Pages

The (Doc) Fix is in....Or is it?

FoIB Holly R tips us that the so-called "Doc Fix" is in, meaning that (as we discussed over the weekend) providers' fees have once again been spared the axe:

"Congress agreed to a one-month delay in Medicare payment cuts to doctors yesterday, giving a short-term reprieve to a looming crisis over treatment of the nation’s senior citizens."

Except that it really doesn't. Let's ask Kelley Beloff, our resident Medical Office Manager, what this really means:

"What was passed was the extension of the current fee schedule that was supposed to expire today, to go to the end of this year. However, we are still facing a 29% cut on Jan. 1, 2011. That was not in this piece of legislation. While history is not always an indicator, Congress has let cuts go into effect at least 3 times since the cuts were started in the mid 1990's. I am anticipating the cut to go through on Jan. 1, 2011.

As to physicians opting out of Medicare. Now is the time to opt out. In fact I have sitting on my desk the CD with the forms in it to opt out of Medicare. Once the New Year begins, the physician is locked in for another year. So the physician has to ask himself, does he feel lucky, do I opt out on the chance the cuts will go into effect, or do I stay in and hope that Congress reverses themselves. My guess is that physician's will not opt out in the numbers predicted and continue to see Medicare patients, though on a more limited basis
."

Gee, good news all around.

Thanks, Kelley!

And what is the most significant way the Federales control their medical care costs ?

Milliman has calculated the cost-shift from Medicare and Medicaid into the private sector as roughly $90 billion a year, or 15% of private insurance costs.

In brief, this happens because:

(1) the government plans pay less than what the medical service providers think their services are worth (2) How does the government get away with this? Just as Hank says, "because they're the government". (3) service providers then increase the fees they bill their privately-insured patients, to make up as much of the difference as they can, meaning that (4) there is a significant shift of costs actually incurred under Medicare and Medicaid, but which emerge as private insurance costs and are then paid for by private insurance plan sponsors and privately-insured people.

This so-called "cost-shift" makes Medicare and Medicaid appear less expensive and makes private insurance appear about 15% more expensive. Private plans would have 15% lower premiums in the absence of the cost-shift and Medicare and Medicaid would have higher premiums. The Milliman work reveals this difference is a serious amount of money.

This cost-shift from the public sector into the private has been going on for as long as I've been in the business. In fact, I first learned of it in
this iconic 1970 Atlantic Monthly article.

You’ll find the cost-shift mentioned toward the end of this article, just click to page 4 and read the author’s 4th and 5th conclusions. He calls the cost shift "welfare reimbursements". The amount in his analysis is $10.00 added to the daily hospital cost of $60.00, resulting in a total billed charge of $70 per day (remember this was 40 years ago) - - in other words, the need to recover federal cost underpayments in 1970 resulted in a daily hospital charge 16% higher than it would otherwise have been. Remarkably, just about the same as Milliman finds today.

The author of the article was a 27-year-old physician. You will recognize his name - and you'll do yourself a big favor if you take the time to read his entire article.

So there is no doubt that this cost shift has existed for decades, and that it makes private insurance premiums roughly 15% higher than they need to be. Its existence raises important questions that need to be answered. Here are some of the questions:

1. What will Medicare do, if or when there is no longer a private sector into which it can shift a meaningful share of its costs? How would the Federales explain the noticeable increase in required funding that will emerge? Who would the Federales then blame? Who would the Federales then tax?

2. What will medical service providers do, if they can no longer recover from private insurance plans some or all of the revenues they cannot collect from Medicare or Medicaid? How might threats of reduced incomes affect medical professionals' fee negotiations and their willingness to participate in Medicare and Medicaid? How would community hospitals survive? How many physicians might simply retire early? How many talented young students might decide not to pursue careers in medicine?

Where have you seen these questions addressed? Where have you even seen them asked?

Post-Thanksgiving Grand Rounds

Our friends Jay and Louise Norris of the Colorado Health Insurance Insider blog host this week's terrific round-up of interesting and diverse medblog posts.

In Vino....What?

At the Jewish New Year, which we call Rosh HaShannah ("Head of the Year"), we celebrate by dipping apples in honey. There are various interpretations of this ritual, but the most prevalent one is that the apple represents life ("the circle of life") and, of course, the honey represents sweetness.

We also offer a "kiddush," a blessing over wine as we toast the New Year.

And how, exactly, does any of this relate to health, much less insurance?

Turns out, more than is immediately obvious:

"Supplements derived from apple skins, red wine and tumeric might someday help slow the onset and progression of Alzheimer's and related diseases..."

Apple parings and a nice Merlot contain within them copious amounts of a "compound that, in Petri dishes at least, sops up type-2 alkenes and protects nerves from harm."

Although scientists still have no idea what causes Alzheimers, neurotoxicologist Richard LoPachin believes that stopping type-2 alkenes holds promise, and both apple skins and red wine are able to drink them up and throw them off.

L'Chaim ("To Life")!

Presenting Ezra the (Not So) Magnificent!

Once again, Ezra the Disingenuous demonstrates his inability to prove an argument. Last time out, he tried to (re)sell the snake oil that is RomneyCare, only to be taken to the woodshed by Bob. This time, he wants us to believe that the federally implemented national health care system known as Medicare is just hunky dory, and actually better than insurance companies at controlling health care expenses.

Here's his "evidence:"

And here's his interpretation of said "evidence:"

"One of the dirty little secrets of the health-care system is that Medicare has done a much better job controlling costs than private health insurers." [emphasis added]

Wrong.

Medicare, owing to the power that is the Federal Government, can control expenses in a way that no insurer can, simply because the law says that it can. Not the marketplace, not the free and unencumbered exchange of goods and services: simply, The Law. Which Law, by the by, means that the costs aren't gone or even lower, they're just shifted to thee and me.

So again, Ezra, you're certainly entitled to your own (wrongheaded and disingenuous) opinions, but you are not entitled to your own facts.

[Hat Tip: FoIB Holly R]

The (True) Cost of Health Care

An overarching theme here at IB has been that health care costs drive health insurance costs. While this may seem obvious to us, it bears repeating.

Why, you ask?

Well, a fundamental precept of ObamaCare© is that by controlling health insurance costs, health care costs can be better controlled. This is patently and (more important) demonstrably untrue:

"What Anderson might not know, however, is how Sutter's battle for market share in her corner of suburbia is affecting her bottom line. Hospital prices in the Sacramento region are among the highest in California, driven in large part by the negotiating clout of the hospital chain Sutter Health."

