Archive for the ‘The Health Care Blog’ Category

My 22 Oldest Jokes and Why they Still Matter in 2022

Wednesday, January 19th, 2022

I have been studying American healthcare for more than 40 years and I have assembled a large number of one-liners over the years. As we enter 2022, I thought I’d share my 22 oldest jokes and why they still matter.

Coming to America

  1. I grew up in Glasgow, Scotland.  In Glasgow, healthcare is a right, carrying a machine gun is a privilege. America got it the wrong way round.

Gun violence continues to ravage the United States. We have more guns than people. Kids get gunned down in school playgrounds and classrooms routinely. It happened once in Dunblane, Scotland in 1996 when a local shopkeeper walked into Dunblane Primary School and opened fire, killing 16 5- and 6-year-olds and their 45-year-old teacher.  It so galvanized public opinion, according to Smithsonian Magazine:  “By the end of 1997, Parliament had banned private ownership of most handguns, including a semi-automatic weapons ban and required mandatory registration for shotgun owners”.

Last time I looked, gun violence was the second leading cause of death in children in the US.  In America when we have mass shootings all we get are thoughts and prayers.

And when it comes to healthcare as a right, even if we Build Back Better, it won’t be a right for millions of American residents, especially those who are undocumented.

2. I am a Scottish Canadian Californian which gives me a unique perspective on healthcare (and all things to do with healthcare, including death and dying) because the Scots see death as imminent, Canadians see death as inevitable, and Californians see death as optional.

This is one of my oldest jokes and it remains true.  In Silicon Valley, where I live, my affluent VC friends want to live forever and are working out and taking supplements to achieve that. In contrast, my British friend Dr. Richard Smith (former Editor of the BMJ) is sitting on the Lancet Commission on the Value of Death.  Enough said. (https://commissiononthevalueofdeath.wordpress.com/category/about-us/)

3. Canada could have been the best country in the world: it could have combined American know how, British ethics, and French culture. Unfortunately, it got American culture, British know how and French ethics, a particularly nasty combination.

Canada is still a great place, especially in contrast to a Trumpian America, but they have had their own issues with competence and corruption in recent years.

4. As to why Americans can’t do Canadian-style healthcare: “I lived in Canada, I trained in health economics and health policy in Canada, my wife is Canadian, and most of my extended family live in Canada.  So the short answer is “You are not Canadian:  Canadians are different from Americans they describe themselves as Unarmed Americans with Health Insurance.” (The latter part is borrowed). 

Despite all their troubles, including waiting times for MRIs and elective surgery, Canadians remain fiercely loyal to their healthcare system and view it more positively than their American counterparts do their own system.  https://leger360.com/surveys/legers-north-american-tracker-july-13-2021/

For Canadians their health care system is a proud point of cultural differentiation from Americans.

5. Why do the French have the highest rated health system in the world? It has very little to do with their health system. The real reason is that the French walk, they drink red wine, and they get naked in the summer. Nothing will keep your BMI down better than getting naked in the summer.

The French still smoke at higher rates than the US and consume more alcohol, and in recent years their diet has increasingly been Americanized by fast food, hypermarkets, and industrialization of cafes and restaurants.  Even though they had their own challenges with Covid, they have life expectancy above comparable countries, whereas America is far below that metric and going in the wrong direction. https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/

On Being a Health Consumer or a Patient

6. (Healthcare) Quality is being in a waiting room with people who earn more money than you do.

Despite enormous investments in what I call the quality police (the health industry agencies and actors who measure, manage, accredit, approve and regulate healthcare quality), the public still has a great deal of difficulty in judging health quality.   Consumers confuse choice with quality.  Patients are frightened and usually defer to their doctors when the chips are down.   Having gone through a serious healthcare surgery recently at Stanford, I would say a pretty good surrogate for quality is being in a waiting room with the affluent crowd. 

By the way, I used this line in a talk to venture capitalists a few years ago.  They looked at me with incredulity and nobody laughed, because nobody makes more money than they do.

7. Good Health is a state of incomplete diagnosis (Borrowed). 

I credit my friend Bill Rosenburg, formerly of KPMG and Met Life with this line.  It was also widely circulated by my old mentor Bob Evans at UBC.  No matter the ultimate provenance of the joke, it is one of the best descriptors of modern medicine.  

If you look hard enough, everyone has something wrong.  Most cultures don’t bother finding out and it either resolves itself or it doesn’t.

8. The Quantified Self movement is going to lead to a Frenzy of Cyberchondria, overwhelmed with false positives and the hyper worried well 

Do you really want to know your blood pressure in real time, all day long from your smart watch?  Does your doctor want 15 terabytes of data from your Peloton? Let me tell you: she does not. 

This technology can be incredibly helpful if we develop the right use cases, particularly in managing vulnerable folk.  Continuous monitoring of the buff seems like a waste of resources.

9. It’s tough to be cost conscious when you’re unconscious.

I used to tease the great Alain Enthoven with this line.  I’m all for more cost consciousness by consumers, but as Mike Tyson famously said: “Everyone has a plan until they are punched in the mouth.” 

10. How to pick a health plan 

Step 1.  Decide on the diseases you and your family are going to have in the coming year

Step 2.  Find the best doctors and hospitals for those diseases

Step 3. Identify which plans offer those doctors and hospitals

Step 4.  Select the cheapest plan

Step 5.  If there are no affordable plans with all the doctors and hospitals you want, go back to Step 1 and pick some new diseases

This accurately describes how many Americans are asked to select health plan options whether in Exchanges, Medicare, employer sponsored coverage or even Medicaid. The joke tries to point to the absurdity of selecting a plan that meets your needs when by definition no one has perfect vision of their future health and disease.  (See Mike Tyson).  Maybe we should figure out a system to pay for care for people who need it, rather than paying for coverage that doesn’t cover what patients may need when they get sick.

On the Role of Employers

11. When it comes to healthcare employers are Cranky, Confused, Aimless and Spineless.

The genesis of this line was a meeting in the early 1990s with the CEO of Baxter Vern Loucks and his leadership team.  My colleague Bob Leitman of the Harris Poll and I were presenting the results form our annual Healthcare Outlook surveys of consumers, physicians and employers.  We had too many slides and generated great discussion and so of course, we ran out of time.  As the meeting closed Loucks turned to me and asked what does the employer survey show in a nutshell: “When it comes to healthcare Employers are cranky, confused, aimless (I said)…..and spineless (Bob added)”.  

“Exactly” Loucks responded “you two are going to come with me next month to tell some other CEOs exactly that”.  Loucks was an ex-marine and a central casting CEO you would follow him anywhere. 

Loucks office called the next day and we were asked to appear in St. Louis at Emerson Electric in a couple of weeks time.  We waited in the board room and in walked Loucks with fellow CEOs Chuck Knight of Emerson Electric and Auggie Busch of Anheuser Busch.

“Tell them what you told me” Loucks said.  “Employers are cranky, confused, aimless and spineless,” we said.

Not missing a beat Auggie Busch said: “Yeah but we are not stupid.  Labor costs are a small part of our business, (we spend more on advertising) and healthcare costs are just 10% of labor costs”. We had a great discussion about healthcare.  Oh, and they did fire the benefit manager some months later, sorry.

I am a long-time advisor to PBGH (Purchaser Business Group Health) which represents industry giants like Wal-Mart, Disney, Boeing and Apple and more than 40 others household names.  They are becoming much more activated in both purchasing and policy making as they deal with the consquences of Covid, and the reality that the healthcare provider “game” is completely dependent on self insured employers for their financial sustainability.  https://thehealthcareblog.com/blog/2020/05/19/the-end-of-the-game/

Stay tuned for more employer activation in 2022.

On Obamacare and Replacing It

12. On Republican Plans to Repeal and Replace Obamacare: “It’s like breaking up the Beatles where you just keep George and Ringo and expect it to sound good.”

Mercifully, John McCain gave Repeal and Replace a thumbs down, but Republicans were close to repealing Obamacare and ripping out the essence of the program (the John and Paul) of raising taxes and subsidizing exchanges and Medicaid expansion.

13. Republican policies are ideologically coherent, they’re just not actuarially coherent

All of the Republican proposals to replace Obamacare were consistent with smaller government principles but they all fell short on affordability for consumers, reduction in the uninsured, and the resulting positive effects on health and financial security of the newly covered.

On Medicaid

14. Medicaid is bigger than France, It’s bigger than Wal-Mart

Medicaid expansion has occurred over the last ten years in 38 states and more recent government action to fight Covid has further expanded Medicaid rolls in every state.  Build Back Better provisions, if enacted, would further expand eligibility for the program.  Even if BBB doesn’t pass, Medicaid will still be bigger than France in terms of number of enrollees and bigger than Wal-Mart in total revenue.  Massive Medicaid is the default program for an increasing number of poor, elderly and vulnerable populations, yet payment rates to providers are inadequate, this will be a central challenge for the future.

15. It’s easier to get into Princeton than to get a Medicaid card in Texas.

This is a true statement for childless adults, because like many other Southern states childless adults are not eligible for Medicaid.  And even worse, if you are in a category eligible for Medicaid but you earn more than $3,733 per year for a family of 3 (17% of the Federal Poverty Level), you are too rich to qualify for Medicaid in Texas.  Princeton has got to be easier to get into.

