If you haven’t noticed, our political leaders love to talk about improving our nation’s competitiveness. Well, you might ask, has anything been done about it?

Not really.

One reason for the inaction might be that lawmakers and policymakers have different ideas about government’s role in improving competitiveness. For example, some want to throw more money and government at the problem, while others assert that too much government is the problem. Others think things are just right.

During U.S. Treasury Secretary Henry Paulson’s March 13 conference on U.S. Capital Markets Competitiveness, some legendary financial types articulated the conflicting approaches on the issue.

Perhaps that may be why the markets, in looking for reassurance and a sense of certainty and direction with respect to reforms and policies to strengthen their competitive position, took a plunge on that day. I’m only kidding, of course, but Secretary Paulson will have quite the task in pulling together a plan for advancing competitiveness based on his panelists’ divergent views.

Discussion quickly zeroed in on the Sarbanes-Oxley (SOX) Act, and whether compliance and reporting rules should be made less onerous. There was a friendly dispute over whether SOX was really that burdensome, and whether it was the reason for significantly higher IPO activity in overseas markets, and a corresponding drop at home. It is well documented that costs have been excessive, particularly for small public companies. This didn’t seem to bother some of the CEO’s and financial gurus who spoke to the issue.

For example, Warren Buffett shrugged off the fact that it cost $24 million to do his books. He acknowledged that they are “doing things that are unnecessary” as a result of SOX. He predicted that U.S. business will adjust to the new environment. Over the long-term, business “will be very ingenious in how it copes,” said Buffett.

Few would disagree with that conclusion. Unfortunately, one key way that business and capital has adjusted (and are adjusting) to onerous government rules and costs, is to move overseas. Wasn’t this the general point of the conference — how do we keep capital and business here in the U.S.?

As NYSE Group CEO John Thain made clear in his remarks, investors and business now have abundant choices across the globe.

“The rest of the world has matured – you can raise billions and not come here,” said Thain in pointing out legal and regulatory deficiencies that are making the U.S. less attractive and competitive.

General Electric Company Chairman and CEO Jeffrey R. Immelt kept drumming home the point that “nothing is wrong with regulation.” Businesses, according to Immelt, are not looking for “less” regulation, just “more balance in the system.” Well, with regard to small public companies that are impacted by SOX, they definitely want less.

Small firms don’t have the luxury of dismissing SOX’s expensive compliance costs. A Government Accountability Office (GAO) report found that smaller firms are disproportionately impacted by SOX – companies with less than $75 million in market capitalization spend 877 percent more on compliance than their larger counterparts.

The Securities and Exchange Commission (SEC) is working to identify an approach to improve SOX, Section 404 compliance and reporting. The latest SEC guidance, which Paulson declared would help mitigate costs, may help on the margins, but doesn’t go far enough in scaling requirements for small public companies, or clarifying a range of issues.

As predicted by Buffett, smaller companies have already adjusted to the new environment. They have overseas choices, too. The United Kingdom’s Alternative Investment Market (AIM), for example, has witnessed an explosion in small company IPOs. Many of these are U.S. firms.

Charles Schwab, founder, chairman and CEO of Charles Schwab Corporation, says the market should decide SOX’s worthiness, and perhaps its fate. He suggested letting SOX compliant companies trade on one market, and non-SOX companies on another. “Let investors figure it out,” said Schwab.

On Capitol Hill, the enthusiasm for addressing SOX has waned considerably. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee and Speaker Nancy Pelosi, D-Calif., are giving the SEC the time and leeway to self-correct. This pretty much points to the reality that SOX, or the intrusiveness and ambiguity of Section 404, is here to stay.

Perhaps it’s a good thing that business and capital have choices.

As a follow up to her previous "Walter Reed Lessons for the Rest of Us" column, Kerrigan responds to reader e-mail. There was a high-volume of feedback provided by readers, and the e-mail comments below reflect the wide array of views received. Most have been edited due to space limitations.

From "J.D." in the U.K.: I would not for a moment dispute your contention that the British public health care system is in a mess at the moment. I am agnostic on private vs. universal care – I am back in the UK having lived in the US for 15 years and so know both systems.
However, your example of British people yanking teeth out of their own heads is not an example of the failure of socialized medicine. On the contrary: this is market forces at work, pure and simple, and as unpleasant as the picture of these auto-extractions is, from an ideological point of view you should be cheering.

In the early 90’s a huge proportion of the dentists of Britain, unhappy with the deal the NHS was offering them, left the system. Successive governments have tried to bring them back into the fold, but with limited success; a new deal from the Blair government last year looks like it will actually cause more to quit. While some dentists continue to operate within the NHS, they are now a massively over-subscribed minority, and most adults in the UK (care for children up to age 16 remains free) have no choice but to seek private care. There is no shortage of this, but market forces enable British dentists to charge rates considerably higher than US dentists, rendering care unaffordable for many.

