Twiceadayevenonsundays: Making Money With Options

Peter Shumlin, the newly elected governor of Vermont, has a plan for health-care reform: Rather than repeal it, he wants to supercharge it. His state will set up an exchange, and then, as soon as possible, apply for a waiver that allows it to turn the program into a single-payer system. You can read a summary of the plan here (Word file). I spoke with Shumlin this morning, and a lightly edited transcript of our conversation follows.

Ezra Klein: The report (PDF) prepared by Dr. William Hsiao offered three options for Vermont: single payer, a strong public option and a form of private-public single payer. My understanding is that you're backing the third option. What separates it from a traditional single-payer system?

Peter Shumlin: Single payer means something different to everyone. The way I define it is that health care is a right and not a privilege. It follows the individual and not the employer. And it’s publicly financed. The only difference between single-payer one and single-payer three in Hsiao's report is that in single-payer three, the actual adjudication of payment is contracted to an existing insurance entity. So the state doesn't have to set up a new bureaucracy to run it. His modeling suggests that’d be more economical. It's a minute difference.

EK: And why go to a single-payer system at all?

PS: In Vermont, this is all about cost containment. There are 625,000 people in Vermont. We were spending $2.5 billion on health care a decade ago. Now we’re above $5 billion. And we project we’ll be spending a billion dollars more in 2014. This is where everyone has failed in health-care reform. And this will go after three of our main drivers of costs.

First, Vermont spends 8 cents on every dollar on administrative costs, just chasing the money around. That’s a huge waste of money. Second, we’ll use technology to conquer waste. You'll get a Vermont medical card, and everyone’s medical records will be on that card, so you’ll go into a doctor’s office and they’ll know what the last doctor did to you. That helps avoid duplication of services. And the last piece, the most challenging, is remaking the payment system so providers are paid for making you healthy, not for doing the most procedures.

EK: Single-payer systems often lose on the ballot and in the legislature. No state has successfully managed to pass one into law, much less implement it. And the objection that usually stands in the way of these projects is that I'm happy with my health-care insurance, and I don't trust the government to create something new and put me into it. How do you answer that?

PS: I suspect I’m the only politician in America who won an election in this last cycle with TV ads saying I was going to try to pass the first single-payer system in America. This election was a confirmation of my judgment that Vermonters are tired of enriching pharmaceutical companies and insurers and medical equipment makers at the expense of their family members. The reality in Vermont is that there are not very many Vermonters who are happy with the current system. We’re losing our rural providers. Our small hospitals are struggling. And Vermonters are lowering their coverage and paying more and more for it.

EK: How will the funding work? Right now, a lot of money comes from employers. What happens to their share?

PS: Where health care has failed is in designing a cost containment mechanism that works. That’s the really hard part of our job. So I’m asking us to spend the next 12 months designing the tools for cost containment. Once we do, we'll figure out how to structure the way we pay for it.

EK: One of the things you asked of Dr. Hsiao was to preserve provider incomes. How can you do that while cutting costs? At some point, doesn't lower spending also mean fewer doctors or hospitals or lower incomes?

PS: The reason Vermont has the opportunity to be the lab for a different kind of change is that we don’t have a lot of high-paid physicians in Vermont. We have a lot of low-paid physicians. We have rural providers who’re making less than they did when they graduated from medical school. Our cost driver is not that we have a lot of physicians running around in Mercedes-Benzes. It’s waste in the system.

EK: How will this interact with other systems? Let's say I have Kaiser Permanente. I come to Vermont and break my leg. What happens?

PS: Nothing different than what happens right now. You’d go to one of our providers' offices, and they’d bill Kaiser for that one. No different than if you break a leg in France or Switzerland. Radical as this seems to Americans, the rest of the world has figured this out and gotten it right. We keep getting it wrong, and we’re paying for it.

Amid all the fanfare over new iPad 2 hardware, Apple’s CEO Steve Jobs boasted that the company has now paid out a cumulative $2 billion to developers for apps sold in the App Store. This comes just eight months after it announced developers had made $1 billion from the app store since the store launched in July 2008.

This is a huge number and highlights one of the reasons Apple is doing so well in this post-PC era. It’s not only building devices that embody the intersection of technology and humanities, as Jobs likes to say; it’s also creating an environment for developers to take advantage of these more personal and powerful machines. This vibrant community of programmers has helped push Apple’s count of apps up to more than 350,000.

The Asymco blog recently (and accurately) estimated that Apple had paid out $2 billion to developers over the course of 31 months, compared to the 34 months it took for record labels to make that much money on iTunes. This suggests Apple’s App Store is on a huge growth trajectory and shows why developers are still so loyal to the iOS platform. Even with some restrictions with the App Store, they have a better shot at making money there.

But the $2 billion isn’t just coming from paid downloads. Apple developers are also raking in money from in-app purchases, which have become a major revenue source for devs in the last year. According to Distimo, an app analytics company, revenue from in-app purchases both in free and paid iPhone apps was 49 percent last year, compared to 51 percent of paid download revenue. And that’s not counting any money that developers are getting on their own through advertising efforts.

The point is, Apple’s App Store is still the top destination for developers because it has robust revenue-generating options ensuring it won’t be shoved aside anytime soon. Android’s ascendance will certainly draw developers, but until it becomes easier to make money there, it’s not going to be the priority for most developers. Google, for its part, is improving the money-making potential of Android with an announced in-app purchase system and a new web store front. It’s also looking at expanding carrier billion options and trying to improve app discovery. But for now, Apple has 2 billion reasons why developers should stick with iOS, and that’s a lot more than Google can say. And as more users buy iOS apps, it further locks them in and makes it harder for them to switch platforms.

Related content from GigaOM Pro (sub. req.):

How To Ride The Freemium App Wave To Success

Will Killer Apps Affect Which Handsets Consumers Buy?

How Carriers Can Crack the App Discoverability Nut

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Twiceadayevenonsundays

Saturday, March 5, 2011

Making Money With Options

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Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

Snow Fairy to miss World Cup for Sheema tilt - Horse Racing <b>News</b> <b>...</b>

Confirmed: AOL's Patch Buys Hyperlocal <b>News</b> Site Outside.In

Newt Gingrich: Fox <b>News</b> Said 'You're Not Here Anymore'

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