On Business Models

16. The prevailing metaphor for American healthcare is “Pimp my Ride”

As I wrote back in 2005:

“If you have teenage kids, you end up watching a lot of MTV or you have nothing to talk to your children about.  My kids are both in college now, but I have watched a lot of MTV in my time.  My favorite show of the moment is “Pimp My Ride”.  The show is in the genre of all makeover reality shows.  In this case a rapper host introduces a poor kid and their beaten up old car (the ride).   The car is taken from the young adult and transformed by a team from West Coast Custom (a body shop and customization company in LA).  

Each episode shows a different kid and a different car:  clapped out Pintos, beaten up Suburbans, and a plethora of ugly, weird, old and dilapidated camper/truck hybrids.  The process is always the same: they strip the car’s interior and install an unbelievable array of stereo equipment (woofers and sub-woofers included), video displays (even laptops) and the whole thing is topped off with an amazing paint job in vibrant blue or dazzling yellow, topped up with custom painted flames on the side.  They never seem to do anything to the engine, drive train, or chassis of any of these vehicles.    At the close of each episode the youngster is shown the transformed vehicle that has been “pimped” and they can never contain their excitement.  They are deeply grateful.

The prevailing vision of quality in American healthcare is “Pimp My Ride”.

We take a really bad chassis and engine and bolt on unbelievable amounts of high technology on a frame that is tired, old and ineffective.  We spend extravagantly on buildings, machines, drugs, devices, and people at West Coast Custom Healthcare.  The people who own the rides are very grateful because they don’t have to pay for it in a high deductible catastrophic coverage world, once you are over your deductible and ensconced in an American hospital the sky’s the limit.  It all looks great, has a fantastic sound system, and nice seats but it will break down if you try and drive it anywhere”.

I rest my case.

17. Really rich people don’t pay taxes, unless they have bad accountants

I actually got this joke from my accountant.  He was correctly pointing out to me the fact that the ultra-rich have a wide variety of offshore and other tax avoidance schemes that are unavailable to even the ordinary affluent.

18. One man’s waste is another man’s income.  Modern variant:  One man’s surprise bill is another man’s lucrative business model

The whole surprise billing policy shenanigans has underscored the fact that many providers such as ER doctors and anesthesiologist (especially if they are private equity backed), air ambulance services and many others are completely dependent on surprises as their business model. Hospitals and health systems are often complicit in these models and it is why they are resisting the rules of adjudication of surprise bills which will inevitably reduce the economic yield from out of network activity.

19. Managed Care Definition: An organized system of healthcare financing and delivery that takes the excess profits of hospitals, specialists, and drug companies and gives them to consultants

Managed care been “berry, berry” good to me.  Managed care unleashed a gravy train for consultants that has continued for 30 plus years (with only minor perturbation by Covid).  The current managed care variants of value-based purchasing and population health still haven’t dealt with the fundamental question if managed care is so great why have American healthcare costs continued to rise faster and higher than anywhere in the world over the last 30 years and life expectancy and other indicators have gotten worse relative to our advanced country peers. 

20. At some point in the next five years the revenue from the Revenue Cycle Industry will exceed the revenue of the hospitals they serve in the financial management equivalent of the Rapture.

We have armies of people faxing things to each other and in the modern version we have dueling robots where automatic upcoding by hospitals meets automated denials by health plans.  At some point the robots will explode and the health system will meltdown.

On Disruption

21. When smart Alec start up CEOs call me with a plan to disrupt American healthcare I give the same speech.  The American healthcare system is larger than the entire Italian economy and about as well organized.  So if you think you are going to disrupt healthcare it’s a bit like saying you are going to disrupt Italy. Good luck with that.

US healthcare just edged out the German economy as the fourth largest economy in the world (it is actually twice the size of the Italian economy).  Such massive incumbency is not easily moved. The new disruptors with the massive resources thrown at them in 2021, also have massive burn rates which will be challenged in the next 24 months to deliver on the lofty promises.  I wish them well, we need the innovation. Ciao.

On Being a Futurist

22.  My definition of a futurist is an economist who couldn’t handle the calculus.

I have been in the sweeping generalization business for more than forty years.  I like data and arithmetic, calculus not so much.  But I believe that if something is going to be a big deal in the future it has to start some time and be detectable to human beings without fancy mathematics.  Jokes can help tell those fundamental truths.  

Ian Morrison, PhD is an author, consultant and futurist in Menlo Park, California

Policies Techies VCS: What’s Next For Healthcare; Musings from a Futurist

Monday, September 20th, 2021

I should’ve been in Paris last week on vacation with my wife, instead I listened in to the Policies Techies VCS:  What’s Next For Healthcare conference (I’ll explain why later).  Matthew Holt and Jessica DaMassa did a magnificent job of assembling the Who’s Who of digital health tech to wax lyrical about what the new kids on the block were up to, where it is all headed, and what it will mean for the system. (Full disclosure Matthew and Jess are friends of mine, I hired Matthew from Stanford almost 30 years ago to join the Institute For The Future (IFTF) and have watched proudly as he has become a Health 2.0 impresario.  Jess simply deserves a gold medal for wrangling Holt and all the other tech Bros with wit, charm and intelligence).

This is a tumultuous time for digital health technology because of the pandemic and the related rise of digital solutions not to mention the very frothy investment market and massive deal flow over the last 24 months.   There are a lot of exciting new faces.  But, many of the companies on display have been at this for some.   And for many of the old guard, like Livongo and now Transcarent Founder Glen Tullman, Athena Health and now Zus Founder Jonathan Bush, and Amwell CEO Roy Schoenberg and others this has been a much longer journey.

(Parenthetically, as a young management engineer in Canada, a position, I was not qualified for, I wrote the justification for an all-computerized hospital at the University of British Columbia in 1979!  I still find it just incredibly pathetic that it has taken us 40 years to suddenly “discover” digital health. I wrote The Second Curve which forecast (among other things) the rise of digitally enabled health transformation 25 years ago!  So it is hard for me to get really excited that this is either “new” or “next”.)

So, while a lot of us have been in this movie for a long time, there is something very different about the current crop of offerings.  In particular, technology has advanced considerably and there are clearly new cloud and SaaS tech enabled care solutions.  There is a new cadre of talented and committed investors and entrepreneurs who believe they have the capability and capital to scale meaningful enterprises that will disrupt incumbent healthcare players and better serve consumers and providers.  And the timing seems right as the pandemic forced consumers and the health care system to confront new ways of doing business.

Common Origins

Most of the entrepreneurs on display at the conference had the same origin story. Almost all had a bad experience with healthcare (either themselves or an immediate family member, some tragically and painfully so) and this so motivated them that they committed their life and talent to fixing a healthcare system which they see as profoundly dysfunctional, overly complex, unresponsive, and that currently runs on brain-dead information technology (what I have termed “steam driven legacy systems”). 

(As a Scot I find these entrepreneur origins very interesting.  In Scotland we complain about things all the time, but when we find organizations dysfunctional and unresponsive, what usually happens is we go to the pub and moan to our friends: “That’s terrible, something should be done about that” and then two pints later you just forget about it.   Not so these young (and some not so young) entrepreneurs).

A lot of these new CEOs are engineers.  About 20 years ago I was presenting to hospital leaders at a conference on the future of healthcare organized by McKesson. I gave a talk about where I thought things were headed and urged hospitals to reengineer care for the future.  Another speaker was the father of industrial engineering and he admonished me for my naïveté saying: “Ian, you can’t reengineer healthcare because it was never engineered in the first place!”

This maybe the source of frustration for many entrepreneurs, particularly tech bros who come into healthcare with an engineering background from another industry.  American health care is a $4 trillion enterprise, the fifth biggest economy in the world.  It is twice as large as the entire Italian economy and about as well organized.  It was never engineered.  So when tech entrepreneurs say “I’m going to disrupt American healthcare” it’s a bit like saying I’m going to disrupt Italy….Good luck with that!

Six Core Assumptions:  Don’t Take them For Granted

There was a fantastic array of more than 20 panels and keynotes in the conference almost all of which was populated by “New New Thing” thinking CEOs (not an incumbent in sight, a deliberate choice by the organizers).   Conference participants got a picture of the full range of digital health tech offerings and new service businesses with strong digital backbones.  I won’t even begin to summarize all of the excellent content.  Just go look it up yourself and you can relive it all.  

But I was struck that there were six core assumptions made by almost everyone who presented, assumptions that I think you have to be careful not to take for granted.

Assumption 1: Value Based Care is Inevitable.  

Most presenters seem to believe value-based care is the inevitable norm for American healthcare.   Along with many others, I have been pitching and preaching this idea for 30 years. Yet if you look at the facts on the ground there are still precious few capitation dollars flowing through the system relative to the dominant model of fee-for-service supported by the high prices paid by self-insured employers, who seem incapable of massifying their firepower to any great effect to change the existing financial hydraulics.

To presume that value value-based care is the inevitable American future is perhaps to bet against history. 

One great hope may be Glen Tullman’s new venture, Transcarent.  Glen seems convinced that a critical mass of employers will provide full at-risk dollars to build end to end care solutions for a wide range of health conditions beyond the care of pre-diabetics.  Currently most of the more activated self-insured employers I know are swamped with a dizzying menu of disconnected point solutions.  Let’s hope Glen is right and we start to see broad, large scale, at-risk offerings being embraced by major employers across the country.

