Economies run on healthy people. Healthy people are handcuffed to their employers. Entrepreneurs can only innovate if they can take those handcuffs off without the risk of losing their healthcare. How do we create a more healthy workforce and society?
All hard questions that The Chad & Cheese can ask, but no way in HELL have the answer.
Enter healthcare expert founder and chairman of Nightingale Partners and former appointee by President Bill Clinton, John Gorman. John is a healthcare rockstar and at 25 years of age he was appointed as Assistant to the Director of Health Care Financing Administration’s (HCFA, now CMS) Office of Managed Care during the Clinton administration where was handling a $79 billion portfolio.... That's BILLION with a B kids.
Big problems need big brains or AI developed by big brains. Enjoy this Sovren exclusive where the AI is the brain and so human you'll want to take it to dinner.
PODCAST TRANSCRIPTION sponsored by:
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How old were you at this point?
John Gorman (31s):
I was 25 years old and had a $79 billion portfolio. That shit only happens in DC.
Hide your kids! Lock the doors! You're listening to HRS most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry, right where it hurts! Complete with breaking news, brash opinion and loads of snark, buckle up boys and girls, it's time for the Chad and Cheese podcast.
Welcome to the Chad and Cheese Podcast everybody! I am Chad Sowash here with my work wife, Joel Cheesman,
Joel Cheeseman (-):
Chad (1m 13s):
and today, Joel, we're going to have somewhat of a cerebral discussion. Are you ready for that?
Joel Cheeseman (-):
Getting our brain on today.
Chad (1m 19s):
Getting our brain on. So on today's show, we have a real rock star. We're going to talk about how we can build a stronger, better, more healthy and innovative workforce. On Chad and Cheese we always talk about and debate quite frankly, about how we need to change government regulations, programs, obviously staff to drive innovation, wages, and many other opportunities zones. Well today we're going to do just that with our friend John Gorman.
Applause (1m 46s):
Chad (1m 50s):
Now John is the founder and chairman of Nightingale partners, and John's did a bunch of other stuff, but John, I can't wait, dude, I gotta, I gotta jump in. I want to hear the story about how you landed in the Clinton administration. Was that an appointed position? How did that all happen?
John Gorman (2m 8s):
Yeah, sir, it's a, it's a long, strange trip. And one, thanks for having me on guys. It's a great pleasure to be here. So how did I land in the Clinton administration? So my career in DC started about 30 years ago. I was hired straight out of Oberlin College to come be the press secretary for my hometown Congressman John Conyers, Jr. from Detroit, where I grew up. A year later, I was his chief of staff. And then a year later I was helping to run then governor Clinton's campaign in Michigan, which he won handily in 1992.
John Gorman (2m 48s):
And I was an appointee to the, what was then called the healthcare financing administration, which runs Medicare and Medicaid, and is now known as the center for Medicare and Medicaid services. My job was to be the founding deputy for what was a new office of managed care. So for the first time we had set up an office that would be the hub for all the Medicare and Medicaid HMO programs back in the early nineties.
Chad (3m 23s):
How old were you at this point?
John Gorman (3m 24s):
I was 25 years old and had a $79 billion portfolio! That shit only happens in DC.
Joel Cheeseman (3m 37s):
So that's a glimpse in the past, let's talk about present real quick Nightingale Partners, what do you guys do?
John Gorman (3m 43s):
We are kind of a weird beast. We are one of these opportunities zone funds, that came out of Trump's big tax giveaway bill, but this was actually Cory Booker's program designed to spur investment in real estate, in disadvantaged communities. And then a really strange thing happened. Last year the IRS loosened up the regs to allow opportunities, zone capital to be used for not just purchasing real estate, but for leases, more importantly for working capital and for meeting the business requirements of a new company in one of the roughly 9,000 opportunity zones around the US.
Chad (4m 27s):
And that was Mnuchin wasn't it?
John Gorman (4m 30s):
Well, yeah, technically IRS is part of Treasury. I doubt that minutia had anything to do with that loosening.
