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Deep Cut

Learned something new from this essay on the recent event in midtown Manhattan. As long as the only reliable way to boost revenue quarterly is to cut cost no matter the consequence, this is exactly the kind of decision companies will make: 

A new policy from Anthem Blue Cross Blue Shield also went viral: the company had announced that, in certain states, starting in 2025, it would no longer pay for anesthesia if a surgery passed a pre-allotted time limit. The cost of the “extra” anesthesia would be passed from Anthem—whose year-over-year net income was reported, in June, to have increased by more than twenty-four per cent, to $2.3 billion—to the patient. On Thursday, the company withdrew the change in response to the public outrage, if only in Connecticut, for now.

There is so many levels of bizarre in this scenario, that I cannot begin to count them. There seems to be the notion that the insurance company can arrive at a pre-allotted time limit for anesthesia. It will not be surprising to learn that number is negotiated and the specifics of the patient's condition are mostly immaterial. The end result is a number that everyone needs to aim for. There is no way this can deliver good outcomes for the patient if the surgery team is racing against the anesthesia clock set by the insurance company.

Many large companies make exactly the same kind of decisions that Anthem has made for the same reasons - turn profits and return value to shareholders. The outcomes are not nearly as visible because they are not in the healthcare insurance business. A large tech company can similarly take the hatchet to cut cost and while no one will die as a direct consequence, chances are it will upend the lives of their employees and customers in very drastic ways. Doing the right thing while being profitable is ultimately hard, requires tremendous foresight and business acumen to deliver. However, the caliber of leadership in these companies is not capable of doing any of that so such feckless and myopic profit-making ensues.

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