Good afternoon and welcome to another addition of
the Stanford Health Policy Forum. My name is Keith Humphries,
I chair the advisory group of the forum which is an educational program
sponsored by the office of our dean, Dr. Lloyd Minor and very ably staffed
by Aaron Hiscocks and Robin Daines. The forum convenes two or three times
a year to bring top health decision makers and thinkers to campus, to engage with us
about cutting edge health policy issues. If you want to know more about this forum,
for example, watch videos at prior events or
find out about future events, you can do that on our recently retooled
and very spiffy looking website. Which is at health policy forum, that’s all one word,
healthpolicyforum.stanford.edu. Our topic today is the high
cost of health care, which most people consider the defining
quality of the US health care system. It’s hard to express how much
money we spend on health care. This year it’ll c,
be coming close to $3 trillion. If you you know, here,
an analogy I found helpful, which was offered by a prior guest
at the forum, Dr. Zeke Emanuel, is that we spend as much on health care
as people in France spend on everything. In other words, their economy is literally about
the same size as our health care system. And yet despite that, we don’t have
strong evidence of great value for all that spending. And so, our topic is why is that so and what might be done to make it better, and
to lead us in that discussion, we have two physician scholars who are extremely
well-qualified to address these issues. So let me introduce them to you,
starting on your right, is Dr. Doug Owens. Doug is the Henry J Kaiser Professor
of Medicine and the Director of the Center for health policy, and
primary care and outcomes research. In addition to being
a practicing internist, he’s also an internationally
recognized scholar in the areas of cost effectiveness,
cost of care, quality of care. Then in the middle is Dr.
Elisabeth Rosenthal. Elisabeth, we are proud to say,
is a Stanford alum undergrad here in biology with Doug,
sort of a nice connection. Then got a Marshall scholarship,
went to Cambridge, and then came back to Harvard to get her M.D,
she practiced medicine for a while, and then moved on to being
a senior writer at New York Times. And that’s,
I’m sure a series many of you know, Paying Until It Hurts, which is absolutely
exceptional in combining the sort of the, the policy realities with the human
experience of, for example, getting $117,000 bill from a doctor
you never heard of in your mailbox, or shopping around for
a hip replacement in you know, in Bermuda. So that series is really the, the thing
that, you know, caught our attention and because, it’s, it’s, it’s so, it’s so good at, at bringing very complicated
issues out in an understandable way, and that’s, that’s one of her many gifts, so
I’m delighted she would come to Stanford. And then our discussion today will
be led by Paul Costello as usual. He is the head of media and communication
at the medical school after a long and distinguished career as spokesperson for many important figures,
including First Lady Rosalynn Carter. We’ll go up to about the hour on
the stage, and then we’ll open it up for your questions and comments. So enjoy and thank you for coming.>>[SOUND]
Thank you everyone for joining us today. It’s impossible I think to
start a conversation about health care today without
raising the issue of Ebola. So I want to start there and
how does it weigh into this. And, you know, one would think that
it would not weigh into costs, but Libby, as you’ve written about,
everything weighs into costs. So I wondered if you, each of you would address what you’ve been
thinking about in that past few months, have you seen the Ebola crisis go
from West Africa, here into the US. And what you think,
how it’s going to rebound, how it’s going to impact
the overall nature of cost.>>Well, I,I, I’ll start, I mean. Whenever I watch any health care crisis
after my last two years of doing this series, I think immediately about, wow,
what’s that bill going to look like? But I, I, you, you know,
I think Ebola is one of those things that the US health
care system can do really well. You know, we’re really good at
that kind of isolation, high tech care that that first experience at
Texas Presbyterian not withstanding. I did wonder, and this is complete
speculation about what happens when an uninsured person comes into
an emergency room with a serious illness. And what are the incentives going on
in the back of the physician’s mind and the hospital administrator’s
mind in terms of, do we really need to admit this guy now? Or maybe we can send him out,
and he won’t have to come in. I mean clearly, they did a lot of tests. They didn’t just say oh, you know. Forget about it, he’ll be fine. But you know, I think money is in the back
of everyone’s mind in this system, and certainly, I’ve spoken to enough
hospital administrators and physicians, and to, to know that it’s
just there in the background. You know, who’s going to pay for this? Are we going to be reimbursed? What are the pressures from the finance
guys at that hospital to say, [SOUND] you know, try not to admit a,
a patient who’s uninsured?>>Send them to Almeria. Send them to Nebraska.>>Well, or just send them out and hope
that, that they’ll be okay on the outside, whereas if you get a person
with good insurance. And I’ll just give you I, I mean my
daughter clearly didn’t have Ebola. But during finals at Princeton, she went
into a local hospital with a stomach ache and got a $32,000 workup that was
completely unnecessary, I think. And I think it’s the kind of
workup that you get, I mean, I guess what I’m saying is so much of
what we get depends on our insurance and the financial considerations
in the background. I think if she was uninsured she wouldn’t
have gotten the, and I will say this because I think it’s shameful, the $12,000
CAT scan or the $9,000 sonogram. She was a kid during finals
who had a stomach ache. [LAUGH].>>Doug, what have you been thinking
about in the past few months?>>Well, I’ll just say first 32,000
she must’ve gotten a discount.>>She [CROSSTALK] [LAUGH] She, our, our
insurance paid you know, I think 1,200 for the whole ordeal, but I was you know,
because I’m a wonk and I get apoplectic about these things I, I couldn’t
resist calling and saying, you know. What on earth are you thinking? You know?
Why did you do this? I didn’t get any
satisfying answers though.>>Would you like to see it on
the front page of the New York Times?>>No, no personal stories.>>Paul, you know,
I think there’s several things. First, you know,
people say all politics is local. I think we should be clear that
infectious disease is global. So what happened in West Africa affects
us now, clearly in Santa Clara County when Malaria goes up in India,
Malaria cases go up in Santa Clara County. When typhoid goes up in India,
typhoid goes up in Santa Clara County. We had two of the eight cases of
SARS in the United States here in Santa Clara County. And we have one of the highest rates
of liver cancer in the United States in Santa Clara County because of Hepatitis B. About 30 to 40% of the people
who live here are foreign born. So it’s global really. And so
that means we have to care about and pay attention to what’s
happening all over the world. So that’s one, that’s one thing is
that we need to think very broadly and be interested broadly. Secondly, I think what’s
happened here has exposed sort of the public health system and
sometimes lack of coordination. There are a number of people
speaking to this federal level, state level, local level, etcetera. As terrible as Ebola is in Africa,
it’s really here. Of course,
there’ve been a handful of cases. But if something like pandemic flu come
along then you have something completely, wholly different order of magnitude. And we should take this as a wake up call
in terms of how we’re thinking about our public health and how that’s organized and
how we fund it to be prepared. So Nayer Khazeni who’s here at
Stanford did some modeling on flu and in New York City,
epidemic flu with modest mortality would cause 200 to 700 deaths per day. Something like that would be really,
very different and then finally I think the risk, how you communicate risk in a,
in a time like this is very important. And I think you both would know
more about this than I do. And you, and you’ve seen a lot
of statements that I think probably were ill-considered the terms
of how people have communicated. All of these things it’s
imposing great costs to us now, public health people
are working around the clock. Stanford has certainly been
spending a great deal of time in energy resources preparing,
as have most hospitals in the US. So what’s happened in West Africa really
has imposed very substantial costs on us.>>Libby, you, you started your series
a year ago plus, and if you were to look at the, at 30,000 feet of the problems of
the health care system, as far as cost. What would you identify as some of
the core issues that are there, and that we’re still grappling with,
