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Healthcare Reform. . . It’s only just begun

March 10th, 2010

This week’s Bloomberg Business Week magazine featured a phenomenal and very personal story of healthcare that actually captures many of the challenges around healthcare reform.  The author, Amanda Bennett, takes us on a journey that she has titled, “Lessons of a $618,616 Death.”  The true title, however, should have been, “How Do You Put A Price on 17 Months?”  In this article, Ms. Bennett takes us on the step-by-step, blow-by-blow journey that ended with her husband’s death.  She and a friend painfully reconstructed every page of his medical records, every dollar paid by her insurance companies, and every charge made by the various doctors and hospitals that treated him during the last years of his life.

Business Week end-of-life issue - Nick Jacobs - healinghospitals.com
Amanda Bennett and Terence Foley

She showed 1.) the grand total of charges, $618,616, 2.) the actual monies paid by the insurance companies to the hospitals after contractual negotiations, $254,176, and 3.) the total paid by her family, $9,468. In the article, she described the 30% overhead/administration costs, the costs of experimental drugs inside and outside of trials, and the 4,750 pages of medical records that were amassed during this time. For those of us who have “spent our time” trying to live within, cope with, and better understand America’s healthcare system, there were no surprises.  For those of us who have watched a loved one take this cancer journey with all of its mysterious unknowns, there were also no surprises. Ms. Bennett’s quote, “The system has a strong bias toward action,” was, I believe, the most poignant in the entire piece.

A few weeks ago, I had lunch with a very healthcare-savvy individual who, when I jokingly referred to death panels, almost came across the table at me.  She did not believe it was funny.  To say that she was passionate would miss the point.  Only the day before, I had spoken with another very intelligent healthcare reform advocate who indicated that the entire concept of death panels emanated from a payment code that reimbursed physicians for simply (or in some cases finally) talking to patients about their alternatives.  I had heard other explanations, but neither mattered.  What matters is that, in many instances, we are not discussing appropriate alternatives or revealing the quality-of-life issues often overlooked before beginning long courses of experimental drugs, or oncology drugs that may not have any positive impact on the health outcome of the individual.

Interestingly, Ms. Bennett did indicate that for all of the time, money, and pain invested in this journey, no one could confirm that her husband’s life was actually extended by these medical experiences.

Someone once described America’s healthcare system to me like this:  You walk into Nordstrom, order several three-thousand-dollar suits, a dozen shirts and some handmade, silk Italian ties, then turn to the person beside you and say to the clerk, ‘”He is paying for this.”  Our heroine Ms. Bennett did mention the fact that her husband would probably have questioned the use of all of these funds in this manner and the relationship that these expenditures might have had on all of the other people in the world who might have been helped by these dollars.

Taking the Hell Out of Healthcare by Nick JacobsWhen healthcare reform is discussed, it is personal.  It is also deep, and it is costly, but the bottom line always comes back to this: “How do you put a price on 17 months?”  In my book Taking the Hell out of Healthcare, I discuss the journey that my father and our neighbor took together over about a 17 month period.  Both diagnosed with lung cancer, my father decided to go for it all.  He had surgery, chemo, radiation, more radiation, and more chemo.  My neighbor, a man without significant health insurance coverage, decided to spend his time with his family.  They both died on the same day.  My father died in a cold, tertiary care hospital where no clergy was present, his family members were not all able to be there with him, and it was over.  In contrast, our neighbor died peacefully in his home, surrounded by his entire family.

Ms. Bennett did say that she was glad that she was not a bureaucrat having to deal with these issues.  Frankly, I wish that she was!

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Posted in Healthcare, Hospitals, Public Policy

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Congressman John P. Murtha

February 9th, 2010

Yesterday’s phone call from the Somerset Daily American caught me off guard.  “Hi, Nick, have you heard?  Congressman Murtha passed away this afternoon.  Could you give us a quote?”  the reporter said.   Truthfully, I was not ready for this call.  Having talked to friends who had been with him only a week earlier, everything seemed like it was going to be okay, but obviously, okay was not what it was.  He had one of the 500,000 or so laparoscopic cholesystectomies performed each year to remove a gallbladder.  This surgery has a .05% complication rate, but the call proved that, regardless of the percentages, there is always risk from human involvement.

