Incognito, Nixon, Paterno and the Pope

Last week, I met a remarkable woman, a newly appointed CEO.  We were discussing her institution, a non-profit healthcare provider serving the underprivileged community in the inner city.  She confessed that she and her management team were struggling to re-define their business strategy.  When I asked her about the leadership culture, she professed that she was proud of the culture that her team embraced.

I probed a bit and she told me (I’m paraphrasing):  “we get together on a regular basis to talk about what we’re doing and we remind each other that our mission is more important than our individual needs.” 

It’s often said that culture starts at the top and that’s how it happens. 

 

Miami Dolphins Incognito and Martin

Much has been written about how the 300 pounders in theMiami Dolphins locker room treat one another.  The pundits, including a lot of league veterans, have told us that the team’s leadership has failed if they didn’t know what was going on.  Culture starts at the top after all.  But, while the criticism is well aimed, it strikes me that the pundits deserve a 15-yard penalty for “piling on”.

The ex-players and coaches and the sports journalists from ESPN and other news outlets are part of the community – the league, the veterans, the media – that benefits from the NFL’s continued success.  It’s in their best interest to describe the event as an isolated incident and blame local management.

We’ve seen it many times – Nixon’s White House, Penn State and, perhaps the most egregious of all, the Vatican. 

Nixon addressing the press

Cover-ups are instinctive.  Self-deception is the rule not the exception, which is why so many decision makers behave in ways that will likely hurt them and others in the long haul.  It’s why so many students and alumni of Penn State came to Joe Paterno’s defense.  It’s why so many Catholics continued to admire Pope John Paul II even after it was revealed that the church had covered up the child molestation scandal for decades. 

Cover-ups are strategic too. Those conspiring at Penn State were rational in their belief that adverse publicity would destroy careers and the reputation of their institution.  Unfortunately, it’s not unlike low interest loan.  Sooner or later there’s a balloon payment due. 

 

Sandusky with Paterno

In my days as a naval officer and as a midshipman at the Naval Academy, we often debated whether leaders are born or made.  It’s a variation on nature vs. nurture, often discussed in child rearing.

There are people who are natural born leaders.  There is an indefinable aura about them.   Political and military leaders like Colin Powell and Nelson Mandela come to mind.  Business leaders like Meg Whitman and Steve Jobs also fit the mold. 

But, many good or even great leaders lack charisma.  Former Defense Secretary Robert Gates is a great example.  A quiet even unassuming man, he gave up an easy glide into retirement at a Texas university to help President Bush restore leadership and integrity to the Pentagon.  And, he stayed on when asked by President Obama to ease the transition to a new administration in the midst of two wars.  Clearly, he viewed the mission as more important than his individual needs.

And, it’s fair to say that not all charismatic people are great leaders as anyone who has read Walter Isaacson’s biography of Steve Jobs knows by now. 

Leadership skills and behavior can be learned.  And, it’s important to learn those skills as you grow and develop in your life and career.  You need to know what to do, how to respond, how to lead before the crisis hits.  In the end, you are what you do, especially in the midst of chaos.  And, what the conspirators in Washington, University Park and Rome have done is unworthy of anyone who aspires to leadership. 

Pope John Paul II

As for Miami, time will tell.  But, the central conundrum of crisis management is that doing the right thing doesn’t necessarily save the institution or the people running it.  That’s why it’s so hard for top management to come clean.  What would have happened to the administrators at Penn State, the top guys in Nixon’s White House or the Pope’s Cardinals and Bishops if they had done the right thing?

They would not have been lauded for their honesty.  Whistle blowers usually don’t fare well in modern society.

Our psychological need to think well of ourselves combined with our instinct for self-preservation makes it much more difficult to do what’s right, what’s best for the institution we represent.

That’s why it’s so rare that we meet someone who places mission above his or her personal needs.

WHO WILL LEAD? 

