My eight-year-old niece, Jackie, is going through a phase. She is an irresistible sprite with tangled nutmeg hair and a smile that crescents atop a dimpled chin. She is also obsessed with moral conundrums – the more macabre, the better.
“Would you rather be burned to death or buried alive?” Her earnest angelic face shines at me like a full moon. I hesitate. “Ummmm, none of the above, honey. I want to live until I am 99, fall asleep in a chair and not wake up.”
“That’s not a choice,” she says defiantly. “Okay, okay, how about…would you rather be eaten by a great white shark or killed by a python?” My sister-in-law shakes her head, “She’s been asking these for six months.” “As long as she doesn’t want to dress up as Lizzie Borden for Halloween, you should be okay,” I say flippantly. Jackie is already locked and loaded with another Catch 22 that involves being either bled by leeches or eaten by cannibals. As if attracted by my squirming and the topic of blood in the water, my boys immediately appear, ready to frenzy on the gory questioning.
My 12-year-old asks, “Dad, what does it mean when they draw and quarter you?” He had obviously been mulling over this particular mode of torture for some time. “What’s drawing a quarter?” Jackie asks. This question immediately plunged me back to my childhood and the memory of a secret place known as the Republic of Richard Stans.
Richard Stans was the country adjacent to but unseen by the USA, sort of like Canada. Each day in class, we would stand and pledge allegiance to the American flag and to the Republic of Richard Stans – one nation, invisible, with liberty and justice for all. At Christmas time we sang Silent Night about the portly celibate “Round John Virgin – mother and child.” Perhaps John was so corpulent he symbolically represented mankind – men, women and children – or maybe he just ate the mother and child. We also sang The Battle Hymn of the Republic: “My eyes have seen the glory of the coming of the Lord. He has trampled through the village where the crates of wrap are stored. He has loosened all the lighting on his terrible Swiss sword, his troop is marching on.” I had no idea what that meant but I knew one thing: God would not even need to use a sword. He could drown the entire Confederate States just by rerouting the Mississippi if he wanted to. The Civil War was confusing. It was an oxymoron like “jumbo shrimp” and “cruel to be kind.” How could it be civil if it was a war?
Yet, these were the rote lyrics of our adolescence; we recited these anthems and carols with earnest incomprehension. Through the filtered lens of a child, everything took on different meaning. Other words or expressions confounded me too, such as mysterious ailments and medical conditions. I remember distinctly hearing my Mom telling someone that Mr. Porter from across the street had “Old-Timer’s Disease” and didn’t know where he was anymore. One of my Mom’s friends had “Carpool Tunnel” syndrome, where her hands hurt from driving her kids everywhere, and I guess she got it going through the long tunnels that stretched to Pacific Coast Highway from Santa Monica. Speaking of carpools, I did actually don a swimsuit at age six when told the car with a pool would be arriving to pick me up. My brother told me when people were choking in restaurants you used Heineken Manure on them. I assumed this emergency technique used beer and horse dung and – which, like ipecac, would force the disgorgement of an offending obstruction.
Later as a collegiate, I was introduced to Richard Brinsley Sheridan’s The Rivals whose memorable character, Mrs. Malaprop, had a knack for inserting contextually inappropriate words that sounded vaguely similar to appropriate ones and in doing so, created disastrous, humorous results. As a baseball player, I knew that athletes were famous for their butchered grammar and syntax. Yogi Berra made a career out of malaprops: “You guys over there, pair up in threes.” “The future ain’t what it used to be.” And my favorite was Carmen Berra telling husband Yogi, “I took (son) Tim to Dr Zhivago today.” Yogi replied, “What the hell is wrong with Tim now!”
Poor former President W was guilty of routinely felonious phrases. Nicknamed “the most misunderestimated communicator of our time,” President W was unjustly maligned. He was one tough verbalizer. To Saddam Hussein, he challenged, “You better disarm, or we will.” To Congress, he extolled, “The law I sign today directs new funds…to the task of collecting vital intelligence…on weapons of mass production.” About life with Mrs. Bush, he was rumored to muse, “We have a good time together, even when we are not together.”
