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September 23 2019

How to Fix Health Care

featuring Hadley Heath

Every fall, Americans find out how much their health insurance premiums will increase the following year. But this fall, they’ll have one new resource to understand (and one day fix) our broken healthcare system: a new book by Dr. Marty Makary titled “The Price We Pay.”

I had the chance to interview Dr. Makary in a special pop-up edition of IWF’s She Thinks podcast. I also had the pleasure of reading an advance copy of the book. But, truth be told, at times I felt like throwing the book at a wall out of frustration. Reading stories about twisted incentives, predatory providers, and helpless patients made my heart ache. And it made me mad. But, as he says in the podcast, Dr. Makary doesn’t diagnose any problem without offering his prescribed solution and examples of those solutions in action. So the book has bright spots, too.

Dr. Makary paints a realistic picture of American health care today. He doesn’t over-emphasize our problems, and he relates to the many doctors who entered their field to help and heal sick people. But he’s no Pollyanna. He calls doctors out and encourages them to also become advocates for sound policy and help heal our systemic problems, mostly related to the appropriateness of medical care and how we pay for it.

I talked with him about price transparency, restoring doctor/patient relationships, and reforming healthcare laws. I enjoyed our conversation and I hope you will too.

Beverly H:
Hey everyone, it's Beverly Hallberg. Welcome to a special pop-up episode of She Thinks, your favorite podcast from the Independent Women's Forum where we talk with women and sometimes men about the policy issues that impact you and the people you care about most. Enjoy.

Hadley HM:
Hello, I'm Hadley Heath Manning, director of policy for Independent Women's Forum, and your host for today's special pop-up edition of the She Thinks podcast. Today we have a very special guest. We have Dr. Marty Makary on the line. Dr Makary is a New York times bestselling author, and Johns Hopkins surgeon, and professor of health policy. His recent book, The Price We Pay, which I've read and thoroughly enjoyed, takes on surprise medical bills and reveals how individuals and businesses can lower their healthcare costs. Isn't that something that we're all interested in? Steve Forbes, a friend of IWF, has described this new book as, "a must read for every American." I second that endorsement. So thank you, Dr. Makary, for joining our podcast.

Dr. Makary:
Great to be with you, Hadley.

Hadley HM:
Well, the subtitle of your book I think is going to catch a lot of eyes. The subtitle of the book is, "What Broke American Healthcare and How to Fix It." This is a very pertinent question. I think healthcare was the number one issue that voters cited in their 2018 exit polls and the midterm elections. So I don't want to ask you for a spoiler, but if you had to summarize what broke American healthcare ... let's say you had to do it in just one word ... what would you say? What would be that word?

Dr. Makary:
Well, can I use two words?

Hadley HM:
Sure, sure.

Dr. Makary:
Appropriateness and pricing. So in other words, we've had a crisis of appropriateness in medicine. Too much medical care, over treatment, some under treatment, but the appropriateness of care has been a giant mismatch. That's issue number one.

Dr. Makary:
Root cause number two of our healthcare mess is pricing failures. These are embarrassingly simple to fix. The pricing failures, initiative calls for price transparency, honest billing practices, these are the issues that are resonating with everyday Americans. Right now people are getting hammered with their medical bills.

Dr. Makary:
Healthcare surprised everybody as being number one during the midterm elections as the number one issue. Healthcare will be number one in the presidential elections that are coming up. It's not the traditional back and forth Republican/Democrat issues, it is the fact that Americans are getting hammered with medical bills, businesses are getting hammered with our healthcare costs, and these are the fundamental issues of our era.

Hadley HM:
Yeah, it doesn't matter if you're a patient if you're a Republican or Democrat, we're all experiencing the same frustrations. I'm curious about your experience writing The Price We Pay, because as I was reading it, I was overwhelmed at the amount of data and research and also personal stories that demonstrate what you're talking about, the lack of appropriateness, the lack of price transparency, just the difficulty that people have navigating American healthcare. But you also demonstrate that there are some glimmers of hope in our current system. So what was your experience writing a book? What was something that surprised you in your research?

Dr. Makary:
Well, I have I loved writing this book, doing the research, which involved traveling to 22 cities over two years. I talked to insurance CEOs, hospital executives, doctors, pharma middlemen, pharmacies, insurance brokers, and most importantly, patients who I still think are the real experts in healthcare.

Dr. Makary:
But I learned a ton. I really wanted to understand the business of medicine with a total command of the field to be able to explain every aspect of it and to encapsulate what's broken and how we fix it.

