Reading… Writing…. Arithmetic…..

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

1

INTRODUCTIONINTRODUCTION

2

•Background•Contact Points•Terms of Art•Presentation - Putting It All Together

OutlineOutline

3

BUTCHER BAKER

CANDLESTICK-MAKER

JACK JILL

Juror ProfileJuror Profile

4

5

Potential Jurors

Keep Estate Tax

Get Rid of Estate Tax

•Banker•Engineer•Nurse Practitioner•Arms Crossed / Legs•Age Factor•Note Takers•Sleeper•Questions from Jurors

6

JuryJury

•New Orleans•Military HS•Catholic / Ivy League College / Ph.D.•England (Foreign)•Professor (Medical School - 4 yrs)•Articles•Three Kids - Teacher / Empathy•Organizations•Court TV / Congress•Two Grandkids

7

HooksHooks

8

CREDIBILITY

Jury AwarenessJury Awareness

•Posture / Clothes / Watch / Car / Truck•Body Language - Rocket Clemens; McGuire •Out of the Box•Permission

9

•Life Expectancy / Work Life Expectancy•Inflation Measures - (Local News Stories)•Medflation•Interest Rates (IRR)•Consumption Expenses•Replacement Services at Home•Paradox of Thrift

Economic TermsEconomic Terms

10

CPICPI

• Typical Market Basket• 95 Locations• Twice / Month• 211 Consumer Goods• Average Prices

11

CPI - cont.CPI - cont.

1. Food & Beverages2. Housing3. Apparel4. Transportation5. Recreation6. Education & Communication7. Other Goods & Services8. MEDICAL CARE

12

13

LOCAL NEWSPAPERLOCAL NEWSPAPER

GIGOPRN

QD / BID / TIDDUCES TECUM

CETERIS PARIBUSSWAG

AbbreviationsAbbreviations

14

OLD INDICATORS

• AUTO• HOUSING• RETAIL

ForecastingForecasting

15

NEW INDICATORS

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

Forecasting - cont.Forecasting - cont.

16

RatesRates

•Discounting to PV - Recent Historic Rate

•Alaskan - Total Offset

•Nominal Rate / Average Rate - 25 yrs

17

• JUNK DOWN• MUNIS DOWN• CORPORATE DOWN• TREASURIES

18

Discount RatesDiscount Rates

Verdict

Bartow

3/2009

19

$65 M$65 M

Life Expectancy

•Census Data - 2010

•Optimal Care - Based on L.E.

20

LIFE EXPECTANCY

LESSON 1LESSON 1

= 2.9 = 1.7

21

Classification of Economists

LaborPublic PolicyFinancial

AgriculturalBehavioralHealth/Medical

22

23

Not The Same

24

• ENGLAND, CANADA & SWEDEN • INSURE 30+ MILLION PEOPLE - H.R. 3200 • AMERICA’S AFFORDABLE HEALTH CHOICES ACT • ELECTRONIC MEDICAL RECORDS

Nationalized Health Care

25

•New Technology•Waste, Inefficiency & Fraud•Drug Company R&D•Aging Population

Reasons for Cost Increases

26

•ELECTIVE SURGERY

•WAITING LIST - HERNIA REPAIR

•RENAL DIALYSIS

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

Health Care - DILEMMAHealth Care - DILEMMA

27

•SIXTY YEAR OLD MALE POSTAL WORKER

•SINGLE MOTHER OF FOUR CHILDREN

•EIGHTEEN YEAR OLD NEVER WORKED

•RETIRED PALM BEACHER

Organ Replacement - DILEMMAOrgan Replacement - DILEMMA

28

MEDICAL INFLATION RATES

•Current (NOW) = 3.5%

•Recent (10Yrs) = 4.0%

•Historic (25Yrs) = 5.0%

LESSON 2LESSON 2

29

Medical CareGrowth Rates

30

YEAR1995

2000

2004

2006

2008

2010

MEDICAL5.1%

4.3%

4.3%

4.2%

3.8%

3.5%

31

AMERICA’S AFFORDABLE HEALTH CHOICES ACT

HR 3200

32

?

1. Therapists / Nurses2. Treating / Evaluating M.D.’s3. Continuation of Care Planner / Rehab Expert4. Economist

Sequence of Experts

33

34

Continuation of CareContinuation of CareLife Care PlanLife Care Plan

35

•Routine M.D. Visits•Therapies•ADL’s•Diagnostics•Orthopedic Equipment•Supplies

Categories of Need

•Attendant CareAttendant Care36

Boston Vs New Haven• Large Med-Schools• Well Informed M.D.’s• Same Region Country• No Difference in Socio-Economic Status

Treatment PatternsTreatment Patterns

37

• White Female• Age 2.0• Life Expectancy = 79.9 years• 24 Hour Nursing Care (HOME)• $30.50/Hour/LPN• Discount Factor = 4.0%

ExampleExample

38

39

•Current (NOW) = 3.5%

•Recent (10Yrs) = 4.0%

•Historic (25Yrs) = 5.0%

40

MEDICAL INFLATIONMEDICAL INFLATION

Current: Growth Rate = 3.5%Present Value = $17.5m

Recent: Growth Rate = 4.0%Present Value = $21.2m

Historic: Growth Rate = 5.0%Present Value = $31.1M

41

RESULTSRESULTS

42

INTEGRITY

• Recent Life Expectancy Tables

• Medical vs. General Inflation

• Sample - Goods / Services1940, 50, 60, 70, 80, 90’s

Trial Charts

43

44

45

46

Presentation

•Earning Capacity - Cistern•Present Value - ‘Car Loan’•Court Reporter Interruptions•9/11 - Security•Jack Pot Justice / Home Cooking

47

VerdictFort Meyers - John Romano, Esq.

Florida

12/2009

$44.9 M

48

Verdict

Miami, FL

4/2010

$11.6 M

49

Verdict

Florida

9/2010

$8.2 M

50

Verdict

Florida

9/2010

$21.6 M

51

Verdict

Little Rock, AR

9/2010

$20.1 M

52

Verdict - Ford

Jackson, MS

9/2010

$131 M

53

Summary 3 Lessons

• LE

• MEDFLATION

• LESS IS MORE

LAW OF LARGE NUMBERS

54

CONSULTING ECONOMIST

PHONE (561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330

#93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: biffpett@gate.net

BERNARD F. PETTINGILL, PH.D.

55

•Homework - CSI•Financial Records•Tax Returns - Official IRS Records - Alignment, Dates, SS#, Signatures, Copies, Income / Expense Flow•Past Meds Minimal•Darden - (doc location: G drive) - CSI

56