My book signing for Health Care: Meet the American Dream was a standing room only success! It was held at BookPeople in Austin, Texas on November 28, 2018. The event was co-sponsored by South by Southwest, where I will be speaking in March. Click here to see the video.
Below is text from the video. It has been edited to remove some extraneous words and may include grammatical errors that result from conversational speaking.
Thank you so much to BookPeople for hosting me tonight.
Can you all hear me? OK. I probably don’t even need this.
Thanks to SXSW for co-sponsoring this event. I am really excited to be speaking at South By in March this year. And thanks, of course, to all of you for coming out tonight. I am excited. There are a bunch of faces that I don’t recognize so I appreciate your coming. I am looking forward to meeting you.
We are going to talk about health care!
So…I would like to eliminate health insurance. I don’t want to eliminate the financial security that it provides but I want to eliminate the administrative overhead associated with processing payments for all of these complex contracts. I want to eliminate price opacity. I’d like to know how much health care costs. I want to eliminate that pit in our stomach we get when we get a bill from the hospital from the doctor that has all these charges on it that we don’t understand for things we didn’t know we needed which we probably didn’t at prices that don’t make any sense. I want to eliminate the misaligned incentives that cause overutilization. So all this testing. Procedures that we don’t need that don’t improve health outcomes. I want to eliminate the hundreds of millions of dollars that go to health insurance companies in profits.
So there are a lot of reasons to want to eliminate health insurance. But I don’t want to just eliminate it. I want to accelerate its demise. Because in the not-too-distant future, health insurance is going to be obsolete.
So this is one of the key ideas in my book Health Care: Meet the American Dream. There are a lot of ideas in the book. We have a limited amount of time tonight. I’m expecting that this is going to be the beginning of a long dialogue. I encourage you to reach out to me directly. There are going to be a lot of questions and I’m gonna leave about half an hour for questions at the end because I want to make sure we get to some of your thoughts. You may not agree with everything that I’m going to talk about. You may not agree with everything that I’ve written, but I do hope that you walk away after reading the book and tonight thinking about health care in a totally new way.
So my book is divided into two parts. The first half is about the current health care system. It’s a great read if you want to sort of level set yourself. Tonight I want to talk about the second half which is my proposal to transform the American health care system. It’s called the Dream Plan. In the Dream Plan which is basically a complete Blue Sky, start from scratch view of health care. This is important. Instead of doing incremental changes to the current system, I’m proposing something completely new. My view is that if we come up with this Blue Sky plan and we have this vision then we can work backwards to achieve that vision instead of incrementally trying to change the system as it is now.
So in the Dream Plan everybody is covered. So you either default into the public health system or you enroll in something called a Longitudinal Health Care Plan or LHCP. And this is what we’ll talk mostly about tonight. There’s a chapter in the book about public health. But the LHCP is a new product. It’s basically like a hybrid between a medical record, a health savings account like an HSA on steroids and a retirement plan. So if you fuse the functions of all three of those together, the LHCP is a new kind of product that has a medical component and a financial component. This is a product that will be available to the general public, to consumers. It’s a consumer-based product. I’m so excited about this idea that I’ve started company with the creative name Longitudinal Health Care to offer these LHCPs to the public and bring this to market. So when I talk about this I’m going to refer to patients sometimes as customers because for us this program provides not just the medical aspect but some of the financial services components too.
So as I said this will be available on the market. And when you enroll in this program, you’d sign up for it like you’d access health insurance or like you’d access a bank account. When you enroll, we’d do sort of a work up on you. And we’d start off with a physical exam. Get all your basic information about how you are physically right now. But a key component of it is to do a genetic analysis.
Now I’m sure we’re all aware that genetic testing has exploded in the market in the past few years. I just read a study that there are 10 new genetic tests that come to the market every day. Which is kind of mind-blowing. So it’s not ten 23&mes that are out there. These are specific tests for things like sickle cell anemia, of a specific type of cancer. But it is a tidal wave information. The medical community, not surprisingly, is having a hard time keeping up with interpreting this information. That’s frustrating to consumers. But the medical community will catch up. And it is essential that we appreciate how amazing this information is. What we should be using genetic testing for in my mind is to mitigate risk. We need to be using the information to do the preventive activities that we can to maybe prevent some of these potentialities from coming to fruition or we can forestall their arrival. So that’s one aspect of it.
