John Gorman, founder and chairman of Nightingale Partners
This episode of Tuning Healthcare features John Gorman, industry expert and founder and chairman of Nightingale Partners. He was formerly the founder and Chairman of Gorman Health Group as well as Assistant to the Director of Health Care Financing Administration’s (HCFA, now the Centers for Medicare and Medicaid Services, CMS). In the episode, John discusses the importance of social determinants of health interventions to support the most vulnerable patient populations. He also discusses the role that the government and private sectors play in driving industry transformation and the need to move toward value-based care. In light of the COVID-19 pandemic, where should health systems be focusing for a sustainable future?
[On the future for health systems] “I think the strategy that’s been illuminated especially during this pandemic, … has got to be, you got to get on a path of value-based care. You’ve got to be accepting risks and you’ve got to be capitated. Because to continue to try to operate in a fee-for-service environment when elective procedures are all shut down and you’re just living on the whims of infection rates right now, getting paid fee-for-service is what kills you in a pandemic. And this isn’t going to be the last one of these that we have. … So I think against that backdrop and where payers are certainly marching in formation too is toward value-based care, toward a more accountable care, toward really delivering on very specific performance metrics that are moving from process measures much more oriented toward outcomes. And I think as we’ve seen in every survey shown of health systems in this last two years…they all agree that one of the absolute top strategic priorities has to be mastering social determinants of health.”
– John Gorman, founder and chairman of Nightingale Partners
In this episode, John and Lumeris Senior Vice President Nigel Ohrenstein discuss:
- The impact of the growing elderly population on the healthcare system
- The crisis facing caregivers, low income families, and the uninsured that has been further exposed during the COVID-19 pandemic
- The role of the federal and state governments in managing healthcare access and coverage
- The importance of moving away from volume-based fee-for-service reimbursement toward value-based payment models
- The power of non-clinical interventions to improve population health
- Why addressing social determinants of health is critical for truly managing health and improving outcomes.
To tune in, subscribe below:
- Read Transcript:
Nigel Ohrenstein: In this episode of Tuning Healthcare, I’m joined by John Gorman, chairman of Nightingale Partners, previously John built Gorman Health Group, and was the first assistant to the director of Health Care Financing Administration, the precursor to CMS. John has a fascinating perspective on the role of government versus the role of the private sector. We discuss how not enough respect and value is given to the caregivers in America, how Maslow’s hierarchy and the need to address the most basic needs of the human population must be addressed by healthcare organizations. He gives us his unfettered view on Trump and the role that Joe Biden needs to play in evolving the healthcare system including his views on Medicare for All. It’s a fascinating episode. Join John and I as we Tune Healthcare. John, thanks for joining me today. Great to have you on.
John Gorman: Great pleasure, Nigel. Thanks. Great to see you again.
Nigel Ohrenstein: You hold a special place in Lumeris history, right? We presented at the Gorman Healthcare conference. And as a result of that, I think got our second client, Network Health plan up in Wisconsin and-
John Gorman: In the Fox Valley of Wisconsin, yeah.
Nigel Ohrenstein: Yeah. So, I spent a lot of time in Appleton Wisconsin. So, you’ve obviously seen Lumeris since pretty much the beginning and today.
John Gorman: There at the birth, yes.
Nigel Ohrenstein: We appreciate the friendship that you’ve shown us over the years. So anyway, but thank you for joining.
John Gorman: Of course.
Nigel Ohrenstein: What I’d love to start with, you obviously have such a storied history in healthcare with a government role, in the private sector. Give us a little bit of background. How did you start? How did you get into healthcare? Take us through the highlights of the John Gorman story.
