In Episode 487 of Relentless Health Value, host Stacey Richter speaks with Kevin Lyons, a former police detective and current executive director at the New Jersey State Police Benevolence Association. They explore, in this two part episode, the significant challenges public sector employees face in obtaining cost-effective health benefits.
The discussion highlights key issues, including the influence of industry profit motives, governmental hiring practices, and media sponsorship biases. Lyons shares insights on the rapidly escalating costs of healthcare for state workers, with specific examples from New Jersey, emphasizing the need for innovative solutions and improved legislative action. The conversation sets the stage for a subsequent episode where Lyons will delve deeper into applying detective skills to uncover financial trails and propose effective changes.
Tune in next week for part 2 when Kevin talks about how he pulls out his notebook and uses what he learned as a detective to, first of all, figure out everything probably that we just talked about in this part one.
But also, you can't solve for something unless you do what most investigators do, which is follow the money.
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00:00 Introduction to Episode 487
00:33 Viral Video and Metaphor for Healthcare
04:48 Healthcare Costs and Union Challenges
07:32 Interview with Kevin Lyons Begins
08:17 Why is it important to “dig in” right now on health benefit cost increases?
08:39 Barriers to Affordable Healthcare
10:16 The first barrier to better health benefits: profit defending profit.
10:54 Profit Defense and Political Influence
16:38 Why “throw money at the problem” isn’t a real solution.
18:31 The second barrier: why a lack of employed experts costs more money.
18:59 Government Inefficiencies and Conflicts of Interest
25:58 The third barrier: media sponsorship from incumbents prevents change.
26:19 Media Influence and Public Perception
28:55 EP483 (Part 1 and Part 2) with Jonathan Baran.
30:23 Conclusion and Teaser for Part Two
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stacey Richter (00:00):
Episode 487.
"A Former Police DetectiveInvestigates the Three Big Barriers
to the Public Sector GettingBetter Affordable Health Benefits."
This I would call Part One today.
I am speaking with Kevin Lyons.
Tom Nash (00:24):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:33):
Did everyone see that video of the CEO snatching the
tennis hat out of that kid's handsat the US Open a few weeks ago.
Short version and watch the video.
It's all over the internet.
A tennis star who had just won hismatch is walking off the court signing
autographs and he hands a kid thiscute to toe head preteen, the tennis
(00:54):
star kind of haphazardly hands thiskid a hat as he walks off the court.
And as soon as that kid's fingers,you know, starts to take the hat, this
grown ass man reaches down, forcefully,grabs that hat, the kid starts crying.
This man now turns out, speaking ofinvestigations, the internet deduced
in T minus 30 minutes that thishat grabber man is actually a CEO
(01:16):
of some paving company in Poland.
But after the kid startscrying and pointing.
The CEO has a moment of reflection.
He gives the kid a millisecondonce over, and then he jams the
hat into his wife's handbag.
Finder's, keeper's, losers weeper style.
Watch the video if you haven't seen it.
It's sort of shocking to behold.
Honestly, what is also shocking,maybe even more shocking was the guy's
(01:39):
reaction afterwards, which wasn't a, wow.
I was caught up in the momentand I did a crappy thing.
Nope.
His reaction was first come, first served.
He actually wrote this in a responseapparently, according to several,
somewhat unreliable sources.
This whole thing, if I wanted toget metaphorical about it, which I
(02:00):
apparently do, the whole thing couldbe a five second summary of the big
problem I have with that CharlieMunger quote, Warren Buffett's partner.
Charlie Munger famously said, "Show me anincentive and I'll show you an outcome".
And I got an issue with that when it comesto healthcare because it implies just
because it is possible to shake down akid for a hat or shake down a firefighter
(02:24):
for another 10 grand, you should do it.
I'm moving along real fast with thismetaphor, but it's really something
to think about as the introduction tothis conversation coming up with Kevin
Lyons, who is a former police detectiveand current executive director, law
enforcement, labor employee benefitsover at the New Jersey State, PBA,
Police Benevolence Association.
(02:47):
And let's keep in mind, the family planin the state of New Jersey for state
workers now costs $67,000 having almostdoubled in the past five years in price.
That's the total cost.
And the crazy backwards thing is theunions are the ones who are fighting to
rationalize the cost of healthcare to makeit affordable for themselves and taxpayers
(03:07):
alike to put forth innovative solutionsthat actually reduce costs, which you
think the legislature would be doing.
It's a strikingly weird role reversal.
Dr. Cristin Dickerson: This Dr. Cristin Dickerson. (03:18):
undefined
Stacey, not only unearths and distillsthe problems with the existing healthcare
system, she also offers hope fora better future for healthcare and
for restoring trust in the system.
If you rely on this podcast asmuch as I do podcast, follow the
Relentless Health Value page onLinkedIn and join the conversation.
Stacey Richter (03:41):
Okay, so back to first come, first served.
Here's the undeniable thing.
The healthcare industry, themajority of its healthcare leaders.
I'm gonna say not everybody, butthe majority, operate just like any
other business with a first come,first served guiding principle.
If you can get the moneyfrom your customers, you'd
be a dummy not to take it.
I mean, to do otherwise would be aviolation of your fiduciary duty to
(04:05):
your board or your shareholders, right?
If you are the sales team at one of thesecorporate healthcare companies, they're
corporations, you'll get fired if you say,well, we knew how to get our customer to
pay $10, but I said, oh, only pay me six.
Imagine announcing that at theshareholders meeting or to the board.
We forget this isreality at our own peril.
(04:27):
Many would love to plug their earsand do the ignorance is bliss thing.
But yeah, it is not possible toargue with any unbiased integrity
that the healthcare industry in NewJersey and in this country is an
industry just like any other industry.
And first come, first served is theirmotto, just like any other industry.
No judgment here.
Just stating very easily proven facts.
(04:48):
And look, the state of New Jersey, justlike many other buyers of healthcare, is
a really unsophisticated buyer right now.
You'd think that wouldn't be the caseconsidering healthcare for state workers
Is coming up here going to be a 3.5billion dollar spend, and it's been
rapidly escalating, way higher thaninflation and almost any other benchmark
(05:09):
you can compare it to like the healthcarecosts of other state health plans.
It's also one of the state's biggestline items in the state budget.
But yeah, we get one rookie errorafter another being made dealing
with these vendors operatingjust like any other vendor.
First come, first served.
And tragically, as a result, the stateemployees and taxpayers are getting
(05:29):
wildly taken advantage of for billionsof excess dollars, getting first come,
first served right into industry pockets.
Why is the state and many othersgetting first come, first served?
Well, Kevin Lyons walks us through threebarriers, very articulately for what goes
on in the public sector, which we havenot discussed here too far on the pod.
So I was all over it.
(05:51):
Bottom line is this, even thoughthe metaphorical man just stole the
metaphorical hat and wrote firstcome first served on the internet.
There are many who smile and believeeverything that man's metaphorical,
highly compensated lobbyists put ontheir desks and fancy full color glossy
reports year after year after year.
(06:11):
They continue to believe what the mantells them and look, in all fairness,
this is complex stuff, this healthcarestuff, we are 487 episodes into it
here and still going strong as we allknow who listen, the honeypots in any
contractual agreement are always gonnabe buried in some contract with sparkly
words on the first two pages and thefirst come first served parts of it in
(06:34):
the 75 pages of little type at the end.
That's where all the fraud, waste,and abuse always is, my goodness.
Listen to the show with Vivian Hoabout the ways that consolidated
hospital systems are in this mix.
Listen to the flywheelshows with Jonathan Baran.
Listen to the Payment IntegrityShow with Kimberly Carleson.
