of what is already on your resume. Rather, create, practice, and use your ABCs, Attributes – Bridge – Closure. Creating and delivering the Interview Intro captures the interviewer’s attention, makes you stand out from the rest of the candidates, and is the first step in controlling the interview.
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A U.S. client expressed frustration in doing business in Africa. As he described it, “the people don’t take business serious”. He described how he would set up a meeting with a prospective client for 10:00AM. However, his client would not appear at the scheduled time. His calls to the client would be left unanswered leaving him wondering what had happened. Did he have the schedule wrong? Had something happened to his client? Since transportation was not the most reliable, he would find himself staying in the office, forgoing things that needed to be done, just in case the client would call and need assistance. Invariably, sometime in the afternoon the client would appear. “Hey, my friend, what happened to you? Are you ok”, he would ask. The gentleman would assure my client that he was fine and he could not understand the unwarranted concern. “You’re five hours late for our appointment” my client would retort in frustration. The gentleman, looking confused, would reply, “Why are you angry and upset? I’m not late. Our appointment is for today. I am here. You are here. What’s the problem?”
This exemplifies cultural norms not being factored into business norms. When I poll my clients about challenges that arise in managing multinational teams they often mention building trust, time zone differences, power struggles, and communication barriers. While it is true that each of these must be managed to avoid conflict within a team, understanding how different cultural norms interact with the expectations of business norms can produce the greatest challenges. To avoid frustration and conflict, it is imperative for businesses and managers to sync these, upfront, into the business model and into team expectations.
The team forming stage of team development is the manager’s opportunity to establish the norms of team behavior. Start by researching the culture. For example, when forming a team with members from Spain or Latin American countries, recognize it is normal for them to take extended lunch periods for a siesta but return to work later into the evening. Research what holidays are observed and how. Inure you understand the norms for taking vacations and for when the kids are out of school. Much of France goes on vacation in August and they get nine weeks of vacation per year. Factor in specific religious beliefs that dictate working hours. Islamists may need a break to observe prayer. As in our example, a meeting time may have a different meaning in different countries. Germany is known for meetings starting and ending on time but in Spain is normal to arrive after the start time. It is considered rude in many countries to start a meeting without first making time to greet and perhaps start with tea, while in other countries these are seen as an unnecessary distraction.
After doing your research, spend the first meeting discussing, and agreeing on, the “norms” for the team. Compromise and agreement is the goal here. For example, you agree all members will be at the designated meeting place, at the agreed upon time, but you allow for the first few minutes to be non-business related. You agree on the expectations for deliverables; example being: data will be analyzed before the meeting, only summaries will be presented at the meeting, but all data shall be posted on the team intranet site within “x” hours after the meeting. You establish the norms of communication; example: what can be exchanged or shared through email versus only through a secure intranet site. Managers need to be prepared to follow-up offline and to do so often to make sure team members understand and adhere to the agreed upon norms. If a member is not following the agreed upon norm, address the behavior in a non-confrontational manner to understand the root cause. Explain the impact on the business, team deliverables, and on other team members. Having these conversations early in the forming stage demonstrates management maturity and establishes comradery. By demonstrating a genuine consideration and concern for accommodating cultural norms into the team and business norms of operation, you will create an environment of open and honest communication that will lead to a stronger, more successful team.
Leadership skills can be taught but to learn them, they must be practiced. However, without embracing the full scope of what is needed to truly be a leader, and without a continuous honing of leadership skills, they forget the skills and soon flounder in to a mediocre shadow of their true potential. Whether it be a company executive, or an elected official, they must rise above the daily “doing” of tasks, and focus attention on leading. In failing to focus on leadership, they risk forgetting one of the very things that may have gotten them that new position; their leadership potential. Here are seven leadership areas that need to be learned, remembered, and practiced.
Personal Development: Jack Welch, when he was CEO of GE, said, “Before you are a leader, success is all about growing yourself.” I advocate that growing oneself is not just something done before you are a leader, but rather a continuous process. A leader who does not continue to learn and develop, risks becoming out of touch with the changing business climate or with the needs of their constituents. While leadership skills can be taught in a classroom, it is by plying them daily that creates learning of when to use what where and that then bonds them to the leader’s persona.
