A costly paradox:  more spending, no better health. - Dr. Elliott Fisher

A costly paradox:  more spending, no better health. - Dr. Elliott Fisher

Dr. Elliott Fisher has spent decades uncovering why high-spending regions fail to deliver better care or longer lives — and what this means for patients and policymakers.

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Transcript

Judson Howe Elliott, you've shaken the way, the very bedrock that Americans think about healthcare by largely by showing that more is not always better when it comes to healthcare. Take me to the moment where you started to understand that more clearly, or what led you to that belief.

Elliott Fisher That's a, you know, what a fun question.

Um, the, you know, first was the surprise, um, that came when I was a first year medical student and read an article by Jack Winberg published in 1973 that showed that in the state of Vermont, uh, physicians, uh, gave certain procedures at rates to the people they were taking care of. That differed by a factor of 10.

You live in one place, you're 10 times as likely to get your prostate taken out as a male, or you're five or six times as likely to get a hysterectomy. And I was a, I was a first year medical student going to medical school. 'cause I, I was convinced that science was gonna give me the answer to how to treat patients.

And it really shook my confidence and my classmates' confidence in, well, hold it. What's going on here? How could we disagree so much? Vermont at the time was, every town was white. Every town had a congregational church. Every town had a general store. They were identical. So the rates had to be something else.

And it took me a long time to get back to join Jack at Dartmouth. Um, but that started the, the work to try to figure out, well, you know, if we're spending two times as much across small markets like that, what do you get for it? And that was about a 10 year project. And I was lucky to be able to do, sort of starting about a third of the way through my career, 10 years after getting to Dartmouth.

Judson Howe I imagine you had a large medical school class and there's probably thousands of medical students that graduated the same year. You did. What, what made Elliott Fisher uniquely interested in that work?

Elliott Fisher I grew up. You know, a, the son of a, a very famous Harvard professor, um, who had created the field of negotiation, of conflict, of principled negotiation.

He was out, you know, solving problems in conflict. International law when my brother and I were growing up. Uh, and I think both of us were pretty intimidated, but we knew from him and from what my mother did with Planned Parenthood that our job as people was to make the world a better place. Neither of us had a clue about how to do that, right?

So you go to college and you're going, what am I gonna do with my life? Uh. And I really never figured it out In college, I actually did mostly focused on climbing, you know, as I joke, I, you know, majored in mountaineering, but that was not a legitimate major in the Ivy League in those years, you know, at Harvard, you know?

Yeah. So I majored in Chinese. Um, but when I graduated, I, I was clueless. I was a climber. I wanted to learn about how to be better in the wilderness, taking care of people, um, if we had an accident. Um, so I, you know, I, I got trained as an EMT and drove an ambulance for a year and a half in Boston or in Somerville, mass, which was a mile from where I grew up in Fancy Cambridge.

Speaker 3: Mm-hmm.

Elliott Fisher Uh, and there were children dying of diseases that none of my classmates had. And so I came through that time. I loved the, the fun of being on the ambulance and thinking you were saving people's lives 'cause. Probably mostly their own human, the human natural human resilience that people have. But we sometimes got someone to the emergency room in time to be helpful.

Hmm. Um, but I thought, you know, maybe I'll go to medical school, but I, I knew that part of it was I had to do something about this difference between what I saw in Somerville and what I experienced in Cambridge growing up. Um, I, I had the best care, you know, I was going to see the, you know, famous p pediatricians or whatever.

Um, but the care in Somerville was awful. I could just tell it that, you know, the, the care that was being delivered was unkind in the emergency room to, to the poor people who were being treated there. And it wasn't technically very good. Even I could tell it as I, you know, as an as an EMT. So I went to medical school and I knew going there that I wanted to become involved in health policy to try to address that.

You know what we'd now call a disparity. All I saw was suffering.

Judson Howe Yeah. You, you used a word earlier talking about you and your brother were intimidated by your father's success and mm-hmm. And, and impact. Gimme a, gimme a story. Give, give, paint. Paint that picture for me. Gimme a moment. You

Elliott Fisher know, around this time he was already getting involved in the Middle East, in, in, in solving, um.

The Middle East dispute. He helped develop the tools that were used at the Camp David, to develop the camp. David Accords, you know, he, he, you know, when the Harvard undergraduates took over the university in the protest of 1968, he was the one who was called into, you know, very publicly speak on the media and talk to the students and try to solve the dispute.

