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Natalie Martin
FFS can improve access to care but it also have a lot of drawbacks as pointed in your post or this talk. I do not think anyone suggested to throw out FFS totally. But we focused too much on FFS now, which created a lot of problems.
Russ Roberts: Yeah. I think the waste you talk about, I think you said 8% for the administrative burden. One, I suspect that's an underestimate. I think that's probably a formal measure of salaries of people in the business of keeping track of stuff, as opposed to the distraction to doctors to have to always show that they've met some standard or justify a code that's in the data.
Russ Roberts: And, we'll be talking about that. But, I think your just general point about headwinds, basically in the current system, we've cut all the feedback loops that normally encourage good performance, where people have skin in the game. You buy something; if you don't like it, you don't buy it again. You tell your friends. But you pay with your own money. The people who provide you that service have a profit motive and an eagerness to avoid loss, and that's missing from the healthcare system for a variety of reasons, for most patients. Not all, of course, but for most patients. For most patients, it's a third-party payment, so the customer for the hospital or the doctors' perspective is the insurance company or the government, rather than the person who is consuming the care.
Russ Roberts: I think the point about health care's effect on wages, I think is extremely important. We've talked a little bit about it on the program before. I think it would be okay if we were getting value for what we spent. If we were getting better health, rather than just more health care--and I think that latter is the real problem.
I want to talk about a personal example and get your reaction to it. Let me[?] see if I have this right. My father passed away a couple of months ago, and the last five days he was in the ICU, and we were with him most of the time. And, I was struck by how heroic and really beautiful the health care he received was. And, my joke was that he got the same healthcare as the President of the United States would have got. In fact, I think he got better healthcare, because I think some of the doctors probably wouldn't have been so excited about taking care of the current President--but put that to the side.
I do think that at the end of life, there are many decisions that individuals and families need to think about if they can, to talk about just how much intervention they really want. We do know that many more people die in hospitals than intensive care units than would like to. Most people would prefer to die at home. But on the other hand, I've also seen so many people who's lived were saved in intensive care units--including today, with COVID [COrona VIrus Disease].
Russ Roberts: Yeah. I want to make clear that I think the--coming back to my dad for a minute--the healthcare that most people in the United States receive is extraordinary. And I think that's often lost in our sadness and despair over the pricing and the tax bill and the future and all that. My dad was, as I said, treated incredibly well with unbelievable--the technology in that room was just, its mind blowing. The bed itself is a marvel. The drugs that were dripping into his veins are a triumph of science. The diagnostic devices--it's an amazing, amazing thing to be a patient in an American hospital as long--as they don't make a mistake. Which you talk about in your book. Mistakes get made in every kind of hospital. But, my point is that if you are covered, if you're an old person, or if you have a good corporate insurance, health insurance program, this is the gold standard. I think we often forget that.
I mean, on example that drives me crazy is the administration of, say, chemo [chemotherapy], not in the ICU, but elsewhere--the doctor who administers that chemo is going to get more money than if they sign the person out. And, sometimes it's okay that it's in their office. But, just the idea that that's all hidden from us and we don't see it--just the fact that we don't, as patients, ask about it--and, even when we do ask, as you point out and as we've talked about before, the hospital can't even tell us what the costs are, is the source of, I think, a lot of dysfunctions.
Russ Roberts: Let's turn to pricing generally. It's something that we talked a lot with Marty Makary about when we talked about his book, The Price We Pay. And as an economist, it's something on my mind. And, we also talked about it with Keith Smith, who runs a surgical center in Oklahoma that posts its prices on the Internet. There's no secrets, there's no surprise billing, there's no, quote, "add-in network. They only take cash." It's a phenomenal thing.
Russ Roberts: Right. But in my experience, reading in your book, for example, and talking to other people, it tends to be about, quote, "three times what Medicare reimburses people for." Is that generally true?
