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Reading…
Writing…. Arithmetic…..
Simplify to Quantify Bernard F. Pettingill, Jr., PhDPalm Beach Gardens, FLOctober 2010Las Vegas
1
INTRODUCTIONINTRODUCTION
2
•Background
•Contact Points
•Terms of Art
•Presentation - Putting It All Together
OutlineOutline
3
BUTCHER BAKER
CANDLESTICK-MAKER
JACK JILL
Juror ProfileJuror Profile
4
5
Potential Jurors
Keep Estate Tax
Get Rid of Estate Tax
•Banker•Engineer•Nurse Practitioner•Arms Crossed / Legs•Age Factor•Note Takers•Sleeper•Questions from Jurors
6
JuryJury
•New Orleans•Military HS•Catholic / Ivy League College / Ph.D.•England (Foreign)•Professor (Medical School - 4 yrs)•Articles•Three Kids - Teacher / Empathy•Organizations•Court TV / Congress•Two Grandkids
7
HooksHooks
8
CREDIBILITY
Jury AwarenessJury Awareness
•Posture / Clothes / Watch / Car / Truck
•Body Language - Rocket Clemens;
McGuire
•Out of the Box
•Permission
9
•Life Expectancy / Work Life Expectancy
•Inflation Measures - (Local News Stories)
•Medflation
•Interest Rates (IRR)
•Consumption Expenses
•Replacement Services at Home
•Paradox of Thrift
Economic TermsEconomic Terms
10
CPICPI
• Typical Market Basket
• 95 Locations
• Twice / Month
• 211 Consumer Goods
• Average Prices
11
CPI - cont.CPI - cont.
1. Food & Beverages2. Housing3. Apparel4. Transportation5. Recreation6. Education & Communication7. Other Goods & Services
8. MEDICAL CARE12
13
LOCAL NEWSPAPERLOCAL NEWSPAPER
GIGO
PRN
QD / BID / TID
DUCES TECUM
CETERIS PARIBUS
SWAG
AbbreviationsAbbreviations
14
OLD INDICATORS
• AUTO• HOUSING• RETAIL
ForecastingForecasting
15
NEW INDICATORS
• WAL-MART• STARBUCKS• APPLE• NETFLIX• PAWN SHOPS• ANIMAL RESCUE LEAGUE• McDONALDS• DOLLAR STORE
Forecasting - cont.Forecasting - cont.
16
RatesRates
•Discounting to PV - Recent Historic Rate
•Alaskan - Total Offset
•Nominal Rate / Average Rate - 25 yrs
17
• JUNK DOWN
• MUNIS DOWN
• CORPORATE DOWN
• TREASURIES
18
Discount RatesDiscount Rates
Verdict
Bartow
3/2009
19
$65 M$65 M
Life ExpectancyLife Expectancy
•Census Data - 2010
•Optimal Care - Based on L.E.
•Census Data - 2010
•Optimal Care - Based on L.E.
20
LIFE EXPECTANCY
LESSON 1LESSON 1
= 2.9 = 1.7
21
Classification of EconomistsClassification of Economists
LaborPublic PolicyFinancial
LaborPublic PolicyFinancial
AgriculturalBehavioralHealth/Medical
AgriculturalBehavioralHealth/Medical
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Not The SameNot The Same
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• ENGLAND, CANADA & SWEDEN • INSURE 30+ MILLION PEOPLE - H.R. 3200 • AMERICA’S AFFORDABLE HEALTH CHOICES ACT • ELECTRONIC MEDICAL RECORDS
Nationalized Health Care
25
•New Technology
•Waste, Inefficiency & Fraud
•Drug Company R&D
•Aging Population
•New Technology
•Waste, Inefficiency & Fraud
•Drug Company R&D
•Aging Population
Reasons for Cost IncreasesReasons for Cost Increases
26
•ELECTIVE SURGERY
•WAITING LIST - HERNIA REPAIR
•RENAL DIALYSIS
•55+ Yr Old, GREAT BRITAIN – DENIED….DEAD
Health Care - DILEMMAHealth Care - DILEMMA
27
•SIXTY YEAR OLD MALE POSTAL WORKER
•SINGLE MOTHER OF FOUR CHILDREN
•EIGHTEEN YEAR OLD NEVER WORKED
•RETIRED PALM BEACHER
Organ Replacement - DILEMMAOrgan Replacement - DILEMMA
28
MEDICAL INFLATION RATES
•Current (NOW) = 3.5%
•Recent (10Yrs) = 4.0%
•Historic (25Yrs) = 5.0%
LESSON 2LESSON 2
29
Medical CareGrowth Rates
30
YEAR
1995
2000
2004
2006
2008
2010
YEAR
1995
2000
2004
2006
2008
2010
MEDICAL
5.1%
4.3%
4.3%
4.2%
3.8%
3.5%
MEDICAL
5.1%
4.3%
4.3%
4.2%
3.8%
3.5%
31
AMERICA’S AFFORDABLE HEALTH CHOICES ACT
HR 3200
AMERICA’S AFFORDABLE HEALTH CHOICES ACT
HR 3200
32
?