So, you know, that was casting long shadow of, just in terms of his, you know, his recognition, uh, he was fighting the Vietnam War for a long time. He held launch a, uh, a non a, a nonprofit that was devoted to reducing the risk of nuclear war. It was so we both felt like, oh shoot. You know, we rebelled in our own ways.

Judson Howe Was climbing part of that rebellion? Yeah, totally. Teeing back in on where you were going a moment ago, which is the disparity between Cambridge and you said what Mile West is Somerville.

Elliott Fisher Yeah.

Judson Howe Why was there that great of a disparity between, in a a mile, what was driving that disparity

Elliott Fisher poverty? So, you know, in those days, uh, certain parts of Cambridge, the elegant parts where Harvey professors could afford to live in those days, they can't anymore.

Um, you know, in those days, parts of Cambridge, you know, were very comfortable, elegant old colonial houses, um, private schools, uh, shady, shady trees. Um, Somerville was, was literally less than a mile away. Um, and it was a very poor Boston community. Old, but very poor. Um, now it's become gentrified, but then there was deep poverty there.

People, you know. You get to go into people's house as an ambulance driver, you know, as an, as an EMT, you know, see that there wasn't much food in the, you know, in the fridge. And see just how simply they were living for a, you know, for a young man who'd, yes, I'd been to India by that point and saw that there was poverty, you know, in other places in the globe.

But I don't think I'd very, I don't think I'd had the direct, personal, close experience of, of that, um, of how people were living essentially in my neighborhood. So, so medical school, you know. We started doing stuff right at the outset. You know, we started to tell all our classmates that they shouldn't take bag, you know, stethoscopes from the drug companies.

We were immediately labeled the granola lunch bunch, you know, and so, oh,

Judson Howe you shouldn't take any gifts from the drug?

Elliott Fisher No,

Judson Howe no. We was in the seventies.

Elliott Fisher We, this, we, we were totally opposed to, and we wrote a pamphlet for that. 13 of us wrote a pamphlet, handed it out to all of our classmates, which was so arrogant.

Luckily 50, you know, 25 years later at our reunions. People were all forgiving and friendly, but we were pretty arrogant about How was that received by your classmates? Oh, I said, they called us the granola lunch bunch. 'cause we lived in Cambridge and walked across the river and there we were.

Judson Howe You mentioned you work side by side with Jack Weinberg, A name that we rarely hear these days.

Mm-hmm. Who was he?

Elliott Fisher So Jack was a, Jack was an, you know, was, was trained as a nephro. He was heading to become a kidney doctor. Hated, you know, doing experiments on frogs, which to study how the kidney worked and decided to become an epidemiologist. And then, you know, one of the founding fathers of, of health services research, um, offered him a, he created the first statewide dataset, um, in Vermont and.

S off managed to persuade Vermont to offer Jack the job of running this statewide health systems agency that had the first statewide healthcare claims database. And Jack just said, we ought to understand, you know, what healthcare, how healthcare's delivered in each of these communities. How much healthcare people get, what kind of procedures are they getting, and how e, how equally are things distributed?

Where is the, where is, where is the healthcare going? And he took three years with his colleague Alan Gilson, and wrote this, this article, you know, variations in medical practice that was published in science. Because no American Medical Journal would take it. They wouldn't touch it. No. 'cause it was too controversial.

How could it be? That doctors are making such incredibly variable decisions. How could it be that they're twofold differences in spending?

Judson Howe Were they doubting the accuracy of the data?

Elliott Fisher Oh, that's been, you know, of course still people were, people must have been sicker back in this, in this community than that.

But that was the work he started to do when he came to Dartmouth, was try to understand what caused the variations. And I got here as he was getting going on that work. Um, and so it was, it was an amazing, it was a great time. We had a wonderful experience. We had small place, lots of good colleagues.

Eventually some economists and social sociologists joined us and, you know, but it was a small team, small group of people trying to say, what's going on here?

Judson Howe What was it like to collect data before EMRs in that era?

Elliott Fisher Oh, well, you know, insurance claims, health insurance claims, especially for Medicare, you know, provided a complete record of what people received from the medical care system.

So every procedure, every diagnostic test, um, was recorded in a claim. Mm-hmm. And you could then start to say, what's, how are people being treated? What are the differences? And that's, that was the early work. The earlier work was saying, does it, do we still see these kinds of variations in rates of specific surgical procedures?

