Why Health Care Reform Keeps Falling Short w/ Dr. Elliott Fisher, Dartmouth Institute

Welcome to Healthcare Rounds. I'm your host, John Marchica, CEO of Darwin Research Group. Today I'm speaking with Dr. Elliot Fisher, Professor of Health Policy and Medicine at the Dartmouth Institute for Health Policy and Clinical Practice, and the researcher who coined the term accountable care organization and helped get it written into the Affordable Care Act. We spoke in November 2020 when Elliot laid out three causes or root causes of systems poor performance and proposed a single system solution. Since then, I think his thinking has sharpened considerably, and I'm interested in getting into it today and learning about some of his new thoughts. So, Elliot, welcome back to Healthcare Rounds. Hey, great to be here, John. Wonderful to thanks for inviting me. Cool. We're going to go back to the early 2000s and the fateful 2005 MedPAC meeting where you defined the term and coined the term accountable care organization. And ironically, you know, I don't have my months lined up, but that was the year that I started in the PhD program at Dartmouth. But I'm wondering about, I want to know about that meeting. But we talked a little bit about this in our first conversation on healthcare rounds. But I'd like to know what the thinking was, let's say, in the five years before that, some of the experimentation that was going on. Obviously, that boom just didn't pop into your head. So, what was some of the thinking behind that? And then, and what were some of the things that you were envisioning that you could accomplish with this model? Fun to go back there. It's important to say that the the really the prologue was the recognition that Jack Wenberg and I had been developing these huge variations in spending across markets. Very hard to explain on the basis of case mix, but substantial uncertainty about whether the places that got more were getting better outcomes or better quality. In fact, David Cutler was arguing at the time that all healthcare has benefits, it just gets smaller as the as you spend more or as you get more of whatever that service is. And so I was really lucky to get a huge grant from RWJ, the Robert Wood Johnson Foundation, to go look at that question. And it let us identify and study five cohorts of patients who should be identical in risk across regions. You get a hip fracture when you're old and frail. You get a heart attack when your risk factors for heart attacks are so severe that they're more severe. We also had chart reviews for the heart attack patients. Colon cancer. So we were pretty confident that we had identical populations. And then we, you know, we stratified regions based on how aggressively they treated people at the end of life, which turned out to predict total spending pretty well, but it was a different population. And then we followed them after their index hospitalization for five years to see what happened. What additional, what kinds of additional care did they get? And then what were the out what was the quality and outcomes? And what we found was the play people in the high spending regions don't get more of the evidence-based care that we know is really important. That's about the same everywhere. Beth McGlynn would, it was about 50-50, as Beth was pointing out back then. We weren't doing a great job on the guidelines, but at least it was equal across markets, right? So, and then but what you did get was much more time in the hospital. These are places that spent 60% more total cost of care, and they spent 60 to 70% more time in the hospital in every single cohort, identically. The ratio was identical. You got more care if you were a heart attack patient because you're sicker. But if even in the even you know, we had a random sample of Medicare beneficiaries, the Medicare Current Benny survey, and they got 60% more care in the high-spending regions after adjusting for case mix. So, but what they were getting was more days in the hospital, more frequent admissions, much more frequent visits to specialists. High spending regions were characterized by having 30% more hospital beds, but 65% more medical specialists. And you saw exactly the deployment of those resources against this population of patients cared for in high-spending regions. And we stratified by every possible thing we could do it, academic medical centers, blah, blah, blah. It all looked the same. High spending regions just did more stuff that we don't think of care as patients as physicians. I'm not trying to prescribe a hospital stay. That's the place I manage somebody. So I'm not prescribing a pill. So we also found outcomes were no better, quality was slightly worse. We interviewed, had survey data from physicians. Physicians said it's harder to coordinate care. Patients said they don't get any better access. On every single measure that we could find, there was no evidence that high-spending regions were getting better care. And what that meant was we're wasting 20 to 30% of healthcare spending on unnecessary, avoidable, discretionary care. That's where we manage people. And that's what led us to start thinking about so hold it, that's a lot of money. What are the underlying what are the underlying causes of this? And then what might we do about it? And it was at that, it was at that time, people were starting to talk about how fragmented the care system was, how terrible care coordination was for patients with chronic or serious illness. And all that was emerging on the on the scene. And we basically came to the conclusion that there's four causes of the problem that we thought should pay attention to. And this is what motivated us. First, you know, we're in a fee-for-service system. Should this be about the money or should this be about better care? So there was some confusion about aims, and we really needed to clarify the purpose of what we're trying to do for the populations served by regions, but also by academic medical centers. By the way, we repeated the whole thing just in the populations cared for by America's best hospitals. We're spending $3,000, $4,000, $5,000 more per year on patients with no better outcomes or care. So the second thing was lack of data. We had lack of data on the benefits of all that stuff until we showed it then, but lack of curiosity about variations in practice