Tuesday, January 28, 2014

Letter to a Thoughtful Conservative on Healthcare

A very thoughtful, economically conservative, socially moderate friend of mine asked me to put down some thoughts about how I would improve Healthcare, with attention paid to the problem of young, middle-class, upwardly-moving folks; who are out on their own; who probably had their individual policies cancelled; who are above $40,000 in income and therefore don't get subsidy support; and who find the new ACA policies asking them to pay for more insurance than they want or can afford. He asked me to try and suspend my desire to support Obama and his policies. Here is what I wrote:

In September, CDC will publish Early Release data from its National Health Interview Survey. It will cover Jan-Mar 2014. This will be the best data on how many are uninsured/insured and trends in those numbers. They don't appear to have a question that would show stats for people who were insured but now are not (the 6MM cancellation group), and data is collected all through the quarter; but we should get a good indication of how the level of uninsured is dropping.

Kaiser and others will do insurance company surveys that will show coverage trends in the individual market: What's happened to total market? ACA vs. non-ACA compliant policies, on or off-Exchange. By September, we should know how many in the non-group market are opting out for 2014. 

Hypothetically, let's say Kaiser estimates that 1MM individuals have chosen to opt out. Presumably they will have done so because the ACA-compliant policies were too expensive for what they felt they needed or could afford. As I understand your thoughtful comments, these are the folks you are most concerned about: the up-and-coming, young middle class who are trying to build a personal economic base and can't afford to put 10% or more of their income into health insurance they don't think they need.

It's just that I'm not sure they've been hurt that much: Inconvenienced, frustrated, pissed off...yes, for sure. But they can pay the penalty and be way ahead economically. Then if they get sick, they quickly buy coverage and not too much will have been lost. This is the argument used by a host of conservative analysts arguing that because of this, the young and healthy won't sign up, and the system won't work. No harm, no foul, I might say. Since the penalties are so low, they can free-ride until sick, then signup with little lost. Pretty good deal, if you don't need the mental reassurance that you are already/always covered.

So if no one is really hurt economically (they surely have been inconvenienced, and may well express their frustrations in how they vote), then the ACA needs to be judged on whether it works, measured by enrollment, reduction in the numbers of uninsured, pool balance, premium trends, insurance company state-by-state participation and degree of financial success in Exchange markets, levels of reinsurance activity, and customer satisfaction with the often narrow networks. By October, we'll know a lot of this; and we'll be able to project pretty well for 2015.

I think the program will work well. And because I think this will be reasonably clear before the mid-terms, I'm predicting a modest election uptick for Dems (+3-5 in the House; hold the Senate). I am confident about ACA's coming scorecard; I'm much less confident this will be seen and rewarded by voters. Specifically: I give 80% odds to my ACA forecast (6-7MM Exchange signups, 10-12MM Medicaid enrollment, 14-16MM reduction in unemployed by end of 2014 (not sure about the Jan-Mar NHIS data), reasonable pool balance, only small premium increases for 2015, increased insurance company involvement in 2015, and continued healthcare cost slowdown despite a growing 2014 economy). I only give 50-50 odds, however, to my political forecast (Dems holding Senate; small pickup in House).

I don't say this because I'm an Obama fan. These conclusions don't come from a desire to beat up on Repubs. This is what I see happening. And because these conclusions have been well researched over time, the new system I might design would not vary much from what we have. Tort reform would make sense; but letting the young/healthy carve themselves out of the central risk pool with narrower policies does not, in my opinion. Possibly the subsidies should be beefed up in the 250-400% FPL levels. We should consider raising the top end to 500% of poverty for a family of four (approx. $115M). Otherwise, assuming I'm right that it will work as defined above, there's not much to change.

Two more points:

First, the cost curve has been bent downwards. Healthcare providers are moving away from fee-for-service towards just emerging new service and payment forms that will reward quality, coordination of care, and new delivery methods that reduce system utilization. They are moving to EHR aggressively, which will enable this productivity improving, cost-curve bending, system-wide change. In fact, I believe this highly complex system (medical care delivery) is beginning to self-organize around a new productivity improvement identity;that the cost curve bending is taking on a life of its own, and that the "half-life" of this system change will be long. This is the complete opposite of top-down, command-and-control org change. This is almost the only kind of big org change that works. I predict that the CBO wonks will have figured this out by  the time they issue their 2016 Long Range Budget Outlook in June, 2016. At this point they will drop the tried-and-true excess cost growth out of their forward calculations, and their forecast will show stable debt/GDP levels looking out, which means Medicare is sustainable and the US is on solid economic footing for the long haul.

