Tag Archives: ObamaCare

The Health Care Solution Can Be Found in the Dunkin Donuts Drive-thru


Almost every morning on the way to work I go through the Dunkin Donuts drive-thru and get a large coffee. On an average day there are two or three cars in line. If it is a school day and my timing is off there may be 4-5 cars in line. But every now and then there are 10-15 cars in line. The first time I saw the big line I thought they were short-handed. However, when I pulled up to the drive thru speaker and ordered my large coffee I was asked what kind of free donut I wanted with that. Yes, it was buy a large coffee and get a free donut day. My first thought was that I needed to lose fifteen pounds and don’t need the donut. My second though was that I could not believe how many people changed their morning routine to get a free high calorie food item that costs $1.20 because they purchased a coffee. As a psychology major I came to the simple realization that this is real human behavior in action.

This gets me to what I have always believed about the U.S. health insurance and health care market. I believe that the major obstacle to achieving significantly lower costs are laws and rules that prohibit normal and instinctive human behavior. If we simply unleashed the power of an individual to act in their own self-interest as they do to get a free donut, the entire market would react to meet the demand that this behavior created. Costs would drop like a rock as insurance companies, doctors, hospitals, and drug companies restructured their businesses to accommodate this new buyer. These lower costs would also free-up needed capital to cover those that need a safety net.

Most can’t imagine this new world because their minds are stuck in the current model. The new models would be very different. Maybe insurance products would not be as complex. I often reference how Steve Jobs was a uability fanatic. He cared about the fonts on the cell phone. If the iPhone wasn’t easy nobody would use it. Apply the same logic to health insurance. Would some company design an easy to understand product? I always make fun of a prescription drug plan that I saw that had 12 different ways to get reimbursed for a prescription. Does anyone really understand what a non-formulary non-network drug is?

A few years ago, I read that 87% of employees had one health insurance option through their employer. That may be a little higher today but still a low number. With almost every other product I purchase I have dozens of options. Dunkin Donuts has 20+ donut options. The local ice cream place has 30 flavors and that is just one place. How many different cars can I buy? A buddy of mine owns a vodka business. How many types of vodka or beers are there? Yet with health insurance I have one option and the price is going up 15% every year. Maybe there is a relationship between these two stats.

I read all these articles by brokers and others about working with employers to try and control health care costs. In my opinion, while it is necessary in today’s world, it is all garbage. It is a temporary fix. I know this may be blasphemous to say such things in the world that I travel but I really don’t think employers want to be going to work and worrying about how to control the claims of their employees. I often say that the best way to control costs is to not hire old fat people. The current market does promote that type of discrimination.

The two areas in then U.S. where there is easy access to capital are in health care and college education. These are also the two areas where costs are exceeding inflation by a mile and are the biggest burdens on our society. In health care employers pay a large part of the premium taking the obligation away from the individual. In education the student loan programs give loans in the hundreds of thousands of dollars to young people who have no job, no credit, and have no idea what $150,000 in debt really feels like. The solution to both is to change the incentives to drive down costs. It seems so simple that I really can’t understand what is preventing this from happening. If a free donut can change human behavior in this way then why not try it in health care and education. I bet it would work.

“Fire” – Obamacare is Not the Only Healthcare Plan That is Burning


I had a short conversation today with a woman that was somewhat surprising and maybe very telling. I was having a prescription filled and I spoke briefly with the women handling my order. I had to give her my new insurance card (third carrier in 3 years) and mentioned how I had to switch often because of price increases. She then told me that she had a $4000 deductible and close to $15,000 in debt from medical bills. I was shocked. Her employer is a major employer and more than likely a benefactor of Obamacare, yet her deductible is $4000 and she has medical bills causing financial duress. I would imagine this story plays out across America. It is a system that is more than broken. It is on FIRE!

In this political environment where Obamacare is in the news daily I think the problems with employer-based insurance gets lost in the discussion. It seems like people have created a one-to-one relationship between Obamacare and the Exchanges. It is the Exchanges getting huge increases. Insurance companies are leaving the Exchanges because of big losses. Many markets only have one option. And of course you won’t have to switch your doctor. All this noise may be hiding the fire that is also burning in the employer healthcare market.

On the employer side, some of the same dire stories are playing out except the press seems to be ignoring them. Sure, if you look for stories like I do you will find them, but they aren’t on the front page of the NY Times or the lead story on the Nightly News. Relative to the fire burning in the Exchanges the employer fire is smaller, but it is still a big fire. I am sure the woman at the pharmacy was much more concerned about her personal “fire” from her healthcare expenses than what is going on with the Exchanges.

If you have employer based insurance, then you more than likely have a single medical insurance option. Your contributions may have increased by 30% or more over the past few years. Your deductibles and coinsurance may have doubled. You don’t even know what coinsurance means. And the odds are greater than 50% that you don’t have enough money in a savings account to pay for your deductible if needed.

