Our Healthcare Payment System is Beyond Broken

December 9th, 2019

A family member recently experienced a healthcare emergency.  Said family member was taken to an emergency room known to be in that family’s network.  The ER staff was great.  After stabilizing the patient, the ER doctor said the patient needed to be transported to a different hospital, still within network, for evaluation and further testing that hospital could not perform.  The patient asked if personal transportation were allowed.  The doctor was adamant that the patient needed to be transported by ambulance. 

Fortunately, the patient is on the road to recovery.  Unfortunately, the patient received an almost $1,200 bill for an ambulance ride because the ambulance was out of network.  The patient was never consulted on choice of ambulance providers.  Had the ambulance been in network, the ambulance company would have been reimbursed $342.  To add insult to injury, the family has already hit its in network deductible, making the full amount due by the family.

Imagine if we all ran our businesses that way.  If I told someone, “Sorry, your labels took longer to produce than we thought, here’s your new bill,” I’d either be out of business or in court a lot.  I have come to find out that it is common practice for ambulance companies and even anesthesiologists that work at hospitals to be out of networks, even if a person goes to an in network hospital. 

The healthcare payment system needs radical changes.  Here are a few ideas:

  1. If hospitals charge non-insured people more than insured people, they lose non-profit status.  How a hospital systems that nets hundreds of millions of dollars in operating income is a non-profit is beyond me.  Both the Mayo Clinic and Cleveland Clinic make hundreds of millions of dollars a year and pay no income or property taxes.

https://en.wikipedia.org/wiki/Cleveland_Clinic

  • If you go to an in network facility, all services determined to be medically necessary must be covered as in network by the insurance company. 
  • All prices must be available online in a format that a grade schooler can understand.  “Facility fees” should be banned.  As part of Obamacare, hospitals are allowed to charge additional fees for using their facility even if you see a doctor that is employed by that hospital. 
  • Any relationships that involve a hospital, doctor, or other service provider receiving payments of any kind must be disclosed.  I wonder if the ambulance company pays the hospital a “Provider fee” or some other payment that would be an illegal kickback in any other business. 

Doctors, hospitals, and insurance companies have to understand that people are incredibly frustrated by the current payment system in our country.  Insurance companies are the easy targets for politicians and the media.  I submit they are part of the problem, but so are the doctors and hospitals.  As our Democratic presidential candidates love to say about successful people in the private sector, “It’s time to hold them accountable.” 

A Leader’s Actions Matter

December 2nd, 2019

For you non-football fans out there, a little background is necessary for this post to make sense.  A little over two weeks ago, the Cleveland Browns played the Pittsburgh Steelers on national television.  The Browns won the game, 21-7, but the real story was a large fight that occurred at the end of the game.  Myles Garrett, the Browns’ star defensive end, sacked the Steelers’ quarterback, Mason Rudolph.  They jostled with each other on the ground.  Garrett got up and tore Rudolph’s helmet off.  He hit Rudolph in the head with the helmet.  The NFL suspended Garrett indefinitely, suspended a Steelers’ player, and fined numerous players and both teams. 

An enterprising Clevelander came up with a t-shirt that says, “Pittsburgh Started It.”  It has become wildly popular in Cleveland.  So popular, in fact, that the Browns’ rookie head coach, Freddie Kitchens, received one from his daughters.  He wore it out in public last week and a fan took a picture of Kitchens with the shirt on.  As you might expect, it went viral.  Of course, the Browns and Steelers played this weekend.  The Steelers won the game with their 3rd string quarterback and three other great offensive players not playing.  The loss effectively ended the Browns’ playoff dreams. 

Kitchens is adamant that the shirt had nothing to do with the game.  He said he wore the shirt because his daughters wanted him to wear it.  He’s right about the shirt not mattering but he apparently does not understand that the act of wearing the shirt did indeed matter.  Throughout the year, the Browns have been undisciplined.  They are the most penalized team in the NFL.  They have had numerous players ejected from games and fined for late hits.  Players have been suspended (and even cut) for being late to practice or missing team functions.  At times, the team looks confused on the field. 

People follow a leader’s actions.  Kitchens can talk to his team all he wants about discipline.  He has said numerous times, “I don’t coach penalties.”  The players, like all people, pay more attention to what he does than what he says.  Until he learns that, the Browns will continue to struggle.  It’s an old cliché: Actions speak louder than words.  That is especially true for leaders. 

A Pre-Thanksgiving Laugh

November 25th, 2019

Last week, I used my grill for the first time in a while.  I lit it and went in the house while it preheated.  When I came back out, I saw flames shooting out the bottom of the grill.  That’s generally not good.  I opened the lid to see a massive fire under my grates that was burning incredibly hot.  It was dark and I couldn’t see what was burning.  After a while, the fire burnt itself out. 

The next day, I went outside to see what happened.  I opened the grill and pulled out my grease pan.  I found a bunch of burnt acorns and other nuts in the bottom of the grill.  An enterprising squirrel decided to store his winter food in my grill.  As my wife quipped, “He wanted his chestnuts roasting on an open fire.” 