The Late Rep. John Murtha I’ve decided to dedicate this as a very personal look back at my journey with Jack Murtha.  Ironically, we had grown up practically as Pennsylvania neighbors in Westmoreland/Fayette Counties.  My first real meeting with Mr. Murtha was during the 1977 Johnstown Flood.  I was a young teacher and volunteer who was mopping the floors of the relief centers,  getting things ready for survivors who had lost their homes when I heard a helicopter come flying in and saw a tall, impressive, 44 year old Congressman deplane.  He had only been in Congress for a few years, but had clearly learned enough about the  System to keep then-President Carter on his toes and get legislation passed to help his home district.

My very next encounter with Mr. Murtha wasn’t until about three years later, when his Washington office called me to see if they could help my employer at that time, Laurel Arts of Somerset, with a bill that was going through the House before Ronald Reagan took office.  Nothing came out of that call except for the fact that I realized that his employees were parents of former students and people who liked and respected my work from those days.

Then the big encounter hit.  Mr. Murtha was looking into bringing the National Park Service into Cambria County to start what became the America’s Industrial Heritage (Tourism Development) Project.  He and several other Congressmen came to the University of Pittsburgh in Johnstown to hold a Congressional hearing on the project, and, as the newly-elected President of the Laurel Highlands Convention and Visitors Bureau, I testified against the plan and explained that if they didn’t include Westmoreland, Somerset, and Fayette Counties, we would not display any literature promoting it at all of the tourist sites that we controlled.  They agreed, and not many months later, he ended up representing Fayette County as part of his district.   It worked out for both of us.

A few years later, I had transitioned into healthcare senior leadership and  invited Mr. Murtha to introduce Bob Hope at a fund raising event for the Mercy Hospital of Johnstown.  Approximately 6,000 people were in attendance and Mr. Murtha got as much applause as Mr. Hope.  The following year he helped us bring in Henry Mancini and his orchestra for a similar event and our respect for each other began to grow.

Rep. Murtha speaking at Biotechnology expo (2004)

Rep. John P. Murtha speaking at Biotechnology Expo (2004)

In 1997, when I became the President of Windber Medical Center, Mr. Murtha and I were seated near each other at a dinner party.  It was there that we  began to discuss healthcare, and his vision for the future.  Anything that would help the soldiers stay well, prevent illness, or stop it before it became an issue was his goal.  I heard him speak at the opening of one of his many health center initiatives at Walter Reed Army Medical Center, and he said, “I have 13 honorary degrees, hundreds of awards, and am well known as for my work in defense, but I want my legacy to be healthcare, prevention, and wellness.

His contributions to healthcare, however  small they may seem compared to what he has done for the world and for mankind, through his tireless and dedicated work were where his heart was.  His strength and vision made him the most impressive human being that I have ever known, and my love and respect for both him and his wife, Joyce, cannot be calculated in mere human measurements.  I am proud of him, his work, and his commitment, and I know that the seeds that he has planted in Breast Cancer Research will go on to save thousands of lives someday.

Ironically, it was healthcare that took his life.  No one can ever replace Jack Mutha; his knowledge of the system, his guts and determination, his singular efforts to help a district that had been devastated by natural disaster, his kindness and great personality.  No one.  So, today, I write with great sadness that our great friend is gone, but at the same time, I vow that his name, his contributions to humanity, and his memory will never be gone.

Look at wriwindber.org or windbercare.com, and see what Jack Murtha built.  We loved you, Jack.

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Staying Humanly Grounded and Healthcare Reform

December 26th, 2009

Each year I put up the tree and begin to believe that it is magic. The room feels and looks warmer. Often, I’ve considered leaving it up all year as a symbol of joy, love, and happiness, but when I returned home last evening it hit me that it was not the tree as much as it was the carefully wrapped packages beneath it. Once they were gone, the room seemed void of its magic.

It hit me that those packages represented anticipation, love, and sharing in ways that truly touch your soul. Those acts of love represent the essence of that entire experience, price or cost don’t really matter.  It’s the giving.

Healing Hospitals: little girl in hospital bed with caring doctorI try to end every night by reading CarePages from a local children’s hospital website; stories of young children that have many times reached the end of effective treatment and are waiting to meet their destiny decades before their time might have been.  The outpouring of the deep, soulful hurt that their parents, siblings, and grandparents are experiencing from this journey is always profoundly moving to me.  In many of these instances, the only gifts that we have left to give them are our  love and support.  That, however, is not the case for the majority of our fellow men in this country.