The other component is that there are just some sort of potential inevitabilities that come out of genetic testing. And this is sort of an oxymoron, right? If it’s an inevitability, there’s no potentiality associated with it. It’s going to happen. And I think we have to get our minds around the limitations of genetic testing. The efficacy is some of these tests has not been proven yet, it needs to be improved. The fact that you’ll get results from a genetic test doesn’t guarantee 100% that you were going to get the diseases and conditions identified in the report. It is an indicator. And over time, these tests are going to get better. But it is an indicator. And so we are going to use the information knowing that, but it is a baseline, it’s an important baseline, it provides incredible information.
The other major data component of the LHCP is to incorporate the external determinants of health. So over the past few decades, I think the health care community and the American community-at-large are starting to understand that our health outcomes are a result of myriad factors. So it’s not just whether you have health insurance or not. In fact, having health insurance doesn’t make you healthier. It is a small component of what makes you healthier. 80% of your health outcomes are a result of these external determinants of health. And they can be behavioral. So that’s the kind of stuff like whether you exercise, what you eat, how much sleep, how much stress in your life. Those are very controllable factors. There are other factors like socio-economic factors, demographic factors. I mean, out of the gate your sex and age is going to be a big indicator of what your health outcomes are gonna be. But, stuff like how much education you have, what your job is, what’s your zip code is. I mean it’s that specific. It’s not the city you live in, it’s the specific zip code you live in. That sort of information needs to be packaged together to taker this baseline genetic information, modify it, include physical information and then for our customers, we should be able to make a projection of all the diseases and conditions that they’ll develop over the course of their life. I call this the Conditions Timeline.
Once you do that then it radically changes how you look at health insurance. And this is the reason that health insurance is gonna be obsolete. There is no reason to put all of us in a giant risk pool when we have mitigated so much of the risk by knowing much more about what’s going to happen. Even in the LHCP Conditions Timeline not everything is guaranteed but there’s so much more clarity on what could happen and there’s much more control over what we have on our futures. There’s always going to be an element of true insurance. And this is part of the LHCP where we insure against things we don’t know are going to happen. Like, I may get struck by lightning. You know, things that you can’t predict. That’s what true insurance is really about and that’s what insurance will be in the Dream Plan.
So that’s sort of Phase One of the LHCP. The second half relates to the cost side. So it starts off with Clinical Protocols. So what is so important in health care is to make sure that the care plans that are designed match the values and behaviors of the patient. When patients are engaged in their health care, their outcomes are much better. So it is so important to make sure that there’s not a one-size-fits-all health plan for everybody because we are all so unique and different.
So in this Clinical Protocols component of the LHCP, we will have a physician work with our customers. And I should add that it is essential in this model, and really in health care, that we are partnering regularly with a physician who understands our needs and is not someone who just comes in and out. That understands us. And has the values that we have as far as health care delivery. So this partner, this physician partner, will help design these Clinical Protocols.
So, like, here’s a good example. Imagine someone like Joe Smith. Joe Smith has a degenerative back issue in his family and it’s you know, represented in his genetic profile. Joe does not like surgery at all. So when we come up with the Clinical Protocols for Joe, we’re going to focus more on maybe acupuncture, massage therapy, we’re certainly going to talk about strengthening exercises for his back. You know, he should be keeping his weight down. Everybody should to avoid strain on the back. We focus things on what is going to work for Joe. At the same time, there may be a procedure. A back procedure that works for his specific kind of degenerative condition and we can talk to Joe before it becomes an emergency and say, Just so you are aware these physicians have conducted this type of procedure. If you want to talk to some of the patients, you know, who’ve had this procedure and didn’t want to go under the knife like you, you can. SO that he is prepared early on for you know actually having surgery.
Another thing that’s important to consider is that if Joe knows that he has a degenerative back condition, Joe shouldn’t get a job in manual labor, right? Because that is going to exacerbate the condition and then ultimately make him unemployable and then, you know, he’ll spiral downwards.
And this situation hits home for me because my father was an asthmatic. Brilliant guy but we lived on Long Island. I grew up on Long Island just a few blocks away from Belmont Racetrack. Horses. My high school English class overlooked the practice track for Belmont and on a hot summer day you can imagine what was in the air. I mean it was a cocktail of disaster for an asthmatic. My father commuted to New York City on the subway. He was a chemist. He worked in a lab. So the rainbow of perfumes going into that lab that he inhaled all the time did not help his condition. And then, of course, my mother was a smoker! So my father died of a massive heart attack at 72. And I am sure that those externalities, even though they weren’t related to his heart condition, made his physical health worse than it could have been. And these are the types of things that we need to incorporate our health care system so that we can all be healthier.