across, and what we saw was it's all fractal. The atlas always revealed that stuff happened. There were variations at a practice level. There were variations that mark HS hospital service areas. So anyway, but I think the two things that we landed on is one is this flawed conceptual model that health is produced by visits to physicians. That's how we think about healthcare in the United States. And everywhere, by the way. We are trained in biomedicine. We know the science. We should therefore be able to prescribe the right pill for you, and that's what makes people healthy. And there's a we are responsible for fixing biology, but so much of this isn't about biology. It's as you've talked about in your prior podcast with Tim and Mike, social determinants are important, all the things that also make people healthy. So we we thought what we really needed to do was think about systems, because systems produce results. And the system that people get care in is this local network of physicians around their primary hospital, or maybe their hospital and the referral hospital. And we started to look into was that true? Did people get most of their care from these physician networks around a hospital? And we showed that it was. You could look at the docs who are admitting to or on staff at hospitals, identify the patients who they're seeing, and 70 to 80% of their care would be given by that group of doctors in that hospital. Suddenly you have the opportunity to say, oh, maybe that's a group of physicians who, if we could persuade them to work together, could become the system that coordinates care across sites over time among specialists. And that was the germ of the idea. And Julie Bynum led the work, one of my colleagues led the work on defining those networks and showing that data that I just reported to you. But then the fundamental flaw under the whole thing, which we're still struggling with, is flawed payment models. And FIPAR service not only revisit refocuses on visits, it focuses on each other service delivered at that point of service. So not only are you paid for that service, but you're held accountable as a nursing home for a nursing stay, as an MRI center for the quality of your MRI. There is nothing about, as a doctor, for the quality of your visit. You're not held responsible for the quality of your primary care physician in any way whatsoever. So we thought this is a cool idea. And we actually, there's a wonderful story about that MedPAC meeting, I'll just share with you for the fun of it. Pete Welch, who was an analyst at HHS now and then had come up with this notion term called the Extended Hospital Medical Staff, the people who rely on the hospital, even if they admit their patients, even if somebody else admit them. They're the group of doctors who work around a hospital. So we titled our presentation to MedPAC, the Extended Hospital Medical Staff. At the end of the conversation, at the end of my presentation, Glenn Hackbarth, bless his soul, said, Dr. Fisher, you're obviously a smart guy. But that's a really dumb name. Why don't you call why don't you call it accountable organizations? And I said, Chairman Hackbarth, I think that's a really good idea. Let's put let's put care in there. Let's call them accountable care organizations. And once what happened was the paper was already accepted for publication at Health Affairs. And I called up the editor and said, I gotta change the title. And I gotta have a footnote. I gotta have a footnote blaming Glenn giving cred credit for the name to Glenn Hackbarth. And six months later we had Glenn Hackbarth having a chapter on accountable care organizations in their report. If there's one lesson, takeaway lesson for all of our listeners, Fred Mosteller, a famous statistician, made the point first, biostatistician, credit is infinitely divisible. And sharing credit with Glenn Hackbarth made all the difference in the successes. And the article came out with the title Accountable Care Organizations in that footnote. Anyway, that's the old story. It's a great story, and I don't mean to interrupt, but just I want to pause for a second because I and I work with industry as various on health systems and manufacturers. And a lot of times when I'm introducing people to the concept of more is not necessarily better, right? And things like the triple aim, and it is when you see the first they struggle with this concept because, and I thought actually, before I even say that, why I think this is important, because I think that people don't understand this history, especially as a while ago, right? 25-ish years ago. Yeah, exactly. They were all in they were all in diapers still there. Exactly. So but this kind of this is underneath everything that that where we are today in the IOM report back in 01. And so anyway, so when I'm explaining this concept, that people just struggle with it because people associate price of something with value. Yeah. And I've got, I don't know how many slides. I've had this conversation. I taught this to undergrads when I it just industry, and I'll throw up like uh Porsches and Maseratis and all of this, and ask the question, you know a Chanel handbag or something, and people they're just as Americans, they're tuned into this. And then I ask the question, well, what if you spent more and you didn't get better results, quality, value, whatever however you want to call it, and then introducing this concept of really what we're after is we can do better. We can get better, more value. And then, of course, that's an entirely different conversation around what is value, right? But we can do this, and we've set up the system, and you can look at the data, and I can't emphasize this enough as we go into the into your the next part. We look at the data, and it is in almost every case when you go back historically, or look, you just you spend more and you don't necessarily get the results that you want. I think this concept is still a challenge for people, is what my point, Elliot, is what I'm making. I think it's still a challenge for them to get their arms around people understand, okay, maternal fetal mortality or some of these measures that we don't stack up as well. And people understand that. But when you start talking about this concept, they just have they just struggle with it and they say, Well, that can't be