I hope this story brought a smile to your face as it did mine, singed eyebrows and all.  Have a wonderful Thanksgiving.   

Can We Find a Presidential Candidate Better than an 8th Grader?

November 18th, 2019

Our son recently ran for class office.  When the campaigns started, the candidates offered platforms that appealed to 8th graders: more recess, fast food for lunch, no homework, and so on.  In a conversation with him, he admitted that his “Chik Fil A” for lunch everyday promise was bogus.  “But Dad, it’s fun to talk about,” was his rationale for his campaign platform. 

With the tease from a Trump official that a “middle class tax cut” could be coming, it is official that every significant candidate in the 2020 presidential campaign is campaigning like an 8th grader.  Tax cuts. Free college. Free health care. Debt forgiveness.  Not one has offered any facts on our fiscal situation.  I’ll present a few:

  1. The US government continues to spend more than it takes in.  Tax revenues are up, but spending is up more.  That’s not sustainable.  Some combination of tax increases and spending cuts is necessary at some point.
  2. Nothing is free.  Every country with nationalized healthcare has a VAT (value add tax).  That’s the most regressive tax politicians have ever come up with.  If we continue to want the government to provide more (healthcare, education, defense, put in your pet project), everyone will pay more.  For all of you that think the rich will pay for everything, remember this warning.  You’re going to pay too. 
  3. There is a lot of talk about the wealthy paying their “fair share.”  As I’ve written in the past, I hate the word fair.  We all have our own definition of fair.  The reality is taking 100% of the income of the top 1% of earners would barely cover our deficit.  See Table 1.  The top 1% earned $2 trillion in 2016 and paid $538 billion in taxes, leaving $1.462 trillion.  Our deficit is over $1 trillion.  I’m pretty sure a 100% tax rate will have an impact on how much people in the “evil” 1% work. 

It’s time to have an adult conversation on taxes and spending.  Unfortunately, it appears the adults have left the room.  We’re left with the equivalent of 8th graders running for president.  Sad. 

A Touching Story for Veterans Day

November 11th, 2019

Last week, William Wright, a Vietnam Veteran in Northeast Ohio, passed away.  Through the internet and local radio stations, word spread that he had no family.  Over 1,500 people attended his funeral service, a vast majority of whom had never met him.

In an era where the internet is blamed for creating division among Americans and we seemingly cannot agree on anything, this story reminded me that we are still capable of doing good when we unite around a common cause.  

Please click the link below.  The video will bring tears to your eyes.  Rest in Peace, Airman Wright.  Thank you for your service.  Thank you to all of our veterans. 

https://medina-gazette.com/news/178202/even-in-death-no-soldier-left-behind-video/

Career Advice

November 4th, 2019

Last week, we were asked to host a group of students from a local college that are interested in business.  I put together some talking points to share with them.  I have shared similar advice with new hires at I.D. Images.  It has been well received.  Let me know what you think.

Below are some thoughts I put together for our discussion.  Remember, free advice is worth what you pay for it!

  1. You and only you own your career.  Not HR.  Not a parent.  Not a significant other.  You.  Invest in you.
  2. We are taught to think linearly.  Second grade comes after first grade, etc.  Careers aren’t linear.  When I was 23, my long term goal was to own a business.  I took steps to get there.  Those steps weren’t linear.  Think of your career as hiking up or climbing a mountain.  Sometimes you go down before you go up.  Focus on the summit.  Have goals.
  3. The more helpful you are, the more people will want to help you.  Figure out where there are needs and help fill them.
  4. Ask questions.  The worst you’ll hear is no.  Most people want to help and want you to succeed.  Take advantage of their willingness to help.
  5. The axiom, “Showing up is half the battle,” is mostly true.  I would change that statement a little, “Showing up with a positive attitude is more than half the battle.”
  6. Learn your industry.  You don’t need to become an expert in your industry but you have to be knowledgeable.  Subscribe to trade publications.  Talk to industry veterans.  Learning doesn’t end when you leave school. 
  7. Network, network, network. See #3 and 4.  Network within and outside the company.  Network within and outside your industry.  Networking isn’t just connecting on LinkedIn.  Networking isn’t asking for help.  Networking is understanding the other person and figuring how you can help him or her.
  8. Have fun!  Not every day will be fun.  But as a general rule, if I’m having more bad days than good days, I think that’s a sign to change something.  If you are consistently having bad days, change something or let someone know. 
  9. University of Chicago Booth School of Business education summarized in two statements:
    1. Options (meaning choices) are valuable.  Create options for yourself.
    1. CIMITYM.  Cashflow Is More Important Than Your Mother.

Profits Matter

October 28th, 2019

Over the next few weeks, the economy will be at the forefront of the news.  The Federal Reserve meets this week.  Jobs data comes out Friday.  Expect a lot of noise about the US and the world economy. 