Yeah, there are container ships ofhats going missing, but once you know
where to look, you can find them.
(06:57):
So here's my conversation with KevinLyons about the three barriers for
getting the healthcare escalatingcosts flywheel to slow its roll.
Next week, come back for Part 2,where Kevin Lyons shares how he uses
some of the skills he learned indetective training to deduce what's
going on with his healthcare dollars.
Where they are disappearing towhat he writes in that little
(07:18):
detective notebook I am imagininghe carries around even to this day.
So with that, here is Kevin Lyonsin Part One of this conversation.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Kevin Lyons, welcome toRelentless Health Value.
Kevin Lyons (07:33):
Hello, Stacey.
It's really awesome to be here.
I, I'm really excited about this.
Thank you for asking me to come on.
Stacey Richter (07:38):
Many who get themselves enmeshed in this buying of benefits
business or even trying to figureout what's going on in the healthcare
industry business, I'd say it becomespretty clear, pretty quick that
some detective skills are required.
So I am very much lookingforward to speaking with a former
detective here in a past life.
(07:59):
But maybe once you become adetective, you never really stop.
So let's dig in here.
Kevin Lyons (08:03):
No, I think, I think that, like you said, these two
sides of my career have, havehad certainly meshed, right?
Because you need to investigateand see what's going on.
If something doesn't look right, itdoesn't smell right, it's just not right.
I don't know if it's made it easier forme to dig in on things, but, but certainly
my background has helped me in some ways.
Stacey Richter (08:22):
I can imagine that it would in, in two ways.
Exactly like you just said, if somethingdoesn't smell right, you wanna dig
in and you probably get an instinctfor like, what doesn't smell right.
And then secondly, just the whole digin part, like how do you do that and
get the answers that you're looking for.
If we're thinking about New Jerseygetting public employees and unions
(08:42):
better in affordable healthcare, whythis is at a critical moment right now?
Kevin Lyons (08:48):
Well, we have rate proposals for 2026 of over 37% for
public employees in New Jersey.
Stacey Richter (08:54):
Wait, 3 7 37.
Kevin Lyons (08:55):
Three seven.
And that's, that's, we've had doubledigit increases the past four years.
So cumulatively over five years, it's,it'll be 115% starting January 26th.
That's how much our, our rateshave gone up for a PPO that
most public employees have.
Stacey Richter (09:11):
We're talking teachers, police officers.
Kevin Lyons (09:13):
The people who pick up your trash to the secretaries in an office.
This is everybody.
This is just not law enforcement,you know, this is across the board.
When you get involved in the governmentside, at least if it's an ERISA plan,
you have the Taft Hartley laws and youhave those laws that can be enforced.
States and municipalities canclaim sovereign immunity, that
they can do whatever they want.
(09:34):
And the laws are so heavily influencedby the people that the laws are
supposed to be enforced upon, it'salmost impossible to get anything done.
Try getting a bill passed.
That cartoon when we werekids was, seemed very simple.
It's not simple.
Stacey Richter (09:48):
Summarizing, if you're trying to change anything
with the benefits, it has to gothrough a legislative procedure.
Like in the private sector, you getthe right decision makers in a room
and you actually, I mean there,there's bureaucracy in some given
company, but it pales in comparisonto the gridlock and infrastructure
and bureaucracy in government.
But the other thing you're sayingis when you're faced with a 37%
(10:12):
rate increase without any of theserequirements, you can just cost
shift the whole thing, for example.
Kevin Lyons (10:18):
And in a lot of ways that's what they've done to maintain
the status quo, which is whata lot of people out there want.
They like the status quo.
They don't care if we, the pot of moneygets bigger, that's what they want.
So I'm very skeptical because ofthe lobbying dollars and because
of the political influence.
It's a tremendous challenge, you know, totry and show them what the problems are.
Stacey Richter (10:37):
Okay, so there's been some serious foreshadowing, probably
leading up to the first barrier, why itis so hard to get public employees and
union members affordable benefits inthe, as I just said, the public sector.
And the first one that you hadidentified as Profit Defends Profit.
(10:57):
Do you wanna dig in a little bit there?
Kevin Lyons (10:59):
You know, I can't understand why the lobby groups for, let's say
the hospitals or the insurers have thesame, if not more influence than the
people who are represented by the plan.
A lot of times, you know, we come withcost saving measures that would save
dozens of percent on the rates, but Oh, wecan't do that because we have a contract.
Well then fix your contract.
(11:20):
You know?
Because we don't contract.
Only the state can contract
. Stacey Richter: Profit, defends profit.
And you've just said this, you've gotindustry that is very happy with the
status quo, frankly, because I thinkit would be a problem to forget that
somebody's cost is somebody else's profit.
And if rates are going up 37%,then somebody is making 37% right?
(11:42):
And it could be a bunch ofsomebodies, but those dollars aren't
just like disappearing somehow.
It's like somebody's making this money.
Politicians' number one job is to get reelected.
I looked at some stats the other daybesides the real estate industry, medical
is the biggest contributor to politics.
Stacey Richter (11:57):
By medical you mean carriers?
You mean hospitals?
Kevin Lyons (12:00):
Carriers, hospitals, pharm, they're all just dumping
tons of money into this.
So, it's hard for them andthey want to get reelected.
Right?
The problem from their sideis that they listen to people
that they've contracted with.
They say, Oh, that's not happening.
I mean, it's that heartbreaking sometimesbecause you can show them what's going on.
You show the people in charge.
(12:20):
Hospital prices are going up at 10% ayear, but they do nothing to enforce
any either the clauses of the contractthat'll put them back into line.
We're pushing right now a transparencybill, that'll have a benchmark, and
we're getting tons of blowback on it.
There's a property tax gap in New Jersey.
Municipal budgets can't goup by more than 2% a year.
How can you have that and not regulatethe health benefits side of things.
(12:44):
So those kind of things are, it'sextremely frustrating because you
know where the influence is comingfrom, you know where the stories are
coming from, but it's just, it's sucha challenge to educate these people.
Because a lot of them, the peoplewho are administering the plans
are career bureaucrats and thenthey're governed by politicians.
It is problematic to try and beinnovative and try and do the right thing.
Stacey Richter (13:05):
Who has the ultimate authority are representatives, politicians
who were elected, and as you just said,their main job is to get reelected.
So you've got two bits to this.
One of them is if they look at theirwar chest for how to get reelected,
and a lot of dollars are coming fromthe status quo healthcare industry,
(13:25):
which is basically what you justsaid, a main campaign contributor.
So you've got that kind of sittingoff to the side while at the
same time, this is complicated.
It's unintuitive like sometimesthings that you think you
know should be the way of it.
You just start digging in and what seemsvery logical is absolutely not logical.
(13:48):
As anyone who listens to this show for anylength of time, figures out on the quick.
But they're sitting above it, kind oflooking down, probably not spending,
they're not detectives, then they'relistening to their major campaign
contributor because the lobbyist is comingin and saying like, let me show you my
glossy PR which looks amazing becauseI've got lots of money so I can afford it.
So, they've got these little buzzesin their ear then, then therefore you
(14:10):
come in and you're like, or the benefitcommittees are just people who really
know what they're doing, come in andthey're, you know, you're trying to
explain why to do something else.
You're countermanded thatsounds kind of intractable.
Kevin Lyons (14:25):
It's extremely difficult and then you're put in a position.
Where all there is todo is, is yell about it.
You go to the media, you go on RHV,you, you just keep talking about it.
You just keep telling everybody what'sreally going on and then they dismiss it.
That's not what's happening, butgive no substance to their argument.