And yes, we did. There were huge differences. Um, did, and were there differences in quality? We, we noted some, although it's hard to tell again. You, you mentioned EMRs versus the clinical data wasn't completely great, but you could see that there were, you know, four or fivefold differences in mortality rates for common procedures that, that could not be explained by.

Case mix had to be about how people were being treated.

Judson Howe So you were, you were confident in your process?

Speaker 3: We, we,

Judson Howe yeah. But maybe the industry was incredulous.

Speaker 3: Oh, there

Elliott Fisher was. There were lots of people who thought, many people thought it was really important. Some, you know, some people pushed back and said, you know, you're pushing too, you don't have the qu the adequate data to address that question.

So, you know, that was the 10 years of, of first 10 years of work or 15 was every time someone said, you haven't addressed this question yet. You go back, you say, alright, let's address it. Turns out Medicare, you know, I'll talk about one of the studies we did, but turns out the Medicare system had collected chart reviews with detailed clinical data on every patient who had a heart attack.

Oh. In the United States, that's a lot of chart reviews with a lot of detail about the clinical data. So we use that to help us understand what do you get when you spend more in some places compared to others.

Judson Howe Tell me more about Jack's mind and the way he thought and how that impacted you and your practice of medicine.

Elliott Fisher Well, I think, you know, uh, applying all what we learned to the 20 years I was practicing in primary care. Um, was hard, um, because we were, we were learning, uh, you know, to be skeptical about the quality of the medical evidence to be uncertain about, well, if we, if we're not, how strong the evidence is, you know, how should we help this particular patient make a decision about it?

And I think so the, it it influenced the way many of us and, you know, to be fair and absolutely, um, and critically important, this was a growing group of people around the country by the time we were really going,

Judson Howe paint that picture for me. So how many people were there in your core group? You know, in,

Elliott Fisher at Dartmouth there were probably 10 people, but there were people at Mass General, there were people in London, there were people in in Norway.

I mean, Jack was very good at always, and this is something I probably learned in part from him and apart from my father, um, you know, reach out to people. Who may disagree with you.

Judson Howe Okay.

Elliott Fisher And try to understand them, try to hear what their, understand what their perspective is, and then engage them in trying to solve the problem.

That was very much what Jack did, you know, the variations in prostate surgery rates. He, the first thing he did was pull together a bunch of urologists to talk about What's your theory here?

Judson Howe To kind of un unassuming, non-threatening, help me better understand. Yeah. Just help me

Elliott Fisher understand how, how you guys are making decisions.

We were all advised at that point, well, there were two competing theories and the urologists were not even aware that they had different theories about why they were operating at that point. You know, one theory was this is because benign prostatic hyperplasia, this enlargement of the prostate gland is, um, tends to be progressive.

Um, and then people get older and sicker. Mm-hmm. You know, some urologists thought, well, we can, it'll be safer for people if we operate soon while they have Okay. Moderate symptoms and or mild symptoms. Um, what they're healthy now, why not make their symptoms better? And, and then the, you know, and then there were others who said, no, no, no.

There's no evidence of that that will will improve people's lives. This should be about helping them pee better. Yeah. And they had two completely different competing theories about what was, what was the right

Judson Howe theory.

Elliott Fisher That's a great que that's, that's that Jack should have gotten the Nobel Prize for this answer.

Right. The short answer is it depends upon what you value. Depends upon what matters to you. You know the common phrase, now, you know, you know, what's important to you. Um, that now should be part of all medical practice. What matters to you, um, is the way you make those decisions. Once you have evidence that there's not, that, that there's no life expectancy gain, which they developed, um, then you're trying to figure out how bothered you are by symptoms and how much the procedure's gonna relieve your symptoms.

And, you know, there's a slight risk of other side effects and you need to understand those. Um, so the right choice is the treatment that a well-informed patient would choose. Once they know the risks, the benefits, the alternatives, and are help to make that wise decision.

Judson Howe We're here in 2025 and you're talking, what era are we talking here?

Elliott Fisher We're talking the early

Judson Howe eighties. Help us understand what the physician to patient value connection equation was like back then. How, how did a physician engage with a patient patient? I

Elliott Fisher think, I think, and it's still true, I believe all physicians thinks they're doing shared decision making even in the early eighties.

I think phys, no, that's probably not fair. Most and many the mental model, which I think is a really useful word for us, all term, for us all to think about what's our mental model about what's going on here? That was a little bit of Jack Jack's thinking. It's, it's, it's now widely used in systems thinking.

