19 Lessons from 19 Years

Nineteen years ago this week, I left the Health Care Financing Administration (HCFA), now the Centers for Medicare & Medicaid Services (CMS) and the Office of Managed Care, to launch what would become Gorman Health Group.  Time has flown, the company has grown, and my backside sewn with hard lessons about our industry and government health programs.  Here are 19 lessons I’ve learned in those 19 years.

  1. What Medicare Advantage and Part D do, Medicaid and the commercial market, including the ObamaCare Exchanges, follow 3-5 years later.
  2. Every CMS staffer I’ve ever known is well-intentioned, many are downright brilliant, and all want to be good business partners to health plans.  Their shortcoming is lack of business experience and how stuff works in the real world.  There is a huge difference between policy/guidance and operations.  That’s where we come in.
  3. If government health programs were an easy business, we’d be out of business.
  4. Inspect what you expect.  Or, as Reagan said, “Trust but verify.”
  5. Star Ratings, like risk adjustment before it, is the biggest and most consistent experiment in performance-based payment on the planet, a total game-changer and the new fulcrum of competition. You don’t excel at Stars by working on them off the side of your desk.
  6. Fish where the fishes is.
  7. Pick your vendors and partners like you pick your fruit.
  8. Capitation with performance-based payment is the only real hope for long-term viability of entitlement programs.
  9. Being a doctor is the worst job ever.  Right after community hospital CEO and President of the United States.
  10. High-performing health plans are good at everything, especially those functions that are member- and/or provider-facing.  It’s about culture and execution.
  11. Health plans’ days are numbered if they can’t consistently provide value to CMS, their customer, and to providers, their partners.  That value is about two things: making data actionable and moving money to contributors when quality and results improve.
  12. It’s easier to increase revenue than it is to cut costs.
  13. Pharmacy benefit managers are a health plan’s most important partner.  They are also the ultimate B2B companies and most are struggling in the transition to B2C and true government accountability for results.
  14. Big data and high-tech is all the rage — and all noise, unless it’s actionable.  What works is low-tech: clogs on the street; a house call; a medication consult.
  15. Doctors of the future are in multispecialty practice and leaders of a team of nurses, aides, social workers, and pharmacists. They are quarterbacks, not gods.  They diagnose, and everybody else treats.
  16. So much of the future is about retail pharmacy.  In short time, they will make more providing services than filling bottles.
  17. Ninety percent of the evil and waste in the system occurs at the tip of a doctor’s pen.
  18. We are all going to retire thanks to government programs.  Demographics is destiny.
  19. Five percent of members account for 60 percent of your spend.  Put the love and focus on them, and you can pretty much leave everyone else alone.

It’s been an incredible ride these last two decades, and especially the last five as health reform blossoms.  We look forward to continuing the journey, older, wiser, and bigger. Stay tuned.



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