If you are an employer, you are tired of the regular rate increases and delivering bad news to your employees. You have not been able to give employees raises. You may have tried PEO’s, captives, wellness programs, cost shifting, HSA’s, self-funding on smaller and smaller groups, or private exchanges, to try and control costs, but at best, are these are temporary fixes if they even work at all. I was once asked how can you reduce health care costs. I said don’t hire anyone old. Is that what this will come to?

While the focus of Obamacare has been on the Exchanges, Obamacare technically covers health insurance in its totality. Employer based insurance is a part of it and it is part of the problem. Fixing health care includes all of it, not just the Exchanges. It is all related. Government intervention putting the squeeze on individual policies, small group, Medicare and Medicaid only shifts the problem to employer plans. And when an employer with a younger population counters that action by going self-funded this results in the younger, healthier people, not contributing to the pool. We heard this before, you need the young to participate for this to work. The recent race to get younger groups self-insured impacts the entire system. The game goes on.

We can all speculate as to what Trump is going to do to try and fix the healthcare problem. Based on what I have been reading his focus is not limited to the Exchanges. He recognizes the problems span the entire healthcare industry and that includes the problems with employer-based health insurance.

For benefits brokers it would be naïve to think that the only change to employer-based insurance will be the elimination of the employer mandate. There is a fire burning at the employer level too and this fire is not unrelated to the other fires burning on the Exchanges. Most of the conversations I hear, or articles I have read, reference the Exchanges as something totally separate from employer-based insurance. I believe one can’t be solved without significant changes being made to the other. Anticipating what those changes will be and becoming part of the solution is a big opportunity. Stay tuned because we are about to see what the next administration has in store.

Beware the Benefits Blind Spot


In the most recent election the one thing we learned was that the media, and probably most Americans, had a blind spot. For some reason, they did not want to see or hear what many Americans were thinking. And maybe, for some reason, people did not want to say what they were thinking, until that is, when they went to vote. Now this is not a political discussion as I am sure many are tired of political debates by now. But this does remind me of an article I wrote this spring titled, “Two health care stories – Which do you believe?”, that is worth bringing up again. In the article, I wrote about two stories being told about how to solve the health care problem in America. The problem is the noise created by one side was drowning out the other, creating a benefits blind spot.

Now that Trump has won the election the articles and chatter about how Trump is going to reform healthcare is growing at a rapid pace. The noise is getting loud again. Yet, as I read some of the articles, blogs, and chat going on, I am sensing that the benefits blind spot still exists. It may be getting even worse now that the Hillary plan of a public option appears to be in the rearview mirror. Having such a blind spot, when running a business, or when running for President, can have negative consequences.

I don’t recall where I read it but I once read that one of the keys to marketing and messaging is to try to say what the buyer is thinking. And buyers don’t always tell you what they are thinking, even when you ask. So, you need to try to understand the buyer. To do this you need to ask and answer some tough questions, as if you were in their shoes.

What do employers want? Do they want to be worrying about whether they just hired a person who has a wife at home pregnant with triplets? Do they want to be telling their employees their costs are going up again every year? When I spoke at a conference about Private Exchanges I asked some employers why they would be interested in a Private Exchange. You know what the answer was. They thought a Private Exchange would get them out of the health insurance risk business. It was an out for them, at least they thought so.

What do employees want? Or maybe we should be asking, what do consumers want?What is more important for most people, broader access or lower costs? Do they want portable insurance? Do they want penalties for not participating in a wellness program? Do they want national healthcare?

When you think back on the Presidential campaign there were signs everywhere of a potential Trump victory. Trump rallies were like sold-out rock concerts. When I was in Florida on Election Day I mentioned to my wife about how many Trump signs we saw and how few Hillary ones there were. The Trump campaign apparently saw things most didn’t. In the final days, he was campaigning in states like Michigan where most people thought he was going to lose. Maybe the signs were there but people either did not want to see them or were simply not looking. It appears Trump was delivering a message many people wanted to hear.

This may be happening in the healthcare market right now. It is not just ObamaCare that is broken. ObamaCare could be an unintentional distraction that may be creating a blind spot as to what is going on. There may be a silent majority that wants a different type of healthcare system. And they won’t tell their broker or insurance carrier because in their eyes you may be part of the “establishment”. And the establishment often does not want change.

To prepare your business for the future one needs to understand what the future will look like. To do so will require that you eliminate the blind spots. I have shared my personal views about where I think the market is going several times in the past. The Trump election has changed it a little but I too have to be careful so that I don’t bias my own views. If the healthcare market goes to where I think it is going I believe there are big opportunities for those that provide value in the new market. But what about those that don’t change. Well, it was Barack Obama that said clearly, “Elections have consequences.”