Mysteries of Healthcare Reform

1. Why are health insurance premiums going up?

All companies raise prices to insure against future uncertainty. With healthcare reform targeting health plans, the plans are trying to position themselves to withstand a shit storm of legislative stupidity.

2. Why do health insurance companies have (limited) anti-trust exemptions?

These exemptions were intended to lower the price of health insurance and force companies to cover remote groups. For example, in rural areas where people are dispersed and may not form natural groups, it was unappealing to write health insurance. The anti-trust exemptions are intended to make it more appealing to write these groups by giving the companies a larger pool over which to spread the cost.

3. Why do drugs cost more in the US than elsewhere?

Drug companies are forced to sell at low and below market prices in Canada and Europe by their government-run healthcare entities. The costs of developing and marketing new drugs is pushed back on US consumers. Our government is supposed to impose tariffs and trade restrictions on foreign countries who control the prices of our products in this way, but refuses to do so. So your grandmother is buying inhalers for German skiers. Nice. Why won’t our government address this issue? The emperor does not enjoy standing naked.

Wouldn’t it be nice if we could talk about what really needs to happen in healthcare instead of engaging in a political shadow dance?

copyright Mark Pastin, 2010

Compliance Tea Party - Hold the Sweatener

HealthCARE reform is dead. Even the administration no longer uses the term. Did you notice the unexplained shift from healthCARE reform to health PLAN reform? The public does not want government run healthcare. The Obama administration thought it could pull off what the Clinton administration couldn't. Wrong.

Why switch to PLANS? Well, who ever met an insurance plan that they could love? So let’s demonize the plans now. That’s the ticket. Health plan compliance professionals take note: You get busy once your industry is put on the 10 Most Wanted list. Ask your friends in pharma.

This is tragic, as there are things that need to get done in healthcare. We have to do something about those in the 55 to 65 age group who can not afford health insurance – often $25K a year and up - should they retire or lose their jobs. We have to quit driving drug prices up by forcing the pharmaceutical industry to massively subsidize European and Canadian healthcare. We have to simplify the rules of existing government sponsored programs such as Medicare and Medicaid so the funds in these program actually go to healthcare. And could we have some fraud enforcement in government programs targeting uninsured kids?

Defeat is not readily accepted here in DC. So expect to see additional evidence that you are a bunch of fraud committing, patient abusing, white collar criminals. I was amazed to learn that a bunch of compliance officers paid real money to have the government read them month old press releases saying what naughty boys and girls they were at the Intergalactic, Hear-It-To-Believe-It Fraud Hoe Down - or whatever it was called.

Those of us in compliance will not rest until fraud is reduced to as close to ZERO as is humanly possible. But we will never achieve that goal unless we are given some credit for what has been accomplished to date in fraud fighting – and we have accomplished quite a lot. I think I individually contribute to global warming when I hear that we have accomplished nothing and that the government needs an even bigger stick just to keep us in line. My message on this is that the compliance community and the government should be on the same page on this one. Could we please just get along?

copyright Mark Pastin

Medical Ethics - Kid's Rights?

From time to time I create medical ethics cases, which are copyrighted, on which I would like comments. The deal is that I will post a "solution" in a later blog update. I would like your comments and will publish or not according to your wishes. Give me you comments on this one.

Whose Witness?

You are working in the ER when a minor comes in who has been seriously injured in a car accident. The child, who is accompanied by his parents, shouts repeatedly, “I don’t want to die.” Immediate surgery is required and you explain the situation to the parents. They advise you that they belong to a religious group which does not permit transfusions and would rather you didn’t perform surgery if a transfusion is necessary. The mother begins to cry and shout at her husband who removes her to a waiting area. The father returns and tells the physician that they would like the surgery but can not permit a transfusion. He returns to the waiting room. There is no time for an ethics consult or any other type of consult for that matter, so the decision is yours. You see no prospect of success with the surgery absent a transfusion and the child will certainly die without the surgical intervention. What is the best course of action?

This is an actual case presented to me for advice and is not uncommon. Of course, there could be any number of extenuating circumstances and additional details. But please address the case on the basis of the information provided. There will be an analysis of this case in a later blog entry.

Golf and Ethics

I think I am in a good position to comment on the much hypothesized link between golf and ethics. There is no such link. It is total poppycock. Shivas Irons - nice try and you did sell some books. You are as likely to meet a cheating scumbag on the golf course as you are in your the investment banking interest group of the Young Presidents Organization. In fact, you will meet many of the same folks. That does not mean that young people can not learn something about ethics from golf; they just can not learn to BE ethical. I have played golf for more than 50 years and practiced ethics for 36 years. I learned the most about ethics from golf between the ages of 12 and 16. At this age, I weighed 90 pounds max and grew to the startling height of 5 feet, five inches. I played a muni called Sylvan Heights that was run by the city and populated by blue collar golfers, my dad (a certifiable golf nut), hoods, my high school golf team, professional gamblers - amongst others. I played golf everyday of the short summer with anyone who would play with me. I was a very good golfer and a fantastic golfer for my munchkin-like size. And I gambled with everyone because that is what golfers do to add fun to the game. Once I had a guy named "Beak" Mirani down $3,000 and I learned fast that winning too much can be dangerous- especially if you take advantage of someone else's gullibility - Beak did not believe that such a little spud could be so good and so mean at the same time. I learned a lot of other things. I played golf with a guy who married vulnerable women for their money. I played with a woman who sought rich men for the same reason. I learned how adults think and act and I have carried the lessons with me to this day. Did I learn to be ethical? No. I learned to be tougher than anyone who thinks I treated them unethically. Now to my golfer friends, I do not wish to offend thee. But to pretend you are engaged in a mystical activity when you are really only contributing to chiropractic is silly business. I did learn about ethics at some point I hope but not from golf.