Um, but the phy, the mental model that many physicians and patients had is that this is a biological process. Okay. I can treat that biological process for most people. It'll reverse those symptoms and therefore I should recommend it to you and. That's, um, and, and patient's mental model was, doctors are experts in biomedicine.

I'm not a medical student. I haven't, I'm not a doctor. I don't understand this. You should tell me what I need. And the work that was, you know, eight years or so of work by international team trying to figure out what was going on with variations in prostate disease. Um, finally figured out that it really depended upon patients' attitudes towards the different risks and preferences for the different outcomes.

And then was able to pretty convincingly show that the actual decisions that were being reached across different physicians were not reflecting patient preferences. They were reflecting physician beliefs.

And it's still, it's still true now, right? You send, send a patient with prostate cancer to a radiation therapist, guess what they recommend? I'm guessing Radiation. Yeah. Send them to a surgeon. Guess what they recommend.

Judson Howe And so you were seeing this in the early eighties. It, I

Elliott Fisher mean, it's been true, it's been true for years from the beginning of the art that, that part, that particular difference.

People, you know, physicians are doing their best with the knowledge sets. They have to provide the best possible treatment to their patients and they believe in what they're doing. And, you know, and the tradeoffs between radiation, you know, radiation therapy has some complications, surgical therapy has some complications.

Um, and men care about those complications. Some of the complications being impotence or incontinence. Yeah. Um, with different rates and different and from different procedures. And it was just this fall that a friend of mine developed prostate cancer and the first place he went was, I won't say where, but he went there and said, you need surgery?

Um, and he was about to get it. Um, luckily talked to my wife and me and we said, you at least need to get a second opinion, um, and consider the different, you know, different possible treatments. And certainly you should find out what the outcomes are by this place that's recommended the surgery. And it was a tiny hospital where, you know, one could, and actually on the national ratings now quality ratings, it was not a safe place to have a procedure done.

Um, so luckily our friend got to a, got to a better, a, a great academic medical center where they helped him make a wise choice and applications were gonna be much lower. What did they end up with? A procedure. Yeah. But that, that doesn't matter what it was. Mm-hmm. That was his, what his, his decision aligned with his preferences, his values, and understanding all those risks was what was absolutely critical.

So if, if there's anything to take away from our conversation for patients is try to get the best possible information about the risks and benefits of the treatment alternatives. Um, and that goes for diagnostic tests. You know, do I wanna be screened for prostate cancer? What are the risks? What are the benefits?

How soon do I wanna start screening for breast cancer? Mm-hmm. Um, get the best information and then make sure you get the, whatever treatment is recommended, um, at a place that does a lot of them and is really good. And that you have can find, you know, both the best existing data, which there still isn't much.

A major gap in American health policy is the, and practice that we don't have great data, but get that data, do your best, get second opinions. So if I'm hearing you correctly, choose wisely.

Judson Howe If we can get data, we should go and get it.

Elliott Fisher Mm-hmm.

Judson Howe Isn't there some theories that more data leads to more utilization?

Elliott Fisher I don't th I, well, I, I think

Judson Howe the, or re reframe that if you need to.

Elliott Fisher Yeah. So if you have a symptom, you know, you, you want to understand what's, what might this be? But then you want to be really careful about this is, you know, about understanding the trade-offs of, you know, of choosing different, do I want to get a total body scan?

A total body CT scan? Uh, that'll find, you know, no. We know that our bodies are filled with stuff that looks like cancer on a scan, um, and turns out to look like cancer under a microscope, but doesn't behave that way. Many of them go away. It's called pseudo disease. So overdiagnosis is a problem. So the best thing you can do is have a great primary care physician.

Good luck finding one 'em these days. We'll get to that when we talk about health policy later. Um, but no, you need to get, you know, think, think carefully about whether, and get good advice from a, from a clinician about whether is this something that I can safely watch, could easily be better in three days.

Right? You know, one of my favorite diagnostic tools is time. You know, I always taught residents that time is your best, your best diagnostic test expend on that. What does that mean if someone comes into the emergency room? You know, yes, you should be worried. You should. Your job is to find the things that could really hurt them, okay?

Um, and many things will resolve. On their own. And it's just over different time courses. So sometimes, you know, and even if you think they're at high risk and need to be admitted to the hospital, you should check them on in a half an hour to make sure they're not, you know, or whatever the right time course is.