It won’t be long until the final product of the healthcare reform effort will appear.  We all know by now that it will be a patchwork quilt of sometimes horrendous compromise.  We can also count on the fact that the negative rhetoric will reach decibel levels typically heard only when standing in close proximity to a jet engine.  The pundits will parade up and down the isles of righteousness, and they will be spouting off their theories regarding what should have happened.  At the end of the day, however, when we approach our bathroom and bedroom mirrors for that last inevitable look, we must all dig into our humanity and ask one very real question: “Will it be better for the uninsured than it had previously?”

As a former hospital CEO, it became evident to me in the first six months of my administrative training that only those without insurance were destroyed by the system.  Only those who were not under Medicaid or an other insurance were hit with the awful burden of paying for everything at the full, retail price.  The fallout was clear.  Due to the risk of having to pay full costs to the hospital, they either were too frightened to go for treatment until it was too late, or they lost what little they had; their homes, their savings, and their possessions.

In a country with such unbelievable abundance, where not just the number but also the quality of the cars, clothes, and even pets that we own are held up as barometers of success, we have often allowed our fellow man to suffer and die for economic reasons.

That fact is no more obvious than at any children’s hospital in Pennsylvania, where you’ll see parents from conservative states where childhood transplantation surgeries were always denied, so as to avoid increased taxes.  You’ll see these parents waiting in line to establish residency here so that they can at least have a chance to save their child’s life.

Healing Hospitals: Mother kisses son in hospital bed

Regardless of your politics, regardless of the dysfunctional (mal-)functioning of our government, in which some of our representatives and senators have taken us to the brink of collapse due to their inability to co-operate; regardless of these issues, we are looking at the beginning of health care reform.  I just pray that we don’t revert to the inhuman practices of our recent past.

It’s time for a human win.

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Posted in Current Affairs, Healthcare, Public Policy

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Healthcare Reform or Health Insurance Reform?

September 12th, 2009

President Obama’s eloquent address to Congress on his proposed changes to the U.S. healthcare system was fraught with ambiguous issues that will certainly provide a feeding frenzy for opponents. When the President stated that “This country’s failure to meet this challenge year after year, decade after decade has lead us to a breaking point,” he was exactly correct. We are the only industrialized nation in the world that has not addressed this challenge.

There are too many people without coverage of any kind who use emergency rooms as their primary care physician. Unfortunately, the difference in cost between a visit to your emergency room vs. a visit to a physician’s office is exponentially different.

Q-tipsIf we, as a country, do not believe that we are paying for these patients in some real way, then we are not cognizant of how the system is being contorted in order to allow hospitals to remain solvent. When you hear individuals complain about the high cost of Q-tips in a hospital, it’s because they are being priced to help cover the losses being incurred from the millions of uninsured.

So, what is it that we must address? When the President said, “Under the present system, due to job loss or illness, many could lose their coverage,” he was totally accurate. Unfortunately, millions of Americans have come to experience this phenomena first hand, and could lose their homes, investments, and their possessions because they have no insurance. So, as President Obama appropriately questioned, “What is the best solution that is both moral and practical and best reflects the ideals and freedoms upon which our country is based?” He was clear to explain that implementation of either a Canadian-style system or an individual based system would both be a radical shift, and each represents extreme positions that would completely change the way healthcare is delivered in this country.

barack-obama-health

So, if we eliminate the extremes and concentrate on compromise, we begin to see signs of conciliation that might be embraced. For example, there appear to be very few people who would argue against providing “more security and stability to those who have health insurance.” The majority of Americans also seem to embrace the concept of providing some type of coverage for those who currently have none.

What the President and most of our elected representatives are avoiding in the conversation is talk about quality, safety, end of life care, wellness, prevention and outcome data.

Nash_inlay
David B. Nash, MD

I had the fortuitous opportunity to hear David B. Nash, MD, MBA and Dean of the Jefferson School of Population Health’s presentation on Population Health. At the risk of misquoting Dr. Nash, I will carefully attempt to touch on only a few of the facts, figures, and points that he made in his analysis of what it would take to fix the system.

One of the most profound points that Dr. Nash made was in seeking the answer to the following question:

What percent of adult Americans do all the following?