Where value-based reimbursement models are a more realistic assumption is in public programs especially Medicare Advantage, Managed Medicaid and programs for Dual Eligibles.  But even there we see health plans hoarding risk perhaps because they feel they have the tools and technologies to manage care without delegating to new (or even old) at-risk models of care.

There are some obvious bright lights in value-based care for public programs from Iora to Oak Street Health to City Block.  We wish them all well and hope they scale rapidly with the financial fuel they have taken on board.

Assumption 2: Pandemic Effect on Digital Health is Massive and Permanent 

It is undeniable that because of Covid there was a rapid, massive digital shift that occurred temporarily to enable the continued functioning of hospitals and health systems across the country.  But to assume that that shift is somehow both massive and permanent belies the experience we are seeing of the reactivation of in person care.  While I do believe that we have learned many lessons, and that digital health is certainly not going away, the evidence on the ground again is that we are seeing a return to some kind of normalcy and reactivation of in-person care across the care spectrum.  (Behavioral health services being the stellar positive outlier where the shift to digital seems both massive and permanent).

Some of this bounce back in physical care is inevitable because surgery and other forms of intervention require the physical proximity of the patient and not everything can be done with an iPhone or at home (although you can bring a care team to the home, even ICU level care and monitoring, more of which below).  

But I have always argued that the challenge for digital health is not to simply “pave the cowpath” in other words simply automating existing processes or virtualizing visits or moving the same activities to the home.  What is needed is a fundamental redesign of all clinical care processes to be more digital in their mix and to use appropriate digital tools and technologies to amplify the efficiency of caring for patients, prevent disease and motivate constructive behavior change and improve overall patient, member and consumer experience.

Assumption 3:  Primary Care and Prevention Eliminates Tertiary Care

An assumption I heard over and over again is the primary care done right, and better prevention and behavior modification would in and of itself inevitably lead to a reduction or elimination of all or most utilization of complex downstream medical care.   One young CEO with a high net worth and a perfect head of hair went so far as saying that 80% of all care would be digital to which I muttered “bullshit”.

As the 70 plus years of experience of Kaiser Permanente has shown, even when you are relentless in pursuit of preventive measures using digital platforms and an aligned at-risk business model intent on keeping people out of the hospital, you are not going to entirely eliminate morbidity and disease burden that requires more complex interventions.

A related phenomenon is the fallacy of composition which is because I saved 20% on the care of the diabetic or prediabetic population I was accountable for, are those savings permanent and systemic across the system.   As my old mentor Bob Evans taught us you must look at the countervailing action by the providers whose care (and incomes) were eliminated to really fully understand whether or not you had a systemic effect on total costs.  Rajeev Singh CEO of Accolade talked about the “leaky bucket problem”, the difficulty of attributing true savings of multiple interventions and possible double counting of savings.  I have worried for a long time that the cost of the sum of the point solutions exceeds the previous costs baseline.  Most health systems around the world utilize what I term Balloon in a Box policy solutions.  They recognize that pushing on one part of the healthcare balloon may cause it to pop out somewhere else, so instead they put the healthcare balloon in a box, and they sit on the box.  Global budgeting from the top-down works. Competition from end-to-end at risk solutions in an open ended healthcare system where providers are free to respond creatively to being economically disrupted is yet unproven as national policy.

All this may explain why we are seeing all of these companies claiming 20% savings and yet total health-care costs keep continue to rise.   Part of this is supplier induced demand.   As one wag put it: “good health is a state of incomplete diagnosis”.   If you look hard enough you can find stuff to operate on.   Another much more troubling problem is that even well-intentioned preventive efforts such as on-site wellness programs have shown remarkably little ability to reduce total cost of care or improve health endpoints when properly accounted for in well- designed systematic double-blind trials.  I call it “faith-based wellness”, it ought to work it just doesn’t. 

Assumption 4:  Technology is a Force for Good

A theme that ran through most of the presentation is that technology will triumph over all obstacles, and, even further, that technology is somehow imbued with a moral authority superior to the motives of the current incumbent actors.  My doctoral dissertation challenged technological determinism and I have been a curmudgeon and skeptic ever since. Technology is powerful, it is an amplifier, it is a tool, but it doesn’t have a conscience.   It isn’t a force for good, or evil for that matter.  It can be used by people to do a lot of different things.   Just as Facebook enabled the Arab Spring, it also enabled the election of Donald Trump and more recently, the disinformation campaign that systematically undermined science and expertise that led us to vaccine hesitancy.  I am always leery when my venture capitalist friends and entrepreneurs claim that technology will solve everything.   It depends on the decisions, actions and behavior of individuals and organizations particularly those with economic and political power. 

Almost all of these young entrepreneurs had highfalutin mission statements, but they are privately funded enterprises whose primary duty is to their shareholders and investors. They are therefore unlike most of the not-for-profit organizations that dominate the healthcare delivery landscape and that have a broader mission to serve the community.  It was instructive that Pauline Lapin, leader of the Seamless Care Models Group from CMMI pointed to the vigilance that the Biden Administration will have in judging issues such as health equity and questioning who profits and benefits financially from new models of care.

Assumption 5:  Incumbents are Losers

A theme through the conference (perhaps deliberate) is that incumbents are stupid, bloated losers who deserve to be displaced. (Some presenter CEOs didn’t go down this road recognizing that the stupid, bloated, losers were their customers).  

Look I’ve made a living tweaking the noses of the incumbents for 40 years, and I’m reasonably good at it, but in the final analysis you have to really be out of your mind to believe that we are not as a society going to need care delivered that is complex, requiring multiple professionals being coordinated in the same place, and requiring unbelievable amounts of capital and labor to deliver very complex procedures.  We need to honor and support the people and institutions that do this, not gleefully drive them out of business. 

As an illustration, one reason my wife and I didn’t go on vacation to Paris last week was because I was recovering from surgery at Stanford having had a massive volvulus (look it up) removed.  I had 4 feet of twisted, bloated colon removed surgically and repaired through a small 4 inch incision in my belly.  Try doing that at home on a freaking iPhone.

In a week, I’ve enjoyed a spectacular recovery, a return to normalcy and feel that I got my life back.   I am deeply grateful to Stanford, my surgeon, and all the care team.  I received exemplary care with incredible professionalism and compassion. 

My GI workup was at the Palo Alto Clinic (PAMF) which is a Sutter facility and and even though they are old strategic rivals, my care was coordinated, I had full access to the much-maligned Epic system and the apps on my phone, in both institutions.  They could access each other’s chart on me. And even though I am a boring old fee-for-service Medicare patient, my physicians at both PAMF and Stanford were completely responsive over online messaging and Open Notes through Epic.  Both institutions were flexible and able to adjust workflows and schedules for CT scans, sigmoidoscopies, x-rays, diagnostic tests and so forth.  Nothing was unnecessarily duplicated.  Professionalism and compassion triumphed over incentives.

So, given my long history working with incumbents and my most recent experience, I found myself throughout the conference bristling at the derision with which most presenters treated existing incumbent health systems.   If the quality of your life has been saved and a return to normalcy achieved by surgical genius, you’re a little bit less picky about the net promoter score the institution may have for its website or that they are using an I-Phone 5 with old code as their mobile care platform.

Assumption 6:  We are Not a Health Company we are a Tech Company

It became a bit of a cliché at the meeting….we are not a health services company we are a tech company.  You can understand why:  valuations are higher, multiples are higher, scalability of cloud computing and SaaS …yadda, yadda, yadda. Of course, you want to be Netflix not Blockbuster.  Clicks not bricks and so on.  But it is very difficult to build healthcare business at scale in pure technology form without all the attendant economics of service businesses. 

It took the great Lisa Suennen @venturevalkyrie on the fourth day of the conference to call the bluff on the conceit that health services businesses with a digital backbone want to call themselves technology companies.

She responded: “I call myself tall.”  (Spoiler alert, she’s not).  Genius.

Eventually these businesses will be judged as all businesses are on growth, profitability, customer satisfaction and contribution.    

What Did I Learn?

What did I learn?  There were a number of very helpful perspectives to be gained from digesting the full content of the conference.

First, there are many very promising innovations enabling a digital front door to health with primary care/ virtual health and behavior modification tied to dedicated at risk payment models.  These models show great potential to emulate the essence of Kaiser and the capitated medical groups of Southern California in the 1990s. I applaud and have applauded such efforts for 30 years…….so let’s grow them.

Second, is the use of artificial intelligence and machine learning as an amplifier and productivity enhancer in healthcare within clinical decision-making, in consumer outreach and behavior modification and perhaps most importantly in internal administrative simplification. American healthcare is the most Byzantine administrative system in the world, with armies of people faxing things to each other.  But by the same token these are good jobs with good wages as healthcare is the last unionized industry in America.  Companies like Olive and others are building solutions for hospitals to dramatically improve their technology stack for administrative functions.

A third promising insight is the recognition that care can happen anywhere, anytime and anyplace especially enabled by mobile digital technology.  The home is rapidly becoming the clinical setting of the future with all the logistic, technology, infrastructure and inequity challenges that creates.  We should welcome home based care options particularly that allow us seniors to safely age in place.

A fourth insight is that mental health must be integrated with physical health into seamless offerings.  For too long we have had policy, reimbursement and delivery siloed approaches to mental health with the related dearth of meaningful improvement in health outcomes.

