America’s Epidemic Of Unnecessary Health Care

It is estimated that as much as 30% of the health care Americans receive every year is completely unnecessary. Health care waste costs approximately $765 billion annually. Of that, an estimated $210 billion goes to unnecessary or needlessly expensive care, according to a 2012 report by the National Academy of Medicine. ProPublica has been documenting ways some of this waste is seemingly “baked in” to the whole healthcare system. Hospitals throw away new supplies, and nursing homes discard still-potent medication. Drugmakers combine cheap ingredients to create expensive specialty pills, and arbitrary drug expiration dates force hospitals and pharmacies to toss valuable drugs. Waste also results when there is spending on more expensive services that lack evidence of producing better outcomes, inefficiencies in goods and services, and costs from treating avoidable medical injuries – like preventable infections. Then there is outright over-treatment that can sometimes be at the urging of a frightened patient, but ultimately is condoned by a healthcare professional. Interestingly, about 59% of physicians in a recent Kaiser Health survey said they have gone along with unnecessary care due to patient pressure. At the same time, 85% of the survey participants said they have over-treated out of fear of being accused of malpractice. Despite the urgent need to address this long-standing problem of medical waste, medical professionals say determining what really is needed and what is not can often be a slippery slope. At its core, traditional medical training emphasizes thoroughness over appropriateness, which can perpetuate a fear of doing to little. Patients can add to the problem with demands for more services and specialists, confusing “more care” with “better care.” Health care spending is projected to grow at an average annual rate of 5.6 percent over the next decade. This will result in 20% of our gross domestic product – or $1 out of every $5 – going to medical services by 2025. Experts believe this can be significantly curbed by simply cutting wasteful medical spending. The Institute of Medicine recommends a number of solutions and many boil down to a pretty simple idea: Health care should be better-coordinated. Doctors should follow up with patients, there should be continuity of care and the system needs a wider adoption of digital records. (Sources: NPR, U.S. News & World Report)

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Medical expenses – Laboratory costs