John Gorman: Well, I like to think I’ve got the scars on my -ss of a man twice my age. But 30 years here in DC is a long tenure. I came to DC straight out of college. I was hired by my hometown Congressman from Detroit, John Conyers Jr., to come and be his press secretary. A year later, I was his chief of staff. And he walked into my office in 1990 and said that he wanted to lead Congressional Black Caucus on healthcare reform and that he wanted to help line up the CBC behind Jim McDermott’s single-payer bill. And he wanted to have a bill of his own. And I said, “That’s all wonderful, and I think that’s great.” And he says, “Great, because you’re going to do it.” And I was like, “But congressmen, I don’t know anything about healthcare.” And he turned around and he said, “Now, Johnny, you know that’s […].”
John Gorman: He’s like, “You were raised in a household full of doctors.” My mother’s a doctor, my dad’s a doctor, my brother, my aunt, my uncle, my stepmother, my little brother, and my little sister. He’s like, “You probably have forgotten more about healthcare from 18 years of kitchen table conversation than the rest of us are going to learn for the rest of our career. So you’re doing healthcare.” And that was that. So I had the great pleasure of working with a single-payer coalition way back when, and putting the bill together, and doing all the investigations up in Canada and England of the NHS and what single-payer systems that were functioning looked like. It was pretty exciting. A year later, I was helping run President Clinton’s campaign in Michigan in ‘92.
John Gorman: And when he won was when I got appointed to what was then, Nigel you’ll remember, the Health Care Financing Administration or HCFA, which is now CMS of course. So we were tasked with opening the first Office of Managed Care. So we had operational authority over all the Medicare and Medicaid managed care programs really at the period of their greatest growth in the early 90s. And I was there for three years as the number two guy in the office. And that was a really formative experience for me. And I think I got known as a no-[…] kind of guy who got stuff done. And from there, I opened Gorman Health Group which led to the relationship with Lumeris. I ran GHG for 22 years before I just decided to sell the company in 2018 and retire. And then my wife came in one morning after I’d been laying about for months saying, “You got to go do something because you got to get out of the house.” And that’s when Nightingale Partners, our current company, was born. And then the pandemic hit. So I ended up being home anyway. So here we are.
Nigel Ohrenstein: Yeah.
John Gorman: A long and storied history.
Nigel Ohrenstein: Yeah. And before we started, you mentioned that your mother lives in Maine, and unfortunately she took a fall…and had COVID. So…
John Gorman: And then she had COVID, yeah.
Nigel Ohrenstein: Wow. So give us a little of a perspective from the personal side dealing with the pandemic. You mentioned your home. Obviously, you had to deal with your mother. Your mother, I’m assuming, as you said had COVID. She’s I’m assuming elderly.
John Gorman: Yeah.
Nigel Ohrenstein: Tell us a little bit from the personal side how this has impacted you, your family?
John Gorman: I think an experience like this is eye-opening in terms of the incredible value, not just personally with a patient but the value to the economy that caregivers represent in this country. Caregiving, especially a sick elderly parent is a full-time job plus, and we don’t ascribe nearly as much value to that role in this country as we should considering the incredible gray tsunami that’s sweeping this country right now. We’ve got to get a lot more proactive about what the needs of caregivers and a growing elderly population in this country really means in terms of how we support them all. I was stuck up there for over a month, Nigel if for no other reason than I couldn’t find a single home healthcare aide or a home health nurse practitioner in the entire state of Maine until September.
John Gorman: So I ended up sleeping on her couch for five weeks with her cats trying to care for her because I had no other options. And I’m an affluent guy that could’ve paid out of pocket had the help been available, but it was not. So her whole village that ended up tasked with her aftercare was this patchwork quilt of friends, family, the occasional physical therapist and occupational therapist, and then just arranging all the follow-up appointments and everything else. We do not nearly ascribe enough value to the role of caregivers, and we’ve got to get a whole lot more sophisticated about how we support them and the patients they’re caring for if we want to have any hope of dealing with the graying of America. It was my big takeaway.
Nigel Ohrenstein: So how do we give more respect and value to the caregiver?