  1. Exercise 20 minutes 3x a week
  2. Don’t smoke
  3. Eat fruits and vegetables regularly
  4. Wear seatbelts regularly
  5. Are at appropriate BMI (Body Mass Index)

The answer surprised even this writer. Only 3% of American adults are following all five of these wellness and prevention guidelines, and 40% of deaths are the result of smoking, unhealthy diet, physical inactivity and alcohol use. In an interesting analysis of the President’s healthcare speech, finance author  J. André Weisbrod writes: “I see it as a Darwin Awards kind of issue. You are free to be stupid and I am free to not have to pay for your stupidity…”

Bundled payments, end-of-life counseling, evidence-based medicine, an emphasis on quality and systemic approaches to ensuring safety are only a few of the myriad suggestions recommended in Dr. Nash’s presentation.  Bottom line? The third rail of politics is limiting honest, open dialogue regarding reform, and time is running out.

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Nine Trillion Dollars in the Hole?

August 22nd, 2009

Let me be the first to admit that I was and am all about change. Change has been the only consistent thing in my life.  Today, however, when the deficit projection was revealed to be nine trillion dollars over the next ten years, my non-economist mind began to wonder where this is all going?

My son-in-law is coming home in the next several days from a one year deployment that saw him in harms way in Iraq for the last eight months, and now we all sit with our fingers crossed that we will not be facing a similar deployment not too many months from now to Afghanistan.

How does one maintain two wars, keep soldiers stationed post-World War II in Italy, Germany, and Turkey, to name a few, and in South Korea plus continuing to remain in Iraq, and now push more and more into Afghanistan without bankrupting this country?  Is it possible that very very smart people are not capable of figuring out that in a down economy, the finances will continue to go south until we are, like the USSR in the Cold War, going broke?

When do we begin to see that the previous several administrations lead us into a mindset of borrowing against our future to the extent that we may not have a future, and when will we say, “Okay, enough, let’s stop feeding trillions into wars, and start trying to figure out the rest of this economic equation?”  It clearly is no longer a war on terror, but what is it?  If it is an economic war intended to create jobs a.k.a., the argument for or against the F-22 cuts, can’t we find a better way?

health_debate_specterThe people who seem the most upset about the health care debate are clearly the people who have healthcare, and the people who are least likely to speak out are the young women and children who have no coverage.  Not only will they not speak out, they also don’t, for the most part, vote.  If anyone believes that we are not in some way paying for the 46 or 47 million uninsured now, they are clearly delusional.  Ask a hospital CEO how much the facility charges for an aspirin or a Q-tip.  It’s not because these items cost so much more in a hospital setting, it’s because there is not enough money to go around when patient after patient presents at their doors without healthcare coverage.

We have acquiesced to AIG, to the very large banking institutions, to the automobile manufactures, and to numerous major financial houses.  We have placed billions of our tax dollars into their hands and have watched as their CEO’s, like that of AIG, continue to make millions in salaries with millions more in bonuses.  We have continued to wage wars that were clearly called “Republican Wars” during the last administration, and have no name now.  And we are watching our Social Security and Medicare accounts dwindle more quickly than anyone could ever have imagined.

Far be it from me to take a political stand on such complex economic matters, but it does seem very certain that our futures are tied inextricably together and, unless we slow down our expenditures, find ways to be more fiacally responsible, and, take care of our fellow man, we seem to be heading down a very destructive path.  Alan Greenspan’s admission of missing the economic targets of not too many years ago rings in my ears as he said, “I underestimated the greed.”  Maybe we have all underestimated the greed for too long.

As a professional giver of advice, let me conclude by saying that we can make this work. We can pull back the reins, slow the spending, and still move the economy.  It’s no different than managing our own personal economics; live below your means, save, take care of the necessities, and realize that not all belts can wrap around a 44″ waist. But all of this takes some serious discipline, something that our leaders seem to have been missing for a very long time.  We can’t continue to talk our way out of trouble;  serious, positive action is the key.

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Happy 4th of July…(Sort of)

July 3rd, 2009

Recently, my youngest child —a wife and mom in her 30’s,  got a new job that came with a company cell phone, a Blackberry. The problem was that she had a “Friends and Family” cell Phone plan, and no longer needed her old phone.  She called the wireless company, explained the situation, and they said, “We’re sorry, but the telephone bill is in your husband’s name, and only he can change this.”  She painfully explained that he is in the Army National Guard in the middle of a war zone.  The wireless carrier’s “Customer Care” representative replied, “I’m sorry, but he must call in, give us his Social Security number and the password or nothing can be changed.  There are no exceptions.”

