Apologizing for Existence

Apologizing for Existing

“Larraine learned a long time ago not to apologize for her existence,” writes Matthew Desmond about one of the individuals he profiles for his book Evicted. Larraine lived in a trailer park, barely getting by on social assistance checks from the government. She spent unwisely, but, with no hope of getting to a more stable financial position in her lifetime, saw little reason to live more frugally.
The simple line from Desmond tells us a lot about people living in poverty. They are outcasts in our country and are looked down-upon no matter what they do. They are treated as if they are not doing the right thing, not working hard enough, and not deserving of smiles, compliments, or sympathy. Poor people are made to feel bad about themselves, about their reliance on others, and about the help they need from the government, from charity, and from private donations. They are made to feel as though they must apologize for existing and being so poor.
The narrative in our country is that one simply has to work hard and everything will be ok. As long as you are industrious and self-disciplined, you can have a car, a nice place to live, a TV, and good food to eat. You will be respected if you either work hard and earn your way, or have enough money on your own to get by without help from others. The reality for many, however, is that you must work very hard for very little, subsist on the same mediocre food all the time, and live without any frivolous spending or enjoyment, otherwise the more important bills won’t get paid. And even if you do all that, people still won’t want to associate with you, won’t want to talk to you, and won’t look at you as if you deserve to be treated like a fully human individual.
Is it any wonder that people opt out and chose to live with short-term pleasures, like expensive steak or commemorative merchandise, at the expense of making their gas payment for a month? This is the situation Larraine found herself in, and rather than acquiescing to the disparaging looks and disappointment from other people, Larraine chose to embrace her seemingly irrational and unwise spending habits. She chose not to apologize for her poverty stricken existence, to be human, and to accept who she was, even if it was not what the rest of her society wanted her to be.
Disconnection Notices

Disconnection Notices

In the book Evicted, Matthew Desmond writes, “in a typical year, almost 1 in 5 poor renting families nationwide missed payments and received a disconnection notice from their utility company.” Life in the United States can be brutal for the poor. We operate under an economic system that helps push the middle class to work hard, strive for more, and be the driving force of our economic engine. Some individuals from the middle class do advance, some do fall, and some poor people do rise up to achieve the middle class American dream. However, this system that focuses so heavily on a productive middle class doesn’t always match the realities faced by our nation’s poor.
It is true that all of us have to make tough choices every day. We have to choose to show up to work, we have to choose to actually work rather than socialize and play games once we get there, and we have to make responsible decisions to use our money to pay our bills rather than buy air Jordan’s and sushi every night. However, what Desmond and other authors who have written about poverty and homelessness in America show, for many of the poorest among us, even making those smart decisions won’t help alleviate their poverty. Desmond argues that one reason why so many people fail to pay utility bills and receive disconnection notices is that many people are paying as much as 50% of their income on rent and as much as 70% of their income on rent plus utilities.
For people in poverty who face high rents and utilities, they may have only 30% of a minimum wage income to spend on the necessities. That’s a tiny amount of their income to use toward transportation to school, work, or childcare. A fraction of their income is available to put food on the table. A sliver of the 30% can be used for clothes, perhaps a religious tithe, cleaning supplies, and basic household goods to replace worn and broken items.
Two things happen to poor people living in these situations. First, one instance of bad luck can upend years of hard work and good decision-making. A child who breaks something, a roommate who steals something, an unexpected healthcare cost, or a product that goes bad prematurely can be a substantial cost that breaks the bank and throws the perfect balance of that remaining 30% of income out of whack. For many individuals working at the lowest wage jobs, one slip-up can mean losing a job, making it harder to get a job and climb toward a higher wage, and compounding the financial difficulties that an individual may face.
The second thing that happens is that the individual recognizes how little it matters if they save a lot or don’t save at all. If one spell of bad luck can ruin your plans for using your money wisely, then why try hard to keep things in balance? Everyone forgets a bill sometime, or overspends impulsively, or faces an unexpected cost that sets them back, but for rich and middle class people, its no problem. For lower class people, it is a major problem that they are blamed for and often punished for. If this is the reality of your life, then there are actually incentives to simply spend money in a seemingly irrational manner and to enjoy what you can of the 30% remaining after rent and utilities. If you are going to have to live with the consequences of not having enough money, then why not enjoy what you can until your water and power are shut off. When you live in a constant state of stress where your entire pay check is gone toward bills and necessities, no matter how much you try to cut down, then you don’t really have an incentive to make smart decisions and continue to strive for better financial stability. Blowing your money on QVC items or a steak (something middle and upper class people also do) doesn’t seem like a bad idea, after all, you may have your power shut off regardless of how wisely you spend.
Outlier Wellness

Outlier Wellness

“Only a handful of outlier health problems are preventable in any real sense,” writes Dave Chase in his book The Opioid Crisis Wake-Up Call, “about seven percent, according to my colleague, Al Lewis.”