true. Yeah, no, it's tough. The first thing we did with our grant was write a paper on the mechanisms underlying how more might be worse. And I I don't know whether you put articles up on your website, I can't remember. But that's one that I might post there because it's a it it really lays out the mechanisms. First of all, it's it's overdiagnosis is a serious problem right now, where we give people labels when all they've had is a lab test, we don't know that any anything's wrong with them. It's something around 20% of breast cancer that's detected early stage in a biopsy would go away on its own, but now you become a breast cancer patient. And the same most notable for prostate cancer, most men die with prostate cancer, not of prostate cancer. So there and then you can when we've interviewed physicians in high-spending regions where there are many more of them, and the practice is much more to refer to different other specialists without even sending people back to their primary care physician. I think people can get it when they say, maybe having ten doctors involved in my care is not necessarily better than having six, because they've all got to communicate with each other. So the doctors are describing in the high spending region, it's much harder to for me to coordinate care. I don't have the continuity of care with my patients that I need to be able to take good care of them. And so the I think it is important to keep in mind. The second thing that I would just say on this is I think there's a recent review. We don't have great data justifying many of the treatments that we provide. We there is not the requirements for proof of efficacy on technology isn't required. You are required to show that it's similar to some prior technology that's already out there, so who cares? AI, oh, a new version of AI, oh, it's already out there, so we can do whatever this is. I think it's the great failure. And when you look at whether it's variations in outcomes following major heart surgery or joint replacements, low-volume joint replacements, a friend of close friend of mine who was going to go get his prostate surgery operated on by a guy who does 15 a year rather than going to Anderson to get the best possible surgery for that condition. So I think it's really important for your listeners that they keep this possibility in mind. And then we'll come back to the affordability problem, which comes along when you do a lot of unnecessary wasteful services. I'm also curious as to the immediate feedback that you had regionally. You talked a little bit about this, was it why you wanted to look at AMCs, but that Boston corridor, right? Which is all these prestigious hospitals and institutions. You could make the same argument in parts of California and Texas, but I'm just thinking geographic proximity, where you were, if you had a response from the Boston community, like, hey, we see all these difficult patients, we're the creme de la creme, and of course we're going to spend more. Of course that's the that's their argument, right? But you can when you restrict the sample of people at Mass General to people who live in Boston, so they're the incident heart attacks. And we compared in one my first New England Journal article, Boston versus New Haven, and the hospitals within each of those, there were only two in New Haven, but the utilization rates of the hospital as a site of care varied by 2.2 fold across those hospitals after the same kinds of conditions that I just presented to you. And there was no evidence that it was illness that was driving those things. In fact, the people who had the lowest rate were the people at Boston Medical Center, which was the Safety Net Hospital, where of course there's a larger reference population in the model of the extended hospital medical staff or an ACO. It's a larger population cared for by a smaller institution, fewer beds. So they spend less time in the hospital. They figure out how to manage them outside the hospital. This concept, I'll tell you, just going back, and it's 20-ish years, this concept and what you talked about about we'll say overdiagnosis with Gil Welch. That first that fall term and the winter were mind-blowing to me as in terms of concepts. I never even thought about it. In fact, my dad had prostate cancer, and I started thinking about did maybe he didn't need that operation, right? And the last time that you were on, we talked about, I think I asked you something like, How are we doing with ACOs? And I think we're gonna get to we'll get we're gonna get to it. But I think you said something like that you had predicted a half a percent or one percent or something like that, or some range that you'd be able to save with this accountable care model. And in fact, you mentioned Tim when we were talking, he brought this up and he said, well, if we do one or two percent, why don't we consider that pretty darn good because of how much money that we're spending? So, in any event, I think it's glass half full, glass half empty to some degree. Where do you see today, after we've gone through all of these iterations of ACO models and specialty models and commercial models that try to model them themselves after the Medicare programs? If you had to assign it a grade today, professor, where would you how would you here's a two-part question? How would you grade it? So, what are your criteria? What's your rubric? And then what letter grade would you give it? First of all, I did go, I went back and read Mark McCullum's in my first article about taking this idea to Medicare, which was where we came up with the number, which was 2%. The modeling suggested it was about a 2% savings, which isn't far off what we're seeing. But I I am on one level, it's a glass totally empty. I thought we'd have transformed American healthcare because we would have moved to a different payment model, which I still believe getting the incentives right, and we can talk about sharpening them, sharpening the model, which we need to do. But I think when you still have 70% of physician revenue coming through fee for service, 90% of physician practices receiving fee for service revenue, almost all hospitals paid entirely by a unit pricing DRG system that pays for volume, that rewards volume. We should not be surprised, but it's very disappointing. I'd give it a I would grade myself on has it