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President Barack Obama had a hard won victory on Saturday night (the 7-8th day of November 2009) when the landmark health care reform legislation (HR 3962) was passed with 220-215 votes. Now if everything goes the Obama way, then by the end of the year 09 Affordable Health Care for America Act would apply as a law impacting almost fifty million US lives. But what does this Act actually imply? How does it stand to impact an average US life? How does the Act affect the outsourcing industry at large? Through my article below I endeavor to answer these and many more questions.
Ab-initio we will refresh the fundamentals of federalism, stating the Roles, Duties, Nature, Scope and Restrictions on the government in a written federal constitution. Next we proceed to see whether the above attempt by the federal government to accede healthcare legislation is ultra-vires the powers granted by the US Constitution.

What is Federalism?

According to the traditional classification followed by the political scientists, constitutions are either unitary or federal. In a unitary constitution, the powers of the government are centralized in one government viz., the Central Government. In the federal constitution, on the contrary, there is a division of power between the federal and the state governments in a way that they are both inter-dependent and independent at the same time.
As we all know that Constitutions are organic documents which operate as fundamental law. The governments and their organs owe their origin to the constitution, derive their authority from the constitution and discharge their responsibilities within the framework of the constitution. The judiciary has the power to declare a law unconstitutional if the law is found to have contravened any provision of the constitution. The American Constitution is the oldest and a well praised example of federalism.

What are the powers granted by the US Constitution to the State Government?

Powers reserved for State Governments are:
Establishing local governments
Issuing licenses (driver, hunting, marriage, etc.)
Regulating intrastate commerce
Conducting elections
Ratifying amendments to the U.S. Constitution
Providing for public health and safety
Exercising powers which are neither delegated to the Federal Government nor were prohibited from the States by the Federal Constitution (residuary powers)
Framing other domestic law (for example, setting legal drinking and smoking ages etc.)

What are the powers granted by the US Constitution to the Federal Government?

Under the Constitution, powers reserved for the Federal Government are:
Printing of money
Declaration of war
Establishing the armed forces
Entering into treaties with foreign governments
Regulating commerce domestically and internationally
Establishing post offices and issuing postage
Making laws necessary to enforce the Constitution

What are the powers shared by Federal and State Government?

Under the Constitution, the shared, or “concurrent” powers are:
Setting up courts
Creating and collecting taxes
Building highways
Borrowing money
Making and enforcing laws
Chartering banks and corporations
Spending money for the betterment of the general welfare
Acquiring private property with appropriate compensation

What is the HR 3962 Act ?

The HR 3962 Act conceptualizes a new, voluntary, public, long-term care insurance program to help purchase services and support for people who have functional limitations. The Act endeavors to form a new national program to provide affordable coverage for those who cant get health insurance today because of pre-existing conditions. Under this, the insurance companies must spend 85 cents out of every premium dollar on medical services, thereby fostering the expansion of Medicaid and improving the Medicare. Under this, the young adults, till the age 26, are covered within their parents policies.

The Obama administration intends to attain this by creating mandates. As a self-sustaining public insurance option (that is financed not by tax dollars but by insurance premiums), this provides an alternative to and competes with private health insurance companies, on a level playing field. Additionally, the Act intends to eliminate the antitrust exemption for health insurers and medical malpractice insurers thereby fostering competition thus targeting the existing monopolies in the health insurance market. It aims to establish a new mandatory essential benefits package that shall become the minimum quality standard for employer plans, with the passage of time. The package places a cap for annual out-of-pocket spending, at a maximum of $5,000 per individual and $10,000 per family to prevent bankruptcies from medical expenses.

This Act requires the employers to either provide insurance to their employees or contribute to the cost of their coverage through the public plan/exchange, though the small businesses are exempted from this requirement.

Arguments regarding Constitutionality of HR 3962

The legal fraternity is divided between two schools of thought about the constitutionality of the Act. First school believes that the Act is unconstitutional and places reliance on Articles I 8 and V of the US constitution and on Tenth Amendment. They claim that their argument is supported by the celebrated case of MARBURY v. MADISON, 5 U.S. 137 (1803) and some federalist opinions. The second school of thought places reliance on Article I 8 and the celebrated case of McCulloh v. Maryland, 4 Wheaton 316 (1819); Steward Machine Co. v. Davis, 301 U.S. 548 (1937); United States v. Butler, 297 U.S. 1 (1936) and some federalist opinions. An in-toto analysis of these school of thoughts would conclude that the true interpretation of the word general welfare in Article I 8 of the U.S. Constitution can only determine the constitutionality of an Act like HR 3962. Till date the court opinions have been more inclined towards Hamilton (Federalist 33, 83 etc.) and Story rather than Madison (Federalist 41, 45 etc.).
Simply put, when the government mandates welfare as a quid-pro-quo for premiums collected, such welfare translates to nothing but a tax liability for the country men. Such an attempt by the government to regulate insurance sector by masquerading as an industry player is inspired from socialism. I personally feel that socialism is a Marxian concept and may not go well in an economy with capitalist foundations. The good thing is that people all over the world should buy insurance; this however turns bad when the government forces people to do so.

