from the world's big
It’s the Prices, Stupid
George C. Halvorson is chairman and chief executive officer of Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals, headquartered in Oakland, California. Kaiser Permanente is the nation’s largest nonprofit health plan and hospital system, serving more than 8.6 million members and generating $40 billion in annual revenue.
George Halvorson serves on the Institute of Medicine Task Force on Evidence Based Care and the Commonwealth Commission for a High Performing Health System. He serves on the American Hospital Association’s Advisory Committee on Health Care Reform. He chairs the World Economic Conference Health Governors for 2009 and chairs the International Federation of Health Plans. He has received the Modern Healthcare/Health Information and Management Systems Society CEO IT Achievement Award. The Workgroup for Electronic Data Interchange also awarded him the 2009 Louis Sullivan Award for leadership and achievements in advancing health care quality.
Halvorson has written several health care reform books, including the newly released Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care. He also wrote Health Care Reform Now!, Health Care Co-ops in Uganda, Strong Medicine, and Epidemic of Care as guidebooks for health care reform.
Halvorson served as an advisor to the governments of Uganda, Great Britain, Jamaica, and Russia on issues of health policy and financing. His strong commitment to diversity and inter-ethnic healing has led him to his current writing project, a new book about racial prejudice around the world.
Prior to joining Kaiser Permanente, Halvorson was president and chief executive officer of HealthPartners, headquartered in Minneapolis. With more than 30 years of health care management experience, he has also held several senior management positions with Blue Cross and Blue Shield of Minnesota.
Question: Why haven’t we focused on the price differential that exists between other countries and the U.S. when it comes to health care?
George Halvorson: You know, it's fascinating because we're having a debate about the affordability of health care in America, and the vast majority of the people who are in the debate have no sense whatsoever that we actually pay more for health care in this country by the piece than anywhere in the world. In my books I write about the fact that we pay more by the piece, more by the package, more by the patient, more by the procedure. Uwe Reinhardt wrote an article five years ago saying, it's the prices, stupid -- a good article. And yet the debate completely and totally ignores that point. And when you look at the price differences between us and the other countries, we pay three times as much for drugs, we pay twice as much for technology. Every single country in Europe spends less than $1000 a day for hospital stays, and there's not one state in the U.S. that charges less than $3000.
So when you look at the numbers, just the straight unit price, we pay much more in the U.S., and yet that whole issue has not been discussed at any level in the health care debate in Washington. We've dealt with other issues, and good issues; we need to fix insurance in this country. We need to cover everyone, and we really can't improve care to the level we need to for the country until we insure everyone, because we need everyone with coverage and everyone in the database. And we need to fix care so that we can afford to cover everyone. But we also need to have a sense of what the underlying unit prices are, and that part of the debate has been completely off the radar screen.
Question: How would you compare the cost of a physician visit in this country to other countries?
George Halvorson: Well, it's literally an issue that we have a different fee schedule in the U.S. The fee schedule in the U.S. tends to have a lot of variation. In Canada, if you deliver a baby you get paid $475. That's it. If you deliver a baby in Paris, you get paid $1,050. That's it. In the U.S., if you deliver a baby you get paid somewhere between $1500 and $4500. Well, premium -- which is what everybody pays to buy their health care -- premium is the total cost of care divided by the total number of people who have coverage. So if the total cost of care goes up -- if you're paying $4500 for a delivery -- you obviously are going to have a much higher premium than you would in Canada if you paid $475. So why can the cost go up more in the U.S.? Because the marketplace rewards cost increases in the U.S., and it does not reward cost increases in the other countries.
Organizations charge more because they can. And the reason they charge more is because they get the money. I mean, it's very simple, basic economics, and it's about pricing. So in Canada, the doctors can't increase that price, and therefore they don’t. But if they could, they would. There's no way in the world that Canadian prices would voluntarily be where they are today. So health care costs in Canada in total are about half of health care costs in the U.S.
Question: Is the quality of care in other countries worse because of the lower costs?