So that’s the Clinical Protocols component of the LHCP. Then we shift to the cost side. And for those of you who’ve worked with me or know me all that well, this is, like, gets me hot under the collar. Because the costs in health care are…they don’t make any sense at all. I could talk to you guys about this for like a week. But the short story is that in 2016 the United States spent 3.3 trillion dollars in health care. The 2017 numbers should be coming out soon and it will be more. But half of the dollars were spent by the government so when you think Medicare. Medicaid, the Veterans Affairs, all those programs, half of the dollars were spent by the government. So when you hear about these ideas that we’re going to “consumerize” health care understand that the government controls and price fixes half of the dollars that are spent in the industry.
And what is more important about that is that Medicare is the largest single payer in this country. So they dictate terms and conditions of who’s going to get covered for what, how long people are going to be seen, what they can be prescribed. They dictate all of these terms and then all the other insurers follow. Not only that, Medicare and Medicaid don’t negotiate their rates. They tell providers – the doctors, hospitals, everybody else – what they’re going to get paid. It’s a fixed payment. And it is below cost. So the reimbursement rate that provider is going to get – that rate itself may not be below cost. But when you factor in all of the other programs and compliance regulations that providers have to deal with, they’re getting, they to lose money every time a government patient walks in the door. In fact, the American Hospital Association calculated that for every patient that’s admitted to the hospital, they have to pay $1,200 in costs just to satisfy all the regulations.
So as a result of that, hospitals got to make up the money somewhere. And by the way, hospitals, providers can certainly push down their costs. There’s no reason that they can’t. But nonetheless, what’s happening now is as Medicare is pushing down what they’re going to pay. What happens? Private insurance pays more. So that’s what, you know the bulk of we in the room, and even if you have Medicare, you probably have secondary insurance which is through a private insurer and those programs subsidize the government, the government payments.
None of this relates, by the way, to how much anything actually costs. The vast majority of providers, hospitals, do not know how much their care costs. And I’m talking, you know, from a cost accounting perspective. Nine out of 10 CFOs don’t understand their cost structure! So you know, that is just mind-blowing!
So in the Dream Plan, what I would like to happen is there to be one price that everybody pays. The government pays it, consumers pay it and is paid directly from the LHCP customer directly to the provider. So those are the costs that we are going to be using when we are costing out the Care Protocol. And we’re getting close. I can talk to you about that off-line with these direct to provider payments but that’s where we need to go.
So when you sum up all of those costs then we basically have an idea of how much your health care is going to cost for your entire life. So the final part is that we do a financial plan and say to you, This is how much you’re gonna have to save over the course of your life to pay for your care. So what this really represents is a total decentralization of the payment system. So instead of paying into third parties, insurance companies, Medicare…we’re always going to have to pay taxes…but we would redirect that money into the LHCPO so we can pay for our own care. It’s like a single-payer system except the single-payer is you.
So that’s sort of the overarching idea of the LHCP. The cool part about it is that it is not static. This Conditions Timeline is dynamic. So each year – this is a requirement. And in fact, in the Dream Plan, I think that we should be mandating that every American has a primary care visit every year. Even people in public health. It is essential that we understand and are better educated about our health and if we don’t mandate people going, they’re not going to go. Because we don’t go right now.
So the LHCP customers would come back. They’d have their exam. They would sort of update their externalities and we’d re-run numbers. And as the genetic testing gets better, we would incorporate that technology in our solution. And we would we re-run things and give a status report to our customers. So an example might be, you know, Jane Doe comes in. Here’s a conversation. Jane, I’m sorry to hear about the divorce. Jane got divorced. We imagine you’re really stressed. Your blood pressure’s gone up this year. You’ve gained seven pounds. Your cholesterol is starting to tick up. We’ve talked to you before about the fact that you have a heart condition in your family. If this behavior continues, you are gonna have an incident. We you know, projected you might have one in your late sixties. It will come earlier if you don’t get this under control. We don’t want to just put you on meds because we understand that that’s not what you want. And we would like to work with you to get through this, understanding you’ve had a traumatic event in your life. So we are recommending exercise, dietary changes, things like that. But we also want to make sure that you surround yourself at this difficult time with a supportive community. We don’t want you to fall into a depression because that’s going to exacerbate your situation and make everything worse. It’s important for you to surround yourself with people who love you and support you.