The Anderson family lives in a suburb of Sacramento, California, but their plight is far from unique or geo-specific. As hospital "chains" grow, competition is reduced, and prices increase. That's basic economics, of course, but a lesson lost on many folks who continue to believe that "reforming" health insurance will have any impact on the cost of care. In fact, the opposite is true. As we've previously discussed, ACO's (Accountable Care Organizations) threaten to dramatically change how health care is delivered, and the price we pay for that delivery. Bob sent me an interesting link, from an outfit called American Medical News, which underscores just how insidious these new entities really are. Here's what they want us to see and believe:

"Accountable care organizations ... generally involve a combination of physicians and hospitals taking responsibility for a defined population, working together to improve care and cutting costs."

Can you see the problem in that very short statement? A "combination" implies a partnership of co-equals. But that's laughable on its face. In any such "relationship," the hospital (and more likely, the chain of hospitals) is going to be the Big Dog, and is going to determine how the organization behaves. The doc is simply another vendor in this equation, with precious little say-so in how (and how much) health care is delivered.

And there's this little tidbit:

"Though ACOs are primarily defined as cooperative agreements between hospitals and physicians, health plans are keenly interested in the model and need to keep on top of developments because they will be the ones to reimburse the new entities for care."

Once again, what they want you to see and what's really happening are two very different things. The primary problem is that there's still that pesky third-party (the insurer) sandwiched betwixt the provider and the patient. Let's ignore for a moment the lack of consumer participation in this equation; if consumer-centric health care is predicated on choice (and it is), then it's DOA when it comes to ACO's. That is, what choice does one have when, as in the Anderson's case, there are only one or two plans that include the biggest ACO, er, hospital chain in the area?

And then apply that to the whole country.

This is a recipe for economic disaster: less choice (competition) means higher health care prices, which means higher health insurance premiums. And, as Bob's pointed out, this is exacerbated by the looming shortage of carriers.

Talk about your death spiral.

[Hat Tip for NPR item: FoIB Holly R]

Karma's a (W)itch

Looks like somebody didn't send in their WaiverMania check to HHS Secretary Shecantbeserious:

"One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants ... The union blamed financial problems it said were caused by the ... new national health-insurance requirements."

Looks like they won't be #112 on "the list."

I found this little tidbit interesting:

"Currently about 6,000 children are covered by the benefit fund, some until age 23."

"Age 23?" Under ObamaCare©, that's supposed to be "age 26." Someone miss the memo?

For its part, the union is pointing the finger of blame at the Empire State, claiming that, under directives that took effect 2 years ago, "it expected that ... many of its members would qualify for state assistance for health-insurance coverage." So the wonderful gunion members counted on saps, er taxpayers to foot their bills?

State officials, on the other hand, are having none of that:

"The state is not forcing 1199 to do anything regarding its employee health insurance,” said Jeffrey W. Hammond, spokesman for the New York Department of Health."

Classic Mexican standoff, or missed opportunity? You be the judge.

MVNHS©: A Most Deadly Game

Our Cousins Across the Pond©, whose "health care" scheme we're attempting to emulate, have a little problem:

"Nineteen hospital trusts are today exposed as having alarmingly high death rates in a major report that also reveals how hundreds of people are dying needlessly because of substandard NHS care."

Okay, so not so "little," after all. A new report, compiled by the British Department of "Health," and Dr Foster Intelligence ("a public-private partnership ... that aims to improve the quality and efficiency of health and social care through better use of information") casts an unflinching eye on the debacle that passes for health care in the UK, finding that tens of thousands of innocent Brits "developed avoidable blood clots, suffered from obstetric tears during childbirth, had objects left inside them after operations or were not given immediate treatment after a stroke."

Still not convinced? Then click here for the gory details.

Told ya so.

We have to pass this bill so that you can find out what is in it

Perhaps missed in the excitement over other wonderful things we have been finding out about health insurance reform, here is a snippet from the Institute of Medicine:

"At the request of the Secretary of HHS, the IOM is undertaking a study that will make recommendations on the criteria and methods for determining and updating the essential health benefits package."

At first I misread this. At first I misunderstood that the Institute of Medicine was asked to define essential medical services. I am relieved to find out instead that IOM has been assigned to work on the design of insurance benefits.

Medicare and Cancer: Both Underwater

The first being metaphorically, of course:

"Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you're a senior covered by Medicare, the wait is eight weeks ... Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients."

So why is our Medicare health delivery system beginning to look like the MVNHS©?

Well, when you have a limited supply and a (virtually) limitless demand, systems tend to end up that way. And if you think it's bad now, well, "that's not even taking into account a long-postponed rate-setting method that is on track to slash Medicare's payment rates to doctors by 23 percent Dec. 1."

The so-called "Doc Fix" is due in a few days, unless it's postponed (again). Hey, it's only (our) money, right?

The good news is that, if seniors manage to survive Medicare, they may also live long enough to benefit from some wonderful treats from the sea:

"Cyanobacteria live in every ocean and on every continent in both salt and fresh water. One species causes a rash known as swimmer’s itch; another blooms in lakes and reservoirs, expelling a neurotoxin that can be fatal to humans."

Ooops, that wasn't the good news. This is:

"(A) family of cyanobacteria called Symploca emits a toxin that attacks tumors."

Apparently, and this is still in the initial testing phase, these little sea assassins can target bone and breast-cancer cells (among others), destroying them without harming healthy cells or tissues. Unfortunately, it could be another 10 years before it can be approved and manufactured.

Keep your fingers crossed.

Chronicles of Mystery The Legend of The Sacred Treasure


American Journalist Uncovers Mysterious Plot in Africa! With smarts, intelligence, and a zest for adventure, young American journalist Chelsea Connor decides to explore the mysterious circumstances surrounding her father’s death. Her father, an experienced treasure hunter, never returned home from his grand expedition to Africa. Her search for answers will take her from Paris to Ethiopia, as she pieces together the clues about an elusive hidden object that may present evidence as to his disappearance. Along the way, Chelsea will come face to face with powerful bent on preserving their dark secrets.




Dress-Up Pups


Pattie is an animal-lover, working at the Dress-Up Pups fashion agency for dogs. When her boss has to leave town on important business, she's put in charge of the whole place; it's a big opportunity for her! Help her deal with ten different clients, each with their own dog and their own special requests, in this hilarious and exciting Match-3 adventure.

