Costs are soaring for community banks struggling to comply with the Dodd-Frank Act and new regulations.

finregsCommunity banks are small business folks serving their fellow local small business community.  Dodd-Frank is just another example of what BIG can and will do to you.

Big Government regulating Big banks has consequences and don’t say they’re unintended as the mainstream media will have you believe.  We should make little Barney Frank and Chris Dodd go with the Feds next time they raid a small bank in a small tight knit community on a Friday night quittin’ time.

Make Dodd and Frank answer to small town bank employees faces when they lose their job.  Make them stay until the Feds are done.  In one case I know they made an IT Manager stay until midnight.  She was told to stand outside her cubicle while they rifled through her files and computer.  I wrote about this in The “Physical” Cliff, Writing Checks My Ass Can’t Cash.

Turns out regulating the BIG banks hurts community banks.

The State National Bank of Big Spring, Texas suspended its entire residential-mortgage division for fear of the newly “spawned” Consumer Financial Protection Bureau (CFPB) liability.

Twelve hundred rural US counties would have “severely limited banking access” without community bankers, who also serve other key sectors of our economy:

Community banks provide 48.1 percent of small business loans issued by US banks, 15.7 percent of residential mortgage lending, 43.8 percent of farmland lending, 42.8 percent of farm lending, and 34.7 percent of commercial real estate loans, and they held 20 percent of all retail deposits at US banks as of 2010.

In the early crucial stages, when a small business needs a loan, the collateral must be equal to or greater than the loan value.  Most large banks just won’t bother.   So where do small businesses turn for essential short and long term cash flow needs?  

According to the National Federation Independent Business (NFIB), six percent of the owners reported that all their credit needs were not met, down 1 point and only 2 points above the record low. Thirty-one (31) percent of all owners reported borrowing on a regular basis.  A net 7% reported loans “harder to get” compared to their last attempt (asked of regular borrowers only), up 3 points.  The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 8% (more owners expect that it will be “harder” to arrange financing than easier), 2 points worse than in March.

Here’s an excerpt from one recent article titled, Main Streets May Soon Be Without a Bank

Government regulations have also forced many small community banks to close over the last three years. The Dodd-Frank Act was designed to regulate the banking and lending industries and decrease the likelihood of another financial catastrophe. Unfortunately, an unintended consequence is soaring costs for community banks struggling to comply with the new regulations. Many of those banks are located in smaller communities. The FDIC released a report last month that stated that no new community bank charters have been granted since 2011 due, in part, to Dodd-Frank.

According to an article, The Dodd-Frank Wall Street Reform and Consumer Protection Act: The Triumph of Crony Capitalism (Part 1) written by Jeff Harding, on August 11th, 2010 there are two questions you should consider while evaluating the Act’s impact and scope that help explain this boom-bust cycle:

  1. Why did the housing market become a bubble?
  2. Why would any lender lend money to a home buyer who (i) had a credit score of 500, (ii) made a down payment of 5% or less, and (iii) didn’t have to prove his or her ability to repay?

He answers these questions by saying:

  1. Only cheap money drives bubbles and there is only one entity that creates cheap money and that is the Federal Reserve—from 2000 to 2004 the Fed Funds rate went from 6.5% to 1.0% wildly distorting entrepreneurial behavior. This was the cause of this boom-bust cycle.
  2. No one would lend so carelessly unless they didn’t care. They didn’t care because someone else, in this case the government (Fannie, Freddie, and the FHA), would guarantee repayment.

Everything stems from these two factors yet there is nothing in the Act that prevents the Fed from starting a new cycle or that prevents Fannie or Freddie from again distorting the economics of the housing market.

Couple these alarming events with the fact there are 8.5M unbanked people eligible for Obamacare who will not be able to get it without a bank account…well we all know what rolls down hill.

In Life Too Often, It’s the Tail Waggin’ the Dog

100_0003 (2)I love the beat of Cody’s tail wagging against the floor, against the door, against the wall, against the bed he is lying on.  I’m not sure whether it will be Cody’s heart that gives out before his tail stops wagging.

