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Healthcare Strategy Beats Hyperventilating
Paul Ryan unveiled a health care bill two weeks ago. Ryan’s favorite lobbyists wrote it. They wrote it in secret. They dumped it on the House GOP caucus.
A lot of my friends on the right went hermatile. “Shoved down our throats!” “Obamacare two-point-oh!” “Obamacare Lite!” “Tyranny!” “Entitlements!” “Worse than Obamacare!” The most frequently used key on the keyboards of tea partiers was the exclamation point!
It’s easy to get spun up over the way Speaker Ryan handled the bill. He violated several of his own promises. He acted a lot like Nancy Pelosi.
No one should be surprised by Ryan’s behavior, though. Paul Ryan works for big corporations. He does their bidding.
Or maybe he’s a master strategist.
I want you to keep in mind two important things about replacing Obamacare:
*1. Strategy *2. Tactics
Most of the hyperventilation from the right this week was unstrategic and anti-tactical. This post will fix that. If you follow it.
You can’t be strategic if you don’t know what strategy is. Most people have no idea from strategy. The people who say “strategy” a lot in business meetings understand it the least. So let’s begin with the simplest, most brilliant explanation of strategy every written.
John Braddock was a research fellow at Washington University. He worked with Murray Wiedenbaum. Then he quit academia and became a CIA agent. He wrote a great about thinking like a spy: The Spy’s Guide to Thinking. If you haven’t read it yet, you’re lucky to survive. If you go up against someone who has read it, they’ll eat your lunch.
[The Spy’s Guide to Thinking is the #1 Best-Seller on Kindle Singles]
Braddock is working on his second book: The Spy’s Guide to Strategy. He’s released some excerpts from strategy book, and one of those excerpts provides the best definition of strategy ever.
If you’re a strategist, you start at the end.
You think about where you want to be. What will be there. Who will be there.
You start at the end.
Then, you think backward.
Braddock shows us how most people think: forward.
Then he shows us how strategists think: beginning at the end.
If you’re a strategist, the first step is choosing the end. You make the end certain. Which makes the now flexible.
If you’re a strategist, you think about the end first.
Then, you think about the rest.
If you’re a strategist, you think like this:
Finally, he tells us exactly why we need to think about healthcare reform like strategists.
Here’s one thing about thinking like a strategist: You’re never hopeless.
You should read those excerpts again right now. Then read them again. Look at those graphics. Those are world-class visualizations. They’re genius. You’ve probably never seen a better example of genius visualization. You want to memorize that entire excerpt. You also want to bookmark Braddock’s website. The first thousand people who read The Spy’s Guide to Strategy will probably rule the world.
Health Care Strategy #
Let’s take Braddock’s advise. Let’s choose the end we want.
The end is not “repeal and replace.” That’s a slogan, not a strategy. “Repeal and replace” makes us feel good. It’s intentionally vague. It gives people a lot of latitude in implementation. Almost anything can be called a repeal. And literally anything can be a replacement.
If our end is “repeal and replace,” we should all support Ryan’s bill 100 percent. It’s better than nothing, and saying you’re for “repeal and replace” is another way of saying “I’m for anything.”
I’m not sure anyone on the right has actually defined our end. So I will.
Our end is the best health care system in the world that ordinary people can afford. We believe that the free market is the best tool for achieving that end. We are open to considering other means (other than free markets), but we’re like doctors. We must see evidence some other method works better than free markets. People who’ve looked hard haven’t found any yet. So we’ll stick with free markets for now.
That’s our end: the world’s best health care system that ordinary Americans can afford. When you think about it, that’s not too much to ask for, is it?
What Comes Immediately Before That? #
Before we get the world’s best healthcare system at prices we can afford is 60 votes in the Senate and a majority in the House. The Republicans have 52 votes. Let’s assume all 52 will vote for some bill. That’s eight votes short.
Braddock also asks “who will be there?” Paul Ryan will be there. Paul Ryan is the Speaker of the House, and nothing gets a vote in the House without Paul Ryan’s permission. Nothing. He literally owns the House. And big medicine owns Paul Ryan.
That means the bill has to appeal to eight Democrat Senators and one bought-and-paid-for Speaker of the House. And that’s the reality you need to deal with.
In Braddock’s first book, he lays out a formula: DADA.