They're not getting worse. Or if now they're getting a lot better, well you don't need to come back and see them in 12 hours, you know, or in two hours. That's, and and for many of the things that people come to the physician for waiting a week, if it's an achy shoulder that the doctor doesn't think his heart disease.

Yeah. If your shoulder aches, maybe it's gonna go away 'cause he just banged it. Yeah. You know, let's not send you to the orthopedic surgeon today 'cause, promise you they'll want to do some films.

Judson Howe Let's go back to Jack Weinberg. We're in the early eighties. You said this, this research of yours is starting to spread.

Mm-hmm. You said internationally London. Yep. Norway, probably beyond mm-hmm. And the United States as well.

Elliott Fisher Yep.

Judson Howe Where did that. Where did that research go?

Elliott Fisher Well, it, it went, you know, it went, you know, after a series of three papers in jama, uh, to get, you know, it, the notion of shared decision making, um, became no, that problem was the, the diagnosis that is, we have a problem of not respecting patient's preferences and values and not having good enough evidence, um, was recognized.

We knew we needed to strengthen the scientific basis of medicine. 'cause a lot of the reason for, uh, for the variations were we actually didn't know the outcomes of those two treatments. So, you know, we didn't know what's the best way to treat a heart attack? Is it bedrest as people thought for a long time?

Well, that turns out to be harmful. You know, which medication should you use

Judson Howe if we didn't know? What was better than how did we end up with these different practice patterns? '

Elliott Fisher cause if, because physicians would then adopt different belief patterns for beliefs about what the right is

Judson Howe beliefs sounds like not data driven.

Elliott Fisher No, it's, it's opinion driven. Okay. Or my own experience driven. And by the way, you know, most people get better. So, you know, the great f logical fallacy is after this. Therefore, because of this, you know, post ho, airco, proctor ho, oh leches. They work. Most people get better when you with or without leches.

Judson Howe My understanding is that this work evolved into the Dartmouth Atlas.

Elliott Fisher Mm-hmm.

Judson Howe What was that and how did we go from research to maybe formalizing and branding this thing, something different?

Elliott Fisher So, so it was a, you know, around the time of the Clinton Health Reform in whatever year it was, uh, 1990, I think, and we got a, Jack got RWJ to give us a bunch of money to define the natural markets for healthcare in the United States.

Where there should be, which is the right, you know, size for competing health insurance plans. Who's, who's RDBG? Sorry,

Judson Howe you said RDGB?

Elliott Fisher No, he got

Judson Howe who to give.

Elliott Fisher Robert Wood Johnson Foundation got the Robert. Yes, we got the Robert. He got the Robert. So it was, you know, it was around 1990 that the Robert Wood Johnson Foundation gave Jack, you know, multiple millions of dollars to create an atlas of healthcare in the United States, primarily to define the markets where healthcare was delivered.

Um, so that that was the right size for competing health plans. If we gave everybody insurance, then you would give them a choice of competing health plans. And these are the right size for those markets. Didn't happen to go through, it's still the right answer, right? Poll, universal insurance, competing health plans.

We can make competition work if we just bothered to try. Um, and, but in the end, they didn't go forward with it. But we had all this money and our, the Robert Wood Johnson Foundation was fine with us starting to do, replicate what Jack had done in Vermont. Okay. For the country as a whole.

Judson Howe So you took, did you have the same quality of data across the nation?

We have

Elliott Fisher the Medicare claims data for the whole country. Did you have every, every Medicare beneficiary was in our data set. So we, and, you know, practice behaviors, it was the only data we had. It was hard. There was not commercial data at the time, um, that was nationally available, but it let us compare for people age 65 and over, you know, what treatments are they getting and what, how much did spending differ across markets.

And it was, it, it was rep replicated what, what he'd found in Vermont. Okay. So

Judson Howe huge variations. Why, why was, why was it that you and Jack and your teams were finding this? Why wasn't this helping happening elsewhere in the country?

Elliott Fisher Well, I think Jack, we were, we were early to get access to the Medicare claims data.

Okay. Probably first off the blocks. Um, and, you know. I, you know, there's not a huge interest that point in just documenting variations and most people had sort of forgot about it, you know, that it did, it did. You know, we had a lot of national interest because, you know, we produced the Atlas and it was carefully thought through Jack trying to influence, think about influencing policy makers and how to solve this problem of, you know, how are what's going on with American healthcare and, and using data, you know, from everywhere in the country, um, to reveal the magnitude of the variations and make them interesting to people.