Fifth there is the need to liberate patient data and eliminate all the legal and organizational barriers to utilizing the data. In the words of the ever-eloquent Jonathan Bush, consumers will demand their data be made available:

“Bitches, give me my shit”

Sixth, there was a lot of talk about new platforms being built including Jonathan Bush’s Zus vision off providing plug and play repeatable module offerings to enable all the companies in the startup ecosystem to rapidly deploy similar solutions such as patient registration.   This platform talk is consistent with the grand vision that was eloquently described by venture capitalist Julie Yoo who presented a cogent alternate vision of how new platforms could be enabled for the emerging healthcare ecosystem.

Seventh, I was heartened to see presentations from regulators and government officials on the program from CMMI, ONC and FDA all of whom were very thoughtful in encouraging all forms of digital innovation and showed willingness to work with the emerging forces in the industry to meet policy goals.  They will rightly focus on health equity and seem committed to encouraging creative and innovative approaches through both payment reform and regulatory changes. 

And finally, I was struck by the time clock of change between tech and healthcare.  The two year sell cycle of approaching incumbent health systems versus selling Viagra direct to millennials on the web.  Part of the reason that Jonathon Bush’s Zus can succeed is satisfying tech and investors need for speed.  “Just get the crazy people.”

Overall, I was encouraged by the conference that we have a lot of very smart people armed with a lot of private investment aimed at doing important things to improve the healthcare experience for American consumers, and hopefully for providers. 

Some of the companies had lofty ambitions that are unlikely be realized.  Some worthy players and toolmakers will be absorbed into larger more aggregated offerings.   And some will be bought by United Healthcare.

But I do believe we may see the emergence of a few successful platform plays combining the elements described throughout the conference.

The final thing I strongly believe is that the greatest value to be extracted from the digital health ecosystem, enough with the disruption, people, let’s try and harness the power of these technologies to make sophisticated medical institutions like Mayo, Stanford, UCSF and Cedars as well as community-based systems of care stronger, higher performing, efficient and responsive to the communities they serve.

Covid-19: The End of the Game

Tuesday, May 19th, 2020

Back in the early 2000s I was on the board of the California Health Care Foundation and one day the German Minister of Health paid CHCF a visit as part of a learning tour of American healthcare. Mark Smith MD CHCF’s CEO invited me to join the meeting with the minister. She was a delightful person who didn’t speak much English, but because she was accompanied by her handler/translator we managed to communicate just fine. Mark and I tried to explain to the Minister how the American healthcare system worked, and we got to the point in the conversation about the money. The essence of the “game” we described was that commercial insurers (particularly self-insured employers) paid a significant multiple of cost (sometimes in excess of 300% of costs) in order to make the math work for providers. We explained that the game works only if these purchasers paid much higher prices. I don’t speak German, but I think she said: “What The F**k?!”. Exactly.

As we enter the Post COVID world, a key question is: Will healthcare simply restart this game? Or make it even more extreme, in fact, by providers turning to those commercial insurers and self-insured employers to make up the difference for the COVID “Elective Collapse Recession” that has so traumatized provider’s finances including hospitals, specialists, primary care, and dentists leading to job cuts, furloughs, salary reductions and bankruptcies of providers.

A number of recent articles have pointed to how the game works. In particular, the always superb New York Time’s columnist Sarah Kliff’s review of the Mayo Clinic and the other highflying institutions whose excellence is rewarded not by value based reimbursement but by high prices for commercial activity under a relatively benign payor mix (industry code for “don’t see a lot of poor people, uninsured or on Medicaid”).

Mayo is not alone. Every hospital I know plays a variant of this game. Some in less generous environments like Arkansas live leaner to the bone to make the math work, lucky to make 130% of Medicare on the commercial side. A tiny few, like my friends at the Benefis Health System in Montana, through passionate focus on operational excellence and a run lean culture, actually can make money on Medicare. But they are exceptional. Many if not most hospitals with more dominant market positions are able to generate in excess of 300% of Medicare on their commercial contracts including many of the country’s leading academic medical centers. And many titrate down their public payment patient mix to keep the game going. As I used to joke to hospital CEOs of financially struggling hospitals, “just move your hospital to the affluent suburbs”. Some did.

RAND has documented in studies of actual paid claims for commercial insurance that on average hospitals charge 241% of Medicare across the 25 or states covered in the analysis. I’m sure all these institutions make wonderful use of the money subsidizing research, uncompensated care, and the salaries of employed physicians especially academic doctors who are teaching the next generation. But all of these worthy activities are enabled from money derived from the game.

George Halvorson, former Kaiser CEO, proposed recently on The Health Care Blog an alternative funding scheme using a 20% payroll tax (paid equally by employer and employee) that would be used to fund a Medicare Advantage type program for All. (I proposed a similar solution twenty years ago in Healthcare in the New Millennium:  Vision, Values and Leadership, Jossey-Bass 2000, pp 231-2).  It might be a better alternative, but I am not sure we can get from here to there and especially by demanding high paying enterprises like Apple, Google and Facebook embrace a 20 percent payroll tax.

In the wake of COVID, hospitals have received one-time financial support from the Federal government to shore up both costs of care for the afflicted by the disease and for the financial damage of suspended clinical operations. Ironically, the share of non-COVID case-related reimbursement was distributed proportional to net patient revenue, in other words revenue gained in the game.

Absent a meaningful alternative like Medicare Advantage for All, to date employers have been complicit in the game and (while not exactly thrilled) have tolerated it for decades. Their coping mechanism has been to transfer the burden of rising costs and prices to their employees progressively over the last 20 years through the magic of high deductible healthcare. Sharing the pain with their employees and making them miserable in the process as workers face the weird reality of rising out-of-pocket costs, surprise bills, and denials of coverage.

Health plans see no real reason to change the game. They can make money on managing Medicare and Medicaid and are eager to do so, while commercial small group insurance is even more profitable. But the majority of Americans with private health insurance, over 60% by most estimates, are employees and dependents of self-insured employers including giant corporations such as Boeing, Disney and Walmart. Insurers typically charge on an ASO (Administrative Services Only) basis charging about 3% to manage networks and pay claims. But remember 3% of a big number is a big number. So plans are not exceptionally motivated to change the game.

All this works if self-insured employers rejoin the game post-COVID. But will they?

Ironically, employers have seen their health spend per employee drop dramatically in the Covid shut down by as much as 20-50%, but it is cold comfort if you are an in an industry that may have seen revenue plummet and you are now facing financial collapse and lay-offs: think airlines, hotels, hospitality and virtually all non-Amazon, non-Grocery retail.

Unemployment claims are up over 36 million, many of those jobs are not coming back in the next 12 months. In fact, I have gone as far as saying that January 2020 was the all time high in level of employer sponsored coverage never to be reached again. A full 10-40 million Americans are likely to migrate to Medicaid and the uninsured rolls in the next year as we stagger back to some kind of an economic recovery.

But as we return to a New Normal, employers are deeply concerned that they are going to be asked to pay higher prices in 2021 as providers try to make up losses. They fear greater consolidation in healthcare as weaker players capitulate and strong, regional health systems get even stronger with greater market power and control over primary and specialty care.  And they are concerned that some of the positive short-term regulatory relief (enabling telehealth and scope of practice easing) will be rolled back, post Covid. Let’s hope not.

Don’t be surprised to see employers step up to this moment and finally do what they have not done to date, namely massify their economic firepower and act in a concerted way to change the game. After all, they are the financial lifeblood for the entire healthcare system.

Employers could demand greater accountability for performance on measures of outcome, appropriateness, and demand a focus on ubiquitous technologically sophisticated primary care.

They could turbo-charge efforts to codify Centers of Excellence models as the means of accessing appropriate, high quality, elective services using mandatory or highly incentivized benefit designs to have patients patronize only select high performers. To date the Wal-Mart and PBGH Center of Excellence models have saved money not so much by price discounting but by reducing inappropriate care by 20-50%.

COVID is like high deductible health care. It is a blunt instrument that has reduced appropriate and inappropriate care in probably equal measure (we don’t know yet in the case of COVID-foregone electives).  But I don’t think employers will just go back to endorsing access to elective healthcare at ever escalating prices without asking some tough questions. 

If you are a plan or a provider. Don’t just assume that the game just comes back. There may be new rules.

Original source: https://thehealthcareblog.com/blog/2020/05/19/the-end-of-the-game/

Médecins sans Hôpitaux (Doctors without Hospitals)

Wednesday, April 4th, 2018

There is lots of talk of disruption in healthcare particularly involving new entrants and weird combinations such as the CVS-Aetna merger, CIGNA and Express Scripts, Amazon Berkshire Hathaway and J.P. Morgan, and now Wal-Mart and Humana all claiming to transform healthcare. At the same time, we are seeing continued consolidation in the traditional healthcare industry with hospital systems merging at the local, regional and national level.

The rise of consumerism is affecting healthcare particularly the retail/primary care area where consumers are spending with their own money in a world of high-deductible healthcare.

The growth of digital health offers the opportunity to disrupt traditional care interactions in both the management of chronic conditions and in routine primary care. And there is a whole new set of patient decision-makers such as millennials who bringing with them different sensibilities in terms of access to services.

Doctors: Disruption and Discontent

Where are doctors in all of this change? One megatrend has been the increasing consolidation of physicians into larger group practices on the one hand and increasingly in employed relationships with hospitals on the other. Recently the American Medical Association (AMA) survey shows that approximately a third of physicians are employed directly by hospitals or by practices either owned wholly or in part by hospitals (Table below).

