Reading… Writing…. Arithmetic….. Simplify to Quantify Bernard F. Pettingill, Jr., PhD Palm Beach Gardens, FL October 2010 Las Vegas 1.

Reading…

Writing…. Arithmetic…..

Simplify to Quantify Bernard F. Pettingill, Jr., PhDPalm Beach Gardens, FLOctober 2010Las Vegas

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INTRODUCTIONINTRODUCTION

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•Background

•Contact Points

•Terms of Art

•Presentation - Putting It All Together

OutlineOutline

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BUTCHER BAKER

CANDLESTICK-MAKER

JACK JILL

Juror ProfileJuror Profile

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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

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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

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HooksHooks

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CREDIBILITY

Jury AwarenessJury Awareness

•Posture / Clothes / Watch / Car / Truck

•Body Language - Rocket Clemens;

McGuire

•Out of the Box

•Permission

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•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

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CPICPI

• Typical Market Basket

• 95 Locations

• Twice / Month

• 211 Consumer Goods

• Average Prices

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CPI - cont.CPI - cont.

1. Food & Beverages2. Housing3. Apparel4. Transportation5. Recreation6. Education & Communication7. Other Goods & Services

8. MEDICAL CARE12

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LOCAL NEWSPAPERLOCAL NEWSPAPER

GIGO

PRN

QD / BID / TID

DUCES TECUM

CETERIS PARIBUS

SWAG

AbbreviationsAbbreviations

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OLD INDICATORS

• AUTO• HOUSING• RETAIL

ForecastingForecasting

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NEW INDICATORS

• WAL-MART• STARBUCKS• APPLE• NETFLIX• PAWN SHOPS• ANIMAL RESCUE LEAGUE• McDONALDS• DOLLAR STORE

Forecasting - cont.Forecasting - cont.

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RatesRates

•Discounting to PV - Recent Historic Rate

•Alaskan - Total Offset

•Nominal Rate / Average Rate - 25 yrs

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• JUNK DOWN

• MUNIS DOWN

• CORPORATE DOWN

• TREASURIES

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Discount RatesDiscount Rates

Verdict

Bartow

3/2009

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$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.

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LIFE EXPECTANCY

LESSON 1LESSON 1

= 2.9 = 1.7

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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

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•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

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•ELECTIVE SURGERY

•WAITING LIST - HERNIA REPAIR

•RENAL DIALYSIS

•55+ Yr Old, GREAT BRITAIN – DENIED….DEAD

Health Care - DILEMMAHealth Care - DILEMMA

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•SIXTY YEAR OLD MALE POSTAL WORKER

•SINGLE MOTHER OF FOUR CHILDREN

•EIGHTEEN YEAR OLD NEVER WORKED

•RETIRED PALM BEACHER

Organ Replacement - DILEMMAOrgan Replacement - DILEMMA

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MEDICAL INFLATION RATES

•Current (NOW) = 3.5%

•Recent (10Yrs) = 4.0%

•Historic (25Yrs) = 5.0%

LESSON 2LESSON 2

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Medical CareGrowth Rates

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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%

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AMERICA’S AFFORDABLE HEALTH CHOICES ACT

HR 3200

AMERICA’S AFFORDABLE HEALTH CHOICES ACT

HR 3200

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?

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

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Continuation of CareContinuation of CareLife Care PlanLife Care Plan

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•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

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• 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

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•Current (NOW) = 3.5%

•Recent (10Yrs) = 4.0%

•Historic (25Yrs) = 5.0%

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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

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RESULTSRESULTS

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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

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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

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VerdictFort Meyers - John Romano, Esq.

Florida

12/2009

$44.9 M

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Verdict

Miami, FL

4/2010

$11.6 M

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Verdict

Florida

9/2010

$8.2 M

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Verdict

Florida

9/2010

$21.6 M

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Verdict

Little Rock, AR

9/2010

$20.1 M

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Verdict - Ford

Jackson, MS

9/2010

$131 M

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Summary 3 Lessons

• LE

• MEDFLATION

• LESS IS MORE

LAW OF LARGE NUMBERS

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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.

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•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

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