‘Broken’ American Health Care: Good People, Bad System, and The Health Powers of the Disruptors

Marty Makary, MD, is a surgeon and professor of health policy at Johns Hopkins. But for two years, he ventured out of the operating room and academe to examine the problems inflaming American health care with hidden prices, added expense, and overtreatment. In his forthcoming book, The Price We Pay: What Broke American Health Care—And How To Fix It, Makary identifies people and approaches, including his own Improving Wisely program, that he believes can remedy the situation. Don’t look to politics and government, he says, because of the grip of special interests. And while Medicare for all may be appealing, Makary believes it would eventually leave the U.S. health care system underfunded, even dilapidated.

What motivated you to write this particular book? Did you have as a starting point the investigation of the price of health care? Or is that where you ended up?

It started with a true investigation about “What are the real drivers of the health care cost crisis, given how everyday Americans are increasingly getting crushed by their medical bills?” And what I found is that there is no single villain in the system. Instead, we have a system gone awry. By and large, what I found was good people working in a bad system.

The main reason one should write a book is that you believe that there is a story that needs to be told that is not currently being told. And in my case, that story is the story of the innovators of health care today: those individuals, physicians, administrators, policy leaders, and entrepreneurs who are disrupting the medical establishment by challenging the status quo with businesses or ways to deliver medical care that are redesigning medicine from scratch.

I had a tremendous trip over the last two years, meeting the disruptors I thought were having the biggest impact on health care and who have the biggest promise to fix our broken system. They are the physician leaders of relationship-based clinics and globally capitated primary care centers, people pushing for direct contracting and self-insurance, and providers offering a price menu of services that is the same price for insurers as it is for patients. So, these were the innovators I was very excited to learn about, and I felt compelled to share their stories.

As I went through the book, I read about medical debt collection, price obscurity—I found myself getting discouraged. Yet you seem to be trying to strike an optimistic note. Did you find yourself bouncing between discouragement, and maybe a little despair, and encouragement?

I think there is a disconnect between those of us who are leaders in health care and the everyday hardworking, low-income and middle-class Americans. Half of Americans have less than $400 in savings and live paycheck to paycheck. And the reality is, things are fine when you are wealthy, but when you live paycheck to paycheck, a medical bill can be catastrophic. It can wipe out a college savings. It can mean a family doesn’t have money for food; it can mean a single mom can’t afford day care. Those are the real consequences of the high cost of care, and I felt it was important to describe the current state so that we can be proximate to the problem. As with any problem in any sector of society, in order to present solutions, you have to be proximate to the problem and understand exactly what it looks like on the ground. Sometimes things have to get really bad before people pay attention, and I think we’re at that point now in the U.S. where, you know, the vase has fallen on the ground and shattered, and we’re now picking up the pieces and asking ourselves, “How did it get this bad?” How can we redesign care from scratch?

There was very little discussion of the ACA, which was supposed to extend coverage through the exchanges and Medicaid expansion and also deal with some of the pricing problem through things like ACOs. Why isn’t there more about the ACA? Also, what is your opinion of ACOs, bundled payments, and the various value-based payment schemes that I believe were supposed to tackle some of the issues you get into?

It’s undeniable there have been small field victories in addressing the appropriateness of care. Those are important efforts, and we need to continue to support those efforts.

But to answer your question: The media and politicians have polarized us on health care as if there is a pro–con split in the country that dominates the discussion. I believe strongly there is broad consensus in the United States. And I wanted to focus on where there’s consensus.

For example, the ACA had patient protections in it—notably three—where there’s broad consensus. Not denying insurance to people because of pre-existing [conditions], keeping kids on their parents’ plan until they’re 26, and getting rid of lifetime caps. [There is] nearly 100% bipartisan support for those measures. The individual mandate? Controversial. Did the Affordable Care Act lower the price of health insurance in the United States by $2,500 per year, as was promised? No, it did not do that. That is not an opinion.

[The ACA] accomplished some things, but it simply did not lower the cost of health care in the way that it was intended to. That doesn’t mean getting rid of it will fix health care. It simply means that it failed to lower costs significantly, and therefore we need to look at the root causes.

One theme of the book is overtreatment, in particular inappropriate care.

The broader issue of what I call avoidable care—that is, care that represents services that are non–evidence-based, that are inappropriate, or that are entirely preventable.

And there is the broader topic of the root causes of illness. We’re recognizing that inflammatory bowel disease, Crohn’s disease, and ulcerative colitis are a function of people having their microbiome changed through what they eat. People are talking about meditation to treat borderline hypertension. People are talking about reducing sugar in their diet to address heart disease. But we have not historically talked about the broader scope of the root cause of the conditions that bring people to care. So, we’ve traditionally thought of avoidable care really as complications that can be reduced, but the real issue is, is the care appropriate?

When I looked at my own personal experience, I realized that these problems are even far more ubiquitous than I recognized. As someone who prescribed opioids liberally, I feel terrible about the inappropriate prescribing that I did. We need to look broadly in health care about how we can learn from experiences.