deflected healthcare spending myself. Oh I won't there are other contributing factors besides my failure to get the model perfectly right the first time. But the we did deflect healthcare spending. So that was so I'd give a sort of a C because the magnitude of the deflection was zero. Not zero, the magnitude of the deflection was very small. I think I tend to prefer to look forward than backwards and try to say, why didn't it work? What is the problem here? What are we seeing? And I just referred to it with so much of the money still throwing for paper service. So I think the failure is what ACOs have done, first of all, they were neither, they weren't organizations, it was a contract, right? The vision was we create organizations that can do this. We ended up with a contract that was how Medicare paid doctors to do some stuff for their medic do stuff for their Medicare patients. That's a contract, that's not an organization. And and so the but so much of the money is flowing still through fee for service. And in the early days of the model, even now, only at the high two level risk, and the lead model seems to be offering sort of something close to capitation, if I understand it. You have to wait two years for your reimbursement to settle up. There's not much incentive, it's just very Tim was generous to say, yes, if you're bearing risk, you will change your behavior. And I think that's I agree with that. But I think the failure is to in our inability to persuade all payers to adopt this model. Two things. One, it's funny you said contract, because back to my trying to explain to industry people or students for the first time, that's exactly how I describe it. In many cases, they start an LLC, and it's the LLC is what's the ACO, right? But one thing that I think is important that needs to be acknowledged, and you may disagree with me on this, I because we're about results, and I acknowledge I'm sitting where you are in terms of evaluating the results. I think you've successfully caused a shift in thinking around when I talk to and I interview physicians and non-clinical people, just as we'll say executives in health systems outside of this podcast, so for research purposes, right? And there is a substantial difference from when I started having these interviews in 2012, 13, 14 to the conversations that I have today. People understand this notion of what we're trying to accomplish without blowing out budgets, improving care, involving the patients, the patient experience, if you will, and other elements of now the Quintuple aim, right? I see that now, maybe as and also a sense of frustration, because as I've said, it's come up, I don't know how many times on the show, the canoe analogy, right? There we're we're trying to go to this new model, but we're stuck in the world of fee for service. But I think there is that the mind shift has occurred. And that for that I think we need to acknowledge. I agree. That is, it is it is it is an important first step to have people start to develop a different mental model of how we ought to be operating this system, and that it ought to have a broader set of aims, and that the payment models we have right now are kind of problematic, not just kind of problematic. They're in the new world that has emerged since 2020, since 1980, as if we look back further, but more aggressively in the last 10 years with the financialization of healthcare, which we'll come to talk about, then fee for service becomes an engine for generating a huge amount of revenue. So net net, we've got a long way to go. I think that we would agree with that. But where I want to get to, you said recently, I have to admit, Elliot, I've followed your papers. This was one that slipped past me, and I don't know how because I read health affairs and I particularly forefront because it's easier than lugging around the journal. But you you've called it, you brought a new word into this. And after publishing, I think the single system solution paper, George Ishan said you'd miss the problem and that it's greed. And that's a big word. Yeah. People throw around the term greed lightly, I think, sometimes. But let's get into that. Yeah, so let's but let's what's really interesting. So the first person to use the term greed, we were talking about it. I George and I talked about it. And yes, there are some people who are greedy, but I think the fundamental thing, and we'll come to it, is the power of the financial incentives to generate more revenue. And those have become the dominant value in healthcare organizations. The bottom line is the value. And I think the reason, and we actually said, I think if I'm remembering correctly, some would say greed rather than I said greed, or George and I did. But I think that we're now at a place where this industry has become a major cause of suffering, especially from sitting in my place where I believe we could be spending 30% less or 50% if you listen to others. That's causing harm, and we came into this work to relieve su to reduce suffering. And that's when I think all my friends who are administrators would say, Oh, I wanted to work in healthcare because we're doing good. We're serving the public. And this is where this question about, gee, are we really? What what are the ways we could be doing better? And that's really the purpose of what George and I pointed out, is that there are all sorts of ways if we decided to be stewards of our communities or the patients we serve, we could act differently. Some of those are the big policy changes that you've been talking about with all your with many of your the people you interview, but some of them are the simple things we can do within our organizations. And the table in that paper offers medical students a way to go learn about quality improvement. It's there are ways you can you can bend the curve to try to reduce suffering among the people we do serve. But when we talk about things like let's use a specific example, Medicare Advantage. The way I think about Medicare is at least where they're going. And you mentioned Mark McClellan, who I also would like to have on the program to get his thoughts. 