Vision: A leader must have a Vision for the organization. Steve Jobs, a Founder of Apple, described leadership as, “…about inspiring people to do things they never thought they could”. This starts with the Leader having a Vision; an aspirational description of what it is possible for the organization to become, to achieve, or to accomplish, and it sets the course for all future actions. An organization without a leader’s Vision is a ship without a rudder doomed to wonder from sunrise to sunset without ever accomplishing the greatness within.
Communication: James C. Humes, a former presidential speechwriter, said. “The art of communication is the language of leadership.” To communicate a Vision requires a mastery of this skill. There is no such thing as leading from behind closed doors because it is only by opening doors that we can communicate in a meaningful way. Meaningful communication does not require both the speaker and listener to agree upon the message. Rather it only requires they share the same understanding of the message. This concept is especially important when applied to a leader when communicating their Vision. Leaders use communication skills to develop a common understanding of the intended goals and mutual benefits the Vision, when implemented, brings to the Organization.
Relationships: Developing support for the Vision requires relationship building. Everything a leader accomplishes, or hopes to accomplish, will require assistance from other people and the easiest way to get assistance is to have built relationships. The right hand of building relationships is collaboration because,” … those who learned to collaborate and improvise most effectively have prevailed." – Charles Darwin. Relationship building is a skill many wannabe leaders have either forgotten, or don’t want to practice, and the art of collaboration seems to have become a dirty word associated with weakness. People fear that collaborating will dilute the Vision to a point where it diverges from the intended goals. The contrary is true. Relationships and collaboration allow the Vision to become an inclusive, long term, sustainable reality.
Integrity: The left hand of building relationships is integrity. Integrity is the personal compass that incorruptibly guides the qualities of being trustworthy. Behaviors that demonstrate integrity include honesty, fairness, treating others with dignity, and respecting individual rights. Without integrity, a leader cannot build the relationships needed to make the Vision a reality, and a perceived lack in a leader’s integrity will overshadow everything they have accomplished or hope to accomplish. Former President Nixon ended the Vietnam war and he normalized relationships with the People’s Republic of China. These were great accomplishments, yet he is most remembered for the lack of integrity he demonstrated through his criminal Watergate actions which culminated in his impeachment and resignation.
Influence: Leaders master and practice the skill of influence. Influence is used to shape the Vision. Influencing starts by communicating the Vision and is followed by listening to the ideas, opinions, and suggestions of others. To influence others requires listening with the intent to understand rather than to respond. Influencing requires rational, respectful conversation focused on the mutual benefit the Vision brings. Those who believe they can lead by delivering witty, one liner, sarcastic criticism of their opponents have forgotten this skill and there has been speculation that the un-tempered rhetoric may have contributed to the recent shooting at the congressional baseball game. Words carry power and as such can be used to gain influence or to drive division. A leader strives for the former.
Execute: “A person's actions will tell you everything you need to know”, author unknown. Leaders know results matter and develop executable plans to make the Vision a reality. Successful execution requires the leader to set priorities, and to mobilize resources because an un-resourced Vision is just a dream destined to be forgotten as the days pass. Successful leaders surround themselves with a leadership team of experts empowering them through delegation with responsibility to execute the plans, authority to make them happen, and accountability for the results. That said, strong leaders take the heat when things get tough and give credit when things go well. Leaders who do otherwise, have forgotten that these types of behaviors and actions reinforce their credibility and integrity as a leader.
I don’t believe in natural born leaders. I do believe in natural born leadership traits. However, even those so fortunate to have those traits need to be trained in the skills of leadership, and focus on practicing their craft daily. Without this focus, they risk forgetting the skills of leadership and join the rest of the populace in wondering why nothing gets changed.
A lot has been written about millennials and their impact on the work environment. Much of it portrays a dismal future workforce with grave economic and social impacts. Maybe it’s because I’m a glass half full kind of guy, or perhaps because I believe problems are just opportunities waiting to be resolved, but as a manager and leader I’m not buying the doom and gloom and neither should you. “Millennials” is the term used to describe the generation of people born between 1980-2000 but there are two other generations in today’s workforce. These are “Gen X”, born between 1965 -1980, and the “Baby Boomers” born between 1945 - 1965. According to the Pew Research, Millennials are now the majority in the labor force, hence the reason for so much focus on that generation. Differences in generational behaviors are influenced by the social system within which the generation was raised, and since social systems are constantly changing, its normal that different generations exhibit different behaviors and have different expectations of their work environment. Let’s examine three Millennial traits and expectations, how they are driving change in the workplace, and how Managers can use these to develop and motivate employees.
