CLICK HERE to check out my latest Forbes.com post discussing just how juvenile life insurance companies can be.
CLICK HERE to check out my latest Forbes.com post discussing just how juvenile life insurance companies can be.
After seven years of bombast and bluster, the Republicans have shown they have no idea how to repeal and replace Obamacare. The problem for Republicans is that they were trying to fix the wrong thing. The misnomer is that Obamacare is a government healthcare plan. It is not. Medicare and Medicaid are government health plans, but Obamacare is nothing more than a government sponsored effort to help an insurance company market policies to individuals who do not have access to healthcare; either from their employer or an existing government program. (About 10 percent of the population.) Obamacare also expanded an existing healthcare system — Medicaid – in order to provide coverage for millions of low income individuals who could not afford private policies, under any conditions.
To achieve its primary objective, Obamacare created an “exchange,” in the form of a government website for insurance companies to list and market their policies. It is much like Amazon where companies list the products they want to sell and consumers go online to buy them. Obamacare is not government insurance, but rather private insurance offered on a government website.
In order to list their policies on the “exchange” insurance companies had to agree to issue coverage to anyone who applies, regardless of their current health or pre-existing conditions. In addition, companies could not put a “cap” on the size of any claim and (unlike most private policies) they had to offer expanded coverage for preventive care, mental health and substance abuse treatment.
This was all good for the insured, but the insurance companies – that are after all in business to make a profit – blanched at these costly requirements. The insurance companies argued that such requirements were not “actuarially sound” and, in fact, guaranteed losses, regardless how much premium was charged.
In response, the government made two promises to the insurance companies: Everyone who did not have health coverage from another source would be “mandated” to buy a policy. This would “spread the risk” and create stability. (Not everyone who bought a policy would have a claim.) In addition, the government guaranteed to reimburse the companies for any losses they might incur by participating in Obamacare. (What company would not want to participate when the government did the marketing of the policies and guaranteed to cover the losses?) Beyond that, the government agreed to subsidize premiums for those who could not afford what the companies were charging.
So what was intended to be a simple process of connecting customer and company to provide individual health insurance via the Internet turned into a complicated, confusing and cumbersome plan that satisfied no one. While it is true that since the inception of Obamacare over 22 million previously uninsured Americans have been able to access health coverage, the vast majority of the newly covered resulted from the simple step of reducing the bar for lower income and the poor to be covered under Medicaid.
Those opposed to Obamacare argue that it is in a “death spiral” and that it will soon collapse. They point to escalating premiums and suggest the individual market is melting down because more and more companies are withdrawing from Obamacare. They are right about all this, but it is a man-made not structural problem. Ever since the Republicans took control of Congress and now the White House, they have been threatening to repeal the “individual mandate,” eliminate subsidies to individuals and de-fund the government’s promise to subsidize insurance company losses. Insurance companies need market stability to properly price the policies to make a profit, so no wonder that under these threats they are withdrawing from Obamacare. (How many companies would continue to offer their products on Amazon if Amazon had requirements that guaranteed losses with each sale?) Because of the uncertainty of the rules going forward, insurance companies have only two options: significantly increase existing premiums and refuse to issue new policies.
REPEAL AND REPLACE OBAMACARE
Obamacare was never the best way to assure that all Americans, regardless of their income or status in life, receive basic healthcare. And there is a better way to achieve this objective, without having to reinvent the wheel. It is a proven solution that is right in front of us.
Medicare and Medicaid have provided millions of Americans with efficient and effective healthcare for decades. If the objective is to assure all Americans – regardless of income or age – the right to basic healthcare coverage (as it should be) the simplest, most effective and least expensive way to do so is by merging Medicare and Medicaid into one program that could provide basic healthcare for all Americans from birth to death. This could not happen overnight, but it could be phased in over the next decade.
Critics argue that the cost of such an approach would be daunting, but by basing premiums, deductibles and co-pays on the basis of means and by diverting monies expended in the current patchwork health care system, the costs would not only be manageable, but less than what is being spent now. Besides, if we can spend $2.4 trillion on wasted wars in Iraq and Afghanistan shouldn’t we be willing to invest in the good health of all Americans? Such a program of universal healthcare would not be “government provided” care, but rather government payment for the services of private providers; just as Medicare and Medicaid do today.
