I avoided the Quarter Life Crisis but can I escape the Mid-Life Crisis?

The quarter life crisis is the new mid-life crisis. A search for "Quarter Life Crisis" on the Generation Y career website Brazen Careerist reveals entries on how to assess if you're having a quarter life crisis, what happens when previously clear paths fog over, and the existential struggle in between.

It does not surprise me that this crisis involving the search for meaning, uncertainty about the future, and ambivalence about the past now hits us in our mid-twenties. Previously paths were more certain as you worked on the farm, your parent's business, or got married. Paths were also delayed as apprenticeships or paying your dues were typical so tough career decisions could be delayed until we were in our 30's. Now, Generation Y has to worry about the right decisions on their Facebook post let alone the choice of graduate school, entrepreneurship, corporate jobs, or year long bender in a Thai opium den.

I dodged and juked past my quarter life crisis like Barry Sanders used to dodge the Green Bay Packers defensive line. My early 20's were spent in the Peace Corps, working on-call at multiple psychiatric floors with complete control of my schedule, or living in a commune. Actually, I should clarify, communes are now called Intentional Communities since commune's got a bad name in the 1970's. During these jobs, I spent the time thinking about what kind of graduate degree I should get to be able to do what I wanted in the health care field. At the end of the 3 years, I had decided on an MBA. I had complete confidence in my decision and future path. Additionally I embraced the small victory of each skill developed. I had experience in construction, grant-writing, and social work. I knew how to knit a sock, spin a pottery wheel, traveled most of South America, cooked for 50 people, garden, used power tools, made soap, spoke 4 languages, and butchered a pig. Actually, my ability to butcher a pig excited one of my rugby classmates so much that everytime I answered the phone, I thought that I would hear squealing in the background with my classmate yelling, "Come on over and let's barbeque!" In summary, I had more than enough stories of adventures to take center stage at most cocktail party conversation. On a serious note, I felt accomplished, lived a life less ordinary, and had confidence in my ability to make decisions about my future.

My method of avoiding a quarter life crisis is not a new one. The idea of spending 2-3 years finding your way in the world, sewing wild grains, and experimenting is a pretty standard career path for my undergraduate class. I know there are those with bigger student loans, visa issues, or family expectations or culture that playtime was over and it was time to get a job that could not take this path. My point is that a quarter life crisis is, for the most part, a relatively modern construct of our making. Some part of it does involve the collapse of the American dream where 4 years in college leaves you with a staggering load of debt and no health insurance. The ability to spend 2-3 years traveling, being a subsistence organic farmer, Americorps, working part-time and doing art part-time, moving to San Francisco and seeing what happens, homesteading in Alaska, or any of my other classmate's pursuits has faded. However, the quarter life crisis emerged well before the economic crisis so I will stand by my position that the quarter life crisis is our own invention and we have more control over it than we may think.

I turned 35 this year so my mid-life crisis is approaching. In some ways, I'm ripe for it as I am married, have a child, clawed my way to middle management, and am 20 pounds heavier than I was in college. One of my high school classmates with a suburban lifestyle lamented how he's realized that we've reached the age where we have as much chance picking up young Generation women in a bar as our grandfathers do. My car died recently and I saw a perfect opportunity to embrace a mid-life crisis by buying a sporty red convertible. My wife said that it was fine as long as the baby's car seat fit in the front seat. We bought a station wagon.

What's saved me from a full blown mid-life crisis so far has been maintaining a life outside of work, family, and social life. I still climb a mountain or two a year which keeps me connected with life and the wilderness outside of the normal 9 to 5. My high school classmate who lives in suburban Chicago doesn't have this outlet and I can tell that he needs it badly. By some quirk, I am also in better shape than I was in my 20's. I can run farther and faster, get into more yoga positions, and rock climb harder routes. Blogging also keeps my feeling connected and involved in what's new in the world, whatever that may be.

However, I can't pronounce my mid-life crisis to be avoided until I have had at least 5 more years of hindsight. There's also still my plan to grow my hair down to my shoulders again when I turn 40. Long hair is part of my plan to embrace a mid-life crisis since I may not be able to avoid it.

