Future Now
The IFTF Blog
Interview Summary - Dr. Robert Pearl, CEO, Permanente, April 13, 2009
HC2020 Interview Summary: Dr. Robert Pearl, Permanente Med Group
Interviwer: Richard Date: April 13, 2009
1. His/her work
He was trained as a physician at Yale & Stanford as a plastic &
reconstructive surgeon; been with Kaiser for his whole career,
30+ years. Is now CEO of Permanente Medical Group, California
and Permanente Medical Group, Mid-Altantic.
Also teaches at Stanford Medical School and Stanford Business
School.
TRENDS/CHALLENGES
2. How optimistic about future of health/healthcare in 2020?
He believes that the shape of health care for the next decade+ will be
largely determined by what happens with health care reform in Washington
in the next two years. THe current system is broken, and nothing can be
done to change that system to avoid crisis that will happen in the next
decade.
What has to happen is that we need to fix the system's fundamental flaw:
fee for service payments. It is not possible to get to effective,
affordable care with a system in which doctors are scattered and frag-
mented and being paid for episodic care. Under fee for service, we will
never get to a system that can provide the most efficient care through
technology.
We will either end up with an integrated, accountable system of care
based on a lot of technology, or a two-tier system that provides
high quality care for those who can afford it and minimal publicly
funded care for everyone else (Medicare ends up like Medicaid).
He can't tell how the reform effort will end up: there are more
voices today in Washington & in the administration calling for
bundling payments for care (e.g., Daschle talks about bundling
payments; former editor of NEJM has called for "a series of Kaisers"
with 50-100,000 members); but others are opposed to this kind of change.
Hardest part may be to get physicians to agree to give up their autonomy
to work in a group interconnected by technology to share information,
agree on a common leader.
"No one has figured out hw we are going to get there."
Just covering everyone but not changing the system is destructive -- will
exacerbate the crisis of affordability, as in Massachusetts.
3-4. Biggest trends or challenges & responses
- Using 21st century technology to deliver higher quality more affordable
care. "Quality/service/cost - pick two" has been the rule. Challenge is
to provide all three.
By 2020, we could have a totally redisigned health care system, where
30 or 40 or 50% of care is delivered remotely by technology. By 2020,
"everyone will have access to technology" including video communications.
Will be able to provide remote monitoring and automated analysis.
Example: In the case of heart failure, if you get daily data on weight,
physical condition, it is possible to predict an ER visit within a few
days. Computers can look at EKGs, flag dangerous conditions - pre-empt
problems by providing more timely care.
The big hurdle is getting American medicine to think about how care is
organized & delivered.
Today, there is a 100% variation in costs for the same care between places
like Minnesota and Florida -- with costs negatively correlated with quality
of outcomes.
Q: IF KAISER IS A MODEL FOR FUTURE OF HEALTHCARE, HOW WIDESPREAD IS THIS
MODEL?
Kaiser is well ahead of traditional competitors in terms of quality &
outcome measures. According to JD Powers, Kaiser is highest in Calif.
in patient satisfaction and quality of service. And is also less
expensive.
But Kaiser is not as good as it could be or will be: system change is
difficult; technology is never as capable as you want it to be.
Look at how airlines moved from a system of travel agents to Internet-
based system for customers. THey will never go back, but it takes
time to make the transition.
Kaiser is not a singular entity. Kaiser's peers = Mayo Clinic,
Geisinger + GHC; Intermountain is "not quite the same."
5. Have these trends surfaced before?
6. Challenges/responses not on radar now?
FUTURE SCENARIOS
7. Most preferable scenario
Federal government moves to require integration of health care in
a way that brings together groups of MDs, linked by technology.
By 2020, 90%+ of population get their healthcare through an integrated
system of care.
Healthcare payments are for "units of care delivery" not for discrete
services. As a result, we have moved from a system of episodic care to
continuous care.
Americans are still paying substantially more than the rest of the
world for health care, but the rate of increase has slowed.
Initially, costs may actually decrease as we move to a more efficient
delivery system. After that, rate of cost increase will depend on new
scientific advances which provide better care, but at increased cost.
In this scenario, there is not much of a role for for-profit insurers.
They are mainly good at manipulating risk pools and maximizing profits.
In larger cities, there will be competition between 5-6 integrated
systems; in smaller communities and rural areas, there may be just 1
or 2 systems.
8. Most plausible scenario
We will have a HYBRID system - with many integrated systems and lots of
traditional providers. Existing integrated systems (like Kaiser, Geisinger)
will expand, new ones will be created.
Key is what the payment mechanism will be. Coverage that includes bundled
payments will be a CHOICE, not a mandate for everyone. There will be a
"battle between traditional fee for service and Medicare Advantage type
plans." Example: how will SCHIP programs (health insurance for children)
be structured? Ultimately, the federal government will determine the
structure of health care in the U.S.
9. Most negative scenario
Reform efforts fail. We end up with a 2-tier health care system:
1) private insurance (from employers) with high quality service for those
who can afford it; or
2) a traditional Medicare fee-for-service type insurance for everyone else -
with mandated cost controls that will motivate many doctors to opt out
because prices will be capped at too low a level.
Will look like schools in inner cities: private schools for the affluent +
public schools for the poor who can't afford any other alternative.
program for everyone.
As long as the government allows employers to pay for employee's health care
insurance with pre-tax dollars, they will continue to offer coverage as a
benefit, will compete on the quality of the benefit.
If the government moves to cap the prices paid for services, it will lead to
lowering the income of doctors, and more of them will chose to opt out of
the system -- leading to a split.
10. Wrap-up
We clearly cannot afford to continue providing healthcare under the current
system.
It is too inefficient and too inconsistent.
But it we can get to integrated care, he believes that "the best days of
American medicine lie ahead of us.
We are at a branching point.
What is required to get to the preferred scenario: 1) integration of care
delivery to allow continuous care; 2) incorporation of technology to lower
costs and improve outcomes; 3) leadership to move to the new model.
The biggest challenge will be "getting doctors to give up their autonomy."