What are the implications of HR 3962 on the Outsourcing industry?

The object clause to the Act states that it is meant to provide affordable, quality health care for all Americans and reduce the growth in health care spending.

In reality, the act is a victim of haste. Ideally if the intention of the Obama administration and the object clause of the Act were actually in-sync then the administration should have awaited a confirmed indication of the end-of-recession. The administration should have first looked at strengthening the fundamentals of the economy, by:
better regulating the existing insurance sector,
improving the US agrarian culture and making the country self sufficient regards its food requirements,
checking the cost-of-living index and
creating more jobs in the private sector.
But if the intention is to make more and more Americans dependant on Federal Government for basic requirements, then the attempt is bang on.

Impact on the outsourcing industry:

Prima-facie it may seem complex but there are clear indications for the outsourcing industry to benefit once the HR 3962 is implemented. The benefit roots from the fact that the employees will become expensive for the employers post this Acts applicability. Now given the very competitive market scenarios, thin profit margin and the inability of the employer to transfer this increased cost to the end consumer, the employer is forced to search for the less costly alternatives. It is needless to say here that the Act magnifies the already existing labor arbitrage opportunities internationally. To appreciate the existing labor arbitrage opportunities you can refer to my older blog post.

Although it should come as no surprise, there are a variety of ways for schools and educators to make money online. While the opportunities are endless, one recent concept has emerged, and thats the notion of selling goods and services through an educational auction and freelance network.

One of the more obvious ways that schools and educators can make money is by selling their unwanted materials and supplies online. The best way to get paid is through a trustworthy educational exchange website, where its free to list items, and a small fee is taken only when the item sells. You can sell items on behalf of the school, an individual, or a preschool or daycare.

If your colleagues are too busy to deal with selling their unwanted educational items, you can always assist them by listing their items for them, and then taking a percentage of their cut.

Educators and professionals can sell their services through the same educational networking website. By listing your areas of expertise, you can get hired to do the jobs that other educational professionals just dont have the time to complete.

You dont have to limit your moneymaking potential to selling goods and services you can also make money by being an affiliate. The gist of being an affiliate is that you indirectly promote the educational exchange site by sharing the link with interested parties and vendors. You receive money whenever your referral results in a transaction during the first year.

Why shouldnt schools and teachers make money in any way they can? You certainly cant depend upon your state and local government for additional help. Beyond selling magazines and submarine sandwiches to raise money, there has to be other avenues.

You can generate revenue by thinking creatively and showcasing your goods and services on the Internet. Youll find an entire pool of buyers online that you never knew existed. When you specifically use an educational exchange auction site, you can buy and sell almost anything related to the field of education.

Whether its janitorial supplies, puzzles, or televisions, there is a school or classroom that needs exactly what you have. You simply have to connect with the schools that need your old electronics or gym equipment. Perhaps you even have something brand new that you never used. Whatever youve got, take the time to list your items for free on a reliable educational networking website as soon as possible. Dont wait any longer to earn some extra money.

This is a highly debatable subject and although it is not considered to be the cause of eating disorders, media is often viewed as a contributing factor, especially amongst adolescent girls, who view the size and shape of models and actresses, as ideal body image.

Adolescents, who have an eating disorder, often have a distorted body image to begin with. They’re often over critical and ruthless in their self-evaluation, in terms of their body shape and weight. Through the medium of magazines and film, current trends pertaining to body image, or rather society’s image of the body, a person with an eating disorder feels that their own personal body, does not measure up to what is portrayed within the media and ideal or beautiful.

Unfortunately for the past decade, the fashion industry, while admittedly being at the mercy of advertisers,’ has used ultra thin, nearly skeletal looking models. The entire waif look has graced the pages of magazines and film, unfortunately for a person with a non- healthy body image and lack of self-esteem, striving to achieve what society has deemed beautiful, becomes an obsession.

The trend within the fashion industry is beginning to change, most notably in Milan, which have recently refused to allow underweight models to grace their notorious runways. Not all within the fashion industry are so willing to take a stand, they are in business to sell and that if the advertisers’ wants to use all too thin models, then that’s what they will have a gracing their magazines pages.

Although this trend is moving towards the use of healthy sized models, it may help to change society’s ideal on what a women’s shape should be. Some argue that it is much too easy to blame the fashion industry, when in reality eating disorders are at least initially a mental issue of the individual and their own idea of body image.

The debate is far from over and even with the strides that the few within the fashion industry has made, in the attempt to change society’s concept of what an ideal shape should be it is a task that will surely take decades to rectify. Society has a tendency to resist change, even more so if the media’s slow to change with it.