John Gorman: Well, I think one way would be to really think about a dramatic modernization of the Family and Medical Leave Act. We’re obviously doing a horrible job of supporting people, especially caregivers, during this pandemic. The fact that most of these poor folks have seen a $1,200 check five months ago, and we’re about to see eviction bands and everything else expire, I mean I would start there. Anytime you’re talking about a social intervention, like a caregiver caring for an octogenarian, I’m always drawn back to the foundation of social healthcare which is Maslow’s hierarchy, right? And Maslow always posited that when you think of a hierarchy of human needs, at the bottom of that hierarchy, the most important of course are food, shelter and safety. And if you’ve got millions of caregivers who are very often lower income people, whether they’re home health aides or whether they’re family members, we’ve got to do a better job of just supporting people through this pandemic.
John Gorman: This has just been an absolute clown show from the federal government by any measure. And I think when you’ve got people, especially caregivers, millions of them worried about whether or not they’re going to be able to make the rent this month because they haven’t gotten help from the government in almost half a year in the middle of this thing. When people are struggling to make ends meet, they don’t know where or how they’re going to feed their family after their check runs out or unemployment benefits run out at the end of the month. Those are not folks who are going to be capable and present caregivers to the folks that they’re minding. So I think the first thing that we’ve got to do is to really take care of the basic human needs of caregivers starting with the all of the theories in Maslow’s hierarchy, that we first have to worry about their shelter, their food, their safety.
John Gorman: And then from there, just doing a better job of stuff like, where are we with universal childcare and things that every other industrialized country has that enables people to do this job? The ability to drop your kids off at a childcare so that you can go care for mom for the day would be hugely helpful. I think we’re also right on the verge, Nigel of a real revolution in home and community-based services and alternatives to congregate care settings for the elderly. I think this pandemic has laid bare the tremendous exposure of congregate care facilities like nursing homes to extreme outbreaks of this virus. Nursing homes were one of the rare products in American life that nobody wanted and insurance companies certainly didn’t want to have to pay for. And the pandemic I think has heaped on the nursing home industry that just nobody wants to be there.
John Gorman: And that we could much safely and more efficiently and really more in line with patient needs care for great many people at home and in community-based settings. So I think we’re really on the verge. As we’re seeing really right now in telehealth, Nigel, a much greater emphasis and a revolution in home care, in community-based services. I think we’re about to see an explosion in the Program of All-Inclusive Care for the Elderly or PACE. This is basically a 40-year experiment the government’s been doing with adult daycare centers on steroids. And those programs are wildly popular with seniors who are SNF-eligible and their caregivers. And they offer them an adult daycare center to go to during the day and all kinds of wraparound services in the community and at home. And I think we’re going to just see a lot more of that, because we are just not at all equipped at the moment for caring for millions of frail elders at home during a pandemic. Does that make sense?
Nigel Ohrenstein: John, you hit on a number of fascinating topics there. One in particular that I’ve spent a lot of time looking at and would love your perspective given your background. What’s the role of the government versus the private sector in trying to fix some of the problems we have in healthcare? You’ve just touched on one. We don’t give enough respect and value to the caregiver. And within that one topic, you probably touched on 10 others as well. As you think about healthcare, there’s such a myriad of problems that we have. What I liked about one of the things you said was, rather than trying to fix everything, you honed in on health healthcare for children as opposed to saying, I’m going to try and fix everything. But just start with that first question I asked, which is, government versus the private sector, who should be responsible for what in trying to make healthcare system better?
John Gorman: Well, clearly I think that’s a role for the federal government. Now, I’m a raging loony left-wing Democrat. So, of course I believe in the power of government to right societal ills and to do so in a way that’s far more consistent than leaving it to a patchwork quilt of 50 states and all the politics that reside therein. So on issues of national import like, are we going to cover all of our children, or are we going to provide health insurance for all of our elders? Are we going to provide a universal basic income to seniors through social security so that they’re not starving in their elderly years? Those are all absolutely questions in the domain of the federal government to address.
