An Era of Change and Possibility

Dave Oliker, MVP’s CEO from its inception in 1982 until the end of 2012, will be retiring next month. This is his final blog post for “Health Care Perspectives.” Denise Gonick is the company’s new President and CEO. Oliker plans always to be associated with MVP: as he puts it, “It’s not ‘goodbye,’ it’s ‘see you around.’”

When I started in the business 30 years ago, American health care was undergoing a major transition. A big new law, passed a few years before, promised major changes in the health insurance industry, but no one knew exactly what those changes were going to look like. Opinions and prognostications came thick and fast, while follow-up regulations came frustratingly slow. In the meantime, doctors, hospitals, employers and insurers were all on edge.

Sound familiar?

Now, as I prepare to leave it, the health care business has entered a similar era of change. Now, instead of the HMO Act of 1973, we’ve got the Patient Protection and Affordable Care Act of 2010. But the sense of upheaval and anxiety is the same.

And so is the opportunity for innovation and fresh thinking.

When MVP started, it was a humble operation, with limited, local aspirations. But we saw each change as an opportunity to build and expand. I learned not to fear change, but to embrace it. Not to be wary of change, but to be wary of those in an organization who can’t, or won’t, adjust. A new law always contains not just new prohibitions but also new possibilities. It’s our job to figure out how to turn those possibilities into reality.

And the first step is just that: take a first step. It doesn’t even matter if it’s not exactly in the “right” direction. The important thing is not to stand still with fear over where to go next.

That’s what I plan to do as I retire from MVP. And it makes me proud to know that the company I grew up with will embrace its future as well.

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Why Not One Price?

I maintain that the Patient Protection and Affordable Care Act focuses on protection and ignores affordability. Yes, there are cost containment efforts built into the ACA , but they are not entirely up to the task.

These cost containment efforts include payment reform initiatives that seek to shift away from a fee-for-service model through capitation, accountable care organizations and bundled payments. A pilot program here, a readmission rate penalty there and a few demonstration projects—these build the case for major change rather than build major change itself. In any case, it will take time—years—before any of those innovations can make a significant dent in health care costs.

In the meantime, here’s an idea that I think would make a big difference: require hospitals and physicians to establish standard fees.

Let’s look at hospitals, for example. As it is now, not only do costs for certain procedures vary by region, they vary by hospital—and within hospitals. A widely discussed study published last spring in the Archives of Internal Medicine showed the cost of an appendectomy in California in 2009 ranged from $1,529 to $182,955. That’s nuts. And not even nuts in a predictable way, such as if that high end of the range represented, say, privately insured people in San Francisco hospitals and the low end Medicare patients at a county hospital. The median was $33,611. Within individual hospitals, the charges varied as much as $100,000.

Of course, appendectomies aren’t the only issue. A previous study, also in California, found hospital hysterectomy charges ranged from $3,500 to $65,300; gallbladder removal charges ranged from $2,700 to $36,000 and a colonoscopy screening cost anywhere from $350 to $5,805.

Wouldn’t it be great if hospitals set a price for each procedure? Sure, there might be complications, or treatment options that carry different fees, but those could be accounted for in a fee schedule that’s available to the public.

A set price would eliminate cost-shifting, wherein those with private insurance are charged more than those with Medicare (and those without insurance are charged even more). It would, in an area with competing hospitals, give patients and doctors the chance to comparison shop.

Making hospitals (and physicians) commit to a standard price for a procedure would go a long way to helping us all better understand health care pricing. And it would be a first, immediate step toward reining in health care costs.

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On The Complexity of Cost Containment

After the election, I made a plea for a real plan to cut health care spending. Which brings us back to my favorite subject: health care costs and what to do about them.

The U.S. spends about 18 percent of its GDP on health care—the most in the world by a large margin. Even accounting for its high per-capita income (which correlates with higher spending on health care), the U.S. is an outlier. And it’s getting worse: this summer the CMS projected it would hit 20 percent by 2021.