1. Therapists / Nurses
2. Treating / Evaluating M.D.’s
3. Continuation of Care Planner / Rehab Expert
4. Economist
1. Therapists / Nurses
2. Treating / Evaluating M.D.’s
3. Continuation of Care Planner / Rehab Expert
4. Economist
Sequence of ExpertsSequence of Experts
33
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Continuation of CareContinuation of CareLife Care PlanLife Care Plan
35
•Routine M.D. Visits•Therapies•ADL’s•Diagnostics•Orthopedic Equipment•Supplies
•Routine M.D. Visits•Therapies•ADL’s•Diagnostics•Orthopedic Equipment•Supplies
Categories of NeedCategories of Need
•Attendant CareAttendant Care•Attendant CareAttendant Care36
Boston Vs New Haven• Large Med-Schools
• Well Informed M.D.’s
• Same Region Country
• No Difference in Socio-Economic Status
Boston Vs New Haven• Large Med-Schools
• Well Informed M.D.’s
• Same Region Country
• No Difference in Socio-Economic Status
Treatment PatternsTreatment Patterns
37
• White Female• White Female• Age 2.0• Age 2.0• Life Expectancy = 79.9 years• Life Expectancy = 79.9 years• 24 Hour Nursing Care (HOME)• 24 Hour Nursing Care (HOME)• $30.50/Hour/LPN• $30.50/Hour/LPN• Discount Factor = 4.0%• Discount Factor = 4.0%
ExampleExample
38
39
•Current (NOW) = 3.5%
•Recent (10Yrs) = 4.0%
•Historic (25Yrs) = 5.0%
40
MEDICAL INFLATIONMEDICAL INFLATION
Current: Growth Rate = 3.5%Present Value = $17.5m
Current: Growth Rate = 3.5%Present Value = $17.5m
Recent: Growth Rate = 4.0%Present Value = $21.2m
Recent: Growth Rate = 4.0%Present Value = $21.2m
Historic: Growth Rate = 5.0%Present Value = $31.1MHistoric: Growth Rate = 5.0%Present Value = $31.1M
41
RESULTSRESULTS
42
INTEGRITY
• Recent Life Expectancy Tables
• Medical vs. General Inflation
• Sample - Goods / Services1940, 50, 60, 70, 80, 90’s
• Recent Life Expectancy Tables
• Medical vs. General Inflation
• Sample - Goods / Services1940, 50, 60, 70, 80, 90’s
Trial Charts
43
44
45
46
Presentation
•Earning Capacity - Cistern
•Present Value - ‘Car Loan’
•Court Reporter Interruptions
•9/11 - Security
•Jack Pot Justice / Home Cooking
•Earning Capacity - Cistern
•Present Value - ‘Car Loan’
•Court Reporter Interruptions
•9/11 - Security
•Jack Pot Justice / Home Cooking
47
VerdictFort Meyers - John Romano, Esq.
Florida
12/2009
$44.9 M
48
Verdict
Miami, FL
4/2010
$11.6 M
49
Verdict
Florida
9/2010
$8.2 M
50
Verdict
Florida
9/2010
$21.6 M
51
Verdict
Little Rock, AR
9/2010
$20.1 M
52
Verdict - Ford
Jackson, MS
9/2010
$131 M
53
Summary 3 Lessons
• LE
• MEDFLATION
• LESS IS MORE
LAW OF LARGE NUMBERS
54
CONSULTING ECONOMIST
PHONE (561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330
CONSULTING ECONOMIST
PHONE (561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330
#93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: [email protected]
#93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: [email protected]
BERNARD F. PETTINGILL, PH.D.
55
•Homework - CSI
•Financial Records
•Tax Returns - Official IRS Records - Alignment, Dates, SS#, Signatures, Copies, Income / Expense Flow
•Past Meds Minimal
•Darden - (doc location: G drive) - CSI
56