Chad (4m 38s):
I don't know, man, any way to be able to perspectively launder. I think he might've had something to do with it.
John Gorman (4m 48s):
Well, what happened was basically the way the program works is if you invest capital in one of these 9,000 disadvantaged communities, not only is the initial investment tax free, but all of the proceeds you make on that investment are completely tax free. So as you can imagine, that was like catnip for Republican billionaires. And it opened up about $6 trillion in available capital of which about 30 billion has been invested in these opportunities zones in the 18 months of the program, that has been operating.
John Gorman (5m 24s):
So it's brand new, but it suits our purposes very well. We are the only opportunity zone fund that makes investments in healthcare and specifically our focus is on social determinants of health. So these are basically four fancy words for poverty. So basically we invest in large scale antipoverty interventions with large health insurers.
Joel Cheeseman (5m 50s):
Give our listeners who don't live this every day, what is an opportunity zone?
John Gorman (5m 55s):
So an opportunity zone is one about 9,000 census tracks across the U S that were selected by governors as being really economically disadvantaged and they're all medically underserved. Which is a designation by the feds that means they have really terrible access to healthcare, not nearly enough healthcare providers to go around to the population. So for instance, the West Baton Rouge opportunity zone in Louisiana is one of the worst medically underserved communities in the U.S.
John Gorman (6m 35s):
and it has about a one to 7,000 primary care physician to patient ratio. So that's where we focus our investments in partnership with health insurance companies. So we'll stand up things like meal delivery programs if food security is a challenge for their members. We do a lot of non-emergent transportation to doctor's appointments, to pharmacies, so people can pick up their meds. We do a lot of housing security and so we are involved in lots of low income housing developments with onsite health and social services because all of these types of investments have been shown to yield about a three to eight X return on investment.
John Gorman (7m 23s):
And so as investors in partnering with health plans on these things, these are really impactful investments that improve the quality of care and dramatically reduce its cost.
Chad (7m 32s):
This actually helps drive the economy. Did you have anything that actually ties to economic growth as well?
John Gorman (7m 40s):
Oh, that's in our DNA as opportunities zone investors, you know, there's always a huge priority on economic development and making underserved communities, disadvantaged communities, more resilient, especially during this pandemic, to really foster job growth. One of the consistent themes that we see in our roughly 50 projects that we've got in development right now, and why I was so excited to join your show today, guys is the common thread in all of our projects include community health workers or Promatores as we call them in Puerto Rico.
John Gorman (8m 24s):
And the community health worker is basically just a social worker without the license, but who's from the community in which we're intervening and can help serve as a navigator and a coordinator of care and services for a really vulnerable and expensive patients within their neighborhoods. So in every single project we do community health workers are a fixture. But you know, the very nature of the stuff that we get into in social determinants even really speaks to physician, nurse and extender burnout.
John Gorman (9m 0s):
All of the surveys of healthcare personnel shows that where they work in a health system that invests heavily in antipoverty initiatives, to their loyalty to their employer and all of the indicators of a burnout, especially during the pandemic are dramatically less, for that workforce. So yeah, we like to think that every aspect of what we do has to have a significant focus on economic development and making communities more resilient during this pandemic.
Chad (9m 36s):
Yes. So raising, obviously in providing healthcare, some of the easy questions for you, but again, we're not, we're not wonks here, what company or what country spends the most money on their health care system?
John Gorman (9m 50s):
I don't think we should judge the quality or sophistication of a health system on how much we spent,
Chad (9m 57s):
I don't think we should either. But I mean, who spends the most?
John Gorman (9m 60s):
Well we do.
Chad (10m 1s):
And then to my second question is what country does the best in covering their, their civilians, their actual full population? Is it, do we do that?
John Gorman (10m 12s):
No, of course not. I mean, our system is a patchwork quilt of coverage on its best day, but especially during a pandemic when in a country that still among industrialized nations is really the only one that still relies on employer based coverage.
