A Bottomless Pit of Money

I should have known what would happen.  Three cities in three days, each with a pre-dawn start to my schedule, culminating with my arrival on Saturday in Rochester, NY where the temperature was 6°F.  So, I caught a head cold.

Well, at least I know it was a cold now.  But, at the time, I thought it could be anything. “It’s either the flu or pneumonia,” said the doc.  Even in my Robitussin induced stupor, the idea that I might have pneumonia scared me a bit.  People my age die of pneumonia all the time. 

“Your lungs sound clear but I could take an X-ray to be sure it’s not pneumonia.  Do you want to do that?” she asked.  Now, I suppose if my head were clearer I might have asked, “If my lungs are clear, why do you think I have pneumonia?”  But, I didn’t. But, because I was asked and said yes, I’ll get a whopping big bill from the radiology department.  So, why am I telling you all this?  Because it’s a microcosm of the challenge we have reforming healthcare. (No, Obamacare didn’t reform healthcare.) 

In the not too distant future, I will be eligible for Medicare.  Then I won’t sweat this stuff at all.  After all, the government is a bottomless pit of money, right?  Of course, being a fiscal conservative, I wonder what might happen when the Medicare fund runs out of money, which should happen in 2024 according its Trustees. 

But then, why worry about that?  The country shows no sign of slowing its production of new money to fund government deficits.  And, no one in Washington (or anywhere else) seems to care.

So, how do we wrestle this beast to the ground?  And, why bother?

I think economist John Mauldin phrases the problem statement best:  “In the US, the real question we must ask ourselves as a nation is, ‘How much health care do we want and how do we want to pay for it?’ Everything else can be dealt with if we get that basic question answered. We can substantially change health care, along with other discretionary budget items, or we can raise taxes, or some combination. Each path has consequences.”

The cover story in this Week’s edition of Time magazine, “Bitter Pill, Why Medical Bills Are Killing Us”, digs deep into the challenges we face.  Before reading the article, I thought of the medical insurance companies as the Evil Empire in this quagmire.  But, the economic power is shifting to hospitals, particularly non-profit hospitals, according to the article’s author, Steven Brill.

Hospitals are buying up physicians’ practices and aggregating services to control the entire medical supply chain.  In some rural areas, they are the only game in town serving the community much like a utility company – except there is no public service commission to control prices.  Brill goes into great detail examining why the so-called non-profits have higher net margins than their for-profit brethren, on which they pay no taxes of course.   The nation’s second largest non-profit hospital, The Cleveland Clinic, nets over $570M and pays its CEO more the $2.5M per year.  Does that sound like a non-profit to you?

To make matters worse, the hospitals grossly overcharge for everything.  How do we know?  Well, hospitals are required by law to submit their actual costs to Medicare, which pays cost plus a standard profit margin. The net of it:  Medicare pays only about an eighth of the average hospital’s full charge.  So, the huge “profits” of the non-profits are the result of them grossly overcharging their non-Medicare patients.

A few weeks ago (in a fit of whimsy) I used the popular TV show Downton Abbey as an example of how entrenched interests -- the lords and ladies of the British aristocracy -- hampered the economic progress of Great Britain, the pre-eminent economic and military power of the 19^th Century. 

Now, the US has its royals – the lords and ladies of the healthcare system --absorbing 20% of GDP, spending it inefficiently and undermining the financial security of the middle class.  The entrenched power of these institutions – represented by lobbyists that outnumber members of Congress 7 to 1 – are hampering the economic progress of the US, the pre-eminent economic and military power of the 20^th Century.

It makes me wonder…  WHO WILL LEAD?

Hope, Love, Forgiveness… Can Society Achieve It?

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Recently, my brother sent me something that got me thinking.  It was a quote from Reinhold Niebuhr. Here it is in part:  “Nothing that is worth doing can be achieved in our lifetime; therefore we must be saved by hope…  Nothing we do, however virtuous, can be accomplished alone; therefore, we are saved by love.  No virtuous act is quite as virtuous from the standpoint of our friend or foe as it is from our standpoint.  Therefore, we must be saved by the final form of love, which is forgiveness.”

That’s a lot to digest.  But, if you can accept the first sentence – embrace the notion that civil society can achieve great things -- then you must accept the rest of the statement. And, if you do, you are forced to elevate your expectations – our expectations – of others and ourselves.

Much of our lives are governed by the drive to attain credentials. We measure our kids by their grades, success at sports and SAT scores.   We measure ourselves by an endless stream of degrees, titles, certifications and awards all of which are beautifully presented on our LinkedIn profiles.  Is that how you value yourself?  C’mon…  really?

Life isn’t about how we’re graded; it’s about who we are.  And, who we are is very complicated.  Most of our mind is occupied by the unconscious.  While our analytical mind expresses logic and reason, our emotions assign value and are the basis for reason.  We progress as individuals or as a society when reason incites passion.

So, what incites our passion?  How do we undertake great initiatives that realize the promise of Niebuhr’s assertion? 

Western society is programmed according to “humanist” tradition, a philosophy that emphasizes the value of people both individually and collectively.  The tenets of humanism can be traced to the ancient Greek philosophers and they re-emerge throughout history.  Humanism survived the Dark Ages and was reincarnated through the British Enlightenment during the 17^th Century – through the works of John Locke, Adam Smith and Scot David Hume.  It evolved in the 18^th Century in the French Enlightenment of Rousseau and Voltaire.  It took form in the Declaration of Independence authored by John Adams, Benjamin Franklin, Thomas Jefferson, Robert R. Livingston, and Roger Sherman. 

The notion of human rights is powerfully attractive, not only to us in the West but also, to people the world over.  Wherever religious conflict arises, tolerance is urged.  The concept of self-rule, championed by Jefferson and Voltaire, is fundamental to the Arab Spring.  Although European in their origin, these ideas now form the basis on which the international community judges nations. 

Exemplary of Niebuhr’s thinking, the hopes of the Age of Enlightenment have taken many lifetimes to spread the world over. 

A great quote from the Iron Lady (a movie about the life of former British PM Margaret Thatcher) expresses it thusly:  “Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become your character. And watch your character, for it becomes your destiny. What we think, we become.”

Our conscious mind craves money and success.  Yet, at a deeper level, we seek moments of transcendence.  Most people cannot achieve the promise of Thatcher’s words – what we think, we become.  It is rarer still that what we think can be captured and expressed so eloquently that it influences world events for generations.  Yet, the inexorable surge for freedom, equal rights and tolerance continues.

The 20^th Century was dominated by tumultuous events that distracted us from our core human values of tolerance and hope.  The first quarter of the century was shaped by the collapse of both the Hapsburg and Ottoman Empires.  It was followed by economic depression and holocaust.  The second half was subsumed in a monumental struggle between two great nuclear powers. 

The post-Cold War era has brought us economic prosperity followed by collapse.  The end of the old world order has brought us terrorism and war.

Yet, I have hope.  Hope that civil society will prevail in accordance with humanist tradition.  Hope that we will continue to evolve according to the tenets of tolerance and self-rule.  Those ideas are part of our DNA.  That they have been expressed in so many ways for thousands of years is ample evidence. 

The only question is:  WHO WILL LEAD?