A Real Conversation: The Value Of Competition In Health Care

By

Leonard Zwelling

Today I had a unique experience.

I had a real conversation with a learned man whose politics and mine do not align. We discussed health care reform and the various forces in play in America today that are changing the way doctors care for patients and patients access health care. In particular, we discussed the role that competition can play in lowering cost and improving quality—regardless of how the health care is paid for.

The reason this experience was so unique is because the man with whom I was having the conversation is a true expert on many levels—as a practitioner and influencer of public policy. That’s a sufficient description to underwrite his bona fides. Trust me. He’s the real deal and I was fortunate enough to have made his acquaintance some years ago and we have stayed in touch.

We were discussing a favorite topic of mine. My book. My co-author, Marianne L. Ehrlich and I, have decided Red Kool-Aid, Blue Kool-Aid needs an update as it describes the events surrounding the passage of ObamaCare in 2009-2010 and needed to include subsequent events that have had an effect on health policy and some of the proposals that have attempted to repeal the Affordable Care Act. The proposals persist to this day, so this is not a settled matter. The newly revised book is tentatively titled The Premature Birth of ObamaCare. We hope to have it out by Christmas.

My friend was kind enough to read the latest revision and give us some suggestions on how it might be improved. His edits were crisp, cogent, and always moved me away from political distractions to focus more on the patient. My friend is a doctor, after all.

He and I come from different histories. He is more conservative than I, far more a free market proponent when it comes to health care, and convinced that if price and quality transparency was introduced to health care, the costs would drop precipitously. He told me about new practices being developed in the country that mirror concierge practices, but are far lower in cost as they require a flat fee of about $50 a month per adult and $20 per child for access to a primary care physician. They are called direct primary care.

My friend told me about a hospital he had come across in his consulting work called the Oklahoma Surgical Hospital. This was started in 2001 by surgeons wanting to provide truly high quality care and who measure that quality and excel in many measures of true outcomes.

My friend told me of the threat of such places to academic centers. Academic hospitals have high cost structures and stratospheric prices for imaging studies that open them to competition from providers without their huge overhead costs, and who provide service for one-sixth the price. People with high deductible insurance and health savings accounts shop for such places and they will avoid the academic centers that cannot provide any price or quality transparency or obvious superiority.

http://www.oklahomasurgicalhospital.com/index.cfm?id=1

My friend also told me about a report from the Brookings Institution on improving competition in health care markets.

https://www.brookings.edu/research/making-health-care-markets-work-competition-policy-for-health-care/

This is an entirely different focus than the one to which I have historically adhered, that of a single payer system. But, these two notions are not mutually exclusive. The payer for healthcare could be the taxpayer, as it is for Medicare. That does not mean that providers cannot compete on price and quality for the business, nor does it excuse the government from inadequately taxing people to actually defray the true costs. If we spend $3.2 trillion on health care, then a single payer system will need to generate $3.2 trillion—unless, we cut costs. Perhaps when we all have a stake in the price and quality, we will finally have as much competition in health care markets as we do for cable TV and internet service.

My friend and I discussed my book for over 90 minutes. He liked a lot of it. He objected to some parts and he was very helpful identifying aspects of my writing that might turn people off if they do not agree with me, as he often does not.

No voices were raised. No names were called, and we parted with the mutual respect that we had going into the conversation.

I had two hopes.

First, that our national political discussion would be as civil as mine had been this day.

Second, that the discussions that will take place over the next few years at MD Anderson about the direction the institution will take are also as civil and productive.

My friend’s perspective is not that of an academic, but as a practitioner and public servant. His views must be heeded as they align with those of most Americans. He hates the electronic medical record as an artificial barrier to doctor-patient interaction. He does not see why the government does not take the lead in the compounding of de-identified clinical data into supercomputers to maximize the benefit of these data to real patients.

I told you he was the real deal.

He certainly will make the new book better than its first iteration ever was. His thinking always makes mine better than it was before I met him.

As MD Anderson moves toward the first address by its new president on Wednesday, this civility of interaction between people coming from different viewpoints should be remembered. There is going to be a necessary give and take at Anderson. There are too many administrators. Some may have to go. The basic scientists want more resources, but these resources are largely generated by the clinicians and the pressure in that marketplace is fierce, making spare revenues for research and education sparse. The high volume model that MD Anderson has employed for the past few years is under attack from a marketplace that, as my friend has said, is demanding price and quality transparency. Such transparency will not help Anderson with its mega-cost structure and will eventually demand that Anderson prove that its outcomes are superior.

Dr. Pisters’ challenges are great, but they are surmountable as long as civility is front and center from the outset. Nonetheless, controlling costs to keep prices competitive and quantifying quality in a transparent fashion will be a necessary ticket to stay a player in the health care marketplace.

Leonard Zwelling