They're so convincing in their argumentsand they have a team of people.
(14:48):
And billions of dollars thatthey can invest in this.
Stacey Richter (14:51):
If their main job is to get reelected, they see where
their bread is buttered and it's verytime consuming to think otherwise.
Kevin Lyons (15:01):
Unions can't do that.
We can't tax our members.
We can give a hundred thousanddollars in a, in an election.
We have 33,000 members in the NewJersey State, PBA, do the math.
Stacey Richter (15:11):
You can even get even less if benefits are going up 37%.
Kevin Lyons (15:14):
Sure we can't keep taxing our members and it for a PAC.
It's impossible.
The system's set up for us to fail for therepresentatives of the employees to fail.
Stacey Richter (15:23):
It almost sounds like another flywheel.
So we started out talking abouthow profit, defends profit, and for
sure I can hear how that's going on.
And the one solution that Iam hearing you talk about.
So we've articulated a lot of issueshere and it sounds like the only
thing that you have on your side, asyou said, just keep talking about it.
Just keep talking about this is thesituation, keep hammering the point.
(15:46):
And trying to get your unionmembers probably also to have a
measure of understanding here,because they're also voters.
So that could probably be harnessed.
But again, you're fighting againstthese huge publicity machines who may
be countermanding everything that yousay, even among your own memberships.
Kevin Lyons (16:04):
In New Jersey to get anything done, you need the Senate
president, the governor, and thespeaker to all agree on something.
They have outside influence or they're,they're even just being told things,
even if it's not a financial influence.
If they're just being toldthings that are contradictory,
who are they gonna listen to?
Are they gonna listen to the roadcop who became a detective who's
telling them what's going on?
(16:24):
Who's actually dug in on this stuff?
Or are they gonna listen to the guy inthe suit who walks in their office and is
taking care of the people in their party?
Stacey Richter (16:31):
It's just like that Upton Sinclair quote.
"It is difficult to get a man tounderstand something when his salary
depends on his not understanding it".
Kevin Lyons (16:39):
Like we hear all the time as lobbyists for, you know, the hospitals and
the insurers say they don't understand.
Well, the problem is we do, we dounderstand what's going on and we're
trying to help them because we are alsotaxpayers who, we are all, we're paying
these high premiums, but we're also payingthem by way of our property taxes as well.
And then when you get intonegotiations, it's always like
(17:01):
they keep throwing money at things.
If we keep throwing money at it,yeah, they're all gonna take it.
The providers and the insurersare gonna take the money if
you just keep making them.
But let's make it a reasonable cost.
Let's try and get everythingto a reasonable cost.
And that's what we want.
We want high qualitycare for reasonable cost.
We don't want the municipaland county budgets and state
budgets to go up because of us.
(17:21):
We wanna be able to take some ofthis money and put it in our salaries
because our wages are shrinking everyyear because of these increases.
Our members pay 35% of the cost of a planthat's going to cost $67,000 next year.
You know, for a family.
Stacey Richter (17:35):
$67,000!
Kevin Lyons (17:37):
$67,000 for the PPO that, that I've been in for 30 years, and like
I said, it's doubled in the past five.
Doesn't anybody else see this?
Stacey Richter (17:48):
I think you just nailed it in what you just said there.
If individuals who are in charge herehave a level of understanding, which
is basically this is an intractableissue, that you just have to keep
throwing money at the problem and thatwe've got foxes guarding henhouses,
and just give the fox some more money,and seriously, this time, this time.
And then the prices keep going up andup and up and you're kind of like,
(18:11):
what's the definition of insanity?
If it didn't work last year,like, why do we think it's gonna,
Kevin Lyons (18:14):
My favorite quote.
Stacey Richter (18:16):
Work this year?
But here we are, and the flywheelcontinues to churn because there's
really not, it sounds like a ton ofincentive for any of these individuals
given the campaign contribution situationto really alter what they're doing.
Kevin Lyons (18:32):
It's just easier for them to throw money at things.
It's easier you for them tojust say, alright, well, we'll
contribute a little bit more.
You contribute a little bit more.
We'll lower your plan, your actuarialvalue a little bit and you could
pay a little bit higher copay ora bigger deductible that's been
the frog in the, in the water.
Stacey Richter (18:50):
Which works until it doesn't.
All right, so number two here, barrier.
So we, we covered number one,which is profit defends profit.
Another one is gonna be that thegovernment tends to not pay its employees,
its full-time employees to save money.
What winds up happening is you have sortof inexperienced people in positions of
great decision making they delegate totheir consultants who are the incumbents.
(19:15):
And then again, you wind up with afox guarding a hen house situation.
Kevin Lyons (19:20):
Government generally doesn't pay, right?
If they brought in the best people, thebest analysts, they don't wanna pay 'em
because there's just this aura that,oh, we can't pay somebody $250,000 a
year, where that person could actuallysave them 10 times their salary.
In my state, the plan thatcovers almost 800,000 lives
doesn't have a medical director.
(19:40):
It doesn't have any, theyemploy no pharmacists.
They cede all that responsibility totheir contracted partners I call 'em,
you know, their business partners,which we have nobody looking at for
our interests solely from our side.
Like I went through an appeal toan appeal for one of our members
who had brain cancer, and it wasabout photon versus proton therapy.
The carrier sent a pediatrician onbehalf of the state to advocate for
(20:05):
the commission and the government.
Well, that's just an insult tome that this dying member doesn't
deserve a doctor who's an oncologist,who's a radiologist, at least to
come in and explain their position.
We ultimately won thatin court, by the way.
We took it up to the next level and, andappealed the committee's decision, the
commissioner's decision, and won that.
Stacey Richter (20:27):
And that whole prior auth in court and lawyers probably
cost more than whatever would havebeen saved by using the wrong therapy.
If there would have been anysavings, given that it wouldn't
have actually worked well or todeal with the nasty side effects.
And now there's a however longdelay for a patient that has a
brain tumor merrily growing away.
Kevin Lyons (20:49):
Those are the kind of things that are just, if nobody's looking out
for our interests, only special interestsare looking out for the special interests.
Then this death spiral, as wecall it, is gonna continue.
Stacey Richter (21:00):
What is the translation of that in the private sector, normal
business operations, you have a vendorlike the steel vendor, and you put the
steel vendor in charge of steel pricesthat your company is paying, and you
just hand 'em a checkbook and you'rejust like, all right, what do you think?
I mean, it's so obvious that thisis not an unbiased party who's now
put in a position to be unbiasedand expecting them to be unbiased.
Kevin Lyons (21:24):
And when we brought in consultants in New Jersey where the state
was under different leadership previously,the plan with Chris Deacon, you know,
she had great consultants come in.
The state chased them away onceChris moved on because they
were upsetting the apple cart.
Stacey Richter (21:40):
If they're the right consultants.
We've had on this podcast over and overand over again, just how conflicted
some consultants are getting all kindsof indirect payments that, as you just
said, public entities aren't subjectto, for example, the Consolidated
(22:01):
Appropriations Act, at least at this time.
So, right, like documenting those indirectpayments is not a requirement here.
Kevin Lyons (22:08):
No, you're absolutely correct.
And it, even with point solutions, youknow, we we're trying to do some things
and some of the people that the statewill bring in has to be brought in
through their TPA or their PBM, right?
So they asked the labor side and it,and in New Jersey, and I don't wanna
be specific to New Jersey on this,but that's my practical knowledge.
But in New Jersey, we have six fromlabor and six from management that
(22:30):
have to make any plan design changes.
So in order to get anythingdone, you need a seventh vote.
So one person from theother side has to vote.