Kerrigan Response: Thank you for your feedback. I could have put my "teeth extraction" point into better context, and should have. That is, it is commonplace because of long waiting periods and access to dentists is difficult for those in the NHS system. Of course, there is a segment of the population who can go outside the NHS system if they can "afford" it (as the former PM did with the drug she needed).

Certainly, I could have used other examples of how the NHS system is "a mess" as you describe — i.e.: its hospitals, etc. I guess my overall point is that the U.S. should learn from the experiences of other nations and systems before we fully decide to go down the path of socialized medicine, particularly with respect to its costs and its impact on our economy, business sector, quality of health care delivery — and unintended consequences with regards to creating two classes of health care delivery.

From "M.S." in Oregon: Instead of continually pointing out the shortcomings of Canadian and British health care systems, why don't you look into one system that works — Thailand's medical care system.

Thailand provides for its citizens as well as offering affordable health care for foreigners. The French system works as well as provided care in both New Zealand and Australia. I have been to every one of these countries and have friends and family in most.

There is not a developed country in the world that would allow its citizens to be bankrupted by illness, with the exception of the U.S. Our system is an international embarrassment. It certainly provides no example to anyone as one that should be followed.

I have been a small business owner in the fishing industry for 25 years. I have never been the recipient of employer paid health insurance nor have I been employed by the Federal government. I have had to pay all my health insurance for myself and my family and employees and I cannot do that anymore. I am being priced out of the market.

I am a Vietnam Era Veteran. You would think that I would be able access health care through the VA as part of my deserved benefits, but I cannot since I make slightly more than $27,500, a figure that Congress put in place in 2003 as the means test to disqualify Veteran health benefits for those making more than that amount. This is a corrupt system. Where is the means test for members of Congress, many of whom are millionaires, in determining their eligibility to receive what is the most generous health care benefit package in this country, at my (a taxpayer) expense ?

This is a horrible predicament to be confronted with after serving my country and maintaining and operating a small business for the last 25 years. I and others of the same light are falling thru the cracks.

Kerrigan Response: Yes, Thailand is one of those “medical tourism” countries, I believe, where people can get procedures at reasonable costs. I simply do not know much about the system to comment, but I am looking at its legal, regulatory and entitlement system to see whether they are of a limited nature, which would keep costs down. I really do feel for your predicament. Small firms, particularly, are getting the raw end of the stick – and Congress is the central problem in why we can’t get simple reforms passed that would make health care more affordable. Thank you for serving our country, and now our economy as a small business owner – you are a true American hero!

From "Ben" in Belgium: Thanks for your article on how the Walter Reed fiasco applies to socialized medicine's future in America. I just wanted to point out two other things:

First of all, my father was a medical professional in the Air Force for several years in order to repay them for their support during his residency. What he pointed out is that the military is not a final destination for medical professionals, it is a means of reaching that
final destination. In the military, they pay their employees mere fractions of what they make in private practice and almost all of them leave the military to make that money.

Just as doctors are fleeing Canada to work in America where they are paid more and taxed less, doctors flee the military ranks to the private sector to be paid more.

Some may suggest that the solution is to get rid of the private sector, the carrot in front of their noses, but this will do little more than reduce the medical work force's total numbers. After all, who wants to study for fifteen years, run the risk of malpractice suits, etc. to be paid little more than a college grad with a bachelor's degree?

I am currently living in Belgium with my Belgian wife. Belgium is one of the more socialist countries in sub-Scandinavian Europe, and it shows when my wife gets her paychecks. However, I'm under the impression that the medical system runs much better here than in France and other European countries where it's on the verge of collapse. Financially, I don't know how long it will last, however I just wanted to point out one immediate "side-effect" of socialized medicine: the lack of preventative medicine.

The starkest example is in the dental industry here. People's teeth are disgusting. Seriously. All the "bad example" pictures that you see in the dentists' office are on display. The problem is this: why would people want to go to the dentist bi-annually for check-ups when they can go just a handful of times in their lives to get teeth extracted and dentures/crowns put in, and there's no difference in price? The answer: they won't. "Preventative" isn't in their vocabulary.

Kerrigan Response: Indeed, the preventative aspect is a critical one to point out — particularly (as we well know now) that teeth and gum problems lead to more severe health problems down the road with respect to heart conditions.