a year after, a year after ObamaCare, and has ObamaCare, the Affordable
Care Act, made any impact there?>>Well, I, I think, I mean, first of all,
I think the issues and the problems are so diffuse, which is one of the messages, and
why the series has gone on for so long. I think there’s a tendency to
be very reductionist when we talk about health care
reform in our system and to say, oh, it’s the hospitals,
it’s the insurers, it’s the, it’s PhRMA. And it’s the, you know,
we’re all so co-dependent, and, and it’s all so intertwined that, you know
I think I could start listing off, but I think the, the ultimate problem
is that our system has shifted. Over the time since my dad was
a physician you know, in the 60s and 70s, to a focus where patient health
was the center, to a foc, to, to, to a situation today where patient
health is still nominally the center, but finances dictate what we do, and
the financial incentives are so powerful. And I think, you know,
one of my messages to patients is, you know,
we’re responsible too in the sense of, you know, when I have friends who go into
a hospital in New York City, they’ll say, oh, it’s a great hospital,
there’s free coffee in the lobby, right? Or it’s all private rooms. And, and so I think, you know,
we’re all part of this together, and yes, the hospitals are maybe, have overbuilt,
and the charge masters are a problem. But they’re, they’re playing
to patient expectations and demands, so I think every part of our
system is going to have to recalibrate. And that doesn’t mean, you know, I know
there are, there are, are people who say, okay, you know, single payer, and
I think that would be one way to do it. I don’t think that’s what’s
going to happen in this country. But I think if every part of our system
does its piece of recalibration, to move away, to think a little bit about, less about the financial incentives
that’s really, really important. And I think some of that will come from,
you know, do I think anything will
come from government? Not at a national level
right at this moment, but, you know, some of the states
have become more active. Attorney Generals can become more active. Some physician groups
have become more active. Hospitals are changing
the way they think about it. I mean, one of the most
heartening things to me, and why I like speaking at,
at a place like this, is there’s been a tremendous response, not
just from patients who are frustrated, but also from physicians, you know, the head
of a cardiac transplant department had called me someone from Yale, and
said, you know, I want to be part of this because I don’t think our costs are
in line with my mission of curing people. So I think, you know, there’s distress
at every level, which, to me, means there’s hope for change, too.>>Doug, What do you see as some
of the sunlight on the horizon? Some of the, you know, Libby’s has
been talking about the physicians and the patient responsibility and the change in culture that needs
to take place in all sectors. What do you see as some of
the bright spots out there?>>Well, I think, Paula, if you think
about the main challenges the health care system face, it’d be cost,
quality, and access. And I think the ACA is primarily
going to affect access. So I think that’s a bright spot. Seven million people signed up,
there’ll be more next year. So I think that is progress. At the same time, even with that we’re, of developed countries, we’re probably
dead last in terms of access to care. And even when people have insurance,
that doesn’t mean that the deductibles and copays aren’t so
high that they can access care, and another issue is going to be,
as Medicaid expands, and more people sign up, will there really be
physicians to take care of these people? So those are remaining, sort of,
fundamental challenges, but I think that the ACA’s primary
contribution is going to be likely in the area of access, not in the area
of cost control or quality.>>Give me one of the significant pieces
you had in the last month that had an enormous amount of feedback and
comments was the front page piece about a surprise bill of $117,000 that a doctor,
that a patient received. And you describe it as
an increasingly common occurrence.>>Yeah.
>>What’s happening here? Where do you see that? How do you see that? And, and how that patient found out
about it was sort of by the detail, looking at his bill. And, what does it mean to the system? What’s happening here?>>Well, I think, you know,
what we see in the system and what so many of these stories reflect, is. Physicians feel like their
income is being squeezed. You know, hospitals and,
hospitals are better positioned, particularly big consolidated health
systems, to push back against insurers. So the insurers are trying
to push back on payments. And hospitals and physicians are looking. And sometimes to unsustainable levels, so they’re looking to recoup some
of that lost income in other ways. And I think what’s lost
in that very real tug of war is the fact that the patients
are kind of held hostage in the middle. And, and
that’s what distressing to me, so. You know, what’s, what was
happening in that particular case. I did a follow-up about smaller
examples of surprise charges. Which I think are more typical. But you know,
in New York the primary surgeon who the. And I have to say, everyone in the series,
liked their medical care. No one said. I hated my doctor. They all like their medical care. They were all treated in ways that they
thought were well, were, were good, they got better. So these are not generally
disgruntled patients. What upset them was the payment and
the bills. So you know, this patient tried
to be a good consumer, and this is another theme that,
you know, we keep saying to people. Oh, you have to be a good
consumer of healthcare. But our system, if we want to go that route,
is not set up to allow people to do that. So Peter Dryer, who was the main character in the case
he found a neurosurgeon he liked. He ended up with the negotiated rate,
getting preapproval, and that neurosurgeon. I believe took something around $6,000 for
his cervical, spine surgery. And again, this wasn’t so
much controversial surgery people. You know, he, he researched it. He realized he didn’t need it. He didn’t run into it quickly. but, you know, somehow he ended up with all these things on a bill that he
couldn’t have been a good consumer about. I mean, there was the $117,000 bill
from the assistant neurosurgeon. Now my guess is, and I’ve since discovered
that sometimes this is a kind of, what I would call very suspect practice
within a group where one person, a few people will be in network and
others will be out of network. And the in network guys will get the con,
you know, get the cases, and then the out of network guys will turn up and help out
with the surgery, and they share revenues. You know, I think there are some
reasonable legal challenges to that. But, you know, the thing that
in some ways disturb me more, which I heard from a lot of
patients afterwards, was. As he was being rolled into the operating
room, he was asked to sign a form saying, you know, I understand that my
neurologic monitoring during surgery is not covered by my insurance,
so I’ll pay. Now, you know, that and, and I, I have since heard that from lots
of patients undergoing neurosurgery. So, what does that mean for
the way we’re doing healthcare? You know. What are you supposed to say? Oh yeah, I,
I’m going to be a good consumer. I’ll go without the monitoring. I mean, that’s really not, you know,
for anyone who cares about health, and about morals and doing the right thing,
that to me is just out of line. And since, you know, I’ve done, I did a follow-up story
that appeared over the weekend about. Kind of funny new charges. You know, one was a therapist who was,
and, and very few therapists are in insurance networks,
because the rates are very low, right? So, that therapist had figured out,
well, I can both $100, my negotiated rate for the therapy, and
then $100 for a room rental fee, okay? That’s not something I’ve
seen on medical bills. I saw another thing. And I see all these bills, you know. An ER that was clearly trying
to augment its, its cash flow. They had something called, and
I’ve seen trauma team activation fees, which, you know, you can argue
about is that justified or not? But at least people. Yeah, I’ve worked in an ER,
sometimes there’s an ambulance coming in, the trauma team is invaluable,
and it’s a lot of people. But, this one was for a non-critical
patient trauma team activation. So what does that mean? A trauma team for someone who,
who doesn’t really need a trauma team? That was for $2,500. Sling charges, you know, and I know,
okay, so the, the, someone will say, well. That’s durable medical equipment,
and we charge for that. I can tell you, you know, I’ve had
lots of kids with broken arms, and the sling was never charged before. Now it’s $150 for a sling. So I think, you know,
providers, sometimes for good reasons, because their reimbursements
from insurers are overly low. Try and make that up in other ways. But, I think the thing that we all