In this specific space it was aGLP-1 solution, quote, unquote.
So being the resident skeptic andasking the questions that nobody wants
to be asked, I said, do you have anybusiness relationship with the PBM?
(22:51):
And he said, Well, we havea strategic partnership
Now, I didn't go to business school.
I learned this as we go.
But just those two words together,I mean, so you're both gonna
make money on this, right?
That, that's how I see it.
If it's a strategic partnership.
You're not gonna have astrategic partnership that
only one side makes money.
So digging in on those things is soimportant for us to bring an outside
independent person with no conflictsand have a contract like that that
(23:15):
says they can't have conflicts isalmost a an impossibility, because once
again, we go back to the status quo.
Stacey Richter (23:20):
Yeah, for sure.
And as we started talking aboutthis barrier, which is basically not
employing the kind of talent that,and, and when I say talent, I mean
maybe the level of expertise, butpotentially also the kind of expertise
as you said, like there's no medicaldirector in the state of New Jersey.
How are you gonna make good appropriatecare decisions when you have no person
(23:43):
that's sitting on your side of the table.
And that same analogy isprobably true across the board.
If you're talking about what shouldthe price be, what there's so many,
which should the care pathway be?
What, which should the benefitdesign, how should we navigate, right?
Like there's a lot of decisionswhere you really wanna make sure that
someone who's totally unconflictedwith no, in air quote, strategic
partnerships that are influencingthe decisions that they're making.
(24:05):
And just to highlight that, I just getmyself involved in many conversations.
I just had one recentlytalking to the head of benefits
for a big teacher's union.
I say, Hey, what do you, what doyou, what are you thinking about
skyrocketing specialty pharmacy spend?
Like, what are you doing there?
Generally speaking, when I askedthat question, I put on a helmet
(24:26):
and fastened my seatbelt becausethere's gonna be like hand waving
and possibly tears at some juncture.
But the answer I gotwas totally unexpected.
She said, Oh, we have verygood insurance coverage.
She's the head of benefits.
So I said, what's your experience?
And she said, Oh, wellI had this other job.
She was like an audiologist orsomething and she just got put
into, now she's head of benefits.
So like you, you have, you knowexactly like you just said.
(24:49):
Like just someone who has zeroexperience here, who's put in this
very, very high decision makingjob, who do they get educated by?
Oh, well, their consultants whomay work for the carriers or who
may work for other incumbents.
Kevin Lyons (25:03):
I see that on a regular basis with the committees, with the state.
We'll get a new member.
And it's like, what's yourbackground in, in healthcare?
Oh, I have health benefits.
When our president, at the time TonyWieners appointed me to this seat, I
said, Tony, I know a little bit aboutthis being involved in negotiating
contracts for my members in my department.
(25:23):
I'm like, I gotta go to school.
You know, so I started going to classes,I started getting involved, and a lot
of people don't wanna do that, and Idon't like to play victim, but when we're
trying to fix something and nobody'slistening, I can bring ideas to the state
government and say, we should do this.
And they don't have an answer.
They come back, well, you, we can'tdo that because it's contracting.
(25:43):
Or I send them one of your podcasts.
Yeah, you gotta listen to this.
Oh, that was very interesting.
I mean, how do you know you're runningthe state health benefits plan, you're
telling us that you're in control ofit and you don't know these things.
Why do I know 'em and not you?
Because I, I guess because I expect moreof myself, but they won't go out and get
a real plan administrator who works forthe state and pay 'em what they're worth.
(26:06):
A lot of the people areinstitutional that are there.
They're wonderful people.
They're well-meaning I've never hada problem with any of 'em personally.
They care about our members, butwhen it comes to the strategy
of a plan, they fail miserably.
Stacey Richter (26:19):
Our third barrier is that the media and publications are
often sponsored by the incumbents.
So not only are there lobbyistsrunning around, not only are there
all the things that we just talkedabout happening, but also the media.
Their bread is buttered oftentimes by someof these big companies who are kind of the
(26:39):
only ones that can afford the advertising.
Kevin Lyons (26:41):
It's probably the most frustrating thing when I pull up to,
especially police union event, and I seethe state's TPA is sponsoring the event.
So, being the timid and shy personthat I am, I usually go right to the
organization's president and say,What the hell is that doing here?
You know, because I don't wanna be here.
If that's here, and they,well, they gave me $15,000.
(27:03):
What, what am I supposed to do?
I'm like, say no, becausethat's your $15,000.
It, it's just we're being gaslit.
And it's such a barrier for me toeducate members and say, listen,
it's not the color of your card.
It's who you can go to.
It's what services you're gonna get.
Are they, are they high quality providers?
And they, we've just been soindoctrinated into this, this is
(27:26):
what health benefits are, this color.
And that's what we have to change.
That's the culture I'm strivingto change even in our magazine.
The TPA is advertising.
I think at the end of the day, what wehave to do is continue to educate them.
We shouldn't be letting some fly bynight doctor advertise in our magazine,
you know, without being vetted.
I think we have a responsibilityas union leaders to do that.
(27:48):
That's a real, real importantpart of this process of change
that we have to bring on.
I remember one day I was, I waswatching a baseball game and I
actually texted Chris Deacon.
I'm like, New York Presbyterian is,is advertising on the Mets jerseys.
And it's like, well, if theyhave enough money to do that,
drop your prices a little bit.
And then the whole not-for-profitthing, that that's a different, I
(28:10):
don't wanna go down that rabbit hole.
But just the fact that we seethis every day of our lives.
When I drive to work, I see thesehuge, huge billboards advertised, oh,
we're the best in knee replacement.
Uh, I'll see a sign, you know, forgastro, whatever services they wanna do.
They're building $4 billionworth of hospital improvements
in New Jersey this year.
So where's that going?
It's going to the profit centersand then to teach people that
(28:32):
and to get it through their headsthat, listen, just because they're
flashy doesn't mean they're better.
Maybe not.
Stacey Richter (28:37):
I saw a, uh, investigative journalism and I, and I'm
saying that in half air quotes, right.
About what was going on inhealth benefits in New Jersey
and you watch the whole thing.
There's a journalist who's talkingabout it, and at the very end, for 30
seconds, the sponsor pops up, whichas you just said, is the TPA being
(28:59):
investigated, you know, in air quotes.
So it's just a really striking scenario.
The barriers that we talkedabout are profit defends profit.
so that was the first thing.
The more profit the one sidehas, because somebody's profit is
somebody else's costs, the higherthe costs are on the other side,
and then the less money they have,
It's kind of this flywheel here.
We just had a show with JonathanBaran about the healthcare flywheel.
The second one is that, again, Theless money there actually is that
(29:22):
the unions or the state coffers have,the less opportunity there is to
hire FTEs, full-time employees, andthe expertise that's required and
the level of talent that's requiredto mitigate some of these factors.
So then the situation just getsworse and you have jobs that
require a lot of expertise and alot of courage and just, you wanna
(29:43):
have the right person in the job.
You can't delegate everything.
Or you know, even the courage tohire the right kind of consultant.
And then lastly, you've got themedia sponsored by the same entities.
So they're gonna do a really hard hittingjournalistic piece, cutting down their
biggest, their biggest advertiser, right?
Like there's just, yeah, it's not subtle.
Kevin Lyons (30:02):
We're just so gaslit by the system.
That's a place that, you know,the education portion, which is
incredibly difficult because peopledon't wanna think about that.
They just wanna be able toknow they can go to the doctor.
But when my members are havinga thousand dollars a paycheck
taking outta their paycheck, I'mlike, okay, are you listening now?
Can you hear me now?