Second, the trend to consolidation in the hospital/doctor space will accelerate. If coordinated care works best in Mayo or Cleveland Clinic formats, and those are the low-cost/high productivity models that work, the industry will move away from fragmentation towards "smokestack/silo function" coordination. It's already happening, as you know. But this will be a full sea change.

That's my forecast. And I'm excited about gathering the data as it comes in.

Sunday, January 26, 2014

Why are the One Percent So Thin Skinned?

(AP Photo-Tom Margot)

Regarding your editorial "Censors on Campus" (Jan. 18): Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich."

From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them. We have outrage over the rising real-estate prices which these "techno geeks" can pay. We have, for example, libelous and cruel attacks in the Chronicle on our number-one celebrity, the author Danielle Steel, alleging that she is a "snob" despite the millions she has spent on our city's homeless and mentally ill over the past decades.

This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent "progressive" radicalism unthinkable now?

Tom Perkins
San Francisco
Mr. Perkins is a founder of Kleiner Perkins Caufield & Byers

 I find Perkins' letter utterly stunning.  Josh Marshall at TPM is startled as well. He does a great analysis and puts it this way:

It is the mix of insecurity, a sense of the brittleness of one's hold on wealth, power, privileges, combined with the reality of great wealth and power, that breeds a mix of aggressiveness and perceived embattlement.

In the Review Section of last Sunday's New York Times Sam Polk adds an important perspective from his own, quite brief, hugely financially rewarding career on Wall Street: It's greed, he says. Pure and simple. As obsessive and as difficult an addiction to kick as alcoholism. Polk titled his article "For the Love of Money".

As Progressives, we need to understand the psychology of the One Percent. We need to be much smarter than the Neocons and the Right generally have been in their simplistic views of Iran. As best we can, we need to understand these One Percent folks at a visceral level.

Saturday, January 25, 2014

Can We Engage Iran?

Most of us are hoping we are able to work out a deal with Iran. The President puts the odds at 50-50. I'm a bit more optimistic, 60-40 maybe. Why? I think our actions in the Middle East since 2008 have convinced Iran that we are no longer an imminent threat, that we have taken regime change off the priority list, and that we are coming to understand that countries in the region must work out their own futures. decide their own fates. In other words, Iran might be able to trust us, just enough to pull back on the nuclear weapons program, but not enough to abandon it completely, in case we turn menacing again. The challenge is to craft an agreement with enough inspection protocols so we will know if they suddenly move to weapons breakout. If we have that and they maintain enrichment capability, neither of us will feel "optionless", and therefore deeply vulnerable. I think we'll get there.

My point in this blog is actually to point out how radical and dangerous this manner of looking at Iran will seem to many of the key players in this now unfolding drama - the GOP, many Democrats, neocons, AIPAC,  Netanyahu, and many foreign policy analysts who would call themselves "realists". Why dangerous? Dangerous because Iran is our enemy. They have killed, or supported the killing of Americans. After Al Qaeda they are the leading terrorist system in the world. They fund Hezbollah in Lebanon and Hamas in Israel. They are supplying money and fighters to protect Assad in Syria, thus preventing a good conclusion to the Syrian civil war. They are a theocracy, completely in the grip of a messianic religious ideology and therefore, not rational actors. If they had the bomb, they would use it. They always cheat and lie in negotiations. They cannot ever be trusted. Only a complete destruction of their nuclear capability will give us a reasonable outcome.