American soldiers with the 101st Airborne Assualt Division at Camp Pennsylvania make phone calls from a makeshift, and often malfunctioning, phone center. - Photo by Benjamin Lowy/Corbis -Image © Benjamin Lowy/Corbis
American soldiers with the 101st Airborne Assualt Division at Camp Pennsylvania make phone calls from a makeshift, and often malfunctioning, phone center. – Photo by Benjamin Lowy/Corbis -Image © Benjamin Lowy/Corbis

She explained, ”He does not have a telephone to call you from his base in the desert.” The service representative said, “ Then he must send us his Power of Attorney.”  This frustrated young army wife and mother of three said, “We’re not adopting a child or buying a house, we’re trying to change a wireless plan?”   “Let’s see, Osama Bin Laden is still making DVD’s, but you can’t change a phone plan?,” she went on.   “That’s correct,” came the icy cold reply.

Undaunted by this setback, we went to the local wireless store hoping that we would find an employee who was not the Tin Man from the “Wizard of Oz.”  The young lady patiently waited the 20 or so minutes until her name was called, went up to the associate at the counter and said, “I’d like to take this phone off the family plan and move it over to my new company.”   “I’m sorry, he said.  “The bill is in your husband’s name.”  She explained that her husband was deployed.  The mystified sales associate said, “I’ll check with my manager.”

The Tin Woodman speaks

You guessed it,” the manager said, “Just have your husband call.” “He doesn’t have a phone,” she exclaimed.  By this time everyone was listening intently.  The young man said once again, “Have him call.”  It was at that point that I lost it and said, “He’s in the war! They shot at him today.”  A few stations away, a man who was obviously a veteran yelled out, “Give me his numbers, I’ll put a war movie in the DVD and call these jerks for him.”  The next woman over just shook her head.  Undaunted, the red faced associate stuck to his guns.

Clearly corporate America was making a point.  War?  What war?  Who cares?  “Rules are rules, and they will not be altered!”  This was the third time in as many months that she was greeted with this type of callous big business attitude.  Because it was in a new location, the local cable company would not put cable into their home to provide access for the family to communicate with their dad via the internet for under $3,000.  Even when she explained the desperation of a war mom separated from her husband for a year, their reply was simple, “No, it’s $3000,  or no cable.”

She then asked that her satellite TV be discontinued, and was told that she would be assessed another several hundred dollars because the contract had not expired.  She once again explained the Iraq situation and the need for high speed cable, but they replied, “Sorry, but that’s the way it is.”

So, let’s all take this opportunity to thank our wireless company, the cable company, the satellite company, and every other United States-based company who so fervently support our troops and their families. Sung to the tune of America the Beautiful:

The magnitude of gratitude expressed by corporate greed;
Tells all our soldiers everywhere we’re grateful, yes indeed.
We’ll fleece you here and fleece you there as you protect our homes
Just watch us help your families until you all come home . . . NOT!

In the words of Stephen Colbert, you’re on notice.

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In My Opinion, It’s Tinker Bell Dust!

June 4th, 2009

Everyone has seen the media reports on the $1.7 trillion of cost cuts being projected by health care leaders over the next decade, but does anyone really believe it? According to this group, the premises embraced that will lead to these cuts are based upon improving care for chronic diseases, reducing unnecessary care, and streamlining administrative costs. Included in this wish/promise list are cutbacks, commitments to permit fewer Caesarean sections, better back pain management, less use of antibiotics and a reduction in diagnostic imaging tests.

U.S. President Obama meets with health care executives at the White House on May 11 (Pete Souza)
U.S. President Barack Obama meets with healthcare executives at the White House on May 11 (Photo credit: Pete Souza)

The groups involved have made commitments to try to reduce medical errors, begin the use of common insurance forms, to initiate a reduction in patient re-admissions, to improve the efficiency of drug development, and to promote the expansion of in-home care. (The majority of the preceding information comes from an article by Janet Adamy entitled “Health Groups Detail Plans to Reduce Costs,” in the June 2nd Wall Street Journal. )

If you are reading this, and you are a health care professional, it may be reminiscent of listening to your three hundred fifty pound, five foot tall neighbor describing how he is going to get back into his size 34 Levi’s. It also reminds me of a conversation that I had about 22 years ago when a hospital vice president said to me, “We are going to begin putting  computers into the hospital, and they will reduce costs, lower the need for staff, and contribute to much higher efficiencies.” What part of this equation didn’t happen? Even at the little hospital from which I just retired, we went from two, to three, to four… to about a dozen experts in every aspect of computer technology, and IT has been a dominant part of the capital budget for over a dozen years. So, what’s wrong with this scenario? As the equipment became more sophisticated, more well trained experts were needed. The higher the cost of the equipment, the greater the overhead required for maintenance, and the larger the demand became for everyone in the facility to be computerized.