Tech Savviness: Millennials exemplify this trait and anyone who has seen an Apple Store help line can see why it isn't used to describe Baby Boomers. Regardless, anybody of any age, given the right training, can become “tech savvy”. Millennials, however, have the advantage. They grew up with computers on their desks, mobile devices in their hands, surrounded by an always connected internet. LinkedIn recently reported that being tech savvy is one of the top requisites companies want in new hires. Being able to use a computer, perform net searches, and fluency in MS Office tools has become a minimum requirement for most office jobs. Millennials did not drive this requirement; the ability to increase profits by being more efficient through the use of technology drove it. Millennials come in the door with this knowledge while the rest of the workforce must learn it. If managed properly, this acts as a catalyst to update the skillsets of your workforce. Managers need to keep job skillset requirements updated, communicate updated expectations to all employees, guide employees to self-assess their tech savviness, and provide opportunities to support those wanting to learn these new skills. The payback to employees is they possess updated, relevant skills that can open doors to higher paying jobs. The payback to Companies who support continuous learning for their employees comes in the form of a more dedicated and engaged workforce. The importance of this is shown by data from Gallup which estimated the cost of a disengaged workforce to U.S. company bottom lines to be more than $300 billion in lost productivity.
Diversity in Work assignments: Many in today’s workforce, especially Millennials, crave diversity in work assignments and become disengaged when it’s not provided. Small and medium sized companies require employees possessing skillset diversity because they may not have 40 hours of work in a specific skill area, but have 40 hours of work available when skill areas are combined. Skill diversity allows teams to quickly resolve issues before they become problems. Managers that promote diversity of skills experience a more motivated workforce, a lower turnover rate (Huselid, 1995), and engaged employees expressing a higher job satisfaction. For these reasons Manager’s should support an employee that asks to work on something outside of their area of expertise. If a manager sees an employee exhibiting a lack of motivation, address the behavior in a non-confrontational manner and ask them to share their thoughts on the underlying causes. If the cause is boredom in their work assignment, guide and offer potential solutions. Ask the employee if there is something else they would like to do and if so, help them understand if those opportunities exist within your organization, or within the company, and the steps they might need to take to work in that other area. Doing this is the Function of Management. The fact that Millennials are not afraid to ask for this diversity makes them the catalyst of change and when managed properly, it produces a positive outcome.
Work-life balance: Baby Boomers often express frustration that Millennials complain about working too much. Yet, the Washington Post reported 80 percent of millennial couples both work full time as compared to 47% of baby boomer couples. Millennials propose flex hours and work from home as ways to provide a work life balance. Millennials are offering creative and innovative solutions to utilize technology, that allows them to be connected anywhere, so they can not only focus on meeting work expectations, but also on nurturing a social life. Baby Boomers, who comprise most of the management positions, struggle with these concepts and interpret empty cubicles as employees not working. My message to Managers is, “Focus on results”. Global Workplace Analytics reported some of the benefits of providing an agile work strategy as improved employee satisfaction, reduced attrition, increased productivity, and saving employers money. Though motivating, influencing, advocating, improving productivity, and innovating are all well within the scope a Manager’s and Leader’s job description, it is Millennials that are the catalyst to this change. They just need Managers, who have the power to influence outcomes, to be their advocates.
If Managers and Companies want to attract, hire, and retain a tech savvy Millennial workforce, they must embrace and meet the changes this generation is bringing. Doing so will result in a more satisfied, engaged workforce, with a decreased attrition rate, and increased profits.