John Gorman: And because of the push-pull of politics in this country and Republicans screaming for the last 60 years, “Keep the government out of my Medicare,” or whatever the hell that means, we’ve developed this very messy hybrid patchwork quilt of coverage in this country where we have universal coverage of the elderly through a single-payer in Medicare, that over 38% of them, approaching 40%, have chosen a private sector option called Medicare Advantage. Then we attempted to do universal coverage of kids and low-income families and single adults through the establishment of Medicaid, then the establishment of the CHIP program under President Clinton, and then the establishment of the Medicaid expansion, and the exchanges in the subsidies in Obamacare. That was only a partial success, in that we still have largely an employer-based insurance system in this country, Nigel, that as you know about 75 million Americans are covered through their employer.
John Gorman: And I think right now, through this pandemic, with 40 million people unemployed, we’re really beginning to see the limits of that system. Because we’re seeing now millions of people losing their employer-based health insurance, and then having to fall back into this patchwork quilt of the exchanges for Medicaid or Medicare to meet the needs. So very rightly during the Democratic primaries, you saw a lot of emphasis around Medicare for All. I think a proposal like that is doomed to fail. Getting everybody in this country, the 40 million plus who are uninsured, into a fee-for-service-based entitlement program would just set us back 40 years from all the advances that have been made in care coordination and value-based payment in accountable care. I think if we’re going to really make a go at universal coverage in a Biden administration, then I think the form that that would take is kind of like what Pete Buttigieg and Kamala Harris were talking about during the primaries.
John Gorman: And that would be a Medicare Advantage for All who want it. We certainly saw in Hillarycare and in the heated debate over Obamacare that those 75 million people with employer-based insurance, they like it. They don’t want anybody messing with it. We should let them keep it. Okay. But anybody else, the 40 plus million who are uninsured, a Medicare Advantage for All who want it would be a uniquely American take on single-payer. You would still have the single-payer that is Medicare. But then, it’s privately administered through a network of hundreds of health plans under contract with that government. And if we regulate the hell out of those plans as we’ve seen in Democratic administrations, you can achieve an incredible public good within a system of care like that. Just being a guy who in 30 years in Washington, I’ve learned to just go as far left as you can and still win, I think that’s actually what could win in a Biden administration which we all, at least in my household, are praying comes next.
Nigel Ohrenstein: So Medicare Advantage for All, I agree with you. If you compare the performance of Medicare fee-for-service to Medicare Advantage, it’s night and day and as you said, the advancements made by that. And I like the way you frame it of a uniquely American way of taking something that is sort of regulated by the government, but in effect run by private industry to drive those improvements, the efficiencies, the innovation and everything else that does that. So I think that’s a-
John Gorman: As opposed to a big Medicaid expansion.
Nigel Ohrenstein: Right.
John Gorman: We’ve seen the shortcomings of that Nigel in Obamacare with all the red states that refused the greatest deal offered them since Reconstruction. The government’s going to pay the entire freight for this expansion for the first 10 years, and then an enhanced rate thereafter. All these red states that declined to take the Medicaid expansion did so just to spite a Black president and sacrifice the health of their populations by the which, they were paying for that expansion in blue states anyway through the tax system. So that’s really the reason why I don’t think a state-administered program like Medicaid is the answer to un-insurance in this country. But rather, it has to be a federal response through a federal program like Medicare Advantage or through the Obamacare exchanges.
Nigel Ohrenstein: So the Democrats just put out their platform, their manifesto for 2020?
John Gorman: Yes.
Nigel Ohrenstein: Go far enough for you in healthcare?
John Gorman: Like I said, man, go as far as to the left as you can and still win.
Nigel Ohrenstein: Right. What would you like to see Biden do between now and November?
John Gorman: Well, what I’d love to see Joe do is entirely separate from what might be possible. And that question all revolves around whether or not the Democrats get the Senate back. Now, that is certainly within reach right now. But you are never going to get to anything approaching universal coverage as long as Mitch McConnell is running the United States Senate. So if the Dems make a complete sweep in these elections in November as is looking like they could… Biden is way up over Trump as you’re seeing. And all of the swing state races to control the Senate are all swinging Democratic right now. Then if the Dems reclaim the Senate, then you have a lot more that’s possible than if Mitch McConnell is still running in place.