It is not my intention to be a complete cynic, but isn’t it true that tens of thousands of people who have become used to a certain standard of living will be controlling these cuts? If we could have improved chronic disease care, why wouldn’t we have done that already? It’s all about the reimbursement system. We are still reimbursing for sickness rather than wellness. How do we line up the incentives so that statements like “we will permit fewer Caesarean sections or we will initiate better back pain management” will not ring hollow as words directed toward placating the new President? Nowhere in the equation is there any reference to initiating tort reform. As long as doctors, hospitals, and other clinicians have to practice defensive medicine, we will not be able to reduce tests. We will not be able to reduce unnecessary costs.

pixie-dustl1Yes, of course a reduction in medical errors would be great. So would common insurance forms, and fewer re-admissions. I’m sure we will see our peers work diligently toward those ends, but, unless or until incentives are aligned, the system will continue to roll along pretty much as is. I’m not sure why the President hasn’t called me yet. Maybe it’s because he knows how I feel about tort reform. Maybe it’s because he knows that I’ll say that the list articulated in the opening paragraph is filled with smoke, or maybe it’s because, like all government-touted initiatives, it’s not supposed to actually come completely into play until two and possibly six years after he leaves office. That philosophy certainly didn’t work for our former Presidents, and, unless someone gets really serious about changing the way healthcare is delivered in the United States, these pledges will be just what they appear to be, “Tinker Bell dust!”

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The Health Care Reality

May 15th, 2009

1979 was the year in Johnstown, Pennsylvania when I decided that it was time to leave teaching and transition into business.  For those of you who don’t remember that year, it was the beginning of some serious financial challenges for our country, but it was also two years after the Johnstown Flood of ’77, and there was an unemployment rate of 19.5% in Cambria County, PA.

1979 Rolling Stone cover Blues Brothers SNL Dan Ackroyd John BelushiIn 1980, when I accepted a job with a then bankrupt nonprofit organization in Somerset, PA, what had been a booming coal industry went into the skids. My house mortgage was about the same as the unemployment rate, 19%.  The job that I took was in the arts and Ronald Reagan was interested in cutting funding to the National Endowment for the Arts.

In 1985, my new job was with a tourism agency, and that was the year that then-PA Governor Casey cut funding to tourism.

In 1988, when I entered healthcare, it was clear that Johnstown could no longer support four hospitals, and the next decade and a half resulted in the closing of two (and almost three) of the four hospitals in that area.

Turn the clock forward to last October, when I announced my decision to become a healthcare consultant.  The stock market crashed, eight of every ten hospitals stopped, postponed, or scaled back needed capital projects, 58% of hospitals are now reporting  increases in uninsured patients using the emergency departments, 48% of hospitals have cut staff, and 80% have reported cutting expenses that include consultants.

As a consultant, the first thing I would tell anyone is that “No matter how bad things appear to be, you can do it.”

  • Our successes as a teacher continue to remain evident as former students ranging in age from 38 to 58 continue to remind me of great memories of our time together.
  • The arts organization became the largest and most successful rural arts organization east of the Mississippi.
  • The Convention Bureau went from almost closed to the fifth largest agency in the State, and most of you have tracked the successes that we experienced at Windber.

Not unlike the little engine that could, we focused on the positive, forgot about the negative, and never dealt with “Mr. In-between.”

roosevelt_action400

There are those who approach life cautiously, carefully, and very conservatively, and then there are those of us who drink from that same cup in big gulps and dream about how things could be rather than how they are.  There are those who are afraid of failure, and those of us who embrace failure because we know that it is getting us closer to more dramatic successes.

The only boundaries that we have are between our ears.

Because the future is a design function. Let me close this blog post with the ending from my commencement address to the graduate students of St. Francis University (with the help once again of Dr. Leland Kaiser):

  • Nothing has to be the way it is.
  • We can invent (or prevent) our future, because all limitations are self imposed.
  • We can empower ourselves to create a new world.
  • Reframe any limitations to become opportunities because…
  • Tremendous limitations breed success. They open doors.