Dr. Makary:
So for everything broken that I present in the book, there's a solution and disrupter who is already fixing healthcare in a small pocket somewhere. And that story needs to be told.

Dr. Makary:
I don't if you saw the movie The Big Short. Have you seen that film?

Hadley HM:
Yeah, it's good.

Dr. Makary:
It was a great film, wasn't it? It took a very complex subject, even a boring subject if you will, the same thing people ascribe to healthcare. Complex, wonky, boring, don't bother me with it. The Big Short took the banking industry and broke it down in very simple and easy to understand terms so anybody could understand. It's actually a lot simpler than we're told to believe. It's as simple as banks spending money they don't have, they're spending borrowed money, they're selling toxic assets, they're trading things that they're sort of betting on their competitors, and they're paying ratings agencies to give them inflated ratings. So I was so impressed at how this film took a very complex industry and broke it down for the everyday American where you could leave that film and understand, "Now I understand exactly how the banking industry worked."

Dr. Makary:
I wanted to do the same for healthcare. So that was this awesome trip for two years across America talking to folks. I think what I left with was an incredible sense of optimism that people are fed up, that there are great solutions being used in the market that experiments with price transparency. With direct employer purchasing of healthcare, with cutting through the middlemen, cutting out the money games, making healthcare simple, making it more accessible, lowering drug pricing.

Dr. Makary:
These were things that we've already fixed in small pockets in little experiments around the country, we just need to get the story out. After all, that's why somebody should write a book. There's a story that needs to be told that is not currently being told.

Hadley HM:
Right. I'm so encouraged to hear that, because I think in my conversations with a lot of my friends, there's just a lot of heavy hearts and head shaking like, "Oh, healthcare, it's so broken." It's almost overwhelmingly broken. So it's nice to hear that there are reasons for optimism.

Hadley HM:
I mentioned my friend group, because ironically, I have a lot of doctors as friends. I'm married to an MD and a lot of our friends are completing residency or have just recently completed residency. I appreciate that you acknowledge the role of physicians in this book in caring not just for their patient's health, but also generally for the health of our healthcare system. So I'm curious what you think doctors specifically can do or should do to help fix healthcare in the U.S.?

Dr. Makary:
Well, you're absolutely right. Doctors and nurses, medical professionals at every level, especially the millennials who as a part of their generation believe in social justice, they are rising up and they are saying the solution is as simple as getting back to our mission. We need to just restore that great heritage.

Dr. Makary:
You know, Hadley, when most U.S. hospitals were founded, they were founded with a charter to take care of the sick and injured in their community regardless of, quote unquote, "race, ethnicity, creed, or one's ability to pay." That's our incredible heritage. Most hospitals were started by churches. Most hospitals took care of anybody. It didn't matter who you were, they were there to serve.

Dr. Makary:
Hospitals today still hold these incredible mission statements, but when you go to the hospital, you can have a simple treatment and get your life financially ruined by these crazy surprise and overinflated bills. We've even discovered a pattern where some hospitals will aggressively sue patients in court and garnish their wages. That is not who we are. That is not our heritage, and the doctors and nurses are right to just absolutely stand against that, to talk to their own hospital leaders, to dispel the myths out there that bills are overpriced in order to compensate for charity care. That's one of the great myths out there.

Dr. Makary:
So in medicine, we're taught medical literacy, but we're not taught healthcare literacy, and that's why I wanted to write the book, The Price We Pay.

Hadley HM:
Yeah, yeah. It's interesting you mentioned the foundational mission that so many hospitals had long ago. I think there's a lot of cynicism today towards the healthcare system and distrust even, especially because of the problem you mentioned.

Hadley HM:
It has to do with with billing, and the lack of price transparency, the way that those bills can wreck us financially, as well as the extreme price variation. You offer several examples of this in the book where patients might have a procedure and they look at two different hospitals, or you go look at two different hospitals and you find two extremely different prices for this same thing.

Hadley HM:
So why is this, Dr. Makary? Why do we have such price variation in healthcare? Because it doesn't seem like we have this in other markets. Why the lack of price transparency and the extreme price variation?

Dr. Makary:
Well, Hadley, I honestly believe, as I met with so many people who work in the business of medicine, that we don't have bad people. Actually, everybody who's in healthcare at every level, from administration to being a physical therapist to office assistant, they go into medicine for one central unified reason, and it's a sense of compassion. They want to dedicate their lives to helping people. The soul yearns for a sense of purpose in life. You see that all over healthcare.

