Episode Details

In this healthcare podcast, I have Merrill Goozner on the show talking about his prognostications for the future of healthcare in this country and how, realistically, it could be engineered so that the healthcare industry rightsizes itself relative to our GDP. Merrill offers three glide paths to this end.

Okay … so, let's break this down some.

First, Merrill talks about the full impact of huge numbers of patients/people in this country who are scared to seek medical attention. They are afraid to play the game at the end when the bill comes in the mail and they open it up having no idea what it is going to be. It's a magical mystery guessing game of luck and chance where losers go bankrupt. This is not a victimless situation we have going on here in this country. All these deaths of despair and life expectancy going down … this is unprecedented.

So now, we're level-set on the stakes.

Interestingly, Merrill plots out the aspiration for healthcare spending in exactly the same way that David Muhlestein, PhD, JD, did in episode 364. The goal, according to both of them, isn't to reduce healthcare spending per se. That would be nie near impossible to pull off in the real world, but we could work on holding healthcare cost increases below the rate of GDP growth. Optimal might be healthcare costing, say, 13% of GDP like it does in Switzerland instead of upwards of 20% ($1 out of $5) getting stuffed in the pockets of a healthcare entity or their shareholders. Fifty percent of that, by the way, is being paid for by the government, the other 50% largely coming out of the wages of employees either directly or indirectly.

Okay … so, what is the lightning-in-the-bottle moment where we clip in for this journey toward rightsizing healthcare prices? Merrill says it's a combo of patients and employers and taxpayers crying uncle at the same time that technology and new competitors move in on the supply side and start to chip away at older incumbents like hospitals, especially hospitals who have broken their social contract with their communities—and there I'm paraphrasing some terminology Vikas Saini, MD, uses in an upcoming episode on hospitals and their embarrassing levels of charity care.

So, it's harnessing forces on the demand side of the equation and on the payment side of the equation, coupled with goings-on on the supply side. With all of this going on, Merrill says that, in this crucible of transformation, we could get better care for lower costs.

To accomplish that, he says step 1 is for the team for healthcare costs going down—employers taxpayers, government policy makers—gang up, create a value alliance, and work together. These allies then tell the healthcare industry, "Look, gang … ixnay on the growth rates you've been accustomed to in the past. Period. You are going to need to deal with that, so get used to it." That is kind of where all of this starts.

Merrill mentions three glide paths that will help up get from here to there, and he names the three:

1. Accountable care—essentially putting providers at risk, giving them budgets that they are responsible to work within
2. Paying for value. We have PCPs who deliver a lot of value. We should pay 'em more. We should also put docs on salary like they do at Mayo and some of these other leading Centers of Excellence.
3. All-payer pricing, which we do get into. They have this now in Maryland. It's basically when everybody pays the same price for the same service.

Merrill says this all kind of rolls up into removing the incentives that reward low-value care. That can be really expensive. I'm paraphrasing here.

I'm sure for many of you, Merrill Goozner needs no introduction. He's been the editor in chief of Modern Healthcare. He wrote a book on the drug industry. He was a reporter for many