As I’ve written, I think the US has already entered a slowdown, certainly on the industrial side.  A slowdown does not mean a recession (classically defined as two consecutive quarters of negative GDP growth) but it could be a precursor to a recession.  If we have a recession, I expect it to be relatively mild, especially compared to 2008 -2009. 

I came across a great chart that is pictured below.  It came from the Daily Shot from the Wall Street Journal.  It is a great resource on all things finance and the economy. 

Corporate profits are falling.  That’s never a good sign.  Despite what some presidential candidates keep saying, profits are a good thing.  Without profits, there is no investment.  That means no new equipment, no raises, no hiring.  Profit is not a dirty word! 

As my statistics professors repeated over and over, “Correlation does not mean causality.”  The decline in profits might not be the cause of a recession but the correlation over time certainly makes me think this is a metric worth paying attention to. 

https://blogs.wsj.com/dailyshot/?mod=djemDailyShot

A Positive Retail Experience Proves the Need for Bricks and Mortar Stores

October 21st, 2019

I often find disappointing customer service experiences to write about.  Given consumers’ obsession with low costs, many traditional retailers have cut training and staff.  Fortunately, Best Buy appears to have invested in service to differentiate itself.  

About a year ago, we bought our son a cover for his phone.  Knowing how a teenage boy operates, we bought him one that had a lifetime warranty.  I remember thinking there’s some catch to the guarantee we had. 

As expected, he dropped his phone for the umpteenth time and the cover broke.  We finally got around to taking him back to Best Buy this past weekend.  We showed them the receipt, which they said they could have looked up, and he had a new phone cover installed in a few minutes.  It was such a positive experience, we looked at televisions.  After explaining what we were trying to do, a helpful customer service rep in the TV department offered a free in-home consultation. The pleasurable experience dealing with an inexpensive phone cover might lead to a large sale of an in-home theater system. 

To state the obvious, online sales are going to continue to grow, especially if companies are willing to subsidize delivery costs.  But “bricks and mortar” retail still has a place.  Returning or replacing items online can be a tortuous process; that’s why the biggest e-tailer in the world bought a retail store chain and has partnerships with others for product pick-ups and product returns.  The best way for traditional retail to compete is to offer great customer service.  As our world becomes increasingly impersonal, there’s a great opportunity for all businesses to create connectivity through world-class service. 

Common Sense Isn’t So Common

October 14th, 2019

I was traveling with my wife recently.  Displaying chivalry, which I rarely do, I grabbed my wife’s backpack as we boarded the plane.  I had a backpack on and placed her backpack on top of my roll on bag.  As I started down the jet way, the gate attendant said, “Sir, I cannot let you board the plane with three bags.  You’re only allowed two.”  The gate attendant saw me take my wife’s bag.  She knew I wasn’t traveling alone and trying to sneak a bag on.  After giving the gate attendant a quizzical look, I handed my wife her backpack, saying nothing.  The gate attendant checked us in.  As soon as we passed her, I placed the backpack back on my roll on bag. 

I don’t know if the gate attendant was having a bad day or just didn’t like me.  Fortunately, I thought the better of making a comment and the situation did not escalate beyond thirty seconds of annoyance. 

I really wish I made stories like this up.  I understand “the rule” that you are only allowed two carry-on bags per person.    A functioning society needs rules.  A functioning society also needs common sense.  Without both, bad things happen. 

The Manufacturing Slowdown is Here

October 7th, 2019

On July 22, I wrote a blog with the title, “Has the Industrial Recession Already Started?”  Freight companies started warning about a slowdown. 

Recent data from the ISM (Institute for Supply Chain Managers) US manufacturing purchasing managers’ index indicates manufacturing contracted in August and September.  These are the lowest readings of this index since June 2009.  Tariffs matter.  When costs go up, people buy less.  While manufacturing is a small part of the overall US economy, do not underestimate how closely tied many service industries are to manufacturing.  Expect the service sector to see a slowdown soon. 

Job creation has slowed.  During the last three months, an average of 145,000 new private sector jobs have been created in the US versus 214,000 per month in the same period last year.  To continue expanding (absorbing new entrants into the workforce, it is estimated the US needs to create 150,000 jobs per month.  Also, job growth statistics have been revised down for two of the last three months.  On a positive note, labor force participation continues to edge up, indicating more people currently outside of the workforce are looking for jobs. 

Bill Belichick, the incredible coach of the New England Patriots has a few sayings I like.  The first is, “I can only go by what I see.”  The numbers are reality.  The economy is slowing.  I don’t expect a protracted or terrible recession, especially compared to 2008 – 2009, but the economy has slowed.  The second “Belichikism” I love is, “Do your job.”  None of us can control the macro economy.  We do have some control over our own micro-economies.  Focus on doing your job and you’ll be fine.

https://www.cnbc.com/2019/10/01/us-manufacturing-economy-contracts-to-worst-level-in-a-decade.html

https://www.wsj.com/articles/u-s-private-sector-added-135-000-jobs-in-september-11570021586?mod=article_inline