As my far-off look fades, I once again turn to eight-year-old Jackie, who’s bugging me for an answer to her query on the age-old practice of “drawing quarters.” I tell her it’s too hard to explain and to go away. She persists. I finally decide to tell her about Joan of Arc and how she was burnt at the stake for being a heretic. I figure that gives her something to cut her teeth on. I explain how she was canonized and how the English and French had a history of conflict. She seems quite pleased with the explanation and runs out of the room. In the adjacent den, I hear her explain, “Mommy, I just learned about Joan from the Ark who was shot with a cannon, burned with a steak and wore armor like the knights in King Arthur. Do you know the French have problems?”
The Mesozoic era was an epoch of magnificent and marvelous social and industrial evolution. It could be divided in to three principal periods: Triassic, Jurassic and the Cretaceous period.
The 1950’s and early 1960’s were the zenith of our modern society’s Jurassic age. T-Rex fathers roamed the landscape bringing order, power tools and Old Testament justice to a post WWII primal world in desperate need of control and benevolent, unilateral authority. The T-Rex possessed an abnormally large mouth from which he would chew out loud, belch, curse and devour any weaker form of life. He possessed a great sweeping tail that could strike with unusual dexterity – hitting anything, including his own children for the slightest infraction. His arms were unusually short which precluded him from helping with chores or changing diapers. He was like a biblical God – – always angry and with lots of rules. He was the perfect working machine – an eating, sleeping, and laboring automaton that was preprogrammed to improve every aspect of his white picket world.
As in nature, his progeny were highly vulnerable. It was a time of great civil upheaval. The ground was rocked by the volcanic violence in the inner cities. There were wars glowing on the distant edges of night fought in the far-off jungles of Southeast Asia. In every valley, long-haired, social parasites advocated sex, drugs and rock and roll – – all vying to corrupt the hearts and minds of the T-Rex’s children. He furiously scanned his horizon lines for signs of sedition and malevolent movement. Threats must be dealt with swiftly and decisively. It was a fight between good and evil and the largest, most fearsome creature to ever roam the earth was not about to yield to any living thing – a Russian, a hippie or even a Russian hippie.
The female, or She-Rex, gently drafted behind the T-Rex. This was a time where social conformity and home economic classes promoted feckless obedience and quiet, efficient martyrdom. She would exist to protect his progeny, cleaning up after T-Rex and moving stealthily in the shadows subordinating her identity to the greater purpose of ensuring the perpetuation of her own species. She made and cleaned the nest. She tenderized everything and she ensured that no one’s lateral incisors went more than six months without being cleaned by a dentist.
Later in her life, She-Rex would realize that the notion of the nest and the myth of marriage were propaganda promulgated by T-Rex traditionalists who did not understand a balanced, more egalitarian world. Her world would also soon change. She discovered she had choices and that her instincts and ideas mattered. She suddenly understood that she was as essential to the family’s survival as her T-Rex partner. In fact, she was pretty sure that if she decided to stop doing the laundry, the T-Rex would be forced to go to work in dirty underwear. This epiphany marked the beginning of the Cretaceous Period.
The Cretaceous Period of the 80’s and 90’s ushered in an era of permanent cooling from the days of hot, humid chauvinism. Some trace the decline of the T-Rex to this very time. A handful of revolutionary historians claim that liberal activists or specifically, Jimmy Carter, killed off T-Rex. Other more insightful paleontologists speculate that the T-Rex did not die but went into hiding. In an Ice Age of emasculated political correctness, replete with its time outs, “I” messages and liberated females, the T-Rex headed for the proverbial hills. The T-Rex father – the provider, the king, master and commander would soon find himself an anachronism – – barely recognizing the wilderness of his youth and lamenting his own inevitable exile.
He still rises each morning as he has for eight decades, stretching weary bones and putting his nose into the salt air that hangs in a marine layer of fog over his seaside home. He faithfully scans society’s horizon lines in the form of newspapers, the Internet and television – – and does not like what he sees. He exerts his right to free speech by sending poison pen letters to feckless politicians rebuking them for their fiscal recklessness and their ignorance to the irrefutable fact that free market capitalism and personal responsibility are the cornerstones to any great Democracy. He is offended by Washington’s patronizing indifference and lack of experience – many of those who “represent” him have never run a company, managed a payroll or had to make difficult decisions involving their own money.