have to realize is if the battle is between the providers and the insurers, it’s the patient’s health
that’s, that’s kind of suffering for that. And that’s not okay.>>Why is the geography so
particularly odd in this? That that can happen in New York City, in
the Midwest it can be totally different, in the West Coast, South. Why is the geography so specifically
strange when it comes to healthcare cost?>>Well, it is and it isn’t. I think you know we find that the, what I found is the gains are slightly
different in every zip code, but, but there gains in every zip code none
the less, and I think it’s partly that. Doctors in one area, and or
or providers in one area. you, you know the Suffolk county
seems to be a little epicenter of high neurosurgical assistant fees and
I think part of what happens is and, and you know the doctors who are. Just trying to do their jobs and
working really hard and see their reimbursement cut. Look at the guy practicing, or
the woman practicing down the street and think, you know,
what kind of a schmuck am I? I’m just working, doing, you know, you
know, trying to keep my practice going and not getting paid for it, and
everyone else is doing it, so there is this element of group think. And it gets kind of perpetuated and
this is something I think, you know, is is and interesting system issue
by some of these database crunchers who try and figure out what’s reasonable
and customary in different zip codes. So, if you look at, you know,
on fairhealth.com, at reasonable and customary for cholecystectomy in
Nassau county, it will be something like $36,000 to $40,000 because
surgeons there charge a lot. If you look over the border in Queens,
it will be 6 to $8,000. So I think that usual and customary is no
longer probably a good way to do things, and, and, and the variation is
tremendous which tells you, to me, that we’re paying too much, but it, the,
the game’s different parts of the country.>>You, you used the words game twice. Sorry.>>And no, it’s interesting. So I want to,
I want to go in a little in that.>>I shouldn’t have said that.>>Doug, reflect on the word games. It sounds like what you’re saying would
be, is, if I’m right or wrong, is that physicians in these networks are trying to
stay one step ahead of the regulations. One step ahead of. Is that what’s happening here?>>Well, I guess I would say
that they’re responding to the economic incentives that they face. And they’re people in the audience who
could say much more about this than I can. But, there you know,
they couldn’t do this if we didn’t have a system that had
economic incentives that allowed it. And you could have charged $117,000 for
a two hour procedure which by the way is probably two thirds the annual
income of some primary care providers. So they are they, so
I think that’s one of the, one of the fundamental things that we would
have to fix if we’re going to have real reform is to have economic incentives that
reward the kinds of things that we want. The health care system to do. Take care of people, keep them healthy. And then people will use that same
ingenuity that they are using to figure out how to keep their
practice afloat, potentially for things that we think are, are, are more
critical aims for the health care system. So I think the economic incentives
are really, really crucial.>>And I don’t mean games, I,
I, I probably should have used the word strategy more, [LAUGH] and
I don’t think it’s, it’s you know, it’s partly the strategic moves
that businesses do all the time. You know, that the insurers are doing. That pharma is doing, oh look, here’s
a generic drug that’s probably under priced relative to what people will pay
for it, so they raise the price and see, and, and it works, you know? So, so, I think everyone is being
strategic, except the poor patients, who. You know, if your just dealing with your
care you have no leverage to be strategic and you don’t have the information to
do it and you don’t have the knowledge. So I think the patients in this
game of strategy which is, which you would expect when its a system,
you know, where everyone is feeling some
what crunched now and trying to. Make what they do financially viable. You know, the poor patients are the ones
that don’t have that option and I can’t tell you how many patients’
homes I have been in in the past year, and a half where you see people with these
crazy payment plans of you know, for things that. They probably need it, but they certainly didn’t need to
have them cost as much as they did.>>What are some of those examples?>>Oh, you know, I, I, [LAUGH] I, I was interviewing he was retired CIA,
I believe. [LAUGH] He looked, he and
his wife have a saddle shop in. In New Hampshire, and
he had had two things. He’d had a cataract surgery that
was billed at about 12,000, I think for the physician fee. And he, he had had a colonoscopy,
my favorite procedure [LAUGH] which was billed at about 5,000 plus
he ended up sending me. You know it was a normal colonoscopy and
his GI doctor sent him 18 months later, a reminder saying it’s time to
think about another colonoscopy. Well, what’s that about you know? And he said, he called me and
said do I really need you know like. Dr. Rosenthal who hasn’t practised in 20
years, do you think I really need this? And I, I said, you know, I, I don’t know. These these reminder
letters are just creepy. So so you know I I think that, that, so you know, but he and his wife,
had these binders full of bills and they. You know, they have their pretty
successful business people, but they’re small business owners,
they have big copays, and they have a very high deductible plan. And so they’re paying off this, you know,
$200 a month for long, my, the more creative patients faced with this dilemma
who I’ve run into recently, I think my, my patients are getting increasingly
defiant over the course of two years. I had one a newspaper person from Ohio
who had been in a bike crash, and she was objecting to an ambulance bill that was
something like $2000 to take her in. And it wasn’t even like, she, she,
her, she said her husband could have driven her in, but someone called
an ambulance, and it was there, and it was the local fire department, so
she didn’t really think much of it. And so
she tried to negotiate it down to $400, and they said no it’s $2000 or nothing. Or, or you can set up a payment plan. So she set up a payment plan
where she’s paying $5 a month. You know, for her life and the lives
of her children, something like that. [LAUGH] So, you know, but
I think it’s a sign of, of dysfunction, not a sign of success. [LAUGH]
>>And when you go into homes of, of patients, consumers and
talk to them, what is, is there a thread that runs through this,
are people really. Are they just exasperated with the system? Are they fearful of it? Do they not underst, what’s the thread
that binds these patients together besides the overwhelming amount
of dollars they may owe.>>I think they’re frustrated. They’re scared. They you know,
I think we’ve probably all felt it. I mean I’m trained as a doctor and I, know every time I open a bill I’m like,
wow, what’s that about? Or I don’t understand what that charge is. I have to call the hospital and
say what is that? You have to negotiate. You think why is it that much. There’s very little transparency. And I think what I’m hearing from, from
patients, and why this series has been as successful as it has been is that,
I mean we’ve had more comments than. On the first day of the series,
we had more comments than Nate Silver on election day, so you know, that,
the, the, the earmark of success. [CROSSTALK] Yeah, yeah. But, you know, we’ve got,
I’ve gotten 10,000 of stories and, and I think the common thread is
that people are frustrated. They don’t know what to do, and these are
New York Times readers, so they are by and large people with insurance, well
educated, who have access to health care. We’re not even talking about
people who are not that lucky. And there’s no place to
put that frustration and I think that’s mostly why you know again, it’s kind of sad that their outlet is
to comment in the New York Times but. No politician is making
a big deal of this. They are an, an they are reluctant
to say to their doctors, look I just can’t afford this. They’re afraid to ask
up front about price. They think it’s kind of rude. And I think if I had I
spoke earlier this year at the American College
of Physicians meeting. And one of the things I, you know, if I, if I was a, I don’t know what,
policy makers couldn’t do this. But was to say to, to physicians you know, you’ve gotta open up
this discussion about. Price and costs and the effect it’s having on your patients,
because they’re embarrassed to do it. And it’s I, Peter Ubel wrote a piece in New England
Journal about cost as a side effect. And, I think it would be really great if. If the profession took that on. Because I don’t think, you know yeah, you
could have it a top down from government. But that would be. [COUGH] I mean,
in some countries priceless, or in every office that
wouldn’t be a bad thing. In other countries. You know, every hospital in the U.S.
