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Nate Kaufman
This is Nate Kaufman with the Healthcare Bridge, part of The Common Bridge family of podcasts. Our goal is to have unscripted, brutally honest conversations with thought leaders in the healthcare industry. Today, I’m excited to chat again with my friend and colleague, Dr Jeff Goldsmith, who is a noted lecturer, author, futurist, and he’ll tell a little bit more about himself. One interesting fun fact is that Jeff and I combined have 100 years of experience working in the healthcare field. Thus the meme of those two old Muppet puppets up there staring - the two grumpy old men talking about whatever. And today these two grumpy old men are going to talk about healthcare. Welcome, Jeff Goldsmith.
Dr. Jeff Goldsmith
Nate, it’s good to be with you.
Nate Kaufman
For those who didn’t hear our first podcast, why don’t you give us a quick background about how you got here, and also about your new book.
Dr. Jeff Goldsmith
Well, it’s not finished, but we can get to that. I’m a refugee from politics. I entered healthcare after grad school, worked with the governor of Illinois, not incidentally on healthcare, and my employer during that period of time, for six weeks, was none other than Lynn Shafer, who went on to found Anthem. I entered healthcare in November 1975 and went to work as the planning and government relations person for the dean of medicine at the University of Chicago Pritzker School of Medicine, and evolved into what is today called the chief growth officer for the organization. After that I taught in the business school at the University of Chicago. I did consulting for Christy Young nationally, had a lot of really interesting clients. Worked a lot in the West, particularly California and Oregon. Beginning in 1975, 51 years ago, I’ve really been interested in the science behind healthcare. I’m really fascinated by what’s going on, particularly right now in neuroimmunology. I can read the read the papers and stuff, but I’ve had a broad interest in the financing and politics and organization of care for most of that time.
Nate Kaufman
And one notable thing about you, Jeff, is that you wrote one of the first books about hospitals, in 1981 called “Can Hospitals Survive? The Future of Hospital Care in the United States,” which is my first question. Right now, there is a foundation funded by a billionaire - John Arnold and his wife - and they’re doing, it seems to me, everything they can to prevent hospitals from surviving in the future. You wrote a number of articles about Arnold Ventures and their impact on healthcare policy. What’s your impression?
Dr. Jeff Goldsmith
When I wrote my book in 1979 and 1980 the industry was $80 billion, now it’s a trillion five - the size of Indonesia economically. I think the the operative question right now - not just for Arnold, but for everybody else, the chairman of the Senate Finance Committee, the secretary of the Treasury - is, can we continue letting a trillion and a half dollar enterprise grow at seven or eight percent a year, and the answer is no. So there are a whole lot of different perspectives on what needs to be done to slow it down. I think the problem I have with Arnold Ventures and Mark Miller, the person who is their healthcare expert, is a lot of what they’re talking about, what they want to do is context free and I don’t think a lot of those folks understand that. If you do a lot of the stuff they’re talking about, like rate caps as a percentage of Medicare, peeling back outpatient payment to essentially what doctors charge in their office, you layer all that stuff on top of the trillion dollars in Medicaid cuts that we got out of the President’s budget last year, then it puts a huge chunk of our health system into insolvency. So there’s got to be a happy medium somewhere between slowing down the rate of growth and cratering the system, creating a huge crisis of access to care. I think that’s where I part company with the Arnold agenda.
Nate Kaufman
I actually call that the RAND fallacy, because RAND publishes all these commercial rates about hospitals, and what they talk about is this hospital is in the tenth decile, which means it’s got the highest rates, and this hospital is in the first which means it has the lowest rates. And their advice to employers is try to use this data to get the lowest rates. So what happened was, I actually did some research, and there’s a hospital called Madera Community Hospital. It’s located outside of Fresno. It served about 150,000 people. Did about 720 births a year. And oh, by the way, it was 85% Medicare and Medicaid. And the good news is it was in the first decile of RAND. That means its prices were the lowest in the region. It was a bargain. It was great. Employers should be rushing to them. Well, they couldn’t rush to them because in 2023 the hospital had to close because it was insolvent. When you sit there and look at hospital pricing without understanding what the impact of those prices are on the overall sustainability of the hospital and its affiliated physicians you’re only looking at like one piece of the elephant. Your thoughts?