One of the warning signs of an eating disorder is the obsession with all too thin models and actresses. A person who suffers from an eating disorder often has many pictures of excessively thin people, strategically placed normally around mirrors or close to food sources. Generally, these pictures are used to remind the person suffering from an eating disorder of what they want to look like and it is used as a deterrent to eat or as motivation to exercise more.

Movement is life. This principle is true for business as well. Every business must develop otherwise it will fail sooner or later. Loss of competitive advantage results in loss of customers. There is a tough competition in all markets, and customers of free to choose any products they like. If a customer is not buying from you it will most certainly buy from your competitor. This is true for all businesses, including hotel business. This industry is highly competitive as there are hundreds of hotels in every country. When high season comes hotel top managers do everything possible to attract customers and make them stay in their hotels. Of course, they do not only promise high quality services but the actually offer them. Hotel is not just a place where you spend the night. Some people want to feel at home in a hotel. This is possible in case you come to a top quality hotel.

In order to improve hotel services owners and managers of our hotel need to know where to start from. In other words they have to be aware of current performance in order to make plans for the future. Until recently performance evaluation was about measurement of financial indicators for the past periods. Such approach is not perfect since it misses nonfinancial indicators that are extremely important in any industry. It is not enough just to announce implementation of new plans and improvements in hotel. A real work begins when these improvements are implemented and measured.

For example, if a new service, say, WiFi connection in all rooms is introduced the hotel spends a certain amount of money to buy equipment and maintain network. Then, the quality of Wireless Network has to be evaluated. However, what is more important is the attitude of customers towards this new service and the way they use it. If it turns out that only 10% of hotel guests actually use wireless network and only half of them really require high speed Internet there is probably no point in spending huge money for super speedy Internet. If most of hotel guests are business people for whom high speed Internet is necessity than well established wireless connection is a must.

If improvements concern reception service top management of a hotel needs to understand who their guests are and why they come to their hotel. If most of them are tourists than it would be reasonable to introduce new services like offering information on sightseeing tours, contact details of various Entertainment Services, taxi phone numbers etc. As time passes by, efficiency of these improvements needs to be tested in order to introduce amendments if necessary.

Such evaluation of improvements can be performed with the help of Balanced Scorecard which is a very efficient performance evaluation and strategic management system. Balanced Scorecard will coordinate efforts of all services and business units of a hotel and align strategies of different departments, for example restaurants and hairdressers service. This is a flexible system which means changes can be easily introduced.

Evaluation of human resource performance has become one of the most popular recent trends in business performance assessment. Balanced scorecard is widely used to optimize performance and evaluate efficiency of human resource departments, especially in huge transnational companies and corporations. Business owners came to understand that human resources are worth to invest in, as such investments proved to be the most effective in the long term. One should not underestimate the power of human resources, and the recent financial crisis is the best proof that efficient and dedicated personnel can help company solve problems and even perform better in post crisis economy.

HR scorecard for publishing industry is gaining popularity. There is a tough competition in the market of both online and offline media. Thats why efficient use of human resources is a precondition for success. Publishing business is not an exception here.

Perhaps, the right choice of key performance indicators for HR scorecard in publishing business is the most important stage of BSC implementation. It is very important to find critical success factors for an effective HR policy. Publishing business has its own peculiar features, business environment and specific nature. It should be taken into account when creating key performance indicators in all categories of balanced scorecard.

Lets review a couple of indicators that might be very helpful in assessment of HR efficiency for publishing industry.

Average equipment cost per employee. Such an indicator is truly considered to be very representative. Personnel uses various equipment in publishing business, like printing machines, powerful computers etc. Inefficient use of equipment may result in huge expanses. In order to optimize production expenses per employee, it might be very helpful to keep track on this KPI. On the one hand, an employee should get everything he or she needs to fulfill duties. On the other hand the company should not overpay. Based on the evaluation results, human resource managers may think of the ways to optimize expenses by forming teams of the right size, allocating the right amount of resources, office space and equipment. Employees may share the same equipment without feeling uncomfortable which will decrease average equipment cost per employee, and thus the company may save money which can be used, for example, for training or personnel coaching.

New hire turnover during the first 12 months. Publishing business involves advanced knowledge and experience in working with specialized equipment. Thats why if a company hires and educates new employees it sometimes spends a great amount of money. If the new employee eventually leave the company having worked less than 12 month, the company is more likely to suffer losses. It is very important to create suitable working conditions for freshly hired personnel, so that newcomers can use obtained knowledge to benefit the company. New higher turnover is a very indicative measure that directly evaluates efficiency of human resource department. Logical leap, the lower turnover is, the better for the company.

Finally, it should be mentioned that when evaluating HR performance one needs to keep balance between interests of personnel goals of the company.