5/30/2017: Our social environment has changed. The 8-5 job is now 6-7, the office is now the home, and vacations are a place you bring your work with you. Companies espouse work-life balance but with 40% of employees reporting they work more than 50 hours a week, the companies leave it to the employee to figure out how to fit in the “life” part let alone figuring out how to further their education. Compound this with studies that indicate the adult attention span is about 20 minutes with some psychologists claiming a student’s attention span can be as short as 10-15 minutes. The short term response to any stimulus is reported to be 8 seconds (just watch any movie and count the seconds before the camera angle changes) and lapses in attention span can start 30 seconds into a lecture and reoccur every 2 minutes by the end of a normal 60-90 minute lecture. Our smartphones, designed to make our life easier, become a distraction because they’re always with us, always on, and always letting us know who else wants a piece of our time. Given all of this, it’s hard to justify spending time in a classroom lecture formatted around the classic movie Ferris Bueller's Day Off unless something changes.
The good news is educators are listening. Many educational formats are reducing time spent lecturing, adding more active learning, and incorporating technology. Online content is ideally adaptable to solving these social challenges. Courses can be viewed at the student’s leisure (commutes or lunchtime), stopped and resumed as attention span wanes or those interruptions come, are accessible from mobile devices, and can incorporate active learning. Well-designed e-learning courses enhance your learning and keep your attention by interspersing videos and active interactive dialogues. E-learning today is even evolving to use Virtual and Augmented Reality though since VR typically requires a headset, it is not as portable as AR. Here are some tips to help select an e-learning environment.
David Hess (www.bestconsultingspecialistsinc.com)
In the final question of the 2017 Miss U.S.A Pageant (fox, n.d.) , Miss D.C. Kara McCullough was asked if affordable healthcare for all U.S. citizens is a right or a privilege. She responded that it was a privilege but she later clarified on Fox and Friends “ It’s definitely a good aspect to have affordable health care for people but I definitely am not taking my health care for granted. And that’s why I said it’s a privilege.” Social media (@MissUSA) has been quick to praise and harsh to criticize her response. Whether you agree or disagree with her response, the question itself serves to highlight three aspects underlying the health care debate currently underway within the U.S.A. The first aspect is whether having healthcare is a right or privilege. The second aspect is should health care be affordable. The third, but hidden, aspect is what should the role of government be in supporting the first two aspects. It is this third aspects that ignites the controversy, not only in the Kara McCullough’s response but, in the health care debate in general. Since we have more than the 45 seconds to respond than did she, let’s exam each aspect of this question separately.
Is healthcare a right or a privilege? The preamble of the Constitution defines itsreason for creation and contains the wording, “…promote the general Welfare”. Article 1, Section 8 reads, "The Congress shall have Power to lay and collect Taxes, Duties, Imposts andExcises, to pay the Debts and provide for the common Defence and general Welfare of the United States." The first 10 amendments to the Constitution make up the Bill of Rights and were designed to set limits on governmental power. Amendment IX states, “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” This ammendment was added to ensure that any right not speccifically stated within the Constitution does not negate it from existing. The Courts and Congress have interpreted and used these three sections to support programs such as infrastructure improvements, grants, minimum wage, and even the social security system. According to Cornell University Law School, the court interpretation has been that the Federal Government does not have the power to legislate the general welfare of the country. The Federal government merely has the power to spend revenue on a matter of general welfare. (Cornell University Law School) It is, then, up to the courts to decided if healthcare is a right as as contained under the definition of “general welfare”. The Supreme court has not decisively weighed in on this and given that neither the 321 million people living in the United States, nor our 100 Senators, nor the 435 Representatives have been able to agree on this topic, it seems unfair to ask a Miss U.S.A. contestant to answer the question; even one as educated as Kara McCullough.
Should health care be affordable? Regardless of whether healthcare is a right, how can society deny that obtaining it should be affordable? There is, however, a debate centered around the definition of affordability, and in defining what happens when it is not affordable. Standard dictionary definitions don't provide any help because they use other nebulous, debatable terms such as “inexpensive” or “reasonably priced”. Therefore, I looked for an economic definition. Uwe E. Reinhardt, Economics Professor at Princeton, reported in an article written for a blog of the New York Times in 2010 that M. Kate Bunford and Mark V. Pauly defined affordable healthcare to the representatives on Capitol Hill as, “What a family could spend with its disposable income for health insurance premiums plus out-of-pocket costs on a minimally adequate package of healthcare benefits, and still have enough money left over for a minimally adequate package of all other basic necessities of modern living (food, housing, schooling, clothing etc).” With this kind of definition being proposed to Capitol Hill, its clear why members of government can’t reach an agreement. They get stuck in a quagmire debating the term “minimally adequate”. Is the economic bar of minimally adequate set at the countries median household income, or at a State’s median income, or at the poverty level, or…? Some advocate that the economic forces of supply and demand, if left alone, will solve the affordability question. Let’s turn to the data to see if it supports this position.
