In this episode, we are joined by Dr. Vivian Lee, author of the new book The Long Fix: Solving America’s Health Care Crisis with Strategies that Work for Everyone.
Highlights of this episode include:
- Dr. Lee’s views on why the American healthcare system was so unprepared for the current pandemic.
- What can be learned from the changes made by government and private insurers to help patients and providers deal with the pandemic?
- Why the fee for service model and over-reliance on billable services is such a challenge for healthcare systems.
- What lessons can learned from the military and VA health systems?
- How employers can play a role in fixing healthcare.
- And more…
Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®. The COVID-19 pandemic has exposed many of the cracks in our healthcare system. As we grapple with the fallout of the pandemic, we’re left to assess the myriad of issues it has left in its wake, including the financial viability of healthcare providers, the rise of insurance premiums, and the way each of us seeks and receives healthcare treatment, to name a few. To help us work through those issues and to discuss ideas for plotting a new course to help fix what ails our healthcare system in America, I’m joined by Dr. Vivian Lee, author of the new book The Long Fix: Solving America’s Health Care Crisis with Strategies that Work for Everyone. Dr. Lee has been a practicing physician, scientist, and healthcare administrator for more than two decades. President of Health Platforms at Verily, Alphabet’s health company, she is also a senior lecturer at Harvard Medical School. Formerly, she was dean of the University of Utah School of Medicine and CEO of University of Utah Health. Dr. Lee, welcome to the show.
Dr. Vivian Lee: Great to be with you, Michael.
Mike: I like to start out by looking at our healthcare system through the lens of the current pandemic and then explore some of the recommendations you offer in your book. So first, why do you think our healthcare system was so unprepared to handle the pandemic?
Dr. Lee: That’s a really, really great question and a very important question because, of course, we really hope that we can learn some lessons to be better prepared next time. Our healthcare system has many strengths. One of the strengths that we’re seeing is the fortitude and commitment of our healthcare workers. And we’re seeing that heroism, the heroic efforts every single day. But we also have some significant issues with our healthcare system. And I think, first and foremost, we’re seeing the limitations of having a healthcare system that is really driven by a fee-for-service model of care where we focus much more on reactive care than on proactive primary care or public health because, frankly, the later just don’t really pay the bills in the current business environment of healthcare. So I think that’s probably one of the biggest lessons that we’re learning, that there are opportunities for us to re-imagine how we can create business models that enable our healthcare systems to be more resilient in the face of these kinds of challenges. I think we’re also seeing real opportunities for how we can provide better care for our patients outside of the four walls of the clinics and the hospitals. We’ve known that we’ve had capabilities with digital technologies and digital health solutions, telehealth being top of mind these days. But there are many other digital health solutions also as part of that landscape. And so the opportunity for us to put those into better practice to make those technologies a part of our daily lives in the practice of healthcare and in the expectations of our patients will be something, I think, that can serve us all much better in the future.
Mike: We’re going to drive in on some of these topics in a little more detail as we go through the interview here. So next we’ve seen government and private insurers implement a variety of policy changes and workarounds to help providers and patients deal with the pandemic from how care is delivered to how it’s reimbursed. What can we learn from these changes and which ones do you think should be made permanent?