Nigel Ohrenstein: So as a Winston Churchill famously said, “A week is a long time in politics.”
John Gorman: Yes.
Nigel Ohrenstein: And you could have a scenario in November where Coronavirus is finally decreasing-
John Gorman: Raging.
Nigel Ohrenstein: …decreasing.
John Gorman: No.
Nigel Ohrenstein: It could potentially, right?
John Gorman: It could…
Nigel Ohrenstein: It could, right?
John Gorman: … but it won’t. Yeah.
Nigel Ohrenstein: And potentially, the economy… So do you think he can just basically stay relatively quiet and let Trump explode, implode, all that? And that-
John Gorman: And that’s what he’s been doing.
Nigel Ohrenstein: Would you say that strategy is enough from your perspective as obviously…
John Gorman: Well, for now it is. It’s like Napoleon said. It’s like when the enemy’s killing himself, don’t interrupt. So that’s what Joe’s been doing. He’s been running a quiet campaign out of his basement. He’s out raising Trump every step of the way. He’s 11 to 13 points ahead of the guy in every poll that’s being held right now. He’s crushing this guy right now by doing very little, running a nice quiet campaign, being the calmness that I think millions, I think a majority of Americans are craving after these four years of chaos. So he doesn’t have to do anything different right now until the convention. I think everybody’s waiting with great anticipation for who his VP pick is going to be.
Nigel Ohrenstein: Who’s your pick? Who would you pick? If he could have said, “John, who should I pick?”
John Gorman: I tell you man, I am far more interested in who he’s going to appoint as attorney general and who he’s going to appoint a secretary of the treasury than I am about who’s going to be the vice president. I know Joe Biden quite well. And his granddaughter goes to school with mine and plays lacrosse with her. And we see Joe frequently. He is as sharp as any octogenarian I have ever seen. I don’t worry about this guy’s longevity in office at all. I just can’t wait for these debates. So maybe one of these questioners will put the dementia test to both of them and they see how they do comparatively in a live setting. That I just cannot wait for it. But I don’t worry about who he’s going to pick for VP so much because of his age.
John Gorman: I think we’ve seen lots and lots of seniors do incredible things at Joe’s age, and I don’t think he’s going to be any different. I really do want to see a crusader at the justice department like Kamala Harris who’s been a prosecutor. She knows what’s going to need to happen to rebuild our nation of laws after this utterly corrupt administration. I am dying to see Elizabeth Warren at treasury, because I think she’s just going to put Wall Street in a fit of panic, and she’s going to bring a degree of accountability to that agency and the sprawling empire that treasury controls especially around figuring out where did all this stimulus money go. There’s been zero accountability for how that money has been spent. I’m far more worried about those two agencies in particular than I am about the VP pick.
Nigel Ohrenstein: Who would you like to see at HHS?
John Gorman: Obviously, my friend/mentor/inspiration, Andy Slavitt would be, I think, an incredible HHS administrator, and I think would restore a lot of confidence in the agency after the lap dog that Alex Azar has become. And I think would bring an adherence to science and evidence back to the sprawling empire that is the Department of Health and Human Services as well. And that’s largely been rendered another politicized agency under the Trump administration. Now for VP, Joe said that it’s going to be a woman, and I love him for that. And I know he’s going to do… The question is its going to be a woman of color to my mind. I love the idea of a Stacey Abrams. I love the idea of a Representative Bass or Val Demings from Florida. There’s just any number of qualified women of color that would be amazing VPs and that I would be very comfortable with a heartbeat away from the presidency. But like I said, I’m not as troubled or concerned about that appointment as I am about who’s going to restore our nation of laws.