The boom in the health savings account (HSA) market in the U.S. has created a greater focus on the wellness and prevention side of health care. This is a good thing. With HSAs, people control and own the money in the HSA, and they now realize that health care is not "free." There is an incentive to stay healthy and take preventative action. Employers are being helpful in providing wellness and prevention resources and information, but we certainly have a long way to go before this is widespread.

From "J.K.": Karen, you raise a couple of sensitive points. First, I am a Reservist. Congress has passed, and the DOD has begrudgingly implemented, a health insurance program for us. It is about time, because we are expected to maintain our health and fitness, like an Active Duty member, but when it comes to medical conditions, we are on our own to get them treated. The only thing that Uncle Sam does is to give us a physical every 5 years, and then tell us to fix anything that the physical finds at our expense.

I agree that universal health care is no cure all, but there is part of the population that we are ignoring. I experienced this to an extent when a major corporation laid me off in 2003 - I could take COBRA, but the cost is astronomical, at a time when your funds are limited. COBRA makes no sense, because it is so expensive. I tried to obtain health insurance for my children, via a State program in GA, but was told that the amount that I would make on unemployment was too little to qualify, so I would have to apply for Medicaid. Unfortunately, or fortunately, I had been too responsible by saving, so my assets were far too great to receive Medicaid. The good news for me is that I was re-employed quickly, and it ultimately was not an issue.

Why can't we have some sort of uninsured pool in the States, so that those who work at places that do not offer insurance, or who are out of work, can get insurance at a cost that is reasonable? In fact, we ought to just about eliminate Medicaid, which is a magnet for fraud, and have everyone who does not otherwise have insurance pay a sliding scale premium, even if it is 1.00 per month, to encourage preventive care, and subsequently lower our costs?

Kerrigan Response: I agree with your assessment — there is a large segment of the population that needs a flexible and easy-to-access safety net. Some of the pools in the states work, but others do not and I am hopeful that the federal government will be more flexible in granting states "waivers" to develop systems that meet the needs of the population you describe. Congress and the administration have said they will be more flexible in this regard, but the jury is still out. I do believe health savings accounts, once they become more fully adopted by the population and get more encouragement from the states and the federal government (better policy) will be helpful in addressing job transition in that the owner of the HSA is the individual so the policy follows the person. However, they are not a silver bullet, and much more needs to be done to make the health care system more affordable for individuals and families. One of the proposals that the SBE Council is supporting is the creation of a nationwide marketplace for health care — meaning you could shop outside your state of residence for a plan that is more financially feasible. Currently, you cannot do that.

From "R.L.D.": I agree with your reasoning that government run health care for all of us would likely be just as dysfunctional as military health care. What I don't understand is all the hand ringing and surprise, from the current government, at the Walter Reed situation.

I was at Walter Reed Army Medical Center (WRAMC) from 1972 to 1974 as a conscripted low level functionary courtesy of the US Army. And yes, then as today, WRAMC was a gleaming, beautiful institution (the part that anybody important sees) with state of the art care for thousands of horribly wounded and maimed soldiers. If their case was interesting enough. If they were powerful enough, or knew someone important enough. Everyone else got the bums rush and no counseling or follow up. They were cut loose with little in the way of financial resources and support. And no, it wasn't only WRAMC but government run health care in general, including Bethesda and including the VA. If you think they treat today's honored soldiers shabbily, how do you think they treated Viet Nam Era soldiers, since we were all drug addicted baby killers?

This is what government run health care or, socialized medicine if you will, is going to be. The vast majority of us will receive the most fragmented, rationed and cheapest possible care, affected by the whims of current politics. Care that equals the quality of care that most of us earn or have earned today will only exist for the rich and powerful, as it does in Canada and Great Britain.

Kerrigan Response: Thank you for the insider’s perspective. Not only don’t I understand the current Administration’s “hand wringing and surprise” as you put it, but members of Congress as well. I cannot believe that these House members and Senators do not hear stories, or get constituent mail, about the deficiencies in the system. Thank you for your service to our country!

From "R.B.": Actually, the failure at Walter Reed and other facilities is due to this administration's propensity to farm out services to private companies. These companies are not interested in care as much as they are the bottom line, hence, the roaches, rats and mold. As a shill for these Republican, sweetheart dealers, you failed to point that out. I'm not surprised, as you continue to fill your greedy little fists at the expense of our wounded servicemen and women.

Kerrigan Response: Oh yes, I benefit personally and enormously from this and all other tragedies and inequities generated by corrupt systems in government and the private sector.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council, a research and advocacy group based in Washington, D.C. that works to protect small business and promote entrepreneurship. She is also founder of Women Entrepreneurs, Inc. , an association helping women business owners succeed through education, networking and advocacy. Kerrigan can be reached at kkerrigan@sbecouncil.org .