I wish there were a single answer to this question, an obvious fix, or at least a villain to blame. Politicians like to demonize insurance companies, which is both convenient and, as I have argued, comical. Pharmaceutical companies make a nice villain, as do Medicare scammers and greedy, doctor-suing lawyers.

Sorry. It’s just not that simple. This fall I attended a health care forum sponsored by MVP and the New Hampshire Business Review. The keynote speaker was Dr. Aaron Carroll, a pediatrician and professor who writes often on the health care system. Carroll described U.S. health care as being more expensive than that of other nations, while covering a smaller percentage of our citizens and providing mediocre outcomes. As for the health reform law, he says it will help with access but ignores issues of cost and quality.

It was discouraging, to say the least. And yet, if we don’t look at this issue squarely, we can’t fix it. Carroll himself has written a wonderful series on the topic, in which he looks at every factor affecting cost in our system. I urge you to read the whole thing. But I’ll give you a sense of the general conclusion with two quotations from the final post in the series: “Our system costs more because just about every part of it just costs more,” and “most of the ‘extra’ spending is in areas of care.”

That means making tough decisions throughout the system, rather than instituting a “painless” cap on health insurance premiums. Believe it or not, I wish it were that easy. I really do.

Posted in Health Care Costs, Health Care Reform | 3 Comments

Dr. Watson vs. Dr. Welby

There are two models of medical care—and for once, I’m talking not about cost models, but about what happens in the doctor’s office.

One model sees medicine as a science and doctoring as a matter of gathering and analyzing data to solve a problem. The other sees medicine as an art and doctoring as a matter of responding to another human being with a mixture of experience, empathy and instinct.

The “medicine as a science” model has a new figurehead: Watson, the IBM computer that beat two human champions at Jeopardy last year. Watson is now being trained to make diagnoses and select treatments. It can understand questions posed in normal language and search and analyze massive amounts of data to arrive at probable answers. Enter the patient’s symptoms along with his or her medical and hereditary history and “Dr.” Watson examines all available unstructured and structured medical information—including published medical books and articles—looking for a diagnosis and treatments to recommend.

The “medicine as an art” model has an older figurehead: Dr. Welby, the kindly, unorthodox GP from TV’s “Marcus Welby, MD.” (Remember that show? It was a popular, case-of-the-week medical drama from the early 70s, elevated by Robert Young’s performance in the title role.) Dr. Welby took his time with his patients and used his extensive experience and feel for people to make diagnoses. Here’s a quote from the second season of the series:

“We use every scientific device we can get. But sometimes, we have to use something more. A look on the face. The texture of voice. A faint odor on the breath. And sometimes, something you can’t even identify. Call it ‘experience,’ ‘instinct,’ ‘hunch.’ Whatever it is, a doctor has to use it, because he’s treating people. And people happen to not have the predictability of molecules.”

Yes, it’s a little romanticized. But it’s not wrong. Doctors do far more than retrieve and synthesize information. They soothe and motivate and read between the lines. If they know their patients well, then they know not just which treatment method is more likely to work, but also which is more likely to be followed.

If they know their patients—that’s the key. A true Dr. Welby needs to spend time with patients; most doctors today do not have that luxury.

The solution? Dr. Welby needs to go into practice with Dr. Watson. While the computer scours the research and crunches the numbers, the human has time to consider the patient. Medicine is a science and an art—each kind of doctor needs the other, and we need them both.

Now, back to the question of how we’re going to pay for them . . .

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Conventional Wisdom vs. Good Health Care

It seems obvious that we should base our health care policy on scientific evidence. But one difficulty that comes with health care policy is that the evidence doesn’t always correspond with conventional wisdom.

Conventional wisdom says regular doctor checkups keep people healthy and save lives. But a recent international study says, no they don’t. Conducted by a well-respected global non-profit organization, the Cochrane Collaboration, this study examined 16 randomized trials comparing health checks with no health checks in adults unselected for disease or risk factors. The researchers went looking specifically for the effect on morbidity and mortality (i.e., illness and death), and they concluded that “general health checks are unlikely to be beneficial.”

