We need healthcare reform, but is this it?

I have been closely following the ups and downs of the healthcare debates. I have spoken to lots of people. Clearly the media coverage and the rhetoric have influenced the thinking of the general public and the consumers. Everyone seems to be thinking about things from a different perspective. Medicare members think everything is fine. Employees still don’t understand how little of the cost they bear. And those who need to buy insurance have wars stories about declinations, exclusions, and prohibitive costs. Interestingly, most of the people I consider experts think the politicians (especially the House of Representatives) have gotten this one wrong.

Let’s start with some points where everyone seems to agree:
#1 The healthcare system is broken and needs fixing.
#2-Making healthcare accessible to all is a desirable goal and the right thing to do.

On point #1, the healthcare system is broken in four main areas—
• Too many people are uninsured and lacking access to healthcare.
• Medical inflation and overall medical costs are too high.
• The quality of care can and should be improved.
• Information is not shared effectively between the various healthcare providers and patients.

The proposed legislation (every version) has focused on point #2, making healthcare accessible to the masses. Unfortunately the other areas where the system is broken have not been adequately addressed.

Everyone does have access to, at least critical care. If an uninsured person gets into a car crash and is lying in the road, the ambulance driver still takes the person to a hospital. The person still receives care whether they can pay or not. The hospital absorbs the charges and increases the cost of care to everybody else. This appearance of inaccessibility worsens to the other broken areas of the healthcare system.

Lots of discussion has occurred on the “public option”. Note that this does not address any of the areas where the system is broken. Mandating access can be accomplished without a “public option”, but many of the supporters of this approach don’t seem to understand this point. To the public option fans, being against a public option means being against access to care. Not true. Our present system is dominated by government-provided (to government employees) and employee-based care. The marketplace for individual purchasers of healthcare is weak. This could change with the right legislation and refinements to the present insurance options. The key to having a system that works is that everyone must be in the system. This will require employers to provide medical benefits to their employees and for other individuals to purchase their own insurance. No opt outs to the young and healthy should be allowed. Or else we end up with a poor risk pool. But high surcharges to those who don’t want to participate is “politically unacceptable”. For those who cannot afford coverage, subsidies should be provided. But everyone must be in the system.

So how about the other broken areas? How do we control the future cost of care? How do we improve the quality of care? How can we use data more effectively? I have some ideas. (Check out a blog in the near future on these topics).

Take advantage of the aging demographics

We all know that the boomers are aging and the number of people over 50 will skyrocket over the near and intermediate term. Under prior forms of wisdom, these people will become obsolete and retire from the workplace. NOT! First of all the boomers have redefined every life phase they have entered and the aging period will be no different. Retirement won’t and cannot be about stopping working and sitting on the porch to read books or to play golf. Retirement will be about continuing to be vibrant and potentially continue in the workforce.Retirement will be about financial and career independence. Oh and with the recent market bust and the uncertainty of the Social Security system, these workers will need to work more years. But will employers agree? Employers won’t be able to replace the brain drain caused by an exit of the boomers from the workforce. Ready replacements aren’t going to be there.

The confluence of factors requires employers to rethink how they utilize aging workers. They cannot simply discard or even let them escape. Creative solutions like flexible scheduling, independent contracting, and courting free agents become necessary. Incorporating these resources in an overall workforce plan becomes a critical success factor for businesses. There are lots of ways to make it happen.

Maturing workers also have a responsibility to get themselves ready. They need a plan which incorporates career, knowledge, and finances. They must stay current—in business practices and technology. They must be willing to accept a new definition of how they contribute to business success. And they must stay flexible—something older people aren’t especially known to be. But these are a new breed of older worker, an aging boomer.

For companies, finding the formula will result in a clear return on investment—lower recruiting, training, and onboarding costs and a focus on driving successful behaviors. In fact costs will be easier to be matched to workflow. They will need to create new jobs and help aging workers in their efforts to stay current. Mixing experienced employees with the fresh ideas and innovation of the younger workers will ensure success. And create a new culture of team and “can-do” attitude. Is this new form of talent management about being rah, rah and nice? No, it’s about bottom line results and sustainable profitability. It is about creating a foundation for perpetual building. It’s about continuity. And in the end it’s about business necessity and global competitiveness.

