Postprandial Healthcare Musings
Who needs ketamine when you have tryptophan?
The holidays are a time for family, rest, and reflection. For me, stepping away from my day job replacing hips and knees frees my mind to wander beyond the clinical realm. Inevitably, I find myself returning to the same questions: How do we align stakeholders, and how do we devise a payment system that fairly achieves its intended goals?
While this year’s tryptophan- and red wine-fueled internal monologue didn’t lead to any magic bullet solutions, it did produce a few thoughts worth sharing. These thoughts are intentionally presented in a stream-of-consciousness format to preserve their rawness. My goal here is to provoke thoughts and spur conversations, not provide erudite insights.
As always, we here at TSR welcome input, feedback, comments, and criticisms. Our goal remains to foster a community of “thinker-doers” — those who have both great ideas and a bias toward action.
Problem #1: Misaligned Incentives
Defining the Problem
“Misaligned incentives” is more of a buzz phrase than a revelation. That doesn’t change the fact that lack of collaboration and widespread mistrust remain critical barriers to reform. Considering the complexity of the medical machinery and the sheer number of moving parts, getting everyone on the same page seems impossible. Forget about mixing oil and water or herding cats. Getting people to work together in health care is like forcing neodymium magnets together.
The relationships between health care stakeholders are highly dysfunctional and getting worse. For myriad reasons, the doctor-patient relationship continues to erode, and trust in clinicians is dropping. Meanwhile, the inevitable backlash of employed physicians toward hospitals and health systems is in full swing. Those same hospitals and health systems are in a never-ending battle with insurance companies for market dominance (and the leverage that comes with it).
Every year, the government pokes physicians in the eye with another pay cut while rolling out more mandates and convoluted payment programs. Medical expenses continue to crush employers and their employees, who get raked over the coals by middlemen. Notice I haven’t even mentioned Big Pharma, Big Retail, health tech, or private equity/venture capital yet. There are more pieces on the board than a post-Thanksgiving dinner game of Trivial Pursuit (and an equal chance of someone rage quitting).
Key Questions
Is it possible or even necessary to align everyone?
Are there enough risk-takers and outside-the-box thinkers willing to break away from the safety and financial mechanisms of the traditional system? If so, how do such people find each other?
Can you create a system where all (or enough) stakeholders are able to “win” while improving quality, costs, and access (i.e., the system winning)?
How do you create enough momentum to become a tangible threat to incumbents?
Will the government ever stop tripping over its own feet and stepping on its own toes?
Are we forever trapped in a zero-sum game where, for someone to win, someone else has to lose?
Closing Thoughts
The first step in driving collaboration is creating communities where entrepreneurial, intelligent, like-minded individuals from across the health care spectrum can find each other. The second step is fostering open and free conversations among these individuals that lead to relationship building.
Finding common ground is the quickest way to break down silos. Communities with robust memberships succeed because they bring together diverse voices, facilitate honest discussions, and prioritize actionable ideas over endless debate. By focusing on shared goals rather than entrenched positions, they create an environment where collaboration can flourish.
Beyond these communities, there’s a wealth of high-yield blogs, newsletters, and podcasts diving into these challenges and opportunities. Blake Madden’s latest Hospitalogy column offers a fantastic summary of these resources for anyone looking to dive deeper. It’s well worth a look.
While these communities and conversations are great, at some point, thought must become action. There’s movement there as well — direct care, employer consortiums, and pockets of sustainable VBC among them. The real issue is whether these efforts will ever gain critical mass.
Problem #2: Payment Reform
Defining the Problem
Again, to suggest that payment models need to be reformed isn’t particularly insightful. Fee-for-service is health care’s version of the Kansas City Chiefs. People who used to tolerate its dominance and ubiquity have come to hate it. No matter how often people declare it dead, it always figures out a way to persist. No one wants to admit publicly that, despite its flaws, there are some good things about it. Conspiracy theorists believe the regulatory deck is inexorably stacked in its favor. Too many people have too much invested to see it fail.