Dr. Makary:
We have great people, but they're working in a bad system where the incentives now are so perverse. They're doing things that medical professionals themselves find despicable and oftentimes internalize rather than having a vehicle to speak openly about. I think if you look at the workload on American hospitals, they've been pounded with regulatory requirements and other burdens. They have not had the time or the need to produce an honest and fair price itemized to the service that's being provided.

Dr. Makary:
Now, we're not talking about getting shot and being in the ICU. You're never going to get a bill or an estimate ahead of time for that. We're talking about the 60% of healthcare that is shoppable.

Dr. Makary:
We're talking about the researcher that called 100 U.S. hospitals that do heart surgery and asked, "How much is a heart bypass CABG procedure?" Only half the hospitals could give him an answer after he called back and called back and fought. Of those who gave them an answer, the price range from 44,000 to almost half a million for the same procedure. All the outcomes are publicly available, and he found there was no association between quality and price. It's been haphazard, it's random, and we can do better.

Hadley HM:
Yeah, that's ... So how can we do better? Because this is sort of my next question for you. When it comes to price transparency ... because when you mentioned calling back and calling back, I think everybody's had this experience at one point or another where your insurance coverage, the hospital or the doctor didn't have the right one, or the hospital had it, but the doctor's group didn't, or there was a doctor who treated you while you were in the hospital that happened to be out of network, and then you get a surprise bill for that.

Hadley HM:
So what can we do to address some of these problems? How can we give patients better tools so that when they are consuming that 60% of services that are shoppable, if they want to comparison shop to save money or if they just want to plan ahead so they know what to expect to pay out of pocket, how can we give them better tools? How can we solve this problem of getting that better pricing information?

Dr. Makary:
Well, good things are happening right now, Hadley. As of earlier this year, Medicare announced that every hospital has to disclose their sticker prices. Now we know those are not the real prices, but it's a first step.

Dr. Makary:
I've been encouraging Google and other patient navigation sites to provide an average markup for a hospital when somebody goes to look up a hospital. That increases accountability and creates more transparency.

Dr. Makary:
I've encouraged U.S. News World Report And Medicare when they rank hospitals in the United States to use the billing quality. Does the hospital use predatory billing practices? Do they sue patients? Or do they have good, honest, forgiving, merciful policies with low income patients?

Dr. Makary:
So we're seeing more transparency, we're seeing more accountability. And although only some patients will use real prices to shop ... not everybody, but some will ... they they serve as proxy shoppers and drive the entire marketplace.

Dr. Makary:
Also, employers that sponsor health plans for their employees, they are proxy shoppers of healthcare. For example, one guy who has a business in Boston saw that the price of delivering a baby, that is a standard uncomplicated vaginal delivery, ranges from $8,000 to $40,000 in Boston for the identical service with the same quality. Of course, he wants his employees to go to the $8,000 hospitals, but he doesn't want to have to tell them where they can and can't go. So he says, "If you go to the $8,000 hospitals, you will get free diapers and wipes for a year."

Hadley HM:
There you go.

Dr. Makary:
That's where everybody went.

Hadley HM:
Yeah, I think I would, too.

Dr. Makary:
So we're seeing proxy shoppers, we're seeing employers do really creative things, we're seeing Medicare make chargemaster pricing available, we're seeing more accountability with the markup. And soon we're going to see patient navigation apps, and tools, and search engines show what a hospital's average markup is when you consider going there for your care.

Hadley HM:
Yeah. Gosh, we live in the information age, and there's an app for everything. There's just so much information available to us at our fingertips. Imagine what some really innovative entrepreneurs could do with better pricing information, and that they're already doing with some pricing information that we have available.

Hadley HM:
I'm glad you mentioned the proxy shopper point, because one piece of pushback I often get when I advocate for greater price transparency in healthcare ... aside from this idea that patients aren't smart enough to shop around or that people are going to be unconscious in the back of an ambulance unable to shop around. I can see that we're not going to be shopping when we're unconscious, but for the pieces that are shoppable, we're seeing this trend towards higher and higher deductibles in health insurance. Certainly there's this segment of the market where out-of-pocket costs, people are very sensitive to that, and those people will be proxy shoppers. So I think that's an important point.