George Halvorson: They actually haven't. The other countries don't do a very good job on their chronic conditions; they don't do a very good job on their follow-through. They do a much better job of primary care. Every citizen in the other countries ends up with a primary care doctor. They're all private physicians. France is full of private physicians. Netherlands are full of private physicians. In fact, your waiting times for an appointment in The Netherlands are half the average waiting times in the U.S. because they have many primary care doctors and they have a good infrastructure of primary care doctors. But they actually don't coordinate care much better than we do relative to asthma or diabetes. And they're actually working on that. We've got people from European countries visiting Kaiser all the time, studying what we're doing and looking at our care coordination and our linkages and our team care, trying to figure how they can take that back and apply it in their own countries.
The reason the costs are lower is not because they do a better job of coordinating that care; it's because they pay less for every piece of care. Prescription drug costs in the U.S. typically are about three times as high as the same drug in Canada. CT scans are double, triple in the U.S. what they are in the European countries. So if you pay more -- I mean, the opportunity in the U.S., the really big opportunity, is to do a better job delivering great care. What we need to do is take the diabetics of this country and deliver care for diabetics that is so consistent and so dependable and so high-quality that we cut the number of kidney failures in half, we cut the number of people who go blind in half. There's great opportunity there. So I think we really need a care improvement agenda in America to make care better. And that's the great opportunity here and the other countries. The other countries actually are complaining about their cost trajectory. They're running at 10 percent of the GDP, and we're running at 17.6. But they're still seeing the costs of care going up because their populations are getting older, they're prescribing more drugs, they're doing more tests. All of the same things are true; they just start from a lower base because they pay a lower unit price.
Question: Where is our investment in care being concentrated?
George Halvorson: Well, it's about -- first of all, 75 percent of the costs of care come from people with chronic conditions. About 80 percent come from people with comorbidity, so they have multiple conditions. So we have a lot of people who have asthma, congestive heart failure, diabetes, coronary artery disease, and those are the people who are incurring most of the cost in health care. We have a very small number of people who are incurring most of those costs, so 1 percent of the population is about 35 percent of the cost; 5 percent of the population about 50 percent; 10 percent of the population's 80 percent of the cost. So if we went to that 10 percent of the population who are 80 percent of the costs and did a much better job of delivering care to those people, we could make a huge difference in the cost of care in America, and we could also make care better. And that's the opportunity: the real opportunity is to make care better by focusing on the people who really need team care and delivering that care and doing it in a systematic way. And the best way of doing that is to have computer support for your care. The best way of doing that is to have all of the information about each of the patients all of the time.
So we need -- all the information about the patients needs to be available real-time, and the caregiver in the exam room who's dealing with a patient needs to understand all the information. And most of the time in the United States, because we are so splintered relative to the care delivery system, doctors taking care of a patient only know the prescriptions they've written; they only know the tests they've taken; they don't know other diagnoses; they don't know other treatments; they don't know other procedures. And so everything is chopped up into pieces. And when you chop it up into pieces and deliver care piecemeal, that's extremely frustrating for the patient. It's also frustrating for the caregiver, and it's inadequate care.
And the only way you can link that care is to get that data on a computer. You can't link it -- there's no possible infrastructure you can imagine of, you know, thousands of trucks driving around town shuffling pieces of paper from doctor to doctor where you could end up with the kind of information coordination you need. You've got to get that information into a computer, and then you need to have the doctor able to access that information so for a given patient they know what the next treatments need to be, and also so there can be care plans about each patient. Right now the care plans are also very silo'd and isolated, so a doctor who's treating a patient for allergies does not link up with the oncologist, who does not link up with the internist, who does not link up with the cardiologist.
And so you end up with these doctors each doing separate care plans, and there are people that have 24 and 28 prescriptions that they're taking, with no coordination between them. And some of them counter-indicate, creating danger, actually, for the patient. We just need a systematic approach to care in this country. And we can do it. We spend twice as much money on care as any place else in the world, and we have a computer infrastructure for every other aspect of the economy. There's no reason not to apply systematic thinking, programmatic thinking and team-based thinking to care. It should happen. And if it doesn't happen, we're going to continue to have the same kinds of outcomes that we have now, with twice as many people with failed kidneys.
Recorded on November 18, 2009
Americans pay more for health care than any other industrialized country. Yet why does the debate totally ignore this point?
Higher education faces challenges that are unlike any other industry. What path will ASU, and universities like ASU, take in a post-COVID world?