Employees are Pacaderms

Tough times call for tough measures. I speak to companies every day that need to cut costs, steamline processes, and forgo investments in order to survive. At the same time some of these companies remember that once things turn around, they need their businesses to thrive and grow. Employees understand that companies must cut back and sometimes it means that co-workers lose their jobs. If management communicates effectively with their workers this understanding grows. If employees participate in redesigning process, the buy-in grows. However many companies don't do this or make smart decisions on ways to save money without the negative employee relations. Several businesses have taken a cavalier approach to how their decisions impact talent in their organizations. They look at the downturn and its impact on employees with the view "where are they going to go?" That is true...for now. Employees recognize if their companies are uncommunicative, unfair, or non-inclusive during this period. And when things get better, they will vote--either with their feet or their attitudes. I have been dismayed with the large number of dissatisfied employees I have met who are waiting for the economy to turn around. This isn't about being nice to your employees, it is about how the company can be financial strong in the future by retaining and riding talent. Companies who don't realize that an elephant and an employee never forget, may be in for a rude suprise and a tougher time improving with the economy.

Citibank makes the next chess move

Citibank has announced it will offer 50% raises because the government rules will limit bonus pay to its bonus eligible employees. Citibank must pay a competitive total compensation package to attract and retain key people. It used to make sense to "pay for performance". But now since performance metrics cannot be trusted in banking, according to the government, bonus pay can also not be trusted. So Citibank has taken the only natural step, pay for showing up to work in order to comply with the rules. I am sure that was not the government's intent when the limit on pay was implemented. Yet how could the next step for Citibank have been different? Of course a more balanced approach would be to fix the metrics and make sure sound risk-taking and decision making become the rule for paying bonuses. A prudently run organization with properly designed incentive plans could have been a better solution. But that wasn't an option in this case. Funny that Chris Dodd said the people running Citibank "just don't get it". Be careful what you wish for, Senator Dodd and others concerned with the banking compensation, because you just might "get it".

Don't exclude the professionally licensed health insurance expert

I support the Obama-Biden health plan proposal. While not perfect it is based on elements that would improve the U.S. healthcare system. Most would agree that we have too many uninsured Americans--80% of them are working but either cannot afford to pay for the benefits or are not offered employer based healthcare. It is tough to argue with the systemic inefficiencies that add to the cost of healthcare. And lastly, I personally have been a big believer in improving population health to decrease costs and make the system less "clogged".

The Obama-Biden proposal recommends investments in health technology and electronic medical records (probably a tough sell to family practioners with cabinets of paper), improving prevention and disease management, including care integration, decreasing catastrophic incidents, transparency on costs, and improving the quality of care (through incentives, standards, research, care equality, and medical malpractice oversight). Most employers would be mandated to provide coverage for their employees (look for those companies to pass on their increased costs to consumers). The last piece involves increasing competition among and with drug and insurance companies; busting monopolistic practices and limiting profits would be the approach.

Yesterday, the Senate Health, Education, Labor, and Pensions committee came out with a draft bill on the new healthcare system. Cost savings seem to be focused on lowering reimbursements to providers. As in the President's proposal employers would be mandated to provide health coverage to their employees and insurance company profits would be capped. And with all this "newness" and complexity, the draft opposes the inclusion of professional, licensed insurance agents and brokers from participating in the reformed healthcare system. The players that encourage competition among plans and provide valuable advice to individuals would be eliminated because HELP doesn't seem to understand their contributions. The cost of these advisors to the system is under 0.2% of the healthcare spend.

As with everything, "the devil is in the details", but someone needs to be there to aid the healthcare consumer in those details. I strongly believe people and companies will need help and advice when the new system is finalized. Shutting out valuable resources and advisors, who add value in the purchasing decision and in resolving ongoing issues is the opposite of what is needed to take good ideas and turn them into good results.

An unbalanced recovery

When the recovery starts, the economy won't improve for everybody. There will be winners who emerge more quickly. And their ascent will be exponential. The laggards will be victims in a couple of ways: either as those gobbled by the fast recovering firms or who will continue to lose share and continue their desperate measures of survival. The key is to be in the first round of success. Recognizing how to operate efficiently (and not just with an embattled "leaner" staff), redesign process and harness and reengage talent will be critical to being one of the winners.