Cavalcade of Risk #119: Call for Submissions

Nina Kallen makes her CavRisk hosting debut next Wednesday (December 1). Submissions are due this Monday (the 29th). Please remember to include:

■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

NB: The Cav is about risk, but not necessarily or exclusively about insurance. So feel free to think outside-the-box (e.g. driving and texting, the environment, vaccination, etc).

You can submit your post via Blog Carnival or email.

Terrafarmers


A cosmic wasteland stretches out before you, an endless expanse of space rock and moon dust. Your job: use advanced terraforming technology to revive this barren celestial wilderness.

King's Smith 2


Anya worked incredibly hard to become the King’s Smith, until a sudden betrayal changed everything! Waking up with memory loss, Anya must unravel the mystery behind her kidnapping, and figure out exactly what is going on.

Your New Health Care Plan

(Click to embiggen)
[Hat Tip: FoIB Jeff M]

Tech Feature: Terrain textures

I have finally finished the part of the terrain rendering that I spent most time researching and thinking about: texturing. This is a quite big problem, with many methods available, each having its own pros and cons.

I was looking for something that gave a lot of freedom for the artists, that was fast and that allowed that the same algorithm could be used in both game and editor. The last point was especially important since we had much success with our WYSIWYG-editor for Amnesia, and we did not want terrain to break this by requiring some complicated creation process.

Even once I started working on the textures, I was unsure on the exact approach to take. I had at least decided to use some form of texture splatting as the base. However there is a lot of ways to go about this, the two major directions being to either do it all in real-time or to rendering to cache textures in some manner.

Before doing any proper work on the texturing algorithm I wanted to see how the texturing looked on some test terrain. In the image below I am simply project a tiling texture along the y-axis.


Although I had checked other games, I was not sure how good this the y-axis projection would look. What I was worried of was that there would be a lot of stretching at slopes. It turned out that it was not that bad though and the worst case looks something like this:

While visible it was not as bad as I first thought it would be. Seeing this made me more confident that I could project along the y-axis for all textures, something that allowed for the cached texture approach. If I did all blending in real-time I would have been able to have a special uv-mapping for slopes, but now that y-axis projection worked, this was no longer essential. However, before I could start on testing texture caching, I need to implement the blending.

The plain-vanilla way to do is, is to have an alpha texture for each texture layer and then draw one texture layer after another. Instead of having many render passes, I wanted to do as much blending in a single draw call. By using a an RGBA texture for the alpha I could do a maximum of 4 at the same time. I first considered this, but then I saw a paper by Martin Mittring from Crytek called "Advanced virtual texture topics" where an interesting approach was suggested. By using an RGB texture up to 8 textures could be blended, by letting each corner of an rbg-cube be a texture. A problem with this approach is that each texture can only be nicely blended with 3 other corners (textures), restricting artists a bit. See below how texture layers are connected (a quick sketch by me):

Side note: Yes, it would be possible to use an RGBA texture with this technique and let the corners of a hyper cube represent all of the textures. This would allow each texture type to have 4 textures it could blend with and a maximum of 16 texture layers. However, it would make life quite hard for artists when having to think in 4D...

When implemented it looks like this (note he rgb texture in the upper right corner):


However, I got into a few problems with this approach, that I first thought where graphics card problems, but later turned out to be my fault. During this I switch to using several layers of RGBA textures instead, blending 4 textures at each pass. When I discovered that is was my own error (doh!), I had already decided on using cache textures (more on that in a jiffy), which put less focus on render speed of the blending. Also this approach seemed nicer for artists. So I decided on a pretty much plain-vanilla approach, meaning some work in vain, but perhaps I can have use for it later on instead.

Now for texture caching. This method basically works as the mega texture method using in Quake Wars and others. But instead of loading pieces of a gigantic texture at run-time, pieces of the gigantic texture is generated at run-time. To do this I have a several render textures in memory that are updated with the content depending on what is in view. Also, depending on the geometry LOD I use, I vary the texture resolution rendered to and make it cover a larger area. So texture close to the view use large textures and far away have much lower.

I first thought had to do some special fading between the levels and was a bit concerned on how to do this. However, it turned out that this was taken care of the trilinear texture filtering quite nicely (especially when generating mipmaps for each rendered texture). When implemented the algorithm proved very fast as the texture does not have to be updated very often and I got very high levels of detail in the terrain.

Side note: The algorithm is actually used in Halo Wars and is mentioned in a nice lecture that you can see here. Seeing this also made me confident that it was a viable approach.

The algorithm was not without problems though, for example the filtering between patches (different texture caches) created seams, as can be seen below:

(click to enlarge, else it will not be seen)

The way I fixed this was simply to let each texture have a border that mimicked all of the surrounding textures. While the idea was simple, it was actually non-trivial to implement. For example, I started out with a 1 pixel border, but had to have a 8 pixel border for the highest 1024x1024 textures to be able to shrink it. Anyhow, I did get it working, making it look like this:

(Again, click image to see full size!)

Next up was improving the blending. The normal blending for texture splatting can be quite boring and instead of just using a linear blend I wanted to spice it up a bit. I found a very nice technique for this on Max McGuire's blog, which you can see here. Basically each material gets an alpha that determines how fast each part of it fades. The algorithm I ended up with was a bit different from the one outlined in Max's blog and looks like this:

final_alpha = clamp( (dissolve_alpha- (1.0 - blend_alpha ) / (dissolve_alpha * (1-fade_start), 0.0, 1.0);

Where final_alpha is used to blend the color for a texture and fade_start determines at which alpha value the fade starts (this allows the texture to disappear piece by piece). blend_alpha is gotten from the blend texture, and dissolve_alpha is in the texture, telling when parts of the texture fades out.

So instead of having to have blending like this:


It can look like this:


Now next step for me was to allow just not diffuse textures, but also normal mapping and specular. This was done by simply rendering to more render targets, so each type had a separate texture. This would not have been possible to do if I had blended in real-time as I would have reached the normal limit of 16 texture limits quite fast. But now I rendered them separately, and when rendering the final real-time texture I only need to use a texture for each type (taken from the cache textures). Here is how all this combined look:

You can see small version of each cache texture at the top.