Hadley HM:
But I wanted to mention a couple of the lines that I read in your book that just stopped me in my tracks. For example, you wrote that, "Half of stage four breast cancer patients have bills in collections." Whoa. As a woman and as someone ... all of us have a friend or family member who has been touched by breast cancer, or any type of cancer really. To imagine someone who's going through chemotherapy or going through these incredibly difficult treatments where their lives are literally on the line, and then to think that they're getting calls from debt collectors on top of that.

Hadley HM:
And you highlight the predatory practices of several hospitals. Can you talk about the air ambulance services? This stuff in the book, everybody needs to go buy the book and read it, but be prepared to have your blood pressure go up while you're reading this book. I told my husband to read the book, because as I mentioned, he's a hospitalist. I said, "But you've got be careful reading this, because you'll become angry on behalf of your patients, just at what patients are up against."

Hadley HM:
So I appreciate that you mentioned the progress that we're making, but some of the problems are just so infuriating. What efforts have been made to help patients, especially these patients that are in just terrible circumstances? How can we help those vulnerable segments of society and those patients? How can we help them navigate this landmine field of medical billing?

Dr. Makary:
Well, Hadley, I did try, as you said in the book The Price We Pay to put bright spots throughout the book. It's in part to show how good things are happening, but in part to manage the outrage, because it is outrageous. Talk to doctors and nurses across America. They are outraged right now. People trust us to the point of putting a knife to their skin within a second of meeting us sometimes, or they'll tell a nurse in the emergency room secrets they've never told their spouse of 50 years within a minute of meeting them. Why? Because of the incredible heritage of trust in the medical profession. Hospitals have historically been a safe haven.

Dr. Makary:
What we're seeing right now is that these crazy, and outrageous, unconscionable billing practices where medicine has adopted a business model of price gouging in some places is eroding that public trust. People are getting crushed out there. People are getting hammered by these bills.

Dr. Makary:
I'm a cancer surgeon. I'm constantly reminded how short life is. People have asked me, "Why are you working on this issue of the public trust, and restoring medicine to its mission, and addressing burnout in the medical community?"

Dr. Makary:
You know what? A quarter of all patients out there don't trust us anymore, and it's because of drug prices, and medical bills, and surprise bills, and price gouging, and [inaudible 00:18:56] statements by preauthorization contracts. These are the money games of medicine, and enough is enough. People are saying, "Can we get back to the bedside art of taking care of patients?" Modern business medicine has created tens of thousands of millionaires who are not patient facing. We're seeing money go into the system that is so wasteful. Administrative waste, and I would even suggest clinical waste. We already spend enough money to provide every American with gold plated healthcare, we just need to cut the waste.

Dr. Makary:
I think that's a bipartisan message that we're seeing senators resonate. I've taken patients that have gotten crazy bills and been sued, and I've taken them right to the White House and I had them tell their story directly to our political leaders. Because these are not partisan issues, these are common sense issues.

Hadley HM:
I want to ask you a sort of political question. But first of all, I want to give people a pick me up, because as in your book, there's some dark spots, but there's also some bright spots. You highlighted an innovative model in the book in the solutions section. I hope I say this right, is it Iora Health?

Dr. Makary:
Yeah, Iora Health.

Hadley HM:
Okay. Tell us about Iora Health and why their model is a reason for hope. It sounds great. I would be curious ... once you explained the model, my question would be how do we make it so that more Americans can use a model like this? What changes would be necessary to expand these bright spots of hope that are in pockets. Pockets where you say we're solving some of these problems, but how do we scale these things up so that more Americans can have the benefit of those bright spots?

Dr. Makary:
Well, Hadley, I loved my time visiting the Iora clinics and the ChenMed clinics alike. These are refreshing, bright spots in healthcare that are on the brink of going national, and they need support, they need people to know about what they're doing. That's why I wrote the book the Price We Pay.

Dr. Makary:
Iora and ChenMed, the same, they take in patients and forget about all billing. They are paid on a global capitation level. That means they're paid lump sum for a group of patients, large groups, sometimes a group of Medicare beneficiaries on a Medicare advantage plan.

Dr. Makary:
But that clinic or that group of clinics is responsible for a population of people, say 4,000 people that live in the community, and they can do whatever they believe in their own medical judgment is best for their longterm health. They'll visit their home if they need to. They will review all their medications and do what we call a deep prescribing review. They've got bags of medications where they realize people don't need to be on these things. People bring in their meds and they take them off, because they switch them to lifestyle based therapies, and food is medicine, and exercise, and diabetes cooking classes.