So why should back surgery rates vary by a factor of eight? Yeah. If you're facing, what's a pretty high risk, expensive procedure, it's worth asking that question. And you know, this was a time when we thought healthcare, healthcare was expensive. How much was it? I can't remember what percent of GDP it was then.

It was probably up to 10 or 11, maybe 12. Um, you know, it was 7% when I started in this business. Um, back in the, in the late seventies. Now we're at 18. Um, so, so, but people were starting to worry about spending. So that's the piece of the puzzle that I took on was what do you, what about these variations in spending and what do you get for them?

Judson Howe Yeah.

Elliott Fisher So

Judson Howe you've been at this for 40 years. Yeah. I came here in in 86. How effective has your time been at improving these things that you identified in the early eighties?

Elliott Fisher Oh, you know, if you, if, if you ask the question, you know, so you were worried about controlling healthcare spending or trying to make sense of healthcare spending.

Yeah. And you look at the curve of what the, the growth curve of US healthcare spending. Mm-hmm. Um, you would not notice any deflection since I arrived on the stage. In fact it got worse. No, I think the rate is actually pretty steadily upward. Um, we can talk about those causes, uh, perhaps later, but the, um, you know, I think the progress has been understanding what are we getting for all that additional spending and what are the underlying causes of the differences in spending and quality that happen across the country.

Um, and then what, what are the implications of those for how physicians and other healthcare leaders and hospital leaders should practice? Yeah. You know, the normative implications of what we learned, um, and I think we've made real progress on that. I mean, I, I think, I think, you know, it's fair to say that the current, you know, if you're inside the baseball of healthcare, most people will know that value-based care is sort of the thing we are people are striving toward to try to improve the value of healthcare.

Um, and I think that's in, you know, that's in large part, you know, that Jack's work, our work revealing the variations and then revealing what you get when you spend more across markets. And what are the cause, what are the causes of that contributed substantially to the adoption of the ideas that are now, I I, you know, that are now, I think there's now a consensus that this is where we need to go more effectively than we have sort of in our limited way, in our weak way.

And I, we can talk more about why I think I'm, why I'm so hopeful, um, that we actually can do better. Yeah. 'cause I think our understanding has advanced a lot and I think that we're reaching the tipping point of tolerance, um, for the costs that we are now bearing from healthcare.

Judson Howe So we've got this problem, right?

We've got this variation in care and outcomes even in small geographic regions. Um, you mentioned a moment ago about. Some things we have improved on, and I, I think you said, um, we've improved on, um, understanding where our dollars are going. Mm-hmm. That was the number one thing you said. Yep. What, what's, where, where are they going now that we understand it better?

So,

Elliott Fisher so it's really, so, you know, here we had, you know, twofold, two plus fold, two and a half fold from the l least expensive areas to the most expensive areas. Just confirmed international study that came out two months ago, but showing that the variations in spending are even larger than we had documented.

Um, and that they are not due to health status differences. Some of them are so normalize that out. Most, most of it's not. So what we did was we, we identified, you know, with, you know, another amazingly generous grants from the Johnson Foundation. Um, you know, we, I tried to identify, we identified groups of patients who we could be pretty sure were identical across markets.

When you have a hip fracture, you're having the hip fracture because you're frail and old. Okay. Um, when you have a heart attack, you're having a heart attack because you've got these risk factors. And so there are higher rates of heart attacks in some places than in other places. But once you've had a heart attack, your risk is of death in the next years.

Pretty similar to people in other areas who've just had their first heart attack. And we also had all sorts of other clinical data because chart reviews have been done on every Medicare patient in our heart attack cohort. And we had a cancer cohort of people. So, um, and then we had a representative sample of just the general Medicare population where they surveyed them every year to see how they're doing.

Um, and we were able to identify those people everywhere and then stratify places in the country by how much they were spending on people. And, you know, we used, we, we did that two different ways 'cause the reviewers cared a lot about making sure we were robust in our findings. But what you found was that the, the patients were in fact.

At the time of their initial hospitalization. Hospitalization, nearly identical in terms of their risk of death in the next year. Okay. Um, their risk of death. So we, we, you know, we had all sorts of clinical data about them, or claims data about their history if they were hip fracture patients. And so they're very similar.

And then we followed them over five years to see what happened to them and, and, and looked at, you know, did they get over those five years? These, did they get the, the treatments that we know are evidence-based? Are they discharged on the right medications? Are they, are they getting, you know, treated for their diabetes?