has a patient bill of rights. Ours doesn’t include. Having a sense of what your
bill is going to be like. That is part of a patient bill of rights
in Australia, if you’re paying yourself. So, I think, you know, we have to
think a lot more about those things, because it’s really sad that people at this point of distress in their lives
where they’re suffering from illness. What they’re worrying about is, oh my
god how much is this going to cost and how am I going to pay for it?>>[INAUDIBLE] What about that
conversation that physicians need to have with their patients? How do you create a culture
within the medical community, to begin that tough decision? To begin that tough conversation,
to open that door.>>I think its very important and I agree. I mean, there is a conversation now about
this being a real harm of an intervention, because you’re at
financial harm potentially. There are several challenges. One is that physicians may not know,
what something costs. And so, if I’m practicing here for
example, Stanford has. Contracts with many different payers. The, the cost, or the price, or
what someone would be charged for a particular thing, depends on
the particular contract with in, and it may be different for one person
to the next, and it certainly is. So, it would be very hard
in many respects, for people to know that for
the physician to know that. There are. Efforts here and
other places to help them with that. But, that’s one of the challenges. Is to first have to know what the, what,
what a person’s exposure might be. And if you see 15 people during the day,
it could be 15 different answers for the same test, or, or procedure. So and, and then I think, we haven’t
really had a culture of doing that. We haven’t considered
financial things as harm. And in the distant past, I think it
was less of an issue than it is now. But I mean, Libby’s fantastic series
has shown just how catastrophic. This can be for people, and it’s one of the most important causes of
personal bankruptcy is healthcare costs. So, I think it’s something that we
need to take on as a profession and think about, but there’s,
there are several challenges.>>One of the,
you wrote about a new drug Sovaldi, the first drug to cure hepatitis C. And when it came on the market,
it was priced at $1,000 per pill, which should be $86,000 for six months regimen, and since then Gilead,
the pharmaceutical company has. The recent agreement with
several generic drug makers, to make this drug in developing
countries at much cheaper cost. What do you find, what,
what’s the story here behind it? And Doug, I wondered if you
would weigh in here about, how do we assess the value
of these interventions?>>So Savaldi is a great example so far. It’s a revolutionary, and the drugs for hepatitis C in general are, there’s been a
complete revolution in the past few years. There’re two things to
think about when you’re, when you’re assessing sort of
the economic impact of a drug. One is the cost effectiveness. Cost effectiveness is a measure,
of efficiency is like miles per gallon. And, you’re comparing one
strategy to another, and trying to understand how much
value do you get for this. And it turns out that,
Sophosphaphere with some of the older drugs interferon can be cost effective
in some groups, and somebody here at our center Jeremy Goldhaber-Fiebert
just published a paper this week. About the cost effectiveness of,
of the drug. So under some circumstances,
in prisons, and so in some circumstances,
it can b cost effective. A separate question though,
is the affordability. Which is the total amount of money,
that you would have to spend to say. Treat everyone in prison, or treat
everyone in the VA who has hepatitis C. And you can have something that is
cost-effective, but is not affordable in the aggregate, because the total
sum is going to be so high.>>Because the state of California, for example, does not have allocated
that amount of money for pharmaceuticals within, you know, the,
the state allocation to go to, to prisons. They see it as a budget buster.>>They do see it as a budget buster, and you can see why,
even though in some combinations, for some people, it might be cost-effective,
it can still be a budget buster. So you really have to ask both of those
questions, and then try to decide how, if it, if it can be good, if it can
provide good value in some circumstances. How can you prioritize people,
so to do this within a budget? And this is an issue, of course,
not just with hepatitis C drugs, but cancer drugs and many, many other things.>>How would you? How would you, if you were asked to consult to
the prisons of California, on this issue. What would you be asking them,
and telling them? To weigh, when they look at this. The overall impact of the drug, will in
the long term decrease significantly. Hep C in prisons, yet
is a budget buster in short term.>>So part of the issue is,
who’s perspective are you choosing? So, a lot of the benefit of
treating someone with hepatitis C might occur after they’re out of prison. So the prisons, are looking at
a particular budget, and they have many other things, and they may bear the
cost but the benefits are accrued later. And that’s not just a problem in prisons, it’s a problem with health
insurance in general etc. So, I would help them think about, who gets the most benefit, and what
group of patients is it the most value. And how could you do that over time, to
do it with, within a, a particular budget constraint, and so that you that you
can try to knock off the highest value groups first within a particular
amount of money that you have to spend. recognizing, though, that they may be bearing the burden for
benefits, that are much broader, but not getting, not, not, not actually
seeing those benefits directly.>>Yeah, I would I,
I think in a way though, I would ask a more fundamental question
which is, why does it cost $86,000? I, I think. You know, the way we have priced
medicine and treatment in the U.S. is often, I don’t always know and this is probably a more, more kind
of radical, fundamental question is cost benefit analysis always the right way
to think about things, because I remember. You know you want to price lithotripsy. For example breaking up kidney stones and you say oh,
well that does away with the need for three days in the hospital, which
would cost at that time maybe $15,000. So we’ll price lithotripsy at $14,000. Well maybe.>>14,999.>>Right. So maybe we should, should say,
okay yes, you know, Sovaldi is less than a liver transplant, but maybe that’s
not the right yardstick to be using. I know that Kaiser says you know, Sovaldi, if they treated all
their patients with hep C. Would double their,
their medication budget. Now what’s that going to do to everyone’s
premiums, for the next few years? So I think we have to be,
you know, in a way I would love to see our culture ask a bit more for,
of these prices. I remember. When I was practicing in the 90s
when the HIV/AIDs drugs came in. I mean they were revolutionary at,
more revolutionary then Sovaldi, when I started,
I’m sure it’s the same thing with you. You know, when I started my internship,
people came in with AIDs and died, and
then I watched these drugs come in, and I remember when they were
priced at $10,000 a year. People were horrified you know,
horrified it’s too much no one should have to afford that you know,
I think what’s, what’s happened in the intervening 15 years we’ve been so
inured to high prices that you know. $10000 we go oh yeah, that’s you know,
that’s, that’s pretty reasonable. So I think we have to ask with these,
when these new drugs come in. At these extraordinary prices, we have
to somehow do what other countries do a little more and say, you know,
that price is too high. You know, that mean, you know,
we want to be able to use it more broadly. We understand that maybe the U.S.
is supporting R&D globally. Maybe we shouldn’t be. I mean, I,
these are very fundamental questions. I, I mean, is it all for R&D? I think that’s something. We have to ask and you know,
it, these are, there are. I don’t know.
I, I know a lot of people are feeling like
the Sovaldi pricing may be a good thing, because it’s pushed this
to such an extreme example. I mean the lasted thing,
I’m, I’m watching. And I hope everyone will watch with me,
is Gillian is now offering, the, the maker of Sovaldi, to pay the first
month free for Medicaid patients. Okay. So, wh, what does that mean? You know, it’s,
it’s a strategic, it, this is->>Reel them in.
>>This is what, this the right. This is the strategy I’m,
I’m talking about. So what are,
how are we going to respond to that? That still leaves you with,
you know, $46,000. and, and now, now the providers
are on the defensive because Medi, because the, the, the phar, the drug maker
can say, well look, we’re giving, and I’m, we’re giving a month away free you know,
patients respond to that, so.>>So when you call Sovaldi, and you say,
or when you call eloquently adding, and you say I’m doing a piece on Sovaldi. And I want to talk about the price,
et cetera. How, how does the pharmaceutical
company respond to you in the way in which they create their,
their story about why this is fair, why this is equitable, why this is just?>>Well, I mean, every, every segment has their own narrative that
makes sense within that silo, which is. You know, we’ve spend all these years
developing it, you know, we, in this case more, we, we spent a lot of money
buying the company that developed it. They did a lot of testing. [COUGH] You know, it’s a revolutionary
drug, which it is, you know, and it’s, it will save a lot
of expensive care later. The fact that we don’t really know how
to deploy it very well at this point to, to kind of maximize that benefit
is really not their concern. So every, every segment when you
call them has their narrative. You know, the problem isn’t us, it’s them.>>You probably heard them all.>>Well, and I think it’s a,
it’s, when I call around, it’s everyone pointing at everyone else,
and which is, which is why I feel like. Everyone has to give a little, and
I don’t know how that’s going to happen.>>We’ve moved to this country towards
a great consolidation practices. And it’s rare to see any
small practice much anywhere, maybe perhaps in,
in rural parts of the country we do. Yet, new research from Stanford
in the last couple of weeks, has said that this consolidation. Has not lowered costs at all. That it has raised
competition essentially. And so the impact overall,
has not lowered cost. How do we get the economics in line,
with these in practices? Is that possible, is that doable? How do we approach that, Doug?>>So the,
the way that people have thought about, one of the ways, is doing a gender
competition between groups. And so the markets vary greatly in terms of where there is competition, and how
