When regional health improvement groups met in Minneapolis for an October summit, Dr. Marty Makary presented a powerful set of slides explaining how 48% of all expenditures by the federal government can be traced back to health care.
The numbers help show how the status quo is not sustainable, said Makary, a Johns Hopkins surgeon and health policy expert who spoke to the Network on Regional Healthcare Improvement.
He is the author of “The Price We Pay,” a 2019 book that vividly portrays inefficiency in the nation’s health care system. The book casts a distressing spotlight on everything from price gouging to the financial motives for dubious health screenings. But Makary also points toward solutions in this interview, which has been edited for length and clarity.
Q: It seems like you are optimistic that people trying to fix the health care system can win, despite all the problems. Why?
A: We have good people working in a bad system. We’ve got young people who are attracted to health care at every level from clinical care to administration and the business of health care, with very altruistic motives. The problem is that when you take a great profession and you apply some of the most perverse financial incentives in a cascade of money games that people in the system themselves cannot interpret, you get a fog where the stakeholders are leaving richer and richer and the only one not making a ton of money is the patient.
Q: Why do you liken the current situation in health care to the financial crisis of 2008?
A: We have right now a system that is so large, so complicated and so intricate. As American individuals, families and businesses are getting fleeced the argument has been: These are very complex systems — leave it to the experts. We’ve heard this argument before in the banking industry, when, in fact, the banking games were very understandable. We just needed financial literacy for the masses. So, my goal for this book was to research the business of medicine in a way that each of its systems can be explained in plain English, and to create broad health care literacy. The opportunity here has been to take what’s exciting and disruptive in health care and to present it using stories and individual experiences.
Q: The health care mess is complex. What’s the yardstick that will show if health care is getting better?
A: We are currently spending 48% of all fed spending on health care in its many hidden forms. That is completely unsustainable. It threatens every other national priority. And so, think about that next time you fill out your taxes. That 48% of all fed spending goes to health care, on top of the roughly $20,000 the average household will spend on health insurance only to be told when they go to the hospital that their bill is not covered. People have a right to be angry. One measuring stick should be how much individuals spend on health care, how much businesses spend on health care, the quality of that care and the amount of waste in the system. If there are two problems that we have not been talking about that we need to talk about, they are pricing failures and inappropriate care. We have a pricing crisis and we have clinical and administrative waste in the system that can be reduced and has been reduced by some incredible individuals who have used data and physician input to identify patterns of appropriate care and inappropriate care.
Q: The book describes wasteful care, but what’s an example of efforts to rein in overtreatment?
A: Skin cancer surgeons banded together to identify overuse with Mohs surgery [a treatment for some types of skin cancers], in a way that can be measured as a practice pattern. Rather than hammering doctors with preauthorizations and denials when they are treating individual patients, the program instead looked at annual practice patterns and identified a small fraction of doctors with outlier patterns. Those outliers were shown their data relative to their peers, and 83% of those outliers as a result reduced their rates of overuse. That program, which cost $150,000, saved Medicare $27 million.
Q: The answer for pricing failures is more transparency?
A: Hospital leaders are good individuals. I have always had tremendous respect for them. But at the same time, they’re not excited that they have inherited this crazy game of inflating prices for the purpose of offering secret insurance discounts. It gets bigger and bigger each year. The prices go higher disproportionately to inflation, and the discounts get bigger. That is an example of the crazy game that we’ve inherited that is being disrupted now with the movement toward transparent pricing.
Q: And finally, you write about all the “middlemen” in health care. What are the solutions?
A: There’s a new generation of brokers and advisers who work via a flat fee or an hourly advisory payment relationship, and they are financially unbeholden to the companies [that develop] the products they offer. I show how a couple honest, independent consultants have been able to save businesses hundreds of thousands of dollars simply by renegotiating their pharmaceutical benefits management contracts.