Now for a final thing. Since the texture cached are not rendered very often I can do quite a lot of heavy stuff in them. And one thing I was sure we needed was decals. What I did was simply to render a lot of quads to the textures which are blended with the existing texture. This can be used to add all sorts of extra detail to map and almost require no extra power. Here is an example:


I am pretty happy with these features for now although there are some stuff to add. One thing I need to do is some kind of real-time conversion to DXT texture for the caches. This would save quite a lot of memory (4 - 8 times less would be used by terrain) and this would also speed up rendering. Another thing I want to investigate is to add shadows, SSAO and other effects when rendering each cache texture. Added to this are also some bad visual popping when levels are changed (this only happens when zooming out a steep angle though) that I probably need to fix later on.

Now my next task will be to add generated undergrowth! So expect to see some swaying grass in the next tech feature!

Cradle Of Rome 2


Journey through 100 levels of matching fun and exhilarating process of building the city. Match three or more tiles and experience the new world of Rome from the cradle to the glory. Solve challenging mini-games and draw blueprints to turn your small settlement into the flourishing empire. Discover all-new game modes and earn trophies to prove your multi-faceted skills. Become the Emperor of Cradle of Rome 2!


About that "You can keep it" Promise

As with so many others, this one has not only gone under the bus, but the driver backed up to make sure it was good and dead:

"No matter how we reform health care, we will keep this promise to the American people. If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what."

As Bob has most recently, and effectively, illustrated, none of these are true. But that's just us, right?

Nope:

"The New York Times reports ... Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve"

Increased regulation leads inexorably to decreased competition, and thus higher rates and fewer choices. That's a threat, not a promise.

[Hat Tip: FoIB Holly R]

Nightmare on the Pacific CE


The Brooks family boarded The Neptune hoping for a relaxing family adventure. What they got was more than just an adventure, but a harrowing experience of disaster and close calls. They also got a mother's perseverance to save her family when the perfect combination of storm, shoddy construction and bad judgement turns The Neptune into a ship-splitting disaster.

Download:  Mirror 1  Mirror 2
 
 

Monkey Money Slots 2


The sneaky monkey is back, and he's brought a tuxedo! With 8 different game features and 25 or 50 paylines, it's Monkey Money 2 HD! Can you accomplish all 45 special achievements?

Trickle Down Effect of Obamacare

Hurricane Obamacare is a category 5 storm that will make landfall in January, 2014 but already we are feeling the effects of the feeder bands buffeting the country. On Monday HHS confirmed that the MLR (medical loss ratio's) as defined in Obamacrap would go into effect in 2011 without modification. We explored some of the impact of this MLR in yesterday's post.


But the MLR is much more insidious than just limiting the amount health insurance companies can spend on overhead. It is a jobs killer. 


Already several smaller health insurance companies have either exited the market or have announce they will soon leave. More will follow.


Giants like Aetna, Humana and others have already slimmed down by laying off hundreds of workers that service their health insurance block. Many of those are still unemployed and more will follow over the next few months.


These layoffs affect their ability to service prospective and existing clients. Already those of us on the front line have seen a noticeable impact on the ability to secure answers to service issues or have problems handled in a timely fashion.


Agent commissions are due to be cut drastically in January of 2011. Some say this is a good thing, but all that glitters is not gold.


Agents are 1099 employees and as such, cost the health insurance company nothing until a service is performed. The carriers do not pay our rent, or insurance or salaries. We pay all of that from our revenue.


Already it is anticipated that half the agents who are working the health insurance market will leave. That number may be low. The rest have already decided they can no longer afford to provide a high level of client service due to the fact our compensation will be cut in half and in many cases even more than that.


This lack of "free" service will shift the burden back to the home offices who are already trying to do more with less staff. If you think customer service is bad now, just wait.


It will also lead to increased complaints about the responsiveness of the health insurance companies. Complaints that will filter to state agencies who have also cut staff due to lack of state funds.


Health insurance will become a self service commodity. Some think that is a good thing. Some believe insurance companies should not profit from health care. They point to executive compensation packages, total profits and stockholders and blame them for the high cost of health insurance.


But in doing so they ignore the facts.


Executive compensation will be mostly unchanged although some will inevitably lose their job as departments are cut or eliminated. If profits suffer too much those carriers that remain in the business will withdraw, leaving less competition and higher premiums.


For what it is worth, the profit margin on health insurance averages 3%. If you look at what is commonly quoted as an average health insurance premium of $350 per month per individual then if there were $0 profits premiums would decline by about $10.


And how will stockholders be impacted?


Well, it depends.


You need to realize that stockholders are mostly retirement plans. Roughly 80% of all publicly traded stocks are held by employee retirement plans. In spite of all the media attention on Wall Street "fat cats" and their massive stock holdings, most stock is held by Joe and Mary Lunchpail. When stocks take a hit the little people suffer.


We touched on some of the issues of the MLR in yesterday's post but the impact on businesses, both large and small, is quite far reaching.


Starting in 2011 health insurance companies will have to track premiums, claims, and administrative fee's and provide a year end accounting on how much was spent on each item. This report will go to HHS but most likely also to the IRS.


If the health insurance company failed to meet the mandated MLR they must issue refund checks, and 1099's, to all covered participants. That cost will be factored into their overhead which means even less for customer service.


The checks that go out to businesses are quite complicated. Starting in 2012 business owners will start to receive refund checks for premium overcharges if things go as planned. The money received by the business means a possible amended business tax return, but it also means each business must pro-rate the refund over each individual that was a plan participant during the year and issue refund checks to those individuals.


If the premium was deducted by the employee on a pre-tax basis that means an amended return for them, and even more work for the IRS.


So far it seems as if the only winners in this deal is the IRS.


These checks and the headache that goes with this grand scheme will hit in 2012. How many businesses, both large and small, will decide to terminate health insurance plans rather than continue doing battle with the government?



All of this hits in 2012, which coincidentally happens to be an election year . . .


I wonder how many voters, already disenchanted with what they have seen of Obamacrap and who voiced their opinion at the polls a few weeks ago will return in November of 2012 and throw the bums out?


Hurricane Obamacrap has not yet made landfall but already the disruptive forces of this category 5 storm are being felt.

Time to Hurry: Nicole's Story


Help Nicole find her vocation and climb up the corporate ladder in this fun Time Management game, Time to Hurry: Nicole’s Story! Work in various shops throughout the city as you help this fresh college graduate find her calling in life. Master multiple minigames and complete challenging tasks to find success and more.