So, as we design our future, remember that we should not work to create what people will like, but instead work to create what people will love!

…and we will know success beyond our wildest dreams.

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A Proactive Approach to Ecology

February 22nd, 2009

The Greening of America is here.

Despite the fact that the Clinton and Bush administrations determined that we would not be legally bound by the Kyoto Agreement, President Obama has a more proactive view on the nation’s environmental policy.

The following is a short list of Obama administration initiatives that will be funded for greener solutions to clean, efficient, American energy: Smart grid, advanced battery technology, energy efficiency:

  • $30 billion for such initiatives as a new, smart power grid, advanced battery technology, and energy efficiency measures, which will create nearly 500,000 jobs.
  • Help state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage.

Tax incentives to spur energy savings and green jobs:

  • Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years.
  • Provides a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars.
  • Includes clean renewable energy bonds for state and local governments.
  • Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.

The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change.

The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions. The Kyoto Protocol was adopted in Kyoto, Japan, in December 1997 and entered into force in February 2005; 184 parties have ratified its protocol to date.

Although the United States did not ratify the Kyoto Protocol, voluntary efforts were made to reduce GHG emissions here, even as 132 of the nation’s mayors pledged to meet Kyoto-like emission targets in 2005.

In 2003, some U.S. companies and cities agreed to participate in a legally binding voluntary carbon market – the Carbon Credit Exchange.

The CCX, like other cap-and-trade programs, set limits or caps on allowable emissions.

The CCX issued allowances for trading among the members that correspond to the emission cap. CCX members have agreed to reduce their emissions by 6 percent below their baseline for 2007 to 2010.

The publically traded CCX is about a $70 billion business that previously was somewhat limited to power producers and large industries.

A recent article in the New York Times indicated that within the next four or five years, this market is expected to grow to $500 billion as the country begins to work toward green and a cleaner environment.

Currently, the European Union has the largest and most famous carbon trading system.

The European Trading Scheme is a cap-and-trade system in which the government sets national emission caps based on its Kyoto and national targets.

Allowances, totaling the caps, are then distributed to individual firms for trading throughout the EU. If emissions are capped, for example, at 200 million tons a year, there are 200 million allowances distributed to firms for offsetting emissions.

These firms can then use the allowances to offset their own emissions, reduce their emissions and sell the allowances to other parties, or bank the allowances for future use.

If a firm does not have adequate allowances to offset its emissions, the firm must purchase allowances or pay a significant financial penalty.

The cost of allowances, if available, is generally less than the financial penalty. The buying and selling of allowances, trading, creates a market, thus the cap-and-trade program designation.

Due to the financial challenges companies face on an ongoing basis, recent studies have shown that Sector 3 organizations will have the most difficulty dealing with this metamorphosis.

Consequently, schools, churches, hospitals, and local government will be struggling to find the means to make the green transitions such as retrofitting lights, more efficient use of demand meters, voluntary curtailment, and the installation of efficient energy supplies utilizing renewable fuels, i.e. biomass combined heat and power systems.

E-CCAP is one possible solution to this nonprofit problem, an initiative that is funded through two prominent Pittsburgh Foundations led by the Pittsburgh Gateways Corp. and its partner in this project, World-Class Industrial Network.

They are working together to capture opportunities in the developing financial markets associated with energy and carbon reduction and general sustainable practices such as switching to renewable resources or investing in energy efficiency methods.

E-CCAP is working on a set of developmental and applied activities designed to define and demonstrate that nonprofit organizations, serving industrial, commercial and institutional based stakeholders, can leverage relationships with its constituents to both promote and financially share in the benefits of sustainable business activities.

In so doing, the nonprofit organization can better meet its core mission by exploiting new revenue streams not previously available.

E-CCAP is targeting a pilot project with industrial, commercial, and institutional based stakeholders, to aggregate the financial benefits of energy efficiency and renewable energy projects through the emerging markets for energy efficiency credits.

These green credits will be aggregated and traded to support the partnership and serve the participating third sector organization and their constituents.

They will specialize in the development of credit generating projects, have those green savings validated by an independent third party, and broker the credits.

(This blog post is also published as a feature article in the 2/21/09 edition of The Tribune-Democrat.)

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