Wouldn’t it be cool if that’s how the health care system worked? That’s how I want it to work. And that’s you know, this whole idea of the Dream Plan, that it’s a much more holistic view. Now there are programs out there that espouse this more holistic view of medicine and combining all of your life experiences together and I think that’s terrific. But the LHCP connects your personal accountability with your financial responsibilities in a completely new way. And I think that’s one of the innovative parts of the program.
So I want to talk a minute about why the book is called Health Care: Meet the American Dream. I started writing this book about four years ago. I had no idea what I was going to come up with at the end, but I wanted to come up with a solution. I didn’t want to just critique the system. And of course the first thing you do is bench mark. You know, you look outside America and you look at what’s working. And we can’t help but look at these, you know, European single-payer systems because the outcomes are so much better and they pay much less per capita than we do. I mean we’re at about $11,000 a year per person and these other countries are around seven, $6,000 a year. So, you know, that’s sort of the simple answer, right? We should have a singer payer system here in America. Obviously, this Medicare-for-All concept is gaining momentum. Please read Chapter 6 of my book because it’s all about why a single-payer system will not work in America. And there are a whole variety of reasons but I think the most persuasive argument that folks don’t really talk about and I wish they would and I hope we now will, is the reason it won’t work in America is because we are one of the most diverse nation in the world. When the Medicare and Medicaid programs started, America was mostly Christian and white. We’re not like that anymore. And that’s for the best. But the fact of the matter is when you have this variety and diversity in a community of 330 million people, a centralized one-size-fits-all solution is not efficient. It doesn’t give people the personalized care that they need.
And, you know, here’s but one example. Look at race in America. The opioid crisis is striking the white community at a much higher rate than others. If you look at diabetes, the incidence is much higher in the African American community that it is elsewhere. If you think about the leading cause of death in America, it’s cardiovascular disease. But for Hispanics, it’s cancer. That’s one factor. If you then incorporate religion and all the different values associated with that. Think about all the geographies that Americans live in and the foods, the culture, the lifestyle associated with all of those. Health care is hyper-local. It’s hyper-local. So this notion that it’s going to be centralized is not going to work here and we need something better.
So I took a step back and thought, Well, you know, America is so unique. We can’t have this single-payer system. What makes America unique? And that is this idea of the American Dream. It’s this notion that every single one of us can have a vision for how we want to be. Everyone’s American Dream is different. Some people may want to send their kids to college. They may want to be a billionaire. They may want to buy a home. But the uniting factor in all of these dreams is that there is a long-term, longitudinal vision and we are accountable. We are in charge of getting there. And we take the action steps to get there. And we get this positive reinforcement every time you get closer to reaching that dream and we help each other get there. I think our health care system should be reflective of those values. And that’s why the LHCP has the American Dream as underpinning.
So in closing, I recognize that this is an incredibly ambitious plan. The last two chapters of the book talk about some of the critical success factors around bringing this to life. There are regulatory issues. Obviously, we talked about Medicare. There always going to be regulatory issues in making change in health care. There are financial concerns about making sure we get enough money into these LHCPs.
But I think the biggest challenge is going to be cultural. This is the part where we collectively have to make change. And when I explain this concept to people, they think it’s really cool but then they say, Well, some people just aren’t going to do it. They’re not. And I think that is totally legitimate. I am hoping and expecting, that the LHCP is going to create different incentives that we haven’t seen before to positively influence outcomes but it’s going to require us to appreciate the fact that we look at each other and we model each other against our behaviors. We, people in the communities behave like each other. We model ourselves around how our neighbors look, act, behave, so we need to be doing a better job of being more accountable for our health.
So when you think about 2019 and you’re making New Year’s resolutions, a lot of times they’ll be related to being more healthy. Maybe you want to lose some weight, exercise more. I encourage you to do that. But I would like you to broaden your resolution and encourage the people around you to do the same thing. I believe it is our civic responsibility, it’s all of our duties to improve the health care system in America and the best way we can do that is to be role models for each other so we can all be as healthy as we can be. Thank you so much.