We need to realize that we can learn from a physician testimonial just as much as we can learn from a randomized control trial. We can learn from an outlier survivor of cancer as much as we can learn from a drug study.

You seem to be letting pharmaceutical companies and marketing off the hook. There is increasing evidence that the liberal use of opioids was the result of an onslaught of marketing. You don’t seem to be going there in your critique.

It’s certainly a part of it. I prescribed too many opioids in my career because of good intentions and bad science. Some of that was actually science presented to us by the pharma industry, right? They’re the ones who are often handing you the studies, explaining how it works when you’re in residency. There is a reason why it was called a “free drug lunch” every week in residency, right? And there’s this time when you would go grab lunch, and the representative from the antibiotic company—or whatever it was—would be there to answer your questions.

Sometimes people from industry can educate us or answer our questions or provide some background. In general, I found people from industry to be very respectful. But the reality is you cannot go on that information. You can’t trust what the companies tell you. You have to make your own decision as a physician.

You discuss your Improving Wisely campaign. The gist of it seems to be identifying inappropriate care and, more particularly, doctors who practice a disproportionate amount of inappropriate care. Has Improving Wisely made any concrete difference?

Absolutely. For example, the skin cancer surgery project. The Improving Wisely model asks specialists in a particular area of medicine [to identify] an area of rampant overuse that is measurable. [The skin cancer surgery] specialists told us it’s [a matter of] the number of blocks of tissue removed. A physician, on average, should use one to two blocks to remove a skin cancer as an annual practice average.

We’re talking Mohs surgery here?

Yes, Mohs. Using the Improving Wisely model, using physician-defined measures of appropriateness and looking at practice patterns, we found, in looking at the national distribution of most surgeons in the country, most are within that reasonable range. But, small groups, roughly 7% to 8%, exceed the threshold of what the experts in the field consider to be appropriate. Of the 2,000 Mohs surgeons in the country, half received the Improving Wisely intervention, which was a “Dear Doctor” letter sharing the data with individual doctors, confidentially, showing them where they stand on the bell curve. Of the outliers who received a letter, 83% immediately reduced the number of blocks per case. In other words, 83% reduced their overuse rates, and that reduction was sustained at two years. That program, which cost $150,000, has saved CMS $20 million in payments.

That’s not a bad ROI.

Where else in health care do you see that kind of return on investment? Even better, it helped change the culture to create more awareness around this practice pattern. There was more discussion of it in practice, more discussion in training the young doctors. It also sent a message to the doctors who are outliers that, hey, your professional society tracks this, is interested in it, and while there’s no penalty, no punishment, it is something that is reviewed by respected peers in your field. That powerful Hawthorne effect had a tremendous impact on the culture within that area of medicine.

In the cover letter from the professional society, our Improving Wisely program invited feedback to an email. I read all the emails. The vast majority were positive, thanking us for showing doctors the data and requesting that the program continue so that they could see their data the following year.

This model, this case, is done confidentially—one might say secretly. And it depends on moral suasion rather than any penalty. Do you see it as being enough? You have a success story, but broadly, is this going to make that much difference?

We’ve observed that nudges are powerful, and when they are done by respected peers in the field, they work. Now, we also observed another research study that came out around the same time as ours that found that when Medicare sends a nasty and threatening email to outliers, it has the same overall net improvement as civil, positive feedback. But we value civility over shame.

There’s also no perfect intervention. I don’t believe in a heavy hand, and I think this has been embraced by physicians in part because it is a physician-led, physician-defined, and peer-to-peer quality improvement program.

It is not a silver bullet for fixing the problem of inappropriate care, but we’ve witnessed that it can have a powerful impact in areas that are highly measurable.

Someday I’m hoping to conduct an interview where somebody says, “Yes, this is the silver bullet!” Changing the subject to price obscurity. You seem to have a lot of faith that more transparency would have a corrective effect on American health care. You advise the public to ask about the price when we get health care. But price information presumes a healthy market, and health care is not a free or well-organized market. It also presumes that you can have an understanding of what you’re buying. You have a pretty persuasive critique of the way we measure quality. Where does your faith in price transparency come from? It seems problematic to me.

Well, no one is suggesting that we provide a price for you if you’ve been shot in the chest and need trauma care.

However, 60% of medical care is predictable and it’s shoppable. And if you saw an airline market where patients went on Expedia or Kayak with no prices listed, and it said, “to be billed after the fact,” and heard rampant stories for the majority of Americans who feel they were price-gouged, and individual examples abounding of people being charged tens of thousands of dollars for a simple flight, you would say that this market is not in check.

An airline could argue, “We can’t give you a price. After all, we don’t know if there would be a delay. It could take more time from our staff. The pilots may have to work harder if they experience turbulence. They maybe have to slightly change their route. And who knows if the flight will happen at all? It could be canceled because of weather.” If they said we cannot give you a price, and then sent you outrageous bills after the flight with itemized lines for a $350 Coca-Cola drink on that flight, you would say that a lot of people are getting rich off a lack of transparency, and you would be able to deduce that there would be tremendous savings to individuals spending money in this market if there were a basic set of ground rules.