Stacey Richter (30:22):
Okay, tribe.
So you heard Kevin use his detectiveskills to really hone in on what the
barriers to stopping the flywheeldriving up healthcare costs are.
Next week though, come back becausewe're gonna have part two of this
conversation which Kevin talks about howhe pulls out his notebook and uses what
he learned as a detective to, first ofall, figure out everything probably that
(30:46):
we just talked about in this part one.
But also, you can't solve for somethingunless you do what most investigators
do, which is follow the money.
So see on the other side.
Thanks so much for listening.
Cora Opsahl (30:58):
Hi, this is Cora Opsahl with the 32BJ Health Fund.
If you love Relentless Health Value justlike I do, then I'll encourage you, please
sign up for the newsletter, follow onyour podcast app, and leave a review.
Tell everyone else about how greatthis is and I'll let you're learning.
Episode 487.
"A Former Police DetectiveInvestigates the Three Big Barriers
to the Public Sector GettingBetter Affordable Health Benefits."
This I would call Part One today.
I am speaking with Kevin Lyons.
Tom Nash (00:24):
American Healthcare Entrepreneurs and Executives
You Want to Know, Talking.
Relentlessly Seeking Value.
Stacey Richter (00:33):
Did everyone see that video of the CEO snatching the
tennis hat out of that kid's handsat the US Open a few weeks ago.
Short version and watch the video.
It's all over the internet.
A tennis star who had just won hismatch is walking off the court signing
autographs and he hands a kid thiscute to toe head preteen, the tennis
(00:54):
star kind of haphazardly hands thiskid a hat as he walks off the court.
And as soon as that kid's fingers,you know, starts to take the hat, this
grown ass man reaches down, forcefully,grabs that hat, the kid starts crying.
This man now turns out, speaking ofinvestigations, the internet deduced
in T minus 30 minutes that thishat grabber man is actually a CEO
(01:16):
of some paving company in Poland.
But after the kid startscrying and pointing.
The CEO has a moment of reflection.
He gives the kid a millisecondonce over, and then he jams the
hat into his wife's handbag.
Finder's, keeper's, losers weeper style.
Watch the video if you haven't seen it.
It's sort of shocking to behold.
Honestly, what is also shocking,maybe even more shocking was the guy's
(01:39):
reaction afterwards, which wasn't a, wow.
I was caught up in the momentand I did a crappy thing.
Nope.
His reaction was first come, first served.
He actually wrote this in a responseapparently, according to several,
somewhat unreliable sources.
This whole thing, if I wanted toget metaphorical about it, which I
(02:00):
apparently do, the whole thing couldbe a five second summary of the big
problem I have with that CharlieMunger quote, Warren Buffett's partner.
Charlie Munger famously said, "Show me anincentive and I'll show you an outcome".
And I got an issue with that when it comesto healthcare because it implies just
because it is possible to shake down akid for a hat or shake down a firefighter
(02:24):
for another 10 grand, you should do it.
I'm moving along real fast with thismetaphor, but it's really something
to think about as the introduction tothis conversation coming up with Kevin
Lyons, who is a former police detectiveand current executive director, law
enforcement, labor employee benefitsover at the New Jersey State, PBA,
Police Benevolence Association.
(02:47):
And let's keep in mind, the family planin the state of New Jersey for state
workers now costs $67,000 having almostdoubled in the past five years in price.
That's the total cost.
And the crazy backwards thing is theunions are the ones who are fighting to
rationalize the cost of healthcare to makeit affordable for themselves and taxpayers
(03:07):
alike to put forth innovative solutionsthat actually reduce costs, which you
think the legislature would be doing.
It's a strikingly weird role reversal.
Dr. Cristin Dickerson: This Dr. Cristin Dickerson. (03:18):
undefined
Stacey, not only unearths and distillsthe problems with the existing healthcare
system, she also offers hope fora better future for healthcare and
for restoring trust in the system.
If you rely on this podcast asmuch as I do podcast, follow the
Relentless Health Value page onLinkedIn and join the conversation.
Stacey Richter (03:41):
Okay, so back to first come, first served.
Here's the undeniable thing.
The healthcare industry, themajority of its healthcare leaders.
I'm gonna say not everybody, butthe majority, operate just like any
other business with a first come,first served guiding principle.
If you can get the moneyfrom your customers, you'd
be a dummy not to take it.
I mean, to do otherwise would be aviolation of your fiduciary duty to
(04:05):
your board or your shareholders, right?
If you are the sales team at one of thesecorporate healthcare companies, they're
corporations, you'll get fired if you say,well, we knew how to get our customer to
pay $10, but I said, oh, only pay me six.
Imagine announcing that at theshareholders meeting or to the board.
We forget this isreality at our own peril.
(04:27):
Many would love to plug their earsand do the ignorance is bliss thing.
But yeah, it is not possible toargue with any unbiased integrity
that the healthcare industry in NewJersey and in this country is an
industry just like any other industry.
And first come, first served is theirmotto, just like any other industry.
No judgment here.
Just stating very easily proven facts.
(04:48):
And look, the state of New Jersey, justlike many other buyers of healthcare, is
a really unsophisticated buyer right now.
You'd think that wouldn't be the caseconsidering healthcare for state workers
Is coming up here going to be a 3.5billion dollar spend, and it's been
rapidly escalating, way higher thaninflation and almost any other benchmark
(05:09):
you can compare it to like the healthcarecosts of other state health plans.
It's also one of the state's biggestline items in the state budget.
But yeah, we get one rookie errorafter another being made dealing
with these vendors operatingjust like any other vendor.
First come, first served.
And tragically, as a result, the stateemployees and taxpayers are getting
(05:29):
wildly taken advantage of for billionsof excess dollars, getting first come,
first served right into industry pockets.
Why is the state and many othersgetting first come, first served?
Well, Kevin Lyons walks us through threebarriers, very articulately for what goes
on in the public sector, which we havenot discussed here too far on the pod.
So I was all over it.
(05:51):
Bottom line is this, even thoughthe metaphorical man just stole the
metaphorical hat and wrote firstcome first served on the internet.
There are many who smile and believeeverything that man's metaphorical,
highly compensated lobbyists put ontheir desks and fancy full color glossy
reports year after year after year.
(06:11):
They continue to believe what the mantells them and look, in all fairness,
this is complex stuff, this healthcarestuff, we are 487 episodes into it
here and still going strong as we allknow who listen, the honeypots in any
contractual agreement are always gonnabe buried in some contract with sparkly
words on the first two pages and thefirst come first served parts of it in
(06:34):
the 75 pages of little type at the end.
That's where all the fraud, waste,and abuse always is, my goodness.
Listen to the show with Vivian Hoabout the ways that consolidated
hospital systems are in this mix.
Listen to the flywheelshows with Jonathan Baran.
Listen to the Payment IntegrityShow with Kimberly Carleson.
Yeah, there are container ships ofhats going missing, but once you know
where to look, you can find them.
(06:57):
So here's my conversation with KevinLyons about the three barriers for
getting the healthcare escalatingcosts flywheel to slow its roll.
Next week, come back for Part 2,where Kevin Lyons shares how he uses
some of the skills he learned indetective training to deduce what's
going on with his healthcare dollars.
Where they are disappearing towhat he writes in that little
(07:18):
detective notebook I am imagininghe carries around even to this day.
So with that, here is Kevin Lyonsin Part One of this conversation.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
Kevin Lyons, welcome toRelentless Health Value.
Kevin Lyons (07:33):
Hello, Stacey.
It's really awesome to be here.
I, I'm really excited about this.
Thank you for asking me to come on.