2014 sort of predicted that we'd all be in eventually we're going to go towards capitation. But I think the way that he put it was something along the lines of we're either going to be in this Medicare Advantage model or an ACO. He threw that out there. And that's the way that it looks like it's shaken out. Although from my vantage point, it looks like Medicare Advantage is really taking over as being this quote unquote popular health systems are getting into, they make partnerships to get into MA. They see it. It's revenue, right? They can make so much money in medic when they get a cut of the profits from the MA plan. Um, you know, Berwick Berwick and you know, Don Berwick and Rick Gilfillan had a piece about the MA games that people can play with the ways that some of those have been cleaned up. But I I think the for me, the generally, I don't think health plans save money. They may they they have contracts with providers. And maybe they've got some incentives for the providers to behave themselves. But I was on the board of the Institute for Healthcare Improvement for 10 years. I've I've studied it a little bit. I am totally convinced that you can use improvement science to do so much better, but that happens in the delivery system. Meaning within the US healthcare system or meaning inner mouth geising. Meaning within an organization that takes responsibility for patients, either responsibility for an enrolled population, a primary care population, or an attributed population in the language of ACOs. And if you have a total cost of care model for that, and the data on this is clear, you suddenly can do all sorts of different things if you're freed up from the FIFA service hamster wheel. You can hire people like community health workers. You can up up, you can have your MA as medical assistants do all sorts of stuff that you couldn't afford to do because you have to do it to document that you did it as the physician or the nurse practitioner. And so getting out of the complex billing system that requires everything to be documented for billing purposes, services to be done by doctors. And Rashika was the first one to show this with his iORA practices, Rashika Fernandapouli, who you should talk to if you haven't talked to him. But I'm aware. There were several primary care physicians, but they had nurses, mental health practitioners, health coaches, community health workers who'd go out and talk to people, and they were able, he says, reduce costs by 20 to 30, 20% or so within the first two years just by keeping people healthy. Because when you have a community health worker who's from their community, speaks their language, helps them understand how to take their anti-hypertensives, you get their blood, you get their blood pressure under control. But that's not paid for under fee for service. And so moving to and the shift to team-based care, and I'm forgetting who wrote the article again in health affairs, it's something like you have to be at least 70% or 68%, 68% capitation or global payment in order to be able to make that shift to team-based care. So we haven't tried yet. So I'm thinking about technology. I know this is something that you've thought a lot about, but going back to the person who says, we're doing good, Elliot. I'm working in this health system and we're doing good. I can tell you for a fact that for over the years, most of the people that I've met in medical devices. My wife now works as a nurse, and now she works for a medical device company. In pharma, viewed from the outside, and I'm sure you have a lot to say about pharma, and we may get to it, but viewed from the outside, they're the pull pushers and greedy and using those terms and things like that, and Skrelly and these horrible examples raising price 2,000%. I don't consider that the bulk of the people that I run into in industry. No, I agree. They made a choice at one point to say, I want to be in healthcare. Maybe I'm not a physician, maybe I'm not a nurse, or but I want I want to do this, right? But there's something about technology in the healthcare space. When you think about this is not really half-baked, but I've been thinking a lot about this. You think about computers and Moore's Law, a lot of areas where technology, as it gets better and better, costs go down. But in the healthcare space, that's not the case. You get better tech just to as a blanket statement, you get better technology, new MRI system. Everybody wants a new MRI system. You come out with a new pharmaceutical that, let's say, does a better job at lowering blood pressure with fewer side effects. Now that drug is four times, ten times the cost of the next available pharmacotherapy. And so there it feels like the technology itself, if we got better results from having more technology or better technology, we would look like a lot of other industries, but that isn't the case. Why is that? I think technology is driving up costs astronomically. And the what's missing are right now, you buy the new technology, you can charge for it. And you can advertise, oh, look, I got the willy whatever device that's the the most modern, cool astrophysically blah blah blah, whatever. And so there is no constraint on the provider side because the new technologies can you can add you can adjust your charge master and increase your billing for it and and build the capital costs into the organization. And so I think there's not people don't have to choose. If the technology is extending life, is improving end of life and quality of life, let's say in the example that I use, that's the trade-off, I think, that people would say, because we're dealing with healthcare, we're dealing with life and death and all of these things, which computers we're not. But we're not evaluating technology so that we have head-to-head comparisons with the current therapies. They're compared to placebo. Sometimes there'll be trials done against the most against the best current drug. But there is no way we are doing the technology assessment of all of these things again and with some assessment of the cost of it. And I think the and you'll you may remember our single system conversation where what patients really need and doctors when they're making referrals is what is the best place to get this thing done? I need my hair, I need a knee replacement. And that's actually a technically much more difficult procedure than the hip replacement. And you know, and then when you need to get a revision, oh my goodness gracious, don't go to anybody. But for major for the most common procedures