A market needs to compete around something, and, in fact, medical care markets do compete today. But they compete around parking, and billboards at NFL games, rather than on price and quality. In order to have a patient-centered system, we need competition around price and quality. And price transparency will usher in quality transparency like we’ve never seen before.

The field of quality measurement has moved like molasses. But when there is price transparency, it will demand—patients will demand, consumers will demand—more quality transparency. Price transparency will usher in quality transparency. There’s almost no market in the world where we have moved to price transparency and then said, “This isn’t working, let’s go back to having people flying blind in their purchasing decisions.” I think the strongest observation is that for the places in the [health care] market that have price transparency—for example, Lasik surgery, in vitro fertilization, plastic surgery—what we have witnessed in the last two decades is a global reduction in the price of that service.

Your argument hinges on health care being shoppable like many other goods and services. It seems like we’ve been running an experiment with health care shopping, with high-deductible health plans, and they fueled unprecedented discontent with American health care. High-deductible health plans were billed as putting skin in the game, bringing consumer discipline to health care. It hasn’t worked.

They are two entirely different topics. One is the skin-in-the-game argument, and the other is the value of price transparency.

I would argue that proxy shoppers drive the competitive market. A proxy shopper can be a health plan, an employer with self-funded insurance that’s picking up the bill, or it could be the fraction of patients who are paying out of pocket who do actively shop on price. Because it’s not everybody that uses price information. It’s a fraction. Those proxy shoppers drive competitive markets. When you go to the supermarket and you’re shopping, you may not be comparing the price of a lemon to the next grocery store in town. However, I guarantee you my mom is doing that. She and her friends who price-shop, down to every last penny, they are keeping markets in check. Proxy shoppers keep markets in check, which benefits the broader consumer.

And when you talk about the proxy shoppers of health plans and employers, don’t you think they would make an informed decision if they could see that the negotiated rate at one hospital for an uncomplicated baby delivery was $41,000, and at the other hospital it was $8,000? Don’t you think that’s information they might find useful?

“The problem with Medicare for all, and the reason I don’t support it, is that invariably, governments that fund health care on a broad scale underfund the system over time.”

You bring a real passion to this argument. But as you know, at least on the Democratic side of the political system, the passion is about Medicare for all. Do you think that’s misplaced or misguided on the part of Democrats? Do you think it’s misguided because it’s not achievable, or do you think it’s fundamentally a bad idea to have a single-payer system that would seem to deal with a lot of problems that you’re talking about? Certainly some of the price obscurity and middle-people that you inveigh against in the book.

First of all, what we hear from members of Congress, in my opinion, is a lot of hot air. For example, drug pricing; we hear outrage in speeches, yet pharma wins every single battle that is waged against them, be it a minor proposal or a bill in its draft stages. Pharma wins every time.

I get the appeal because the intent of Medicare for all is to address these two underlying problems— secret pricing and kickbacks. But the problem with Medicare for all, and the reason I don’t support it, is that invariably, governments that fund health care on a broad scale underfund the system over time. And after 10 or 20 years, uniformly, the country is left with a massively underfunded, even dilapidated, health care system. And we already see that in today’s Medicare program. Medicare is already massively underfunded.

So the idea that somebody wants or doesn’t want health care for all Americans is not really the question in front of us, because I think we all want health care for everybody. The real question is, can you pay for it? And if you can’t, it doesn’t serve anyone any good to have pie-in-the-sky promises about how they’re going to find money for it, because already, today, right now, Medicare is so underfunded that the Medicare trust fund is unsustainable, there is a growing population that is not going to be able to have reimbursement rates commensurate with the services.

I focus in the book on highly actionable things that don’t rely on the government. And I believe we can fix the health care system through competitive markets, and by addressing two fundamental root problems in health care where I believe there is broad consensus. One, to eliminate secret pricing. Two, to eliminate kickbacks. If we can do that to create healthy markets and eliminate the middleman, we can see a tremendous amount of waste cut out of the system, and a restoration of the mission of medicine and patient-centered care.

You’ve written a couple of books. They have taken you out of the operating room, out of medicine, into the wider world of health care. Do you have a hard time staying optimistic about the arc of American health care?

I am not optimistic at all when it comes to the U.S. Congress or the government solutions, because of the influence of special interests. In fact, I have no faith that the government can fix health care.

However, who’s to stop Keith Smith* in Oklahoma from posting prices for operations at his center, and for patients to come from anywhere in the world, and for health plans to sign on? That’s a disruptor, and that’s why I’m so optimistic about health care. I have met people who have redesigned primary care. Iora, Oak Street Health, ChenMed. They practice relationship-based medicine to address avoidable care and preventable care. And people who are redesigning medical education.

The reason I’m so excited about the future of health care is that health care is a calling, and when you can appeal to the best in people and remind them why we all went into medicine, people will do amazing things to restore medicine to its mission.

I think there’s no better job in the world than taking care of a patient. For me, there’s no greater moment in my job, in my life, than walking out of the operating room and letting the family member know that their father did well in surgery and is going to live. There is incredible heritage in medicine, and our task is to keep the torch lit, and to pass it on with dignity.