How an MBA will view buffalo wings and other potentially irritating habits

We went out to dinner at the newest location of a local buffalo wing restaurant called Fire on the Mountain. The Grateful Dead reference, variety of food, local beer on tap, and comfortable northwest atmosphere all made it an enjoyable outing. I also used to play against the owner in some pick up Ultimate frisbee games. One of the highlights of my Ultimate career was forcing a stall with my lock down goal line defense against him. As you can guess from that highlight, my Ultimate frisbee career was not very illustrious.

We had previously been to their first location which was smaller and located in a transitional part of town. Given the size and central location of their new restaurant, we ventured that wing business was booming and Fire on the Mountain was doing well. Like any good Pavlovian conditioned MBA, I immediately started thinking about how the business model drove success. Just like a Peace Corps Volunteer becomes conditioned to salivate over the local bitter tea or gut rot grain alcohol, MBA's become conditioned to view the world in terms of margins and cost structures.

While dipping a french fly in blue cheese dressing, I wondered what the margins were like on buffalo wings. Given that places will give them a way for a nickel each, the gross margins must be incredible. $6 for 6 wings must be at least an 80% gross margin even if they bought from the farmer spent extra on free range chickens that were given cello lessons and yoga balls to sit! All right, that doesn't include the blue cheese dressing but we're still looking pretty good. They also don't need the most upscale kitchen or chefs to primarily make buffalo wings so the kitchen operations is probably pretty low cost. While wings look like a good business, the margins are probably as good if not better on their beer.

While those margins are great, there is only so many $6 wings or $4 beers that can be sold in a day. It's a similar problem that coffee stores face since there is only so many $3 coffee drinks that can be sold. While the new location looks great, I don't know if it was financed by loan shark debt or could be considered a rounding error in their bank account. At this point in the conversation, the rest of my dining mates had tuned me out in favor of the Trivial Pursuit cards, football game, and dipping their french fries in my water glass (the age of my dinner mates varied). As you can tell, this is that glamorous post-MBA life that you hear about.

Post-MBA life, you too will view the world in the context of gross margins, variable costs, and fixed costs. You may even try to bargain at closing time by trying to pay slightly above variable costs for the wings that will otherwise be thrown away.

While bargaining based on business model is rooted in the time honored tradition of haggling, I'll ask MBA's to avoid a more annoying post-MBA habit of talking about "operational efficiency." Invariably, when food takes a long time to arrive at a restaurant or the line is longer than some would like, one of your classmates will say, "They could really improve the operational efficiency in this place." The problem with that statement is the only operational improvement skills that any MBA learns is the newspaper vendor model and timing someone with a stop watch. That's really it. We really have no clue how to motivate an hourly cashier to move quicker when it has no impact on their salary or personal satisfaction. We have no great insight on how a waiter can prioritize a drink order, new table being sat, and soup being ready at the same time. Our knowledge of business process redesign is limited to key stroke short cuts on Excel. Talking about improving the operational efficiency is just a fancier and extremely irritating way of saying, "I'm bored/hungry/in a hurry/about to start eating my groceries in line, please hurry." That is why the FedEx commercial is still so popular.

Fellow MBA's, the sooner that we embrace the fact that we have no clue how to make someone unload a moving trucker faster than anyone else without using a Taser, the less annoying we will be to the world at large. That is a goal with an excellent business model.

Review of the House Health Care Bill, Affordable Health Care for America

My review of the Affordable Health Care for America Act, HR 3962, is based on 2 key aspects. First, it's a health insurance reform bill, not health care bill reform. The prevailing mood around reform has been that if we just get everyone insured, we'll win. Insurance reform is not time for a victory lap but rather a quick pit stop to prepare for the hard work of cost containment. I am making the big assumption that government will address health care costs after addressing coverage. This strategy worked for the creation of Medicare as Lyndon Johson knew that he could never show Medicare would pay for itself initially. Instead he focused on creating the need and for better or worse, let future governments work on the financial viability.

Second, our current health care system is a mostly clogged artery that's waiting to burst. Taking the stairs instead of the elevator would be an improvement. Doing nothing is rapidly disappearing as a choice. That's why I found the Republican's decision to work on their Sudoku or their profiles on the new GOP social networking site to be so counterproductive. Their lack of interest made the narrow House vote less significant.