Chad (10m 29s):
John Gorman (10m 29s):
Why we now see enormous spikes in the uninsured because people are getting laid off or losing their health insurance. So now, you know, we are almost back to a pre-affordable care act levels of uninsurance with about 45 million people are uninsured in the U S right now it's an international embarrassment that, that this is happening in the wealthiest country, in the world. And as you point out the country that spends the most on healthcare. The countries that do the best, the European Christian democracies and Canada, you know, the Brits, the Germans, the Norwegians, the Swedes, the Canadians all do an amazing job of universal health care.
John Gorman (11m 17s):
But these things, all of course come with trade offs in terms of access to care and things of that sort. But if you ask their populations, they are so much happier with their systems of coverage, then any American has ever testified to here.
Joel Cheeseman (11m 33s):
Is your organization specifically advocate for universal health care.
John Gorman (11m 39s):
Yeah. The, because if you want to address social determinants of health, if you want to address systemic poverty and racism, that's embedded in the U S health system, then it has to start with coverage because coverage, you know, opens up a whole new world of access to providers, to prescription medication and to related social services that charity and any number of other state and federal government programs can, can only dream of having the impact of.
Joel Cheeseman (12m 14s):
Why is America's the only sort of advanced nation in the world, the richest nation in the world, why don't we have a universal healthcare system?
John Gorman (12m 22s):
Several reasons, one, our whole system of employer based coverage, which covers 75 million Americans really sprung out of World War II. All the men went off to war and among those that were left home. And then of course, all the women that rose to the occasion, a large employers had to use offering health insurance as an incentive to get a more qualified and highly skilled workforce to come work for them as opposed to their competitors.
John Gorman (12m 55s):
So it sprung from there really. And then just because of the organized resistance, primarily from doctor and hospital organizations, have you seen, you know, historic resistance to universal coverage? I mean, you have to remember that it was back in the day, it was the American Medical Association that lobbied the hardest against the establishment of Medicare of all things back in 1965.
Chad (13m 23s):
Why did they, why did they lobby against that?
John Gorman (13m 25s):
Well, it's always been along the lines of the words that echo true still today, socialized medicine. And they send people into a panic that, you know, we're going to have socialized medicine and, you know, it's just, that just makes me laugh every time I hear it because, or when you hear, you know, Trump supporters screaming about keep the government out of my Medicare. Medicare is the government, and Medicare is a single payer, Medicare is socialized medicine!
John Gorman (13m 59s):
And it works pretty damn well for the most part.
Chad (13m 60s):
John, the best healthcare I have ever had was when I was in the military, I could just walk in, have my ID laid on the counter and get whatever service I needed, whether it was going to the dentist going to, you know, get a checkup. It didn't matter. And the thing was, it was standard, you know, right today in, in, you know, today, it's almost like, well, I'm not really sure if I should go see the doctor or not in the military, it was like, you know, get your ass to the TMC.
John Gorman (14m 31s):
Exactly. We, we offer it within segments of the U.S. Population. You know, those were in our country, right. You guys get great health care when you're serving, but then by the way, when you're out, then you're in the VA.
Chad (14m 44s):
John Gorman (14m 44s):
And we know how well that kind of care has gone since its inception.
Chad (14m 51s):
Well talk about preventative then, because I mean, that's, that's one of the things that we don't really focus on here in the U S is preventative care because we're not all covered. And if we're not doing preventative care, then the likelihood of us getting to a stage three, stage four cancer or whatever it might happen because we were never going to the doctor is much higher than other countries. What is, what is the, I guess the biggest advantage for not for universal healthcare other than just obviously covering everybody and making it a human right?
Chad (15m 27s):
But what is the biggest advantage? Would it be the preventative side of the house?
John Gorman (15m 32s):
Well, it can be depending on the population you're trying to insure. The folks that are in the gap right now tend to be childless adults, especially in red states that did not accept the Medicaid expansion that came out of Obama's Affordable Care Act. And there in lies, another impediment to universal coverage is that, you know, the ACA really tried to get there by doing this incredible offer from the feds for Medicaid expansion and that they would cover all of the costs of it for the first And the real vulnerability and the fatal flaw, and that strategy was that it relied on Republican governors willing to accept the deal of the century from a black president.
