 We're a show that broadcasts live every Thursday from 2 to 2.30, from the downtown studios of Think Tech, Hawaii, in the Pioneer Plaza and beautiful Halalulu. We are a show that focuses primarily on success stories, success stories related to businesses as well as individuals and the organizations that support them. We also get into topics that affect businesses here in Hawaii and occasionally around the country, so that we can have a deeper understanding of what some of the issues are. Today is going to be one of those days where we have a guest, Lloyd Lim, who has been a senior executive in the health care regulatory environment, Department of Insurance here in Hawaii, and has left. He's no longer affiliated with DOI, but he's a wealth or a psychopathy, if you will, of knowledge in a lot of regulatory issues, in the insurance industry and some other things that we're going to touch on during the show. So welcome, Lloyd. It's great to have you here on the show today. Thanks, Lloyd. It's great to be with you. I appreciate you being invited. I think we're going to have some fun. We've got a lot to talk about today. Now, just to set the groundwork a little bit, you were involved with the regulatory environment in the insurance industry here in Hawaii for a number of years. Can you just give us a quick summary, synopsis, if you will, of what your experience is and what you've done? Sure. After law school, I started out in New York in a securities firm. I was a bond lawyer. In fact, I did some of the dreaded mortgage-backed securities that everyone loves. And then I came back to Hawaii after the bombing of the World Trade Center, which I was in. So I came back here. Well, you were in the World Trade Center? Yeah. Our offices were in the World Trade Center, and so I was in that. And I thought, well, I think I'll come home now. That was a wake-up call, huh? Well, you know, wouldn't you take lessons, I think. And so I came back, and I went into the Hawaii Hurricane Relief Fund, first as the staff attorney, and then I became the executive director toward the end. And then I transferred over to the insurance division in the health area, and I was lucky to become the branch administrator there. So I did that for about a dozen years or more, and then I left the DCCA. And so that's kind of how I've come to be where I'm at. Well, in the dozen years, you were there for pretty eventful years. I mean, simultaneously, I was with HMAA, which is a large medical insurance company here in Hawaii. We worked together on different issues, and of course, I was under your regulatory oversight. And so I was there about the tail end of some of this. But it was pretty exciting times. We had the Affordable Care Act or Obamacare that was implemented. And there was a lot of change that was taking place in the marketplace while you were there. Yeah. I was fortunate in that health insurance was an area in Hawaii that was more lately regulated, and about the time I came in was when Commissioner Wayne Metcalf had helped to put in the legislature, put through the rate oversight. So I helped to implement that. And then shortly thereafter, Obamacare came about. That was a very large implementation with a lot of issues. And so I feel fortunate in a weird way, because when you have to do that kind of complicated work, it forces you to think a lot. And so I feel fortunate. Yeah, there was a lot of thinking in those days. And then they tried to launch the health connector and the exchange. And there was a lot of thought needed to go into that. Right. And now you flash forward a few years. And although I know you've left the department, things seem to have settled down a little bit. But wait a minute. Now they're talking about some more changes. What's your thoughts on some of these changes that's currently being proposed by the Trump administration? Well, I think any legislation that is created, particularly one that is 1,000 pages in length, will have to be amended. And because of partisanship, it wasn't amended. And so some amendment has to happen. And the question is what? And the big problem that we face is that forever, and it's not just because of Obamacare, but there was always cost increases for decades. It's always happened. It's going to continue to happen at a rate higher than normal inflation. And so it's really the high cost that is disabling Obamacare. And so something has to be done. But the question is, what can be done without doing too much damage? Well, and some of the fixes or some of the things that need to be done can't be all done at one time. They need to be probably stretched out over a period of years. So anybody who thinks that we're going to have this immediate quick fix is probably not going to be satisfied there. It's going to take a while for the dust to settle, so to speak. In Hawaii, we had the prepaid health care law for a number of years. And so some of the impact wasn't as severe here as it was on the mainland. I mean, the mainland, it was very disruptive. Over here, we had a lot of these protections already. A lot of coverage was already in place. So it was a positive thing, but not as disruptive as it was on the mainland. Is that a fair assessment? Yes. Our prepaid health care act, which is our employer mandate, is unique in the nation because we got a special exemption from ERISA. Both prepaid and ERISA came in in 1974. And so we have a broad range of coverage that we already had fairly rich coverage. A lot of people were covered under it. And the other big thing I think that makes a difference between prepaid and what's happened on the mainland is that Obamacare, the deductibles ended up being a lot bigger for people than they thought. And so they feel like they don't have insurance even though they're paying what they paid before or higher. Whereas that didn't affect us because prepaid protected the local population. Right. And they have some pretty specific requirements that have to be met in order for the insurance companies to offer the policies here in Hawaii. So it's controlled, I think, a little bit better here or a little bit more stringently here. A lot of people don't quite understand exactly how health insurance works. I mean, the insurance concept itself can be fairly complicated. Could you, and