Obamacare Puts the Squeeze on Health Insurance

The Spectator informs us that HHS has finally spoken with regard to the MLR (medical loss ratio) guidelines for health insurance companies. The MLR dictates how much of every premium dollar health insurance companies must spend on claims.


On the surface this may sound nice but in practicality it is smoke and mirrors.


When you consider that health insurance is marketed in (at least for now) a free market where carriers are free to set prices for their product, it would seem foolish for a carrier to arbitrarily attempt to mark their product up more than their competitors. But the folks in DC and the media would have you believe just that.


The decreed loss ratio's are 80% for individual major medical and 85% for group health plans. But this comes with a hidden price.



These requirements were at the root of the controversy that arose in September over McDonald's having to drop 30,000 workers from its health plans. Eventually, they were granted a waiver from the requirements. But a lot of businesses won't receive a waiver, meaning that insurers will have to stop offering some policies, and many of them will decide to exit the individual market entirely, due to the nature of the way the financing works. This will translate into less choice and competition, and is another way that the law will lead to people losing coverage they may like.



As the article points out, not everyone got a waiver. So many who currently have health insurance will lose that benefit.


If you like the plan you have you can keep it . . . . but only if  HHS grants it a special waiver.


If the carriers fall short of those payout's they have to cut refund checks.  HHS estimates the refunds will total about $1.4 billion or about $164 per insured.


Think about this for a moment.


Each carrier will have to incur ADDITIONAL costs to comply with this stupid rule in order to calculate IF they owe a refund. Once they complete that task they will have to track down anyone who has been covered by their company, calculate their pro-rata share of the refund, and cut them a check.


If you are a business that get's a refund after you have filed your tax return that means adjusting your return to reflect the lower outlay you had for health insurance. More costs and hidden taxes associated with Obamacrap.


And then there is this little goody.



Also, it's no accident that the requirements were set at 85 percent and 80 percent. Last December, the Congressional Budget Office issued a memo saying that if the requirements were set any higher than that, health insurers would have to be considered part of the federal budget -- driving up the cost estimate of ObamaCare. As the CBO put it, referencing proposals for even more stringent requirements, "this further expansion of the federal government's role in the health insurance market would make such insurance an essentially governmental program, so that all payments related to health insurance policies should be recorded as cash flows in the federal budget." At the time, the Cato Institute's Michael Cannon pointed to the memo as a "smoking gun," revealing that Democrats had deliberately hidden the true cost of ObamaCare by making sure the CBO wouldn't factor in the cost of the private sector mandates imposed by the legislation.



Well isn't that interesting?


The MLR thing is a heated battle that will result in fewer health insurance companies offering fewer choices and higher rates overall. Somehow that doesn't match up with what was promised.

How the player becomes the protagonist

Introduction
In Amnesia one of the main goals was for the player to become the protagonist. We wanted the player to think "I am" instead of "Daniel is" and in that way make it a very personal experience. The main motivation for this was of course to make the game scary, but also for the memories that were revealed to feel more personal for the player.

In this post I will go through some of the design thinking we used, problems it caused and how it eventually turned out. I will also briefly discuss the future of this sort of design.


Playing a role
First of all, it is not required that the protagonist matches the player character in order for the player to "become" him/her. As an extreme example, I see no problem with a game featuring an animal as lead character to have the player become the protagonist. The idea is not that the player should match the physical / mental protagonist, but rather that he/she should be able to roleplay him/her and to feel like really being him/her.

There is of course limits to this kind of roleplaying and certain characteristics might make it impossible for a player to feel a connection. This is the same for works in other media where the reader/viewer is meant to feel empathy toward one or more characters. Sometimes there is some mismatch that removes this feeling, and much of the work's power is lost. Note that this sort of friction is more likely to happen because of the personality of the character and not so much because the physical appearance. A simple example of this would be that protagonists in Disney movies are often very easy to relate to despite being animals.

Considering this, the general rule that we used was not to force emotions and actions that players were unlikely to accept. When the protagonist is displayed as doing or feeling something, we had to make sure that player could agree to this.


Getting into the act
In film or literature it is possible for the audience to not like the protagonist at the start, but then make them feel a connection over the course of the work. This is not possible to do in a videogame, as players must start acting out their role as soon as the game starts. If the situation does not feel comfortable at the start, then it will be very hard to connect.

Because of this, videogames need to have a tutorial of some sort where the player gets used to the idea of playing a certain character. During this phase it is also important that the player learns how to act as the protagonist, so they later act accordingly. I do not think this can be done solely on a mechanics basis, as the trial and error involved will most likely just frustrate. This is largely dependent on the space of actions available though and sometimes players will quickly realize the role they are meant to play.

In Amnesia we made the choice to be very upfront on what is expected by the player. This is accomplished by displaying messages before the game starts, telling the player what to do. The main message was a rather simple one, simply saying that the player should not try and fight any monsters. As this is pretty close to what most people would do in real-life, we basically just had to tell players that the game was not a first-person-shooter and the rest came naturally. If the game would have required more specific behavior from the player, more info might have been needed.

Once the player accepts this role and is ready to play, the next step is to provide an interface between the player and world. Here a bunch of problems arises and it becomes less clear what is the right thing to do.


What emotions to hide?
First of all, we decided to remove any form of cut-scene from the game. Upon entering a cut-scene, there is a large distinction between the kind of control a player has during normal play, creating a discrepancy that weakens the player-protagonist connection. In our previous effort, Penumbra, we had little of these, but there were still places when control was taken from the player for longer periods. In Amnesia, we only used very short "view hijacks" to display points of interest. These were not very frequent and were meant to be seen as reflexes, which seemed to be accepted for most players. Some were a bit annoyed by them though and we are not sure they were that necessary.

Next thing we decided on was that, unlike Penumbra, Daniel (the protagonist) should never comment on the situation. In Penumbra the most obvious place this happens is when a spider is spotted and the text "A spider! I do not like spiders" appear. This sort of interface where the protagonist make subjective remarks on the game world can very easily break the connection between player-and-protagonist.

We tried to skip descriptive texts completely, but this caused problems when dealing with puzzles. If players start thinking about a puzzle "incorrectly", then it is imperative that they get on the right track. In these cases, the easiest (and many times only) way to communicate this to the player is by using texts. We tried to add as many solutions to avoid having texts, but it only works so far, and eventually some kind of explanatory / hinting text was needed. If not the player would have gotten stuck instead and we thought this would be worse than having the texts. In order to keep the player-protagonist connection, we kept all of this texts very objective and impersonal, careful to not force emotions on the player.