John Gorman (16m 24s):
And we know what happened. Most of them refused to accept it. And now, you know, the vast majority of the uninsured reside in red states that refused the Medicaid expansion. So it's just maddening story of the last century of trying to drag our way into universal coverage when you face impediments at every step of the way, because entrenched interests, primarily hospitals fight so hard.
John Gorman (16m 56s):
And then of course, Republican governors in this case, a fight so hard against common sense solutions that would get us there.
Chad (17m 4s):
Didn't Pence actually take the money. And then he goes to the White House and now they're trying to disassemble everything that he took money for?
John Gorman (17m 11s):
Exactly. It's maddening, isn't it? The hypocrisy is just astounding. And so now, instead of course, is that all of the Medicaid expansions that are occurring now are happening on ballot initiatives that can go around governors and legislatures and force them to enact a Medicaid expansion. We've seen that most recently and in several red States in the past year, last November, so several states enact.
Joel Cheeseman (17m 43s):
So there's obviously a political angle to this. When I try to discover answers to questions I to say, follow the money. Who's, who's getting rich on the current system and who has the most to lose financially going to a universal system?
John Gorman (17m 56s):
First, we got to start by talking about what universal means, right? There are a lot of ways to get to universal coverage guys. We can get there through existing programs that we've got. I think we just have to do them through a lens of understanding the political reality in which we live. Republican governors are not going to accept Medicaid expansion. And so unless we can reliably get ballot initiatives in all the outstanding red states to put Medicaid expansion on the ballot and, and have confidence that they will pass as they have in the last several red states that took them on, you're never going to get there through a Medicaid expansion.
John Gorman (18m 41s):
Okay. You clearly can't do it through employer based coverage so then that means the best way to approach it would be through making Medicare a more open to people who are not currently eligible for the program. Medicare forces are our federal insurance program for the elderly and the disabled. You can get there through Medicare for All like Bernie talked about during the primaries. And that, you know, from my standpoint is just, you know, a, a moderate who goes as far left as he can, and still wins.
John Gorman (19m 17s):
Medicare for All is not only politically infeasible, it's never going to happen, but if it did, it would set our health system back actually by about 40 or 50 years, just in terms of the progress we've made in value based and coordinated care, just because it would be moving everybody into a fee for service environment like traditional Medicare is. Now, if you want to talk about how you get to universal coverage and you could actually accomplish it, you could actually get there that is politically doable.
John Gorman (19m 51s):
Then you got to start looking at something like Medicare Advantage for All Who Want It, like Pete Buttigieg and Kamila Harris were talking about during the primaries and which is now embedded in Joe Biden's Medicare proposals, to some extent.
Chad (20m 9s):
So the Humana's of the world, those organizations, the insurance companies, I mean, they're still getting rich, are they not off of this, off of this system?
John Gorman (20m 18s):
Yeah. So, so that's part of where the money goes. Not to mention if we have a, a sick population, which it, to me just boggles my mind. If we have a sick population, then we're generating money for companies like that. Oh, and they just all reported record second quarter earnings as a result of the pandemic because, because utilization plummeted during the lockdown. And then in the last couple of months, it's now creeping back up, especially for outpatient services.
John Gorman (20m 52s):
But we have seen a dramatic decline in elective, inpatient procedures in hospitals. And so as a result, the insurance companies were printing money and most of them were, were turning our earnings that were 18 to 20% higher than they saw at the same time in 2019.
Chad (21m 10s):
How do you get away from privatizing people getting sick?
John Gorman (21m 14s):
There are several approaches to it in the other industrialized countries. You've got countries like great Britain and Canada that do have true universal coverage systems that in effect function like Medicare for All, because that's how they were originated. That's how they started. That's what their populations are used to. And it's what has so much broad political support in those countries. Then you've got others like Switzerland and Germany and Poland that actually do have privately administered universal coverage.