Dr. Lee: One of the easiest ones to talk about, I think, is really telehealth. We all know that it’s been very difficult to really pursue telehealth in most settings because of the lack of reimbursement and also the bureaucratic hurdle. I’m an MR radiologist by training and so, in radiology we’ve been thinking about and using telehealth for a long time. In fact, I would say, maybe 20 or 25 years ago, I remember doing telehealth in the sense of teleradiology, where I could read MR scans from Michigan or Wisconsin or California and just was so straight forward and was such an obvious application. But in order to do that, I had to be licensed in Michigan, Wisconsin, and California. And as those of us who have gone through the credentialing process know, licensure in a state is complicated. There’s a ton of paperwork, a ton of bureaucracy. It’s all pretty much the same bureaucracy from state to state, but nonetheless, it’s a lot of work and a lot of waste and it’s really a barrier. So those kind of regulations we saw with the COVID crisis, basically disappear overnight, at least, many of them, at least during the time of this emergency. So, I think, most of us have been really impressed by how rapidly our physicians have come, and other clinicians have come to embrace the practice of telehealth. I think many people were skeptical that it could be as useful as it has and we’ve changed our practices. And, I think, we’ve heard a lot of the new statistics of where health systems might have been in the past, doing maybe, a couple of hundred telehealth visits a week, to now, thousands or even tens of thousands a day, depending on the size of the system. So that change has been dramatic, not only in terms of physician acceptance and clinician acceptance, but patience acceptance. And I think that’s a really, really positive step going forward. I also think actually, speaking of telehealth, that there are other useful applications that I would love us to also see developed further. When I was at the University of Utah, we were responsible for a large spans of geography across the West, including Idaho, Wyoming, Montana, Western Colorado, many areas where there weren’t enough physicians. And so, we actually used telehealth directly to connect with patients. For example, from our burn unit, patients who might go back to Montana, and instead of having to come hundreds of miles, we’d actually do even physical therapy by telehealth, where patients might demonstrate in front of the camera their range of motion, for example. And the physical therapist would encourage them with their exercises and measure the range of motion and so on, so forth. But besides doing telehealth directly with patients, I think there’s also an opportunity to expand our clinician to clinician or physician to physician telecommunications. There was a project that started out of New Mexico, called Project Echo, which was to support primary care physicians, general practitioners, for example, in the care of complex patients with hepatitis, and they would dial in and what at the time, seemed pretty special, now we’re all accustomed to it, like the Zoom or video conferencing grid. But back then, it seemed pretty novel, where you would have a whole bunch of doctors calling in from all across the country with difficult patients, meaning patients that they didn’t know exactly how to treat, because they were so complicated. And then, calling in and being able to talk with an expert who would advise them about how to care for those patients. So we did actually, a fair amount of that also at the University of Utah but expanded it beyond patients with chronic hepatitis to all kinds of other conditions, including one of the areas that I thought was really very impactful was children and adolescents with mental health disorders. And of course, we’re seeing a lot of mental health issues right now during this COVID crisis. And in this case, we had our child and adolescent psychiatrist, go online video conference with primary care physicians, general practitioners from all over our area, and the West, calling in about a teenager that they were seeing with an eating disorder and anxiety disorder. And in that case, our physicians provided consultation, they did it pro bono, it was for free because there wasn’t any kind of reimbursement mechanism for that. But I think that’s another example of where telehealth could be expanded even beyond what we’re talking about now to start support rural and underserved areas of the country, for example. So I think that’s probably one big area of change that I hope will be lasting beyond the COVID crisis. And I think it could be really beneficial for our healthcare systems and enable us to be much more resilient in the advent of further crises like pandemics or other challenges that we face.
Mike: When we began our discussion, you mentioned fee for service and I like to talk about that a little bit more. In your book, you discuss the misaligned incentives in our healthcare system largely driven by our fee for service system. The over-reliance on billable services was certainly highlighted during this pandemic. Do you think that’s going to be a driver for change going forward?
Dr. Lee: In my view, I really do hope it is. I think that our fee for service model of healthcare is really the fundamental challenge. The way I think about it right now is we are paying health systems and rewarding health systems for doing more things to people, more procedures, more operations, more imaging studies, regardless of their impact on health. And so even though as a former hospital administrator and as a physician, I will say that I always tried to do the right things for my patients. And I think most clinicians do that. We don’t intentionally try to over-treat or over-diagnose. There’s no question that the financial model is designed to incentivize overtreatment and over diagnosis. And the metaphor that I’ve been thinking about lately is it’s as if we’re flying this plane on our journey to better health for this country, right into the headwinds of capitalism. And what I mean by that is that all of the innovation and competition that capitalism drives that has made so much of this country so successful is actually at odds with better health. And so what we really need is the capitalism to be really our tailwinds to have better alignment between our provider systems and our payer systems and patient interests. And when we can achieve that alignment, we’re just going to be a much more effective healthcare system and a more resilient healthcare system. One of the challenges I think everybody probably listening to this podcast will understand very well is that because of our financial model of fee for service, what happens in response to our fee for service model is that the insurers and other payers view themselves as needing to control costs. And so what they do they put in barriers to the practice of medicines. So, they put in prior authorization or they’ll put in denials, or so on and so forth. And so, we just have this back and forth, back and forth. We order