As he looks across the blue infinity of his beloved Pacific Ocean, his back is turned to an America that once rewarded ability and persistence – – only now choosing to alter the definition of success out of some horribly misguided sense of social equity. Charlatans, social engineers and unqualified liberal public servants are slowly mortgaging his final days and the future of his children. Society now considers his unflinching values of self-sufficiency, corporal punishment, personal responsibility and meritocracy to be quaint, nostalgic echoes of a simpler and less sophisticated time.
Apparently, he muses, politicians have decided people can no longer think for themselves. He wonders if there is not some undercurrent of truth in the notion that the next generation lacks the stamina to stay informed enough on the issues to deserve to vote. Perhaps we could make people take a test….
To those who might question his steel-trap logic, impugn his well-reasoned opinions, attack his seeming lack of empathy or try to leverage this great nation’s future with expanded entitlements and reckless foreign policies, he has just two words, “Piss off!”
His numbers are clearly dwindling. Yet, he remains faithful to his creed and to his She-Rex, for everyone knows that a real T-Rex mates for life. Their heritage is another place and time. They are bonded by their simple act of survival in a turbulent and treacherous period and in having weathered the tempests together, they share a mutual respect that runs deeper than any sediment of the past. They have integrity and grit. They are the last of an extraordinary breed whose over-sized footprints and well-worn paths are disappearing – swept by winds of change and overgrown in a world so deafened by the din of self-interest that one can barely hear them as they share their stories of living and raising children in an epoch as wild and unrestrained as any time in history.
We live in a society that loathes uncertainty – particularly the unintended consequences that sometimes result from a catastrophic event or in the case of PPACA, landmark legislation. Wall Street and the private sector crave predictability and find it difficult in uncertain times to coax capital off the sidelines when the overhang of legislation or geopolitical unrest creates the potential for greater risk. Despite our best energies around forecasting and planning, some consequences, particularly unintended ones – only reveal themselves in time.
In the last decade, employers have endured an inflationary period of rising healthcare costs brought on by a host of social, political, economic and organizational failures. There was and remains great anticipation and trepidation as Congress continues to contour the new rules of the road for this next generation’s healthcare system. Optimists believe that reform is both a way forward and a way out of a mounting public debt crisis and a bypass for an economy whose arteries are clogged by the high cost of medical waste, fraud and abuse. Cynics argue reform is merely a Trojan Horse measure that offers an open invitation for employers to drop coverage and for commercial insurers to “hang themselves with their own rope” as costs continue to spiral out of control — leading to an inevitable government takeover of healthcare.
Meanwhile, leading economic indicators are flashing crimson warning signs as recent stop-gap stimulus wears off and long overdue private/public sector deleveraging results in reduced corporate hiring, lower consumer confidence and increased rates of savings. The symptoms of a prolonged economic malaise can be felt in unemployment stubbornly lingering around 9.2% and a stagnating US economy that is struggling to come to grips with the rising cost of entitlement programs. Across the Atlantic, the Euro-Zone is teetering as Italy and Spain (which represent more credit exposure than Greece, Portugal and Ireland combined) stumble toward default. Despite these substantial head winds, US healthcare reform is forging ahead – – right into the teeth of the storm.
Closer to home, states have begun to debate and propose legislative amendments to their own versions of reform as they attempt to reconcile a declining tax base with the soaring obligations of Medicaid and collectively bargained pension and long term care. Should Congress finally agree to allow an estimated 28% of fee reductions in Medicare provider reimbursement to become law, the private sector could see as much as a 400bps increase in core medical trends resulting from cost shifting – pushing trends back into the mid-teens. Hospital systems, providers and healthcare agencies are bracing for cuts and potentially looking to the private sector as a source for more dollars. All of this is building at a time when certain industries are nearing a “point of failure” – – an inflection point where healthcare spend as a percentage of revenues and operating profit will either consume earnings or completely erode employee take home pay.
Many are looking ahead to 2012 as a “burning bush” year – a seminal presidential and Congressional election where political results will help clarify the direction of reform – pivoting toward the reinforcement of employer sponsored healthcare as catalyst for market based reforms or merely a cementing of the incentives that seem to encourage the deconstruction of employer based coverage. With 33 Democratic Senate seats up for reelection and 10 GOP spots up for grabs, the entire composition of our government could change – or perhaps not. In the interim, the fiscal year 2012 will continue to show 44 states projecting budget deficits totaling $ 112B.
