They are called general practitioners or primary-care doctors. Overworked, suffocating under mountains of paperwork, they see more than 30 patients a day in one of the most underpaid areas of the medical field.

 

An estimated one-third of all physicians in the U.S. are primary-care doctors, according to the Robert Graham Center, which studies the primary-care market. They include medicine physicians, general internists, and pediatricians. Depending on the definition, other researchers, like the Peterson-KFF Health System Tracker, say that number is far lower, around 12 percent. That compares with a range of 23-45 percent of primary care doctors in Europe.

 

My doctor, whose office is a stone-throw away from my house, fits the profile of most doctors in her field. She is meticulous, saved me from serious health issues several times, and knows my family intimately. I trust her implicitly and don't know what I would do without her.

 

Through the COVID-19 pandemic, her doors were always open, and she did it alone since finding anyone willing to work for her was impossible. With no help, she spent her evenings entering patient data into the nation's cumbersome electronic health record systems, scheduling appointments, and checking on patients.

 

Today, a smaller and smaller percentage of medical students are even considering the field. Salaries are a big reason why other medical and surgical specialties are promising far more income. Retirement is further depleting the nation's stock of GPs. At the same time, the demand for primary care is growing, thanks to record enrollment in Affordable Care Act programs. 

 

This results in longer and longer waiting times between visits to see your primary-care doctor. The average wait time is now about 21 days and growing. If, God forbid, your doctor retires, most people are faced with a "not taking new patients" electronic message from most physicians.

 

In response, over the last five years, large primary care and urgent care groups have sprung up across the nation. They are flourishing. Patients can usually walk in to see a doctor (although not necessarily the same doctor) on each visit. Many times, they will not even see a doctor. They will instead see a nurse practitioner or a physician's assistant.

 

Retail clinics like CVS Minute Clinics, offer in-person and virtual care seven days a week. Changes in Medicare and state laws have loosened the requirements for physicians and billing. This has boosted the growth in these areas, making them one of the fastest-growing segments of the medical arena.

 

The trend has grown so fast that roughly 46 percent of all primary-care physicians are currently working in practices they do not own. And two-thirds of those doctors do not work for another doctor, but a different entity altogether — Corporate America.

 

Given the present state of the primary-care field, why would the country's largest health-care insurers, drug store chains, and other billion-dollar corporations want to get involved in this business? Names like CVS, Amazon, Aetna, and Amazon are all buying up primary-care centers, doctor groups, and even the practices of individual doctors.

 

The simple answer — to create one-stop shopping for all your health-care needs. Corporations want access to the nation's huge number of consumers who need all sorts of health care and medical insurance. Primary-care doctors hold the pulse of millions and millions of patients. These patients will continue to generate a steady flow of business and profits to hospital systems, health insurers, and pharmacies.

 

In addition, Medicare, the federal health insurance program, is gradually being privatized. As it stands now, more than 30 million beneficiaries have policies with private insurers under the Medicare Advantage program. That is worth $400 billion a year for insurers and is growing every year.

 

Corporations entering the field say they are bringing coordinated health care to patients. Health insurers and others want to institute "value-based care" where the insurer and doctor are paid a flat fee for individual patient care. They argue that fixed payments will act as an incentive to maintain the health of the patient and provide access to early care, which in turn will reduce hospital stays and visits to expensive specialists.

 

Critics, however, worry that the economies of scale invading patient care will destroy the personal doctor-patient relationship. It may also end up in situations where corporate owners begin to dictate and limit services from the patient's first visit to extended hospital stays.

 

Given the growing scarcity of primary-care physicians, many millennial patients, especially those who are younger and generally healthy, are unfazed by the changes in health care. A video call or a no-wait visit at their local drug store or big-box store beats waiting for weeks to see a doctor. As for me, I am both lucky and grateful for my primary-care doctor.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

The American work culture has shifted radically since COVID-19. The idea that there is more in life than work is catching on among many workers. Working from home, quiet quitting, and "missing Mondays" are all symptoms of this change as is a four-day workweek.

 

Most full-time workers and job seekers, when asked, say a four-day workweek is at the top of their wish list. That is what a recent study by Bankrate, a consumer financial services company, discovered. Fully 81 percent of 2,367 adults polled, supported such a move, and 89 percent of workers were willing to make sacrifices to achieve that goal. Those surveyed said they would work longer hours, change jobs, take a pay cut, have fewer vacation days, switch industries, and even sacrifice advancement for the chance to reduce their days of toil.