Obama gets Iran's viewpoint. He has the integral leader's capacity to fully enter into the perspective of the other, even -no, particularly when that other is considered an enemy. If you were an Iranian leader, why in the world would you think anything other than that America is an existential threat to your existence? On January 29, 2002, President Bush declared that Iran, along with North Korea and Iraq formed the "Axis of Evil". The following Spring, the US invaded Iraq, captured Saddam Hussein, and effected regime change. In 2008, Senator McCain, the GOP presidential candidate, was caught on camera singing about bombing Iran. Why wouldn't Iran fear the US? And why wouldn't they want a nuclear capacity to defend themselves? In fact, why wouldn't they work through proxies (Syria, Hezbollah, Hamas) to destabilize Israeli, Sunni and American control of the region? Iran's job as a country, quite simply, is to protect itself and its people. That's the very rational manner in which they have been acting, for quite some time now.

But right from the start of his Presidency, with his Cairo speech on June 4, 2009, new President Obama called for change. He extended an invitation to all, enemies and friends, to engage with the United States, to see if we could work together to find ways to solve old problems, and new ones - problems on the world scene that increasingly needed collaborative, multi-country engagement to solve - WMD proliferation, climate change, resource scarcity, poverty and sectarian conflict. A week later, when the elections in Iran gave Ahmadinejad a lopsided, and surely rigged victory, and the country exploded in the Green protests, the President was very circumspect, clearly choosing not to intervene or to be seen supporting efforts for regime change, saying that the form of their Government was fully up to the Iranian people. Then the withdrawal from Iraq. The surge but simultaneous planned pull-down date for troops to leave Afghanistan. And perhaps above all, the last minute decision not to strike Syria: rather working with Russia to eliminate Syria's chemical weapons.

Can you see the long game Obama was playing? Much of this was designed to create a conversation with Iran - the one that has taken five years to become verbal and face to face, the one going on right now.

Getting an agreement with Iran will not be the hard part. It will be selling the deal at home and to Israel. So many are committed to the holding of Iran as enemy, as a force of evil in the world that must be destroyed, not engaged.

This is not a game for the weak of heart. Appeasing evil is frowned on in this country. Not agreeing with the wise folks who recognize evil beyond a shadow of a doubt is also not likely to make you many friends.

Obama is up for the challenge. And we must pray for him!

Friday, January 24, 2014

ACA Update


Charles Gaba (@Charles_Gaba on Twitter) is doing a great service for all of us by keeping meticulous track of ACA signups at ObamacareSignups.net. If you follow Charles on Twitter, you will get regular updates.

QHP means Qualified Health Plan(s), so Private QHP Enrollment is, from the media's perspective, the key number. The original target was just over 7 million, set by the CBO and agreed to by the Administration. This is where the famous 2.7 million young adult (18-34s') target came from: roughly 40% (38.6% exactly) of the uninsured are young adults (18-34s'), so this percentage was selected as the target for this group, i.e., 2.7 million young adults out of an overall goal of 7 million.

The media have latched onto this 40% number as a make-or-break target. Not so. Kaiser did a study and found that even with 25% young adults in the final mix, this would most likely only move premiums up a couple of points for the following year. And in any case, what really matters is what percentage did the insurance companies use in making their pricing decisions. If, for example, insurance companies, on average, estimated young adults to be 25% of the risk pool, then achieving 25% would not cause any premium spike (results to date: 24%).

But here's a question I don't have the answer to: Is the 7 million target for QHP signups on the Exchanges only, or a combination of on and off-Exchange signups? Charles assumes it's the latter, and gives us the 30,000 sliver of off-Exchange QHP sales to add to the 3 million current Exchange total. CBO's Enrollment Chart shows 7 million for Exchanges alone; 9 million for Medicaid; and minus 2 million for the Non-Group market, giving a 14 million reduction in the uninsured in 2014. So there's no way to tell from the CBO chart how many total QHPs are estimated for 2014.

Why does this matter? First, bragging rights. If we use Charles' approach and hit 7 million combined QHP signups, with 1 million coming off-Exchange, did we hit our target or not? Much more important, though, is (and this I do know) the risk pool is based (state-by-state) on the total number of QHPs sold in any particular state, whether sold on or off the Exchange.

I spoke to Larry Levitt at the Kaiser Foundation and asked him how many QHPs are likely to be sold off-Exchange in 2014. He said: 2 million in the first half and 4 million by the end of the year. If Exchanges hit 6-7 million, as now seems quite possible, we still have an estimated 4 million additional people to put into the 2015 risk pool. And all of these will have come from the Non-Group/Individual market, where everyone was carefully screened to weed out likely health risks. 