Data published by the Kaiser Foundation and reported by Time (Tuttle, 2016) , as well as another 2016 Kaiser Foundation report (Cynthia Cox, 2016) was reviewed. The first report indicates that while the premium price of healthcare for the average household has continued to increase since 2001, the rate of rise has steadily decreased.
However, the rate of increase between 2016 and 2017 does not show a continuance of this trend. For a 40 year, old non-smoker making $30,000 per year, the 2016 Kaiser report shows the national average monthly Silver Premiums increased by 24%, but at least 18 States had premium increases exceeding that, five of which were greater than 50% with Arizona reporting a whopping 145% increase. In 2016, the Department of Health & Human Services stated that 20 million people in the U.S.A gained health insurance since the Affordable Care Act was passed in 2010 so demand increased yet Kaiser reported the number of healthcare providers is decreasing leaving 21% of ACA enrollees with only one provider.
None of this should not come as a surprise if we understand the forces of supply and demand. In creating the ACA, government directly intervened in the demand for healthcare by adding those 20 million new households. The ACA requires that all persons must obtain health insurance. It guarantees coverage even for those with pre-existing conditions. It provides premium subsidies for lower income households to help them meet that requirement. It is supposed to offset these subsidies by requiring younger and assumed heathier households to obtain healthcare and pay premiums if they do not get healthcare via another method such as an employer. Come tax filing, the ACA penalizes those who have not obtained healthcare. These provisions created an increase in the demand by moving the demand line to the right. Initially, providers, seeing what they thought was an opportunity, jumped into the market. Price stickiness and more providers getting into the market created more competition and maintained downward pressure on prices. However, the new demand was composed of people from an aging population and people with preexisting conditions. Theoretically, their extra “costs” should have been offset by the younger age population, with less healthcare needs and expenses, joining the demand population. I have been unable to locate data to validate this offset has worked but suppliers dropping out of the healthcare market indicates their costs are too high and implies that the offset has not occurred. A reduction in providers, combined with increasing provider costs, is once again increasing the rate of increase in the healthcare premiums. What would have happened to healthcare premiums if the ACA had not been implemented is speculation. The ACA went into effect in 2010 and proponents claim victory for the reduction in the rate of premium increase between 2011-2016. (See Chart 1). However, the rate was already on a path towards that in the preceding 5 years. Regardless, what is occurring in healthcare premiums is a prime example of the forces of supply and demand. (Click on this link if you need more understanding about economics.)
This brings us to the question of the role of government. Government can be defined as how a society or community is, or chooses to be, controlled or regulated. In the U.S.A., government works for the people. If society believes health is a right as defined within the constitution wording “…promote the general welfare” , then government’s role is to protect that right. How they protect that right is another area heatedly debated. Advocates of Universal healthcare as the way to protect the right point out the United States as the only developed country not using such a system. However, opponents of Universal healthcare are quick to point our deficiencies in these Universal Healthcare systems such as waiting times, and to South Africa whose system was grossly inefficient and failed. Others advocate for a more privatized system but with government regulation and subsidies to control or offset costs. A third camp weighs in a more libertarian approach of absolutely no government interference. To all of these I ask if the unregulated forces of supply and demand would result in true reduction in premiums, or if it would result in collusion between providers, or create monopolies that would serve to drive costs up. Such was the case in the early 20th century with the railroad monopoly and government’s intervention led by Teddy Roosevelt through the Sherman Antitrust Act.
The point of this whole discussion is, was it fair to ask such a controversial and complex question, with so many aspects of discussion, to a Miss U.S.A contestant given only 45 seconds to answer, and no time to prepare a response? i advocate the answer is NO and as such, the criticisms of social media are ill placed, and show a lack of compassion and understanding of the complexity of the issue. We all need to answer for ourselves if “affordable” healthcare for all U.S. citizens is “a right or a privilege” and then get down to the work at hand of solving the related issues. Society can ill afford to have a large percentage of its population without affordable healthcare.