- Everywhere you turn, the idea that coronavirus has brought on a "new normal" is present and true. But for higher education, COVID-19 exposes a long list of pernicious old problems more than it presents new problems.
- It was widely known, yet ignored, that digital instruction must be embraced. When combined with traditional, in-person teaching, it can enhance student learning outcomes at scale.
- COVID-19 has forced institutions to understand that far too many higher education outcomes are determined by a student's family income, and in the context of COVID-19 this means that lower-income students, first-generation students and students of color will be disproportionately afflicted.
What conditions of the new normal were already appreciated widely?<p>First, we understand that higher education is unique among industries. Some industries are governed by markets. Others are run by governments. Most operate under the influence of both markets and governments. And then there's higher education. Higher education as an "industry" involves public, private, and for-profit universities operating at small, medium, large, and now massive scales. Some higher education industry actors are intense specialists; others are adept generalists. Some are fantastically wealthy; others are tragically poor. Some are embedded in large cities; others are carefully situated near farms and frontiers.</p> <p>These differences demonstrate just some of the complexities that shape higher education. Still, we understand that change in the industry is underway, and we must be active in directing it. Yet because of higher education's unique (and sometimes vexing) operational and structural conditions, many of the lessons from change management and the science of industrial transformation are only applicable in limited or highly modified ways. For evidence of this, one can look at various perspectives, including those that we have offered, on such topics as <a href="https://www.insidehighered.com/digital-learning/blogs/rethinking-higher-education/lessons-disruption" target="_blank">disruption</a>, <a href="https://www.nytimes.com/2020/02/20/education/learning/education-technology.html" target="_blank">technology management</a>, and so-called "<a href="https://www.insidehighered.com/sites/default/server_files/media/Excerpt_IHESpecialReport_Growing-Role-of-Mergers-in-Higher-Ed.pdf" target="_blank">mergers and acquisitions</a>" in higher education. In each of these spaces, the "market forces" and "market rules" for higher education are different than they are in business, or even in government. This has always been the case and it is made more obvious by COVID-19.</p> <p>Second, with so much excitement about innovation in higher education, we sometimes lose sight of the fact that students are—and should remain—the core cause for innovation. Higher education's capacity to absorb new ideas is strong. But the ideas that endure are those designed to benefit students, and therefore society. This is important to remember because not all innovations are designed with students in mind. The recent history of innovation in higher education includes several cautionary tales of what can happen when institutional interests—or worse, <a href="https://www.insidehighered.com/news/2016/02/09/apollos-new-owners-seek-fresh-start-beleaguered-company" target="_blank">shareholder</a> interests—are placed above student well-being.</p>
Photo: Getty Images<p>Third, it is abundantly apparent that universities must leverage technology to increase educational quality and access. The rapid shift to delivering an education that complies with social distancing guidelines speaks volumes about the adaptability of higher education institutions, but this transition has also posed unique difficulties for colleges and universities that had been slow to adopt digital education. The last decade has shown that online education, implemented effectively, can meet or even surpass the quality of in-person <a href="https://link-springer-com.ezproxy1.lib.asu.edu/article/10.1007/s10639-019-10027-z" target="_blank">instruction</a>.</p><p>Digital instruction, broadly defined, leverages online capabilities and integrates adaptive learning methodologies, predictive analytics, and innovations in instructional design to enable increased student engagement, personalized learning experiences, and improved learning outcomes. The ability of these technologies to transcend geographic barriers and to shrink the marginal cost of educating additional students makes them essential for delivering education at scale.</p><p>As a bonus, and it is no small thing given that they are the core cause for innovation, students embrace and enjoy digital instruction. It is their preference to learn in a format that leverages technology. This should not be a surprise; it is now how we live in all facets of life.</p><p>Still, we have only barely begun to conceive of the impact digital education will have. For example, emerging virtual and augmented reality technologies that facilitate interactive, hands-on learning will transform the way that learners acquire and apply new knowledge. Technology-enabled learning cannot replace the traditional college experience or ensure the survival of any specific college, but it can enhance student learning outcomes at scale. This has always been the case, and it is made more obvious by COVID-19.</p>