Source: AMA, 2017 https://www.ama-assn.org/sites/default/files/media-browser/public/health-policy/PRP-2016-physician-benchmark-survey.pdf

Among the third of physicians that currently work for hospital systems there is strong anecdotal evidence and some survey evidence that there is considerable buyers’ and sellers’ remorse among those hospitals and physician practices. Indeed, there has been a “cooling of ardor” toward hospital owned physician practice by both parties. Some physicians are now realizing they have sold out “to the man” and have reduced autonomy and control. Conversely, some hospital leaders are realizing they are subsidizing the incomes of the employed physicians to the tune of tens if not hundreds of thousands of dollars per year per physician and experiencing declining productivity among the newly salaried doctors. Nevertheless these employed physicians are a core component of most health systems’ strategy going forward, as we explore below.

In 2011 my colleagues (at Nielsen at the time) developed a segmentation of physicians based on surveys of attitudes of physicians to practice arrangements and industry trends such as electronic health records, payment reform and evidence based medicine. At one extreme was a segment of Blazing Believers, those who had “drunk the Don Berwick Kool-Aid” in that they were willing to be on salary, believed in large group practice, believed in the use of electronic health records (EHRs) and evidence based medicine. Approximately 37% of doctors were in this category by 2016 rising steadily each year from 23% in 2012. At the other extreme were the independent resisters, think “cranky old surgeons from Texas” who were more likely to be in solo practice and less likely to be enthused about groups, salaried employment, EHRs and so forth. Resisters comprised approximately 30% of physicians the remaining third were split almost evenly between what we labeled optimistic intenders (12%) physicians that have not experienced integration but were open to it and a fourth category, reluctant objectors (20%) who had tried integration and did not like the experience.

Changing practice circumstances in combination with payment reform pressures, increased scrutiny of quality, heightened reporting requirements, and angst over the electronic health record have led to rising physician discontent. This is not new. A similar trend existed in the 1990s as managed-care took hold. The fever broke with the managed-care backlash and physician satisfaction bounced back and was relatively high in the early 2000s. Over the last seven years surveys show continued growing physician dissatisfaction with practice (not a majority of physicians to be sure but a significant plurality (40%) reportedly dissatisfied with practice).

Surveys also reveal high levels of burnout with the majority of all specialties and 56% of all physicians nationally responding they are burned out. More recently physicians have described to me that the more accurate term is “demoralization” reflecting the compounding effects of these broader changes that undermine the autonomy, authority, independence, and stature of physicians.

It is against this backdrop of change that we are seeing alternative models proliferate in terms of offering physicians new ways to practice.

Three Buckets of Physicians

In my travels I see many hospital systems with three buckets of doctors. The first bucket is the employed multispecialty medical group (usually split evenly between primary care and specialists) which has grown rapidly over the last few years both organically through recruitment, and through acquisition. In many markets across the country, from Oklahoma to Oregon, from Mississippi to Maine, these groups account for a third or more of all the physicians practicing in the institution and perhaps an even higher proportion of admissions and all clinical activity. A second bucket is the loyal medical staff most of whom practice in traditional solo, small group or single specialty group arrangements. In some cases these physicians are included in the clinical integration organization legal structure that enables activities such as care coordination, managed care contracting, and population health activities but often this second bucket are simply the loyal medical staff who practice exclusively in the health system. The third bucket is the community-based physicians some of whom maybe “splitters” working with competing health systems, some may be in more entrepreneurial mode operating independent surgery centers or in procedural oriented specialties such as orthopedics, ophthalmology, dermatology, or plastic surgery where they do not need to have a close full time relationship with the hospital. Most health systems are trying to drive more of the clinical activity towards the first bucket, but recognize the central importance of the other two buckets as key revenue generators for the foreseeable future.

My friend Daniel Varga M.D. Chief Clinical Officer for Texas Health Resources talks eloquently about the need for THR (and all health systems) to develop “economic docking opportunities” with all three buckets of physicians. And that makes good sense to me. However, increasingly health systems are not the only place that this third bucket or even the second bucket of physicians look for practice opportunities.

Increasingly, we are seeing publicly traded companies, as well as private equity and venture capital backed initiatives that are seeking to organize physicians in different ways then the traditional relationship with independent practitioners, small or large groups or hospital owned practice.

Here are some interesting examples of physician consolidators. Each has a very different approach to the marketplace.

One Medical is a nationally growing member-based primary care practice founded originally by Dr. Tom Lee a pioneering, highly trained physician MBA entrepreneur who created an innovative environment for primary care physicians to practice using high-tech, high touch medical care targeted perfectly to the Uber generation. Well-funded by elite venture capital investors including the prestigious Google Ventures and Benchmark Capital, One Medical is growing rapidly in the San Francisco Bay Area and in other sister markets such as New York, Washington DC, Boston, Chicago, Phoenix, Seattle, Los Angeles and beyond. Their new CEO, Amir Dan Rubin formerly CEO of the Stanford Health Care system and more recently executive vice president at Optum brings vast experience in managing leading edge provider systems at scale. Amir Rubin is building on One Medical’s vision to transform the patient care experience for primary care physicians and their patients leveraging technology and value based care, while growing employer sponsorship for membership for their employees. One Medical will continue to grow as it provide opportunities for young tech savvy physicians to practice the way they really want and for patients to get primary care on their terms.

Amir notes that, “One Medical is focused on transforming health care by delighting consumers with 90% Net Promotor Scores, delivering premier health outcomes, reducing the total cost of care, and engaging providers and technologists within an outstanding environment.”

Oak Street Health is a venture backed primary care service in Illinois and Indiana with growing footprint in the Midwest focused on vulnerable elderly populations. Their model as I understand it, mirrors the pioneering work of CareMore (a medical group that is now part of the Anthem family) that focused on providing coordinated care to frail dual eligible elders on a capitated basis. The revenue flow for such patients is enormous on a Per Member Per Month (PMPM) basis and with prudent management and population health and primary care concierge medical services, has the potential (as CareMore did in its day) to dramatically reduce unnecessary hospitalization and costs.

Core Institute is a private equity backed orthopedic, neurology and spine health practice based in Phoenix and expanding to other markets such as Michigan. Core’s model is a “focused factory” that improves quality and dramatically reduces costs in high volume orthopedics such as hip and knee replacement with a special focus on bundled payment opportunities. They also have a rapidly growing management and advisory services practice helping hospitals manage and optimize their orthopedic service lines.

Optum is the rapidly growing $91 billion revenue health services company buried inside the behemoth $200 billion United Health Group. Optum has built its own monster PBM and has stealthily acquired other physician practice and other healthcare delivery assets such as 200 Ambulatory surgery centers through their purchase of Surgical Care Affiliates, and 280 Urgent Care Centers through their purchase of Med Express. Optum has reportedly 20,000 affiliated physicians and has added to their portfolio recently with the acquisition of the former Healthcare Partners Practices that were previously owned by Da Vita with 2,000 employed or affiliated physicians. All of these delivery assets can be brought to bear on the 91 million lives served one way or another by Optum. In particular, 75 geographic markets have been targeted for OptumCare primary care driven practices (35 already penetrated) according to United Health Group’s most recent financial filings.

Investor Backed Ambulatory Services are growing in many states especially where there is no Certificate of Need legislation. A previous column (https://www.hhnmag.com/articles/7795-the-future-of-emergency-care) focused on the future of emergency medicine highlighted there are 10,000 urgent care centers, 5,000 ambulatory surgery centers, 2,800 retail clinics and more than 500 freestanding emergency rooms in the United States. In addition, there are numerous micro hospitals and diagnostic imaging centers that either employ or partner with community based physicians. These new settings provide increased opportunities for physicians to practice without hospitals.

Physician Led ACOs are proliferating rapidly with one study found: “As of January 1, 2017, half of the 480 organizations participating in the government’s Medicare Shared Savings Program (MSSP) — which offers upside potential and downside protection for the 438 Accountable Care Organizations (ACOs) in what the Centers for Medicare & Medicaid Services (CMS) refers to as Track 1 — reported to CMS that they are composed solely of networks of individual physician or small group practices”. This study and others seem to show that “small is beautiful” with independent physician led ACOs apparently out performing ACOs on average. (https://catalyst.nejm.org/do-independent-physician-led-acos-have-a-future/ )

Physician Outsourcers such as Team Health, MedNax, AMN are for profit health service companies. They are not traditional healthcare providers and yet they organize tens of thousands of physicians. Team Health has 20,000 affiliated physicians and provides physicians for hospitals and health systems in several specialties especially emergency medicine, anesthesiology and hospital medicine. MedNax is a physician aggregator/outsourcer with revenues of $3.5 billion and over 4,000 employed or affiliated physicians focused primarily on pediatrics, obstetrics and anesthesiology (including through their well know Pediatrix and Obstetrix brands). For example, MedNax physicians represent over 20% of the nation’s neonatologists (1,125 of the estimated 5,300 neonatologists nationally according to company presentations to investor conferences). AMN is the largest healthcare staffing company with $2 billion in revenue that provides a wide range of healthcare workforce solutions including physicians recruitment, nurse staffing, locum tenens and healthcare workforce optimization services. All of these companies position themselves as providing diverse opportunities for physicians to practice the way they want.

Implications

So what does this all mean for hospitals and healthcare systems across the country?