Stacey Richter (07:38):
Many who get themselves enmeshed in this buying of benefits
business or even trying to figureout what's going on in the healthcare
industry business, I'd say it becomespretty clear, pretty quick that
some detective skills are required.
So I am very much lookingforward to speaking with a former
detective here in a past life.
(07:59):
But maybe once you become adetective, you never really stop.
So let's dig in here.
Kevin Lyons (08:03):
No, I think, I think that, like you said, these two
sides of my career have, havehad certainly meshed, right?
Because you need to investigateand see what's going on.
If something doesn't look right, itdoesn't smell right, it's just not right.
I don't know if it's made it easier forme to dig in on things, but, but certainly
my background has helped me in some ways.
Stacey Richter (08:22):
I can imagine that it would in, in two ways.
Exactly like you just said, if somethingdoesn't smell right, you wanna dig
in and you probably get an instinctfor like, what doesn't smell right.
And then secondly, just the whole digin part, like how do you do that and
get the answers that you're looking for.
If we're thinking about New Jerseygetting public employees and unions
(08:42):
better in affordable healthcare, whythis is at a critical moment right now?
Kevin Lyons (08:48):
Well, we have rate proposals for 2026 of over 37% for
public employees in New Jersey.
Stacey Richter (08:54):
Wait, 3 7 37.
Kevin Lyons (08:55):
Three seven.
And that's, that's, we've had doubledigit increases the past four years.
So cumulatively over five years, it's,it'll be 115% starting January 26th.
That's how much our, our rateshave gone up for a PPO that
most public employees have.
Stacey Richter (09:11):
We're talking teachers, police officers.
Kevin Lyons (09:13):
The people who pick up your trash to the secretaries in an office.
This is everybody.
This is just not law enforcement,you know, this is across the board.
When you get involved in the governmentside, at least if it's an ERISA plan,
you have the Taft Hartley laws and youhave those laws that can be enforced.
States and municipalities canclaim sovereign immunity, that
they can do whatever they want.
(09:34):
And the laws are so heavily influencedby the people that the laws are
supposed to be enforced upon, it'salmost impossible to get anything done.
Try getting a bill passed.
That cartoon when we werekids was, seemed very simple.
It's not simple.
Stacey Richter (09:48):
Summarizing, if you're trying to change anything
with the benefits, it has to gothrough a legislative procedure.
Like in the private sector, you getthe right decision makers in a room
and you actually, I mean there,there's bureaucracy in some given
company, but it pales in comparisonto the gridlock and infrastructure
and bureaucracy in government.
But the other thing you're sayingis when you're faced with a 37%
(10:12):
rate increase without any of theserequirements, you can just cost
shift the whole thing, for example.
Kevin Lyons (10:18):
And in a lot of ways that's what they've done to maintain
the status quo, which is whata lot of people out there want.
They like the status quo.
They don't care if we, the pot of moneygets bigger, that's what they want.
So I'm very skeptical because ofthe lobbying dollars and because
of the political influence.
It's a tremendous challenge, you know, totry and show them what the problems are.
Stacey Richter (10:37):
Okay, so there's been some serious foreshadowing, probably
leading up to the first barrier, why itis so hard to get public employees and
union members affordable benefits inthe, as I just said, the public sector.
And the first one that you hadidentified as Profit Defends Profit.
(10:57):
Do you wanna dig in a little bit there?
Kevin Lyons (10:59):
You know, I can't understand why the lobby groups for, let's say
the hospitals or the insurers have thesame, if not more influence than the
people who are represented by the plan.
A lot of times, you know, we come withcost saving measures that would save
dozens of percent on the rates, but Oh, wecan't do that because we have a contract.
Well then fix your contract.
(11:20):
You know?
Because we don't contract.
Only the state can contract
. Stacey Richter: Profit, defends profit.
And you've just said this, you've gotindustry that is very happy with the
status quo, frankly, because I thinkit would be a problem to forget that
somebody's cost is somebody else's profit.
And if rates are going up 37%,then somebody is making 37% right?
(11:42):
And it could be a bunch ofsomebodies, but those dollars aren't
just like disappearing somehow.
It's like somebody's making this money.
Politicians' number one job is to get reelected.
I looked at some stats the other daybesides the real estate industry, medical
is the biggest contributor to politics.
Stacey Richter (11:57):
By medical you mean carriers?
You mean hospitals?
Kevin Lyons (12:00):
Carriers, hospitals, pharm, they're all just dumping
tons of money into this.
So, it's hard for them andthey want to get reelected.
Right?
The problem from their sideis that they listen to people
that they've contracted with.
They say, Oh, that's not happening.
I mean, it's that heartbreaking sometimesbecause you can show them what's going on.
You show the people in charge.
(12:20):
Hospital prices are going up at 10% ayear, but they do nothing to enforce
any either the clauses of the contractthat'll put them back into line.
We're pushing right now a transparencybill, that'll have a benchmark, and
we're getting tons of blowback on it.
There's a property tax gap in New Jersey.
Municipal budgets can't goup by more than 2% a year.
How can you have that and not regulatethe health benefits side of things.
(12:44):
So those kind of things are, it'sextremely frustrating because you
know where the influence is comingfrom, you know where the stories are
coming from, but it's just, it's sucha challenge to educate these people.
Because a lot of them, the peoplewho are administering the plans
are career bureaucrats and thenthey're governed by politicians.
It is problematic to try and beinnovative and try and do the right thing.
Stacey Richter (13:05):
Who has the ultimate authority are representatives, politicians
who were elected, and as you just said,their main job is to get reelected.
So you've got two bits to this.
One of them is if they look at theirwar chest for how to get reelected,
and a lot of dollars are coming fromthe status quo healthcare industry,
(13:25):
which is basically what you justsaid, a main campaign contributor.
So you've got that kind of sittingoff to the side while at the
same time, this is complicated.
It's unintuitive like sometimesthings that you think you
know should be the way of it.
You just start digging in and what seemsvery logical is absolutely not logical.
(13:48):
As anyone who listens to this show for anylength of time, figures out on the quick.
But they're sitting above it, kind oflooking down, probably not spending,
they're not detectives, then they'relistening to their major campaign
contributor because the lobbyist is comingin and saying like, let me show you my
glossy PR which looks amazing becauseI've got lots of money so I can afford it.
So, they've got these little buzzesin their ear then, then therefore you
(14:10):
come in and you're like, or the benefitcommittees are just people who really
know what they're doing, come in andthey're, you know, you're trying to
explain why to do something else.
You're countermanded thatsounds kind of intractable.
Kevin Lyons (14:25):
It's extremely difficult and then you're put in a position.
Where all there is todo is, is yell about it.
You go to the media, you go on RHV,you, you just keep talking about it.
You just keep telling everybody what'sreally going on and then they dismiss it.
That's not what's happening, butgive no substance to their argument.
They're so convincing in their argumentsand they have a team of people.
(14:48):
And billions of dollars thatthey can invest in this.
Stacey Richter (14:51):
If their main job is to get reelected, they see where
their bread is buttered and it's verytime consuming to think otherwise.
Kevin Lyons (15:01):
Unions can't do that.
We can't tax our members.
We can give a hundred thousanddollars in a, in an election.
We have 33,000 members in the NewJersey State, PBA, do the math.
Stacey Richter (15:11):
You can even get even less if benefits are going up 37%.
Kevin Lyons (15:14):
Sure we can't keep taxing our members and it for a PAC.
It's impossible.
The system's set up for us to fail for therepresentatives of the employees to fail.
Stacey Richter (15:23):
It almost sounds like another flywheel.
So we started out talking abouthow profit, defends profit, and for
sure I can hear how that's going on.
