The healthcare system is basically a lucrative game of tug-of-war among players – and the winner reaps a trillion dollar pot of gold. But is it a fair game? David explores the monstrous “fee-for service system” with Dr. Vivian Lee. Then, Dr. Jill Gross joins David to explore how the results can lead to a total system breakdown.
Resources from the episode:
- Pick up your own copy of Dr. Lee’s book, The Long Fix: Solving America’s Health Care Crisis with Strategies that Work for Everyone – https://wwnorton.com/books/9781324006671
- Read more about the “fee-for-service monster” in Dr. Lee’s STAT article – https://www.statnews.com/2020/06/12/fee-for-service-is-a-terrible-way-to-pay-for-health-care-try-a-subscription-model-instead/
- Learn more about Dr. Jill Gross at https://www.drjillgross.com/
Keep up with David on twitter @CHIDavidSmith.
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Dr. Jill Gross, David Smith & Dr. Vivian Lee
David Smith 00:00
Hey listeners, the COST OF CARE is a 10-part series. We think it’ll make more sense if you start from episode one. So go back, start there and we’ll be here when you’re ready.
Dr. Jill Gross
My name is Jill Gross. I’m a licensed psychologist in Seattle, Washington, I have a private practice. And I’m a recovering contracted provider.
Dr. Jill Gross called and left us a voicemail after listening to the show.
Dr. Jill Gross
In fact, I’m a little shocked to have heard from you cuz I was on the way to the grocery store, when I heard that was like almost a phone call them and I was like, called y’all up. And it just was rambling because I care a lot about it. But I don’t know that anything I said made any sense.
Of course, everything Jill said made a ton of sense.
Dr. Jill Gross
I’m actually calling because I am a mental health care professional, a licensed psychologist in the state of Washington. And I’m wondering if you guys are going to tell the story of what it’s like to be a health care provider who accepts insurance. And why mental health professionals specifically, most of the seasons clinicians, who’ve been doing it a long time, they sort of become burned out and fed up by a system that pays them only a fraction of what they charge, a fraction of the going rate for services in their communities. And therefore, especially post-COVID, there is a conspicuous absence of contracted providers. In fact, there are not enough contract providers to service the needs of all of the card-carrying members. And it really is a problem. And COVID is only made it more of a problem.
I’m so glad Jill called in because this problem has been going on way before COVID hit. And it speaks to something I felt for a while. Most of us working in this industry know how broken it is. And we do our best in our tiny little corners of the field. But at the end of the day, we know that our individual ability to create wide scale structural change is pretty limited. And that can be demoralizing. There are so many people who start a career in health care with good intentions that get chipped away as they get further into a system that feels utterly immovable. So this week, we’re looking at that immovable system from the clinicians perspective, because it turns out, they are as fed up as patients are.
Dr. Jill Gross 02:36
We’re tired, that feels like we’re just *** all over the people, we need the most, something’s gotta change. It’s gotta change.
This is the COST OF CARE. I’m your host, David Smith.
The thing that is so crazy to me about what we pay mental health professionals in this country versus what we would pay a cardiologist or a nephrologist, or an endocrinologist, you know, these high compensated, highly specialized clinical professions, we will pay those people 5-10 times more than we pay a mental health professional. And the thing is so vexing about that. It’s like what organ in our body is more complex than the human brain, like the human brain is literally the most complicated part of our body. It’s the thing we understand the least even after decades and centuries of trying to understand it. And yet the people we look to, to try to help us make sense of what’s going on between our ears are paid less. And mental health itself is treated like an afterthought. So it makes perfect sense that these practitioners eventually hit a breaking point.
Dr. Jill Gross 04:08
I think that most therapists have kind of a lifespan. And at the beginning, when they start out on their own, they’re either in a group practice setting or they contract with insurance companies because they have the promise of referrals when they do and in exchange for those referrals contracted providers agree to accept a lower fee for service. So sometimes that fee is significantly lower, it’s about 30 to 50% lower depending on what contract we’re talking about. So what happens is, therapists will do that and they’ll get full pretty quickly, but they’re getting full working for 30% to 50% less than they would be making if they were seeing clients who are paying their full fee.