My conclusion: the 2015 Private QHP risk pool will be well-balanced, and we will (over the full 50 states) see no significant premium increases for next year. Conservatives will be deeply disappointed!

My last forecast was 5 million on the Exchanges, 7.5 million for Medicaid by March 31.

My forecast now: 7 million - Exchanges; 10 million - Medicaid

If we do this, and none of the Medicaid numbers are renewals (Charles is screening them out), and the CBO is right, that 2 million of the Exchange signups come from the Individual market, then the ACA will have reduced the uninsured by 15 million by mid-year, versus the 14 million CBO target. And the CBO target is for all of 2014, not just through 3/31/14.

The ACA ship is gathering momentum. I believe she is unstoppable. Even if we hit the 7 million target, even if premiums stay flat for 2015, and even if the next wave of cancellations (small-group policies for small business) results in only muted outcry, Republicans will not be able, I believe, to acknowledge this. If Democrats are very savvy, and run good, fact-filled campaigns, we could make a dent in the GOP House in November, while we hold the Senate.

Go Blue!!

Thursday, January 23, 2014

Our Transformational President (3)

(from Nancy LeTourneau)

My argument is that President Obama has effected transformational change in five areas:

  • Healthcare
  • Healthcare Costs
  • Immigration
  • Budget/Debt
  • Ending State of Perpetual War
I also argue that a transformational leader has the following characteristics:
  • Has undergone personal transformation
  • Listens deeply, with "clear lenses"and a "beginner's mind"
  • Creates safe space, sanctuary, allowing others to "show up"
  • Internal calm, grace under fire
  • High cognitive capacity - vision logic, sees emerging wholes
  • Strong moral compass, values-directed
  • compassion for others, a Servant Leader
  • present, mindful, resilient, trusting, fearless, unflappable
Lao Tzu, a 5th Century BC Chinese sage, told us:

A leader is best when people barely know that he exists, not so good when people obey and acclaim him, worst when they despise him. Fail to honor people, They fail to honor you. But of a good leader, who talks little, when his work is done, his aims fulfilled, they will all say, “We did this ourselves.”

The sage is clearly making an argument for "leadership from behind", the kind of leader that honors the people, engages them, and to a large extent, leaves the people to figure out for themselves how to  accomplish the work. What Lao Tzu does not say (though I believe it's implied) is that there must be crystal clarity on what the work is. This is the North Star Obama talks about - the clear attractor that calls the entire fleet of little ships, gives them a direction, and provides a "magnetic intention" that helps to organize them into a coherent formation, sailing towards a clear destination.

Listening. Honoring the people. Fierce, unyielding clarity about the direction intended, where North is for each great endeavor. Then trust in the people's capacity to provision the little fleet, outfit them, and get them all sailing coherently towards the desired destination.

This is the pattern Obama has followed in all his major initiatives. Lao Tzu, my list of capacities for a transformational leader, and Obama - all of these are of a single measure; they cohere together. In the hard science of complexity theory, the experimental results are clear: a complex system can be changed, transformed in fact, by engaging three central "levers" - identity, relationship and information. When a complex system's identity is altered, and it selects a new Mission, a new North Star; when all elements of the system are open and available to connecting relationships; and when essential information is shared, and flows freely thoughout the system - then the system will self-organize, creating its own means of reaching the North Star.

This is why there is a healthcare bill. The President set three clear organizing criteria: Budget neutral (no more than $1 trillion on the expense side); affordable and available for all Americans (excluding the undocumented); and designed to bend the accelerating healthcare cost curve. The Democratic leadership team fully accepted these organizing principles. And from there until the bill's completion, the President mostly stayed out of the legislative logrolling. When Scott Brown won the Massachusetts special Senate election in early 2010, the President had to come back in and reaffirm everyone's commitment to "getting 'er done!" And by the end of March, we had a bill.