And the one solution that Iam hearing you talk about.
So we've articulated a lot of issueshere and it sounds like the only
thing that you have on your side, asyou said, just keep talking about it.
Just keep talking about this is thesituation, keep hammering the point.
(15:46):
And trying to get your unionmembers probably also to have a
measure of understanding here,because they're also voters.
So that could probably be harnessed.
But again, you're fighting againstthese huge publicity machines who may
be countermanding everything that yousay, even among your own memberships.
Kevin Lyons (16:04):
In New Jersey to get anything done, you need the Senate
president, the governor, and thespeaker to all agree on something.
They have outside influence or they're,they're even just being told things,
even if it's not a financial influence.
If they're just being toldthings that are contradictory,
who are they gonna listen to?
Are they gonna listen to the roadcop who became a detective who's
telling them what's going on?
(16:24):
Who's actually dug in on this stuff?
Or are they gonna listen to the guy inthe suit who walks in their office and is
taking care of the people in their party?
Stacey Richter (16:31):
It's just like that Upton Sinclair quote.
"It is difficult to get a man tounderstand something when his salary
depends on his not understanding it".
Kevin Lyons (16:39):
Like we hear all the time as lobbyists for, you know, the hospitals and
the insurers say they don't understand.
Well, the problem is we do, we dounderstand what's going on and we're
trying to help them because we are alsotaxpayers who, we are all, we're paying
these high premiums, but we're also payingthem by way of our property taxes as well.
And then when you get intonegotiations, it's always like
(17:01):
they keep throwing money at things.
If we keep throwing money at it,yeah, they're all gonna take it.
The providers and the insurersare gonna take the money if
you just keep making them.
But let's make it a reasonable cost.
Let's try and get everythingto a reasonable cost.
And that's what we want.
We want high qualitycare for reasonable cost.
We don't want the municipaland county budgets and state
budgets to go up because of us.
(17:21):
We wanna be able to take some ofthis money and put it in our salaries
because our wages are shrinking everyyear because of these increases.
Our members pay 35% of the cost of a planthat's going to cost $67,000 next year.
You know, for a family.
Stacey Richter (17:35):
$67,000!
Kevin Lyons (17:37):
$67,000 for the PPO that, that I've been in for 30 years, and like
I said, it's doubled in the past five.
Doesn't anybody else see this?
Stacey Richter (17:48):
I think you just nailed it in what you just said there.
If individuals who are in charge herehave a level of understanding, which
is basically this is an intractableissue, that you just have to keep
throwing money at the problem and thatwe've got foxes guarding henhouses,
and just give the fox some more money,and seriously, this time, this time.
And then the prices keep going up andup and up and you're kind of like,
(18:11):
what's the definition of insanity?
If it didn't work last year,like, why do we think it's gonna,
Kevin Lyons (18:14):
My favorite quote.
Stacey Richter (18:16):
Work this year?
But here we are, and the flywheelcontinues to churn because there's
really not, it sounds like a ton ofincentive for any of these individuals
given the campaign contribution situationto really alter what they're doing.
Kevin Lyons (18:32):
It's just easier for them to throw money at things.
It's easier you for them tojust say, alright, well, we'll
contribute a little bit more.
You contribute a little bit more.
We'll lower your plan, your actuarialvalue a little bit and you could
pay a little bit higher copay ora bigger deductible that's been
the frog in the, in the water.
Stacey Richter (18:50):
Which works until it doesn't.
All right, so number two here, barrier.
So we, we covered number one,which is profit defends profit.
Another one is gonna be that thegovernment tends to not pay its employees,
its full-time employees to save money.
What winds up happening is you have sortof inexperienced people in positions of
great decision making they delegate totheir consultants who are the incumbents.
(19:15):
And then again, you wind up with afox guarding a hen house situation.
Kevin Lyons (19:20):
Government generally doesn't pay, right?
If they brought in the best people, thebest analysts, they don't wanna pay 'em
because there's just this aura that,oh, we can't pay somebody $250,000 a
year, where that person could actuallysave them 10 times their salary.
In my state, the plan thatcovers almost 800,000 lives
doesn't have a medical director.
(19:40):
It doesn't have any, theyemploy no pharmacists.
They cede all that responsibility totheir contracted partners I call 'em,
you know, their business partners,which we have nobody looking at for
our interests solely from our side.
Like I went through an appeal toan appeal for one of our members
who had brain cancer, and it wasabout photon versus proton therapy.
The carrier sent a pediatrician onbehalf of the state to advocate for
(20:05):
the commission and the government.
Well, that's just an insult tome that this dying member doesn't
deserve a doctor who's an oncologist,who's a radiologist, at least to
come in and explain their position.
We ultimately won thatin court, by the way.
We took it up to the next level and, andappealed the committee's decision, the
commissioner's decision, and won that.
Stacey Richter (20:27):
And that whole prior auth in court and lawyers probably
cost more than whatever would havebeen saved by using the wrong therapy.
If there would have been anysavings, given that it wouldn't
have actually worked well or todeal with the nasty side effects.
And now there's a however longdelay for a patient that has a
brain tumor merrily growing away.
Kevin Lyons (20:49):
Those are the kind of things that are just, if nobody's looking out
for our interests, only special interestsare looking out for the special interests.
Then this death spiral, as wecall it, is gonna continue.
Stacey Richter (21:00):
What is the translation of that in the private sector, normal
business operations, you have a vendorlike the steel vendor, and you put the
steel vendor in charge of steel pricesthat your company is paying, and you
just hand 'em a checkbook and you'rejust like, all right, what do you think?
I mean, it's so obvious that thisis not an unbiased party who's now
put in a position to be unbiasedand expecting them to be unbiased.
Kevin Lyons (21:24):
And when we brought in consultants in New Jersey where the state
was under different leadership previously,the plan with Chris Deacon, you know,
she had great consultants come in.
The state chased them away onceChris moved on because they
were upsetting the apple cart.
Stacey Richter (21:40):
If they're the right consultants.
We've had on this podcast over and overand over again, just how conflicted
some consultants are getting all kindsof indirect payments that, as you just
said, public entities aren't subjectto, for example, the Consolidated
(22:01):
Appropriations Act, at least at this time.
So, right, like documenting those indirectpayments is not a requirement here.
Kevin Lyons (22:08):
No, you're absolutely correct.
And it, even with point solutions, youknow, we we're trying to do some things
and some of the people that the statewill bring in has to be brought in
through their TPA or their PBM, right?
So they asked the labor side and it,and in New Jersey, and I don't wanna
be specific to New Jersey on this,but that's my practical knowledge.
But in New Jersey, we have six fromlabor and six from management that
(22:30):
have to make any plan design changes.
So in order to get anythingdone, you need a seventh vote.
So one person from theother side has to vote.
In this specific space it was aGLP-1 solution, quote, unquote.
So being the resident skeptic andasking the questions that nobody wants
to be asked, I said, do you have anybusiness relationship with the PBM?
(22:51):
And he said, Well, we havea strategic partnership
Now, I didn't go to business school.
I learned this as we go.
But just those two words together,I mean, so you're both gonna
make money on this, right?
That, that's how I see it.
If it's a strategic partnership.
You're not gonna have astrategic partnership that
only one side makes money.
So digging in on those things is soimportant for us to bring an outside
independent person with no conflictsand have a contract like that that
(23:15):
says they can't have conflicts isalmost a an impossibility, because once
again, we go back to the status quo.
Stacey Richter (23:20):
Yeah, for sure.