Operation Desert Storm

It was on this day back in 1991 that the United States led coalition forces from 35 nations against Iraq in response to their invasion and annexation of Kuwait, the combat phase of this mission was officially termed ​”Operation Desert Storm”. The Iraqi Army’s movement and occupation of Kuwait that began on August 2, 1990 was met with international condemnation and brought immediate economic sanctions against Iraq by members of the UN Security Council. U.S. President, George H. W. Bush took the lead by deploying U.S. forces into Saudi Arabia, and urging other countries to send their own forces to the scene. An array of nations joined the coalition, forming the largest military alliance since World War II. The greatest majority of the coalition’s military forces were from the US, with Saudi Arabia, the United Kingdom and Egypt. A bit of history tells us that throughout the Cold War, Iraq had been an ally of the Soviet Union, and there was a history of friction between it and the United States. The US was concerned with Iraq’s position on Israeli–Palestinian politics. The U.S. also disliked Iraqi support for many Arab and Palestinian militant groups. Interestingly however, Iraq’s invasion of Iran in 1980 threw in a sizable twist. The U.S. felt forced to pick sides and started providing resources, political support, and some “non-military” aircraft to Iraq. In March 1982, Iran began a successful counteroffensive, and the U.S. increased its military arm sales to Iraq to prevent Iran from forcing a surrender. When Iraqi President Saddam Hussein expelled Abu Nidal to Syria at the U.S.’s request in November 1983, the Reagan administration sent Donald Rumsfeld to meet Saddam as a special envoy and to cultivate ties. By the time the ceasefire with Iran was signed in August 1988, Iraq was heavily debt-ridden and tensions within society were rising. Most of its debt was owed to Saudi Arabia and Kuwait. Iraq pressured both nations to forgive the debts, but they refused. The Iraq–Kuwait dispute also involved Iraqi claims to Kuwait as Iraqi territory, and the accusation Kuwait was exceeding its OPEC quotas for oil production. By the summer of 1990, Saddam Hussein believed an anti-Iraq conspiracy was developing – Kuwait had begun talks with Iran, and Iraq’s rival Syria had arranged a visit to Egypt. On July 23rd, 1990 the CIA reported that Iraq had moved 30,000 troops to the Iraq-Kuwait border, and the US naval fleet in the Persian Gulf was placed on alert. On July 25th, Saddam met with April Glaspie, the U.S. Ambassador to Iraq, in Baghdad. The Iraqi leader attacked American policy with regards to Kuwait, but there was still no imminent threat of the U.S. getting involved in a war in the Middle East. Saddam upped the ante on August 2, 1990 with the bombing of Kuwait’s capital, Kuwait City. In spite of Iraqi saber rattling, Kuwait had not mobilize its forces and at the time of the Iraqi invasion many Kuwaiti military personnel were on leave. On the flip side, the Iraqi Army was thought to be the world’s fourth largest army, with the ability to field a massive number of soldiers. Just two years prior, at the Iran–Iraq war’s end, the Iraqi Army consisted of 955,000 standing soldiers and 650,000 paramilitary forces in the Popular Army. Within 12 hours, most resistance had ended within Kuwait and the royal family had fled, leaving Iraq in control of most of Kuwait. After just 48-hours, most of the Kuwaiti military were either overrun by the Iraqi Republican Guard, or had escaped to Saudi Arabia. After the invasion, the Iraqi military looted over $1,000,000,000 in banknotes from Kuwait’s Central Bank. At the same time, Saddam Hussein made the Kuwaiti dinar equal to the Iraqi dinar, thereby lowering the Kuwaiti currency to one-twelfth of its original value. In December 1990, Iraq made a proposal to withdraw from Kuwait provided that foreign troops left the region and that an agreement was reached regarding the Palestinian problem and the dismantlement of both Israel’s and Iraq’s weapons of mass destruction. The White House rejected the proposal. One of the West’s main concerns was the significant threat Iraq posed to Saudi Arabia. Following Kuwait’s conquest, the Iraqi Army was within easy striking distance of Saudi oil fields. Control of these fields, along with Kuwaiti and Iraqi reserves, would have given Saddam control over the majority of the world’s oil reserves. US President George H. W. Bush quickly announced that the US would launch a “wholly defensive” mission to prevent Iraq from invading Saudi Arabia under the codename Operation Desert Shield. Operation Desert Shield began on 7 August 1990 when U.S. troops were sent to Saudi Arabia due also to the request of its monarch, King Fahd, who had earlier called for US military assistance. During a speech in a special joint session of the U.S. Congress given on 11 September 1990, US President Bush summed up the reasons with the following remarks: “Within three days, 120,000 Iraqi troops with 850 tanks had poured into Kuwait and moved south to threaten Saudi Arabia. It was then that I decided to act to check that aggression.” Tensions continued to escalate, then in mid-January of 1991, The Gulf War or “Operation Desert Storm” was officially kicked off with an extensive aerial bombing campaign. For 42 consecutive days and nights, the coalition forces subjected Iraq to one of the most intensive air bombardment in military history. The coalition flew over 100,000 sorties, dropping over 88,500 tons of bombs. For what it’s worth, on January 29, Iraqi forces did in fact attack and occupied the lightly defended Saudi city of Khafji with tanks and infantry. The Battle of Khafji ended two days laterwhen the Iraqis were driven back by the Saudi Arabian National Guard, supported by Qatari forces and U.S. Marines. The U.S. Marine Corps also fought the biggest tank battle in its history at Kuwait International Airport. In fact the ground campaign consisted of three if not four of the largest tank battles in American history. Casualties of the war remain heavily debated, but several sources place Iraqi combat casualties at between 20,000 and 35,000 fatalities, and another 75,000 wounded. The Department of Defense reports that U.S. forces suffered 148 battle-related deaths (35 to friendly fire), with one pilot listed as MIA (his remains were found and identified in August 2009). A further 145 Americans died in non-combat accidents. The largest single loss of life among coalition forces happened on 25 February 1991, when an Iraqi Al Hussein missile hit a U.S. military barrack in Dhahran, Saudi Arabia, killing 28 U.S. Army Reservists from Pennsylvania. In all, 190 coalition troops were killed by Iraqi fire during the war, 113 of whom were American, out of a total of 358 coalition deaths. The number of coalition wounded in combat was 776, including 458 Americans. On March 10, 1991, an estimated 540,000 U.S. troops began moving out of the Persian Gulf. (Source: Wiki; History)