much the competition makes a difference. But as part of,
as groups have consolidated. Take our, take this market for
example, where if Sutter and Kaiser is humongous players, and
then Stanford and other groups. you, you can imagine that there is some
competition among those, certainly. But the more consolidation you get,
the less there is. And so, that is a complicated problem,
I think, where you have. Even if you have economic incentives
that help align for a particular group so if you’re paying people in an
accountable care organization, et cetera. To, to try to maximize the health
of a population, if there’s not. Other alternatives that
they’re competing with they can still charge whatever they want. And so that is I think largely
an unsolved problem here and an, and an important one, and just this
story is I think continuing to play out.>>Yeah, I think one thing that. I, I would, I, I see as, as being in
a very quick possibility which I know is on the table is, part of what ha, has
happened recently with consolidation is not so
much consolidation within systems, but the consolidation of doctors’
practices as part of hospitals. So, what we see a lot in the Northeast. I’m not so
sure how much it’s happening here. Is that the echocardiogram you might
have had in your doctor’s office for $500 will now be done in
your doctor’s office, but since your doctor’s office is
now a part of the hospital. They’re will be you know,
$1,000 facility fee tacked on. So you know, there’s an example
where consolidation works very directly against cost and
patient interests. I know Medicare is thinking about
site neutral payments, which means. You get your, because obviously
it’s this game of strategy. If you’re paying more for things done in a
hospital which we do, and for good reason. Because hospitals have a lot of overhead. The long-term tendency once people get
smart in the business of medicine. It’s going to be to move all of these kind
of trivial procedures into a hospital, so you can charge a facility fee. So and
I think we are seeing a lot of that now. I’m not sure about in this market,
but in, in the Northeast.>>But that’s an example of a perverse
economic incentive that doesn’t, that, that can work against us and
the people, people will respond to that economic incentive in,
in as creative ways as we can. And, so if we don’t get that part right. If you reward people, you know,
you pay them more for doing something in hospital,
that’s what they’ll do.>>The big, bad word in health care and
in politics is rationing.>>Mm.>>And, it, said another way,
it’s utilization, right? And, in order to control costs,
a number of health economists believe that we’re going to continue
down this bumpy road. And then some financial
crisis is going to hit. And then once again, they’ll be
sort of the drive to what do we do? How do we control costs? And ultimately that word may come back
into the reality of the healthcare system, utilization healthcare. Americans get everything, they want
everything at the moment they want it. And they seem to get it at
the moment they want it, versus other countries where
it’s much more controlled. How do you see that playing out in
the future, utilization, and rationing, and, and really taking con, and
just letting the American people know. That when you want it you can no
longer get it in healthcare because the healthcare system can’t afford it.>>Well, I would start by saying
that we need to recognize that we’ve been rationing. We’ve rationed based on
your ability to pay which I think is the most inequitable
possible way to do that. And so many people have gotten little
healthcare because they’ve had no way to pay for it. Now, the ACMA may ameliorate
that to some extent. There’s a lot of what we do that provides
little benefit, or no benefit, or is actually harmful. And so, the first step, of course,
is to try to eliminate that. Not so easy to do, but to try to
eliminate things that don’t help. Then look at the value of
the remaining things and make sure that you’re not
eliminating high value services. For example, Medicare is considering
an across the boards cuts. And that is as oppose to trying to figure out which services don’t
making sense are not providing value. And you run the risk of throwing
the baby out with the bath water there. So I think there’s some
steps that we can take to, to eliminate things that
aren’t doing any good. And then focus on the value
of the remaining things. But in the end, there is going to have
to be a conversation about that, for low value things. That if people want them,
it’s not clear that the, that we as taxpayers
ought to provide them. Is that an expectation, that you feel? That, how was when, when your,
comments section from all the pieces? Is that something people talk about? Is that something that people think about?>>Really not. I think, you know, again, I’m, I’m,
I have New York Times readers who comment. I don’t have, I suspect there are not a lot of Tea Party
commenters on Paying Till It Hurts. But I think, to me,
the rationing debate is something that came along with the whole
worry about death panels. That we are so far from rationing. I mean, when you look at the studies,
I think that, you know, how many people get colonoscopies way
more often than they’re supposed to? How many people, you know, I, I’m, when I was doing that
first piece on colonoscopies. I was getting distress
calls from geritatricians. Who said you know,
my 95 year old nursing home pason, patients are being told
they need colonoscopy. I mean, I, I feel like we are so far,
in insured patients from rationing. That, boy, we’ve got, we’ve got a deal with this you know,
mis-utilization and mis-alignment. And yes, at the end of the day, there’s probably going to have to be some
talk, but boy we’re so far from there. You know, we’re, we’re not, we’re not, and so I feel like rationing is a little
bit like one of those bugaboo words. With, with, with like death panels. But I haven’t heard anyone say,
wow, I, you know,. I mean most of my comments are like in that vein are like wow
I was told I need this. Is that true? And I’m like I used to be a doctor but
you know. [LAUGH] My doctor says I
need to have you know, ten radiotherapy treatments for
my basal cell skin cancer. And I’m not sure if I need this, you know. So, I think people are, have their antenna
up now for is, and this is unfortunate. Is my physician telling me what I
really need rather than in, in, what’s in their interest? Do I really need anesthesia or
propofol for my colonoscopy? You know now, now,
now that I hear it from every one who kind of went without sedation in
their colonoscopy and had a good time. And had a great conversation
with their gastroenterologist. But I think our assumption that and when
you go into a surgacenter you need it, you need it with an anesthesiologist. And certainly Joan Rivers experience
in New York has, has reinforced that. But its a complicated message
that we take for granted. Because in most of the world, people don’t have anesthesiologists giving
them Propofol for their colonoscopies. But they do colonoscopy.>>We’re going to take questions
from the audience for one minute and I just want to ask one final question. If, if you if each of you were in power. and, and what transformation
in the healthcare system we should immediately put into place? What is what are the one or two or three things that from the from
what you observe in the system?>>[LAUGH]>>I was going to say
Libby should go first.>>[LAUGH]
>>Clearly->>Yeah.
I, I have I mean. I, I hate to say this because I think. Wow I just, I got louder I think. I, I, I don’t think I sh, I’ll say this. I don’t think transparency
is the solution, but I think it’s a certainly
good easy first step. I, in that I would like
to see every hospital, including [LAUGH] here,
make their charge masters public. Not that I,
I understand that those are, you know, notional prices,
that no one really charges that. The first thing I think it would happen,
would happen, though, and I, I wouldn’t mind seeing prices,
on order forms and in doctor’s offices. Understanding all of that, that, you know,
insurance has different contracted rates. But I can tell you, I had my,
my colonoscopy [LAUGH] at, at, at Sloan Kettering Cancer Center
in New York. because where they have a screening
colonoscopy clinic, and it was billed at $12,000. Now, if anyone had to write
that down on a price list, no one would charge $12,000,
I can promise you. So I think part of putting
things on paper is starting the discussion
about what’s reasonable. And until you can look at
those price lists, and until there’s a bar then you can’t
even start talking about it. You know, I often use the,
the example of hotel rates. I, you know, no one,
no one pays the rack rate. But you can know what it is, so I think there’s a value for having a bar,
and starting the discussion. I also am not quite, sure why,
order sheets within hospitals shouldn’t tell doctors this is what we charge for,
for these different tests. because I think part of the problem,
as Doug said,. And as I hear from physicians over and
over again is, gosh I, you know, I sent my patient for,
I did a hernia operation. And I saw the bill and I’m shocked
how much that, the OR time costs. I had no idea. So I think, you know, more transparency
would be a good starting point. Not an end point but a starting point.>>Doug.>>Well, broadly Vic, Vic has written about,
the [INAUDIBLE] has written about this. And, you know comprehensive healthcare
reform what would involve coverage, cost control,
coordinated care, and choice. And I do think those
are the right elements. The cost control I think is going to
depend on to, to have a system that gets a handle on cost control I
think you need several things. One is you need to know what works and
what provides good value. That’s often not known. But when it is known it’s often not used. Along with that information you
need to have economic incentives. That would encourage you to actually do
what works and what provides good value. And the third thing is you need
the tools the management tools, both on the clinician’s side to
help implement those things. And tools to understand how
to manage a population. So I think the thing is to
control costs we at least have to have an understanding of what works and
provides good value. Economic incentives that encourage that. And then give the providers and the health care systems the tools
to really manage that process. In a way that,
that they can accomplish those goals.>>Thank you.
Thank you Doug, and thank you Libby and
especially thank you Libby for the series. That has really helped elucidate and helped put a significant
spotlight on those problems.>>I hope it’s. Promotes more discussion of this, so.>>Thank you.
We’ll take questions from the audience. [APPLAUSE] Think there are microphones,
is a microphone there?>>Hi.