Dr. Jeff Goldsmith
I had a similar client. I had a client similar to Madera - Watsonville Community Hospital. They hired me after the Loma Prieta earthquake destroyed their facility about what do we replace it with, where do we put it and all the rest of that. And Watsonville had a very similar trajectory to Madera. In fact, I think we’ve talked, you and I, about writing a paper about these two places. What they had in common was not just that they weren’t paid an adequate amount of money by commercial payers and they didn’t have very many of them to offset the losses that they were experiencing for Medicare and Medicaid, but they had a huge number of uninsured - and in some cases, not even legal - resident agricultural workers that they were taking care of, because that was part of their community responsibility, and that wasn’t included either. So the cost of that was 100% loss for every one of those folks that was admitted to the place. At Brown University in Providence, Rhode Island, 2500 miles away, you don’t have any idea what the actual circumstances of the hospital are on the ground. It’s that lack of a situational awareness that makes a lot of their advice so dangerous.
Nate Kaufman
It is dangerous. You have to understand that Brown University and Dr. Whaley - and a number of others there - are publishing articles funded by Arnold Ventures on the benefits of capping hospital prices. And I thought about the quote, there’s a famous quote, let’s see if I have it right: it is difficult to get someone to understand something when their salary depends on not understanding it.
Dr. Jeff Goldsmith
And I’m going to give my colleagues in academia the benefit of the doubt - that they really don’t. They really don’t understand the circumstances under which the care is provided, and they also don’t understand, other than in very broad terms, the financial options that hospitals have in those communities or markets. And I guess it’s just that lack of situational awareness that makes their stuff so dangerous. It’s not like they’re lying to us. It’s that they don’t have all the facts. And the facts that they do present, present a truly misleading picture of the operating reality of running a hospital in a community like Watsonville, or the one that Madera served. I have trouble... I mean, I’ve looked at Arnold a lot. Arnold is a genius. He made his billions of dollars essentially running a hedge fund that traded in energy futures, and was an early master of the idea of arbitrage. Where are there differences in the value of an asset depending on where it was located? If I could hire the guy to run my retirement plan, I’d do it. When I looked at what his foundation is doing, 85% of it I happen to really like. I really like his work in scientific integrity. Can we really believe the research studies that a research scientist is publishing? Are there conflicts of interest that are shading his or her findings? I really like the stuff that he’s doing in criminal justice, where he’s going after absurdly long sentences and really badly managed parole trying to get people back into society. I really like a lot of the stuff that he’s doing in infrastructure. You guys have infrastructure in California that is actively dangerous, that’s setting multi-hundred thousand acre fires. Wouldn’t it be ironic if the advice that he was giving to the hospital industry had the same effect on that industry as the regulators have had in the state of California in creating what is truly an unsafe public service? So I guess it’s just they don’t know what they don’t know about our field.
Nate Kaufman
You’re giving them a little bit more credit than I am. I mean, I don’t know anything about space travel, so I’m not going to do it...
Dr. Jeff Goldsmith
Well, you’re smart enough to not do it, Nate.
Nate Kaufman
That’s the whole point. These people are economists who don’t understand the industry, who don’t live where I live, and have to negotiate with doctors and health plans and understand all of the unfunded mandates. They’re just creating this propaganda, in my opinion, that essentially encourages state regulators to take the popular position of controlling rates in states. What do you think about price caps and rate controls?
Dr. Jeff Goldsmith
Well, you probably don’t know this about me, but when I was responsible for Government Affairs at the University of Chicago Medical Center I came within an eyelash of getting a Maryland style rate setting system put in my state. I was the motivating factor behind it. Governor Thompson signed it into law. We got one of our trustees appointed as the chairman of the commission, a friend of mine from the legislature was appointed executive director. What on earth was I thinking? Well, what I was thinking is my institution was going bankrupt because it had 31% Medicaid, and I wanted to use the rate review system as a way of preventing them from cutting my Medicaid rates. We had enough political clout in the state that we could put it in place and do it, and of course, we were looking at Maryland. Maryland had been in operation for three or four years. It was a system that was essentially de facto, politically controlled by the two big teaching hospitals and by CareFirst, their big Blue Cross plan which is sort of like the single payer in Maryland. So how cynical was I? I wanted rate review to put a floor under my rates and to try and get Medicare to pay me more, and, in effect, to cap the prices of suburban hospitals as part of the deal to make all that happen. That was 40 years ago, Nate, I don’t think all that much has changed. I mean, price controls are a reason why we get forest fires in California during the dry season. That is not a very good model for running a hospital system.