And as we started talking aboutthis barrier, which is basically not
employing the kind of talent that,and, and when I say talent, I mean
maybe the level of expertise, butpotentially also the kind of expertise
as you said, like there's no medicaldirector in the state of New Jersey.
How are you gonna make good appropriatecare decisions when you have no person
(23:43):
that's sitting on your side of the table.
And that same analogy isprobably true across the board.
If you're talking about what shouldthe price be, what there's so many,
which should the care pathway be?
What, which should the benefitdesign, how should we navigate, right?
Like there's a lot of decisionswhere you really wanna make sure that
someone who's totally unconflictedwith no, in air quote, strategic
partnerships that are influencingthe decisions that they're making.
(24:05):
And just to highlight that, I just getmyself involved in many conversations.
I just had one recentlytalking to the head of benefits
for a big teacher's union.
I say, Hey, what do you, what doyou, what are you thinking about
skyrocketing specialty pharmacy spend?
Like, what are you doing there?
Generally speaking, when I askedthat question, I put on a helmet
(24:26):
and fastened my seatbelt becausethere's gonna be like hand waving
and possibly tears at some juncture.
But the answer I gotwas totally unexpected.
She said, Oh, we have verygood insurance coverage.
She's the head of benefits.
So I said, what's your experience?
And she said, Oh, wellI had this other job.
She was like an audiologist orsomething and she just got put
into, now she's head of benefits.
So like you, you have, you knowexactly like you just said.
(24:49):
Like just someone who has zeroexperience here, who's put in this
very, very high decision makingjob, who do they get educated by?
Oh, well, their consultants whomay work for the carriers or who
may work for other incumbents.
Kevin Lyons (25:03):
I see that on a regular basis with the committees, with the state.
We'll get a new member.
And it's like, what's yourbackground in, in healthcare?
Oh, I have health benefits.
When our president, at the time TonyWieners appointed me to this seat, I
said, Tony, I know a little bit aboutthis being involved in negotiating
contracts for my members in my department.
(25:23):
I'm like, I gotta go to school.
You know, so I started going to classes,I started getting involved, and a lot
of people don't wanna do that, and Idon't like to play victim, but when we're
trying to fix something and nobody'slistening, I can bring ideas to the state
government and say, we should do this.
And they don't have an answer.
They come back, well, you, we can'tdo that because it's contracting.
(25:43):
Or I send them one of your podcasts.
Yeah, you gotta listen to this.
Oh, that was very interesting.
I mean, how do you know you're runningthe state health benefits plan, you're
telling us that you're in control ofit and you don't know these things.
Why do I know 'em and not you?
Because I, I guess because I expect moreof myself, but they won't go out and get
a real plan administrator who works forthe state and pay 'em what they're worth.
(26:06):
A lot of the people areinstitutional that are there.
They're wonderful people.
They're well-meaning I've never hada problem with any of 'em personally.
They care about our members, butwhen it comes to the strategy
of a plan, they fail miserably.
Stacey Richter (26:19):
Our third barrier is that the media and publications are
often sponsored by the incumbents.
So not only are there lobbyistsrunning around, not only are there
all the things that we just talkedabout happening, but also the media.
Their bread is buttered oftentimes by someof these big companies who are kind of the
(26:39):
only ones that can afford the advertising.
Kevin Lyons (26:41):
It's probably the most frustrating thing when I pull up to,
especially police union event, and I seethe state's TPA is sponsoring the event.
So, being the timid and shy personthat I am, I usually go right to the
organization's president and say,What the hell is that doing here?
You know, because I don't wanna be here.
If that's here, and they,well, they gave me $15,000.
(27:03):
What, what am I supposed to do?
I'm like, say no, becausethat's your $15,000.
It, it's just we're being gaslit.
And it's such a barrier for me toeducate members and say, listen,
it's not the color of your card.
It's who you can go to.
It's what services you're gonna get.
Are they, are they high quality providers?
And they, we've just been soindoctrinated into this, this is
(27:26):
what health benefits are, this color.
And that's what we have to change.
That's the culture I'm strivingto change even in our magazine.
The TPA is advertising.
I think at the end of the day, what wehave to do is continue to educate them.
We shouldn't be letting some fly bynight doctor advertise in our magazine,
you know, without being vetted.
I think we have a responsibilityas union leaders to do that.
(27:48):
That's a real, real importantpart of this process of change
that we have to bring on.
I remember one day I was, I waswatching a baseball game and I
actually texted Chris Deacon.
I'm like, New York Presbyterian is,is advertising on the Mets jerseys.
And it's like, well, if theyhave enough money to do that,
drop your prices a little bit.
And then the whole not-for-profitthing, that that's a different, I
(28:10):
don't wanna go down that rabbit hole.
But just the fact that we seethis every day of our lives.
When I drive to work, I see thesehuge, huge billboards advertised, oh,
we're the best in knee replacement.
Uh, I'll see a sign, you know, forgastro, whatever services they wanna do.
They're building $4 billionworth of hospital improvements
in New Jersey this year.
So where's that going?
It's going to the profit centersand then to teach people that
(28:32):
and to get it through their headsthat, listen, just because they're
flashy doesn't mean they're better.
Maybe not.
Stacey Richter (28:37):
I saw a, uh, investigative journalism and I, and I'm
saying that in half air quotes, right.
About what was going on inhealth benefits in New Jersey
and you watch the whole thing.
There's a journalist who's talkingabout it, and at the very end, for 30
seconds, the sponsor pops up, whichas you just said, is the TPA being
(28:59):
investigated, you know, in air quotes.
So it's just a really striking scenario.
The barriers that we talkedabout are profit defends profit.
so that was the first thing.
The more profit the one sidehas, because somebody's profit is
somebody else's costs, the higherthe costs are on the other side,
and then the less money they have,
It's kind of this flywheel here.
We just had a show with JonathanBaran about the healthcare flywheel.
The second one is that, again, Theless money there actually is that
(29:22):
the unions or the state coffers have,the less opportunity there is to
hire FTEs, full-time employees, andthe expertise that's required and
the level of talent that's requiredto mitigate some of these factors.
So then the situation just getsworse and you have jobs that
require a lot of expertise and alot of courage and just, you wanna
(29:43):
have the right person in the job.
You can't delegate everything.
Or you know, even the courage tohire the right kind of consultant.
And then lastly, you've got themedia sponsored by the same entities.
So they're gonna do a really hard hittingjournalistic piece, cutting down their
biggest, their biggest advertiser, right?
Like there's just, yeah, it's not subtle.
Kevin Lyons (30:02):
We're just so gaslit by the system.
That's a place that, you know,the education portion, which is
incredibly difficult because peopledon't wanna think about that.
They just wanna be able toknow they can go to the doctor.
But when my members are havinga thousand dollars a paycheck
taking outta their paycheck, I'mlike, okay, are you listening now?
Can you hear me now?
Stacey Richter (30:22):
Okay, tribe.
So you heard Kevin use his detectiveskills to really hone in on what the
barriers to stopping the flywheeldriving up healthcare costs are.
Next week though, come back becausewe're gonna have part two of this
conversation which Kevin talks about howhe pulls out his notebook and uses what
he learned as a detective to, first ofall, figure out everything probably that
(30:46):
we just talked about in this part one.
But also, you can't solve for somethingunless you do what most investigators
do, which is follow the money.
So see on the other side.
Thanks so much for listening.
Cora Opsahl (30:58):
Hi, this is Cora Opsahl with the 32BJ Health Fund.
If you love Relentless Health Value justlike I do, then I'll encourage you, please
sign up for the newsletter, follow onyour podcast app, and leave a review.
Tell everyone else about how greatthis is and I'll let you're learning.
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