Which feels unfair, like who among us wants to work for half price? So as therapists become more and more qualified and build a more client base, they get more selective about which insurance companies they’re willing to deal with.
Dr. Jill Gross
So they’ll get rid of all the, frankly, the crappy contracts. And then they’ll keep the companies that are the easiest to work for who have the highest allowed amount. Up here in the northwest, it’s Premera Blue Cross, they tend to be the easier of the insurance company. So what happened is I went from like three or four behavioral health contracts, to two behavioral health contracts, to one behavioral health contract, and I got myself to a place where when someone would call me and tell me that they had Premera Blue Cross. My first reaction was resentment. And I thought, if this person is coming to me for help, with the best of intentions, or good faith, ask for help, I owe it to my clients to be good faith available to receive that request open heartedly, and I felt like knowing that I’d have to deal with the discounted rate and the administrative work associated with being paid for claims.
Dr. Jill Gross 06:01
I just couldn’t show up that way anymore for people. That is how I knew I was starting to get burned out. When new clients reach out to me, I want to feel energized, and I want to feel hopeful. And I want to really be attuned to what they need and respond to that. And what I was noticing was that the emotional weight of being connected to their insurance company was starting to eclipse the enthusiasm I felt for the work.
This resentment makes a ton of sense. Just imagine you’re a cashier at a retail store. And there’s three total credit cards you take. And each of them require a totally different checkout process, but one of them requires a bunch of extra steps. Every time someone hands you that card, you have to close out the app you’re in, go into a new app and collect 10 different pieces of information to process the transaction. Like just imagine how annoyed you would feel every time someone presented that type of card.
And then imagine how long other customers would have to wait in line because it takes you so long to process these different forms of payment. And this is what it’s like when you’re in the Byzantine maze of our system. Jill, even when she was only taking one insurance plan wasn’t dealing with the equivalent of three credit cards, it was more like dozens because of all the different plan permutations. She basically had to solve a rubik’s cube every time she saw a patient.
Dr. Jill Gross
So when a patient comes into the office, and they hand you an insurance card, as a therapist, you have to fill out a claim form, the insurance company receives the claim. And it takes them about two weeks to a month depending on the insurance company to process the claim. And forward the money to the provider for the service, the services rendered. At any point between the time that the claim is sent and the time that the check is received, there is an opportunity for a multitude of things to happen, claims get lost. Claims get processed inappropriately, they get the insurance companies make mistakes claims get rejected for a number of reasons, you have to figure out that the claim got rejected, you have to figure out why it got rejected, you have to change it, you have to resubmit it that sometimes requires hours on the phone with a representative from an insurance company to even figure out what went wrong and correct it.
Dr. Jill Gross 08:30
And then you have to wait for them to pay you. And if at any point down the road, they decide that treatment may not have been what they deemed to be medically necessary. They have the right to come back to the provider and reclaim any funds they paid that they deem were not medically necessary services. So when that happens enough therapist sorry, sort of get out there calculators and realize that they are putting in a lot of time and energy that actually is unpaid time and energy in addition to the discounted rate. So that is what happens on the back end. It’s not as simple as I perform a service, I submit a claim and I’m paid in a timely fashion and that’s it.
I want to zero in on something Jill said about why some of these claims get rejected. The insurance company has the power to deem what is and is not quote unquote, medically necessary. This is a messed-up thing that can happen in medical care, too. But it’s especially problematic when it comes to mental health. Because there’s still so much stigma and failure to act proactively in this space.
Dr. Jill Gross
Insurance companies will cover people when they are clinically depressed when they’re suicidal when they’re considering taking action on violent thoughts against themselves or other people. But what they won’t pay for is 10 steps earlier when someone started to feel isolated alone or mistrustful have their own thoughts and feelings, that’s preventive. And that is not reimbursable in the eyes of insurance companies.
Dr. Jill Gross 10:10
That’s why I think therapists and private practice are subject to the lifespan that I talked about with insurance companies, we try it out. We’re hopeful, we’re naive. We put it into practice, we work long hours for less pay and high administrative frustrations. And then any spiritually well-connected individual loses faith with that. And rather than completely burning out, many leave for their own self-care, and to be able to better care for their clients.