Dr. Makary:
And they don't have any billing. Their doctors are not burdened by it. The doctors are sort of relieved. They come from billing practices and they realize, "Hey, I can just do what's in the best interest of the patient." If you look at the ChenMed example, they take all the downstream financial risk of the patient. That is, they're paid this lump sum amount electronically, it's not an exchange.

Dr. Makary:
Basically, over a short period of time, they assume the long term downstream consequences of whatever happens to that patient. So if you need an open heart surgery, you need a colonoscopy, you name it, they are picking the high value doctors in the area. After all, who knows best about quality than the primary care doctors in that location? So they're not referring you to their golf buddy, they're referring you to the doctor with the best outcomes that has a fair price. Not necessarily a low price, but a fair price. They assume those downstream financial costs of the patients.

Dr. Makary:
So they are a true medical home. They're a true gatekeeper. They're practicing the art of medicine. They've converted their billing room in the clinic to a lifestyle medicine room where they're teaching them things they can do better. It's awesome. Iora, ChenMed, they're awesome.

Hadley HM:
Yeah, that's so refreshing to hear that there are potential paths forward for healthier lives, but also just a healthier healthcare system.

Hadley HM:
But the way things stand today ... and I promised our listeners a political question ... people are so frustrated that they're ready to just throw in the towel. They're ready to say, "We need something completely different. Just scrap the current healthcare system that we have." And this is sort of a hot topic, but they say, "We just need Medicare For All." You mentioned Medicare rates throughout the book as a comparison or contrast with other prices that other hospitals charge.

Hadley HM:
The nonpartisan Congressional Budget Office just issued a report on Medicare For All. They said that if we moved to a system like this, it might expand coverage for preventive care and other benefits that may ultimately improve people's health, but the CBO also said that extending coverage to more Americans could produce longer wait times or reduce access to care if there weren't enough health workers. So I'm curious if you agree with the CBO's analysis, why or why not, and just sort of a general take on Medicare For All.

Dr. Makary:
Well, I understand how people are attracted to the concept of Medicare For All because they're sick of the current system, and they're sick of the middlemen and the pricing failures. But you look at any country that has adopted that type of model, over the long term, they massively underfunded over time, tightening the belt year after year. It's irresistible, all governments do it. Everywhere in the world where it's been used, you have in 10 or 20 years a massively dilapidated healthcare system. I think we can do better. We're the United States, we've been the leaders in medicine and innovation in doing things, putting patients at the center, and adopting what is really a democratic model for medicine. So I think we can do a lot better.

Hadley HM:
Listen, Dr. Makary, I know you're a doctor, you've got to go see patients, you've got to continue researching how to restore the public trust in healthcare providers, and the art of practicing medicine, as you mentioned. But as we close, I want to ask you where can people go to learn more about your work, and your books, and specifically this new book The Price We Pay.

Dr. Makary:
Well, thank you, Hadley. The Price We Pay is available online momentarily everywhere books are sold.

Dr. Makary:
Our work is really to help people who cannot afford their medical bills. We do that by defending them, either to the hospitals or sometimes in court to explain that the hospital shaking down people for overpriced bills, it violates their mission and the charter of many of these hospitals. So we want to remind them of why we're all in healthcare.

Dr. Makary:
Our group is called Restoring Medicine. It's at restoringmedicine.org, and we're on Facebook. We, of course, love all the tremendous support out there. It's been awesome. So thank you so much for having me on this. You're doing great work, and really a pleasure to finally meet you here.

Hadley HM:
Yeah, well, thank you, Dr. Makary. I appreciate knowing a physician who's not just in the the business of medicine, but really in the art of practicing medicine, caring for patients, and caring for American healthcare. And like I said, I really enjoyed the book, I appreciate the work you're doing.

Hadley HM:
I think we need to get more physicians and more patients aware and involved in this effort to put doctors and patients back at the center of American healthcare. Because I think the frustrations today come from maybe there's too much corporate control or maybe there's too much involvement, as you mentioned, from those regulations and the bureaucratic demands on hospitals and so forth. But it really shouldn't be either way, it shouldn't be a big government model and it shouldn't be a big business model, it should be about doctors and patients.

Hadley HM:
So I appreciate your efforts to move us in that right direction. We really appreciate your time today. Again, our guest has been Dr. Marty Makary. His book is The Price We Pay. I encourage you all to to go get a copy and read it. This has been another edition of Independent Women's Forum's She Thinks podcast. If you liked it, please share it, and subscribe, and become a follower of our work at iwf.org.


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