Side note: A problem we had when removing subjective comments was the hints were much harder to write. Not being able to let the protagonist guess, use insights or personal knowledge proved quite tricky at times.

We did not remove all of the subjective protagonist emotions though. We kept the more autonomous physical actions such as panting and heart beats, a choice that proved slightly controversial. After releasing the teaser video some people argued that having these sort of reactions pulled them out of the experience. Others felt that it just heightened the experience. Once the game was released, the main complaint came at a very specific feature, namely the "sanity damage"-reaction (that happens whenever the player witnesses something frightening). In the end, we estimate that something like 15-30% of the players disliked these kind of effects.

For the people that did not dislike these effects, many felt it increased the connection to the protagonist. For example feeling as if their own heart beat faster when the protagonist's did or becoming startled when a "sanity damage"-effect told them to. This is a really interesting subject and while using these kind of effects might detract the experience for some, I think it might be worth taking the risk. So far we have mostly tried this for very simple situations, but I believe it can used to evoke much more complex emotions.


Bringing back memories
An important part of Amnesia is that players slowly learn the background of the character they are playing. As the name suggest, the game starts out with the protagonist having amnesia that sets the player and protagonist on equal footing. By progressing through the game both the player and the protagonist gain access to increasingly more lost memories, slowly getting an idea of how Daniel ended up in the situation he currently is in.

The main mechanic we used to deliver these lost memories was through diary entries scattered throughout the game. We decided to voice these in order for them to be more interesting, but I think this backfired a bit. What many players seem to have experienced was that Daniel was reading the entries aloud. Thus this proved to be a large distraction and must have weakened the player-protagonist bond for many. What we intended was for the player to hear Daniel's voice as the voice of their old self. This was probably way too obscure though and it might have been better to just had them as pure text.

Added to this was the fact that Daniel actually spoke at some points. Some lines are spoken during the start of the game and some during gameplay if sanity is too low. Again, this was intended to be lost memories, but many players did not perceive it as such and instead thought it was strange to hear Daniel talking.

As mentioned earlier, we wanted the player to feel as if the lost memories were their own. But because of the way the memory content was delivered I think the effect was not what it could have been.


Dialog
A major obstacle when trying to create strong a player-protagonist connection is that one often end up with the so called "silent protagonist". The reason for this is simply that that whenever spoken words are required, the lines spoken by the protagonist must be predetermined and chosen for the player. Either, the character simply speaks a scripted line or the player chooses from a list canned responses. Using the first type allows for more fluent conversation but removes any interaction. The second choice provides some interaction but makes conversations stiff (as other actions are only possible when in "dialog mode") and might lack options the player finds appropriate to say. Some hybrid solutions exist (like in Blade Runner where the player just sets an attitude) but the problem still remains.

Side note: Interestingly, the problem is quite opposite in Interactive Fiction. Instead of lacking options for the player, the characters one speaks to lack the intelligence to understand all possible (and fitting) sentences.

So how to solve this? Well, first of all it is worth noting that the systems mentioned above can still be used if applied carefully. If the player's emotions are in line with the protagonist's then simply having short scripted lines could work very fine. To make this work I also think it is important that the protagonist's voice is a recurring element of the game to get the player used to it. If it just pops up on rare occasions, the illusion is easily broken. Call of Cthulhu and the Thief series use this to some success (I think it is at its best when short, in-game and the player is free to do other actions at the same time).

The multiple choice system is also possible to use, but I think it comes with more problems. The biggest is that since the player gets a choice it is more obvious when the game does supply the wanted action. With other actions such as walking and fighting, it is easier to set up rules for the player on what is allowed and not. Conversations have a much wider scope and it is much harder to keep it consistent. It is also much harder to display the options in a way that feels okay. Unless they entire game is controlled with a menu-like system, having a menu pop up for a specific action is very distracting.

In Amnesia we chose to avoid conversations as much as possible and there are only two occasions when you meet another character face-to-face. And in only one of these were there any real opportunity for a conversation (with a tortured man called Agrippa). The way we went about it was for Daniel to be silent, but for Agrippa to respond as if Daniel had spoken. This gave the dialogs (or rather monologue) more flow but many players found this quite disconnecting. They found it strange that Daniel silently spoke back, especially as many was sure they had heard him speak before when reading diaries. On the other hand, it might have been even more strange if Agrippa had never asked Daniel anything and simply just spoken in direct orders or in a lecturing manner. Agrippa was put into game pretty late in development and we did not gave it as much thought as we should have, so this might have been solved better.

When creating a videogame with a strong player-protagonist connection, the best option is probably to fit the game world around a protagonist that does not require none or very simple (as in yes-no or simple vocabulary) speech. This way, the player-protagonist connections is more easily kept and consistency is maintained. An example of this is System shock where all characters are dead or talking through a one-way radio. Another example is BioShock 2 where the protagonist is a dumb robot that is not expected to speak. This of course put limits on what kind of experiences that can be made, but might be the only way to create a strong player-protagonist experience.


Problems to overcome
It is not only dialog that is a large problem when trying to make player and protagonist one and the same. Since we are trying to craft an experience where the players themselves are a central ingredient, much pressure is put on them.

A major problem is that it is hard to let the protagonist have any special knowledge. This is a reason why stories starring amnesiacs, outsiders or cannon-fodder are so common; things becomes very complicated if players need to have a deeper understanding of their surroundings. A way to solve this is to force the player into learning things before starting the game. But since reading a novel before starting the game is not really possible, the amount of information that can be given is quite limited. Another way to solve this is to have some sort of tutorial texts popping up, but this is of course very distracting.

Another issue, is that the player and protagonist might not share the same goals. For instance the protagonist might be out for revenge, but the player might not be interested in this. This makes games of this type end up with fairly simplistic motivations. It might be possible to give some kind of instructions before the game starts, but that does not seem very good to me. Better would be to provide an experience at start that sets up the player's mood to match the protagonist's. This is easier said than done though.


Why bother?
So why go into all of this trouble of making blurring the line between player and protagonist? For one thing, I think it is something that is extremely interesting to explore. So far games that try to create strong player-protagonist bonds are mostly about killings things and exploration into other themes is pretty much uncharted.

Secondly, it is something that that is unique to the medium. In no other media can the audience step into works of art themselves. And just because of this I think it demands to be experimented with. Instead of looking too much to film or other art as inspiration, we should try and do things in ways that only videogames can.


