EP388: Merrill Goozner on the Future of Healthcare and Glide Paths to Get There

In this healthcare podcast, I have Merrill Goozner on the show talking about his prognostications for the future of healthcare in this country and how, realistically, it could be engineered so that the healthcare industry rightsizes itself relative to our GDP. Merrill offers three glide paths to this end.

Okay … so, let’s break this down some.

First, Merrill talks about the full impact of huge numbers of patients/people in this country who are scared to seek medical attention. They are afraid to play the game at the end when the bill comes in the mail and they open it up having no idea what it is going to be. It’s a magical mystery guessing game of luck and chance where losers go bankrupt. This is not a victimless situation we have going on here in this country. All these deaths of despair and life expectancy going down … this is unprecedented.

So now, we’re level-set on the stakes.

Interestingly, Merrill plots out the aspiration for healthcare spending in exactly the same way that David Muhlestein, PhD, JD, did in episode 364. The goal, according to both of them, isn’t to reduce healthcare spending per se. That would be nie near impossible to pull off in the real world, but we could work on holding healthcare cost increases below the rate of GDP growth. Optimal might be healthcare costing, say, 13% of GDP like it does in Switzerland instead of upwards of 20% ($1 out of $5) getting stuffed in the pockets of a healthcare entity or their shareholders. Fifty percent of that, by the way, is being paid for by the government, the other 50% largely coming out of the wages of employees either directly or indirectly.

Okay … so, what is the lightning-in-the-bottle moment where we clip in for this journey toward rightsizing healthcare prices? Merrill says it’s a combo of patients and employers and taxpayers crying uncle at the same time that technology and new competitors move in on the supply side and start to chip away at older incumbents like hospitals, especially hospitals who have broken their social contract with their communities—and there I’m paraphrasing some terminology Vikas Saini, MD, uses in an upcoming episode on hospitals and their embarrassing levels of charity care.

So, it’s harnessing forces on the demand side of the equation and on the payment side of the equation, coupled with goings-on on the supply side. With all of this going on, Merrill says that, in this crucible of transformation, we could get better care for lower costs.

To accomplish that, he says step 1 is for the team for healthcare costs going down—employers taxpayers, government policy makers—gang up, create a value alliance, and work together. These allies then tell the healthcare industry, “Look, gang … ixnay on the growth rates you’ve been accustomed to in the past. Period. You are going to need to deal with that, so get used to it.” That is kind of where all of this starts.

Merrill mentions three glide paths that will help up get from here to there, and he names the three:

1. Accountable care—essentially putting providers at risk, giving them budgets that they are responsible to work within
2. Paying for value. We have PCPs who deliver a lot of value. We should pay ’em more. We should also put docs on salary like they do at Mayo and some of these other leading Centers of Excellence.
3. All-payer pricing, which we do get into. They have this now in Maryland. It’s basically when everybody pays the same price for the same service.

Merrill says this all kind of rolls up into removing the incentives that reward low-value care. That can be really expensive. I’m paraphrasing here.

I’m sure for many of you, Merrill Goozner needs no introduction. He’s been the editor in chief of Modern Healthcare. He wrote a book on the drug industry. He was a reporter for many years before that and also did public interest work.

Thank you to Hugh Sims, MD, MBA, for his support and insight!

Merrill Goozner served as editor in chief of Modern Healthcare from 2012 to 2017 and, as editor emeritus, continued to write the magazine’s weekly column until April 2021. In October 2020, he launched GoozNews.substack.com, where he continues to write about healthcare, the environment, and other subjects.

Prior to joining Modern Healthcare, his journalism career spanned nearly 40 years as an editor, writer and journalism educator. In 2004, he authored The $800 Million Pill: The Truth Behind the Cost of New Drugs. He previously served as a foreign, national, and chief economics correspondent for the Chicago Tribune (1987-2000) and a professor of journalism at New York University (2000-2003). He has contributed to numerous lay press and scientific publications over the course of his career, ranging from the New York Times to the Journal of the National Cancer Institute.

He earned his master’s degree in journalism from Columbia University in 1982 and his bachelor’s degree in history from the University of Cincinnati in 1975. The University of Cincinnati named him a Distinguished Alumni in 2008 and inducted him into its Journalism Hall of Fame in 2016.

06:24 How is the rise of the high-deductible plan affecting the nation’s health?

07:20 What is one of the big issues not being discussed in America today?

08:33 What kind of tipping point is in store for hospitals in this decade?

09:01 What two trends are we going to see in healthcare in the coming decade?

10:50 What are the ways in which the changes in healthcare go well, and what pitfalls do we need to look out for?

11:14 “[This] is about what is sustainable and what is not sustainable.”

12:35 “Healthcare is misnamed. It’s sick care.”

13:12 Why do we need to talk more about who gets sick in this country?

13:51 “Pricing is part of the problem, but volume is the other part [of the problem].”

15:40 “The world is gonna change, you’re gonna change, and we’re gonna provide you a glide path … because this is what we need as a society.”

17:20 What should be the overall goal for healthcare spend?

18:45 EP364 with David Muhlestein, PhD, JD.

19:40 Why do we need to address physician pay?

25:31 Why does the single pricing system create equality?

30:11 EP363 with David Scheinker, PhD.

30:34 EP370 with Erik Davis and Autumn Yongchu.

30:55 What are the three glide paths for the future of healthcare?

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