Welcome to the blog of Martin J Wolff & Co. I am Brian Sullivan, President, Employee Benefits. It is our objective to provide you with regular information and insight into issues of healthcare, healthcare financing (Insurance), healthcare reform and employee benefits issues in general. Our firm has well over 100 years of combined experience in this area. In addition to my time in private practice, assisting employers and their employees in their benefits matters, I have also served as a Director and Vice President with three of the largest health plans in the country. My partner, Marty Wolff has been serving the needs of business owners for over 45 years.
This combination of experience gives us a unique perspective into the macro (the national and state political matters) and micro issues (how businesses and consumers can deal day to day with these matters) regarding this most important subject. Healthcare and the financing of healthcare will be a much talked about and heavily politicized issue on an on-going basis. I have had the good fortune to serve in this great industry for over 28 years, and the fact of the matter is that it has been a public and political football for as long as I have been around and longer. Frankly, it should be. It is too important an issue to let it not be the topic of public debate. We all have opinions and we should let those opinions be heard. That is part of our political process, and the way our founding fathers meant it to be.
So, as we delve into this issue, you will hear a lot of talk about “special interests”, and it will often be uttered as a scornful phrase. Getting past the hype might be helpful. We are a small business owner in CA: that makes us a special interest. My wife is a teacher: she is a special interest. One of my daughters is a high school student, and the other is a college student athlete: they are both special interests. We have friends who have an autistic son: he and they are special interests. I serve as a volunteer for Big Brothers and Big Sisters of Ventura County, which is (you guessed it) a special interest. So, be cautious when you hear ads and speeches bemoaning the “special interests”. People, groups and organizations making their voices heard to policy makers is how our country and the political process is supposed to work. We elect policymakers every 2, 4 and 6 years. That is the beginning and not the end of our rights and responsibilities.
Leonard Schaeffer, the former Chairman and CEO for Wellpoint, and perhaps the most brilliant and effective leader I have ever seen in this business spoke often about healthcare and healthcare reform. He would say (and I paraphrase, but not much) that Americans want three things from our healthcare system: we want to look good, we want to feel good and we want to live forever. The Sullivan corollary to that is that we also want someone else to pay for it.
Leonard was clearly right. Our expectations are very high when it comes to our healthcare system, and some very tough social discussions will need to occur at some level. Approximately 50% of the dollars spent in our Medicare system, are expended in the last six months of an individual’s life. We have similar issues when it comes to the delivery of premature babies, chronic conditions and terminal diseases. When it is a loved one involved, nothing is too much. 20 years ago, a premature baby born less than 2 pounds had a very limited chance at survival. Today, it is a common occurrence and a very expensive one. We all pay for these costs because they are spread in the forms of premiums and taxes.
Bear in mind that in the days or Social Security’s formation, the age of 65 was arrived at because in those days only 11% of the population lived to age 65. And those who did, lived on average 2 additional years. This helps us understand some of the pressures on our Social Security and Healthcare issues. The average life expectancy at the turn of the 20th century was 45 years old. A hundred years later (a blip in the history of mankind) that number is nearly 80. With technology and the advances in medicine we have wiped out many of the conditions (scarlet fever, rheumatic fever, polio, plagues, child-birthing issues) that historically killed people, replaced by a host of new conditions (Cancer, heart disease and diabetes). Previously, we got old, we got sick, and we died. Now we get old, we get sick, we get treated (often not cured), get sick with something else, etc, etc, etc.
The point is that a system that nearly doubled the life expectancy of humans is not all bad. This is a very complicated and intra-dependent system that encompasses nearly 20% of our nation’s GDP. There is something in politics and economics called “The Law of Unintended Consequences”. It is akin to Forrest Gump and his box of chocolates, “Sometimes, you never know what you are gonna get”. The lessons of the drive for “affordable housing” in the early 90’s should remind us of that. Who could have argued back then, when the nation was in the midst of great economic gain, that all Americans should be able to benefit from the boon. The wave of the events that followed in those 15 years put us in the financial mess we are in right now.
So I think the message is,…I think the lesson is: tread carefully. Have discussions. Have debates. Study the potential unintended consequences. Take the time to do this right. It is too big and too important to push through change for the sake of change,…to be able to wave the flag declaring victory in order to satisfy campaign promises. This is the greatest political and economic system the world has ever seen. It may not be perfect, but it trumps anything we have seen so far in history. Thanks for joining us. We will see you soon.