Friday, January 8, 2010

The Welfare State is Collapsing

In the words of Mike Church (Sirius Patriot Radio - 144), "The welfare state is collapsing all around us". [Who is Mike Church? He is the host of the Longest Running Talk Radio Show in satellite radio history - 16 or 17 years and counting].

Anyway he was talking about how the Mayo Clinic is starting a trial period of NOT ACCEPTING new patients who are on MEDICARE. Starting tomorrow apparently.

When I hear the words 'Mayo Clinic', I immediately think of it as being one of the most advanced medical centers around. I know a woman from my little city in Alberta who goes to a Mayo Clinic for treatment because she was sick of having to wait forever and beg for help here. Her husband is even a medical professional and she can't manage to find the right care! sheesh!

According to the article, the Mayo Clinic lost 840 MILLION dollars last YEAR because of not being reimbursed for medicare patient claims. Wow. So they are not accepting new medicare patients at one hospital in Arizona to see how it goes. A bit of a slap in the face for the president since he has apparently named the Mayo Clinic "an exemplar for the healthcare industry", eh?

In other related news, Mike Church spoke of serious problems in states like Illinois that are so far in debt, they have serious difficulty putting money into their various welfare like programs. I know this has been going on for awhile because I have a friend in Illinois who works at a childcare center where people receiving drug treatment can leave their kids while they are working the program. She spoke a lot last year about how they may get shut down completely and it came close a few times. According to, Illinois has 5.1 Billion in unpaid bills to date (end of 2009). It reeks of the collapse in California. How many other states are struggling?

How much longer can all of these tax funded programs survive? It seems they are just not sustainable. Plain as that. Simple as that. Harsh truth.

Similar things happen up here as well all the time. I have worked in daycare since 1994 and every year there are months where the payments (subsidy for low income parents) are late and that leaves our center floundering. When we had 14 out of 21 children subsidized, we did not get the payment for 6 weeks, on SEVERAL occasions. Think about it - that is over half of the center's income going MIA. It was a nightmare since at least 70% of income goes straight to wages. My boss had to take out a personal loan once to pay us or our cheques would have bounced, leaving her workers unable to pay rent or mortgages. Who wants to live like that?? I know of centers in my city that do not take more than one or two subsidized children. That actually is not legal, we aren't supposed to turn people away based on their status even though these are PRIVATE businesses --- but they manage it a number of different ways that I won't go into ;) The point is, they were losing money and really struggling the more subsidized children they had, so they go about it differently now. How sad is that? Some would criticize those manouvers and say it was prejudicial - but the centers would SHUT DOWN completely if they didn't take matters into their own hands. We have had some very scary times at work waiting and waiting for the subsidy payments to come in over the years. As it is, you don't get the money for 6 weeks after the fees are due, so imagine tacking on another 2-6 weeks wait for thousands of dollars. It's the only income for that business - parent fees, so you're kinda stuck.

But I talk about this because it's the same with almost every social program. There is so much red tape to jump through, and they take their sweet time sending out money (and sometimes don't at all), people start to back away and don't want to deal with a govt funded program at all. The problem is, if more and more centers stop taking subsidized kids, their parents will be left floundering. In order to get full subsidy, you have to send your child to a registered center, not a private sitter. But more and more registered centers and dayhomes are balking at not receiving their money (hmmmm like the Mayo Clinic perhaps??) and changing their intake process (hmmm like Mayo Clinic). Do you blame them? Maybe it shouldn't all be about money but if your staff provides a service and you cannot pay them, you are not going to have any staff left! If you need to buy new equipment but you don't have the money coming in, you can't buy it. Money makes the world go round whether we like it or not, and staff have bills to pay at home or they will move on. Simple as that.

My friend works in a diff social care sector - special needs children. At the end of December she went to pick up her pay cheque but it was $200 less because the office did not receive the right amount of funding and they had to distribute cuts throughout the staff. My friend freaked out because she had given her landlord post-dated checks, but now she would be short. This is a fully govt funded program and yet again, she was left worrying herself to death over regular bills. She lives in a very modest rented home (one floor). She has a son to feed. But the govt did not send the right amount of money again due to their own program funding problems. They said she could pick up the rest of her money on Jan 4th, but that was 4 days after her rent was due. Her landlord was out of town and unreachable so she could not even ask him to hold her check back til Monday. It was crazy! She had to borrow money from friends.

Why am I telling you this? Because I think people need to know the human factor that all of these programs affect. The people who receive the subsidies can often wander along without having a clue what is going on behind the scenes. In the case of daycare, all they know is that their child had daily care for the whole month and they did not have to pay out of pocket for any of it (in my city). They don't know that the staff taking good care of that child all day did not get paid and are going to have to move on. Or that the center itself is so bogged down in debt, it is going to suddenly close it's doors and leave dozens or hundreds of families in the lurch. We are getting a new child next week because the child's registered dayhome just gave 2 weeks notice. She is going private because she is sick of all the red tape. The mom is understandably upset - but she hasn't had to pay a dime for childcare in 2 years and has no clue what really goes on.

These programs all seem to be on a crash course to collapse and disaster and it will affect a heck of a lot of people. They are just not sustainable, forever relying on tax dollars that are few and far between these days with job losses and cuts; but also because there are SO MANY programs and sectors using the money, it is stretched far too thinly. Is the answer more govt spending? Spending WHAT exactly if they cannot keep up with the programs they are already running????


  1. They lost 840 billion? I think you mean million.

  2. Oops! Typo fixed thank you for letting me know ;)

    Million, Billion, Trillion - I get my fingers twisted up lol. I remember the days when Million was pretty much the only one we used on a regular basis!

    The Time: 1967ish
    The Setting: Austin Powers The Spy Who Shagged Me

    Dr Evil: ""I want 1 Hundred Billion Dollars""
    US President:""That amount doesn't even exist yet!""

    [not quite verbatim but close enough]

  3. If more people had your insight into these govt. funded programs and how they can collapse, we would be so much better off.



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