So I had a couple questions. I know there’s a movement toward
shared medical decision making. And I was wondering how
these sorts of things and tools, because there’s a lot about patient
decision aids and those sorts of things. And it just seems like with the computer
age it wouldn’t be that difficult to populate something with the costs. And you know, by insurance and
that sort of thing. So, whether or
not there’s discussion among people doing that sort of research and
work towards that. And also the, you know, if we’re moving also towards
the science of de-implementation. because you mentioned, you know, there’s a number of things that
we could probably stop doing. But there’s also a psychology of
people feeling like if you do more. They’re getting better care. And so whether or
not we also have to train patients. because I know for myself,
when I went in for something and they didn’t order something. I was like, you know should I be
getting an x-ray or what have you. And she said, well actually
the research suggests that it isn’t actually much better than a physical exam. And,so she actually sat and
explained to me. You know, there isn’t much evidence
that this is actually better so that’s why I’m not recommending an x-ray. So I think you know, you know,
to Doctor Owens’ point. About there’s really not a lot of research
on all sorts of you know the practices and that sort of thing. I think providers also feel
like they should just order it. Because, you know, insurance will
likely cover it for some people. And people, I think patients probably feel
better when they get more procedures so. Is there psychology around that as well?>>Yeah, I think, you know, one of, one of the most harmful phrases I
remember, or financially harmful phrases. From my,
I remember from my days as an ER doctor. Well, was,
why don’t we just get, you know. And that’s, you hear that over and
over again. Well, I’m not sure. Why don’t we just get a chest x-ray. Why don’t we just draw some bloods. Why don’t we just, so I think
the science for deciding that, you know, why don’t we just is not a good reason. And, particularly, for
people who are insured. You know, I’ll hear, well,
let’s just get an x-ray. You have good insurance. Well, that’s, that’s something I think
I would like not to see anymore, right? That’s not a good idea. I in doing the,
the last article on back surgery, I was talking to James Weinstein,
who was a back surgeon in Dartmouth. And one of the things they’re trying, looking at there, is not informed consent,
but informed decision making. So you know, informed consent, the model
is the doctor decides what you need and then you just sign the form. But what if a doctor sat down and said here are the pros and
cons of black, back surgery. Here’s the costs. And you know what with computers,
I probably should be able to tell you exactly what your,
your you know, your, I mean. Not that, that there’s much incentive
to program that right now, but it should be possible and you decide. You know, someone I know was sent,
wonder, someone who, who’s on who wrote to me was sent
to a sleep study for $5000, right. And she said, which I think is true,
if the doctor had said to me, we can send you for a sleep study,
but it’s going to cost $5000. She would have said you know what
why don’t I try counting sheep or doing a you know it’s but
we don’t have it. So I think instead of this idea, instead
of informed consent it should be informed decision making with a with
a cost component folded in. I think this is a good idea. This by the way, and I have to do
my plug here came in through our, we have an association with Paying Till
It Hurts, our series of Facebook group. And this came in on the Facebook group. It’s wonderful. Anyone interested in health reform. It’s just Facebook group’s
Paying Till It Hurts, all one word. And it’s a great place where
both patients, physicians, lawyers, hospital administrators,
everyone’s joining this conversation. It’s really interesting, so Donn?>>First of all,
I agree with what you just said. I think in a world of patient autonomy. To not tell the patient the cost of the
procedures borders on an ethical issue. But my question is would you please
comment on the cost of end of life care?>>I mean, it, it, I, you know, I heard,
I was at the, I had a conference over the weekend where I heard that
some of that data is being studied now. And it’s actually not going to be as high, the new studies show that it’s
not as high as we thought it was. But obviously the same principles,
apply there, and often you know end of life
care often occurs in hospitals. Where people really lose their autonomy,
and I think in a way that’s what the last story was about,
the, the one about the patient bill. You know, all these people are coming
in and doing things to you. No one says, you know, other than the,
the DNR discussion, no one says. Oh, here’s the dermatologist
to see your rash? Here’s the, you know, do you want,
you basically, right now, the model is you have to say. Which is kind of obnoxious when you’re
sick and lying in a hospital bed. Who are you, are you billing separately,
you know, [LAUGH] do I need, I don’t want, I don’t need a physical therapist,
I’m, you know, I, so, I think, I think to me, in so, I mean, obviously
end of life care is a big discussion that, some of my colleagues have written about. But I think many of the same
principles apply, that patients when they’re in the hospital
they turn into this kind of passive entity, and things are done to them and
they have very little say about that, so.>>But is, isn’t some of that
mitigated with palliative care?>>yes,
although I think I’ve heard a lot of and I’m debating whether
to do a story on this. There’s a lot of strategies surrounding
billing and palliative care too. [LAUGH] You know, what I’ve discovered is
that in every corner of medicine, even the ones that you thought should be cost
saving, and are cost saving objectively. There are people who figured
out a way to monetize them and, and and it’s really sad. You know, so I, I, you know,
yes, it should be. It’s not always.>>Thank you. Jack?>>Great discussion. Thank you very much. Do you think that a unifying
value metric can be defined?>>[LAUGH]
I’ll let you start this one.>>Yes, and I’ll tell you later. [NOISE] You know, I, I think that, so I, we do a lot of cost
effectiveness analysis where we, it, we try to evaluate how much do you pay for
something, how much benefit do you get. We never think when we evaluate
the cost effectiveness, that that is the only thing, that you
should base a decision about whether to offer something to somebody, on. And I think that understanding
the value of interventions is in many cases do-able, but it is
isn’t the only consideration in terms of whether you would give something to
somebody, or offer it, or cover it, etc. There are ethical questions. There are social justice questions. And so, if you mean by unified metric that
allows you to say yes/no on everything, no, I don’t. And I think that
cost-effectiveness should be used->>You’ve lost your microphone.>>Oh, sorry. [NOISE]
>>There we go.>>Cost-effectiveness should be used in
a decision framework that accounts for these other very, very important things,
like ethical questions, and questions of social justice, et cetera
not as a single, stand-alone thing. There was a question. Two over here.>>Hi,
do you think that over in the corner. Do you think that the cost of a new
drug should be considered when, I guess, considered by the FDA, when
they’re considering approving a new drug? [LAUGH].>>They don’t know the cost.>>Right.
They, yes, I do personally. [LAUGH] I’m not suppose
to have an opinion, but when you look at some of the discussions
that, that go on in there I think the notion that it is cost
blind is, it’s just not realistic. I mean they know it’s
going to cost something. So instead of being able to
work with the actual cost, you often see these studies
that assume different cost. And then the company
comes out with the cost. So I think one of the things that always surprises me a little bit,
I think would be, you know, surprises people from other countries
even more is that drugs get approved. And then there’s this kind of, you know, the market people speculate about what
the, the, the drug maker might charge. And then we find out. And so. You know obviously,
value means cost at some level, you know. And to pretend that that isn’t there,
to me, is just, it’s, it’s not saying that, you know, health is so
valuable, I mean health does have a price. And we have to, I think we could have more
rational discussions if we said, okay, there’s this new vaccine on the horizon
and this is what it’s going to cost. Rather than have these researchers have to
say, there’s a new vaccine on the horizon, it looks really promising, it could
be priced at A, B, C, D, E, F or G. Let’s think about the cost-benefit
at each of those levels. I mean you, you probably deal
with that more than I do, but I would like to see more
talk about costs upfront.>>So, so Stanford’s done two things that I think are interesting regarding
healthcare costs, and one of them is that, I don’t know how you got here from the
airport or which airport you came from, but their, Stanford medicine is
expanded beyond Stanford, California. And so, there’s cancer centers. There are orthopedic centers. There are all sorts of places, sleep
centers, to get treatment, which I assume are built in order to generate revenue
from fee for service interventions. In other words, they’re trying to get paid
to do more individual units of service. And yesterday was the beginning
of open enrollment for Stanford health insurance,
if you’re an employee. And, I know what insurance
I’m buying this year, which is Stanford’s self-insured
health plan, their own HMO. If I wanted to continue to have
Blue Cross through Stanford, I think it’s about $1600
a month in premiums. Did I add that up right? And it’s.>>It went up 7%.
>>For my family. Some enormous number, but if you get
Stanford self insured healthcare where I have the same access to all the Stanford
doctors that I’ve used over the past year. The, my charges are very,
my premiums are very, very small and my co-payments are really very small. And, and so
Stanford’s done two separate things. One is trying to maximize its revenue, and the other to cap the cost of
healthcare for its employees. Do you, could either of you.>>Just don’t get sick
outside of Stanford.>>Well.