I know you've thought a lot about this over the years, but in layman's terms, can you explain a little bit about how health or medical insurance works so that maybe the typical layman can understand it? Sure. We can start with another area, something that has nothing to do with insurance, which is in church, in the old days, if somebody got in trouble who was a member, they might take up a collection and everyone would pitch in. Or one example is the Amish. People might have seen the old movie with Harrison Ford Witness where if the barn burns down, everybody gets together and build them a barn. So the idea really is there's a kind of a social collective thing where we all pitch in to help people out. So if people ask me what insurance is, really, there's two aspects. One is what we call risk transfer, which means that you as the policyholder or the insurer are transferring risk to the insurance company, which protects you from unexpected losses. And then the other aspect is what we call risk pooling, which is that the insurance company will then take all this premium from all these different policyholders and put it in a big pot and use that to pay the losses. So what happens is that normally in most insurance situations, only a few of the policyholders have a loss and most don't. So the people that don't that year end up subsidizing the ones that do have a loss. So it's an annual pooling arrangement. So basically, those that don't have losses subsidized, those that do. Right, and so in a sense, it's like me paying into this pool over a period of a year or two, or if I'm lucky, five or ten. And then at some point, I'm going to need to use it. And I'll call it reserves, but I've got this contract that says they'll pay for whatever I need to have done up to certain limits. Right. Yeah, and so it works good in a general sense, it works good. But then when you start getting into price fixing and determining prices that are going to be applicable. So for example, if I'm really sick and you're not, I'm going to probably need to use that policy a lot more than you will. So is it fair that if we're the same age, we pay the same premium? Yeah, that's a philosophical question, I guess. But that's part of what some of the issues are that's going to have to be addressed with some of the reform that's taking place today. Does that make sense? Right, so what will happen is the insurance company will collect the premium or the fee for meats insured to cover the costs, in this case, the underlying medical costs. So the premium prices are one thing and the costs that are paid are another thing. And when you look at rating structures across the different kinds of insurance, you can go all the way to one side and have everybody pay the same rate. In which case, some would say, well, that's not fair because that other guy has a bigger risk than I do. That guy's got a woodhouse when I have a masonry house. But on the other side, or you can add some factors in there that will individualize the rate a little bit, such as the age or utilization. So there's a balance in there. You don't want to find a balance in there normally, and you don't want it to be too complicated. Right, it's got to be understood. People have to have a perceived of value that they're getting for this. But it's a very complicated area. It's an area that people wrestle with all the time. And I think with the Obamacare, they're trying to simplify it, make it a little bit more transparent, and maybe moving in the right direction. But it's still a fairly complicated area. And there's insurance companies out there that's losing a lot of money right now. Other insurance companies are making money. So somewhere there's going to be a balance. Let's talk about costs a little bit. And we've got a rising cost environment. We have had a rising cost environment in healthcare for many decades. Can you speak to that a little bit? Why is that happening? There are a lot of things that are driving the costs. One example is lifestyle. If I'm overweight, and that's not helpful to healthcare costs. I don't, but some people, they drink too much or smoke too much. So lifestyle plays a role, and public health plays a role, even outside of the delivery system. And then you have advances in technology. I mean, if all you can do is give someone an aspirin, that's not going to cost very much. But if you have many new technologies that may reduce the cost, in some cases, in other cases, it may increase the cost. But the more things you can do for somebody, the more things that are going to do. And then there are some other things, like how you pay the physicians in hospitals can create perverse incentives and things of that nature. There's a lot of different drivers, but some of those are the key drivers. Yeah, and the aging population and the fact that people are living longer. And I think it's fair to say that the older you are, the more health care you're going to need. I mean, in my case, parts just don't work as well as they used to and need to be either fixed or more susceptible to colds or injury or whatever. So as the population gets older, the costs will go up. And I think, as you mentioned, the technology develops. That's helping us to live longer, and that doesn't come cheap. But let's circle back on that for just a second. We're going to have to take a one-minute break, and then we'll come back and we'll maybe have a couple more comments about the costs to drivers. And then we'll go into some other topics. This is Business in Hawaii with Reg Baker. I'm here today with Lloyd Lim. We're talking about health care issues. We're also going to be talking about a couple other topics right after this 60-second break. You're watching Think Tech Hawaii, Hawaii's leading digital media platform for civic engagement, raising public awareness on tech, energy, diversification, and globalism. Great content for Hawaii from Think Tech. I'm Kauii Lukas, host of Hawaii Is My Mainland every Friday at 3 p.m. on Think Tech Hawaii. We talk about things of interest to those of us who live here, and my past blogs can be found at kauiilukas.com. Okay, I didn't listen. Foundation for a Better Life. Welcome back. This is Business in Hawaii with Reg Baker. We're here today with Lloyd Lim. We're talking