This is why the healthcare cost curve is really and truly bending. The ACA supported healthcare providers in choosing a new North Star. Providers had begun experimenting with moving away from fee-for-service under Bush; what the ACA did is highlight and supplement this beginning movement; identify clear test protocols and incentives to accelerate it; and in the process made it clear that quality, not quantity was the new North Star, the new organizing principle of the healthcare delivery system. Supplement this with an early and significant investment in electronic health records plus including insurance companies deeply in the ACA design, and you have all the elements of a system that will become self-organizing - new identity, inclusive relationships, and available information. The cost curve is bending, and by a process that conservatives simply don't understand.

For immigration, once again the President focused on making clear what was his North Star, his organizing principle - a path to citizenship plus strong border security. He began connecting quite regularly with a group of Republican Senators, mostly focusing on Budget discussions; and when the 
Senate vote was taken, there was a solid bipartisan majority in support of the bill. Pressure now is mounting on the House to act on their own or a similar bill; but the forces of conservative opposition are still powerful. I'm betting this will happen, possibly this summer, and almost certainly before 2016.

On the Budget, the key decision the President made was to set a $4 trillion 10 year deficit reduction goal early in 2011, following release of the Bowles-Simpson Commission Report. Few people saw the stratagem - after all, when has a Democrat ever been serious about deficit reduction? But Obama had made this decision, thinking it was the only way to disarm the GOP budget-cutting machine. This $4 trillion target  set the agenda and provided an organizing direction to a host of unrelated actions and events through the present day. The GOP has little room to move to cut spending: the President won't negotiate on entitlements unless Republicans open up on new tax revenues; and further cuts to social programs will need to be matched by Defense cuts, which the GOP hawks won't swallow. Stalemate. Precisely the objective.

On foreign policy and ending our state of perpetual war, Obama set the tone early: engagement, not confrontation; an honest accounting of how US policies may well have contributed to some countries distrusting us; a demonstrated ability to take the warrior's clear risks (Osama bin Laden); a refusal to have his policies be categorized or labeled (Remnick said Obama's policies were neither idealist nor realist - rather they were particularist - in other words, every new situation, every country is dealt with in a particular, i.e., individual manner); a parallel refusal to lock himself into "old" definitions and labels (i.e., Iran is an irrational, irredeemable actor); and above all of these - patience, waiting for the moment - knowing that if the seeds have been properly planted, the crop will, at the end of the seeds' own, particular germination cycle, appear. As for the Global War on Terror, he just quietly turned out its North Starlight. Without fanfare or fuss, the GWOT was over. In the next 6 months to a year, we will see what kind of crop these transformative plantings will yield. I am an optimist; I predict a deal with Iran, a Syrian peace agreement, and real progress in Israeli-Palestinian discussions. The President said in his Nobel prize acceptance speech that he and America would fight when it was necessary, but that peace and non-proliferation were the guiding objectives, the North Star. But while demonstrating a clear willingness to go to war, at the same time Obama withdrew America's claws: ended the war in Iraq; a planned exit from Afghanistan; no strike in Syria, working instead with the Russians to eliminate Syria's chemical weapons; and a preliminary agreement with Iran. A major transformation is underway.

Obama, as a man, has done the great and difficult work of his own personal growth and transformation. He is in the 6th year of his Presidency, and he has used his qualities as transformational leader to effect or begin transformational change in huge areas of our domestic and international polity. 

Most of this is invisible to Republicans and a fair share of America. But it's true.

Wednesday, January 22, 2014

Our Transformational President (2)

(President Obama with Aung San Suu Kyi in November, 2012)

I love this picture and have used it before. It shows Obama modeling an essential quality of the transformational leader - deep listening. Here's what poet David Whyte says about listening:

We speak only with the voices of those
we can hear ourselves
and the body has a voice
only for that portion
of the body of the world
it has learned to perceive.

It becomes a world itself
by listening hard
for the way it belongs.

There it can learn
how it must be
and what it must do.