Nate Kaufman
Well, we already have price controls. We have Medicare, it has a price control and is paying 80 cents on the dollar of cost. Medicaid is a price control my hospital. 75% of their prices are controlled by the federal government.
Dr. Jeff Goldsmith
I don’t see it as price controls at all. You and I are both Medicare beneficiaries, and to me, I think Medicare’s job is to be a prudent purchaser of health services on behalf of us beneficiaries and the taxpayers. And if they can figure out a way to twist our arms into accepting 80% of cost as a way of covering their obligations to us, more power to them. The problem is, if everybody does that you don’t have a hospital system, you don’t have an ability to meet people’s needs. I don’t see Medicare negotiating with the industry as price controls at all. It is, in effect, a market transaction by a very influential purchaser.
Nate Kaufman
Well, I guess we could disagree on that, but sure, we do all the time, in fact, daily. But the question I have for you, Dr. Goldsmith, is, if you look at Maine, if you look at Indiana, if you look at California, what we’re seeing is rate controls and price controls with absolutely, basically, personifying the RAND fallacy.
Dr. Jeff Goldsmith
But Nate, look, the reason why this stuff is even being discussed right now is because people don’t really have a good vision of what to do instead. And I have argued strongly in my recent writings that what price caps do is treat the symptoms of a problem. The real problem is, why are the costs going up? Well, they’re going up because the amount of administrative complexity that we’ve introduced into the healthcare system is completely unsustainable, and huge chunks of the cost of that CT scan or that operation or that emergency room visit are imposed by the government and by the fragmented payment system that we have. If we want the cost to go down, capping the rates doesn’t do it. It just puts the problem off to future years when the hospital begins falling apart. If we want the cost to go down, we’ve got to simplify the health care transaction. We’ve got to eliminate a lot of the wasted motion. Why should a hospital spend 13% of its expenses on revenue cycle and another five or six percent on its information technology? That’s a ridiculous expenditure. Why should hospitals be supporting 40% of the physicians in their communities? Well, the answer is because Medicare put them out of business by paying them far less than it costs to actually operate their practices. A lot of the problem that we have with the cost of care right now is the unintended consequence of poorly thought through regulatory schemes that are damaging the industry. If we really want cost stability, we’ve got to own the fact that we as a society created a lot of these problems and go in and fix them. That’s what I think we need to do.
Nate Kaufman
Well, there’s another component, the healthcare industry is somewhat unique, and I would say over 60+ percent of our costs are people. A lot of those people are in short supply. And a lot of those people who are in short supply, I negotiate with. When you negotiate with an anesthesiologist who is in short supply and has to be up every fourth night to come into the hospital for an emergency, or if you negotiate with a union who’s looking for better wages for their employees, that’s 60% of our cost just going up. And then what happens is the the union turns around and says, well, hold on a second, our premiums went up and our cost of healthcare went up. Well, guess why it went up? I think Scott Becker said it. He said we have huge shortages; we have shortages of beds, we have shortages of specialists, we have a shortage of primary care. We need to expand that capacity if we are going to have any chance of, I’ll call it, health equity. You and I, because we’ve been doing this long enough and have put a few bucks away, we’ll find our care. We’ll be able to buy our way in, but a huge percent of the population will not be able to afford their care.
Dr. Jeff Goldsmith
I really liked your conversation with Becker, he kept coming back to the shortages over and over again. We’re going to make those shortages worse by strangling, essentially, the core of the health system. We’re going to make those shortages worse. How do you reduce the cost of the people? Well, a lot of those docs are coming out of medical school with 400K in debt. Why on earth are we continuing to charge tuition to people that are in scarce supply? We could figure out a way to not have them have that 400K in debt. That’s going to alleviate a lot of the pressure right there. Plus we created a lot of the shortage, Nate, by diverting half of their time into typing, into fiddling with their electronic record to justify every single clinical decision that they make; what an absurd waste of their time. If they’re spending only half their time taking care of us, that time is going to be more expensive, and we created that expense by diverting half their time into justifying every single thing that they do. Managed care got completely out of control, and we are now in the midst of... it’s not just hospitals that are struggling right now. Pretty much all four of the major lines of business or health insurers have turned brown at the same time, so it’s not just our friends in the care system that are looking at the concrete coming up to meet them. Now, we did a lot of this to ourselves, Nate, and we’ve got to have the courage to own it and undo some of those things.