about health care issues, particularly in the insurance markets, and then also some other topics that will be of interest to you here shortly. Lloyd, we were just talking about some of the cost drivers. I think one of them that we didn't have a chance to talk about in addition to longevity and people living longer, and some of the technology that's been developed doesn't come cheap. There's also, I guess, potential liability, whether it be malpractice or other types of liabilities in a hospital environment or whatever, that causes, I guess, practitioners to really do all the tests that might perceivably be needed instead of just the ones that they feel maybe are the most appropriate, and they do that in order to protect themselves a little bit. Is that a fair assessment? Yes, it's been long documented that doctors who are afraid of getting sued will practice what we call defensive medicine and do more than perhaps they need to do, or indeed also if the patient is requesting something, they don't feel free to just say no. Well, because if the patient who, in theory, is supposed to know themselves better than anybody else feels that there's something wrong and they are ignored and then it comes to find out that, well, they were right, then they got another problem. Exactly. So it's preservation, defensive medicine, as you said. All of these things together help drive up the costs and that's not necessarily the fault of the insurance companies, it's just the industry itself is moving in that direction and we benefit from it because we're living longer and better than we ever have before. So I don't like paying the high cost myself, but it's better than being sick or dead. Well, on that point, I had spent, I had done quite a number of coverage disputes between the insurance companies and patients in what we called an external review process and it's an interesting contrast to the rates because when you're the regulator, you hear a lot from people who don't wanna pay the premium and well understood, it's extremely expensive. But when you get into the coverage dispute, people don't wanna hear about, well, we're not gonna pay for your medical care. It depends on which hat you happen to be wearing and so it looks a lot different when you're sick and you want care and someone's telling you no. So it's just that perspective that people should have. That's true, that's true. From your experience that you've had in the industry for all these years, and in today's environment, what do you think are the biggest challenges that we're gonna be facing in the near term? Access to care is potentially one of the issues? Well, I would say that we still haven't agreed on a couple of things from a philosophical or ideological standpoint. As a country, some people think everybody should get care, maybe not every care should be covered that way. Some people think it's a right, some people don't. We also have a big debate about the extent that the government should be involved. And so it's those kinds of, and also this whole issue about cost control, there are good aspects to that and there are some trade-offs to that. And I don't know that we really had a fully blown discussion about what that impact could be on people. So I think it's some of the philosophical and partisan related debates that we haven't really shaken out yet that are the biggest challenge. And those are some of the tougher discussions that's gotta be had. They are, yes. And that's something that may not have any clear-cut answers to. True. So it's gonna be an interesting environment, I think, in the next few years to see how this all kinda shakes out and falls into place. But I think one thing is fairly sure is it will probably gonna continue to have Medicare and Social Security. I mean, I've heard all these horror stories about how we're gonna lose Social Security, we're gonna lose, and two different things I know, but a lot of people, for whatever reason, combines the two. But Medicare is gonna be there. I mean, it's gonna be funded somehow. They're gonna figure out a way to make it work. It's not gonna go away. And Social Security is probably gonna be there in some form or fashion. But the solutions to fixing these two issues are different. And we're gonna have to have those discussions, too. So it's gonna be an interesting few years. You know, what do you, now that you're, is it fair to say you're retired now, or I know you're busy, you're doing a lot of stuff. I am. We do have an ethics restriction in the government of a one-year moratorium on representing people before the agency that we work for. And I don't know if I would do that, but I wanted to observe that. But I also had a number of family business items and personal pet projects that I wanted to pursue. And so I've been rather busy doing that. Surprisingly, so I didn't think I'd be that busy and for this long, but I haven't. But how long has it been since you left the department? I left the department officially in June 30th, 2016. So it's been almost a year. Okay, so you're almost there. So that might open up some opportunities or options that you could take a look at down the road. But you've got the family businesses that you've been involved in, but you're also a writer too. You've been writing, I guess, in the past as well as presently. There's books that you've been working on. Can you just, what are these books that you're writing? Well, I was actually an English literature major and so I do like to write. And so I've written a couple of books. I started out in 2010 there for a variety of reasons. And I've done some essays for a local think tank. But one of the reasons why I started writing is that because I was in government, I got to speak to the public pretty much every day. And I began to find out that people didn't know everything that they should know, at least on a basic level, even on a basic fundamentals level. And in my own life, I found that for myself too, that even though I've been through a lot of education and a lot of experience, I'm constantly learning things. So what I try to do is teach what I think people need to know in an efficient way so they don't have to go through the pain that I went through learning the easy the hard way. That's sort of my objective. Save some