Nigel Ohrenstein: So if you were a health system right now, let’s say you were tapped, and then they said, “Hey, John. Come run ABC health system.” Obviously, you had to shut down elective procedures during the Coronavirus. You’re losing money, razor thin margins, being attacked on all sides by payers, primary care aggregators. What would your strategy be? What would you do if you are running a health system now, now that obviously we could go into so many nuances of rural versus city competition… But broadly speaking, as you think about health systems, where would you set the strategy? What would your advice be?
John Gorman: First and foremost, I’ve always said that the worst job I could imagine right now would be to be the administrator of a small community hospital. Man, is that a tough job in this environment. If I was running a health system, of course it would depend on geography and sophistication and everything else. But I think the strategy that’s been illuminated especially during this pandemic, Nigel has got to be, you got to get on a path of value-based care. You’ve got to be accepting risk and you’ve got to be capitated. Because to continue to try to operate in a fee-for-service environment when elective procedures are all shut down and you’re just living on the whims of infection rates right now, getting paid fee-for-service is what kills you in a pandemic. And this isn’t going to be the last one of these that we have.
John Gorman: In fact, it’s possible and even likely that another one will break while we’re still dealing with this one. So I think against that backdrop and where payers are certainly marching in formation too is toward value-based care, toward a more accountable care, toward really delivering on very specific performance metrics that are moving from process measures much more oriented toward outcomes. And I think as we’ve seen in every survey shown of health systems in this last two years, Nigel, they all agree that one of the absolute top strategic priorities has to be mastering social determinants of health. And I think the last survey that I saw when I was doing work over at Premier, the big hospital purchasing cooperative as a Medicare Advantage advisor to them, was that upwards of 90% of health system said, “We have to master social determinants if we’re going to have a long-term future as a health system.”
Nigel Ohrenstein: So lots in that. Let’s hit social determinants of health first.
John Gorman: Sure.
Nigel Ohrenstein: John Gorman once famously said, “Social determinants of health are just four fancy words for poverty.”
John Gorman: Sure.
Nigel Ohrenstein: Tell us what you mean by that, and how does that then play into the health system strategy?
John Gorman: Sure. Well, we know social determinants and I think saying that’s just four fancy words for poverty really does simplify it for everybody, because that’s what it is. Social determinants are the circumstances in which people live, who they live with, what they eat, what they drink, what they breathe. What are the long-term effects of systemic racism, of non-stop police oppression as we’re seeing in the streets right now. All of those things inform strategies, and they are all responsible for 60 to 80% of what we spend on healthcare in this country, Nigel. And I think one of the great reasons why the disease management fad collapsed and burned in the 90s was, I think we know now you can’t just manage diseases in isolation. You have to manage a whole patient holistically in order to have any hope of addressing an underlying disease or comorbidities. Again, we get back to Maslow’s hierarchy that says, “If you’re not meeting people’s basic human needs; food, shelter, safety, then you can’t reasonably expect them to be a compliant or engaged patient.”
John Gorman: Mrs. Ramirez, with uncontrolled diabetes and two other comorbidities, who is housing insecure and food insecure, she’s thinking about where her next bed and her next meal is coming from. She’s not thinking about, did I take my insulin right today? Have I taken my insulin right for the last 30 consecutive days so that I avoid being the million dollar baby to the health plan I’m enrolled in? What really tipped me into wanting to do this and to dedicate the remainder of my career, Nigel, to addressing social determinants and helping the insurance industry and big health systems invest in social determinant interventions was the landmark study out of Geisinger a couple of years ago, the huge rural system in central Pennsylvania. Geisinger found that it was spending about $300,000 per patient per year, Nigel, on their uncontrolled elderly diabetics.