With those two caveats (and these caveats border on assumptions like Lindsey Lohan has finally gotten herself straightened out), I'll say that the House bill is not bad. Just like NCIS Los Angeles, I first found it to be unwatchable due to the complete lack of chemistry between the main parts. However, some role players have emerged and the writing has improved. While the Senate bill will dictate the final outcome, here's how I see the House bill using my trusted framework of the Good, the Bad, and the Ugly:


The Good:

• The House was somewhat serious about the individual mandate: Everyone is starting to understand that in order for insurance to really be affordable, everyone has to participate. The young, healthy, and good-looking have to pay for the old, sick, and ugly. The House bill has a penalty that is 2.5% of income. Considering there should be available health plans for 8% of income, that penalty should be enough to make most participate. One of the biggest problems with the Massachusetts reform was that the penalty was not significant for people to care given the cost of insurance. While I'm going to congratulate Congress for growing a pair, I'll at least offer a fist bump.


• The fact the Florida seniors get twice as much for Medicare was discussed: According to the >Huffington Post, there is a provision to study the geographic variation in the costs of health care or why it costs twice as much in Florida or McAllen, TX. I think the fact that some seniors receive twice as many health care dollars or that their doctors are paid enough to accept Medicare while others do not and are not is one of the least talked about injustices of our health care system. While I know commissioning a study is like forming a committee to address a problem, at least, it's getting discussed.


• It's an insurance reform bill: There is no great secret to paying for universal health care. It's always been a matter of requiring the Haves to contribute to the Have Not in some way to prevent people from gaming the system. The wealthy, health care companies, and employers will be taxed more. Seniors will receive lower Medicare benefits and individuals will have to pay or play. Whether this is considered to be socialism, communism, or paganism, it's just the basic concept of how you pay for insurance.
  

The Bad:

• There are no cost containment plans: Health insurance for everyone is going to be expensive and the government has had little success reducing costs. Medicare has had little to no success with disease management programs. No one in government has ever negotiated with drug companies or providers. Their only ideas around value-based benefit (value-based involves covering evidence-based services at little to no cost while charging more for services with questionable value) designs involve lower copays for preventive services. Private insurance companies figured that out 10 years ago. The government has had success with requiring providers to manage all care, including complications, for a set price (called DRGs). However, that's it and that's why I really hope that there is still the political fortitude to get serious about cost when the bills come. The bills will be about as pretty as lipstick on a pig.


• Seniors are going to be pissed: This bill will cut funding for Medicare Advantage which includes health plans that have been providing Medicare coverage for decades. This year, we have seen that a 4.5% revenue cut resulted in higher prices for Medicare Advantage by 25%, reduced benefits, and had plans already leave the business. Seniors were told not to worry about benefit cuts and that the doughut hole in the drug plans will be filled with this bill. By the way, the doughnut hole (after a certain level of coverage, seniors whose drug spending is around the 75th percentile will have to pay $1500 on their own, and then only have to pay 5% of drug costs in the catastrophic category. The $1500 they they pay on their own is the doughnut hole), is an example of a value-based design to promote better utilization of drugs. However, the government is running away from it in an effort to show seniors something bright, shiny, and new with Medicare. Taking money away from Medicare to fund the uninsured is probably a good use of the health care dollars, but no one has been that honest with the seniors. No, I did not expect politicians to be upfront with a key voting block about bad news, but this is an impressive bait and switch considering the cuts will wipe out the prescription drug program and its newly filled doughnut hole.
  

The Ugly:

• With this Public Plan Option, the government is going to start a brand new insurance company: A government-run health plan or the Public Plan was included in this bill but it requires that they negotiate with providers for fees and act like a regular insurance plans. I have written ad nauseum about how I think the Public Plan is a bad idea and the majority of the cost savings would come from paying providers lower rates. This Public Plan in the bill does not pay providers a lower fixed rate and the Congressional Budget Office notes that price for the Public Plan will be higher than comparable private plans. I have am image of dominant hospitals telling the Public Plan administrators the astronomical fees that they will have to pay them to make up for the fact that Medicare and Medicaid pay them too little. Next, the dominant hospital would tell them that they don't accept Medicare, don't accept Medicare, and where they can shove the Pubic Plan. The Public Plan has been a bigger distraction from the real issues than abortion or immigration.
  