John Gorman (21m 50s):
And that's why I think, you know, a Medicare Advantage for All Who Want It, would be a uniquely American solution to universal coverage because of course, Medicare Advantage is the private option in Medicare that where the Medicare program contracts with health, private health plans like Humana, like Blue Cross Blue Shield of Massachusetts or Indiana. And then they pay them a fixed rate to provide all of the services that their members will require for the coming month.
John Gorman (22m 25s):
And that's, that could be a very good framework to build, you know, as I said, a uniquely American approach to universal coverage that could actually get enacted.
Chad (22m 36s):
Yeah. And I can't think of anything more American than having portable health care benefits because today, I mean, Joel and I talk about it all the time. We really believe that America is hurting on the entrepreneurship and innovation side of the house because individuals, families are locked into jobs. And if they can't get away from those benefits, they can't actually do what they want to do as an entrepreneur and drive innovation.
Chad (23m 6s):
Do you have, are you seeing any of that? Are you tying again, back to the economics of it in the actual workforce side of the house? Are you seeing any of that in the studies that you guys are either tapping into or doing yourself?
John Gorman (23m 19s):
Well, I mean, job lock has always been a major characteristic of the American health insurance system. Because as I said earlier, 75 million of us have our coverage through our employers. Now the Affordable Care Act was really designed as a backstop against that system in the formation of the health insurance exchanges and marketplaces, and then all the subsidies that it provides to individuals that need to buy their health insurance that way.
John Gorman (23m 53s):
So when you, when you put it that way and talking about entrepreneurs, I think about startups, frankly, like, like us and we are in the DC Health Insurance Exchange for our coverage here at Nightingale, as most entrepreneurs are or should be because this is where you get, you know, the whole marketplace for small employer sponsored coverage or for individuals.
John Gorman (24m 23s):
And if you qualify for the subsidies, you can actually get very good quality coverage through the Health Insurance Exchanges for little or no money. As I think most small business people would find themselves qualifying for.
Joel Cheeseman (24m 40s):
We talk a, a bit on the show in terms of the gig economy, which kind of dovetails into this topic. Uber and Lyft, for example, have been in the news recently in our space in California, in terms of government saying, we need to treat drivers as employees so now Uber Lyft, you have to start giving benefits, retirement, et cetera. The latest news I saw was Uber and Lyft are gonna consider franchising being drivers. So they don't, they don't have to cross that bridge.
John Gorman (25m 8s):
Joel Cheeseman (25m 8s):
How does the gig economy and how, how these folks are treated, sort of shake out in your mind, if you could fast forward a little bit. How does, how does that, how does that play out in your mind?
John Gorman (25m 20s):
Well, a couple of different ways. You know, again, I would think most of the folks that are in the gig economy would find themselves eligible for coverage under the affordable care act through the exchanges. If their income qualifies them for subsidies, then you're going to get great deals on individual coverage, through the exchanges. Now, some folks in the gig economy may even find themselves eligible for Medicaid coverage, and then that's going to be highly dependent on the state in which they live.
John Gorman (25m 50s):
As a general rule, eligibility requirements for Medicaid are much richer in blue states than they are in red states. And so you have to be almost desperately poor to qualify for Medicaid in many of the red states. You know, you live in California or you live in New York, you know, you can get a Medicaid eligibility, and there, you're just really kind of dealing with people's concern about stigma for enrolling in the Medicaid program.
Joel Cheeseman (26m 27s):
So in your mind, it'll be more of a government solution as opposed to Uber and Lyft sort of actively or proactively, providing or services like Upwork or Fiverr, which are sort of gig platforms. You don't see them providing some sort of substance substance for them?
John Gorman (26m 45s):
You know, I mean they could look at some of these, the group offerings that Trump has suggested, but that's all junk insurance. You know, it really, it's just terrible insurance and it's just shot four holes like Swiss cheese. You know, you see some of these like religious and fraternal organizations going that route, but that doesn't work for individuals in the gig economy. I think if you're going to be looking at groups of people getting together, you know, then you could maybe through maybe a franchise put together a small group that would then go on to the, the health insurance exchanges and be able to get slightly better rates by having, you know, hundreds or thousands of people in a group buying together.