This is a pretty sad state of affairs, providers should absolutely do what’s best for their own practice. But these decisions leave a lot of people in the dust, I’ve witnessed both sides of this from the patient perspective. I personally see a mental health professional every three months, and I just pay her out of pocket. Because I need that care. And rather than go through all of the mechanical hoops and jumps of dealing with a prior authorization or submitting for what would be an out of network claim, or sifting through EOB’s, I would so much rather just pay cash. But not everyone has that option. And for those who can’t pay out of pocket, they just give up and don’t get the care they need. What happens to them?
Dr. Jill Gross
I don’t have an answer for that. That’s what concerns me. I think what’s happening and what I think COVID has really sort of pulled the curtain back on is that our system is deeply flawed. Any system where illness is a commodity is deeply flawed. I don’t know what the answer is, I don’t know if it’s a single party payer. I don’t know if it’s to get rid of contracted providership and afford a stipend to every policy holder that they can apply towards seeing the provider of their choice. I don’t know what that means. But I think contracted providership is really not a sustainable model.
David Smith 12:12
The status quo is not a sustainable model. We’re missing countless opportunities to address illnesses early on. And we’re making care less accessible by driving qualified clinicians away at a time when we need them more than ever. After the break, we look for answers.
Hey, listeners, we want to hear your stories. Have you been hit with a surprise bill after a procedure? Did you have a run in with the health care system that felt infuriating or unfair? Or have you struggled to find in-network providers in your area? Share your story now by calling 8334-LEMONADA. That’s 833-453-6662 or email us at email@example.com.
We’re back. So if I’m being honest, I am no stranger to burnout. And I’m sure people are split on this. But there’s a part of me that does not want the world to go back to the way it was in 2019 because in some ways 2020 ended up being a really positive time in my life. And I know that set in the backdrop of this amazing amount of human suffering and trauma and loss and all of the incalculable things people have felt. But for me, the pace I was running for the 10 years before COVID-19 was so chaotic. It was so loud and tumultuous. I was in six or seven cities a week constantly on an airplane. I never saw my kids. I ate terrible food. I hardly exercised. I slept four or five hours a night.
David Smith 14:09
And I was living that way, I was living in that level of chaos as all these other things were happening as I was severing from my faith as my own trauma from my own experiences as a teenager really just flew off the shelf at me and while I was trying to process a lot of other things and so the fact that COVID happened at a time where I couldn’t be constantly going where I wasn’t thrown into chaos. I’ve dinner with my kids five nights a week I am very accessible over the weekends. I have hobbies. Like I never had hobbies I have never once in my life had a hobby and now I have like three hobbies that I really enjoy doing and you will never get me to go back and live the way I lived before because that level of burnout can categorically kill a person. And we don’t pay enough attention to that in our society, in our culture, because we all think we’ve got to just go go, go go go, to keep up. And we do it at the expense of our own health.
And again, I speak from personal experience, it literally took a global pandemic, the likes of which we have not seen in over a century, to force me to slow down and take a hard look at my life and rebalance myself. And anything short of that, like I don’t, I don’t know that that would have been enough. I share this because I think that this is the level of disruption that’s going to be necessary for us to fix this burnout problem in our healthcare system. All the power players aren’t just going to wake up tomorrow and decide to change just because it’s the right thing to do. Change at that level doesn’t happen overnight. So I wanted to sit down with someone who understands we’re in this for the long haul.
David Smith 16:20
So I call upon Dr. Vivian Lee, author of the wonderful book, The Long Fix: Solving America’s Health Care Crisis with Strategies That Work for Everyone. So you wrote a book, called The Long Fix, and really grateful it wasn’t called the quick fix, because we’ve kind of made the case that there are no quick fixes here. And up to this point, we’ve talked a lot about this incentive alignment conundrum we have between providers and health insurance companies, and this fee for service problem, and you term that problem as the fee for service monster in the book, can you can you just take a couple minutes to explain what you mean by that?