A recent controversial McKinsey study forecasted that as many as 30% of employers or 54m individuals covered under private healthcare would be “dumped” into public exchanges as of 2014. This number is in sharp contrast to the 12.6mm assumed by the CBO (approximately 7% of 180mm privately covered individuals.) The influx of 41.4mm unbudgeted insureds – all eligible for federal subsidies of as much as $5,000 – would upend the initial CBO estimate of $ 140B deficit reduction over 10 years and result in an increase in public debt in just six short years. The ensuing debt arising out of PPACA over the periods 2020 to 2030 could easily eclipse $ 1T of additional public debt.
Any economist can confirm that all unsustainable trends eventually end. Rising premiums, public to private cost shifting, perverse and unaligned incentives for care, rationing and a host of other stop-gap issues are all doomed to be replaced by a system that either drives efficiency through market reform or through the single payer procurement of healthcare. It will take at least five more years and three election cycles for this marine layer of debate to lift. Unlike 1996, there is graveyard silence arising from the private sector. Employers seem to be stuck in one of the several stages – – often attributable to the dead and dying.
Denial — “This can’t be happening, not to me.” One could argue that this generation of business leaders has drawn the short straw when confronting the decisions we will need to make to keep our businesses viable in a period of sustained high unemployment and economic stagnation. Many larger employers are nervous regarding reform but somehow feel that reform is more likely to happen to other people – smaller employers and the individual marketplace.
These firms do not want to believe that the myriad unintended consequences associated with reform could impact their bottom line. Denial has been a principle ingredient and willing accomplice to healthcare cost inflation in the last decade. For many employers, the inability to confront the fact that many of their own business practices – insistence on open access PPO plans, less medical oversight and utilization review, limited appetite for employee disruption, inability to dedicate the time or resources to assess the health risks embedded within their own population of employees – – has them resigned them to a cycle where premiums are increasing faster than wages and corporate earnings. While costs continue to rise, many employers have simply focused on stop-gap year over year cost shifting. Others prefer to abdicate to commercial insurers who have failed to drive affordability and improved access. It comes down to believing you can make a difference and a willingness to confront the hard choices – choices that could fundamentally drive market-based reforms.
Anger — Many find themselves simmering with resentment, hunting for villains whose feet they would seek to lay all blame: “It’s those damn insurance companies!” “It’s that Socialist in the White House!”” It’s the failure of regulators to do their job in managing the complexities of the healthcare delivery system. “It’s the big hospitals!” “It’s the drug companies!” It’s the rich and their lack of empathy” “It’s the poor and their lack of personal responsibility” The list of culprits could fill a thousand postal office walls.
A polarized Congress, pariah hungry media and a workforce unwilling to understand that access does not equal quality means that change cannot happen without some noses getting out of joint. Yet, we understand clearly that if we want to reduce our exposure to the coming storm of public to private cost shifting, we must engage and move on from our own anger. As 35m additional Baby Boomers increase the double the ranks of Medicare to 70mm by 2030, total health spending will near 30% of the GDP and Medicare costs are expected to eclipse $ 32,000 per enrollee up from $12,000 in 2010. Facing the magnitude of these suffocating entitlement costs, we will either embrace private sector, market-based reforms that fundamentally realign the current delivery system or we will default into a more regulated, lowest common denominator system that will rely on rationed access and reimbursement as a means of controlling cost.
Bargaining —”I’ll do anything for a few more years.” The third stage involves the hope for postponement. The lion’s share of stakeholders in healthcare can be found milling in this no man’s land of indecision. While hope is not a strategy, a surprising number of firms are clinging to the dream of “repeal and replace” legislation. Others are merely expecting Washington to do what it does best – prolong debate and delay implementation long enough to afford them enough altitude to pass the problem on to someone else. The tea leaves do not look promising for fundamental legislative intervention that would disrupt the momentum of reform. Repeal is unlikely. Employers must understand that 2014 will require certain decisions. Fundamentally employers will have one of four choices:
•Take the Money And Run – Do I drop coverage, pay the penalties associated with moving employees into the public exchange and pocket the difference?