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Nate Kaufman
Well, when you say “we,” first of all, my take is that these insurance cartels, as I call them, are essentially claims processors masquerading as value creators. I mean, they didn’t create any value.
Dr. Jeff Goldsmith
But they would argue that they got into the business that they’re in to bargain with hospitals and doctors to keep the cost down. But you do that for 40 or 50 years, and it’s not bloody obvious that there’s a huge amount of waste left over to justify your continuing to take 10% or 15% off the top. I grew up in Portland, Oregon. Portland, Oregon has had managed care since the 1950s and it’s a very conservative physician community, so the idea that there’s a lot of waste and inappropriate care in that community just doesn’t stand up to a lot of scrutiny. I think the same thing is true in large parts of California. In Minneapolis, where we’ve got a very puzzling merger going on right now, it’s the same thing. The original premise of those health plans was to try and encourage more conservative and evidence based decision making. Well, 50 years on, I think you could argue mission accomplished. That’s not what’s driving the cost of care up right now. It’s those shortages that Becker talked about in his interview with you that are the real problem. How do we do stuff so that we don’t make those shortages worse? How do we take intelligent steps to actually control the cost of care and make it affordable? Because frankly, Nate, it isn’t charging somebody 4,500 bucks for a CT scan. Give me a freaking break. That’s not okay.
Nate Kaufman
Somebody like a close relative by chance?
Dr. Jeff Goldsmith
Yeah, I’m not going to get into who it was exactly. She had a $7,600 emergency room visit. It was completely unavoidable, she was in racking pain, bleeding, I mean, there was nowhere else to go but the ER, and she ended up paying three grand of it herself - thank you, Obamacare. Well, $4,500 of that $7,600 was a CT scan that went over the little dotted line between two organ systems and got doubled as a result, that kind of stuff. Nate, I’m sorry, it isn’t going to stand and it’s something that is putting the industry in trouble. You talk about affordability - high end pharma, specialty pharma and hospital care are the least affordable things that our health system does. We have to figure out how to do a better job of doing those things and bring the cost down.
Nate Kaufman
You talk about “we,” and you just mentioned a couple groups. Pharma is a “we.” The insurance companies, what they’re doing in order to become more profitable is they’re leaving patients stranded in markets where they can’t make enough profits, and they’re skimming off of drugs, either through PBMs (pharmacy benefit managers) or now what they’re calling group purchasing organizations.
Dr. Jeff Goldsmith
I think the voters are going to have a limited tolerance for blaming and finger pointing. They’re going to want people to take ownership of this problem and fix it. And unfortunately, I don’t see a lot of that mindset in this field right now. I’d like to see more of it.
Nate Kaufman
When you talk about fixing it, okay... so if the voters go... What are we seeing? We’re seeing Arnold Ventures going out and saying price caps work and they don’t really harm hospitals, beds, and all this other stuff. I mean, who are the voters going to listen to? My challenge is if I try to explain... when I’m in a fight with an insurance company, the insurance company says it costs $4,500 for a CT scan that should cost $250 - that’s their bumper sticker.
Dr. Jeff Goldsmith
Well, and they’re going to pay $2,000. It’s still too much.
Nate Kaufman
Yeah, my bumper sticker is, well, you don’t understand health care; we got Medicaid underpaid, Medicare doesn’t pay enough, and the bumper sticker is running around the car. So how is an average voter going to understand which politician is coming up with the right solution?
Dr. Jeff Goldsmith
I honestly don’t know. And all I can say is, the guy that I rely on for advice on all this stuff, believe it or not, is my doctor. They’re on the factory floor. They see all the stuff that’s happening to them. Whenever I go in for a checkup, I always give him a checkup. He’s 61 years old. I don’t want him to retire, because I have a funny feeling that when he does, I’m going to have a great deal of difficulty finding someone to replace him. I don’t want to use chatGPT as my physician, thank you very much.
Nate Kaufman
Well, what you can do is do what I do, which is MD² . I had to lock in a doctor for me and my wife, because this whole idea of primary care... getting back to Scott Becker saying, that’s the solution - it’s not the frickin’ solution. We’re going to have 38,000 vacancies in primary care, especially in rural markets, where the insurance companies have essentially starved these hospitals the point where they cannot afford to recruit doctors.