an MRI, it’s denied or there’s a prior authorization something that’s required, and back and forth, back and forth. And, as you know, we now spend in this country, about 8% of the healthcare dollar just on administrative work. And, that’s compared to other developed nations, other OECD nations for example, that spend on average 3%. And that back and forth is painful for all of us. It definitely contributes to physician and other clinician burnout. And then, of course when we can’t resolve it, that’s how we end up with balance billing and surprise billing, that the public is completely up in arms about, and justifiably so. So, if we can create better modals of payment, then I think we can achieve much better alignment and much more success. And, I think one of my favorite examples out there, which is really a– their response to COVID is actually also impressive, is some of these new Medicare Advantage programs, the ChenMeds of the world, the Iora Healths, Atrius Health for example. These health systems that have contracted with Medicare Advantage– through Medicare Advantage opportunities to be paid per patient per year, to care for the patient and to have the autonomy to decide how they want to spend those dollars. Those medical groups are really demonstrating that with that autonomy, these physicians and other clinicians are making very good decisions for the benefit of their patients. Instead of being rushed through 8 or 10 minute visits with their patients, they can spend 30 minutes, even an hour for new patients. They have onsite pharmacy, they have shuttle services, they can actually even deliver medications to patients homes, for example refills, Tai Chi and yoga classes. And, when I visited ChenMed, I actually even saw some of their social events in the evenings, just to help deal with social isolation and loneliness. And, as a result, even though they spend more money upfront on primary care, what they save in preventing hospitalizations, more than makes up for those costs. So, at the end of the day, the patients do better and it costs less and these medical groups actually can flourish. And, what we’re seeing now during the COVID crisis, as so many health systems that are living hand-to-mouth, are having to furlough nurses and furlough doctors, is that these– some of these Medicare Advantage groups are actually doing very well, because they’re still getting their monthly payments. It’s like Dr. Chen refers to it as a subscription model of care. So, they’re still getting their monthly payments for keeping their Medicare patients healthy. And, as a result, they’ve been able to adapt much more quickly to the COVID crisis, and provide better care, better services to their patients. Including for example, setting up urgent care in their clinics, so that their patients who are afraid of going to the emergency room, can be seen there. I would love to see how these models can be adapted to our hospitals and larger healthcare systems, because I think that’s fundamentally the challenge that we face now. If we can adapt similar models to our hospitals to create an alignment of interest and to ensure greater resiliency, then we will have achieved what I refer to in my book as the long fix. That’s really, I think, a big challenge ahead for us.
Mike: And also, in the book, you talk about lessons that we can learn from the military to create a medically ready system, as you called it. And indeed, the VA hospital system has shown some unique strengths during the pandemic. What do you think are some key takeaways that we can learn from that system?
Dr. Lee: The Military Health System and the VA Health System are really fascinating to me. I have the privilege of serving on the defense Health Board, which is an advisory board to the Department of Defense around its military health system. And what really struck me about my time there was the complete dedication of every single person, whether it’s the medical folks or the military leaders to the health and, very importantly, the readiness of our soldiers. And I think it’s that notion of readiness that has really appealed to me the most and really resonated with me during this pandemic. There’s an idea within the Military Health System, or maybe a mantra that they use, which is to provide a medically ready force and a ready medical force. So I’ll say that one more time. To provide a medically ready force. So imagine if that said a medically ready America and a ready medical force. Recognizing that in order to have a nation or a military force that is ready, that is resilient, that is prepared for any kind of challenges, that we also need a ready medical force. Our country right now– our health system is really managed by mostly the Department of Health and Human Services, which aside from overseeing some health systems like the Indian Health Service, for example, is predominantly focused with respect to our healthcare delivery system. It’s primarily a payer system. And what I would love to see happen more– and we’re starting to see it now with the government’s efforts to try to coordinate across multiple different entities. I’d love to see the focus on how we can improve readiness in this country. And I think that there are many lessons that can be learned from the Military Health System. Those include a very strong focus on training. The Military Health System, whether it’s through the Uniformed Services University or through the scholarship program that they have at other medical schools really invest in training of healthcare providers, whether they’re physicians or nurses or other allied health professionals. From the beginning, you are actually paid to be a medical student so that the graduates of the Uniformed Services University don’t emerge with the hundreds of thousands of dollars of debt. When they’re practicing in the healthcare system, whether it’s the VA or the Military Health System, they work– how should I say? There’s a very much a top of license kind of mindset. So I talk about the folks in the Navy and the medics who have basically the equivalent of training of a medical assistant who support smaller ships, largely healthy population. And then when they’re larger, more complex environments, they have more highly trained medical specialists there. And there’s just a lot of focus on delivering value and much less of a fee-for-service mindset in both the military health system and the VA. And one last thing I also should mention is they were very early adopters of electronic medical records, and the VA particularly has distinguished itself early on in investing in experts in biomedical informatics who could take the data from the electronic medical record system and use it to create a truly learning health system so that they could, for example, look at which new medications were really benefiting their patients in order to modify the formulary accordingly. So they showed early on that the EHR instead of really using it as a focus of billing and coding could be used to underpin a learning healthcare system. I think we have a lot to learn from them in that regard.