It may surprise you that one well-known politician has long favored this approach to healthcare. In his book The America We Deserve he wrote, “We must have universal health care… Our objective should be to make reforms for the moment and longer term, to find an equivalent of the single-payer plan …” In multiple interviews and public comments over the years he has consistently endorsed the right of all Americans to receive basic health care coverage. In February of this year, he praised Australia’s health care system, saying to the Australian prime minister, “You have better health care than we do.” Of note is that Australia has a universal health care plan that is modeled after American Medicare and even called Medicare. Of course the individual referred to here is none other than Donald Trump.
Medicare and Medicaid provide access to efficient, effective healthcare for millions of Americans, so rather than constantly haggling over fixing failure, why not build on the proven success of established programs that could provide healthcare for all Americans?
The generally accepted norm is that success is difficult to achieve. And indeed it is, but the reality is that retaining success is far more difficult than attaining it. There is a tendency to believe that success is the end of the road, when it is really just a confirmation that you are on the right road. It may seem counter-intuitive, but surviving success is almost always more difficult than surviving failure. Fail and that is the end of it, you can move on, but success demands more and more, and that can lead to what some have called the “agony of success.”
Many prepare to achieve success, but surprisingly few prepare to deal with the way success has a way of weakening the behavior that spawned it. I have seen many individuals and businesses who made yeoman efforts to be successful, only to fall prey to the “agony of success,” once it was achieved. All too often when an individual or company achieves success, it leads to what may be an unconscious lessening of the passion, commitment and effort that led to success. Without the threat of imminent failure present, the fear of failure dissipates and is often replaced by the curse of complacency.
The only antidote to this malady is to make it your goal to always get better at what you do, if so, you will never fall prey to the feeling that you have made it, because for you, success will be defined by how good you can be, not how good you have been. Continued success means always making history and if you’re not making history, you are history.
Buffalo Wild Wings can be a learning lesson when it comes to dealing with success
Few companies in any industry have enjoyed the growth and success of Buffalo Wild Wings. From a single store opened in 1982, just off the campus of Ohio State, BWW expanded to operate stores in every state and is now an international presence. I joined BWW as a director, just prior to its initial public offering in 2003 and served on the board for over a decade.
It was a heady time of growth. More important, it was profitable growth. During my time on the board over 1,000 new stores were opened and the initial foray into the international market was initiated. Each year increases in sales, revenues and profits were at the top of the “casual dining” segment of the restaurant industry; only outperformed by the steady increase in stock value.
From my perspective as a board member, the entirety of the credit for the success of Buffalo Wild Wings belonged to CEO Sally Smith and the outstanding management team she led. Over a long business career, seldom had I seen a management team as dedicated, hard-working and as creative as was this team.
But as time went on, I began to be concerned about a mentality of inevitability and entitlement that had crept into the psyche of management and the board. It was not any one thing, but there was an almost imperceptible shift from the feeling that continued success was something to be earned, to something that was preordained. Management and the board began to, even if subconsciously, feel entitled to the benefits of success achieved to date. Those concerns when raised were masked by a steep increase in stock value and continued growth (although the growth had begun to slow) and were, for the most part, ignored.
The company began a steady evolution from an entrepreneurial to a corporate culture. Some evidence of this includes:
Individually, these and other changes that were taking place, would not impact the success of Buffalo Wild Wings, but taken together, they started a process of deteriorating success that continues today. They may not even recognize it, but the reaction of management in this type of situation is to shift focus from seeking success yet to be achieved, to protecting past success. In short, management becomes defensive rather than aggressive. This mentality rarely works and in reality puts the very future of the company at risk.
Sharks in the water
When a company loses its drive and direction it begins to flail about like a wounded fish in the ocean and that attracts sharks who move in for the kill. Unfortunately, that is the position BWW is in today. There are predator investment groups that prowl the business seas looking for successful but wounded companies. When the target is identified they sweep in, take a big chunk of the company, and then attempt to impose their will on the company. The only objective of these killer sharks is a quick meal of increased stock price and then they move on to the next target; leaving the prey wounded and struggling to survive, which rarely happens.
Unfortunately, this is the plight that Buffalo Wild Wings finds itself in today. Management and the board are spending most of their time attempting to fend off the sharks and this leaves little time to focus on making what was a great company great again. This did not have to happen, but it is a great example of what can result when the management of a company allows itself to fall prey to the “agony of success.”