Dr. Vivian Lee
Sure, in the 1960s, when, really, when Medicare came of age, the practice of medicine was like you might expect, you know, you go and you see the doctor, and then you pay the bill. And the more complicated the process or procedure that the doctor might do, you know, so if it’s just a checkup, that’s simple. But if they’re doing say, a colonoscopy, or if they’re doing an operation, the more they’re going to get paid. And from the beginning that seemed to make sense, right? It’s a fee for service model, it’s how you might pay your plumber or you know, or your carpenter or other services that you receive.
Dr. Vivian Lee
But in health care, over time, what happened with that fee for service model, as we call it, is that it set up a series of incentives as you say, where healthcare businesses like health systems or hospitals or big groups, they realized that the more of these procedures they did, the more money that they made. And so naturally, what would you do naturally, you might do much more investment in the things that make you the most money, you might build more surgery centers, and you might build more cancer centers, and you might not invest as much in primary care, because you just don’t get paid as much.
David Smith 18:38
We’ve talked about how the fee for service model drives up prices. But it also skews how we invest in the system. We’re not putting our money into the parts of the system that can keep us well. Instead, we’re investing in all the stuff that makes big profits by treating us when we’re the most sick. This drive on volume, this trying to jam as many patients through the door in a day and do as many things to them as possible. How much of that is driven by the physicians themselves? Like are they compensated to do more of those things? Are they under orders from the institution to do those things? Or would they just far prefer to be left the hell alone and just practice medicine?
Dr. Vivian Lee
That’s a great question. Well, so there are almost a million physicians in the US and so I can’t really speak on behalf of all millions of them. But I’ll say that healthcare used to be you know, when I was in high school, the reason why I became a doctor actually, was because a very resourceful teacher of ours in ninth grade, I think it was 9th or 10th grade. Wanted to get us set up with various professionals in the community just as you know, career guidance, and just sort of randomly I got assigned one of the Leading physicians in town, and he ran a small practice maybe a handful of doctors to begin with and they grew over time.
Dr. Vivian Lee 20:09
And very, very independent, very autonomous. Probably not a huge billing office with, you know, hundreds of people, probably just a couple people in a billing office. And it was sort of how medicine used to be, you know, used to be that a lot more physicians in private practice passing it down generations, or just less of a business enterprise and more of, really the practice of medicine. And that’s just changed. You know, it’s there’s so much consolidation just generally, it comes with the complexity, the administrative complexity, that just individual doctors can no longer really operate the business.
Dr. Vivian Lee
It’s inefficient for them to set up a whole electronic health record, and respond to all of the documentation and reporting requirements of Medicare of all the private insurers of the accrediting bodies. I mean, it’s just, you know, our administrative load in this country takes up about 8% of the health care dollar, compared to other high-income nations where it’s at most 3%. So we’re two and a half, almost three times as much administratively that’s a, that’s billions and billions of dollars.
Let’s break down the numbers here real fast, because the difference between 3% and 8% really doesn’t sound like a lot. But remember, we’re talking about a $4 trillion pot of money. So that 5% difference comes out to roughly $200 billion. That’s money that could be going towards things that most people agree are really important, like getting people back to work and fixing our nation’s crumbling roads and bridges or investing in things like education. But instead, it’s going towards stuff like upcoding software and billing departments, things that are designed to squeeze every penny out of consumers, that also drives up overhead costs for doctors.
Dr. Vivian Lee 22:05
Very few doctors can afford to practice that way. So there are big groups. And then hospitals have bought up a lot of these groups, health insurance companies have bought up these big groups, one of the largest employers of physicians is actually insurance companies now. And as a result, I think it has turned into this big, you know, it’s just an enormous business. And that’s why right now, it’s surprising to many people who aren’t in the field. But even before COVID, the national rate of burnout among physicians was 40%-45%. And I think that’s because they aren’t really, doctors today aren’t able to practice the way they really want to practice. So you know, who became a doctor just to do paperwork? No one. So I think there’s a lot of appetite on the part of physicians to make this big change also.
after the break, we hear more about what that big change could look like in practice.
We essentially have a system that seems to do really, really well when people are sick, and doesn’t do as well when people are not sick. And that so much of our capital investment in this country has gone into, as you said, kind of building this institutional base to support the situations where people are ill and health is poor. How do we flip to a place where the system captures value or is incentivized when people are not sick, when people are well?
Dr. Vivian Lee
Well, that’s like the multi trillion-dollar question of this country.