Can you. No there’s still only
a $6000 catastrophic cap, so. Which I reached in my insurance this year,
so thank you for reminding me to schedule my colonoscopy
before the end of the calendar year. [LAUGH] But would you care to comment
about those two separate things? The fee for service piece,
and the HMO cap cost kind of, way of approaching health care.>>You want to do that? Okay.>>So I can just tell you that Stanford is facing, the, the health care
system is facing different incentives. because some, in some services
they get paid fee-for-service and so that involves a particular strategy and
Stanford has launched the, the accountable care organization, where
they’re going to be paid m, in parties, in simplified terms, a certain amount
to try to take care of people. And, that is a real pivot,
because then you’ re, you’re facing the incentives to take care
of a population and keep them healthy. As opposed to doing more things for them like, you know, go to Midas,
you get a muffler, right? And so, you know,
there is this schizophrenia that, that the healthcare system has to deal
with because they are facing both of these sets of, of payment schemes. And I think it’s very laudable that
Stanford has launched the ACO and is trying to figure out how to do that. And I, and we think that that’s the way
many reimbursement is going to be handled more broadly in the future and
that’s going to require a big adjustment on the part of healthcare
systems to understand how to do that well.>>And I think one of the interesting
things is long term will. I think there a lot of really
interesting experiments going on at places like Stanford, and
Mayo, and Cleveland Clinic. Just to name a few, they’re all over
the place, but I think to me, and I don’t know what Doug thinks about that,
one of the interesting things is going to be, can institutions
remain these kind of hybrids? If part of you is making money fee for
service, and the other part is, is, doing accountable care, can you,
won’t the temptation always be to, to fund your, your non, you know,
the part you don’t get paid for with sleep studies or, you know,
or $4,000 echocardiograms. You know, likewise a number of places
that are, are doing these kind of network approaches, they still pay individual
physicians with productivity bonuses, is that going to work, or do you really
have to go to this model of shared income? So, I think there are a lot
of hard questions that institutions are going to
have to deal with.>>There’s a question over here. I’m not sure about this, but is it
the case that by law that medicare can not negotiate with pharmaceutical
companies for the price of drugs? If that’s true, would that be a factor and
what’s the rationale for that? yes, that’s true. I, I believe,
although I’m not 100% sure that, that was brought up in the debates
over the Affordable Care Act, and it was decided that that the ability of
Medicare to bargain in pharmaceuticals. That they, they wouldn’t get
buy in from the insurance and pharmaceutical industry to get the ACA
pass, and that was the priority. That’s my understanding, I don’t know.>>That’s correct.
>>That’s correct. And so I think if Medicare could barg, I mean Medicare kind of sets
the yard stick for what insurers do. And so, yes that would be a huge
that would make I think for a big change in drug
pricing in our country.>>Let me give you a counter
example as you know well, Rex, is the VA does bargain for prices. And we don’t pay a thousand
dollars a pill for Sophosphofere. And the VA gets you know, very,
very competitive prices, as the largest healthcare system in the U.S.
So, there are opportunities for that. But that’s all the bigger picture? No, but it might help.>>Hi ma’am. I just have a question. I used to work for
a company called Prudential. So I’ve signed off policies like 22.5
million for big critical care writers for cancer, long term, is the medical
community aware of such kinds of things? And is this something
that’s really useful?>>I don’t know much about that. Do you, Rick?>>I don’t either. So, I’m sorry. There were, there are caps? Or, is that what you’re, the poli->>No, we used to sign, something like. It’s like a life insurance. But with the critical care rider.>>Mm-hm.>>Suppose you had, you did get cancer
after 60, 65, the policy kicks in. It’s a $2 million policy. And then it will cover your cost for medicine and
their long-term care insurance. And I was just wonder
if this really works. I don’t know the answer to that.>>I don’t know, I don’t know the answer. One thing I would love to know is
the idea of a $1 million hospital stay. It’s really easy to get there in
the US with a serious illness. I don’t know if it’s that easy to get a $1
million hospital stay in other countries. I mean our, our per day hospital charges
and test charges, are just so much higher than other countries that, you know,
maybe that’s part of what we have to, you know, our whole, I, we’re almost like,
calloused to hearing about cost, and that was part of why I wanted
to do this series, you know? We accept that healthcare has to come
with these incredible prices, and it doesn’t in most of the world. And I think that’s one thing we have to
be asking ourselves and our politicians. So.>>Have you heard from politicians, have you heard from Washington
anything the series? It’s one group I haven’t heard a lot from. Although, I’ve heard bits, and, not from Washington, some states
are doing very interesting things. The state of Maine is,
I don’t know how many of you have been following their
prescription drug effort there. They’re allowing people in Maine
to mail order prescription drugs from pharmacies in Canada, Great Britain
Aust, and Australia and New Zealand. They’re waiting to see, the, the Pharmaceutical Manufactures
Association tried to sue them. They said they don’t
have standing to do so. Some of the pharmacy
chains are suing them, and I think everyone’s
watching that very carefully. This is not just like buy your drugs
willy-nilly over the internet, this is from licensed pharmacies
in those four countries. So, that’s a really
interesting experiment. You know, if that goes forward, that could be a big game-changer,
if other states follow. likewise, a lot of insurance commissioners
are trying to do interesting things, but I think they’re all feeling like, kind of, pretty much lone wolves trying
to get something done against. You know, fairly big odds.>>Hi.
Thanks for this great discussion by the way. One of the players that I haven’t
really heard mentioned so far is the training institutions. And I was wondering if you could speak
a little bit to the financial incentives that are generated by such a high
cost of medical education and the loans that the doctors
have to take on?>>Well, I think in terms of
the financial, and the, the situation for students coming out, is,
can be quite daunting. And so, when I decided,
I’m a general internist and when I made that decision, specialists
made more than general internists. Maybe 50% or something like that. But I wasn’t facing a situation
where I could make four or five times what I make by
going into a sub specialty. And so I think when people come out
with debt, you can imagine facing someone making a decision where the
disparities in income are so remarkable. That it’s really hard to ignore that. So I do think that that
creates an incentive for people to go into specialties
that are highly paid. And it’s but it also- The fact that we pay those specialties
like that is symptomatic of a larger issue about how whether the
economic incentives really make sense in terms of the kind of care
we want to get delivered.>>You know,
I think we have to talk about you know, re-evaluating physician compensation and,
and the special, and the specialties particularly, because
often you find that the higher paid specialist that doesn’t really correspond
to training or difficulty of practice. It, it, it, conforms more to
the ability of that specialty to have figured out a way to monetize their,
what they do. The thing I do say when,
because I have spoken to a bunch of medical school classes is I have lots of
friends who are unemployed journalists. Many, many in fact [LAUGH]. I know, I know unemployed lawyers and
I know unemployed bankers, but I don’t know unemployed physicians. So I, I tell, I like to tell students
to follow what they love to do, because life is long and
that matters in the end because I think, payment reform is coming, whether
whether the specialists like it or not. I mean, the, the the National Commission
on Physician Payment Reform was co-chaired by Bill Frist you know,
a good Republican, and they said fee for service payments to
physicians have to end, so. I, I think, you know, at this point if I had a kid in medical
school, I would say do what you love.>>So a lot of this conversation obviously
is around intervention and procedures. But what gets lost is sometimes
the conversation about prevention. And I think that’s also the conversation
about primary care versus specialty care, where primary care model is
more about prevention of eh, and catching things early. Can you speak a little about how,
what role that can play or how we can incentivize
more preventive type of programs that could help
control the cost of healthcare?>>Well, I, I, in my, my, [LAUGH] my big group of people
I hear from all the time now. I, I’ve heard, I’ve heard recently from a
bunch of primary care doctors who were so thrilled that, I think it’s Medicare is
now paying them $27 a month in New York to, to manage to just to manage some of
their patients with chronic conditions. Doing, to just, you know,
it wasn’t for any specific thing. It was just kind of for being their
doctor and for being available. So I think we need to think of
other kinds of things like that, that you know, allow doctors to spend
more time doing preventive care. I mean, when I talk to people with
Type II Diabetes who said, I mean, many of them knew what a better
diet would be, but they said, look buying fresh fruit and vegetables
is really expensive where I live. So it’s almost like rethinking
how we define medicine. There’s a really interesting
project called Road to Wellville, which is being funded by Esther Dyson
who’s a angel venture capitalist. It’s taking five communities and just trying to see what you can do in
communities to promote better health. I’m, and I’m PS now, since I’m in
this kind of close to Silicon Valley, I should say there are a lot of iPhone
apps out there that purport to do this. I predict most of them
will make some money, but not help people very
much with their health. [LAUGH].>>The, the ACA as you probably know, mandates first dollar coverage for
preventive interventions that are recommended by
the US Preventive Services task force. And we’re looking at that,
I’m on the task force, and we’re trying to look to see whether
that’s made a difference or not. I think that’s an open
question about whether or not that’s going to make
a difference in utilization. And if it does make
a difference in utilization, is that going to translate
into better health outcomes? And I think that it’s also not really
a foregone conclusion that, I mean, preventive care is good, but
probably, not necessarily for the reason that it’s going to lower costs. I think that’s less certain. Jack, since I have someone from
the task force sitting next to me, I should mention that one of the unusual
fees that I saw in the last article was people who got preventive care, which
should have been covered 100% by the ACA. And suddenly, there was a blood, there
was some, I, I think this is, you know, when we say, oh a preventive a preventive
physical should be covered, right? So if you’re creative and trying to
make sure your income stream stays, stays up there, you say, oh, you know,
I, I’m sending off your blood test and I’m putting in a thyroid function test. Which, is that preventive or
not, you know? And, and so we, we,
we say preventive services and should be well covered but
we don’t define. I think in this day in age with all
this strategic business stuff going on, we have to define a really specifically
a prevention means IUD plus putting it in, you know? [LAUGH].>>Well, let me, let me,
let me I’ll just give you->>Sorry.