If you're looking for more information or think I'm an idiot and want to hear other opinions, This American Life did an excellent job of explaining the key issues of the health care system that this bill does not address. Here's the more pessimistic view from an objective (but grumpy) health care insider or a slightly wonkish but accessible view.

Buying a House or Car: Considering how much your soul is worth

This year my wife and I had the fortunate yet-gut-wrenching-experience-that triggers-doubt-and-doomsday-thoughts experience of buying a house and a car together. These are the two largest outlays of money that any couple is likely to make besides education, a hip replacement, or that last kilo of cocaine before you retire and go straight.

Our circumstances are very fortunate, we were conservative, and I knew that if our mortgage and car security were sold individually, pension funds would even buy them. If worse came to worse, I had sold my bodily fluids before so that wouldn't be new. Therefore, I was able to ponder how homes and cars are bought and sold, the parties involved in the purchase, the business model, and purchase experience.

The housing market still seems as unstable as a Southern California hill side during the raining season. Transparency has improved but is not completely there. The biggest problem to me seemed like those who work in the housing industry are either overwhelmed or aren't the brightest candles on the menorah too begin with.

We were refinancing the house (which still felt like buying it all over again with the financial paper work). I started with my current lender, Wells Fargo, which was able to give an easy trade in from a 6% interest rate to a 5.5% with no closing costs. We didn't find anything better so accepted and attempted to sign, initial, and notorize their tablet sized closing book. Wells Fargo has an "easy" 1-2-3 Do It Yourself (DIY) closing process where they give you instructions on where to sign and initial. Of course, we missed on signature somewhere on the back of page 8A, Section G. Wells Fargo didn't tell us until I call them asking for an update, and that offer had already become null and void. They offered to resend us the closing book so we could try the DIY process again. I told them what they could Do It Yourself with their closing book that involved physically impossible acts. They didn't really seem interested in actually helping us with the process.

I had also sent my information on Lending Tree prior to accepting Wells Fargo. Looks like the mortgage business was doing better since I got flooded with so many calls and emails that I felt like Lending Tree was run by a Turkish bazaar. The offers were better then the month before and I was now looking at 5% interest rate. Our main criteria was a lender with a local presence to prevent the DIY disaster. This narrowed it down to 2 lenders.

One of the lenders, Arivian Financial, put together a very accurate estimate with the right amount of days interest, months of state taxes, and other factors based on actual state laws and lending requirements. The other broker underestimated those factors to make their offer look better and included his photo in the email signature with his hipster soul patch and side burns. Arivian Financial not only had the best deal but was able to send me state legislation to support their terms. Finally, any documents that they sent us clearly showed me where to sign.

The final piece of incompetency in the mortgage lack of value chain was the Title company sent me someone else's initial estimate. The inability to handle personal financial information combined with inability of some banks to handle their work load, the Turkish bazaar atmosphere, and the ability to still misrepresent closing costs makes me understand the mortgage disaster even more.

On the other hand, the car market is remarkably clear and transparent with access to easy to compare information. The last time that I had been involved in a car purchase was during the Clinton administration so I felt like a cave man entering the Bronze Age. Car features were clearly outlined as well as the dealer price and the sticker price (although it was no longer actually on a sticker so it didn't leave glue on the windshield). The dealers told us their profit, their incentive plans, and how they got paid. I can't think of any other purchase where you know this much about their compensation and business model.

The sales force had some interesting approaches. At the first car dealership, the head sales guy came out with a piece of paper that had the dealer price. We talked about this family, my family, and my favorite cars. At one point, I thought that he was going to look at my teeth as part of the horse trading. Finally, he wrote down his profit next to the dealer price, added it up, and told me the total price. He told me that he was giving me the same price as his father-in-law which could mean he really liked me or really hated me, depending on the relationship with his father-in-law.

Ultimately, I bought a car from another dealership. After I agreed to their price, the sales person told me that part of their compensation ($25 per car sale) depended on their performance in a customer satisfaction survey that I would receive in the mail. They showed me the survey, explained it, and emphasized its importance to their compensation. As a result, it ceased to be a customer satisfaction survey but turned into a customer compassion survey as in how did I feel about the sales person receiving full compensation for their work. My satisfaction was irrelevant as I realized that my influence on their compensation did not stop with my decision to purchase a car from them.