David Smith 24:04
I’m really hoping this is just a 5-episode show and you can just get right to it.
Dr. Vivian Lee
On the next few minutes. We’ve wrapped it up. No worries, we’ll just move on to global poverty, you know, some other. So you know, one of the things that people often ask when I I’ve been on this book tour to talk about The Long Fix is, well, why is this any different from any other industry? Like just said earlier, plumbers work this way. So why aren’t we seeing kind of a crushing overflow of like piping and tubing around everybody’s houses, you know, and then sort of same way that we have in healthcare with too many bright shiny hospitals everywhere.
Dr. Vivian Lee
And the reason is because of the people who are paying for health care aren’t always the people who are you know; you have a complicated environment where you’ve got patients or people and their families who are trying to achieve better health. And then you have the clinicians, the pharmacists, the physical therapists, the nurses who are trying to help you get there. And in general, neither of them are really responsible for paying for the healthcare itself. And so that disconnect is one of the big reasons as to why we have this sort of system that is really kind of gotten out of control over the last 20-30 years.
And this is such an important point that might just need a little clarification. Vivian is saying that the people pay for care aren’t necessarily the patients. The we’ve been telling you all along that patients are the ones stuck paying the tab for this crazy system. How can both of those things be true? Well, essentially, we are all funding the system with our taxes and insurance premiums and our co pays, I mean, that’s what creates the $4 trillion pot of money in the first place. But then half of it goes to government who uses it to provide care through Medicare and Medicaid. And the rest of the money is managed by employers and insurance companies. These are the middlemen between that money we put into the system, and the care we want to get out of the system. And as long as they hold the purse strings, they’ll have the power.
Dr. Vivian Lee 26:20
What we’re trying to do is to get to a point where there’s a little bit more alignment, where the insurance companies, the employers, the government, the people who are actually paying the bills, and the doctors and the nurses and so on who are actually providing the services are more aligned.
Right now, no one is aligned, because they’re all competing against each other.
Dr. Vivian Lee
There’s a certain amount of money that’s paid every year for healthcare, it’s like your premium for an insurance plan. And every year right now, the payers, you know, the insurance companies, and the doctors and the hospitals are at this trillion-dollar tug of war literally, to try to get that money and one side wants to get paid, the other side wants to deny that payment, because that determines their profitability.
In Episode 4, we talked about the tug of war from the patient’s perspective, but many doctors and nurses find themselves caught in the middle too. Luckily, there’s a growing effort to shake up the system from the inside.
Dr. Vivian Lee
There’s some really good models that are have been evolving around the country over the last decade and starting to really gain some traction. Medicare Advantage is one of them. Some Medicare Advantage groups are groups of doctors, who started maybe 10-15 years ago in pilot projects. And in that pilot project, Medicare, which you know, covers the health of all seniors 65 and above, and is the largest government program. Medicare said, okay, we’re tired of this fee for service, we want to try something new. And in this new way of paying, we’re just going to say, we’re going to pay you a fixed amount of money, you doctors instead of paying every time Mrs. Jones comes into the clinic, you know, pay come in and pay, which is forcing you to see Mrs. Jones in like an eight-minute intervals. So they can up patients through to make it a money.
Dr. Vivian Lee 28:18
Instead of that kind of broken system, we’re just going to give you a fixed amount of money every month, kind of commit to a whole year’s worth of payment for Mrs. Jones, if Mrs. Jones signs up to have you guys as her doctors, and we’re going to give you that amount of money. And you have to keep Mrs. Jones as healthy as possible, we’re going to keep very close track of that. And if you end up spending more than the amount we gave you, too bad. That’s your problem. And if you end up spending less than that amount we gave you let’s say we give you $10,000 a year for Mrs. Jones, she’s got some different conditions, and we want you to keep her healthy. And if you spent $8,000. And you managed to keep Mrs. Jones healthy, you get to keep that $2,000. totally different models of payment.