 

At the same time, more than half of American employers offer, or plan to offer, a four-day workweek, according to a poll of 976 business leaders by ResumeBuilder.com. In that survey, 20  percent of those businesses already offer a four-day week and another 41 percent are planning to implement a similar week at least on a trial basis.

 

Several large trials are already occurring both here and abroad to explore the possibilities of a shortened work week. Studies have shown that for those who have implemented the change employees are happier, have less burnout, and it is also easier to attract new talent. In a Canadian trial, researchers found that revenue increased by 15 percent in many of the 41 companies that decided to continue with the approach after the trial ended.

 

Some large private-sector companies in the U.S. including Shopify, and even Amazon and Microsoft, are experimenting with a shorter workweek. California, Massachusetts, Missouri, Pennsylvania, Texas, and possibly Vermont have introduced legislation to reduce the standard workweek as well.

 

You would think that with this much support from both employee and employer, why hasn't it happened already?

 

The facts are that the lion's share of U.S. companies and organizations still operate under a five-day work schedule. It happens to also be a labor law and has been for more than 80 years. Changing that would require a large adjustment and require a great deal of planning. Just think for a moment about how downsizing the working week might impact you. Everything from taking the kids to school, to when you go grocery shopping might change.

 

From the perspective of your company, there is a lot that needs to be assessed. Staffing needs, concerns over productivity gains or losses, increased costs, and complex changes to operations are all legitimate concerns. None of those issues can be overcome quickly. Experts estimate a complete changeover could take five years or more.

 

Back in 1926, Henry Ford was credited for standardizing the five-day workweek (down from six) in response to pressure from the labor movement. Unions have long been instrumental in fighting for most of today's worker benefits like weekends off, overtime, and health benefits.

 

In 1940, an amendment to the Fair Labor Standards Act mandated pay for any time worked beyond 40 hours per week. Since then, not much has changed in labor laws.

 

While remote workers, office jockeys, and the salaried bunch are lobbying for a change in the workweek, the United Auto Workers are putting the four-day workweek on the map for hourly workers. Today's striking autoworkers union, in addition to wanting better pay and benefits, are asking for a four-day workweek. The deal they want is to put in a 32-hour week and get paid for 40 hours. In addition, anything clocked over the 32-hour limit would count as overtime.

 

Part of the union's effort is due to the auto industry's transition from building gas-powered vehicles to electric. It takes less time to assemble EVs on the line, so assembly workers wouldn't necessarily see their weekly take-home pay take a hit.

 

Most labor experts do not expect the UAW will win on that demand. And not all workers want a reduction in their hours worked anyway. Hourly workers across many industries are fighting for more, not less, hours to work. It is a sad fact in this country that many employers actively try to keep workers' hours under certain thresholds to avoid paying fringe benefits. It would take a concerted effort by labor unions, corporate executives, and politicians to pull off something like a four-day workweek. Nonetheless, the idea is gathering steam across the nation, and at some point, we should expect it to become a fact, possibly in my lifetime.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

The ongoing partisan battles in Congress over a government shutdown are making daily headlines. However, whether a shutdown ultimately occurs or not may not be the most important outcome of this squabble.

 

Over the weekend, at the 11th hour, Congress and the White House passed a continuing resolution to postpone a government shutdown until Nov. 14, 2023. Axing funding for Ukraine was the price Republicans demanded to kick this spending can down the road. This was somehow hailed as a bipartisan victory, one of the few in this deeply divided Congress. It seems to me that the only victor in this mess was Russia. 

 

Since then, a handful of radical right Republicans in the House, led by Matt Gaetz, a Republican congressman from Florida and the subject of an ethics probe, forced a vote to push House Speaker Kevin McCarthy out of his post. Combined with most Democrats, the House voted to oust McCarthy.

 

Gaetz and the radical right had accused McCarthy of breaking his word to conservatives on spending bills and how he would run his house. They pointed to McCarthy's behind-the-scenes, side deal with the Biden administration to restore funding for Ukraine as just another reason not to trust the speaker. The straw that broke the radical's back, however, was when McCarthy reached out across the aisle to come up with a compromise that would keep the government's lights on at least temporarily.