Because it's kind of irrelevant, except that for the people who--as we talked about--who can't pay, then they could be on the hook for it. Excuse me--people who don't have insurance could be on the hook for it. It allows, as some have suggested on the program, it allows the insurer to brag about, 'Oh, we did really well for your employees. We got a big discount for you.' Is there anything more to it than that?
We're seeing, for example, these better systems, much more resilient in the face of COVID-19. Our VA [Veterans' Administration] system that pays for VA hospitals; our Department of Defense that pays for the military health system--all of our military hospitals--some of our Medicare Advantage programs that are funding new kinds of clinics in the private sector: They're all demonstrating a significantly more resilient response to COVID than our fee-for-service practice we've[?] talked about so far.
Russ Roberts: Not literally. No: Whether they have an incentive to, even if they don't literally calculate that number. The program we're talking about of compensated, for people without insurance, I think it's called DSH, [Disproportionate Share Hospital, pronounced 'dish'], D-S-H, right?
Russ Roberts: Let's talk about some of the things you highlight in the book--and there are many--that I would call sources of optimism. Things that you see happening that are getting us to both better outcomes and more wiser outcomes in terms of how money is spent. You talk about telemedicine, you talk about the VA, as you mentioned, and I think the other impetus is things like looking at quality of life years and quality of care rather than fee for service. Talk about how we're moving in those directions. Medicare Advantage would be another example. Talk about some of those changes that are happening now as people are trying to get to a better system.
Vivian Lee: I think it's a challenge. It's also an opportunity. One of the lessons that I try to talk about in this book, The Long Fix, is the opportunity to create what we call a 'learning health system.' We are beginning to see the rewards of investing in digitizing all of our health data in hospitals through these electronic medical records. In the beginning, I believe that they have been primarily used as very expensive billing and coding machines, but over time, I think we are starting to see--starting to see--that there's a lot that can be learned from experiences with very complicated patients with very complicated conditions.
Russ Roberts: What's your feeling about top-down mandates to spread that information or standardize it? We talked a little bit about price transparency. There's an Executive Order--I think it goes into effect December 31st of this year, in theory; I heard you say, 'Well, maybe, maybe not'--but that would require more transparency, from the Federal Government imposed on the system. Obviously, we can impose the sharing of information, like you're talking about. And, it's true that the digital world gives us a chance to do that, but do you think it should be mandated? Do you think that's a good idea?
Vivian Lee: I think if you want the healthcare system to operate with free-market advantages, then you need to enable that market to be a free market. So, I think it is really important to have transparency and standardization go hand-in-hand. As we talked about with the Chargemaster, you can have as much transparency of the chargemaster as you want. It doesn't do anyone any good when it's not standard--
Russ Roberts: So, one of the positive results of the pandemic, for me, as someone who cares about more competition, is that, at least some states, maybe all states, have relaxed some of their occupational licensing restrictions to allow nurses, say, from outside New York, because New York was hit so hard. I'd love to see those kind of restrictions permanently lifted. The use of telemedicine, which you talk about in the book--obviously the opportunity to be able to do telemedicine, either as a Medicare patient or as a health insurance patient across state lines--it's a huge game-changer. Obviously, that market is very embryonic. It hasn't really evolved. But it would evolve, I think, very quickly if it was allowed legally to be used that way. Do you think that's important? Do you think there's some important stuff there that could happen?
Russ Roberts: So, let's close talking about maybe your optimism, and you seem to have some. It's called The Long Fix, but I think you imply somewhere in the book, it's only 10 years. That would be amazing, if it's only 10 years. I'd be so excited if we have a better health care system in 10 years.
But, talk about you, and your journey. You've had an extraordinary career. You've been a practicing radiologist. You've run a healthcare system. And now you're doing this very different thing that I'm sure some people thought you were crazy. Maybe family member, maybe friends. You've leapt, leaped into this very different world. Talk about that experience for you and where you see Verily, which is the company you're with now--which is very different than being a healthcare administrator, I think, but correct me if I'm wrong--where you see that taking the healthcare system, what role it can play in the future.
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