John Gorman: So they started a medically appropriate meal delivery service for about a thousand of them. And within 14 months, they had reduced the average cost to $48,000 per patient per year. So net of the cost of the meal preparation, packaging, delivery and all the wraparound services that went into it, Geisinger saved $192,000 per patient per year just by feeding people, just by dealing with Maslow’s hierarchy. That I think is an object study for all of us, whether you’re in finance, whether you’re in health systems, whether you’re in direct care management. That was a 35X ROI. Where else in this world, Nigel, do you see a 35X return on investment but in dealing with the effects of poverty and the concurrent savings that we can achieve by investing in anti-poverty initiatives, like a meal delivery program for diabetics, or a transportation program for homebound elders so that they can get the doctor’s appointments instead of to the ER in an ambulance.
John Gorman: Like doing a peer-based prenatal counseling program for at-risk African American women. Like deploying an army of community health workers to help really complex patients better navigate the health system and to help them enroll in all the other social welfare programs that they may be eligible for. All of those interventions that I just mentioned, Nigel, have been shown in study after study to save at least $2,500 per member per year when you deploy them. And all of those measures taken together reliably result in a 3-8X ROI.
John Gorman: And in Geisinger case, sometimes as much as 35X. For an investor like me, those are investible events. Those are beautiful projects to structure. And since we opened our doors in January, we’ve yet to produce an investor prospectus that had less than a 30% internal rate of return, because you can just save so much money just by meeting basic human needs in the healthcare system. So that’s why I think… Frankly, health system executives have grasped onto social determinants as the path forward on bending the cost curve far sooner than their colleagues in the health insurance industry, because health and health system execs are far closer to the patients and they see these effects in daily life far more than a CEO of an insurance company does.
Nigel Ohrenstein: Right. So one of the things that it’s great to see, John, is the Opportunity Zone Program. Isn’t that a Republican policy.
John Gorman: No.
Nigel Ohrenstein: Medicare Advantage, another one that I think came out of a Republican. It’s great that there’s room for bipartisan opportunity even from the great John Gorman.
John Gorman: Well, I’m not immune to opportunism when we can help a great number of people. And the Opportunity Zone Program, I initially blew it off Nigel. For a better part of the year, when I was retired, I was chasing social impact bonds as a potential source of financing social determining interventions in our industry. And I just found that all these guys doing social impact bonds, it was largely just a big carriage of […]. A lot of it was greenwashing just investments they would have made otherwise in private equity or venture capital. And to the extent that they were health-related, stuff like digging wells in Africa or doing better access to retroviral cocktails for folks with AIDS in third world.
John Gorman: We wanted to really ensure that all of this money was being invested domestically. And I blew off Opportunity Zones precisely because it came out of Trump’s big tax giveaway bill. And then last April, Nigel, the IRS in a shocker revised the regs to make them a lot simpler. So originally, this was conceived… And by the way, this was Senator Cory Booker’s program and designed with his home city of Newark in mind. It was originally designed to be a real estate revitalization program in economically disadvantaged areas. Like I said, last April, the IRS pulled the shocker and loosened the regulations. So now it wasn’t just real estate purchases, but now you could use Opportunity Zone capital for leases, but more importantly, Nigel for working capital and for meeting the business requirements of a NewCo in one of the 9,000 Opportunity Zones that they designated nationally.
John Gorman: So all of those Opportunity Zones are economically disadvantaged and medically underserved. That revision of the regs which were then codified in December and why we opened our doors in January was now we can use Opportunity Zone capital for big, large-scale investments in social determinants with health insurers and with health systems, and in some cases we’re doing it with some state and local governments as well. And as long as we base that venture in one of the Opportunity Zones that’s in their coverage area, we’re golden in terms of the use of funds. So it’s proving to be a wonderful program. And we like to say that we hacked a Republican billionaire tax shelter to try to improve healthcare for Black and brown people.
Nigel Ohrenstein: It actually… So, we obviously wish you great success with that. It’s an important mission. But it actually warms my heart that there’s an opportunity to make the world a better place by pulling some of the best ideas irrespective of where they come from.
John Gorman: Sure, yeah.