What conditions of the new normal were emerging suspicions?<p>Our collective thinking about the role of institutional or university-to-university collaboration and networking has benefitted from a new clarity in light of COVID-19. We now recognize more than ever that colleges and universities must work together to ensure that the American higher education system is resilient and sufficiently robust to meet the needs of students and their families.</p> <p>In recent weeks, various commentators have suggested that higher education will face a wave of institutional <a href="https://www.businessinsider.com/scott-galloway-predicts-colleges-will-close-due-to-pandemic-2020-5" target="_blank">closures</a> and consolidations and that large institutions with significant online instruction capacity will become dominant.</p> <p>While ASU is the largest public university in the United States by enrollment and among the most well-equipped in online education, we strongly oppose "let them fail" mindsets. The strength of American higher education relies on its institutional diversity, and on the ability of colleges and universities to meet the needs of their local communities and educate local students. The needs of learners are highly individualized, demanding a wide range of options to accommodate the aspirations and learning styles of every kind of student. Education will become less relevant and meaningful to students, and less responsive to local needs, if institutions of higher learning are allowed to fail. </p> <p>Preventing this outcome demands that colleges and universities work together to establish greater capacity for remote, distributed education. This will help institutions with fewer resources adapt to our new normal and continue to fulfill their mission of serving students, their families, and their communities. Many had suspected that collaboration and networking were preferable over letting vulnerable colleges fail. COVID-19's new normal seems to be confirming this.</p>
President Barack Obama delivers the commencement address during the Arizona State University graduation ceremony at Sun Devil Stadium May 13, 2009 in Tempe, Arizona. Over 65,000 people attended the graduation.
Photo by Joshua Lott/Getty Images<p>A second condition of the new normal that many had suspected to be true in recent years is the limited role that any one university or type of university can play as an exemplar to universities more broadly. For decades, the evolution of higher education has been shaped by the widespread imitation of a small number of elite universities. Most public research universities could benefit from replicating Berkeley or Michigan. Most small private colleges did well by replicating Williams or Swarthmore. And all universities paid close attention to Harvard, Princeton, MIT, Stanford, and Yale. It is not an exaggeration to say that the logic of replication has guided the evolution of higher education for centuries, both in the US and abroad.</p><p>Only recently have we been able to move beyond replication to new strategies of change, and COVID-19 has confirmed the legitimacy of doing so. For example, cases such as <a href="https://www.washingtonpost.com/education/2020/03/10/harvard-moves-classes-online-advises-students-stay-home-after-spring-break-response-covid-19/" target="_blank">Harvard's</a> eviction of students over the course of less than one week or <a href="https://www.nhregister.com/news/coronavirus/article/Mayor-New-Haven-asks-for-coronavirus-help-Yale-15162606.php" target="_blank">Yale's apparent reluctance</a> to work with the city of New Haven, highlight that even higher education's legacy gold standards have limits and weaknesses. We are hopeful that the new normal will include a more active and earnest recognition that we need many types of universities. We think the new normal invites us to rethink the very nature of "gold standards" for higher education.</p>
A graduate student protests MIT's rejection of some evacuation exemption requests.
