BROADCASTS.com

In this healthcare podcast, we\u2019re gonna zoom out and look at the entire healthcare industry. I am very confident that you know a lot about the healthcare industry and its basic stats. It\u2019s huge. The healthcare industry is approaching the $4 trillion mark, and it employs more people than any other industry in 47 states. Think about that momentarily. More people work in healthcare than in any other industry in every state except for Wisconsin, Indiana, and Nevada.

We could get into (but we won\u2019t) how many of the gigantic, consolidated incumbents in the healthcare industry are either for-profits sporting very happy shareholders or investors. Then, of course, we have our \u201cnonprofits\u201d\u2014especially mega-nonprofit health systems\u2014who enjoy some pretty healthy margins while, at the same time, these health systems in general offer up some fairly embarrassing levels of charity care considering the amount of taxes they deprive their communities of.

You also are probably eminently familiar with various ways that have been cited to transform the industry. So, the usual suspects here are, of course, changing incentives\u2014offering true value-based care contracts, for example\u2014and then the whole creative destruction angle, wherein upstarts come in with far superior products and services, \xe0 la the whole Kodak case study or what happened to Sears and Kmart. Maybe this will happen in healthcare. Other ideas to transform the healthcare industry include employers harnessing the latent power that they have in some markets and then, of course, getting rid of middle people, for sure. Or we could go single payer, of course. That\u2019s another suggestion/solution.

Today\u2019s conversation is a rather holistic look at all of this. I dig into this with David Muhlestein, who is chief research and innovation officer at Health Management Association (HMA). And when I say dig in, I mean dig in. David made some very intriguing points that I had not heard before, actually\u2014and I\u2019ve heard a lot in my time, so that\u2019s saying something. I\u2019m gonna tick off a couple of them, but I don\u2019t do them justice. So, you\u2019ll need to listen to David explain them and give context.

First off, what\u2019s the problem with healthcare being a $4 trillion industry in this country\u2014I mean, almost 20% of GDP\u2014and employing more people than any other industry in 47 of our 50 states? There are other big sectors in our economy, after all, that get lots of love. Why is big healthcare \u201cbad\u201d and these other sectors \u201cgood\u201d in economic terms when we talk about employment?

That\u2019s one thing I wanted to know. And David made a point that may be self-evident for some but is worth reiterating in all cases. The government pays for roughly half of healthcare, and from a consumer or just American standpoint, it kind of sucks. I mean, I don\u2019t see many Insta selfies of someone rocking their brand-new insurance premium. Dollars going to healthcare or health insurance are not going to consumer goods. And that matters economically as well as retail therapy. For all you econ geeks out there, this industry offers no marginal utility.

Here\u2019s a second interesting point: Just changing incentives might not be enough. Organizations downstream and upstream need to be on board with the spirit and objective of the incentive change. If they are not, then it\u2019s game on for every CFO and their revenue cycle managers to finagle how to find the loophole that enables revenue maximization. Revenue maximization. Period. Revenue. The end.

Which brings me to another interesting point: Boards of directors, CEOs, people with fiduciary responsibility \u2026 they need to know thyself and consider their actual customer.

Spoiler alert: 99% of the time, that actual customer is not patients, no matter what is printed in big letters on the front door.

No change can really happen unless those who serve in the upper echelons of these businesses get really real about where their bread is buttered. Organizations are built to serve their customer, after all. So, if a patient isn\u2019t identified as a customer, the organization at its very core is gonna have a lot of difficulty serving the patient.

So, now what? If I want my organization to move forward in a way that is more patient-centric and less financially toxic, say, what to do? Here\u2019s thoughts after chatting with David Muhlestein. Four main steps:

1. As I just said, you gotta get your current state unemotionally understood. For reals, who is the organization built to serve? So, first step is being introspective in the harsh light of day.
2. Consider the timeline of your existential demise. Ha ha, this show is so uplifting. But unless organizations really think out 5 years, 10 years, 25 years and really internalize the existential threat, it\u2019s going to be hard to motivate change. I see this all the time. So do you. Inertia is real. Nobody does anything until they absolutely have to.
   • Sidebar: But if you need an eventual demise to bring up at your next strategy meeting, I just saw a paper come out saying that by 2030, cost-related nonadherence could become a leading cause of death in the United States, surpassing diabetes, influenza, pneumonia, and kidney disease. This is as per a study by the nonprofit West Health Policy Center and Xcenda. Nonadherence \u2026 what does that mean? It means the patient is not doing their treatment. They are not going to the doctor or getting medical care or not taking their drugs. Meaning no one is making money off of all of those patients, especially when they\u2019re dead. This is where the rubber meets all of those excess profits everybody is reaping in the short term. I hope that was helpful for anybody trying to motivate change today.\xa0\xa0
3. Consider what legacy we want to leave behind. Do we all want to wait until we\u2019re forced to change to do so? Is this the healthcare system we want to leave behind to children and grandchildren? I mean, anybody who\u2019s got a loved one in the hospital with anything complex, fighting for their own patient records, on the phone for hours a day with insurance carriers while care is delayed with possibly devastating consequences, the family having to coordinate care and cross their fingers and pray they don\u2019t get a ridiculous bill for services that may or may not have been rendered and then use retirement savings to pay for them \u2026 if anyone is not looking to be a party to all of this, then let\u2019s think about our strategy moving forward and how it will change to meet the future we want to see.
4. On to the evolve and change approaches: How exactly do you think about doing that? According to David Muhlestein, you can repair your current organization or remodel or rebuild.

It sounds daunting, but as Dr. Eric Bricker said on our recent interview together (EP351)\xa0and as others have said as well, this is already happening in some regions across the country. There are pockets with real transformation. These changes are on the edges right now, but they\u2019re showing that this can and is possible. \xa0

David Muhlestein, PhD, JD, is chief research and innovation officer for Health Management Associates (HMA). He is responsible for the firm\u2019s self-directed research and supports strategic planning and innovation.

David\u2019s research and expertise center on healthcare payment and delivery transformation, understanding healthcare markets, and evaluating how the broader healthcare system is changing. He is a self-identified data nerd and regularly speaks and writes about healthcare system evolution.

David joined HMA via its acquisition of Leavitt Partners in 2021, where he was the chief strategy and chief research officer.

Additionally, David is a visiting policy fellow at the Margolis Center for Health Policy at Duke University, adjunct assistant professor at The Ohio State University College of Public Health, and a visiting fellow at the Accountable Care Learning Collaborative. He previously served as adjunct assistant professor of The Dartmouth Institute (TDI) at the Geisel School of Medicine at Dartmouth College.

David earned his PhD in health services management and policy, JD, MHA, and MS from The Ohio State University and a BA from Brigham Young University.

07:38 Is it an issue for the healthcare industry that it is one of the largest employers in the country?
08:42 \u201cI think that we need to figure out what is an appropriate amount to spend on healthcare and get to that level.\u201d
09:01 How do we not decrease the amount of healthcare we\u2019re receiving while paying less for that healthcare?
10:11 What are the two ways we can look at decreasing healthcare spend?
15:39 \u201cI think that a regional approach may happen.\u201d
16:56 \u201cWhen somebody takes less, others are going to follow them.\u201d
17:33 Who is really paying in our current healthcare system?
19:47 \u201cAny sort of a model that you start with influences everything else that you do.\u201d
20:09 What\u2019s the common challenge David Muhlestein sees in value-based care systems?
23:21 \u201cThere are countless things that you can do to improve the current system today.\u201d
27:25 What are the three options for building up better healthcare?
28:19 David\u2019s advice for healthcare executives.
33:22 \u201cTo really lower the total cost of \u2026 healthcare, it\u2019s a 30-year process.\u201d

@DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Is it an issue for the healthcare industry that it is one of the largest employers in the country? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cI think that we need to figure out what is an appropriate amount to spend on healthcare and get to that level.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

How do we not decrease the amount of healthcare we\u2019re receiving while paying less for that healthcare? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What are the two ways we can look at decreasing healthcare spend? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cI think that a regional approach may happen.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cWhen somebody takes less, others are going to follow them.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

Who is really paying in our current healthcare system? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cAny sort of a model that you start with influences everything else that you do.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

What\u2019s the common challenge David Muhlestein sees in value-based care systems? @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cThere are countless things that you can do to improve the current system today.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\u201cTo really lower the total cost of \u2026 healthcare, it\u2019s a 30-year process.\u201d @DavidMuhlestein discusses #healthcaretransformation on our #healthcarepodcast. #healthcare #podcast #digitalhealth

\xa0

Recent past interviews:

Click a guest\u2019s name for their latest RHV episode!

David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O\u2019Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes, Paul Simms, Dr Steven Quimby, Dr David Carmouche (EP343), Christin Deacon, Gary Campbell, Kristin Begley

\xa0