This, of course, is a broad conclusion—it’s a statement that applies to entire populations of patients. But how do we apply it to individuals?

That’s another difficulty that comes with health care policy: what’s true of patients in general is not necessarily true of the specific patient in the paper gown. A patient could be sitting there with undiagnosed high blood pressure or blood sugar levels tipping toward diabetes. A patient could feel fine, but comes in for his or her annual checkup just to be sure.

Across the general population as a whole, health checks make no statistical difference in the incidence of disease and death. (I would venture this is partly because health checks do prevent illness, but they also identify illness, meaning more is reported.) But this patient’s health check could result in a lifestyle correction that could ultimately be life-changing, if not life-saving.

How do we make sure a patient gets the attention and treatment he or she needs (but doesn’t realize he or she needs) while making sure not to over-treat the vast majority of the population? Is it safe to wait until the patient shows symptoms? Are there basic checks we could do without heading to the doctor’s office?

Getting the scientific evidence is just the first step in making health care policy. Turns out it might even be the easy part.

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A Vote for Obamacare?

People are saying that President Barack Obama’s re-election is a victory for the Patient Protection and Affordable Care Act, a.k.a, “Obamacare.” And I’m not really surprised by this. Americans feel that expanding access to health care and aiming for the goal of universal coverage are the right things to do.

And having health insurance, as 30 million more people are expected to under the health care reform, improves health outcomes. A recent study by the Johns Hopkins Bloomberg School of Public Health found that patients admitted to hospitals for heart attacks and strokes had significantly better survival rates if they had health insurance.

Having everybody—or close to everybody—in the system also makes intuitive sense: spreading the risk across more (and younger) people should help stabilize that risk.

But while getting more people insured seems like an unambiguous good, it presents some issues. Our health care system is dysfunctional and costs are out of control. Obamacare essentially opens the floodgates to this dysfunctional system without addressing cost, thereby giving access to more people who expect the quality of care to remain the same—or even improve.

We have to have a plan to address cost. It’s simply not enough to vote for Patient Protection. Now we must demand Affordable Care.

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Giving Thanks For A Very Small Coke

When I was a kid, you could put a nickel in a Coke machine and out would come a glass bottle with 6 ½ ounces in it. Six and a half. That’s about three quarters of a cup. That little Coke was a treat—brief, but delicious.

Today, of course, a can of Coke is twice that size, and the smallest fountain drink you can buy at a 7-11 is 20 ounces. A “Big Gulp”—which, if you think about it, should be the name of the size Coke I had as a kid—is 30 ounces. And there’s even a “Double Big Gulp,” which used to be 64 ounces, but was recently changed to 50 ounces because customers were having trouble carrying the larger size.

If you can’t carry your drink, that’s a pretty good indication that you shouldn’t drink it.

But who am I to scold? I’m about to tuck in to a big feast in a few days. Like most of us, I will eat more than I need to on Thanksgiving. Maybe even more than I can carry on one plate. The difference, though, is that Thanksgiving comes just once a year. It’s a treat, a celebration of plenty, a happy memory in the making.

The problem with Double Big Gulps isn’t so much how big they are, but how common they are. They aren’t special-occasion drinks—they’re just drinks. And, of course, many more calories than anyone needs.

The proven link between soda consumption and obesity has led Mayor Bloomberg to ban the sale of oversized sugary drinks in New York City restaurants and concession stands (although in convenience stores, the Big Gulp lives on). As someone who was raised on a measly 6 ½ ounces once in a while and as someone whose job puts him in regular contact with the health effects of obesity, I understand where he’s coming from. But I don’t think grown-ups should be told how much of something they can legally buy. It smacks a little too much of the nanny state. I think this is just an area where we’re going to have to teach self-discipline and personal responsibility.

Which is why I do support the new nutrition standards for school lunches. Where should the nanny state reign if not in school? Sure, there’s some grumbling about the new rules. That’s OK. Kids grumble about homework, too. But maybe if we get them used to eating well when they’re young they’ll be thankful later—for healthy eating habits, for good health and for the occasional day when they treat themselves to a third slice of pie.

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