Live From AHIP 2018: 5 Global Lessons For U.S. Healthcare

Here at the America’s Health Insurance Plans (AHIP) annual meeting in San Diego, the roster of speakers reads like list of healthcare’s household names: Atul Gawande (newly announced head of the Amazon-Berkshire-JPMorgan Chase venture), Jo Ann C. Jenkins (CEO of AARP) and Ian Morrison (healthcare futurist).

And if that wasn’t enough, our nation’s 43rd president, George W. Bush, took this stage on Thursday, June 21, as well, to weigh in on our nation’s healthcare system.

It was a privilege to keynote alongside this “who’s who” of American medicine at one of the largest and most impressive healthcare conferences on the planet. AHIP, an industry association that boasts 1,300 members, provides health insurance to over 150 million Americans. The organization shapes the coverage and care landscape in the U.S. with a powerful and widely respected voice.

For my part, I was asked to flesh out a chapter of my 2017 bestselling book Mistreated: Why We Think We’re Getting Good Healthcare—and Why We’re Usually Wrong. So, from the chapter on healthcare’s legacy players came today’s presentation: “What the U.S. can learn about healthcare from other countries.”

As the title of the book suggests, many people think (and still vocally espouse) that the United States has the best healthcare in the world. Unfortunately, when independent researchers crunch the numbers and compare wealthy nations, the USA ranks near the bottom in nearly every measure except one: cost.

We spend way more on our care than any other country and yet we have very little to show for it in terms of outcomes. The disconnection is perception and one of the cures is acknowledging (and embracing) what other countries are doing right.

So, without further ado, here’s what American doctors and hospitals can learn from their global counterparts:

1. Coverage is critical. A significant percentage of Americans lack health coverage. Ours is the only industrialized nation with that problem. And, without coverage, patients won’t obtain the care they need. From preventive medicine to advanced treatment to the management of chronic diseases, great care delivery is dependent on adequate coverage. The thing is, the U.S. insurance industry understands the sad state of America’s health outcomes. And yet it collectively continues to act as though our system requires only minor tweaks, rather than major change. This is important context for understanding the problems facing American Medicine, and the solutions: Our healthcare system needs to be integrated, capitated and technologically enabled. If those who fund it, cover it and deliver it believe our system is among the world’s best, there’s little incentive to overhaul it. After all, our nation’s economy is riding a high. Unemployment remains low, making purchasers reluctant to seek more restrictive solutions. As such, insurers see the status quo as sustainable.  I caution that complacency is the catalyst of disruptive change. It’s lesson many American industries learn the hard way. To our nation’s insurers, remember: It’s better to repair the roof while the sun is still shining.

2. Primary care counts. Depending how you categorize things, our nation’s specialists account for approximate 60-70% of all physicians. In other nation’s that number is typically at or below 50%. What’s wrong with having such a high ratio of specialists to primary care providers? As other nations can attest, excellence in primary care is responsible for 80% of positive health outcomes, whereas specialty care accounts for 80% of the cost. Shifting the ratio in the U.S. to match other countries would enable higher quality outcomes while chipping away our nation’s $3 trillion healthcare price tag.

3. Consistency raises quality and reduces costs. When comparing nations, there is very little correlation between cost and quality outcomes. A much better predictor of quality is the consistency with which care is delivered. In Mistreated, I write about a world-leading hospital I visited in Jonkoping, Sweden. in the Southern half of the country, around 350 miles from Stockholm, the degree of coordination in this hospital (and in its surrounding health system) is unmatched anywhere else in the world. Doctors from across specialties meet regularly to establish best practices, which all doctors and staff follow consistently and with practically no variation.  Imagine you break your hip, experience a heart attack or have severe diabetes in Sweden. Regardless of who is on call, the treatment will be practically identical and invariably exceptional. As a result, the clinical outcomes are superb and the cost of providing the care is dramatically less than elsewhere in Sweden or the United States.

4. Drug costs can and should come down. In most of Europe, the government negotiates drug prices with manufacturers. Consequently, the cost of medications are significantly lower than in the U.S. That means our nation pays a disproportionate share of the world’s R&D expense. There’s a reason for this imbalance. Our nation’s pharmaceutical industry has held a controlling share of publicly elected officials for decades. This kind of quid pro quo simply doesn’t exist elsewhere and it’s why U.S. business and patients ultimately pay the price.

5. Volume and specialization equal excellence. The two best ways to avoid medical complications are to increase volume and specialization. This solution is not to be confused with increasing the number of specialists. On the contrary, the United States has too many specialists performing not enough procedures to maximize quality. In fact, nearly half of all U.S. doctors and hospitals fail to perform enough of any given operation of procedure to ensure the best outcomes for their patients.

In contrast, we should take a very close look at the work of India-born and America-trained physician, Dr. Devi Shetty. His hospitals in India, along with the facility he recently opened in the Cayman Islands, are delivery quality outcomes that rival, and often exceed, the best of what the United States has to offer—all at a fraction of the price (even when adjusted for wage differences). How? Dr. Shetty ensures that his volumes are high enough to maximize clinical excellence. The more a specialist personsa certain procedure, the better the outcomes.

I predict that at some point, possibly during the next recession, large self-insured businesses will seriously consider programs that send workers to Dr. Shetty’s off-shore facility. And when these business discover that they’re actually paying less for their employees to get major surgeries done outside the country, other major business will soon follow.

I closed my comments at AHIP by acknowledging how hard change can be, especially when it doesn’t yet seem necessary. At the same time, I cautioned that the recent alignment of Amazon, Berkshire Hathaway and JPMorgan Chase should be a warning—a clarion call to all healthcare providers.

These three CEOs aren’t looking to find the best insurance deal. They’re looking to disrupt and eliminate the entire insurance industry. And given their track record, they are likely to succeed unless insurers rally and support major change throughout the American healthcare system.

Dr. Robert Pearl is the former CEO of The Permanente Medical Group, the nation’s largest physician group. He’s the bestselling author of “Mistreated: Why We Think We’re Getting Good Health Care–And Why We’re Usually Wrong” and a Stanford University professor. Follow him on Twitter @RobertPearlMD.