Some thoughts on graduation and graduation balls

It’s graduation time in the Philippines, and many graduates and parents attend not only graduation ceremonies, but also activities associated with it. This could be a special mass, a ball, etc. And there are also accessories associated with it – a pin, a ring.

Of course these events cost money, and it is quite logical that some people are calling for sobriety, of not requiring graduates to dish out money for yet another school expense.  After all, college graduation is not a universal practice. Here in the Netherlands, students graduate individually or in small groups; it is a private and (I think) more meaningful practice.  And the high school graduation, while en masse, consists mainly of students and their advisors signing the diploma. And then there are snacks served after this.

Thus, one may say, why not have more meaningful and/or cheaper graduations?

While a simpler graduation format may be cheaper or even more practical; graduations have a symbolic and ceremonial function. Parents bear their burden of paying for a child’s studies partly on the expectation of a graduation march at the end of the road. To do away with the ceremony would make things seem bare – and working for a piece of paper is not as appealing as marching up the stage.

The bigger expense would be the graduation ball – in a sense, they are not needed for symbolical purposes.  However, if we think about it a bit more; the ball precludes the need for private celebrations. In effect, the expense for such private celebrations is replaced by the centrally organized event. Even those who would not organize their own graduation party would also spend money if they are invited to such parties.

So, I think that in general it would not be a  good idea to “simplify” the process of graduation. Let the students and parents have their day in the limelight.

Universal health care: tips from Europe

There has been much talk about the proposal to have universal health care in the US. This is not a simple matter of getting the millions of people without health care insurance to get coverage. Some changes in the overall system need to be made in order to minimize costs and maximize efficiency. Perhaps some lessons could be learned from the experiences of other countries with universal health care.

Family Doctor as “Gatekeeper”.
In European countries with universal health care, the family doctor is the first stop for anybody who feels sick. This doctor fixes the problem if possible, or refers one on to a specialist if this is necessary.  People who try to go straight to the hospital or specialist without this referral run the risk of having no insurance coverage for these.

This system minimizes the overloading of specialist doctors, especially with cases that are relatively simple to treat. It also lowers the “threshold” for going to the doctor, which in turn helps to ensure that ailments are reported and treated earlier.  Another advantage of having a “gatekeeper” function is that there is at least one doctor who knows everything going on with the patient medically – the various specialists report regularly to the family doctor. Thus, when various treatments are done simultaneously, someone can help to ensure that they don’t work against each other.

No Malpractice Suits
A significant part of the growth in health costs in the US is to cover the cost of malpractice insurance. This is due to the common practice of patients sueing the doctors if they make a mistake in treating them. This is not common in Europe.

Perhaps it would not be possible to completely do away with malpractice suits, but at least there should be limits set on the amounts awarded as damages.

Another problem with malpractice suits is that doctors tend to do more tests on the patients than they otherwise would do, in order to minimize the chance of getting sued.  The additional tests would of course cost more money.

Everybody should have Health Insurance Coverage
In order to have universal health insurance, everyone should be required to have their health insurance. Even temporary residents, or visitors should be required to prove they have health insurance when in the country.  This should not be optional.

With everybody covered by health insurance, some things are simplified. For one, people can readily avail of health facilities e.g. hospitals with the minimum of administration procedures. (Emergency treatment is an exception to the rule that all patients should go through the family doctor.) Also, the system of having the health insurance company determine which treatment you can get, and where you can get it, could be ended.

Government Supervision
The government could also make guidelines re which treatments should be covered by the health insurance. Also, insurance companies are not allowed to refuse to cover some people because of their health history or their unhealthy practices (e.g. smoking). However, giving discounts to people with lesser risk of health problems is allowed.

The governments in Europe own most of the health infrastructure, even though hospitals etc.  are administered independently.  Thus, there is no real need to make a profit from hospitals.

The health department should set the guidelines re doctors fees, the use of medicines (e.g. that generic drugs are preferred), and hospital costs. This could be implemented in cooperation with health insurance companies, who also want to standardize and minimize costs.

US crisis will last longer than expected

The economic crisis in the US will last longer than the authorities there expect. I think that the crisis will last well into 2011.  I came up with this conclusion based on certain features of the US crisis that will tend to let it last longer than expected.

Artificially high demand for houses and cars before US crisis
The crisis was caused by the bursting of “bubbles” – a housing bubble, a credit bubble. The long period of low interest rates and large cash flows from foreign banks propped up the housing boom which caused both the demand for houses, as well as housing prices, to rise sky high. The boom fed on itself, with people buying houses on the expectation of rising prices. At the same time, automobiles sales were kept artificially high by the provision of cheap financing by the big three automakers. The actual demand for cars was already low for a number of years before they finally fell as a result of the credit crisis.

Both the housing and the auto market were at an artificially high level at the start of the crisis.  But economic data always compares the previous demand level with the present; so, since the previous levels were artificially high, a more “normal” level of demand for houses and autos would register as decreases in demand.

Oil Prices will rise again
Oil prices are now at a low point, especially if you compare them with their recent highs of almost $150/barrel. And this is due to the lessened demand caused by the economic crisis. In response, OPEC has reduced its output, and it is poised to further reduce output if prices don’t rise soon. At the same time, the oil consumption of the countries that are still growing e.g. China and India is still increasing.

It is but realistic to expect oil prices to rise in a year or so, just when the initial effect of the US stimulus spending is expected to take effect. Thus, as the US economy tries to make a sputtering start, it will be hit by the high price of oil and other commodities. This will dampen the effect of the stimulus.

Inertia
The economic crisis has a certain inertia – a drop in demand causes companies to cut down on orders and to lay off workers; this in turn causes other companies’ sales and income to decrease as well decrease the buying power of the general population. With the decreased buying power comes less demand for products. This goes on until at some point demand stops to decrease, and even increase.

The present economic crisis affects the whole world; but the effect has only really kicked in during the last months of 2008, with the sudden drop of US imports. It will take time for the crisis in these other countries to go through their cycle. All this feeds back into the US, with lesser imports of US’ products.

This all means that 2010 will be too early for the crisis to end in the US. More likely, it will be sometime in 2011 or 2012 when this will happen.