• Looking for Doctors. At every health system board or management retreat I have been involved with in the last five years (and there are a lot of them all over the country) one common recurring strategic issue is attracting and retaining physicians. For the old hands out there, this is not exactly breaking news. This is how the game has been played for a century. But it is different now. All the consolidation, disruption, shift to the ambulatory environment, coverage expansion, physician demoralization, changing character of the labor force in terms of gender and lifestyle all combine to increase the challenge of recruitment and retention of physicians. Whether it is because of over priced housing markets in the Bay Area or Boston, or disinterest in taking call, or an overall shortage of physicians, or all the intervening opportunities described here, most health systems are having trouble attracting physicians. Except Kaiser of course.

• Doctors are Unsettled. While hospital based employment provides economic security and (in many cases subsidy) it is not for everyone. Whether it is burnout or demoralization there is no doubt that doctors are unsettled. And many of them are entrepreneurial and value autonomy over anything else (for many physicians, that’s why they went into medicine in the first place so they don’t have to work for a boss). The new plethora of practice arrangements especially with investor backing may represent an attractive option. (Actually making money in these investor backed ventures is a whole other matter as evidenced by the horrible financial history of Physician Practice Management companies in the 1990s).

• Not Either/Or. The healthcare outsources like AMN and Team Health work with health systems, the disruptors like CVS-Aetna will partner with health systems, the focused factories like Core Institute may build significant ambulatory operations and still partner with health systems. Like Silicon Valley learned decades ago you need to simultaneously collaborate and compete. Get used to it.

• But People will get Sick. No matter how successful disruptors and innovators are there will still be sick, vulnerable patients needing hospitalization. Your I-Phone won’t change your diapers, or turn you in bed at four in the morning, or bring together hundreds of highly-trained professionals, just for you, to deliver complex care like transplantation. And let’s not forget that complex care for the sick is where the money is in healthcare. Just 5% of patients account for 50% of costs and a lot of it quite frankly is not easily disruptible, no matter how many PowerPoints argue the contrary. We will need hospitals, doctors and nurses in our future more than ever as we age and get sicker as a society. But hospitals must understand that Médecins sans Hôpitaux will have an effect on their strategy and operations as physicians have more opportunities to practice in a wider range of settings.

Ian Morrison PhD is an author, consultant and futurist in Menlo Park, California

Trump State of the Union

Sunday, November 13th, 2016

New POTUS Donald Trump doesn’t like the White House, it is drafty and was occupied by black people, and so he and his family have decided to stay in New York to run the country on Twitter.   The State of the Union address will be a live Twitter event from Trump Tower at 3.00 AM.  THCB has received the secret first draft from an anonymous POTUS speechwriter.

TRUMP

Thank you.  We won.  We won big.  It was huge.  And we would have won popular vote except for all illegals voting.  Hillary poor loser. Sad.

State of the Union is not strong.  Weak.  We don’t win anymore, but we will make America Great Again!

Priorities:  Jobs, Repeal and Replace Obamacare, Immigration and National Security.  Already working on them all.  I am doing this for you.

Jobs.  Will bully CEOs to keep manufacturing in US & throw tax breaks at them. Expect air conditioners to get expensive.  Sorry Florida.

China: You are currency manipulators dumping product in US.  Expect tariffs and then big increases in prices at Wal-Mart.  Sorry America.

Infrastructure.  We will build beautiful new bridges using American steel and coal.  Plans announced soon.  Good Jobs for hard hats.  Bigly!

Repeal and Replace.  Obamacare is a disaster.  Dr. Tom Price a surgeon will cut it out.  Will replace immediately with something amazing.

Replace.  Get rid of the lines.  it will be beautiful. So much great competition from amazing plans.  Much better than Obamacare.  Watch!

Immigration.  Working on Muslim registry plans.  But need Wall first.  NAFTA renegotiation includes Mexican funding the wall.  No games.

NAFTA.  Don’t trust the Trudeau kid…….a socialist.  So maybe Canadian wall too if they don’t behave.

Love riffing with world leaders without briefings.  Even our enemies are amazing people.  We get along. Great opportunities for Trump brand.

No Legal Conflict of Interest for POTUS, but stepping away.  Kids will run Trump brand I will have no involvement except for my name on it.

My children will not formally help me run the country, just Ivanka and Jared, informally.  I will see them and we will talk.  Great minds.

No Salary.  I will not take a salary as President.  And I will continue to not pay any taxes.  That makes me smart.

Cabinet handpicked for a diverse America:  Goldman Sachs, billionaires and Fox News contributors.  Successful people not affirmative action.

National Security.  Big issues to deal with.  Obama told me some of it.  Wow, we have great assets but huge challenges, I had no idea.

ISIS.  We will bomb the shit out of ISIS with Russia’s help and take their oil.  Know more than the generals, on this.  Need strong leaders.

Torture.  A general told me it doesn’t work.  Wow, who knew?  Maybe we keep it up our sleeve and let ISIS think we will do it.

North Korea.  If he tweets at me or tries something with the nukes I will respond big time.  That I can assure you.

Growing the economy.  Taxes on the wealthy will be cut massively.  Economy will grow at 4%. Lots of manufacturing jobs as a result. #MAGA

Role of the Press.  The failing NYT and WAPO need to support Trump policy.  Need to change libel laws to curb press criticism. Unfair.

On Democrats who Lost.  I want to be President for All Americans, but you lost and I won so now you have to do what I say.

God Bless You and God Help the United States of America.

 

 

 

 

 

 

 

 

 

The Trump Healthcare Interview: Part Two

Saturday, March 12th, 2016

Donald Trump is leading in the polls and has the best chance of becoming the Republican nominee and maybe even President. In February, THCB asked Scottish-Canadian-Californian healthcare futurist Ian Morrison to conduct an interview with Trump, figuring that Morrison would have an in with Trump given Trump’s praise for Scottish and Canadian healthcare (SEE HERE).  Fittingly, that interview was published on THCB on President’s Day, February 16th.  Since then Donald Trump has racked up impressive victories and more importantly has released some specifics of his healthcare proposal.  THCB thought it was time for Morrison to reach out to Mr. Trump again.

MORRISON:  Thanks for making time Mr. Trump, it is a pleasure to have a chance to follow up with you.

TRUMP:  You were a little rough on me last time, but I enjoyed it, I thought I did very well in the interview.

MORRISON:  Indeed you did, it was incredible.  Mr. Trump before we get to your healthcare plan, let’s just catch up on the race.  Since we last talked you have had some impressive victories in a wide variety of states from Hawaii to Mississippi.  Why do you think you have done so well?

TRUMP.  I’m winning everywhere, everywhere, and with all the groups: vets, high income, low income (we love the low-income).   I won Hispanics in Nevada? Hispanics, Trump?  They like me because I am a winner, and I’m winning everywhere.  I am winning by a lot.

MORRISON:  You did particularly well in the South, the so called SEC primaries, where Ted Cruz was expected to do well, particularly with evangelicals.  You won by more than 20 points in Alabama for example.

TRUMP: Well they loved me in South Carolina, I won big there and then I did the dog whistle to the Klan and that probably helped, in the South.

MORRISON: You mean being slow to disavow David Duke and the Klan before those southern primaries?

TRUMP:  It worked well, we had hats ready: “Make America White Again” but Corey (Trump’s Campaign Manager) told me it probably wouldn’t work in the General, but we trademarked them anyway, I couldn’t believe it was available, so we may use the “Make America White Again” hats later, we’ll see.  But now I disavow, I disavow, how many times do I have to say it.

MORRISON:  Mr. Trump are you a racist?

TRUMP: Look I told the New York Times Editorial Board the whole story on deep background.  Republican primaries are about getting angry, white people to turn up.  Those people are tired and angry at the Mexicans, the Muslims, and Obama (we still don’t know if he was born in Kenya).   So when we win, we can be nicer in the general election, because I get along with everyone.

MORRISON:  But in the meantime Mr. Trump you have called Mexican immigrants rapists and murderers and only “some of them are nice people”.  A set of assertions that are factually incorrect.  You plan to deport 11 million undocumented immigrants, separating families, and build a wall to prevent anyone from returning.  You also called for a temporary ban on all Muslims coming to the US, regardless of their circumstances or legal immigration status.  You stereotyped Jewish people as being “good at making deals”.  You have young black demonstrators forcibly thrown out of your rallies, urging supporters to rough them up.  And you criticized the Pope for being too political.  All of this sounds like you are a xenophobic, racist, bigot with fascist tendencies.

TRUMP:  Maybe that’s why I am winning……. Look I love immigrants.  I married two of them.   But they came here ……legally.

MORRISON:  Did Melania come on an H1B Visa like the ones you are trying to eliminate?

TRUMP:  She’s a supermodel.  They have special visas for supermodels and world class golfers.  Look Adam Scott just won my tournament at Trump Doral, he’s Australian, he can come in.  Rory from Ireland, in, no problem.  Supermodels, in, no problem, but they have to be a 10.

MORRISON:  Mitt Romney criticized you in a remarkable speech in Utah two weeks ago, basically arguing that you were unfit to be president; you weren’t much of a businessman; and that the party should vote for Rubio in Florida, Kasich in Ohio, denying you the delegates and leading to a contested convention in which anyone, maybe even Romney, might win.  So far that strategy seemed to have backfired on the Republican establishment with your victories this week.  How do you see it?

