Did everyone see that video of the CEO snatching the tennis hat out of that kid’s hands at the US Open a few weeks ago?
Short version and watch the video (it’s all over the internet): A tennis star who had just won his match is walking off the court signing autographs and he hands a kid—this cute towheaded preteen—the tennis star kind of haphazardly hands this kid a hat as he walks off the court. And as soon as that kid’s fingers, you know, start to take the hat, this grown-ass man reaches down, forcefully grabs that hat … the kid starts crying.
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This man now, turns out, speaking of investigations, the internet deduced in T-minus 30 minutes that this hat grabber man is actually a CEO of some paving company in Poland.
But after the kid starts crying and pointing, the CEO has a moment of reflection. He gives the kid a millisecond once-over, and then he jams the hat into his wife’s handbag finders keepers, losers weepers–style. Watch the video if you haven’t seen it. It’s sort of shocking to behold, honestly.
What is also shocking, maybe even more shocking, was the guy’s reaction afterwards, which wasn’t a “wow, I was caught up in the moment and I did a crappy thing.” Nope. His reaction was, “First come, first served.” He actually wrote this in a response apparently, according to several, somewhat unreliable sources.
This whole thing, if I wanted to get metaphorical about it, which I apparently do, the whole thing could be a five-second summary of the big problem I have with that Charlie Munger quote, Warren Buffett’s partner. Charlie Munger famously said, “Show me an incentive, and I’ll show you an outcome.”
And I got an issue with that when it comes to healthcare because it implies just because it is possible to shake down a kid for a hat or shake down a firefighter for another 10 grand, you should do it.
I’m moving along real fast with this metaphor, but it’s really something to think about as the introduction to this conversation coming up with Kevin Lyons, who is a former police detective and current executive director, law enforcement, labor/employee benefits over at the New Jersey State PBA (Policemen’s Benevolent Association).
And let’s keep in mind the family plan in the state of New Jersey for state workers now costs $67,000, having almost doubled in the past five years in price. That’s the total cost.
And the crazy backwards thing is the unions are the ones who are fighting to rationalize the cost of healthcare to make it affordable for themselves and taxpayers alike to put forth innovative solutions that actually reduce costs, which you think the legislature would be doing. It’s a strikingly weird role reversal.
Okay, so back to first come, first served. Here’s the undeniable thing. The healthcare industry, its corporate leaders, I’m gonna say—not everybody—operate just like any other business with a first come, first served guiding principle.
If you can get the money from your customers, you’d be a dummy not to take it. I mean, to do otherwise would be a violation of your fiduciary duty to your board or your shareholders, right? If you are the sales team at one of these corporate healthcare companies, their corporations, you’ll get fired if you say, “Well, we knew how to get our customer to pay $10, but I said, ‘Oh, only pay me $6.’” Imagine announcing that at the shareholders meeting or to the board.
We forget this is reality at our own peril. Many would love to plug their ears and do the ignorance is bliss thing. But yeah, it is not possible to argue with any unbiased integrity that the healthcare industry in New Jersey and in this country is an industry just like any other industry.
And first come, first served is their motto, just like any other industry. No judgment here. Just stating very easily proven facts.
And look, the state of New Jersey, just like many other buyers of healthcare, is a really unsophisticated buyer right now. You’d think that wouldn’t be the case considering healthcare for state workers is coming up here going to be a $3.5 billion spend, and it’s been rapidly escalating, way higher than inflation and almost any other benchmark you can compare it to, like the healthcare costs of other state health plans.
It’s also one of the state’s biggest line items in the state budget. But yeah, we get one rookie error after another being made dealing with these vendors operating just like any other vendor. First come, first served.
And tragically, as a result, the state employees and taxpayers are getting wildly taken advantage of for billions of excess dollars, getting first come, first served right into industry pockets.
Why is the state and many others getting first come, first served? Well, Kevin Lyons walks us through three barriers, very articulately, for what goes on in the public sector, which we have not discussed heretofore on the pod. So, I was all over it.
Bottom line is this: Even though the metaphorical man grabs the metaphorical hat and wrote “first come, first served” on the internet, there are many who smile and believe everything that man’s metaphorical, highly compensated lobbyists put on their desks and fancy full-color glossy reports year after year after year. They continue to believe what the man tells them.
And look, in all fairness, this is complex stuff, this healthcare stuff. We are 487 episodes into it here and still going strong.
Listen to the show with Vivian Ho, PhD (EP466) about the ways that consolidated hospital systems are in this mix. Listen to the flywheel shows with Jonathan Baran (EP483: Part 1 and Part 2). Listen to the payment integrity show with Kimberly Carleson (EP480). Yeah, there are container ships of hats going missing, but once you know where to look, you can find them.
So, here’s my conversation with Kevin Lyons about the three barriers for getting the healthcare-escalating costs flywheel to slow its roll.
Next week, come back for Part 2, where Kevin Lyons shares how he uses some of the skills he learned in detective training to deduce what’s going on with his healthcare dollars, where they are disappearing to, what he writes in that little detective notebook I am imagining he carries around even to this day.
Also mentioned in this episode are NJ State Policemen’s Benevolent Association (NJSPBA); Cristin Dickerson, MD; Vivian Ho, PhD; Jonathan Baran; Kimberly Carleson; Chris Deacon; Tony Wieners; and Cora Opsahl.
You can learn more at njspba.com and follow Kevin on LinkedIn.
Kevin Lyons is a retired police detective from Long Beach Township, NJ, where he served over 25 years in many roles. He is currently the executive director of the New Jersey State Policemen’s Benevolent Association, New Jersey’s largest law enforcement union, representing over 32,000 active and 6000 retired members. His current responsibilities include operating the organization’s legal protection plan, where he manages $4 million worth of claims a year, 500 attorneys, and over $34 million in reserves, advising his members on health benefit issues and managing the staff and day-to-day operations of the organization.
Kevin has a bachelor of arts degree from Richard Stockton College (now Stockton University) and numerous certificates in healthcare-related fields.
In 2012, he was appointed to the NJ State Health Benefit Plan Design Committee, a body that manages plan design for a plan that has over 800,000 lives. In 2017, he was appointed to Governor Murphy’s Task Force on Quality and Affordability.
Kevin has also served on the Southern Regional Board of Education since 1997, where he currently serves as the chair of the finance committee, which manages a budget of over $70 million.
Kevin has done numerous op-ed articles and has been featured in Bloomberg News, the Wall Street Journal, NPR, Fortune magazine, and PBS. He is committed to making healthcare more affordable for his members.
08:17 Why is it important to “dig in” right now on health benefit cost increases?
10:16 The first barrier to better health benefits: profit defending profit.
16:38 Why “throw money at the problem” isn’t a real solution.
18:31 The second barrier: why a lack of employed experts costs more money.
25:58 The third barrier: media sponsorship from incumbents prevents change.
28:55 EP483 (Part 1 and Part 2) with Jonathan Baran.
You can learn more at njspba.com and follow Kevin on LinkedIn.
@bluekcl discusses #barriers to affordable #healthbenefits on our #healthcarepodcast. #healthcare #podcast #financialhealth #patientoutcomes #primarycare #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation
Recent past interviews:
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Dr Stan Schwartz (EP486), Dr Cristin Dickerson, Elizabeth Mitchell (Take Two: EP436), Dave Chase, Jonathan Baran (Part 2), Jonathan Baran (Part 1), Jonathan Baran (Bonus Episode), Dr Stan Schwartz (Summer Shorts), Preston Alexander, Dr Tom X Lee (Take Two: EP445), Dr Tom X Lee (Bonus Episode), Dr Benjamin Schwartz