•Drop Them But Ensure A Safe Landing – Do I drop coverage, grossing all employees up to my current level of subsidization so all might afford coverage in the public exchanges?
•Create a Consumer Plan of Your Own – Do I move to a private exchange or defined contribution approach to financing my medical benefits to cap expenditures but remain involved as a sponsor of my benefit programs?
•Control Your Own Destiny – Do I continue to offer group based private insurance believing that employer sponsored health coverage is more likely to experience lower trends if properly managed and that medical coverage remains a fundamental part of my company’s ability to attract and retain employees.
Depression — “What’s the point?” The problems we face as a nation and in business can feel overwhelming. We have the misfortune of having to confront $38T in underfunded Medicare liabilities, $ 14T in public debt, and a potential double dip economic recession arising out of any number of black swan events – – credit defaults abroad, domestic hyper-inflation or a slowing of Chinese GDP. It seems inevitable that we must head into a period of profound austerity. Facing the potential of sustained uncertainty can burden any decision maker to the point of inaction. While some period of reflection is healthy to any organization, people must take a position, plan around the certainty of change, grieve over the passing of an epoch and move forward with a renewed conviction to address the challenges that lay ahead.
Corporate depression may manifest itself in a lack of willingness to engage in the discussions or conduct financial modeling required to understand what scenarios will best benefit your organization. It is a strange period where we express grief knowing that the traditional employer/employee social contract has changed forever in a hot, crowded, global marketplace.
The sense of urgency to explore alternatives to traditional employer sponsored coverage will led by retail, agriculture and hospitality while professional services, technology and collectively bargained public sector plans may feel more obligated to remain on a course of employer sponsored coverage. Planning prior to 2014 is essential to be position a firm to react to opportunities that may present themselves. Should a key industry competitor choose to discontinue coverage and use operating overhead reductions to drive down prices, what will you do? Many have promised to not be first but not be third in line to change.
Acceptance — “I can’t fight it, so I better prepare for the inevitable.” 2014 will mark the beginning of a movement toward or away from employer-sponsored healthcare. It is more likely that most will be carefully weighing election results, the first two years of public exchange performance and the actions of their competitors to determine a course forward.
2014 is forcing discussions over the will of the private sector to drive market-based reforms, and the review of decades-old beliefs regarding direct and indirect compensation plans. Employers that have navigated these phases of change and are now aggressively accepting the new normal of healthcare and will most likely end up as self insured, in touch and aware of their own population risks, directing patients to primary care based system that reward providers based on quality and efficiency and are committed to driving healthier behaviors and personal compliance with to reduce chronic illness. Employers will realize returns on these efforts as aggressively managed plans will likely experience lower single digit medical trends. These firms will be reticent to abdicate management of healthcare costs to a public exchange but instead focus on educating and activating their workforce to the personal and corporate dividends of change.
Some employers may convert to defined contribution plan designs such as cafeteria plans to allow for a more diversified workforce to allocate finite dollars to purchase coverage that make most sense for their unique needs. Health benefits may become part of an overall defined contribution approach to retirement and benefit planning – affording each employee to allocate their dollars to their circumstances and in doing so, accept their circumstances more freely because they have choice in where they spend their dollars.
Reform is a process and like many of the vagaries in life, every person and each business will react differently to the stimulus of change. Every problem is a disguised opportunity and with it, comes the added dividend of using change as a catalyst for reassessing your strategies to attract and retain employees. It’s about making decisions by commission rather than omission. And, the sooner an employer navigates these stages of change, the more likely it is that healthcare reform will happen for them – instead of happening to them.
…..I know the rent is in arrears
The dog has not been fed in years
It’s even worse than it appears
but it’s all right.
Cow is giving kerosene
Kid can’t read at seventeen
The words he knows are all obscene
but it’s all right….
Oh well a Touch Of Grey
Kind of suits you anyway.
That was all I had to say
It’s all right.
Touch of Grey, Robert Hunter
The first grey hair showed up when I was seventeen. This sudden loss of melanin in this particular follicle coincidentally followed my first Grateful Dead concert. It seemed a novelty at the time – – a rare phenomena like corn snow that would occasionally fall for two minutes every few years in Los Angeles and then melt quickly against the wet, warm asphalt. That single hair was a harbinger of a silver flood that would transform me from ingénue to elder statesman by thirty.