Cody’s my 10 year old chocolate lab.  We’re kinda attached at the hips.  He goes to work with me every day.  He goes to work most days, I am out of town on business. I now have a ramp he uses to load up into the back of my SUV.  It is a ceremony.  He’s not fan of the trip up.  I’ve employed what is best to describe as a soft suitcase I wrap him in, to coax him up the ramp.  He’s frantic, so there’s always a treat waiting for him.  Upon arrival, and his descent, he reminds me of an arriving dignitary, including the obligatory pause for photo ops, before his parade trip down the ramp.

Cody knows when it’s time to go to work.  He knows when it is time for his 10 and 4 o’clock walks.  He knows he goes to North Park in the AM and he knows he tours the office park in the afternoon.

Most important he knows when it is time to go home.  Dinner!

If you ask him to change his routine, you meet with the stubbornness of a 100+ lb. dog, who knows who’s in charge.

He knows when the UPS truck arrives.  He knows the drivers.  He knows whether to expect a biscuit or a good rub.  The drivers know him, too.  After all, “What can brown do for you?”

You might say Cody has it made.  Even before you see his beds at home or the leather sofa he spends an increasing amount of time on at the office, but there’s a point to all this dribble. So bear with me.

Cody’s hips are giving in to father time, so he’s getting laser to strengthen his shoulders and flanks.  If it works for him, I’m next in line.

Cody now goes to bed before Terri and I do.  Both of us cracked a smile and laughed the first time he left us to head for bed.  Now we know Cody has more common sense than we do.

A former neighboring business owner had a 10 year old white lab named Jack.  Like Cody, he came to work with his owners each day.  Jack died suddenly.  We were commiserating when Jack’s owner said to me, “give Cody a good back scratch for Jack.”

When I scramble to meet a deadline, decry the political theatre, grouse over a lost order or worry about where the next dollar is coming from, all I have to do is look to my friend.  He’s most often at my feet.

I am reminded.  I have so much to live for, why not make things right in this messed up world?  The solution?

Everyone should get a good tummy rub and a nice back scratch every day.  Cody does.

Reflections of a Physician Patient Facing Government-run Medicine and Cancer at a Crossroad by Kris Held, MD

Kris Held

Kris Held, MD

by Kris Held (Notes) on Sunday, May 5, 2013 at 3:39pm

I am a physician and surgeon home today recovering from my third operation for breast cancer. I am blessed to live in the United States where we enjoy the earliest detection and highest survival rate for breast cancer in the world…at least for now. Tragically, government has taken over the practice of medicine in the U.S. via the unwanted and corruptly passed, without-having-been-read, paradoxically named Patient Protection and Affordable Care Act (ACA).

The US Preventive Task Force born of the ACA has already trumped our established guidelines for breast cancer screening to save money over lives – not a single breast cancer specialist was on the committee. Committee members picked and chose which studies they would include and which they would disregard – in the same fashion that this self-serving political ruling class picks winners and losers and now picks who lives and who dies. I am thankful for my physicians, surgeons, and their teams who carried me through this ordeal to a cure and good physical result. I was able to select my doctors, my treatment, and I only missed two weeks of work last year and 2 days this year. You see, as a physician and small business owner, my patients and my employees need me to be at work.

There is no room in the business model for the doctor to be out. My overhead is tremendous, and when I am out the lost income is nothing compared to the uncovered operating expenses. I love my patients, my employees and the privilege of practicing medicine, but sadly I fear that at some point it is just too risky, if not stupid, to continue in this oppressive, punitive, stifling environment.

Government first got its claws on medicine when it froze wages on workers allowing employers to instead offer health insurance as a benefit to attract employees. Health insurance as an employee benefit has evolved into a government mandate, now called a tax. Then in 1965, the federal government’s grip on medicine was tightened to a chokehold with implementation of Medicare and Medicaid, massive entitlement programs that have bloated to beyond what experts fathomed to the point that they are fiscally unsustainable and will soon throw our economy into fiscal ruin.

Rather than reforming these broken, bankrupting components of healthcare, the federal government has expanded them and seeks to place everyone on them. There is no understanding the irrationality of the process other than to accept that this is nothing about the health of the American patient but is all about keeping power and money in the hands of the political ruling class, whose intent is to fundamentally change our country to accepting the socialized medicine of a dictatorial state in complete disregard for the Constitution.

