Cautious Optimism and Daunting Complexity

With a controversial new health care waiting for Senate approval, the topic of the near and distant future of American healthcare — what role markets can play in controlling healthcare costs — felt especially timely. Against the backdrop of a sparkling blue Lake Michigan, faculty, alumni, students, and healthcare industry experts gathered at Kellogg’s new Global Hub for the 2017 Malcolm MacEachern Symposium to discuss how business and government can work together to improve American healthcare.

James Weinstein, CEO and President of Dartmouth-Hitchcock Health system, said that a lack of transparency in health care, both clinical outcomes and costs, is one of the major problems in the current American healthcare system. “I liken it to asking passengers to get on an airplane that has no instruments. The pilot doesn’t know which direction he’s headed in, what altitude he’s at, or how much fuel he has. It’s the same when patients see a physician who can’t tell them what his or her outcomes have been, what the evidence is for the treatment or procedure they’re recommending, or how much it will cost. Like the pilot, the patients are flying blind. Would you get on that airplane?” He asked.

Weinstein’s strategy at Dartmouth-Hitchcock is to create a ”sustainable health system” that emphasizes health, not just healthcare; rewarding quality, not quantity of care; and focuses on populations rather than market share. But to spread this practice, Weinstein says, “The partnership between communities, business, and government are more important than ever.” He envisions market-controlled healthcare that is more transparent about costs and outcomes, with virtual visits for routine checkup, and partnerships with industry and consumers to obtain data analytics to help with modeling.

The Keynote speaker Julian Harris, President of CareAllies, a Cigna company focused on supporting providers in multi-payer value payment efforts. He addressed the question of how government and markets can work together to control healthcare costs, even with challenges like the technological needs to keep up with big data as well as a changing consumer profile that necessitates more personalized care. “For quite some time, we’ve gotten away in healthcare with doing things that are not acceptable for patients or consumers in any other part of their lives,” he said.

Harris discussed fee for value as opposed to service, which MACRA is attempting to drive with changes to Medicare that will have an impact on commercial and Medicaid value-based payment efforts as well. Harris, a medical doctor who has worked as an executive both in government and in the private sector, said, almost conspiratorially, “MACRA showed that if you’re willing to quietly work with people without needing to get all of the credit, you can get a lot done.” Harris said that the reason high quality, affordable healthcare may be more achievable now can come from learning from past mistakes. Financial models have changed, technology have improved, and healthcare experts better understand the evolution that’s necessary in the relationships between consumers, providers and plans.

Both Harris and Weinstein were cautiously optimistic that reform could happen, and both also lamented the complexity of the issue—Harris opined that anybody who works in Medicaid finance “deserves a PhD.” Weinstein quoted Donald Trump’s take on healthcare. “The president is correct. It is complicated!”

In addition to Harris and Weinstein, the symposium included a conversation between Amanda Starc, Associate Professor of Strategy at Kellogg, and David Dranove, the Walter J. McNerney Distinguished Professor of Health Industry Management at Kellogg, about the future of anti-trust in healthcare markets. The symposium ended with Craig Garthwaite, Associate Professor of Strategy and Co-Director of Health Enterprise Management, offering his forecasts for the year ahead with healthcare and the Affordable Care Act. He said that if the healthcare system is going to be improved, the US must continue to monitor and enforce anti-trust provisions and promote competition. “We’ve got to have markets that work.”