From The Winter of Listening
by David Whyte in The House of Belonging

My hypothesis is straightforward: to be a transformational leader, you must first undergo your own transformation. Listening is the essential element that begins and undergirds this growth process. Listen to yourself. Listen "hard for the way you belong." You must discover your "place of belonging", so you know "what you must do" and "how you must be". This is poetry and it is true.
  • Listen to others, to yourself, to the world to undergo your own transformation.
  • When you know your place of belonging, your transformation (one of them) has occurred.
  • Suddenly, like a revelation, you know how you must be, what you must do.
  • And then you have the interior capacity to be a space maker for others. Through your listening, you create sanctuary for others - as Obama is doing for Aung San Suu Kyi above.
  • You quite literally listen others into speech.
Obama has done the inner work of personal transformation (Dreams from my Father). He knows where and how he belongs. He knows how he must be and what he must do. He is a listener, a space maker, and he is being both of these things on the national and international stage.

Remnick doesn't use this language in his wonderful article, but he gives us an unhurried look into the President's way of looking at the world and how he engages with the host of problems he faces. Here are the qualities I see in the President, the ones that, in my opinion, give him the capacity to effect transformational change. And I think one can pick up on most of these in Remnick's article:
  • Internal quiet and calm - giving one space to listen to others and to offer them a safe, generative space in which they can join the conversation. In other words: interior quiet, listening, and making safe space for others.
  • High cognitive capacity, transcending yet including formal operational thinking (Piaget - rationality, thinking about thinking, seeing alternatives, taking perspectives, logical analysis). The transformational leader must have this, then move to vision logic (Wilber - sees patterns, senses what is trying to emerge, sees wholes and parts simultaneously, welcomes complexity, never tries to solve a paradox - simply embraces the tension and opens to see what is resonant).
  • Strong moral compass - the unchanging North Star. Journeys, projects, huge initiatives - all are organized around the idea and the reality of a clear North Star acting as a strange attractor, helping the ship, or fleet of ships, correct course in turbulent seas, as they endeavor to direct their progress always and only towards the Star (the vision, the mission). There is a kind of mysterious certainty that any endeavor, however complicated, will come out right in the end, if you keep your eye on the Star, and constantly adjust course (adjust strategies and means used to move towards your end objective). 
  • It's not about you as leader; it's the group, the family, the community, the nation. Not you. The leader lets go of self-focus; embraces the group he is leading/serving; becomes a true Servant Leader; and continually grows in his/her capacity for compassion and care.
  • Other qualities/capacities: resilience, mindfulness, trust, and fearlessness
  • And one more: slowness to anger. My grandfather used to say, "When in doubt, take it as a compliment!" If you can identify the "incoming missiles" and label them "friendlies", they will pass right through you. No ego contraction; no arrows sticking in your back. They flow through you. This gives you the center of quiet that allows anger to move through you, instead of storing it up for a coming explosion.
How was Obama able to get healthcare reform passed, when so many others had failed? What has Obama done (within the ACA bill) that has helped cause healthcare costs to grow more slowly? How has Obama been able to "end the Budget wars"? In a polarized and oppositional Congress, how has Obama been able to get a solid, bipartisan immigration bill through the Senate? How has he been able to end our Perpetual War? How has he brought us this far in our negotiations with Iran? What more is needed to give us a real deal?

Tomorrow I will look at these qualities of a transformational leader and show how I think they have allowed Obama to effect the transformative changes that I outlined yesterday.

Until then.

Tuesday, January 21, 2014

Our Transformational President

(from David Remnick's January 27 New Yorker article)

Have you read David Remnick's article in the current New Yorker? If not, do. Soon. Remnick listens to Obama without apparent lenses. He even discards the almost always present lens of "Are you succeeding or failing?" Healthcare is hardly mentioned. The article almost seems to me to exist without apparent intention or angle. We are invited to experience the President, through his own words, almost in slow motion, as he answers Remnick's many thoughtful questions. Obama (to my view) neither lectures nor sells. He expresses himself, sometimes taking a long moment before beginning. Remnick notes this characteristic of the President, not as judgment, but rather so we can experience this too. The words. And the space between the words.

A brilliant piece. The first one I've found where the author isn't trying to figure Obama out, and where we are gently told not to bring all our judgments to the reading, but to relax, sit back, simply experience the man.

Remnick does not say that Obama is a transformational leader. That's my conclusion, and I've felt that way for a long time. But I use that title now because Remnick's piece gives us a clean look inside someone who has the interior spaciousness, self-awareness and generosity of heart to have followed his own path of transformation, and to therefore be able to offer transformative space to others, including you and me.