Your thoughts?
We would be very interested in hearing your thoughts on this. How did you feel like you connected with the protagonist in Amnesia? Was there any especially large obstacles for you to have a strong connection?

Also, in case you are interested in more discussions on this, check out the previous post on self-location in games:
http://frictionalgames.blogspot.com/2010/09/where-is-your-self-in-game.html

ACO: Told ya so!

ACO's (Accountable Care Organizations) are an ObamaCare© invention purportedly designed to increase access to, and affordability of, health care. As we've seen, of course, they do neither. But why take just our word for it? Writing in the New York Times (hardly a bastion of right-wing thinking), Robert Pear notes:

"Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses."

Gee, ya think?

On the other hand, if you're Donald Berwick, this is a feature , not a bug:

"Judith A. Stein, director of the nonprofit Center for Medicare Advocacy, said she was concerned that some care organizations would try to hold down costs by “cherry-picking healthier patients and denying care when it’s needed.” [emphasis added]

And since over a quarter of Medicare beneficiaries exhibit multiple conditions, the system is ripe for rationing, not to mention financial abuse:

"Hospitals and doctors have also asked the administration to waive laws intended to prevent fraud and abuse in Medicare."

Wonder why that is.

On second though, no, I don't.

And by the way, be sure to check out Mike’s take on this, as well.

We have to pass this legislation so that you can find out what is in it

"Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses."

Nawwww . . . . Reeeally?

Didn’t consumer advocates tell us back when that Obamacare would increase competition, reduce costs and increase access to health care?

Didn’t 60% of the American public - including InsureBlog - doubt those things would happen?

And didn’t the advocates respond that we were naysayers, sadly misinformed, immoral, and didn’t know what was good for us?

Gotta hand it to those advocates, they have principles.

And if their principles don’t work - - well, they have others.

The Wonderful Wizard of Oz


Join Dorothy on a journey through Oz. Based on the timeless tale, this version has you matching gems and saving your friends. With the Wicked Witch gone, it's up to you to free the munchkins and make your way to the Wizard. Along the way, you'll have to help the Scarecrow, the Tinman and the Cowardly Lion find everything they need, too! Revisit The Wonderful Wizard of Oz today!

Brick Journey (Repost)


No one has ever been inside the Golden Room! No one has ever been able to find all the parts of the missing key. You have an ancient map to guide you but without all the parts of the key, the map will be no help. With five distinct settings and over 50 mind melting levels, your journey will separate the true adventurers from the weekend trekkers. Great graphics and smooth game play personify this brick breaking adventure

Do you see it? I don't see it . . . Part 2

[Part 1 is here]

Only this July, Kathleen Whatshername at HHS told the nation that
$5 billion was now available for the hundreds of thousands of people who can't get insurance because of a pre-existing condition. The average person could be forgiven for believing that this was a crisis of near-Biblical proportions. OK, so what happened?

Well, on November 12, I read that a grand total of 8,011 people had signed up for government-subsidized individual insurance having no pre-existing conditions exclusion.

The Wall Street Journal had some fun with the enrollment of 8,011, stating that “HHS created a program designed to operate at a loss and still can’t lure customers”. The Journal added that “HHS won’t take this for an answer, so . . . it said it will cut premiums by 20% and expand benefits . . . to encourage more people to enroll.”

In other words HHS takes as a given that the government’s failure to solve the crisis - - calls for more government.

The way I see it, appropriating $5 billion to meet the medical care needs of less than 10,000 people shows something is terribly wrong within HHS. And besides, the way I see it, this HHS insurance plan suffers from the same basic flaw as the government’s unemployment insurance strategy: overreliance on “government subsidies”. Government subsidies can only come from taxes paid by productive workers. Increasing subsidies means increasing taxes. Higher taxes dampen economic activity. So I still see reducing taxes as a better strategy than increasing taxes. Of course that also means reducing government spending and that is not in the lexicon of most lawmakers.

I have the same view about the uninsured. I still don’t see why a 2,000-page statute that commandeers virtually 100% of the U.S insurance and health care delivery systems is necessary to assist the 15% of the population who are uninsured. I don’t see why helping that 15% should cost anywhere near a trillion dollars a year. And I also don't see how that trillion dollars of annual spending ends up “saving” us money.

My lack of vision in these things probably explains why I could never be successful in government.

Do you see it? I don't see it . . . Part 1

Barack Obama, in an interview with "60 Minutes" recorded 11/4/2010 said several important things - - but in my opinion this is not one of them:

(scroll down to #3) "unemployment insurance, most economists will tell you, is probably the single most important thing we can do to improve the economy.”

The President’s statement prompted me to look up some history about earlier recessions in America. I did not find what the President’s comment suggested I would. For example, I found that James Monroe did not implement any unemployment insurance during the Panic of 1819. Yet somehow the American economy recovered. Not only that, Monroe was re-elected the very next year, in 1820. And for example I found that many states enacted unemployment insurance during the Great Depression and Congress enacted Social Security. Yet that Depression lasted for a decade. So I have my doubts that unemployment insurance is truly as important as the President says – despite the President’s belief that most economists think so. Am I saying the insurance is not important? No. I’m just saying I doubt it's the single most important thing the President can do to improve the economy.

Apart from history, unemployment insurance is paid using so-called government funds. Government funds come from taxation of productive workers, which unemployment insurance diverts to people who are not working. That may well not be their fault. Nevertheless they are unproductive while not at work. The very act that the President suggests is the single most important thing that he can do, in fact siphons money out of the productive parts of the economy – that’s the only place he can get the money. (Yes, he can print more, but that produces inflation which is just a sneakier tax).

Even if a company has oodles of cash, why would it hire or invest knowing that higher tax rates reduce the odds of gaining income from additional hiring or investment? Oh hello, we DO have companies right now with oodles of cash that are not hiring or investing. We read almost daily that the illuminati wonder why that is. Maybe their wonderment arises from the failure of reality to obey their theories.

I just don't see a tax on productivity as the best way to stimulate productivity. Do most economists disagree with this? Really?