My last post was about the cost of outliers, how just a small percentage of patients account for a huge percentage of overall healthcare spending in the United States. We know that there are a few unlucky individuals whose healthcare is incredbily costly, yet they are not the first people we think of when we think about excessive healthcare spending in the United States. As a result, we fail to truly understand the weaknesses of our healthcare system and how our healthcare dollars are actually being spent. We introduce programs that don’t actually address the real problems in escalating healthcare costs.


This is where the ideas about and problems with wellness programs begin. Chase continues, “While the notion of workplace wellness and prevention was a noble idea, we now know that company after company is spending a huge amount of plan dollars and resources trying to do something that can’t be done.”


The idea of workplace wellness programs is to encourage healthy living habits and lifestyles of employees. Since our employers are usually paying a lot for our healthcare coverage and sometimes directly for our healthcare, anything employers can do that makes employees more healthy, outside of the healthcare space, will reduce the healthcare costs and needs of employees, generating a return on investment in the long run.


Unfortunately, the people who cost the most, who really drive incredibly high healthcare spending in the United States, don’t suffer from conditions that can be addressed through workplace wellness programs. Your plan to encourage workers to walk more, to buy foam rollers for the office, and to reward employees who count calories is not going to prevent an employee from being diagnosed with a congenital heart arrhythmia, won’t stop a rare blood disorder, and isn’t going to prevent any other unpredictable obscure disease from costing thousands or millions of dollars for your health plan.


What is worse, wellness programs usually just encourage those who are already living healthy lifestyles to flaunt how healthy their lifestyle already is. You likely won’t reach or encourage the employee who has a second job someplace else, the single mom with two kids who is just  trying to get dinner on the plate each night, or the employee who has been discouraged and dejected their whole life. An Apple Watch or an iPad isn’t going to solve the problem of a long commute, an unsafe neighborhood, or past trauma. We spend a lot of money on wellness plans that don’t address the real upstream social determinants of health for many employees, and can’t possibly address the health problems of the most expensive outliers in our healthcare system. The idea of workplace wellness programs has the right spirit, but the truth is these interventions need to happen at a much larger level than what the employer can really address.
Steel, Coffee Beans, and Healthcare

Steel, Coffee Beans, & Healthcare

“GM spends more on health care than steel, just as starbucks spends more on health care than coffee beans.” Dave Chase writes in his book The Opioid Crisis Wake-Up Call. “For most companies, health care is the second largest expense after payroll. This puts you in the health care business.”


It is incredible to think that major companies like Starbucks and GM spend more on healthcare than on the products they produce that make them stand out. It feels incredibly troubling and a bit counter to our American pro-business narrative for our companies to spend so much on something that is not a key part of their business and that is not part of their core competency. But as a quote from Warran Buffett that Chase uses to open the 11th chapter of his book says, “GM is a health and benefits company with an auto company attached.” 


I am among those who think that one of the greatest failures in America’s healthcare past was to allow businesses to provide health benefits with a tax break for the company. Rather than paying employees more money, which would come with higher tax rates, companies have been allowed to provide health benefits, which instead come with tax breaks. This is how we have fallen into a system where the quality of care, the structure of access to healthcare, and what you pay is largely determined by how well your employer does with navigating the complex healthcare landscape. You might work for someone like Harris Rosen who has figured out how to provide large amounts of preventative services with low costs, or you might work for a cash strapped organization with a random HR person trying to make healthcare plan decisions while also dealing with that employee who won’t take down the inappropriate calendar in their office and is simultaneously trying to review several applications for a new position.


The reality of healthcare spending by companies shows us that they cannot reasonably expect to have an inexperienced HR person handle healthcare benefits. The spending is too high for someone who is not completely focused on industry trends and changes, someone who doesn’t understand how insurance companies and PBMs work, and someone who has multiple other responsibilities to manage. If we want to keep private health insurance tied to our jobs, then we need to demand better from our employers and our public policy.


When we discuss the costs of healthcare in our nation, and when we consider whether a single entity (the Federal Government) should provide health insurance versus having everyone either buy private insurance through individual markets or receive health insurance through their employer, we need to consider the reality of business spending on healthcare. We need to ask whether GM should be producing cars and accountable to so many employees for their basic health needs. Maybe there is still a space for GM to be involved with the health of their workforce, but should they be the entire determining factor, spending more on healthcare than the steel that goes into the cars they produce? These are the questions I would like to focus on when we think about how we should access and pay for the care we receive.
Healthcare Pricing Failures and Overtreatment

A Story of Healthcare Pricing Failures and Overtreatment

I don’t know anyone who would not agree if I said that there was a pricing failure with the way that healthcare operates in the United States. My personal favorite example of this was a story about a person who wanted some type of medical care, but couldn’t get it due to complications with payment between what he would pay and what his insurance provider would pay the provider. The individual one way or another found out what the charge was for someone who was uninsured, and asked if he could just pay that amount instead, but the provider couldn’t offer him the same rate because of the complications involving the private insurance, contracts, and all the confusing legal structures involved. The price of healthcare in the United States is not just high, it is completely opaque to even the people on the inside, it is apparently arbitrary in some instances. It is a pricing failure that is detached from the costs that anyone involved actually seems to face.