that we go, we undergo, we ought to be able to comparison shop. And that would with an episode price. And now suddenly the places that's saying for the episode gotta put their episode price together, they're gonna want to know what the they need to know. Maybe we don't need that really expensive MRI for the follow-up MRI. Because we're responsible for the cost of this episode. And I think the same thing happens when you put an organization under a total cost of care constraint with a risk-based contract, they're gonna say, What of this stuff do we really need? What of this stuff offers real benefits? And those will be those will be we should be having that, getting that data so that you can have quality and price and multiple dimensions of quality. But you want to know complication rates. You want to know it's the how are they doing? And how many are they doing if you don't if you may not have enough numbers to know whether they've got complication rates. Since we've got every small hospital in the country doing lots of orthopedic procedures, because that's how they pay, that's how they pay to stay, that's how they stay open. Let's use another example, a popular one. GLP1s. I'm looking at a list of the top 50 drugs. And when you combine the molecular the compound, shall we say, yeah, the lily piece, and then the Novo Nordisk piece, smaglotide and terzetotide. When you combine, those are actually the top two selling drugs in the world, and combined, it's over $70 billion in revenue in 2025. But there's two things that I think I want you to, as a physician, as a researcher, that I really want to hear your thoughts on that may offset the system cost. One, there's all kinds of benefits that and risks that we don't know, right? But there are all kinds of benefits. Yep. Lower weight, it leads to a whole bunch of good, better outcomes. We don't need to list them, but they're benefits. And then the second piece, which is different from let's say Kitruda, which would be in this new ranking, would be the third biggest selling drug. We're not talking about cancer, and this is not being it is being reimbursed through insurance companies, but there's this whole other model where people are paying 300 bucks a month for their WeGovi, right? It's coming out of cash because people say, I want to look better, I want to feel better, my insurance company's not going to pay for it. Dr. Elliot Fisher's thoughts on GLT1s, go. First of all, I think I I worry that's a distraction from the half of healthcare spending that we should be paying attention to. Fair enough. Fair enough. I'm willing to answer the question. I think we need much more information. I think they may offer real benefits. I think if we had a pill right now, which helped people be so healthy that they sick people didn't reduce their hospitalization by 20%, we would fill all those other beds with somebody else. Yeah, then you're not really addressing the problem, right? Obviously. So the challenge is that we have a system that is designed to meet the revenue, the capacity of the hospitals, the people they've hired, the size of the workforce. Pharmaceuticals are added on top of that. But if we don't get our hands around utilization, which I think the IHME folks point to as 70% of the variation in spending is due to utilization, not price. I think others would say price is right up there. And I agree with them. I think price is really because they're both avoidable, right? They're both avoidable costs. So I think the I think the GLP ones offer tremendous promise. If they really are beneficial, it looks like they're coming out pretty quickly. Competition may bring prices down. And so I think we want, I want good medications. My father's life was saved by a great surgical procedure. I can't remember which one of my hips got replaced because they feel that the one that got replaced feels just like the other one. So medicine is great. And it's a cause of avoidable suffering because we're spending too much on it. Not to dwell too much on this little piece. I think this is an interesting experiment, which is why I brought it up. The experiment, and you mentioned it, you said it's becoming hot. The competition is becoming hot. It's a perfect way to look at, I think. You have the insurance markets that really they're covering the diabetes, we'll call it just the diabetes drug of these compounds, primarily, and in some cases the weight loss version. But when you see what's happened with, say, HIMS and Roe and these online providers, and even I've seen health systems and others that are offering cash for these drugs. In the private market, if you will, the price went from $1,200 a month down to $300 a month almost practically overnight, because people aren't gonna aren't gonna pay that kind of money. And as more products get introduced, I guess all I'm saying is in the private market, you expect to see the benefits of better technology, prices coming down, and competition forcing these prices down. When it's in the insurance market or the PDM market, or however you describe that, the price stays high and of the of these new drugs, and there's zero competition really. And so I just wonder, I sorry, I haven't thought through this completely. This is a plane ride. I'm thinking about this on the way home. Well, I think, as we talked about last time, there are ways to make this market work. We could have competition among health plans if they all had identical benefits and were required to with identical quality measures. That's what they did in California, covered California. You can't be on the exchange unless you show that you're a decent system, and then you have to have these quality measures. And by the way, your benefits at each tier of each metal tier have to be identical. So people can shop, shop based on mostly on price, and they did. It drove costs down. So we could have a competitive insurance market. I don't know whether we need insurance. I think I think we should have integrated. I'm back with Alan Enthoven, and we need competing integrated delivery systems, but that's not where we are right now, and we have challenges ahead of us. So talk to me about this utility model. By the way, love love the USA today, love the piece. First of all, I think you're a great writer, and I don't think that your stuff, even with co-writers, you they're not hard