Q Yet surveys consistently show that a large portion of the
population isn't even familiar with the term "managed care." Does that
A There's a good reason why many people don't know what managed care is:
They don't pay for their health care directly. Their employers take a portion
of their salaries and buy health insurance on their behalf. If people had the
money to spend--and I'm not advocating that they use their own--they would be
better informed about insurance.
It stands to reason: The average American family income is between $36,000 and
A health-care policy can cost between $4,000 and $6,000. You give that amount
of money to the average family, and they're not going to treat it cavalierly.
They're going to learn more about what they're purchasing.
Q How do we move from a third-party to a consumer-controlled
health insurance system ?
A Give employees the money to purchase health insurance directly. Now,
the premium payment an employer makes is, in effect, part of an employee's
salary. Why not give that to the employee directly, requiring by law that
everybody buy health insurance?
We'd have to transfer those funds in a tax-neutral way. Right now, if I wanted
to buy my own health insurance, I'd have to do it with after-tax dollars. Say,
for example, that I were in the top tax bracket, which is around 40 percent. So
for every dollar that I needed to pay for my health insurance, I'd have to earn
nearly two dollars. What's needed is a law that enables everyone to deduct
health insurance from their taxes, or that gives them tax credit for the
purchase of health insurance.
When consumers pay directly for the health services they use, they'll not only
learn more about what they're purchasing, but also accelerate the pace of
innovation that will lead to the kind of health system they want.
Q In your book, you write: "Doctors seem oblivious to the
convenience revolution. " How so?
A Convenience--making things easier for your customer--is not taught in
medical school, as far as I know. But doctors should be concerned about
convenience for two reasons. First, consumers want it--and sooner or later in
this market-based economy, what consumers want is what they're going to get.
Second, the lack of convenience diminishes the quality of health in our
country. How? By discouraging well people from getting important preventive
care, and chronically ill people from getting the ongoing support they need.
Q What can the practicing doctor do to make care for the chronically ill
A Employ physician extenders, for instance. Professionals like these can
provide the support that chronically ill patients need to help
themselves. Patients don't have to wait a week to see them. And when you do see
them, they're not looking at their watches: They have a lot of time to spend
with you. If we had a focused system for dealing with chronic illnesses such as
asthma or diabetes, these physician extenders--health educators, really--would
be a natural part of that system. The reason is simple: Chronically ill
patients who help manage their own diseases are healthier, and therefore cost
less in the long run. So everybody in the system is better off.
Q This brings up the other characteristic of the new consumer--the
demand for mastery, for self-control. Does this new assertiveness call into
question the traditional doctor-patient relationship, in which the doctor is
the expert and the patient the beneficiary of that expertise?
A I don't think so. It's just that doctors must learn to accept--as
many already have--that today's patients are more knowledgeable than those in
the past. If for example a patient says, "But I read B, C, or D in the 'Mayo
Clinic Family Health Book,' " or "I got B, C, or D off the Internet," that's
not necessarily a hostile patient. More likely, that's an informed consumer who
wants to discuss different points of view with her doctor-- who looks to her
physician to help her make sense of the disparate pieces of information she's
gathered. Doctors shouldn't begrudge patients this kind of assertiveness, but
rather make it part of the process of dealing with them. After all,
well-informed patients are often healthier patients.
Q In the final chapter of your book, you write, "The health-care
providers who flourish in this new market-driven system will give customers the
mastery and convenience and the focused, cost-effective services they want."
You've already discussed some ways that doctors can meet patients' demands for
mastery and convenience. What are some things they can do to deliver "focused,
A They can think about specializing in some way. That might mean
affiliating with groups that specialize in managing certain diseases. The
management of cancer, for instance, doesn't just require oncologists. It
requires a lot of people in the community.
Q We now touched on one of the major concepts in your book--the idea of
the "focused factory," a group of professionals and others who come together as
part of an interdisciplinary team to accomplish a goal. How does this concept
relate to primary-care doctors, who, by definition, must cover a wide spectrum
of health-care services?
A The concept relates very well to primary-care doctors. For example,
as chronic diseases are increasingly carved out, primary-care doctors can
occupy a point in the system--typically at the community level--at which my
asthma, say, is monitored and supported. Or they can become focused
factories in non-chronic-disease primary care. Or, as in the Mayo Clinic, they
could be part of a diagnostic focused factory. Any one of these more focused
roles actually enhances what the primary-care system can deliver.
Q And you believe that physicians should be in control of these
"focused factories." Why do you think that's so important?
A The reason is that physicians know what patients need. When push comes
to shove, it's these kinds of people who make the biggest changes in our
economy. It's no accident, for instance, that Bill Gates is the head of
Microsoft. Gates eats, breathes, and sleeps software. He really knows what he's
doing. The same is true in other industries. Phil Knight, who heads Nike, was
an athlete. In health care, the doctor is in that kind of position.
Physicians have a tremendous opportunity not only to participate in this
revolution, but to lead it. Of course, they'll need managerial advice, and
that's where insurers or physician practice management companies can help.
Q Does this mean the end of managed care as we know it?
A Increasingly, managed-care organizations will take on the role that
insurance companies typically play--the role of broker. Brokers give you a
choice of many options. They'll package these options for you and tell you what
the pros and cons are. But they aren't directly involved in the industry that
Now having said this, I should tell you that, until recently, I was a member of
Harvard Pilgrim Health Care--an HMO--and I'm still an HMO member. Harvard is
partly staff model. I believe in this classic HMO model, but it can't be
replicated. Other classic HMOs weren't just businesses--they had a clear
ideology and culture behind them. Kaiser has existed since the 1930s. Group
Health Cooperative of Puget Sound was driven by a socialist belief in the
sharing of health care.
You can't take this kind of idealism and use a cookie cutter to stamp out more
classic HMOs. So the diminishing number of staff-model HMOs will survive
because there are still people like me who want them. But the other HMO models
are going to have a lot of trouble. Already, health activists are using the
legislature to stop them from rationing health care. And if these HMOs can't
manage their health-care costs, the employers who select them primarily on
price will look elsewhere.
Q What's the role of government within this new market-driven
health-care system ?
A In my fondest dreams, government would provide a safety net for the
poor and would also devote a lot more resources to public health, by which I
mean public health education. In a market-driven system, the government must
also ensure that the information provided to consumers by insurers and
providers is accurate, prevent insurance companies from discriminating, and
vigorously enforce the antitrust laws, which are in the public's interest.
Plus, the government must make sure that consumers don't cheat. That can happen
in two ways: The first is not to buy health insurance, which we already
mentioned. The second is for consumers to misrepresent their health status.
Insurers and focused-factory providers must have accurate health-status
information about the members they enroll.
As in the case of the stock market, the term "market" doesn't imply the absence
of government. It means that government is there to ensure that consumers
retain control of the market.