Data –> Analysis –> Decision –> Action
Everybody wants action. But action, as Braddock points out, is expensive. Action eliminates options. If we want the best healthcare system in the world at prices ordinary Americans can afford, we better have great data, excellent analysis, and great decisions first.
[The Spy’s Guide to Thinking is the #1 Best-Seller on Kindle Singles. I do not ]
Some of the data is the reality I pointed out above: 8 Democrat Senators and a bought-and-paid-for Speaker of the House.
Now for the analysis.
At least eight Democrat Senators will do what their big medicine handlers tell them to do. So will Speaker Ryan. Those big medicine executives, like all executives, prefer the devil they know. And the devil they know best is the devil some call “the administrative state.”
Free market reforms in medicine and insurance will disrupt that administrative state. Big league. That panics those candy-ass corporate MBAs. Spooks them, I tell you.
I’ve written before that most executives would rather know for sure they’re going out of business than be surprised by a $20 billion profit. They spook easily, and they wouldn’t recognize leadership if Patton slapped them in the face.
If you want free market reforms, you better persuade big medicine execs that free markets will provide predictable growth and substantial cost savings in the near term. If those execs come to believe the free market can be predictable and cheaper, they’ll instruct eight Democrat Senators and their Speaker to vote for the bills that deliver it.
But we’re getting ahead of ourselves here. We’ve introduced another “who.” Big medicine execs. They represent new data. We need to feed that new data back into the analysis loop.
Big Medicine Execs #
Imagine that you’re a big corporate executive. Your company is in medicine. Pharma, hosptials, insurance, devices, whatever. You have a big office. And huge income. You get paid based on your company’s current stock price. Your pay and prestige have nothing to do with the quality of your company or the quality of your products. You can sell poison to kids and be treated like a hero in the business world. You can go bankrupt nineteen times in a year and get a trillion-dollar bonus. Just so your stock price stays inflated. You can cook the books, evade prosecution, and replace all your American workers with foreigners and be hailed as a Great American if your stock price goes up. In other words, there is no honor among execs.
You get paid based on your company’s current stock price. Pretend you’re a CEO. About 80 percent of your CEO pay comes bonuses and incentives mostly tied to stock performance, according to Salary.com. Your pay and prestige have nothing to do with the quality of your company or the quality of your products. You can sell poison to kids and be treated like a hero in the business world. You can go bankrupt nineteen times in a year and get a trillion-dollar bonus. Look at Wall Street after the crash. Just don’t let your stock price falter. You can cook the books, evade prosecution, and replace all your American workers with foreigners and be hailed as The Great American Leader if your stock price goes up. In other words, there is no honor among execs.
There’s no point in appealing to a business executive’s honor. They’ve been trained since childhood that the measure of a man is his total compensation relative to his peers in business. These execs have compensation plans based on stock price, and that’s the only thing they care about. That compensation is more important than anything, including their families, including their country. You can’t shame them into doing the right thing. There’s no class on shame at Harvard Business School.
Big business runs on imaginary predictability, and everyone in business knows it. Before becoming a famous cartoonist, Dilbert’s Scott Adams worked in that business-modeling world. Here’s how he describes his old job:
By the way, my educational background is in economics and business. And for years, my corporate jobs involved making complex financial projections about budgets. In other words, I was perpetuating financial fraud within the company, by order of my boss. He told me to pretend my financial projections were real, and I did. But they were not real. My predictions were in line with whatever my boss told me they would be. I “tuned” my assumptions until I got my boss’s answer.
Nothing has changed since Adams left the corporate world. Believe me.
That’s why hyperventilation about Obamacare 2.0 does no good. The most important lobbying group in the country doesn’t care. They just want stability. They want to know that they can continue to rely on their erroneous and fraudulent economic models and projects. They know their projections are bullshit. But the corporate world has spent decades erecting a facade around their fraudulent modeling techniques. They will fight like dogs to prevent those facades from coming down. Because, if the facades fall, we’ll see that they’re all naked.
So my analysis: stop shouting “no” to Ryan’s bill. Look ahead to our end, **the world’s best health care system that ordinary Americans can afford. **Then reason backward. What will be there? Who will be there? What happens just before that? And before that? And again until we get all the way back to now?
Once we get back to now we will know our next step. And by working backward, we can see only one future: the future we chose.
_To be continued. Don’t jump to conclusions. _