Dr. Jeff Goldsmith
Well, maybe it’s one of those things like the war in Iran, where people just didn’t listen until the guys in charge did something really stupid. I think we may be in a similar position in healthcare. Nate, no offense, but neither of us has an enormous audience. We don’t have the ear of policy makers. We really don’t. We’ve worked in the field for 50 years, and we have our own biases and prejudices. We see what’s going on in the industry, but it’s how the care system affects ordinary citizens that’s going to determine what happens. And if they’re as afraid of the bill that they get for visiting a healthcare provider as they are of the illness itself, guess what? They’re going to do something different than we are, and maybe not going to listen to the right advice. I don’t know how to fix that problem. I really don’t.
Nate Kaufman
You mentioned something a little earlier about Minnesota a and recent announcement, a hospital system in Northern California - fairly progressive, dominant system in Northern California, San Francisco area - has decided to merge with a hospital system in Minneapolis, which is 1,585 miles away. As I said, I have been in the business 50 years, other than somebody trying to create their own reality and then hiring some broker to create some Excel spreadsheet to justify the relationship, can you, given your vast experience, come up with a rationale for this merger?
Dr. Jeff Goldsmith
Sutter was a client. I’ve got a 40 plus year memory of Sutter, it’s a fine health system, and a lot of my friends in my space were Minneapolis people; George Halvorson, who ran Group Health, Healthcare Partners in in Minneapolis. Jim Rice was the strategy person for Health Central, which became a part of Allina. I know both these systems really well, but like we were talking about earlier, what do these two markets have in common? They’ve had managed care in them for 50 years. And what has managed care done? It’s burned down the hospital rate structure to the point where there isn’t any cash flow. It’s a miracle that Sutter was in a degree of financial distress similar to what Allina is in and now, and five or six years ago, they turned it around. So it’s not like they don’t understand what it is like to operate in an environment where managed care has been around for 50 years. But there are no economies of scale or coordination in the hospital business, and there are even less economies of scale and coordination when the two main nodes of it are 1500 miles apart. I don’t know a single person in this field that isn’t scratching their head over this merger.
Nate Kaufman
I raised that issue, by the way, on LinkedIn and I was shocked I got 90 comments about the merger, I can’t figure it out. Let me just mention one thing that Mark Cuban said - see, if you notice, I’m tying these things - Mark Cuban made the comment that there’s an incentive right now for health systems to get bigger, because when you get bigger, executive comp goes up. I’m not saying that that was the only reason, but it sure is not a de-motivator for trying to get bigger.
Dr. Jeff Goldsmith
It’s a big reason, and I think the comp of those folks in alignment will probably be between double and triple as a result of the deal. To me, again, remember what we got. We’ve got a bunch of frightened people who are out there saying, how is this going to affect us? And my thing to boards and CEOs that are compiling a deal like this is if you can’t explain in English in a paragraph how what you’re doing is going to make the life of your patients and the doctors and nurses that take care of them better, you have no basis for doing it, and that’s the issue. If all they get is a bunch of mumbling and buzz words, they’re going to go, “And that’s the reason why I can’t afford my care.” So it raises a lot of questions. I’m not anti-merger and I’m not anti-systems. We’ve got a great system here in Virginia - Nova. They’ve stuck to their knitting, and they’ve stayed in Metro DC. There’s a great system in Georgia called Piedmont that has been given multiple opportunities to expand, to grow into Indiana or North Carolina or whatever it is, and they said, “No, we’re going to stay here in Georgia and do the best we can.” So it’s not like all mergers are bad, but the ones where you know you’re creating an entity that doesn’t make any sense to an ordinary citizen and then going and complaining when people begin criticizing it, that’s going to be kind of hard. I don’t think they’ve got an anti-trust problem, so it’s not going to be anti-trust that stops them. I think what’s going to stop them is the local politics in Minneapolis. You may remember a year or two ago, the other big system that’s been struggling in Minneapolis for years, Fairview, tried to merge with, I think it was, Sanford Health and a revolution inside the community saying we don’t want our care system to be controlled by somebody that’s 100 some miles away. I think that very same thing is probably going to happen here. I don’t assume that it’s a done deal at all.