Nigel Ohrenstein: We live right now in a world that is so partisan. There’s no room for nuance, debate or discussion on any topic. We know the reality of it is that it’s so nuanced. And in order to be successful, you have to be able to appreciate and understand those nuances. And so the ability to take ideas, opportunities that come and use them to drive better healthcare is excellent. I like to end John with…
John Gorman: Thank you.
Nigel Ohrenstein: … what we call the quick-fire round. It’s a couple of questions-
John Gorman: Oh, Jesus.
Nigel Ohrenstein: … to get your initial… to get you off the cuff, easy questions. Best piece of business advice?
John Gorman: Could have used a shot of tequila for this. But go ahead.
Nigel Ohrenstein: Go for it.
John Gorman: Best piece of business advice.
Nigel Ohrenstein: Go get one quickly. Your best piece of business advice?
John Gorman: Be acutely honest with yourself about not just what you’re good at, but more importantly, what you’re not good at, and surround yourself with people that are good at those things. That’s been the key to the success of every business I’ve ever launched and sold. I know what I like to do. I know what I’m good at. And I’m very honest with myself about what I suck at. And those are the people that I go out and look to surround myself with. And that’s been by far some of the best advice I’ve ever gotten.
Nigel Ohrenstein: That’s great advice. The thing you like to do for fun when you’re not building Nightingale?
John Gorman: Well, I’m a very proud doggo daddy. But probably the craziest thing that I do for fun is twice a year, we go on a very storied annual boar hunt in Texas. And we even ran the quarantine to go on our spring hunt in Texas this year, Nigel. So I’ve been going to this ranch in Texas for the last 15 years. And I tell you my friend, if you have never been out with a gang of dudes out in the wilderness, hunting dangerous animals that are trying to kill you too, and the comradery and all the insanity that goes with an outing like that, man, it’s about as much fun as you can have with your clothes on. And I’m a very rare liberal, heavily armed gun nut. I would gladly give up my arsenal to stop the carnage on the streets. But while we can have them, I love killing pigs with my AK.
Nigel Ohrenstein: And then finally, on healthcare, if there was one thing that you could change to improve our healthcare system, what would it be?
John Gorman: Well, you got to say universal coverage. As much as we’re committed to social determinant interventions, a lot of the projects we look for are how can we expand coverage? Because it’s one thing to give people access to services, but to give them coverage gives them financial security and access to providers that many of these folks who have been uninsured, especially with the chronically uninsured, access to services that they’ve never had. And I think that’s just crucially important. One of the most favorite periods of my career, Nigel, was serving as the lobbyists for the community health centers and during the Hillarycare debate. And Republicans love to use the community health center program as a fig leaf by saying that if we have universal primary care, then what do we need health insurance for? And I just think that’s just such a […] argument. Coverage is what really grants people access to a great many more providers than just the amazing federal and qualified health centers across the country. So I think we really do need to start there.
Nigel Ohrenstein: Great. John, thank you for joining us today. Thanks for taking the time. We wish you well. We wish your mom-
John Gorman: Always a pleasure, Nigel.
Nigel Ohrenstein: … would be well. And-
John Gorman: Thank you so much.
Nigel Ohrenstein: … look forward to connecting again soon. Thank you.
John Gorman: All right, brother. We’ll see you again soon. Thanks for having me.
Nigel Ohrenstein: Thank you for joining us today. Please follow us on your favorite streamer, and don’t forget to rate us as it helps others find this podcast. I hope you stay safe and healthy at this difficult time, and please join us next time as we Tune Healthcare. This is Nigel Ohrenstein in New York.
The opinions of the podcast guests are not necessarily reflective of those of Lumeris.
- Text Message Alert 1 Sound. Available at http://soundbible.com/2154-Text-Message-Alert-1.html.
- ECG Sound. Available at http://soundbible.com/1730-ECG.html.
- AM Radio Tuning Sound. Available at http://soundbible.com/2099-AM-Radio-Tuning.html.
- Intro music. Gordon Household. August 2019. WAV File.