When Things Don’t Make Sense - Prepare for Change

I was out having a beer after work a few weeks ago with a few friends when a woman across the bar started telling everyone how her son just made $500 selling Bit Coin. The first thing I thought was 2008, when the housing market tanked. When things just don’t make sense, there is big change coming and with it may come a lot of pain. In the movie the Big Short they found waitresses in Florida owning 5 houses when they had little income. Back then I remember thinking, “how can housing prices continue to rise at this crazy pace.” Like most others, I did nothing, and would never have imagined things were as screwed up as they were. Whether it be Bit Coin, Housing, or the Tech Bubble of the late 90’s, it seems like these Ponzi schemes with a product are not going away. In the industry I play around in, the health insurance business, is going through this now. Things don’t make sense. Change will come. 

A few other things don’t make sense which is a sign of the times. My daughter is spending her semester of college in Barcelona. It will cost me less to have her study a semester in Barcelona and travel throughout Europe than have her study at the University of New Hampshire, where she will graduate next year. It doesn’t make sense. High college costs need to end. Nobody seems to care.   

I saw a medical plan the other day that an employer was providing that had a $6800 deductible. That is not insurance in a country where 70% of the population is living paycheck to paycheck. The system is broken. It must change.

This same health care system has people getting on planes in our version of Domestic Medical Tourism to have surgeries in lower cost areas across the U.S. This is just plain stupid. How do you move populations of people all over the place to get health care when they would prefer it closer to their homes where friends and family can support them? I wonder how this idea can support the 6.5 million people in the Boston area. Are they going to get on planes and fly to Kansas? When you see something real dumb, change is on the horizon.

I would add that my medical insurance premium renewal was +29% this year. This was after +16% last year. It goes on and on. Then it will crash, and it should. Unfortunately, until then, our health insurance will continue to cause pain. And please, don’t tell me how you saved someone money by putting them in a captive with medical tourism, some new RX plan, and a personal direct primary care physician. All are symptoms of the problem. Aetna and CVS get this. They are trying to change this. Most perpetuate the insanity.

In the health insurance industry, we have seen private exchanges, then captives, now the buzz is referenced based pricing, domestic medical tourism, and direct primary care. For someone who has been in the business for 20+ years all of these seem like old ideas rebranded as something new. Some see this as change. I see all this as symptoms of a bigger problem. These trends will come and go. They may hide the problem for a while or simply push the problem forward a few years. But it doesn’t make sense. So, things will change.  

Let 2018 be the year where we start tackling some tough problems. Health care costs, college debt, market bubbles that create havoc, Ponzi schemes with products, are all things lurking behind the scenes that for some reason most of us are blind to. Others we see yet push to tomorrow. The bubbles continue to grow. Tomorrow will come. Look around, if it doesn’t make sense, it should change. We can continue to ride on this rollercoaster of steep ups and steep downs or choose to do something about it. Let’s start.

I am starting by writing my book about how to fix health care in America. I think I have a good solution. I may never finish it, or I may be the only one to read it, but I am going to try. Maybe after that I will tackle the high costs of college. My kids will be out by then, but the madness needs to stop.