Dr. Vivian Lee
Now all of a sudden, how does this doctor, how does this group of physicians think? They think okay, how can we keep Mrs. Jones as healthy as possible, not let her get into the hospital because that is very expensive, because they have to pay that hospital bill now. But they have to keep her happy because she has to stay with their group and they have to keep her healthy because otherwise Medicare will really penalize them. And it’s just a bad thing to do. And so they just reinvent the way they practice medicine. And they spend a lot of time with their patients upfront. They talk with them; they see them even when they’re not sick. So they do monthly visits. Some of them do monthly visits with their most frail and elderly patients, even if they don’t have an issue just to check in with them.
Dr. Vivian Lee
They have on site pharmacy; they have shuttle services to bring them to and from clinic. They even have Tai Chi classes or yoga classes at night in their clinics that are free for their members because they’re really worried about preventing falls, they just, you know, once somebody falls and breaks their hip, it’s really tough to recover, just to completely reinvent health care. Now Medicare Advantage is almost 40% of all Medicare. So it’s really taking off and it’s an example of what you just asked, How can we pay for health care in a different way.
Dr. Vivian Lee 30:19
And from a physician perspective, you know, as somebody who’s a doctor, I will say that we’re looking for this alignment, we want to be able to do the right thing, and be successful financially as a result, in a fee for service model, the way we can be financially successful is just to see as many patients as we can possibly rush through in a day. And, you know, do as many procedures as possible. And it’s, you know, obviously, we try to make the right decisions by the patients, but it’s really become very, very difficult. And this model is just much more satisfying.
Many physicians know what, what help their patients, but they’re not given the space and resources to do it. So when providers finally get to implement new programs that work, it’s so much more fulfilling and more effective.
Dr. Vivian Lee
The data show that groups really do better in terms of better outcomes for patients. So over if you take an overall, while they invest more in the primary care part, they save so much in preventing hospitalizations that from a business perspective, they actually do better. So taken overall, they can lower the amount of costs for health care for seniors. And of course, what senior wants to go into the hospital, you know, who wants to do that, so they actually improve the quality of life of their patients. And that’s really the track we need to completely pivot our healthcare system. We’re just spiraling downward in this fee for service model.
Dr. Vivian Lee
And we just need to pivot onto this, what I call a virtuous cycle instead of a vicious cycle. So in this virtuous cycle of better health outcomes, and when you realize that, you know, what’s the lowest cost of care when you’re your podcast series is on Cost Of Care, what’s the lowest cost of care, its health, health is the hope is cost of care. So that’s what we need to go for. And if we could get everyone working towards that. And if it’s a few free blood pressure cuffs out there to prevent a stroke or a heart attack, then obviously that’s worthwhile.
David Smith 32:32
Vivian said that she interviewed hundreds of people for her book and asked everyone the same question. If you could change one thing about the system, what would it be? And nearly everyone had the same answer, changed the way we pay for care. But it’s gonna be hard to convince everyone to move away from a fee for service model when it’s built a booming $4 trillion business. Vivian knows this firsthand. From her time as CEO of the University of Utah’s health system, they were on their way to being a $3 billion institution, when Medicare Advantage said, next year, instead of paying you on this fee for service thing, we’re gonna pay you a fixed amount per patient.
Dr. Vivian Lee
When that message came through to us, it became clear to me that we really didn’t have a way of managing the costs of care. That if you all of a sudden told me, hey, Mrs. Jones next year, that Medicaid patient, you’re only going to get $10,000 for caring for her. Oh, and then you look back on her record last year, and she’s been in your emergency room more than 50 times. What do I do about that? I need to understand in order to really manage that situation, I need to know, how much is it costing me to care for Mrs. Jones, and Mr. Smith and all of their families? And how can I actually reduce the cost of care? That’s the only way in which I can embrace this new way of doing business. Otherwise, I’m gonna put my head in the sand as a no way not until I retire.
David Smith 34:08
Which is what I hear from a ton of executives. But once leaders like Vivian were forced to change, they found ways to make it work.
Dr. Vivian Lee
We built out some really fantastic tools that enable doctors, nurses, the teams to see what it was costing us to run the business. And where there were opportunities to reduce those costs. A huge opportunity to reduce the cost is to detect if somebody is about to get sick before they get really sick. So for example, one of the projects that we did at the University of Utah was to identify patients who had early signs of what we call Sepsis. Sepsis is when you have kind of like a really bad infections and often multiple organs fail like your kidneys and your liver and this is just a bad condition.