If FFS is the Chiefs, VBC is the Buffalo Bills (past and present). You’re constantly convinced to believe that this is the year it’s going to fulfill its potential. There are so many promising elements that seemed destined to come together. Enough people are tired of the status quo that they’re willing to throw their weight behind it. Heck, even some of the rules are changing in its favor. And then, wide right — over and over again. Just when it seems VBC will dethrone FFS, the ball sails wide of the uprights. FFS wins again.
Free market health care is like the XFL. It exists, certainly has its fans, and is doing some really interesting things. Unfortunately, the audience is small, and it’s not where the big-name, important players are. If it manages to stick around long enough, bides its time, and continues to attract an audience, it may one day gain significant traction. After all, greed, infighting, and hostility toward your core customers can be the downfall of incumbents. (Enough with the odd Wednesday and Friday games behind streaming service paywalls NFL!)
Key Questions
How do we make VBC sustainable without resorting to ratchet mechanisms and complex, costly programs?
If we get rid of the RUC/RVU system, what replaces it?
Is FFS really that bad, or are there useful lessons we can learn from it?
How do we uncouple health care from traditional insurance in a way that’s accessible to most? How do we preserve access for the rest?
Can enough stakeholders agree on a different model to create a closed loop system? Could such a model eliminate expensive middlemen?
As we steamroll toward an untenable $5 trillion/yr health care spend and crushing strain on GDP, when will we reach the breaking point (and what does that look like)? Do we really want to find out?
Closing Thoughts
The idea of reforming the current payment system is tantalizing. Done well, it could fundamentally change the way we incentivize health care. Shifting toward a system that rewards preventive care, healthy behaviors, and high-value, low-cost treatments makes logical sense. Done poorly, it could be a bloated, expensive, complicated mess that makes things worse. In my experience, the best approach is didactic, inductive, and dynamic, not prescriptive, retrospective, and convoluted. Put simply — we should learn from high performers, foster innovation, and allow room for growth and evolution.
Brain Dump
A sampling of random thoughts sparked by the wandering mind.
We’re not fixing anything unless we get buy-in from patients. Patient responsibility is an elephant in the room, third-rail topic that doesn’t get discussed nearly enough. Yes, it feels like victim blaming to suggest more individual responsibility. Yes, we can do a better job engaging patients. But it’s past time we had this conversation.
I keep coming back to some form of a two-tiered system: A public option (Medicare for those who want it) coupled with a private system built on HSAs, free markets, transparency, and government-backed stop-loss insurance that ensures no one gets bankrupted by medical bills. Think transparent pricing and a true private market that competes on quality, experience, and outcomes. (ICHRAs are interesting but may be too convoluted.)
Health care cooperatives never took off, but they make some theoretical sense. Could someone with the resources to overcome startup and administrative costs and the business, actuarial, and infrastructure acumen make it work? Amazon Prime Health Co-op? Replacing payers with public-private trusts could decentralize the system, returning control back to patients.
Primary care should be the central hub of health and wellness tied to subscription services, carveouts, and subcapitation for specialty care. Decoupling the way primary and specialty care are reimbursed makes sense — the goals are different (longitudinal, holistic care vs. focused, condition-specific treatment), so why shouldn’t the incentives be different?
We want consumers of health care (including patients and employers) to be well-informed so they can make smart decisions. But we still don’t have high-quality data and useful insights to inform those decisions. Nor do we have the proper tools to inform and educate. Limited transparency, poor data capture/reporting/analysis, and lack of standardization means we’re still mostly guessing at who and what are high-value and cost-effective.
Smaller players being squeezed out of the system face a race to the bottom. Bold action is necessary to remain relevant. A payer (Humana?) will realize the folly of competing with UHG and embrace a contrarian path away from care denials, utilization review, and MLR hacking. Intrepid private practices and MSOs will overcome their fears and break free. Patients and employers will seek out and demand better solutions. Innovators and entrepreneurs will recognize this opportunity and create the tools to facilitate the transition. Aligning incentives will be necessary for survival.
