(Note: In keeping with our 2 Minute Drill mantra, we’ve broken this into two parts. Today in Part 1 we’ll highlight Gawande’s view of the three big systemic problems with healthcare. Tomorrow in Part 2 we’ll summarize his vision for the ABJ-HCE.)
Last week Amazon/Berkshire/JP Morgan Chase announced the appointment of renowned author, surgeon, and researcher Atul Gawande to head up their ambitious new “Amazon/Berkshire/JP Morgan Chase healthcare endeavor” (still unnamed, we’ll refer to it as ABJ-HCE for now). In a long form interview at the Aspen Ideas Festival Gawande expounded on his view of the problem facing the U.S. healthcare system and his thoughts on what the ABJ-HCE can do to make the whole system work better.
Here are few of Gawande’s thoughts that struck me as I watched the interview:
- While healthcare comprises 18% of the U.S. economy, 30% of those expenditures are of no benefit to the patient.
- The three biggest sources of waste are:
- Very high administrative costs. He said there are a lot of “middlemen” in the system some of which must be taken out of the system to simplify the equation.
- Pricing (I think he’s referencing the price of healthcare services and the method of paying providers for the services)
- Mis-utilization of treatment. This is identified as by far the biggest of the three buckets. He defined mis-utilization as the wrong care, delivered at the wrong time, and in the wrong way.
- On the reality of our healthcare system:
- It was built in the 1940’s and 1950’s when there were only a handful of treatments.
- Then: A system where the clinician could be expected to do it all – administer the right medicine and treatment. Add in some staff and a place for the patient to recover otherwise leave the clinician alone to do it all.
- Now: We’ve discovered in the last century that the number of illnesses we can have and the number of ways the human body can fail exceeds 70,000 (covering 13 organ systems).
- And, in the last fifty years we’ve generated 4,000 new surgical procedures and 6,000 new drugs.
- Yet, we’re still deploying all these new discoveries and capabilities on a 40’s and 50’s system where the clinician will take care of it.
Gwande points to a broken system. Healthcare is now so complex “that everybody involved feels it’s out of their control – payors, patients, and providers — with no real influence over the end results. “Obamacare is on life support” and “even though I’m going to work for a bunch of employers, employer-based care is broken”.
Tomorrow in Part 2, Gawande on what’s needed, what ABJ-HCE brings to the table, and achieving his goal for the endeavor: “Scalable solutions for better healthcare delivery everywhere”.