Are, you know, the, the evidence-based things are they screened for cancer, um, that we knew were important and could be measured in our data? And there really weren't, there were marked differences in those things, but those weren't associated with differences in spending. Okay. Spending more didn't buy you that, more of that stuff, you know, and eventually that made sense to us because doctors are doing the best they can.

Wherever they are. Mm-hmm. You know, they're doing their best to adhere to the guidelines that are known.

Speaker 3: And

Elliott Fisher they were getting, you know, the, so it wasn't more evidence-based practice and high spending more didn't buy you more of the better stuff. Spending more didn't buy you much more of the major elective procedures like bypass surgery or joint replacement.

What it bought you was more time in the hospital. So in the higher spending places, um, and it's still true. Patients in spend, you know, 60% more were spending 60% more time in the hospital. They were spending 75% more time in the intensive care unit, identical patients. Wow. And of course, if you're in the hospital.

And you're seeing lots more physicians and getting lots more diagnostic tests. The whole difference across these markets was how much time people spend in the hospital. And there was no gain in life, no gain in more in life expectancy, no gain in survival. Did it get worse? Yeah. For the hip fracture patients, it got worse.

For the a MI patients, it was borderline worse, but the reviewers wouldn't let us say that.

Judson Howe Okay.

Elliott Fisher We, we could, we, we proved conclusively that it wasn't better. Sure. And that's all we needed to do. So, you know, it, it, um, and then we had all sorts of other measures of quality and we then we interviewed physicians to say what they thought about quality in those different markets.

There was, we could find no evidence that there was a consistent pattern that places that spent more, um, got better outcomes in the context of the way American or other health. And I think other systems, healthcare is practiced where a lot of our decisions are based on what we have available to us as physicians.

And it's so much easier to manage someone in the hospital. And there are strong financial interests to keep those beds full. Yeah. So people were spending a lot more, and we could have, you know, the estimates that we came up with and we had a bunch of reviewers, you know, and editorials about the work. Um, no.

Looks like America's wasting 20 to 30% of its spending on, on unnecessary care.

Judson Howe When you showed this to a policymaker, you know, tell me a story about you, you go into a policymaker. How, how, how did they react to it?

Elliott Fisher Well, it's, it was very interesting, you know, uh, it was not long after these, I mean, we had a republican former me Medicare administrators, one of the editorials, oh, editorialists.

Remind me the era on this one. This was, this was gonna be 2003. Okay. So very kind editorial from Gail Wilensky saying this is really important work. Um, very kind editorial, you know, supportive editorial from a prominent economist and one by the head of the National Academy of Medicine all saying, this is really important work.

It suggests we can do better. So. Everybody was interested in this, right? I, I spent time in the Bush White House, you know, I spent time in Congress with Republicans and Democrats. What were they saying? What, what did they do with this solution? How do we, what should we do? What was the answer?

Speaker 3: Well,

Elliott Fisher we had more work to do.

You know, it suggested that, I mean, you know, it did, it did provide a rationale. Um, and I know this from subsequent conversations with, um, Peter Orzo, um, for passing universal health insurance.

Judson Howe Bipartisan,

Elliott Fisher bipartisan, well support. It wasn't, it wasn't, not really, but, but the Republicans were, to their credit, very interested in trying to figure out what to do about this.

'cause we can't, we couldn't Sure. People, the Republicans were actually much more concerned about the deficit at that point than the Democrats were.

Judson Howe Yeah.

Elliott Fisher Um, so there was serious interest in, and so it was a, it was an an interesting time, you know, and our work. We quickly followed up our work, our findings from those papers, which took three years from when the paper was submitted to like, when it was finally published.

'cause brutal reviews by a brutal, brutal review process led by the current president of Harvard, who was the, who became the i I had seven reviewers, eight reviewers, you know, and, and anyway, so some thank God for Alan Garber. He, he got the thing through and, you know, he helped me work to satisfy all the reviewers.

But we began working on the next project, which was. Given what we know about American healthcare, how can we fix this thing? And that was, that's what led to accountable care organizations over the course of about five years.

Judson Howe You're gonna have to give us a lot more detail. So how do we go from 2003, this conversation?

No, that's, of

Elliott Fisher course, that's the fun, right? So it's a great story. I had so much fun. Now would be a good time for that story. Yeah. So, so the first, the first thing was to try to really come to grips with what are the underlying causes here was, what are the underlying problems of this? First we learned that capacity was part of it, right?