Personally, I would rather have that influence on how much the participants in the mortgage business get paid.

Republican Health Care Proposal: Tweedledumb and Tweedledumber

The Republicans and their Congressional leader, John Boehner, seemed to have just realize that health care reform has longer staying power than the Spice Girls. With the Democrats bringing bills to the floor, the Republicans announced their latest health care reform proposal. My response was a Groundhog Day-esque sensation of "Haven't they announced their health care proposals before?" Looking at their four key aspects, I realize, that yes, it's deja vu all over again as they have the same ideas which consist of two ideas that every reform policy has, the Tweedle Dumb idea, and Tweedle Dumber idea.

I have spent enough time writing about how the Democratic Public Plan Option is the health plan to nowhere that I feel truly bipartisan by spending an equal amount of posts about how the Republican health care reform ideas have just gone nowhere. They don't seem to think that there are any problems that changing the methodology for classifying the uninsured won't fix. It's like they are waiting for someone to announce that the health care debate was just a test of the American Democratic system and we can now return to our regularly scheduled programming.

Here are the 4 ideas in their proposal that they either copied from someone else or fall in the Tweedledumb category:

Allow individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do today. This is copied from everyone else who has thought about reform for the last 20 years. This is basically the concept of insurance or a risk pool or the Democrat's Health Care Exchange proposal where you bring a large group of people together and hope you have enough healthy folks to pay for the sick. The problem that no one has solved is how to get relatively healthy people excited about participating in these pools. Generally, the only people who are interested in participating are those who are sick enough to need insurance and they get really high rates or no insurance company wants to offer them a policy. I call this a great example of market failure.

Give states the tools to create their own innovative reforms that lower health care costs. This is the equivalent of an idea like "Let's paint the White House white" or copied from someone else. States have been creating their own innovative reforms with existing tools like Medicare and Medicaid waivers since those program were invented. The Oregon Health Plan made tough choices in 1993 about benefits in order to cover more people with the truly important services. Massachusetts launched universal coverage in 2006. Vermont and Hawaii have their own reform programs. What do the Republicans have in mind, giving these state back rubs while they continue to look at innovative reform proposals?

End junk lawsuits that contribute to higher health care costs by increasing the number of tests and procedures that physicians sometimes order not because they think it's good medicine, but because they are afraid of being sued. Texas enacted malpractice reform in 2003 and didn't even cause a dip in the medical cost trajectory. A 2006 Harvard study showed that most malpractice law suits aren't frivilous and their impact on medical costs is overstated. Malpractice reform will not solve the health care system. It will help with tort reform which is really a separate topic. I share the Republicans lack of interest in a litigious society. However, we're talking about health care reform right now, so let's stay on topic. I all thisTweedledumb.

Let families and businesses buy health insurance across state lines. This idea is Tweedledumber and it's the only remotely new idea that the Republican have offered. It rests on the premise that state mandates like requiring coverage of domestic partners, smoking cessation, or birth control is a significant driver behind medical costs. It ignores the Medicare data which shows how medical costs vary significantly from state to state or city to city in a universal benefit design (Medicare).

I help make decisions for the health plan that families purchase and I have no interest in letting families in other states purchase our plan. It would attract interest from those in high cost states like New Jersey which have higher medical costs based on the practice patterns. As a result, they would drive up the cost of my plan and I would become more expensive compared to competitors in Oregon which is a low cost state. I would also lose money on the New Jersey residents.

If this proposal was enacted, I would charge a higher rate to any out of state residents from high cost states or market my competitors plan in those states so they would have higher medical costs.

With proposals likes this, I view a bipartisan plan as one that moderate and more liberal Democrats agree upon. When I think of the Republican viewpoint, I am reminded of how passionate they were about the Terry Schavio, the woman who was going to be disconnected from life support. The Republicans considered that to be a very important issue while I personally spent most of my time wondering if Schavio was a Greek or Italian name and thought it was a bigger waste of network time than the OJ Simpson white Bronco car chase. The Republicans seem to reserve a similar amount of interest in health care reform.