people some pain for time anyway. Well, in one of the books, and I'm not sure if we can get a shot at this or not, but one of the books that you've been reading or writing, and I'm gonna be doing some reading on, is No More Stupidity, Insights for the Modern World. Now, what's this book about? Okay, so it's actually No More Stupidity. It was a joke on a play on the strategically thing, but I have a pretty extensive liberal arts background. And so what I thought was some folks, maybe they're STEM, they have engineering science backgrounds, or perhaps some people don't get to go to college for a variety of reasons. And so I wanted to write a short book that would kind of fill that gap. And also to remind teachers that those certain things that I thought were fundamental to teach that sometimes get missed. And so that was the idea behind the book. It's a kind of a training book. Cliff Notes to Western Civilization, you could say. That's where I was kind of going. I was trying to figure out exactly how to describe it. It's Cliff Notes that covers a lot of different subjects and a lot of different topics that is, I would think, helpful, healthy to have a lot of people have a better understanding on. And this kind of dips your toe into the water a little bit and gives you an orientation to where those areas are. That's good. And how can people get this book if they wanted to take a look at it? Well, there may be a few copies left on Amazon. Also War Barnes and Noble. And also one can contact me directly. I'm locatable on the internet by putting my name in there. So it can be gotten from me directly. Okay, so just typing in a search for Lloyd Lim. Lloyd Lim, Hawaii. Lloyd Lim, Hawaii. There are quite a few Lloyd Lims out there. But Lloyd Lim, Hawaii. There's only two here in Honolulu or Hawaii. All right. And you're the one with the book. So they'll be able to find you. Very good. And is there any particular area in here? And I know that I'm looking at the contents and it's very broad. There's a lot of different things. Is there anyone in here that you would think is more important than any of the others? Or what's your thoughts about some of the content here? I'm not sure. Well, there are probably two things that matter more than others. One, I sort of address the larger question of the role of government in the economy, which is really at the core of our political issues, a lot of our issues today. And another one, I sort of talk about science. A lot of people don't know that there is actually a whole area of study that is the philosophy of science and that it's not as simple as we're taught through textbooks. And so I try to make that very simple and also raise the question of what is the difference between correlation and causation? Because it's very easy when you live in a complex society and a complex economy to think things are causing a problem when something else is actually causing it. So I think those are probably some of the more important things in there. And I'm just kind of going through it. I'm looking at some things, it jumps out, intelligence and education, what is an American, law pointers, technology and politics, racing culture. I mean, there's a very broad, I mean, this is a good, I guess, summary of some of the bigger issues that are going on in the world that people can just kind of take a look at and get a little orientated with. It's very interesting. Are you working on any other books or anything? I should have another book coming out this year, 2017, which is a business book, which I've tried to be very concise and yet give people a broad range of, to cover what many other books would cover and also to give some practical training tips, which makes it more practical than most books are. And my objective is that, as the market changes and more people aren't gonna be relying on staff jobs and staff employee jobs, but will be independent contractors, entrepreneurs, what I call economic vagabonds, they're gonna need something to prep them and they probably don't wanna spend a huge amount of money on business school or over the time, really. So I wanted to create something for that purpose and hopefully make it a kind of a one book training mechanism. Now, we got about 45 seconds left, so we don't have much time, but I know, and your skill set is amazing. I mean, you're also a skilled musician and you've gotten into the music world and you're a big supporter of symphony. I mean, was it, my gosh, I mean, there's a lot that you can talk about there too. Yeah, I play the piano. I have a long-standing interest in music. I did wanna say a few words about the Hawaii Symphony because they are a very good orchestra today in a way that they weren't in the past, but a lot of people also don't know that even a top orchestra like the Berlin Philharmonic can't rely solely on ticket sales. They must also get support from businesses. For example, the Berlin Philharmonic is underwritten largely by Deutsche Bank and the city of Berlin. It's not really ticket sales, and I could say a number of things about the symphony, but one should, the one thing I would like to say is that the musicians of the symphony are also typically, almost all of them at least, are teachers, and they teach our students, and there's a big difference when you're a teacher of music, if you have the opportunity to play for a really top orchestra, a very fine orchestra like the Hawaii Symphony, because it keeps your skills up, it keeps your, you keep in the music in a way that a teacher that doesn't have that. So these benefits go beyond merely listening to a concert, and that's why, one of the reasons why I think supporting it's a good idea. All right, so let's support the symphony, and I'm sure that they have a website that they can do a search and find in and see all the different ways that they can do it. HSO. HSO, all right, very good. Well, Lloyd, it was great to have you on the show. We'll have to do a follow up one time and talk some more about some of these broad range of topics that you've gotten into. So thank you for being here today. This is Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30. Our topics are success stories in Hawaii, or the organizations and the people that make that happen. So until next week, aloha.