TRUMP:  Romney choked.  He’s a stiff who should have beaten Obama.  He begged me for his endorsement in 2012:  he would have gone down on his knees to get it, and now he turns on me?  But we won easily this week in a lot of states, and we had a great event in Jupiter with the Trump steaks, and the Trump water, and the Trump wine, and the Trump winning. So Romney is a loser.  I have a store worth more than Romney.

MORRISON:  What about Rubio and Kasich.

TRUMP:  We will win Florida.  Bye-Bye Little Marco.

MORRISON:  Why so much animosity towards Senator Rubio?

TRUMP:  He hit me with the hands thing.  He said I had little hands…and you know, the implication.  But, I’m a counter puncher, so I had to come back with the schlong at the debate.  I guarantee you there is no problem.  That I can assure you.  I would have pulled it out at the debate, but Melania told me to be presidential.

MORRISON: And Kasich?

TRUMP:  We win Ohio and Kasich goes bye-bye.  Then it’s me and Lyin Ted I can’t wait.

MORRISON:  You match up well against Senator Cruz?

TRUMP:  Look Cruz is not likeable.  He has no friends.  And he has a problem with the Goldman Sachs and Citi loans, so we will beat Ted.  We will win all the big ones: New York, New Jersey, California and we will wrap it all up by the Convention and then we can go after Hillary or Bernie.  It might be Bernie, because Hillary may get indicted and Bernie is winning so we may end up against Bernie.  We’ll see. Either way we win easily.  Bernie is a socialist Jew from New York who has never had a real job.  I am a very successful businessman.  I have built a terrific business.  I employ tens of thousands of people.  I’m a very good Christian (remember 2 Corinthians and the crackers). And, you know, they’re chipping away at Christianity. We’re not going to let that happen anymore..So you put me, a Christian businessman up against a Jewish socialist who do you think will win?

MORRISON: Which brings me to healthcare.  You recently released some specifics about your health plan.  Let me quote a respected conservative health care commentator Avik Roy who wrote in Forbes magazine about your plan: “It has the look and feel of something that a 22-year-old congressional staffer would write for a backbencher based on a cursory review of Wikipedia.” Mr. Trump a lot of pundits from the right and left have criticized your 7 point plan as a hackneyed rehash of old Republican ideas, none of which would work.  I thought Trump healthcare was going to be amazing?

TRUMP:  I told you last time.  We will repeal and replace Obamacare and it will be amazing.

MORRISON: But the 7 point plan didn’t seem very amazing, or new, do you want to talk about it and explain how exactly it would be amazing.

TRUMP:  Look this is simply a place to start the negotiation.  I told you already, it will be different when I win and I am President.  I get along with people and I will make a great deal on healthcare.

MORRISON:  So you are not a real conservative?

TRUMP:  Look I am a conservative, I like to conserve, I just don’t believe in free trade, and I like Planned Parenthood.  But with the health plan we start with the conservative ideas and then we will negotiate.

MORRISON:  You want to keep guaranteed issuance and in earlier interviews supported the individual mandate.

TRUMP:  I disavow the mandate, I disavow. But I want to keep the pre-existing conditions.  I told you I don’t want people dying in the streets. And the Trump healthcare plan will do all that.

MORRISON:  So what are the specifics?

TRUMP:  First, we get rid of the lines around the states.  Once we get rid of the lines then there will be more competition and the prices will fall so fast.

MORRISON:  Most healthcare analysts agree that this is impractical to implement given that health insurance is regulated at the state level.

TRUMP:  Once the lines are down, the prices will drop I guarantee there isn’t a problem..

MORRISON:  Just like your….

TRUMP:  Exactly.

MORRISON:  The second point in your plan is making health insurance tax deductible for everyone.  But only half of people pay income tax, and anyone who is self-employed or has employment-based insurance already has the benefit of tax deductibility, so it is just a tiny sliver of the population who would benefit.

TRUMP:  But it sounds good, to say everyone gets a tax break.  That’s why we are winning because we say things that sound good to the Trump voter, even if they won’t make much difference.

MORRISON:  Your next point is Health Savings Accounts.

TRUMP: It was really Ben’s idea, but I liked but.  I like Ben.  He is a doctor, so you have to listen to him about this stuff so we will do the Health Savings Account thing.

MORRISON:  But Health Savings Accounts have been around as described in your plan since 2003.  Ben Carson didn’t invent them.  20 million Americans already have them, how is this a new idea?  How is this amazing?

TRUMP:  Trump Health Savings Accounts would be a much better brand.  People would sign up in droves.  We would have hats.

MORRISON: You want to have increased price transparency for doctors, hospitals, and drugs and many people support that.  But again it is not a new idea and many groups and organizations from the Obama administration to industry leaders are already promoting this so

how is this amazing?

TRUMP:  The difference is we will get it done.  We will get them all around the table and get it done.

MORRISON: You are in favor of block grants to the states for Medicaid, but you and many other conservatives want to eliminate the lines around the states for regulation of health insurance.  Which is it?   Should states have more authority or not?

TRUMP: States should have more authority apart from the lines …we need to get rid of the lines.

MORRISON:  You also plan on saving healthcare dollars currently spent on illegal immigrants some $11 billion you estimate.  Will that money be used to pay for the wall?

TRUMP:  No, the Mexican government will pay for the wall, I can assure you, because of the trade deficit.  We have so much leverage with them on trade, and the Mexicans are bringing drugs into the country especially to New Hampshire where it is the number one problem.  I couldn’t believe the beautiful hills, and roads and the little towns and the nice people and the number one problem is heroin from Mexico. So we will build a wall and stop it.

MORRISON: Which brings me to a final point of your plan which is to increase free trade on pharmaceuticals and allow importation from other countries where pharmaceutical prices are much lower, like Mexico. Don’t you think that is somewhat ironic, given what you just said?

TRUMP:  No, we would bring in the drugs legally.  Like oxy.  And the prices would come down for oxy so no one would have to buy heroin from the Mexicans.

MORRISON:  While we are on pharmaceuticals, earlier in the race you claimed you will save $300 billion on the drugs spend for Medicare recipients, which is remarkable given that the total spend by Medicare on drugs is about $75 billion.  How could that possibly work?

TRUMP:  Carl.

MORRISON:  Excuse me?

TRUMP:  Carl Icahn.  He is a good friend, a terrific businessman and a fantastic negotiator.  He is tough.  So I am going to get Carl to lead the negotiation with China on trade.  But I will also ask him to negotiate with the drug companies for the drugs for Medicare.

MORRISON:  But what if pharmaceutical companies don’t want to reduce prices given they have strong patent protection and monopoly pricing power.

TRUMP:  Maybe we will use eminent domain.  We’ll see.

MORRISON:  What if that is rejected by the courts, what could you do to get drug companies to comply?

TRUMP:  Waterboarding….and more.

MORRISON:  Mr. Trump that truly is amazing.  Thank you.

The Trump Healthcare Interview

Monday, February 15th, 2016

Donald Trump is leading in the polls and could become the Republican nominee and maybe even President.  He has not been specific on healthcare.  The Healthcare Blog (THCB) asked Scottish-Canadian-Californian healthcare futurist Ian Morrison to conduct an interview with Trump, figuring that Morrison would have an in with Trump given Trump’s praise for Scottish and Canadian healthcare.  Note, this interview is a fake, but Donald Trump is real.  Think about it.

MORRISON:  Thanks for making time Mr. Trump, I was asked to interview you on healthcare because I am Scottish and your mother was a Scot.

TRUMP:  Yes she was, a beautiful person.  I love Scotland.  I own Turnberry, the best golf resort in Europe.  I built a magnificent new course near Aberdeen.  The Scots love me, I get along with the Scots.

MORRISON:  Actually, Mr. Trump, with all due respect, they think you are a bit of an asshole and were offended when you told them not to build a wind farm off shore from your new golf course because you thought it would spoil the view for your American visitors.

TRUMP: (Angrily).  Look, the problem with the Scots is they don’t win any more.  When was the last time you won…Braveheart, right?  When was that 1800 or something?

MORRISON:  1305

TRUMP: See. Losers for 800 years.  So don’t talk to me about the Scots winning.

MORRISON: So why did you point to Scotland and Canada as good example of healthcare.

TRUMP:  I saw it on a show. A….nd I thought that if Scotland and Canada do well…and they are both losers…then we are really bad at healthcare.  By the way, Canada are such losers we don’t even need to build a wall because they are not smart enough to come here illegally.  So I want to make America great again, and especially healthcare.

MORRISON:  So let’s turn to healthcare, you don’t like Obamacare?

TRUMP:  Let me tell you something.  Obamacare is a disaster.  The costs are going about 20, 30, 40 percent, the doctors are quitting it is a disaster, because of Obama.

MORRISON:  Mr. Trump those rate increases are what insurers asked for in some states, but reputable studies show that if consumers shop around on the exchanges they can secure a better deal. For example, in Nebraska some insurers asked for 15, 20, 30 percent rate increases but two new insurers entered the market at zero premium increases over 2015.  So isn’t it working?

TRUMP: Nebraska, do they even have a primary?   Look, everyone knows Obamacare is a disaster and we have to repeal and replace.  Everyone.  But I will do it.  I will get it done.  I will make American Healthcare great again.

MORRISON:  So you don’t think that covering 20 million uninsured people was a good idea?

TRUMP:  Look we are not going to let people die in the streets the way they are now.  So we  will repeal and replace Obamacare. Period.  And everyone will be taken care of.