>>A couple of other examples of that, so, for the chair of the task force past chair
went into to get her colonoscopy and then got that was covered but
got a bill for the biopsy of the polyps. And so these people unbundle these things.>>Right.
>>And so for example lung cancer screening, we just recommended lung
cancer screening with CTs. But, I’ve done two of
those in my practice, and both of them discovered other things
that need to be evaluated, and so those things probably
wouldn’t be covered. So, it’s very complicated and, and
a covered prevention intervention might discover other things that would saddle
you with costs but not be covered.>>I would argue that as a society
we have pretty poor health literacy. And while shared decision making and
transparency is a great idea, in modern medicine the decisions we’re
facing are really complex and nuance. So how does this lack of patient
education hinder the feasibility of that kind of system and
what do we do to address that?>>Okay, I’ll say. I mean, I think that, I was, you know,
I haven’t been to Dartmouth. I haven’t seen their model, but I do think
some of our lack of patient education is from our here, here’s a consent form,
sign this, rather than. And I understand doctors are really busy,
there’s not time. But I think and I, I, you know, and the internet has all kinds of bad
education as well as good education. So I think we need to figure out
a way to reimburse providers for doing that kind of education.>>I don’t know Doug,
do you have a, a good answer? It’s hard.>>I, I, I agree with what you said, and
I think if you paid people to help do those kinds of educational things,
then it would get done. I think the shared decision making is, is
useful and helpful in some circumstances. Adding costs to it would be challenging, because costs are highly variable,
et cetera. And but,
a key thing is helping people understand how their preferences for different
things, how they feel about the quality of life of different things ought
to influence their decision. And I’ve been in the business for quite a
long time and we’ve been saying that we’re going to you know, there are going to be
decision aids to help people do that, and that’s been going on for
20 plus years. And we really still haven’t
made that much progress. So I agree with the premise
that there are a lot of decisions where they really
are difficult decisions and we don’t do such a great job of
educating people about them.>>We have time for two more questions.>>Oh yeah, thank you for
your series of articles. It’s a nice companion to an earlier
article that was by Steven Brill. You know that one.>>Yeah, sure.>>In Time Magazine that occupied that
entire issue from a year and a half ago. So I recommend that one too. But one of the things that
is kind of bothersome to me about this whole issue of healthcare cost
containment is that it really requires tremendous courage on the part of the
leaders of the institutions to do that. Especially if doing the right
thing might negatively impact the the revenue flow
into that institution. So how do you address that?>>[LAUGH] That’s a really hard question. I think, you know, to me, the, the, the
primary example of this is how hospitals and hospital rooms look in the United
States compared to the, you know? I think, I, I’ve been in, at dinners
where people have said to me, oh, I’m so sad, you know, we couldn’t rebuild
our hospital with all private rooms. And I’m like, okay. I would, I would encourage
everyone in the room to look. We did an online quiz called
is this a hospital or a hotel? And it was pictures of 12 pictures
some of hospitals, some of hotels, and you can’t tell
the difference in the US. There is also a picture of one of the
patients in the series went to Belgium to get his hip replacement, to one of
the best respected hospitals in Belgium. It looks like a hospital that
no American would go into. [LAUGH] So,
if you were a hospital CEO, I mean, you can’t just say,
I don’t care about these things. You’ve gotta keep your
patients’ flow going. But I think part of it is educating
patients to what really matters, that the free coffee in the lobby
doesn’t matter so much. You know, there are all these billboards,
all private rooms. Well, has there been a good study
showing that all private rooms matters? And then P.S., I’ve seen on hospital bills
at hospitals with all private rooms, private room surcharge. [LAUGH].
>>You know, so, so the, the shenanigans are, re endless. And I think it does take some really
brave leaders to say I would love to see a hospital in New York that said we’re
just going to do healthcare, you know? We promise you no surprise charges. Your rooms are not going to be fancy. There may not, you may have to go out
to the corner to get your coffee, but it’s good, you know, healthcare is us. That’s it. You know, no amenities.>>Bunk beds.>>no, not bunk beds. [LAUGH].>>One more question.>>Yeah yeah. My wife and I have mm, do I have it? Okay, great.>>Well there you have it.>>Elizabeth.
>>Yes.>>My wife and I have seen through
a variety of healthcare conditions in our family. All the games that, that physicians, that
hospitals, that insurance companies play and my wife, God bless her, has spent
a lot of time learning about this, and fighting back, and
you know, we managed to, to not only be able to confirm all the
things you wrote about in your articles, but also you know,
get the charges eliminated. You know? In the spirit of Silicon Valley it seems
to me there’s an opportunity here for a business. Non-profit or for-profit, I don’t know. But patient advoc, advocacy because how do
you if you’re going through breast cancer or whatever, how do you have the time to
learn to find out all the games that, that insurance companies, or
doctors, or hospitals play? There’s gotta be somebody out there that,
that does this. I mean I’ve seen lots of other industries
where you have people that will go in and audit bills.>>Yes.
[SOUND].>>On behalf of a business or
an individual.>>Well I think there are, there is a kind
of industry now in patient advocacy. Just as there are navigators for
the affordable healthcare act, while I think they’re all really good and,
I mean, in Steve Brill’s article, those patients were patients who’d,
who’d been to a, a, a patient advocate. I think A the problem is patient advocates
also charge money, so unless you’re dealing with the $100,000 bill,
it’s not likely to be in your benefit. And, and I think patient advocates and
patient navigators, and I know some people will not like me for
this, for saying this, are a symptom of a really dysfunctional
system that’s way too complicated. You know, I,
I was writing about, last week, complicated charges on patient bills, and
I open my email this morning and get a, a kind of pitch from a company that
is working with hospitals to add another layer to take those complicated
bills and send out a simplified bill. Okay, well, well what, why you know,
part of the problem in our system as, is, is that as we see one problem,
we, we rely on the profit motive to bring in a solution, and that in
the end, I think fuels even more cost. So there are some really interesting
sites that are out there, like goodrichs.com for,
for pharmaceuticals. You know, and, and some clear
health costs healthcare blue book. They give you good estimates of what
things should cost in your area. And, boy, you know, in the meantime,
I think it’s really helpful to patients to have a look at those
before they schedule elective stuff. Thank you Elizabeth, and thank you Doug. [APPLAUSE] Thank you for coming everyone. [APPLAUSE].>>The preceding program is copyrighted
by the Board of Trustees of the Leland Stanford Junior University. Please visit us at ned.stanford.edu.