The relationship between traditional health care and the typical Silicon Valley innovation ecosystem is uneasy. But medical innovation can take a page from the tech bros determined to replace docs. Health accelerator programs can bring together patients, providers, and payers to implement innovative care pathways designed around a common goal. By being nimble and flexible, such programs allow for rapid iteration, thoughtful integration of technology, and meaningful outcomes measures. Lessons learned from these programs can be scaled for the benefit of the broader system.
A final postprandial thought is that our public discourse isn’t nearly messy enough. In an age of social media and influencers, there’s a reluctance to show vulnerability or admit knowledge gaps. The more ideas we throw at the wall, the more likely we are to find some that stick. No one has perfect knowledge, but we can learn from each other. Many other fields, industries, and professions invite brainstorming sessions, moonshot ideas, and safe spaces where thoughts can be exchanged without fear of judgement. We can and should do the same in health care.
One of our goals at The Surgeon’s Record is to encourage open, respectful conversation and the free exchange of ideas — no matter how unconventional, controversial, or contrarian. We’d love to hear from you.
Small Incisions
Why some patients pay up to $50,000 a year for 'concierge medicine' (STAT News)
While $50,000 a year is a pretty hefty price to pay, this is the high end of the range for concierge-level access. Other patients pay a more reasonable $2000-$5,000 yearly fee for improved access, more time with the doctor, and a consumer-focused experience. Is “freemium” health care a bug or a feature of the system? If reimbursement continues to drop and overhead continues to rise, doctors will either have to do more with less or offer premium add-on services to survive. I suspect patients will increasingly find value in reasonably priced concierge medicine or subscription-based care, not just in primary care but in specialty care too. In some ways, it’s sad that it’s come to this. But seen from another viewpoint, concierge care is a path to restoring the doctor-patient relationship, fostering innovation, and creating its own version of a competitive marketplace. Charging extra for an elevated experience creates expectations that naturally lead to better patient care. If enough practices do it, a free market naturally arises. Concerns over inequities are valid — but there are ways to creatively incentivize low-cost options that maintain access. (I mean, we do it for “not-for-profit” hospitals after all).
A thorough and well-reasoned takedown of the unfortunate fascination with proving AI’s superiority over physicians. The JAMA study referenced here was picked up by the mainstream media, including the New York Times and CNN. The headline is attention grabbing but, as usual, oversells the lead and glosses over the details. Are we that eager to replace doctors with technology? Sergei points out the many methodological flaws in the study, including a small sample size, lack of statistical significance, and the fact that a large media organization (once again) failed to understand medical nuance. Graham Walker, an ER doc with health tech chops, had an equally insightful critique. One take home lesson here that won’t get enough attention: We have a long way to go before most doctors have the skills to fully leverage AI to their advantage. If it’s true that AI won’t replace doctors but doctors who understand AI will, we’re clearly not there yet. Kudos to those docs innovative enough to be early adopters.
The (Healthcare) Ground Beneath Our Feet… (Michael Greeley via On the Flying Bridge)
An interesting perspective on the ripple effects of making health care asset-light. The hope (at least in some circles) is that advances in technologies, techniques, and care delivery will shift more care to low-cost outpatient centers and hospital-at-home approaches. This trend, arguably health care’s version of work-from-home, stands in stark contrast to hospitals and health systems doubling down on sprawling health campuses and skyscraping medical towers. (Orthopedics is a perfect example of this shift as more joint replacement and spine procedures migrate to ASCs and fewer patients are discharged to post-acute rehab facilities — a movement in part spurred by VBC programs.) It would seem something has to give. How much longer can hospitals and health systems rely on shrinking revenue from once-lucrative inpatient procedures and vertically integrated revenue streams to fuel expansion? If commercial real estate struggles and site of service continues to shift, will these towers and campuses become albatrosses?
Ben Schwartz, MD, MBA
Editor-in-Chief, The Surgeon’s Record
Commons Clinic Senior Clinical Fellow
As usual, Dr. Schwartz, you are asking all the right questions.