[Part 2 is here]

Fiction Fixers The Curse of Oz


The Land of Oz is in great peril. An evil man has erected towers that consume the people, light, and energy of Oz itself. Protect Dorothy and Toto as they travel across Oz in hopes of finding a way home to Kansas. Team up with the Scarecrow, the Tinman, and the Lion and use their powers to overcome great obstacles. But beware of the Wicked Witch and Victor Vile, an Illiterati agent, who will stop at nothing to destroy you. It's up to you to save Dorothy and the Land of Oz in this Hidden Object Puzzle Adventure Game!



Fortune Tiles Gold (Repost)


The goal here is to make a matching line of 3 or more tiles of the same color. As you use the tiles you're presented with, these tiles will be replaced with new--and different--ones. Clear all the marked tiles to complete the level. Play in either of two modes--Timed or Endless--and, along the way, look for bonus-ups like the magic rainbow, hammer, and a plethora of magical creatures.

Leviathan VR5 Mortis (Totenköpfe - Deaths Head)

For those of you who have not seen it, I felt I should post a description of the first Leviathan release. For those that have.... Here is some new eye candy.

Grandfather of all Leviathans; the VR5 design is over 200 years old and has seen many improvements and variants. It and its variations are widely considered some of the finest designs ever produced. A balance of size, speed, armor and armament all come together to make a very formidable vehicle.

The decision to design the cockpit after the Totenköpfe was primarily nostalgic and a matter of national pride. The frame of the first Leviathan was designated VR5 in honor of the 5th Regiment commanded by Colonel von Ruesch, the first Hussar commander to use the deaths head symbol. The Prussian army Hussar first adopted this symbol in 1744.
The Mortis in its purest form is outfitted with two close combat weapons, and no additional armor, this allows for the fastest possible movement and a vicious close combat capability. The massive oil stacks provide the option of overcharging the reactor for enhanced speed or combat. Two KwK 200 20cm auto cannons mounted in the torso ensure its survivability in a ranged engagement.
Here is a pic. to help add a little scale referance...

Leviathan Mortis release date

I have a (tentative) release date of December 15th. If all goes well and there are no major hiccups.

There is still ALLOT of work to be done. Molds checked for vent and sprue issues, Instructions, Box art, Web store and shopping cart integration, ect. Perhaps a more realistic date would be January but I like to push myself.

I may releases the first one or two on Ebay if I don’t have time to work out the cart and website issues.

Pricing as it stands now:
Leviathan Mortis: With Scythe and right hand Claw $350.00
Optional weapons: Right hand Vulkan $45.00
 
The Leviathan Mortis is a all resin model kit, roughly 9.5" tall
I will be working a lot of late nights to try to get this out the door by the 15th, so please be patient with me if the date is bumped.

Please understand that they will initially be produced in house so the number of kits available will be limited due to having only one set of production molds and production equipment.

I will update the blog with pictures of the final casts and assembled model as soon as they are completed.

I am the great and powerful OZ!

Many people ask why is this so expensive. The short answer is that nothing about making resin models is quick or cheap. The long answer requires a more in depth look at the costs involved. Unlike many manufacturers, I do not feel it is constructive to dance around this question. An honest question deserves an honest answer.

So let us pull back the wizards curtain and see what hides behind...


Pricing my models is a subject that often causes me a great deal of discomfort. Every kit, every release begs the question what is a fair price? What do I need to charge to keep the doors open and continue making things I, and hopefully others enjoy. While understanding not every model will be a spectacular hit, what is a reasonable number of models you should expect to sell to amortize your upfront costs?

Now we look at the ugly numbers. I already own the equipment so I will not count that in the total but I show them here for general reference. Also, keep in mind this rough overview is for a rather large and complicated model with over 32 molds and 136 parts. Although the costs are not accurate to the penny, they are honest reflections of the true costs. There are numerous other costs that will not reflected in this break down, such as overhead, web development, problems with molds, etc. These costs likely reflect another 3% to 5% reduction in true profit.

Initial equipment investment: (This cost is not reflected in the totals below)
Compressor, Pressure pots, Vacuum pump, Vacuum chamber, assorted tools, mixing containers, etc
Rough estimate- $1800.00

Initial materials investment:
Model print cost, Initial molds (RTV Silicone cost), Mold boxes, clay and other tools, Resin for mold master.
Rough estimate- $3850.00

Cost for each model produced:
Assuming a conservative25 pulls per mold, before mold needs replacing. Estimate for resin, rubber and packaging.
Rough estimate-$89.00

Cost for casting service:
Assuming the molds are made and supplied by me.
Rough Estimate-$75.00?? (This number is still unresolved)
Shipping costs back to me from caster-$4.00

Credit card transaction fees:
3% to 6.5% (average 4.75% of $350.00 retail) $16.62

TOTAL  PER KIT COST TO PRODUCE AND SELL A SINGLE MODEL- $185.00

RETAIL PRICE PER KIT- $350.00

Taxes on profit:
 $65.00 (Uncle Sam and California demand their share of my hard work)

 TOTAL NET PROFIT- $100.00

DreamForge-Games company profit- $50.00 per kit
Costs of initial investment, $3850.00. (First true profit after 77 kits have been sold)

My profit per kit- $50.00 per kit
Target of $15.00 an hour for my time. CAD Modeling, Benching, Mold Making. Four hundred and sixty hours invested, and an additional ninety hours for the three mold change outs needed to meet the 77 total kits sold to square up the initial model/materials costs.
Total dollar cost of my time $8,250. (First true profit after 165 kits have been sold)

What do I make per hour, if we try to zero my hourly rate at the 77 kits sold, based on the initial investment costs of the model and materials. I net $6.99 an hour for my time…Hmmmm…

Add the taxes back into the total that we removed earlier and were up to a “respectable?” $9.44 per hour actual working wage. This begs the question, if you possessed the creativity and the skills set in CAD and mold/model production, would you work for $9.44 an hour with no health plan.  I am not crying poor me, this work is something I love doing or I would not be doing it.

I hope that this release is a smashing success and I sell hundreds…  This would improve the look of my financials greatly. I would much prefer to amortize my investment to the first 40 or 50 kits sold, and on smaller less expensive models, this is always my target.

For the immediate future, I will need to cast these in house while I search for a suitable service provider. This will increase my profit margin but will slow the development of new models and severely limit the number of kits available to my customers. With this in mind, moving production out of house is a very high priority. If the contract casters services are far greater than expected, I will need to increase the price to reflect the additional costs.

Things being what they are, I feel it is a fair price for my customers and a fair price for the product I deliver. I hope that you feel the same and I hope that I helped to dispel the age-old question “why is the price so damn high?!”