As an eye surgeon, most of my patients are seniors on Medicare. Cataract surgery is a minor miracle for patients who are able to continue enjoying the highest quality of life with restored vision. Having performed nearly 10,000 cataract operations over the past twenty-some years, I have become a highly skilled surgeon able to achieve successful outcomes in even the most difficult cases. With technological advances and an experienced surgeon, the operation can be performed quickly. Trust me, there are surgeons who take much longer and achieve poorer outcomes. Government, because it has no concept of how to practice medicine, judges quality of care based on time taken and pays physicians based on a convoluted communist based system of relative value units. So, ironically, as the surgeon and technology gets better, our pay gets lowered.

Medicare now pays $629.91 for cataract surgery including 3 months post op care, and United Healthcare pays $526.08. Most believe the goal of this administration is to ultimately have a single-payer system (socialized medicine) to be administered by United Healthcare, the largest provider in the US and worldwide. Because of its world market, it will be able to undercut all other carriers long enough to remain the sole survivor.

While physician fees have plummeted (because we are motivated to care for our patients first as opposed to fighting for pay), payments to hospitals and pharma have skyrocketed. There is a convoluted billing game that goes on between government, hospitals (represented by the-American Hospital Association lobbyists), big insurance, and big pharma. These interest groups all colluded behind closed doors with big federal government to cut deals in the ACA. Physicians were excluded, demonized, denigrated, and lied about-especially by President Obama who famously said doctors are immediately paid “30,40, or $50,000 to cut off a foot”, when in reality a below knee amputation fee to physician is around $700 including 3 months post op care. He further accused surgeons of taking out tonsils for cash instead of prescribing antibiotics, which is not only a lie, but in reality the surgeon’s fee is around $200 while the cost of antibiotics may exceed that.

The final blow was when Obama declared “we will let doctors know, and your mom know, that you know what, maybe it’s better to take the painkiller instead of having the surgery.” Government is now arrogantly practicing medicine without a license, and sadly this government puts the collective good ahead of the individual patient and family.

While I am now paid $500 for performing intricate, vision saving but potentially blinding eye surgery, the government will further reduce my pay if my patients don’t achieve a perfect outcome. So, if I operate on patients with coexistent disease, like macular degeneration, who will be greatly benefited but will not achieve 20/20, I will be penalized. Surgeons will stop operating on complex patients. My fee will be reduced further if I do not implement meaningful use electronic medical record reporting, quality reporting and data collecting, and I will not be paid at all if I do not adopt the absurd ICD10 codes by October 2014.

Further, any HIPAA violation subjects me to a $1.5 million dollar fine, and a dictation error can land me in jail, as exemplified by Dr. Natale this past year. Government is doing random unauthorized audits on physicians looking for fraud; the physician is presumed guilty until proven innocent, and bounty hunters are offered a percent of what they can dig up. The government is seeking to link the license to practice medicine with forced-taking of government insurance and forcing doctors to spend thousands of dollars and hours on “Maintenance of Certification” and “Maintenance of Licensure” scams that ultimately line the pockets of our specialty societies, which like the AMA have become nothing more than partners in crime with the feds.

All this, while patient expectation and sense of entitlement escalate…patients are unhappy, if not angry, if they have to come out of pocket a dime and if they don’t get 20/20 vision without glasses. Doctors are then subject to lawsuit. No tort reform was enacted in the ACA, because the trial lawyers’ desires exceeded the doctors’ need for protection. So, is the risk of jail, lawsuit, audit, $1.5 million dollar HIPAA fine, patient and government harassment, oppression, and demonization and MOC and MOL demands worth the $500, when I can’t even cover my expenses? Is your eyeball worth more than your iPhone? At some point it becomes too risky and flat-out stupid to continue to operate in this environment.

When the doctor in me wants to throw in the towel, the patient in me says “stay in the ring”. I would not be here if my surgeons had quit. What we must do as physicians is refuse to play this game any longer. We must stand against government for the sake of our patients, profession, and future of our country. When Government says grab your ankles, physicians must say NO! Government can’t do this without us. Are we complicit, compliant pawns doing government bidding, or are we men and women of the mind serving the sick, honoring the tradition and advancing the field? The only way not to lose is not to play.

Physicians must refuse to participate in this destructive, abusive, wasteful system. We must practice our trade outside the stranglehold of government. We have actual workable plans founded on the sacred doctor–patient relationship that will drastically cut costs and vastly improve quality of care.

Will we stand? Will our patients stand with us?

%d bloggers like this: