Equifax: Further Outrage



We should be outraged by the incompetence of Equifax, as suggested earlier. They were not the victim, we were. Nearly half the population of America may have given up personal information to thieves, a lot of information. Now that some details are emerging, there is even more to be outraged about. The Wall Street Journal reported se­cu­rity re­searchers at Cisco Sys­tems Inc. discovered a bug in the web server soft­ware used by Equifax earlier this year. Apparently, Equifax had not updated to the lat­est ver­sion of the software. Keeping current with security patches is IT 101.

Although Equifax seems to be inept at the basics of security protection of a web server, the company is adroit when it comes to lobbying. The Wall Street Journal reported the company spent at least $500,000 on lob­by­ing Con­gress and fed­eral reg­u­la­tors in the first half of 2017. One of the key issues lobbied was to get a reduction in the le­gal li­a­bil­ity for credit-re­port­ing com­pa­nies such as themselves. I would add the best way to limit liability from breaches is to properly administer web servers and keep the software up to date.

Posted in Encryption, Security Tagged with: , , ,

Equifax: Two Takeaways



The latest privacy breach is outrageous in two ways. First, Equifax incompetence should cause us to not use them or trust them. This is the third time they have been hacked in two years. The news coverage makes it sound like it is just one of many, and being hacked is just the way it is. That is not the true. It is possible to protect against breaches. Not doing so represents gross negligence and incompetence. Security is especially important for the business they are in, providing credit rating information at a personal level. They have obviously not made this a priority. A small company may not have the skills and resources to properly protect their website. Equifax has nearly seven billion in assets and nearly four billion in revenue. There is no excuse for them not protecting our data.

The second thing we should be outraged about is their response. Three of their top executives sold nearly $2 million of company stock right after the breach happened. The company said the executives were not aware of the breach. We were not either, and the company did not disclose the breach for six weeks. Even more outrageous to me is the company apologized, but then said they will compensate the millions of consumers who had their privacy violated because of Equifax incompetence, by offering a free year of the company’s service. In other words, their response is to launch a promotional campaign to get people to sign up and then start paying after a year. In order to sign up and find out if you were affected, you have to go to their site and enter personal information. I would not accept their offer if they paid me to do so. One thing out of this disaster is clear: lawyers will make millions. Whatever settlement is eventually reached will be trivial for consumers and in no way compensate for the violation of our privacy due to Equifax incompetence.

Posted in Encryption, Security Tagged with: , , ,

Healthcare Cost

Healthcare Cost

Healthcare cost is extraordinarily high in America. We spend 50-100% more per person than other developed countries. It is not because their care is better, to the contrary. Our cost is high for a number of reasons which I discussed in some detail in Health Attitude: Unraveling and Solving the Complexities of Healthcare. The media and political focus seems to be on healthcare insurance premiums. Premiums relate to the underlying cost of the healthcare delivery, which special interest groups have been successful in convincing politicians to not talk about. Although I have just somewhat defended healthcare insurance companies, there are reasons to scrutinize them. 

Lets start by looking at six of the 35 or so healthcare payers and see what they pay their CEOs. The average for the six companies is $18,650,000. This pay level is 35% higher than the average for all industry CEOs. If you look at the average compensation for doctors, nurses, and home health aides, they earn $189,000, $71,000 and $33,000 respectively. The range for each goes to roughly 50% higher than the average. Compensation varies by speciality and location. If you look at their compensation relative to the CEO’s, you find the average CEO at the six companies makes 99 times more than a doctor, 263 times more than a nurse, and 848 times more than a home health aide.

Being CEO is a tough job with a lot of responsibility, pressure from stakeholders, and turnover for not delivering desired results. They deserve a premium, but how much of a premium? I cannot think of any rationale to support what they are paid. Nobody is worth that much. The blame lies with board of director compensation committees. I have served on several such committees and learned the only source of comparison comes from compensation consultants who basically look at what other CEOs are paid compared to the one the committee is about to approve. Most committees don’t want to take the view their CEO is worth less than others similarly situated. It is a bad system, and shareholders need to speak out more. 

Another area of high cost is lobbying. We indirectly pay for it. The Pharmaceuticals/Health Products industry spent $250 million last year and has 1,400 lobbyists. A lot of money goes toward re-election campaign funds for politicians of both parties. Their top priority is getting re-elected. People filing for personal bankruptcy because of medication costs don’t make the list. The Insurance industry spends $150 million and has 900 lobbyists. This includes all kinds of insurance but the largest spender is Blue Cross Blue Shield healthcare which spent $20 million. The Hospital and Nursing Home industry spent $100 million and has 800 lobbyists. What a system!

I know a number of my readers believe an answer to much of the cost problem is a single payer system. I do not think so, and detailed why in Health Attitude. The real problem with the payers is administrative inefficiency. Canada has 13 payers and Germany has 200. What is different is the countries mandate administrative standards. In the U.S., each payer does things differently, and it takes doctors and their staffs incredible hours sorting out what is covered and what is not. If we had the administrative efficiency of Canada, we could save $300 billion. Single payer cannot solve the problem. Congress can’t agree on simple concepts. There is no way they would legislate eliminating dozens of multi-billion-$ insurance companies. Zero chance. There are a handful of simple things Congress could do to reduce healthcare cost by at least a half-trillion-$. They just don’t want to. Read more about the problems and my proposed solutions in Health Attitude: Unraveling and Solving the Complexities of Healthcare.

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Name (Company)Compensation
Michael F. Neidorff (Centene)$22,000,000
Bruce D. Broussard (Humana)$19,700,000
Mark T. Bertolini (Aetna)$18,700,000
Stephen J. Hemsley (UnitedHealth)$17,800,000
Joseph R. Swedish (Anthem)$16,500,000
David M. Cordani (Cigna)$15,300,000
Average of six companies$18,650,000
Average of all CEOs in all industries$13,800,000
Health insurance CEO premium35%
Avg. Comp.Multiple
Home Health Aide$22,000848
Lobbying ExpenseLobbyists
Pharmaceuticals/Health Products$250,000,0001,400
Hospitals/Nursing Homes$100,000,000800

Posted in Attitude LLC Books, Health Attitude, Healthcare cost Tagged with: , , , ,

Authorfest 2017: White Mills, PA

Posted in Attitude LLC, Attitude LLC Books, Conferences, Election Attitude, Health Attitude, Home Attitude, Net Attitude Tagged with: , , ,

Home Attitude On The Way

Home Attitude

I finished writing Home Attitude: Everything You Need to Know To Make Your Home Smart, the fourth in a series of Attitude LLC books. Many steps are ahead including editing, getting reviewers to offer feedback, getting some blurbs for the back cover, engaging CreateSpace to perform interior editing of page layouts, finalizing the book cover, creating an index, and some other publishing steps. The target publication date will be in October. The following paragraphs from chapter 9, Hubs and Networks, will offer a further glimpse at what the new book will be about. If anyone would like to be a reviewer of Home Attitude, please drop me an email at john@johnpatrick.com.

The central part of a smart home is the hub. The home automation hub is analogous to other kinds of hubs: the hub of a wheel which connects the spokes, a geographic regional hub which facilitates economic activity, or a transportation hub which expedites national and international transportation. Every smart home has at least one hub which serves as the commander in chief. The hub coordinates commands to and from the devices. A hub, sometimes called a controller or gateway, can be a standalone device or a desktop, laptop, smartphone, tablet, or smart watch. A hub can be as simple as a single purpose hub to control the light on the front porch, or it can be a very sophisticated hub which controls everything in the smart home including hundreds of devices.

The hub uses specialized home automation software to tell devices what to do and when to do it. To make this possible, hubs have special capabilities including schedules, action groups, triggers, and scenes. The nomenclature may differ among the various vendors, but the capabilities are basically the same. Hubs have a user interface which allows smart home owners to use these capabilities. The interface can be a smartphone app, a smart watch, a web page, or your voice.

I will describe two hub alternatives out of the many choices available. First is the Samsung SmartThings Hub, available for $99. It requires an iPhone or Android phone for the user interface. The SmartThings Hub is easy to set up and easy to use, although somewhat limited in its capabilities and compatibility with other devices. The second hub I will describe is the Indigo Smart Home Software platform. Indigo has a very broad set of features and capabilities. It offers the do-it-yourself hobbyist a virtually unlimited home automation solution. Indigo costs $250 and requires an Apple Mac computer.


Posted in Gadgets, Home Attitude, Home Automation, iPhone, Technology Tagged with: , , , ,
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