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Milk Producers Suing Dairy Farmers of America… Could Your Co-Op Be Next?

I really don’t have a dog in this fight, but over the last several years, I continue to hear stories of dairy farmers banning together to sue Dairy Farmers of America (DFA). They accuse the milk processor – the largest in the country – of conspiring with other large agribusinesses to drive down the prices they receive for their milk. They also accuse DFA of retaliating against any farmers who complain or try to go around DFA. The DFA bills itself as a cooperative, meaning dairy farmers themselves are joint members and the organization is supposed to work on behalf of those members. Historically, dairy co-ops have engaged in collective bargaining with the typically much larger corporations to negotiate prices for their milk and milk products. The co-op system in general is considered crucial for receiving a fair price because of something known as “monopsony power.” A monopsony market (aka a “buyer’s monopoly”) situation occurs when there is only one buyer with many would-be sellers and drives down the price of the product. In situations where monopsonies occur, sellers often engage in price wars to entice the single buyer’s business, effectively driving down the price and increasing the quantity. Sellers that get caught in a monopsony are known to race to the bottom, losing any power they previously had over supply and demand. With a dairy co-op stepping in, they would negotiate on behalf of their members with giant businesses like Carnation and Borden, as well as retailers that market products under their own label. They have also typically helped negotiate freight rates with trucking firms. Some co-ops are also involved in processing and marketing products. The role co-ops have typically played has helped to ensure that large companies are not abusing their negotiating power. But some dairy farmers are arguing that DFA is not a typical cooperative. The organization has about 13,000 member farmers. At the same time, they own or control a large number of outfits across the dairy industry, including food processors and milk truckers. According to figures reported in its 2016 financial statement, DFA’s “non-member business earnings” were responsible for 60% of the organizations net income that year. Member farmers say this is a conflict of interest as the less money paid for their milk products means some DFA-run businesses turn a bigger profit. DFA controls about 30 percent of all milk sales nationally and in some regions of the country, they are the only option dairy farmers have for getting their milk to market. Dairy farmers that oppose how the DFA operates accuse the organization of antitrust violations like price fixing. Some industry experts say the U.S. government has not been able to effectively constrain the DFA’s power because of its designation as a farmer co-op, which are protected by an antitrust exemption. A couple of lawsuits have been brought against DFA over recent years with at least two ending in multi-million dollar settlements. The latest case against DFA is being pursued by 115 DFA member farmers, whom are alleging an antitrust injury. DFA denies any wrong doing. They claim that controlling the supply chain actually helps protect the farmers. They also claim that many cooperatives across industries in the U.S. also own manufacturing, trucking and or other assets. The farmers are part of a group that opted out of a 2016 class-action settlement in which DFA agreed to $50 million. However, no payments in that case can be made until all appeals have been exhausted. An appeals court declined to take up the appeal in July, but some inside the industry are thinking the case could be taken to the Supreme Court. I just wonder as technology and transparency continues to drive margins lower for the co-op’s, how will they adjust and adapt? Won’t many have to start digging deeper and deeper into the alternatives to stay afloat? All reasons I could see tensions amongst the members become more and more strained. Yes, I understand the latest tax advantages are going to give co-ops an edge in sourcing crop, but I have to imagine they are ultimately facing serious stiff headwinds. (Sources: Washington Monthly, Lancaster Farming)