Photo: Maddie Meyer/Getty Images<p>Finally, and perhaps most importantly, we had started to suspect and now understand that America's colleges and universities are among the many institutions of democracy and civil society that are, by their very design, incapable of being sufficiently responsive to the full spectrum of modern challenges and opportunities they face. Far too many higher education outcomes are determined by a student's family income, and in the context of COVID-19 this means that lower-income students, first-generation students and students of color will be disproportionately afflicted. And without new designs, we can expect postsecondary success for these same students to be as elusive in the new normal, as it was in the <a href="http://pellinstitute.org/indicators/reports_2019.shtml" target="_blank">old normal</a>. This is not just because some universities fail to sufficiently recognize and engage the promise of diversity, this is because few universities have been designed from the outset to effectively serve the unique needs of lower-income students, first-generation students and students of color.</p>
Where can the new normal take us?<p>As colleges and universities face the difficult realities of adapting to COVID-19, they also face an opportunity to rethink their operations and designs in order to respond to social needs with greater agility, adopt technology that enables education to be delivered at scale, and collaborate with each other in order to maintain the dynamism and resilience of the American higher education system.</p> <p>COVID-19 raises questions about the relevance, the quality, and the accessibility of higher education—and these are the same challenges higher education has been grappling with for years. </p> <p>ASU has been able to rapidly adapt to the present circumstances because we have spent nearly two decades not just anticipating but <em>driving</em> innovation in higher education. We have adopted a <a href="https://www.asu.edu/about/charter-mission-and-values" target="_blank">charter</a> that formalizes our definition of success in terms of "who we include and how they succeed" rather than "<a href="https://www.washingtonpost.com/opinions/2019/10/17/forget-varsity-blues-madness-lets-talk-about-students-who-cant-afford-college/" target="_blank">who we exclude</a>." We adopted an entrepreneurial <a href="https://president.asu.edu/read/higher-logic" target="_blank">operating model</a> that moves at the speed of technological and social change. We have launched initiatives such as <a href="https://www.instride.com/how-it-works/" target="_blank">InStride</a>, a platform for delivering continuing education to learners already in the workforce. We developed our own robust technological capabilities in ASU <a href="https://edplus.asu.edu/" target="_blank">EdPlus</a>, a hub for research and development in digital learning that, even before the current crisis, allowed us to serve more than 45,000 fully online students. We have also created partnerships with other forward-thinking institutions in order to mutually strengthen our capabilities for educational accessibility and quality; this includes our role in co-founding the <a href="https://theuia.org/" target="_blank">University Innovation Alliance</a>, a consortium of 11 public research universities that share data and resources to serve students at scale. </p> <p>For ASU, and universities like ASU, the "new normal" of a post-COVID world looks surprisingly like the world we already knew was necessary. Our record breaking summer 2020 <a href="https://asunow.asu.edu/20200519-sun-devil-life-summer-enrollment-sets-asu-record" target="_blank">enrollment</a> speaks to this. What COVID demonstrates is that we were already headed in the right direction and necessitates that we continue forward with new intensity and, we hope, with more partners. In fact, rather than "new normal" we might just say, it's "go time." </p>
The coronavirus pandemic has brought out the perception of selfishness among many.
- Selfish behavior has been analyzed by philosophers and psychologists for centuries.
- New research shows people may be wired for altruistic behavior and get more benefits from it.
- Crisis times tend to increase self-centered acts.
Paul Krugman on the Virtues of Selfishness<div class="rm-shortcode" data-media_id="7ZtAkm6C" data-player_id="FvQKszTI" data-rm-shortcode-id="828936bf6953080e9018307354c0c02b"> <div id="botr_7ZtAkm6C_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/7ZtAkm6C-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/7ZtAkm6C-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/7ZtAkm6C-FvQKszTI.js"></script> </div> The Nobel Prize-winning economist on the virtues of selfishness.
Evolution Is Moving Us Away from Selfishness. But Where Is It Taking ...<div class="rm-shortcode" data-media_id="cyeqmYCb" data-player_id="FvQKszTI" data-rm-shortcode-id="6c5efecb56456e9acc25cf36935b1826"> <div id="botr_cyeqmYCb_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/cyeqmYCb-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/cyeqmYCb-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/cyeqmYCb-FvQKszTI.js"></script> </div>
Exploring Morality and Selfishness in Modern Times<div class="rm-shortcode" data-media_id="02eX1Cag" data-player_id="FvQKszTI" data-rm-shortcode-id="45cc6180db791f32683988fb52faff26"> <div id="botr_02eX1Cag_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/02eX1Cag-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/02eX1Cag-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/02eX1Cag-FvQKszTI.js"></script> </div> Philosopher Peter Singer discusses the state of global ethics.
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Hollywood has created an idea of aliens that doesn't match the science.
- Ask someone what they think aliens look like and you'll probably get a description heavily informed by films and pop culture. The existence of life beyond our planet has yet to be confirmed, but there are clues as to the biology of extraterrestrials in science.
- "Don't give them claws," says biologist E.O. Wilson. "Claws are for carnivores and you've got to be an omnivore to be an E.T. There just isn't enough energy available in the next trophic level down to maintain big populations and stable populations that can evolve civilization."
- In this compilation, Wilson, theoretical physicist Michio Kaku, Bill Nye, and evolutionary biologist Jonathan B. Losos explain why aliens don't look like us and why Hollywood depictions are mostly inaccurate.