Dr. Vivian Lee
And we have in the medical literature, some really clear signs that we can use to identify early Sepsis. And if we identify the early Sepsis, we actually have measures that we can take to prevent it. And once we prevent that people do better, which is great, they don’t die, which is even better. And of course, it also reduced the cost of care, just like I said, healthy is less expensive.
So often, we dwell on the big immovable parts of this system that feel impossible to change. And it’s easy to lose faith that things will ever get better. But this is a perfect example of the small shifts that can happen on our way to rebuilding a better system.
Dr. Vivian Lee
One of the real opportunities around programs that we’ve been discussing today, these more value driven programs, is to really kind of do away with this endless battle between insurance companies, and healthcare systems. We’re kind of in a transition right now, which is a little bit painful, I’ll say. So the way I describe a lot of this Value Based Payment, and paying for better health outcomes, is the kind of the destination we want to get to I’m not sure we’re really totally there now, most of the Value Based Payment Models create, you know, a lot of administrative work as well. And so hopefully, we can get through this transition period more quickly. And get out to the other side, where we can have better health outcomes, and also a better experience for patients and for providers.
David Smith 36:36
In my career, I have been in meeting after meeting after meeting after meeting, where executives have told me that they do not really believe we’re going to end up in a place where they’re going to be at risk, that it’s a fad, it’s going to go away, and they’re waiting out the clock. And we can’t let them wait out the clock. Because waiting out the clock in this case, is going to lead to 5 trillion here, 6 trillion here. Suddenly, it’s going to be 30 cents of every dollar we make going into an even worse system. When I worked for Governor Leavitt a number of years ago, I started working from about 12 years ago and a couple years and he started on this riff like he would start every speech and every client presentation, the same way he would talk about we are 25 years into a 40-year journey.
And like people ate that up and it was all around value is this notion that it’s a long game, you know, the long fixes Vivian talks about when I left working for governor Leavitt, three years ago, he was still saying 25 years into a 40-year journey. And that says something I’m not and I’m not ripping on Mike Leavitt. But it means we’re kind of stuck. One of the most important parts of Obamacare that most people don’t know much about is the funding for a whole bunch of programs to experiment with the kinds of things Vivian talked about. And we’ve had dozens of programs over the last 10 years, and we’ve learned a lot from it.
David Smith 38:13
But the most important thing we’ve learned is that when providers have skin in the game, when providers are at risk when providers lose money, when their livelihood is at risk, they’re going to scrutinize the new piece of technology, they’re going to scrutinize the new relationship, they’re going to be damn aware of when you check into a hospital and if it was clinically appropriate or not, they’re not gonna have one hour of patient time for every two hours of administrative time, it changes the incentives. And that’s not going to get us to a perfect place. But suddenly, the $2 trillion of extra money we’re spending downstream through high prices in an inefficient market.
We’re investing that much differently. The point is, we know what is necessary to get us through this transition period. Given the right incentives, we can convince more providers to put down the road and step away from this high stakes tug of war. Next week, we make a transition to the upstream factors which we call Social Determinants of Health. And we start by taking a look at maternal care as a really important case study of the physical, mental and social factors driving poor health outcomes and the role that race plays and all of it.
We want to know you before you get pregnant so that when you get pregnant, you are automatically celebrated and you don’t need to be heterosexual married and of age to be celebrated. But you know, when you get pregnant, we have Black babies coming into the world. And that is a joy to us, a celebration to us.
The COST OF CARE is a Lemonada Original. The show is produced by Jackie Danziger and Kegan Zema. Our associate producer is Giulia Hjort. Music is by Hannis Brown. Executive producers are Stephanie Wittels Wachs, Jessica Cordova Kramer and David Smith. Help others find our show by leaving us a rating and writing a review. If you have a story to share, call us at 8334-LEMONADA or send us an email at firstname.lastname@example.org. Follow us at @LemonadaMedia across all social platforms or find me on Twitter at @CHIDavidSmith. Lastly, we want to express our appreciation for the men and women who get up every day and work in this system with a passion for improving our health. We are grateful for the work you do. We’ll be back next week.