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Americans Are Leaving These 5 States in Droves

I was sent an interesting report showing where Americans have moved throughout 2017. The U.S.Census Bureau estimates the percentage of people that move every year equates to 14% of the population (or roughly 40 million). People move for a variety of reasons: housing, jobs, family, etc. But knowing migrating patterns can provide you with a better idea of the behavior and mindset of Americans. It also helps in making more informed real estate decisions. The following historical U.S. migration study by North American Moving Services provides you with the states that had the largest influx of moves and the states that have the most outbound moves. It’s also interesting to think about how these demographical shifts and changes could impact national elections in the months and years ahead: Below are some key takeaways from the report:

  • Moving To – Arizona, Idaho, North Carolina, South Carolina and Tennessee are the top-5 states people are moving to.
  • Moving Out – Illinois, Connecticut, New Jersey, California and Michigan are the top-5 states people are moving out of.
  • Arizona became the leader in inbound moves. They have come in second each of the last three years.
  • Illinois topped the list once again for the most outbound moves. This is the third time since 2011 they have earned this disappointing statistic. As we recently noted, Illinois lost a staggering ~125,000 residents in aggregate, or roughly 1 man/woman/child every 4.3 minutes for the entire year of 2017. In fact, recent Census Bureau numbers also confirmed that the mass exodus from Illinois was the largest of any state in the country.
  • Tennessee made its first debut in the Top-5 for most inbound moves.
  • California made its first debut in the Top-5 for the most outbound moves.
  • Southern States – Georgia, Florida and Texas continue to remain in the top-10 steps people are moving to.
  • Western States – In 2013 and 2014, Idaho wasn’t in the top inbound states. Then in 2015, it was #1. It remained #1 in 2016 and slipped to #2 in 2017. It is currently the nation’s fastest-growing state, with its population increasing 2.2% between July 2016 and July 2017. Oregon, Arizona and Colorado have consistently been in the top 10
  • Midwest States – Michigan has been on the top 10 list of states with the most outbound moves since 2013. Iowa consistently had more outbound moves than inbound until 2017, when it had more people move to the state than out of the state. Kansas has consistently had slightly more outbound moves, as well as North Dakota and Ohio. South Dakota has gone back and forth in having more outbound and inbound moves. Wisconsin was consistently having more outbound moves until 2016.

USDA Supply And Demand, Quarterly Ending Stocks, January 12, 2018

2017 U.S. Production


Jan. Est.

Avg. Guess


Trade Range



Corn Yield



173.7 – 177.0


Corn Production



14.400 – 14.750


Harvested Acres



83.000 – 83.222


Soybean Yield



49.0 – 50.0


Soybean Production



4.385 – 4.472


Harvested Acres



89.250 – 89.899


U.S. Dec. 1 Grain Stocks


Jan. Est.

Avg. Guess

Trade Range

USDA Sep. 1 2017

USDA Dec. 1 2016




12.230 – 12.675






2.963 – 3.305






1.795 – 1.906



U.S. Winter Wheat Seedings


Jan. Est.

Avg. Guess

Trade Range


Hard Red Winter



21.100 – 23.100


Soft Red Winter



5.180 – 5.900


White Winter



3.120 – 3.600


Total Winter



30.100 – 32.000


U.S. Ending Stocks


Jan. Est.

Avg. Guess

Trade Range





2.263 – 2.550





0.425 – 0.543





0.855 – 0.986


World Ending Stocks


Jan. Est.

Avg. Guess

Trade Range





198.50 -207.00





97.00 – 100.50





265.00 – 271.00


South American Production


Jan. Est.

Avg. Guess

Trade Range


Argentina Corn



41.00 – 42.50





55.00 – 58.00


Brazil Corn



86.70 – 98.50





108.50 – 115.00


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