Dickens once said that “Regrets are the natural property of grey hairs.” While scientists insist the process of graying is genetic, I am convinced that I earned most of my silver the hard way. I am a firm believer that each grey hair is a “reward” for life’s travails: telling your boss what you really think, hitting a seventeen at the blackjack table with your semester’s spending money on the line, losing your toddler in a department store for an hour only to have her emerge laughing from a circular clothes rack where she had watched you frantically search muttering “she’s going to kill me. She’s going to kill me!” It’s having your computer literate child hack through every parental control application you have installed. It is a call at 3am.
Some people run from the grey. They use cosmetic products to mask the salt that starts to sprinkle in their hair. Guys, I hate to tell you but those products don’t seem to really work for men. I see a guy who I know is pushing fifty but he has hair blacker than a bowling ball at Rip Van Winkle lanes. It’s not good genetics. It’s bad shoe polish. And there are those who nurture their single strand of hair that could actually stretch across the state of Utah. Lovingly, each morning they wind that massive black mamba around their head, carefully avoiding swim parties, wind tunnels and head massages.
Grey is a state of mind. Youthful Satchel Paige, the oldest major leaguer of his day debuted for the Cleveland Indians at age 42 after years as a star in the Negro Leagues. He was the first African-American player in the American League. Ever the ingenue, Paige was constantly asked about his age. He would rhetorically ask, ”if you did not know how old you are, how old would you be?”
For me, it’s only as a result of mirrors and cameras that I am reminded that I have physically yielded to middle age. I still feel twenty and as my spouse will attest, I maintain a highly childish and warped sense of humor and see comedy everywhere….in growing up in a house full of boys, Will Ferrell, neo-conservatives, movies like This is Spinal Tap and The Big Lebowski and well, everything. Certainly my inability to be serious for sustained periods of time has sometimes proved a social impediment. However, immaturity occasionally serves as a tender bridge to a surly teenager or a disgruntled friend. It is also healthy. It’s a known fact that one’s immune system is reinforced through the simple act of laughter. Laughing suppresses the release of cortisol and epinephrine, two chemicals known to attack the immune system. According to studies “laughter activates the T cells, B cells, immunoglobulins, and NK cells; it helps to fight viruses, and regulates cell growth.” It starts with learning to laugh at oneself. Grey hair gives you permission. It’s a rite of passage and a merit badge that suggests you have been around long enough to know that Mel Torme was not a forward for the New York Knicks, Hunter S Thompson was not the 39th President and Jerry Garcia is not an ice cream.
A silver streak means you may have felt the deep ache of losing a close friend to illness. It means you have known disappointment. Grey means you are on your way to realizing the only person that can make you happy – – is you. It means you understand that comedy is tragedy plus time, and that you never burn a bridge because you invariably need to cross it again. Grey hair teaches you to be careful how you treat people on the way up because you will meet them again on the way down. A little frost around the temples means you understand that expectations can become resentments.
A little grey means you probably have lost something that you could not afford to lose. You most likely have discovered that you can’t control life but you can control how you react to it. A little salt and pepper has you finally figuring out the more you focus on other people, the less likely you are to feel sorry for yourself. You understand that fame and fortune can be a trap and that your legacy will be how many lives you have touched, not what you have accumulated. You understand that class is style, not stature.
Let’s face it, society celebrates youth and has a tendency to view “grey” the way some Americans view Europe – – old, past its prime and seemingly jealous of the adolescent that has arrived to assume the role of the Alpha. Youth may have size, strength and a sense of immortality but often lack the perspective that comes with age. Insight is gained through pain and the bitter experience of getting what you think you want only to find it is not what you needed. Grey is humility. It is being able to say “I’m sorry” but not spend the rest of your life self-flagellating. It is being able to laugh at your own expense, not at someone else’s. Grey may lack the visceral allure of youth but it radiates the intrinsic beauty of a centered soul. In the end, age teaches us that nothing in the world is black and white.
Everything, as the Grateful Dead suggest, has a “touch of grey “.