Mike: Dr. Lee, when we address the healthcare system, we generally gravitate towards discussing payers, providers, and patients, but you also had a strong take in the book on the role employers can play in fixing healthcare. Tell us about that.
Dr. Lee: Well, that’s a terrific question, Michael. Thank you for asking me that question because employers in this country end up paying for healthcare for about half of all Americans. They cover one-third of the US healthcare bill. That’s a lot of money, and the latest data shows that healthcare costs per employee averages over $15,000. So an employer who has maybe 1,000 employees, so not a huge company, will be footing about $15,000,000 of healthcare per year just to cover their employees and their families. So one of the stories that I tell in the book, The Long Fix, is about how employers can actually work together to try to really be a powerful force in improving healthcare in this country. There was a group of five employers in Seattle that include names that we would recognize like Costco, Nordstrom, Starbucks, and they reached out one day to the healthcare system Virginia Mason Medical Center in Seattle that had been providing care for their employees. And they basically said, “Look, if you don’t start meeting some of our “performance specs”, we’re going to have to take our business somewhere else.” What had happened with them was they had realized that healthcare for their employees, the way in which they should have a relationship with that healthcare system should just be like any other supplier. Because if the supplier isn’t providing the services that they need, their employees can’t work. So when they reached out to them, they said, “Okay, here are five performance specs. Give us what works and skip the rest. We don’t want unnecessary back surgeries for our patients with back pain for example. We want 100% customer satisfaction. We want same day care. We want you to be responsible for getting our employees back to work. And we want predictable and consistent prices. We’re tired of all this variation in prices every time our patient goes from this medical center to another.” And when they demanded those changes, the health system actually responded, and that was the beginning of what led to, I think what many people have heard about with these centers of excellence, where these employers may even fly their employees from other cities just to, for example, Virginia Mason Medical Center, just to ensure that they’ll get the kind of care that they need for their employees. I dedicate a whole chapter of my book just to employers because I think that they’re such a potential driving force for healthcare in this country. And I actually conclude with a 10-point action plan for employers. And I think that today, given where we are in this crisis, given the fact that we know that our economy has been hit seriously and it’s going to take a long time to recover, and the fact that we know that our premiums for healthcare next year are very likely to go up– Covered California just put out in the last few weeks an estimate that premiums are likely to go up between 4 and 40 percent next year because there’s so much uncertainty about how healthcare costs are going to turn out after we reopen after we rebound in the fall for example. And also, there’s uncertainty about what’s going to happen with COVID. So given all of these changes that are on the horizon, I think it’s really a great time for employers to take a step back, to review what they’re spending on healthcare costs for their employees, and to try to take a few steps, even though I know there are a lot of things on their minds right now. But take a few steps that I actually recommend in the book like ask for the data, look at how you’re spending money on your employees, think about getting involved on one of the community advisory boards of a local health system so that you can learn more about healthcare and maybe contribute also to those healthcare systems, for example, consider banding together and working with other employers in the community. Those are just a few of the ideas that I put forward.
Mike: Dr. Lee, as we conclude our time together, I want to ask you just one last question. Our audience is on the frontlines of dealing with the pandemic, do you have any advice or thoughts for them as we wrap up?
Dr. Lee: Well, I think that this is a really challenging time for everybody. And I definitely have been thinking hard about the lessons that are learned and the ways in which we can recover and rebuild our healthcare industry. I do feel, right now, that there are opportunities to pivot strongly into telehealth for example as we talked about earlier and to take advantage of some of the changes and regulations there. I also believe that it’s an important time to address costs. One of the areas that we’re working on in the company that I work for, Verily, which is part of the Alphabet family, is building tools to enable health systems and medical groups to really reduce the cost of care. Some of that work has been shown to really benefit health systems because in the inpatient space with DRG-based payments, reducing the actual costs of care can really drive significant savings and improve the bottom line. And that would be an area that if I were working back in the healthcare system I would be focusing a lot on. I think that financial strength will serve our healthcare systems and enable them to really weather any further challenges going ahead. So with that, I would say also that we are here to support our healthcare systems. You are all vital to the health of this nation, and we are really cheering you on.
Mike: The Long Fix: Solving America’s Healthcare Crisis with Strategies that Work for Everyone is available now, so be sure to get your copy wherever you buy your books. Dr. Vivian Lee, thank you for sharing your insights today on the Hospital Finance Podcast.
Dr. Lee: Thanks for having me. It was a real pleasure.