Medicine and money

As private equity has charged into the system and nonprofit healthcare agencies have become investors, the role of altruism has been questioned.

Recognizing such disruption and the need for innovative responses, more than 100 healthcare industry professionals, Northwestern students and alumni gathered at the James L. Allen Center on April 25 for the 2012 MacEachern Symposium.

Honoring the life of the late Dr. Malcolm MacEachern, founder of what is now the Kellogg School’s Health Enterprise Management Program, the symposium has explored pressing issues in healthcare since 1983.

For the symposium’s 2012 edition, organizers adopted a timely theme: “What Happened to Altruism in Healthcare?”

MacEachern Memorial Lecture
The Malcolm MacEachern Memorial Lecture featured Harvard University economics professor David Cutler presenting an hour-long program titled “Money, Mission and the Future of Medical Care.”

One of the world’s foremost health economists, Cutler said the inefficiency of medical care — a system that costs too much and delivers too little — has dictated a need for change and a finer focus on incentives and the organization of healthcare firms.

“In healthcare, things change when the alternative is death,” Cutler said.

To improve, Cutler said better organization was essential, including:

• Appropriate info
• Compensation arrangements
• Empowered employees and consumers

“All three of those are the drivers of productive industries,” Cutler said, later adding that policy is gradually promoting change with payment reform and incentives for IT adoption.

With the right changes, Cutler said, leaner, more aggressive systems would deliver better care rather than more care and install methods to measure and disseminate both quality and costs.

Looking to the present and the future
In addition to Cutler’s lecture, the symposium featured a range of presentations that assessed healthcare’s current state and future possibilities, including:

• Burrill & Company CEO Steve Burrill discussing innovation and biotech in 2012 and beyond
• Peter Budetti, deputy administrator for program integrity of the CMS, presenting insights on halting Medicare fraud
• Health Care Financial Management Association President and CEO Dick Clarke offering perspectives on hospitals’ financial responsibilities to charitable care
• A roundtable discussion with industry leaders and academics, including Kellogg Professor Leemore Dafny, as they explored the modern state of healthcare and potential future developments

Kellogg Professor David Dranove, the Walter McNerney Professor of Health Industry Management, hoped attendees left with a clear sense of the “incredible opportunities” available in healthcare.

“And when they think of those cutting-edge opportunities and those influencing healthcare, we want Kellogg to rise to the top of that list,” said Dranove, who also serves as director of the Center for Health Industry Market Economics at Northwestern.

Further Reading

2011 Business of Healthcare Conference

2012 Biotech and Healthcare Case Competition

Kellogg Insight: Healthcare gets a check-up