 

Democrats were divided on their response to the turmoil within the Republican Party. But few Democrats trusted the speaker, given his partisan track record. In the end, partisan politics dictated they voted to oust the speaker, even though it meant that no work could be done in Congress until a new speaker was elected.

 

If one steps back from the hour-by-hour circus in Washington and looks at this debacle from the perspective of others, the U.S. government appears to be in a precarious state. Many developed countries plan their budgets, their spending levels, the level of debt, etc. in five-to-10-year increments. Our government can't even agree on whether they will be able to pay its employees next month.

 

It is also becoming increasingly apparent that the U.S. government is unable to control spending on both the short-term and long-term levels. This failure to manage continues to happen under both parties. This is not just my opinion. Two of the three largest credit agencies, Fitch and Standard and Poor's, have come to the same conclusion.

 

Back in 2011 Standard and Poor's reduced our long-held triple-A credit rating to AA, citing a weakening in the effectiveness, stability, and predictability of American policymaking and political institutions. 

 

This year, thanks to the debt ceiling debacle spawned by this same group of dysfunctional politicians, Fitch, another big credit rating agency, downgraded our debt as well. Fitch cited a "steady deterioration in standards of governance over the last twenty years." They went on to explain that "repeated debt limit political stand-offs and last-minute resolutions have eroded confidence in fiscal management."

 

And here we are again — more than two months later — repeating the same suicidal behavior. The actions among U.S. legislators befit a banana republic economy, not the U.S. Only one credit agency is left, Moody's, that still maintains a AAA rating for our sovereign debt. How long that status remains is my concern.

 

Politicians of both parties fail to realize (or don't care) that these rating changes have a real cost to the nation and taxpayers for decades to come. The cost of issuing U.S. debt and paying bondholders interest is climbing year after year. As it stands today, interest payments alone are costing the country 8 percent of GDP. That percentage is expected to increase exponentially. We are talking billions of dollars, readers, if not trillions, when we consider the cost that we will have to bear (as will our children and their children).

 

Moody's has already commented that a shutdown would have credit implications. A downgrade in their rating based on "the weakness of U.S. institutional and governance strength," as well as "the fractious bipartisan politics around a relatively disjointed and disruptive budget process" indicates to me that unless things change dramatically next week, we could see yet another downgrade.  

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

On Saturday, Sept. 30, 2023, $24 billion in emergency funding for the nation's child day-care industry expires. Estimates are that as many as 70,000 care centers or more will close over the next year, impacting as many as 3.2 million kids. The downside for working women with young children could be even more substantial.

 

In recent columns, I have written of the gains women have made in the post-pandemic labor force. Women's workforce participation, especially women with children under 5, is higher than it has ever been (at 70.4 percent, compared to a pre-pandemic high of 68.9 percent). That brings the employment gap between men and women to record lows.

 

This progress was made possible in part by the $1.9 trillion American Rescue Plan of 2021. During the pandemic and its aftermath, the federal government, under the Biden administration, a congressional bipartisan bill passed one of the largest economic rescue plans in U.S. history. The legislation earmarked $24 billion in spending to bail out the faltering day-care industry. It gave wage increases to woo workers back into the sector, helped to offset rising costs, and made several more improvements to help an area reeling from the impact of COVID-19. The result was to give mothers the ability and freedom to rejoin the workforce. They did so in droves.

 

Those gains will now be threatened. The care centers that remain open will need to reduce staffing and operating hours, while raising tuition and fees. This will take time to unfold, but probably over the next six to 12 months the results of this change will be in full force.

 

A Hail Mary hope within the day-care industry is that the states might come to their rescue. The disruption could cost states $10.6 billion in tax and business revenue annually and reduce family earnings by as much as $9 billion, according to the Century Foundation.

 

This crisis is going to force parents (especially women) into working fewer hours or leaving the workforce altogether. For many others, it may mean switching to less demanding roles with obvious consequences for career advancement.

 

It will also resurrect a litany of economic inequalities that have plagued American women for decades. If they become part-time workers, they will lose employer medical benefits. And if they must once again leave the workforce it will reduce their Social Security benefits at retirement.

 

A viable child-care system is considered a public good by most Americans. Studies indicate that children who receive high-quality care become better educated and ultimately receive better-paying jobs. Unfortunately, in this country, the myth that the private sector can do a better job at this than the government has proven not to be the case.