to understand, but this is pitched at a level that I think people could really understand what you're getting at with this utility model. So let's talk about that. Sure. I think it's it helps me in articulating it to step back and point to the underlying causes of our current difficulties. Financialization has become a feature of the American economy, where everything to the extent it is possible can be turned into a financial instrument. So whether it's our subscriptions to the apps on our iPhone or everyone wants a revenue stream from whatever we're doing, hospitals are deep in the middle of that. And part of that is this shift that Milton Friedman really caused, the Chicago School, to believing that profit is the only motivation that's worth paying attention to. If you give someone a profit motive, they will fix these. So financialization leads to all sorts of strategies in healthcare, raising prices where possible, increasing the provision of high margin stratices, cutting costs, make employees work harder, burn out, whatever, and private equity just accelerates all those things. Market failure is a second fundamental problem, which is that 90% of markets aren't sufficient to support hospital competition. 65% of specialty markets. This data is 10 years old from folks at Berkeley. So for your for our audience, our listeners, economists have a measure of the number of entities that are Competing within a certain market for services. And hospitals have can have defined markets. And as we have had consolidation of hospitals and becoming hospital systems, the calculations were done across, I think it was hospital referral regions or it may have been metropolitan service areas, to show that 90% of them would not do not meet the criteria for sufficient competition to keep prices down. Thank you. I took a freshman seminar from Hirschmann. What a character. Anyway, I didn't appreciate him at the time. But that so once you have a monopoly, you can raise prices. And that that's where Uvia Reinhardt 30 years ago, it's the price is stupid on the commercial side. That's certainly true. And so market failure just means we all pay more, and the quality is worse. When you know the there's been really good work. Gruber, I think, at Penn, I may not, I may be misremembering, really done good work on competition and quality. Without competition, you get higher prices and worse quality. I think McClellan did some of that work as well. There's a third problem, which is the collective action problem. And that is that the wealthy and powerful show up in Congress. We're used to seeing them in their dark blue suits wandering around. Even in Vermont's legislature, there were something like 300 lobbyists registered. This is the smallest state in the country. Gee who is. And so, you know, they show up and the public doesn't. What the public utility, and we recognized in electric utilities a long time ago, and water utilities, that they have natural monopolies. And so every state now has a public utility commission and the District of Columbia. And the the it's a mental model for thinking about how in a healthcare system where consolidation is happening a lot, where it's really hard to judge the quality. What public utility commissions do is say, hey, the lights gotta stay on. Their criteria you gotta meet. And so you could public utility mission could measure quality, could report quality, could make sure that local monopolies, and it wouldn't they wouldn't have to regulate everything, but they would say, how can we sharpen, how can we improve the healthcare system? Now that's one free that's what led us, the four of us who wrote that New England Journal article that you mentioned in your note to me, around why we need strong state agencies to do this. Because it can't be regulated from the federal side. There's too much that states are already responsible for. Insurance regulation, the safety, the safety of some technologies. So states have to be in the middle of this. And I think I'm I think with sufficient authority to regulate prices and premiums and to set budgets for hospitals so that they're capped at a certain level. And Maryland has global budgets, Vermont is going in that direction to regulate payment models, to make sure that to try to nudge or push or require everyone to be in a certain payment model or to work with a legislature to enact the enabling legislation that would make that possible. We argued that it's a four-pronged or the several-pronged system. It's essentially a public utility model, but we didn't say it in that article. But I think we have to figure out how to solve the collective action problem. And unless we all start doing community organizing, which is another way of doing it, we need regulation. We need a regulatory body that's going to do it. First thing I remember way, way back when in public policy, the first concept you learn about is collective action problems, right? And they they abound with market failure. How does that align? And we did talk a little bit about this time last time, but we can bring it to the forefront. How does that align with the results that we've seen in Maryland or with the experience with the all-payer model in Vermont? What is the I know it's not exactly what you're saying, Elliot, but what have we seen at that state level? I think the Maryland has made as much progress as many people on trying to hold in hospital cost growth. They were pretty generous to the hospitals in terms of the they get to keep all the savings or 90% of the savings. That's more generous than I would be. Maybe I'll come back at some point and talk about where things are going in Vermont. But I think we're actually successful, our Green Mountain Care Board is successfully pushing back on the hospital, which I I haven't seen the budget, but they're supposed to be submitting it. But I think it's going to be a decreased amount of revenue going to our largest teaching hospital by a substantial decrease with further decreases over the next few years imposed by the Green Mountain Care Board because of the what was believed to be inefficiency from reviewing budgets and looking at the data. So I think the Vermont all-payer model, we had a flawed, deeply flawed ACO run by, oh, the hospitals. We know from the CBO and everywhere else that hospital-run ACOs don't do much. And they weren't