Nate Kaufman
I have this strategic advice when you’re considering a strategy for boards, because I worry that there are... there are great boards, there are good boards, and then there are boards that can get... and all of them even understand the nuances that we do. If you want me to convince a board of anything, I can do it. I can say, “Well, you have to understand managed care,” and this and that and the other thing. So if a CEO has an idea - and I’m not saying this happened in the case of Sutter - they hire their friend consultant to come in to support the idea, and then everybody gets all juiced up. One of the questions that I want boards to ask is, have we received a second opinion from a contrarian?
Dr. Jeff Goldsmith
Nate, the problem is that there’s very little market for saying, “don’t do this deal” and there’s an enormous market for doing the deal, which is that the typical $25 billion merger would probably have a five percent transaction cost. What’s the transaction cost? Well, it’s the deal broker that brought the parties together. It’s the lawyers that have to draft up all the deals. It’s the bankers that have to redo the debt. It’s the systems integrators that have to get all their different versions of instances of Epic to talk to one another. There is an industry that is rolling up these health systems and it’s the American way, there’s all this. But at the end of the day, if the combination of those entities isn’t creating measurable value for patients, for the clinicians that are on the factory floor doing all the hard work, it’s a waste of everybody’s time and money. Like I said, there are some mergers that meet that test, that bring capabilities and perspectives and talent that wasn’t there with the entity before it merged. So it’s not like all of these deals are bad, but the ones where you’re just scratching your head and going, where exactly is the value being created other than in jacking up the C-suite comp. Those are the ones that are really creating trouble for the industry, and the industry is not in a position to do a lot of stupid things right now.
Nate Kaufman
Another system that I work with, which I think is a great model, is Hartford. They basically have stuck to their knitting in Connecticut. And again, when I think about my advice, I’m the guy there that is the contrarian. I’d say I get listened to about 50% of the time. But I’ve got to give Jeff Flaks credit, at least he listens to me, listens to both sides, before he makes a decision.
Dr. Jeff Goldsmith
I’ve had a slightly more bitter experience, which is I’ve been called in as an advocate by legacy managements to argue against doing a merger, but remaining independent. I wrote a book 40 some odd years ago called “Can Hospitals Survive?” so it’s not exactly mystifying that I begin getting a lot of calls from people that are worried about their hospital surviving. I probably have worked with 15 institutions over that 40 years, and I’ve lost almost all of them. And it’s been immensely frustrating. The last one was Virginia Mason in Seattle, which I had a 35 or 40 year relationship with. That was an incredibly bitter experience. I didn’t want them to lose their independence, because I thought there was something really unique to what they and their clinicians were doing, and now they’re a part of Common Spirit. I mean, God love them, but it’s a completely different institution, and it’s lost something in that process. So I’m not entirely objective about this, Nate, it isn’t a business proposition at all. I haven’t made a ton of money advising people to not do deals compared to, like, a billion and a half dollar market opportunity for bringing places together. I might as well be throwing pebbles at somebody’s gulfstream.
Nate Kaufman
You’re absolutely right. So let’s talk. Let’s close this up with a couple things. First, advice for policy, advice for the nation, advice for healthcare policy people, advice for health; let’s start there. Do you have any advice for them on how we can make this system better right now?
Dr. Jeff Goldsmith
Well, I mean, the way you don’t make it better is by savaging the safety net that’s there in communities to keep people out of the hospital. So if you want health care costs to not rise at eight or ten percent a year you don’t take apart your public health system. You don’t tell people not to get vaccinated. You make sure that they can get access to primary care services when they need them. You have community health centers that don’t have long waiting lists. You create pathways that patients can follow before they become patients that keep them out of the emergency room. I think that’s the single most important thing that we can do. We have skimped on our social safety net and the politics has moved in the direction of blaming people for getting sick. You have got to stop blaming people and start helping them before they show up in the emergency room and need a $4,500 CT scan. I think that’s the biggest one. But I think the other piece is we need to be asking questions, like if employer-based insurance is not affordable are we really going to be able to continue doing this? Are we going to be able to charge 500% or 600% of Medicare to a dwindling number of people that are paying the bill? I think it’s pretty clear. We’re going to need to begin the conversation now about what replaces employer-based insurance. It’s going to be a very contentious and difficult conversation. It’s going to take probably a decade to figure it out, but we need to start now, because I don’t think it’s going to be viable for all that much longer. Then the administrative complexity related to the previous one is, if you’ve got five or six different systems for paying for care, and you’ve got a thousand payers each with their own data requirements and needs, that’s going to end up imposing costs on your doctor and on the hospital that they work in that really isn’t sustainable. We’ve got to take out a lot of that absurd complexity and give the doctors that take care of us a day a week back to actually take care of us and listen to our problems. We do those things and and healthcare is going to be more affordable at the end of the day than it is now.