HR's Evil Empire

Human Resources is often the bane of employees and compliance professionals alike – the HR Catberts and squids of corporate life. Although HR professionals don’t like to hear this, their domain is often called Fortress HR, the Evil Empire and The Avengers. These titles are often well earned. Well, it isn’t entirely their fault.

Many HR professionals start out trying to make the organization a better place to work – a place with a culture that attracts high performing employees. But HR professionals soon learn what is truly expected of them. The first blow is that many organizations make no distinction between Personnel and HR. So the HR professional spends an inordinate amount of time dealing with benefits issues. And then the HR professional get her/his first real HR question when a manager asks how to go about firing an employee with slim evidence of non-performance. HR becomes the hangman’s apologist. An HR professional who handles all of this may be allowed to participate in mass firings, benefit cuts, demotions – everything short of genocide.

After years of never getting to do their job, many HR professionals become bitter and petty. And then along comes big-stick corporate compliance.

The first battle is the hotline. It quickly becomes evident that HR is concerned about compliance learning about all of HR’s malfunctions via the hotline. Since compliance relies on HR to handle many investigations, it often becomes clear that HR couldn’t care less about anonymity promises made by compliance. And then you have to deal with the fact that HR does not want to punish the supervisors and managers for retaliating against reporting employees. This is war.

I can not tell you that I know of a way to avoid this sort of situation.

But there are things you can do to improve the situation. The first is to let the HR professional know that you understand what he/she really wants to be doing. One part of every compliance officer’s job is culture change – and this is like music to HR’s ears. You can also try to get HR involved in the process of incorporating compliance related measures in the performance appraisal system. If you first raise this issue at a committee meeting, HR is sure to swat you with alleged impossibility of measuring compliant conduct. So let HR have the bright idea in the first place.

Of course, there are HR professionals who are too far gone to be redeemed. You can always check their travel vouchers, expense reports and contracts with vendors. Ah, Fortress Compliance!

Of Mice and Lawyers

One puzzle of current attempts to defang the compliance function is why it seems to some, particularly members of the Legal Department, a good idea to have the Chief Compliance Officer report to the Legal Department. The idea would be laughable except for the fact that it is carrying the day. This is one of the few things in compliance that can be made perfectly clear.

Go back to the beginning which is the Federal Sentencing Commission in the mid-1980s. The country had survived the scandals in the defense industry but was in the throws of economic collapse at the hands of a sick financial system run by scoundrels. Some folks refer to this as “the S&L Crisis” which was thought to be the financial crisis to end all financial crises. Maybe not.

In response to this perceived increase in corporate misconduct, the Federal Sentencing Commission decided to develop guidelines for sentencing companies convicted of criminal conduct. It was intended that such companies be assured of suitable and consistent punishment.

But the Commission conceded the obvious fact that even the best corporations may have individual members who do reprehensible things in the name of the corporation. Thus, the Sentencing Guidelines specified a model of what counts as a good citizen corporation even in cases in which an individual or individuals have committed crimes in the name of the corporation.

The idea is that good citizen corporations will have ethics or compliance programs designed to detect, prevent and correct misconduct by individuals prone to wrong doing even at the highest levels of the corporation. The Commission defined an effective ethics or compliance program as including seven elements which are now the recognized building blocks of all reputable ethics and compliance programs.

The Sentencing Commission was not under the delusion that savings and loans, banks, and brokerages had committed wrong doing because their legal departments were understaffed. In fact, they had armies of loophole seeking, regulation side stepping attorneys. It was obvious to all that legal departments had failed to detect, prevent and correct the wrong doing that resulted in the economic crimes of the late 1980s and early 1990s. An additional system of checks and balances was to be instituted to allow members of the organization to point out wrong doing at even the highest levels of the organization and without fear or retaliation from those high levels – even if those high levels include members of the legal department. The Commission was not trying to add staff to the legal function but instead was trying to add a separate element to a system of check and balances.

This is not to say that lawyers can not or do not make good compliance officers. Some do and some don’t. Former Naval Commanders, former CEOs, the theologically or philosophically trained, CPAs, internal auditors, social workers and many others sometimes make good compliance officers. But none can succeed if they are thwarted by an ill-conceived organizational structure that places them in the executive team’s harem.

The Zen of Then

While I am as dedicated a golf nut as anyone, even I can not believe the idiocy that passes for advice among pros and hackers alike. In terms of mental gurus, we have gone from a name dropping “boy toy” to a platitude machine with hair by Devo. All of this mental coaching comes down to one thing: Be in the present. Professional golfers pay mental coach quacks tens of thousands of dollars to tell them: Be in the present. I am going to tell you the whole truth about this.

At any given time, such as now, you can only BE in one time – the time that it actually is. You can not BE in the future and you can not BE in the past. That is how time works. On the other hand, there are three ways to be in the present. 1) You can presently be reflecting on the past; 2) You can presently be anticipating the future; or 3) You can presently be concentrating on what you are doing. Here is the punch line. You do most athletic things better if you concentrate on what you are doing.

There it is. The whole tamale. The zen of golf in one cracked egg shell.

Now will you please pay me to tell you to concentrate on what you are doing?

In fact, the only endeavor with more quacks than golf and herbology is ethics. Darn it now. Would you just do the right thing: ask what your mother would think; ask how you would feel if you read in the morning paper; explain it to your kids. How about:

Get a brain