very effective at getting the stuff launched. And then only a fraction of the payers joined the it was a voluntary model, and only one of the payers was in, and then they pulled out, so it fell apart. I still think we need mandatory fixes to the financial incentives. You're the third person to come on recently and say mandatory is essential for any of these things. Any of these things to work. Where do you see Vermont headed? Just looking to the future. Where do you see where's the light coming from? I am I think there is we do have a crisis, and your listeners won't know that we suddenly over the course of six years became the most ex went from being average, just like Maine, New Hampshire, and the rest of the country, to being the most expensive state in the country, with premiums on our exchange plans going up by twofold over that short time period. We're more expensive than Alaska. There's some supply chain and transportation costs that get built up there in Alaska. And so this and this is largely attributed to UVM health system. And they're monopoly positioned, consistently increasing prices, expanding their academic medical center and footprint to become a bigger system, buying associating with some New York hospitals to bulk up. And it came back to bite them. Our lowest. That led to a change of leadership. And we now have a we now have a wonderful leader there who's digging into the problem of how to reduce costs in Vermont as a whole. I think Vermont is positioned to really come together and work. RHTP is one piece of one opportunity. We have pretty strong primary care infrastructure, at least, called the Blueprint, which is a way of providing team-based care to support tiny practices. So it's centralized within a community, and small practices can draw in a central pool of resources. So I think Vermont, I'll know more in another year when we get through the next legislative session. But there's very strong interest in primary care reform and strengthening primary care. Our hospitals are undergoing very serious work to try to figure out how they can coordinate and centralize some services and coordinate so not every hospital is doing everything even when they're only 20 miles apart. And it's a half-hour drive to get to the gastroenterologist that might be in one place and the neurologist who might be in another. And there is a real spirit that change needs to happen. We have a new leader at the hospital, a new leader at Blue Cross Blue Shield. And it'd be fun to come back and talk about primary care reform in Vermont sometime in the future. I'm going to hold you to I'm going to hold you to that. I know we're at the hour mark, and I just had one last piece and then we can wrap up, Elliot. And again, thank you for taking so much time. We're not going to solve this now. I think there's a fair amount. Yeah, we're tried in an hour, right? But it seems to me that given all the forces and given the market failure, and given all the things that you put in your papers, and Mark McClellan has put in his papers and Michael Cherno's put in it, right? It has, I think it obviously has to start. We've got to start statewide, start local, start something, because we're not going to see some panacea coming down from the federal government. That's I firmly believe that. Absolutely. So given that, are there things at the margins where here let me ask you an even better question? And I don't want we don't have time to get into it. Everybody wants to talk about AI. But is there a disruptive technology? Is there a disruptive technology, a disruptive policy, if you will, at the state level that can really start to move the needle? I just feel we spent so much time conceptualizing the problem and how to fix it, but there's all these market forces, political forces, right? If there are the disruptive technology that I think is on the horizon and may even come as a consequence of the RHTP is a single EHR across all the systems. Everybody's on the same EHR. If you look at Denmark, how they provide 24-hour access to great telephone coverage talking to a primary care doc, they have a single EHR. Anyone can log on and see all the visits you had to the emergency room and what problems you have. I think a single EHR, and that's what the new CEO of our larger hospital, Steve Leffler, has advocated. If we all get on the same EHR, so much can happen. Whether it's measurement to support improvement, whether it's measurement to support accountability, putting that platform, and then it's integrating care without having to be owned by the same big giant behemoth organization. So that would be my dis version of the disruption technology. I think the second thing is we know our strategy. The strategy has to have three legs. Delivery system reform is about great primary care and home care support that keeps people out of the hospital, making hospitals focus only on what is necessary to happen in a hospital, and not doing anything that's unnecessary or unwanted. And third, the payment models that support that. I think we can leave it there with the that for the next time. And I am gonna wait five, six years, Elliot. I'd love to have you back. This is a great conversation as usual. I had my list of questions. I think I got to two of them. There's just so much to talk about, but it's just a delight having you on. And I have to say, your influence is almost immeasurable on where we are today and the kind of thinking that we have around changing the system for better and really making it better for patients, which at the end of the day is what we're I think we're all in agreement about. Yeah. So thank you. John, thank you. It's always a treat to talk to you. And of course I'll come back. But people won't want to hear from me for at least a few months, anyways. This guy who talks, this guy who talks too much. Anyway, take care. Absolutely love it. So again, thanks. And thanks everybody for joining us on healthcare rounds. And to our listeners, if this episode made you think differently about where healthcare reform goes next, and I hope that it did, please share this with a colleague who needs to hear it. If you're not following the show, now's the time. Listen on Spotify, please follow us there or on Apple. Wherever you get your podcast, make sure to listen, share, and subscribe. I'm John Marchica. We'll see you next time.