 

Providers operate on slim margins, pay workers a lot less than most fast-food chains, and experience high turnover. Low-wage workers have plenty of other choices in this tight labor economy, which leaves care centers in many areas of the country unable to provide the services needed. 

 

Today the industry is short 40,000 positions from early 2020 levels. The end of government funding could mean as many as an additional 232,000 jobs could be lost. Day-care waiting lists are years long. And that is if you are lucky enough to live in an area that still provides child care. Even with the government funding, child-care costs have skyrocketed in this inflationary environment. Families, especially in lower-income jobs, can't pay the freight any longer. 

 

It all creates a combination that turns out to be a disaster when it comes to child development. "Child care is a textbook example of a broken market," said Janet Yellen, the U.S. Treasury secretary, back in 2021.

 

As I write this, the new battle cry of partisan politics in Washington revolves around cutting government spending. We suffered through the debt ceiling debacle because of it and now a potential government shutdown is in the making. The government appears ready to abdicate its responsibility to ensure the continued existence of child care. We will all suffer, but women most of all.

 

As the Sept. 30 expiration approaches, couples and single parents will be faced with some hard choices. Pay for the coming higher costs and reduced services of a dwindling number of child-care providers or figure another way to keep working and take care of the kids at the same time. Let's hope there are still a lot of grandparents available to fill the child-care gap.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

The financial markets were expecting a lot of good news out of the Federal Open Market Committee meeting this week. Investors were betting that not only would the Fed pause, but possibly announce an end of interest rate hikes altogether. Some even expected a timetable for future rate cuts that would be sooner than later.

 

The market was right on the pause in interest rate hikes. The U.S. central bank decided not to hike the Fed funds rate but that was about the extent of the good news. In his Q&A session after the meeting, Chair Jerome Powell reiterated his message that further rate hikes were still on the table, but they would proceed "carefully." They have already raised rates 12 times over 17 months. He also left the audience with an expectation that there would be at least one more interest rate hike, if not two, this year.

 

In addition, the dot plot chart, which represents Fed members' expectations for future changes in interest rates indicated that most members had backed off from a prospective four cuts next year to only two, maybe. Most thought an interest cut would not occur until sometime in the latter part of 2024 — if then. Part of the problem, Powell said, was the continuing strength in the U.S. economy, which is performing far better than fed officials expected.

 

When everyone is on one side of the boat (as they were before the meeting), the risk is that a disappointment could capsize the boat. That was what exactly happened as Powell came out much more hawkish than anyone expected. Traders pulled the plug on bullish trades driving the main averages down by more than 1 percent and followed through on Thursday with similar losses.

 

In the bond market, the thinking was just as dire. If interest rates were going to stay higher for longer than yields needed to adjust to reflect that new reality. 

 

Traders sold bonds across the board sending yields to 15-year highs. The yield on the 10-year, U.S. Treasury bond spiked to 4.6 percent, which sent the dollar higher and equities lower.

 

Technology was the hardest hit, but few sectors escaped the selling. Sectors that have an inverse correlation with the dollar, such as precious metals, and materials. etc., were dumped and speculative stocks took it on the chin.  Energy was one of the few bright spots with oil prices holding up in the $90/bb. range. However, higher oil prices only complicate the Fed's work. As I wrote last week, higher energy prices fuel higher inflation and the longer it stays at this level, the harder the Fed's job becomes in reducing inflation.

 

Several negative short-term events are adding to the pessimistic attitude of investors. The UAW strike, which threatens to expand, could dent economic growth. The looming government shutdown, caused by the chaotic atmosphere within the Republican party, does not inspire buyers either. The sharp climb in bond yields has also tempted more investors to seek safety.

 

The Fed's hawkish stance ruined my hopes for a bounce this week, and we are still in a weak seasonal period. I warned readers this is historically a negative time for the markets. I had expected that the SP 500 Index would at least re-test the August lows and that did occur this week (the intra-day low for that index was 4,335). Right now, the S&P 500 Index is oversold, more so than at any other time this year.

 

A relief rally on Friday was to be expected. It seemed anemic to me but could continue into next week. I advise readers to remain cautious for now and most likely into mid-October. There could be further downside, especially if we see yields and the dollar move higher.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.