John Gorman (27m 32s):
But generally the gig economy will find its coverage in Obamacare and/or the Medicaid expansion that came from.
Chad (27m 41s):
So you said Trump in his, his offering is really looking at doing more than, I mean, he's already decimated healthcare the way that it is today. Anyway, what I'm hearing is he really just wants to, like, you always does give the crumbs to the pawns who are out there. Let's say it's pushed away from the table for a second. Let's say Biden gets elected, what do you see happening then?
John Gorman (28m 6s):
Well, what happens then really depends on whether or not the Dems reclaim the Senate. Right now, it's actually looking pretty good. Now if Biden gets elected and if the Dems reclaim the Senate and hold the House as is assumed, they will then boy, it's a whole new world out there. And I think you're going to see coverage rocket to one of the top two priorities of the Biden administration.
John Gorman (28m 37s):
And I think that's where you're going to see Joe's Medicare proposal, his big Medicare expansion proposal, and a reaffirmation of the Affordable Care Act, assuming it's spared the executioner's ax and the Supreme Court in November. Did you notice they just scheduled that hearing conveniently for a freaking week after the election? Imagine that yeah. Imagine
Chad (29m 0s):
Joel Cheeseman (29m 3s):
John yeah, last one from me in regards to sort of assuming Biden gets it in some of these things is, you know, start, start moving forward. How would you pay for this system? I mean, I've, I've read anywhere from, you know, everyone's going to pay higher taxes to you know, 71% of families are gonna have a much higher tax burden. Do you take money away from the defense budget? I mean, how do, how do you, how do you guys propose? We pay for a universal system?
John Gorman (29m 28s):
Well, first and foremost, you've got to, you got to completely roll back both Trump and Bushes, billionaire tax rebates. I mean, there's trillions of dollars right there that gets reclaimed by revoking those tax cuts for guys like me, who just never asked for it, didn't need it, frankly didn't want it, and would much rather see that going back to the government to help a great many more people, so you start there.
John Gorman (29m 59s):
Two is, we have had a massive military expansion under Trump and in, you know, the dirty little secret of a lot of these COVID relief bills have been, they've been embedded with billions of dollars in increased defense spending! In a pandemic relief bill! So you gotta roll that stuff back. And then I think then you are looking at tax increases on the wealthy, which is where it would be. I mean, nobody's going to be trying to, in a completely democratic government is going to try to finance a health insurance coverage expansion on the backs of working people or middle class people by any stretch of the imagination.
John Gorman (30m 39s):
This is all going to go on a upper tax bracket folks who've had a free ride for the last 30 years.
Chad (30m 45s):
The guys who aren't doing the work, always getting smacked down that the little guy, John Gorman, everybody thanks so much for joining us, man. We appreciate it again. We don't get a chance to get too wonky about this, but this is incredibly important for our space, because we want to be able to innovate. We want to be able to grow, but it feels like in many cases we have those handcuffs on. So we appreciate you taking the time and really digging deep and explain all this to us.
Joel Cheeseman (31m 14s):
Thanks for joining us, man, John, for our listeners, who want to know more about this topic, where would you send them?
John Gorman (31m 19s):
Oh man. The greatest source of objective information on this stuff is always the Kaiser Family Foundation at kff.org. They're just amazing on, on coverage issues and matters of public health. And I recommend that site to everybody.
Joel Cheeseman (31m 35s):
Excellent. My brain hurts. We out.
Chad (31m 38s):
OUTRO (32m 1s):
Thank you for listen to podcasts with Chad and Cheese. Brilliant! They talk about recruiting. They talk about technology, but most of all, they talk about nothing. Anyhoo, be sure to subscribe today on iTunes, Spotify, Google play, or wherever you listen to your podcasts. We out.