One of the worst parts of the pricing failure of healthcare, however, is that it isn’t even connected with the services we receive. Because no one knows what anything costs at a pure base level, consumers can’t easily shop around, and providers have no incentive to make sure they are actually providing value for the service they provide. I’ll use an example from my own life:


I had been getting vision checks and contact prescriptions done at Costco for several years, but thought I ought to actually get in for a full eye exam at an office a couple years back. Costco was cheap, it was easy, the service was quick, and the optometrist was a good communicator. In other words, the service and the value of the care I received were excellent. At the other office I paid substantially more for an eye exam, did a bunch of tests that seemed unnecessary and needed to be repeated, never got a great answer about why I was doing the tests, why I failed them, and if it was a problem with my eyes or the machine in use. The optometrist was less friendly, didn’t communicate as well, offered me fewer contacts to try on and conducted what felt like an unnecessary contact fit exam rather than letting me try out the contacts for a couple weeks before making a purchase. Where Costco gave me my prescription and sent me out the door, the office I went to had no intention of letting me have my actual prescription, in an effort to force me to purchase contacts through their office rather than someplace cheaper.


Dave Chase in his book The Opioid Crisis Wake-Up Call writes, “Broadly speaking, the two biggest problems in the U.S. healthcare system are pricing failure (no correlation between price and health outcomes) and overtreatment.”


I experienced both of these in the example above. I (and my insurer) were billed for unnecessary services at the more expensive office. The services provided were worse, less convenient, and didn’t seem to be related to my actual eye health outcomes.


There are a ton of challenges to addressing these problems. Policies to reward good health outcomes often end up rewarding providers who serve more affluent populations, who tend to just be more healthy in general. Equating patient satisfaction and quality of services also are not always related to actual health outcomes, so measuring the quality of services from a patient standpoint is not always helpful and often full of bias. Nevertheless, it is clear we need more transparency, and more market mechanisms in the U.S. healthcare system so that quality, outcomes, and price can be taken into consideration and more directly linked to the services and products that medical providers offer.


Self-centeredness and materialism are two of the topics Richard Wiseman touches on in his book 59 Seconds: Think a Little, Change a Lot.  Wiseman looks at how making purchases affects our happiness, and compares spending money on items versus spending money on experiences.  As he explains, research suggests that spending money on experiences leads to greater and more sustained happiness by creating social interactions leading to positive memories and stories for the future.

Wiseman continues to dive into the world of shopping and happiness and explains a study by Elizabeth Dunn which evaluated peoples scores on a questionnaire meant to measure their level of materialism. The study asked what the individuals would do if they had $40,000 to spend. “Materialists spend, on average, three times as much on things for themselves as they do on things for others,” Wiseman writes, “Also, when they are asked to rate statements about the degree to which they care for others (“i enjoy having guests stay in my house,” “I often lend things to my friends”), they end up giving far more self-centered responses.”  Wiseman’s section on materialism is not surprising.  Our culture pushes us to want to be impressive and to make purchases that will display our success and high status.  The research shows that people who are more materialistic tend to also act in more self-centered ways.  Wiseman continues to explain Dunn’s research, “from the perspective of happiness, this self-centeredness can have a detrimental effect on people’s happiness.”

What Wiseman explains is that our brains are wired to make us social creatures.  We depend on and rely on others, and when it comes to spending money to make us happy, purchasing experiences that can bring us closer to others is more effective than purchasing items for ourselves.

I am currently working on a book called Return on Character by Fred Kiel, in which he examines leaders in the business world, their character, and the performance of their enterprise.  What Kiel’s research shows is that those CEO’s who tend to be more self-focused don’t produce the same results as CEO’s who are more caring, empathetic, and operate with a strong character.  This is in line with Wiseman’s findings about happiness and self-centeredness. Those CEO’s who are self-focused are more likely to be materialistic, less likely to be happy, and don’t stick to the same values and morals that drive the (as Kiel puts them) virtuoso CEO’s.  When your company is run by people who are less happy and act in self-centered ways, the leadership team is likely to be less interactive with employees, and they are less likely to create a work environment based on integrity and positivity.  This in turn can bring the entire company apart, as apposed to creating an organization that pulls all of its members together.