MORRISON:  So you would be in favor of universal health insurance provided by the government like Bernie Sanders has proposed?

TRUMP:  I want to to debate Bernie so badly, because we would win.  Hillary is a bigger name so part of me wants her because it would be two great brands going head to head.  But Bernie, he is a socialist.  I make a lot of money.  I don’t like socialists.

MORRISON:  With all due respect Mr. Trump, you did not answer the question.  How are you going to take care of everyone after you repeal Obamacare?

TRUMP:  Look.  The way I do things I get the best people together in a room, I have a beautiful conference room at Trump Tower on 5th Avenue.  It’s a beautiful, classy room, Ivanka did it.  So I would get a few of the best people.  Not a lot,  just a few.  We’d take a day.  Figure it out.  And I’d sleep on it overnight and come up with a plan.  And then the next day we ‘d go ahead and get it done.

MORRISON:  Have you thought about who you would invite to the meeting to redesign healthcare.

TRUMP:  No I haven’t, not yet.  (Smiling)  I am kind of busy right now, running for President.  And by the way we are winning everywhere.  The polls ahead……..so far ahead.

MORRISON: You lost to Senator Cruz in Iowa.

TRUMP:  No technically…We actually won because Cruz defrauded Ben’s vote.  But I am not worried about Cruz…people say he’s a pussy.  I didn’t say that.  People call him that.  I like him.  But the people they come to my rallies.  They love me.  They say these things.  “Cruz is a pussy”, and I reprimand them for saying it, but what can you do?

MORRISON:  Back to the meeting to design the replacement of Obamacare, what kinds of best people are we talking about?

TRUMP:  Look we will get to healthcare, when we are finished winning all these elections.  But let me give you some examples.  And this isn’t final.  But, I would probably invite Ben Carson, nice man.  He’s a pretty good doctor and he’s black, so he’s a twofer, so Ben for sure.  Dr. Oz he’s in New York, great brand guy, and he’s making a fortune from the vitamins.  So he would be good.  And look New York has some great hospitals like Mount Sinai and, by the way I do fundraisers for all of them. They love me.  I do these fund raisers I get my friends to donate millions.  So I would get someone from the hospitals, probably New York Presbyterian, because I’m a Presbyterian.  Which by the way goes over big in the Bible belt.  They are very religious.

MORRISON:  So Ben Carson, Dr. Oz and someone form New York Presbyterian.  Anyone else?

TRUMP:  Ivanka….she is very fit, she has a beautiful body.  By the way, I have tremendous children.  They are very healthy because like me , they don’t smoke (never have), don’t drink and they work out.  So I would get Ivanka involved.  Maybe she would run the whole thing, we’ll see.

MORRISON:  Your children are a real credit to you and your wives, Mr Trump.  But back to healthcare what will Trump healthcare look like?

TRUMP:  Look we will get the specifics out later.  But let me tell you this.  We will get rid of Obamacare, we will make America great again, and…..we will make American Healthcare great again.  It will be huge, classy, unbelievable, it will have the best people…and by the way the utilization will be very low because there will be a gigantic wall around it paid for by the Mexican government.

MORRISON: Mr. Trump, thank you.  This has been incredible.

The Incredible and Wasteful Complexity of the US Healthcare System

Friday, March 11th, 2011

During the health care reform debate, we wrote that most people’s attitudes to it were “confused, conflicted, clueless and cranky.” A major reason was that the American health care “system” is fiendishly complicated and few people really understand it. As a result hardly anyone knows much about what is actually in the reform bill (but that does not prevent them from having strong opinions about it). Sadly, the reforms, whatever their merits, will make the system even more complicated, the administration more Byzantine and the regulatory burden more onerous.

System complexity

The American healthcare system is already the by far the most complex and bureaucratic in the world. We were once asked to spend ninety minutes explaining American health care to a group of foreign health care executives. Ninety minutes? We probably needed a few weeks. Most other countries have relatively simple systems, whether insurance coverage is provided by a government plan or by private insurance or some combination of these. But in the United States insurance coverage, for those who have it, may be provided by Medicare Parts A, B, C, and D, 50 different state Medicaid programs (or MediCal in California), Medicare Advantage, Medigap plans, the Children’s Health Insurance Plan, the Women, Infants and Children Program, the Veterans Administration, the Federal Employees Health Benefits Program, the military, the hundreds of thousands of employer-provided plans and their insurance companies, or by the individual insurance market. This insurance may be paid for by the federal or state governments, by employers, labor unions or individuals. Some employers’ plans cover retirees, others do not. The result is that the system is pluralistic, mysterious, capricious and impossible for most patients and providers to understand.

Administrative complexity

The administrative complexity is amplified by the multiplicity of insurance plans. About half of all Americans with private health insurance are covered by self-insured plans, each with its own plan design. Employers customize their plan documents, led by consultants who make a good living designing their plans and tailoring their contracts. As one prominent consultant told us recently, if all the self-insured plan documents were piled on a table they would not just exceed the 2,700 pages of Obamacare, they would probably reach the moon. For the rest of the commercially insured population, health plans may be traditional indemnity plans, Preferred Provider Organizations or Health Maintenance Organizations.

The coverage provided by different plans varies dramatically. They may or may not include large or small deductibles, co-pays or co-insurance. Beneficiaries may pay a large, small or no part of their health insurance premiums. Some plans cover dependent family members and children, others do not. The Medicare Part D pharmaceutical benefit plan involves a “doughnut hole,” which will disappear as health reforms are implemented. Surveys have found that few people fully understand their own insurance plans let alone the bigger picture. While health reform takes some steps toward standardization of insurance offerings and improving transparency, overall it is likely to increase complexity.

Physicians may be paid by salary, fee-for-service, or capitation, with “pay for performance” bonuses based on complicated metrics. In order to get paid, most doctors and hospitals have to use many thousands of codes to describe the care they have delivered. Doctors can spend hours a day doing this; hospitals employ tens of thousands of coders; insurance companies and government programs spend a small fortune entering and checking this coding. A substantial proportion of payment claims are disputed, further increasing administrative costs and the “hassle factor.”
Some insurance companies are for-profit, some are not-for-profit. Hospitals may be for-profit, not-for-profit charities or be run by federal government agencies such as the VA or the DOD or by cities.

The administrative complexity exists in the private and public sectors and in both for-profit and non-profit organizations. Medicare is relatively efficient because it has a simple criterion for eligibility – your age (although it also covers people with disabilities). But for many of us administrative complexity is rampant because health insurance is a function of our jobs or our income (or lack of it). Our insurance changes often (because our employers change their plans, because we change jobs or because our income changes), far more often than it does in other countries. As a result we have armies of people who sell insurance, keep track of who is eligible for what, chase, authorize or deny payments, and lob faxes, emails and assorted missives at us and each other. In Los Angeles County, 1,900 people work on nothing but MediCal eligibility with a union-mandated productivity target of completing two forms a day. There are an estimated 150,000 such eligibility workers across the country. The health reform bill proposes to expand Medicaid by 16 million so the number and cost of these workers will surely increase.

Regulatory complexity

Different parts of the health care system are managed or regulated by dozens of Federal government and state agencies, including the Department of Health and Human Services, the Center for Medicare and Medicaid Services, the Centers for Disease Control, the Veterans Administration, the Food and Drug Administration, and the Agency for Healthcare Research and Quality. One report claims that the health care reform bill will create 183 new agencies, including state insurance exchanges and a Medicare Independent Payment Advisory Board and the Center for Medicare and Medicaid Innovation.

And then there are the acronyms. If you don’t know them you will not understand much of the health policy debate: PPACA, DHSS, FDA, CMS, VA, CDC, AHRQ, SRG, MLR, HMO, PPO, PBM, COBRA, P4P, CER, EMR, HIT, DRG, FEHBP, WIC, CHIP, DSH, MMA, and many more.

We believe that this complexity is a major reason why we have (and this is very well documented) the most expensive, inequitable, inefficient and unpopular health care system of any developed country, with poor to mediocre outcomes. The problem is not the doctors or the hospitals but the system. Reimbursement, with its many thousands of points of public and private sector payment and the mindboggling payment rules, creates a bow wave of administrative costs and many perverse incentives. And these costs are the incomes of powerful interests who fight to preserve them.

The American “system” is exponentially more complicated than the systems in other countries – and the reforms will make it even more complicated. Unfortunately reform that would simplify the system is probably not politically feasible. A benign dictator might scrap the system and start over with a much simpler system. But in a democracy, with powerful interests and 17% of our economy involved, “you can’t get there from here.” We have to build on what we have, heaping complexity on complexity.
It is therefore no wonder that surveys find most people (including, it would appear, many members of Congress) understand very little about the health care system let alone health care reform. A recent Harris poll asked people which of 18 items are or are not in the reform bill. Modest majorities were able to give the right answer for only 4 of the items. And pluralities got the answer wrong on nine of the items. For example pluralities believed that the bill includes higher income taxes for the middle class, new ways to ration care, a new government run health plan, cuts in Medicare benefits, increased payroll taxes and “death panels”.

Of course, many millions of people followed the reform debate with interest and passion, but because the issues were so complicated, very few of them understood them. Which is why rhetoric often trumped substance, and misinformation often fuelled strong opinions. And why American health care is likely to be extraordinarily inefficient and expensive far into the future.

Humphrey Taylor is Chairman of the Harris Poll.
Ian Morrison is a healthcare consultant in Menlo Park, California.