It's Not a Website... It's a Health Plan

My birthday is in January; so I find myself reviewing my new health insurance options during the open enrollment period for those covered by Medicare.  (Yes, that’s right.  I will be 65.) 

Last week, I attended a seminar by a local insurer.  The presenter covered all the options – Medicare Parts A and B, Medicare Advantage, etc. – concisely and congenially.  It was well worth my time having come away from the various government and AARP websites totally confused.  Obamacare will cause premiums to rise.  Aetna CEO Mark Bertolini says it will cost his customers about $1 Billion per year.  But, I am not complaining.

Regular readers know that I believe that government should not intervene in private enterprise.  So, why am I looking forward to Medicare?

Well, my premiums will go down 80% after I sign up.  Moreover, I have grappled with the free market for private individual insurance and I’m familiar with its flaws.  An insurer has turned me down because my blood pressure is below normal.  My doctor says I am too healthy.  However, there was no medically qualified person at the insurer to whom I could make my case.  Just a faceless bureaucracy following a set of guidelines.

Still, I got a chuckle when NBC broke the news about people having their policies cancelled because Obamacare requires insurers to offer only those policies that meet new standards.  The news story featured a middle-aged guy whose premium went up 400% in order to meet those standards, which include coverage for, among other things, maternity. 

Hey, I could afford to chuckle.  I have Medicare!

The hodgepodge of regulations that technocrats will shape from this onerous 2500+ page law will undoubtedly cause us more grief, just as the Healthcare.gov website has in the first few weeks of implementation. 

By now, we shouldn’t be surprised that the government would spend $375 Million of the taxpayers money to build a website that doesn’t work.  So what if that’s more than double what Apple invested to develop the iPhone?  Remember those $600 toilet seats on Navy submarines?

What’s the big deal?

The big deal is that the law doesn’t do what its headline says it will do – make healthcare affordable.  The President has talked about “bending the cost curve”, whatever that means.  But, mandating that young folks who can’t afford health insurance buy it or be penalized doesn’t bend the cost curve.  It just adds people who don’t go to the doctor to the insurance pool with the intent of lowering the average premium. 

The real driver of healthcare cost is the fee for service (FFS) payment system.  From an economist’s perspective, if you provide a financial incentive for doctors to perform medical procedures, they will perform more procedures – especially when there is a bottomless pit of money at the other end of the claims process.

It gets worse.  The best defense against a medical malpractice suit is to follow (or perhaps “over-follow”) published protocols on each patient.  You guessed it.  More billable procedures.

However, there’s hope.  The Affordable Care Act authorizes the creation of Accountable Care Organizations (ACO’s) and healthcare providers are beginning to experiment with this model.  Payment would be based on the quality of care provided rather than the amount of procedures performed.  The financial incentives and disincentives are being studied with results that are, to date, inconclusive.

The Center for American Progress suggests other alternatives such as Bundled Payments, wherein providers would receive a single payment for each patient based upon medical history.  Patient centered medical homes would restructure primary care to focus on preventive medicine, patient education and coordination among healthcare providers.  It would encourage preventive care rather than excessive treatments.

Again, these alternatives to FFS are great ideas as yet untested.  But, they represent potential free market solution within the government’s framework.

All of this confusion and complexity could easily lead one to buy into the liberal Democrat idea of Medicare for all.  Medicare works well for seniors (and, if you don’t believe me, see what happens if you try to take it away).  Why not extend coverage to every American?

Well, you have to ask how we’ll pay for it.  By many estimates, the Medicare Trust Fund will go broke before Baby Boomers go on to their great reward.  Clearly, the current 2.7% payroll tax is insufficient to extend coverage to the population at large.

No doubt, there are many who would propose raising taxes to close the gap.  And, certainly the half of the population that receives subsidized health insurance would sign up for that.  That includes me – I’m on Medicare!  So, it would be easy to tax the other half, wouldn’t it? 

Wait a minute!  That includes me, too!

WHO WILL LEAD?