Nate Kaufman
My biggest thing is for policy makers and politicians to stop talking to each other and to stop talking to the pinnacles of healthcare, the CEOs and the deans and people like that, and start talking to people like my son, who’s a VP of operations and is knee deep in running a hospital and dealing with the multiple problems that happen every day. Or talking to me about what it’s like to negotiate contracts with hospital based physicians, and if you don’t have those physicians, you shut your hospital down and so how do you come up with a fair deal. The nuances that exist in what I call the gutter of healthcare - the policy people and the politicians are totally oblivious to those things.
Dr. Jeff Goldsmith
But they also don’t want to make a mistake, and they do not want to have their names on a disaster. And unfortunately, I think we’re going to have some disasters before people wake up and begin asking the kinds of questions you’ve been asking. I hate to say it, but I think we’re going to need some people to launch missiles and then watch what happens when they land on people’s lives. I wish there were a more efficient way of learning what not to do, but I think we’re at the point where people are going to begin acting impulsively, and they’re going to begin doing things that they’re going to regret later. I can tell you, I adore my doctor, and I am grateful to the hospitals that saved my life. If it wasn’t for our hospital system, I wouldn’t be here on the other end of this conversation. I’d be dead, or I’d be in a wheelchair because I’d lost the use of my legs or had my spine shut down. The hospital system and the young people that took care of me during these crises saved my life. I’m not objective. I don’t want them to be put out of business. I want them to be able to help me the next time I have a terrible problem, as opposed to saying, oh, we’ll be with you in six months. That’s what I want. I’m selfish. I’m sorry, but that’s what I want.
Nate Kaufman
No, I would agree with you. I think that’s exactly the point. People say everybody hates hospitals until you need them and then you want the most expensive CT scan, and then you want the robotic surgery, and then you want the neurosurgeons that specialize in spine.
Dr. Jeff Goldsmith
Nate, I just want people to tell me the truth. That’s what I want. Maybe that’s unrealistic, but that’s what I want. I want people to tell me the truth. And that goes for the CEOs that are talking about all these deals that they want to do. Tell me the truth. Tell me why you’re really doing this. And the last point.
Nate Kaufman
And the last point I’m going to make, and then I’ll give you the final word, the last point I want to make is hospitals and physicians are not commodities. I love my doctor so much that we named our dog after him. [Chuckle.]
Dr. Jeff Goldsmith
That isn’t necessarily a good thing, Nate. [Laughter.] What’s the matter with you?
Nate Kaufman
The point is that if you go to the right doctor and the right hospital for the right reasons - and it’s not a matter of cheap, it’s not a matter of shopping based on price - it’s a matter of shopping based on competency. And that is one of the things that I hope over time, is that certain hospitals specialize more in certain areas, and others specialize in other areas, rather than saying we have to be everything to everybody, because you just can’t afford to do that. You have the last word.
Dr. Jeff Goldsmith
I don’t know, like I said, I mean, I just want my caregivers and the people that they work for and with to tell me the truth. That’s what I want. I want truth. Truth is the solution here. Things can be infinitely complicated. This is the most complicated product in our economy. It’s the scariest thing that happens to us, illness. We really need a higher level of honesty and integrity from everybody who participates in that system, including the people that study it and make our laws that affect it. If we can get that kind of honesty, I think we’re going to be in a better spot than we are now.
Nate Kaufman
Well, I hope the listeners of this podcast believe that we gave them the truth and that we were brutally honest, and if they ever have any questions, they can reach out to you or me, and we’re happy to discuss this in more detail. This is what we have done all our lives, and this is all we know. This is Nate Kaufman with the Healthcare Bridge, thanking Dr. Jeff Goldsmith. Thanks for taking another hour out of your day and chatting with me and having a spirited conversation.
Dr. Jeff Goldsmith
Nate, it was fun, as always.
Nate Kaufman
All right. Have a good one.
Dr. Jeff Goldsmith
Stay out of trouble.
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