If you have a lot of hospitals, a lot of doctors, you're gonna use it all. 'cause it's all fee for service medicine.

Judson Howe Okay?

Elliott Fisher Right. Everybody can stay busy, you know, and we, we interviewed physicians and they, you know, the physicians in Miami, the most expensive place in the world, saw their patients once a month on average.

You know, you know, Oregon was seeing them every six months. People wouldn't, you know, basic high blood pressure and no other medical problem.

Judson Howe Miami is the most expensive or was, was then. Um, so, so frequent visitation. So

Elliott Fisher frequent visits. You know, the, the most expensive decision doctors make is when should I see you again?

Okay? If I say a month versus six months, it's gonna cost much less to see you in six months than it will in a month, right? Mm-hmm. So, so the, but the, everybody was interested in, so everybody was interested in the question. And what we tried to figure out was, well, fee for service has several problems.

First leads to fragmented care. 'cause everybody, no one has any incentive to coordinate care with anybody else, okay? It's sort of your personal, it's your obligation as a professional, but it's really hard.

Judson Howe You and I know what fee for service, but what does that mean?

Elliott Fisher Well, that, that means. It means that each of us as physicians is only responsible for the visit or condition for which we're seeing the patient.

There is no one playing quarterback except in a few rare places like Mayo Clinic at that point. Okay. Um, or Kaiser Permanente where you, you know, people would have a primary care physician who really was responsible for their care and primary care physicians to their credit, in those days. We actually had highly functioning primary care systems in some places and primary care physicians would be playing quarterback.

Um, but, uh, so care is fragmented. It's not very well coordinated. It's hard for primary care unless the specialists really collaborate. It's hard for primary care to do anything. Um. And then there's no accountability and no, so what we came up with was the question of is there any way we can replicate, um, integrated delivery systems?

'cause there were some early models. Mayo was pretty integrated. If you went there, you'd get cared for that way. Kaiser Permanente, it was Group Health Cooperative with Puget Sound. Um, and what we, the question we asked was, could, does it probably make sense that physicians work in natural networks around a given hospital?

Okay. They're all admitting to that hospital. So could we figure out who those physicians were, even if they weren't practicing in the hospital, weren't part of the formal medical staff. Okay. So we showed with Medicare data, you know, the claims that yes, you could assign patients to hospitals and their physicians based on claims data.

You could identify the, the group of physicians, and then you could do, you could measure two things, the total cost of care for this. Population of patients cared for by this network of physicians around a hospital. And you could measure the quality better. 'cause you've got much bigger numbers to act actually accurately measure quality with, with measures that we had.

And so we, you know, came up with this idea of, you know, a, a group of physicians around a hospital and went and presented the idea to the Medicare Payment Advisory Commission. Okay. And we labeled it the extended hospital medical staff as a way of reforming the payment of healthcare. Where

Judson Howe did we come up?

Who coined the term a CO Accountable Care Organization? That was,

Elliott Fisher it was at that very meeting. It was a great story. So Glenn Hackbarth, who's the chair of the, was then the chair of the Medicare Payment Association, said, Dr. Fisher, you're a smart man, but that's a terrible name. Okay. And he said, why don't you call them accountable organizations?

Okay. And I said, you know, chairman Hackbarth, I think that's a great idea, but I'd like, I think it should be Care in the Middle. Okay. Accountable Care Organization. You just inserted it in the middle. And we had actually used that term at Dartmouth to talk about what we were trying to envision, and I hadn't mentioned it, but he came up with that term.

And the, the funniest part of the story is that the paper was already accepted for publication at Health Affairs in Galleys. So it's ready to go to press and, but it was called the Extended Hospital Medical Staff. And so you stopped the presses? I, I stopped the presses. The editor gave me a chance to change the title to something about Accountable Care organizations and also gave me a footnote that gave Glenn Hackbarth credit for the name joint credit that we took.

The name came up as we were talking at the hearing. It's the first footnote in the paper. Two years later, you know, the name was widely accepted. Hackbarth took credit for it. MedPAC became a supporter of the idea. Okay. Um, it was a very interesting moment. And then, so that's the, then it was three or four more years to get it into a shape that Congress would endorse it and was included in the Affordable Care Act.

Judson Howe So we got these ACOs, or adopted by MedPAC, they become part of the Affordable Care Act. Mm-hmm. Which is what, 2010?

Elliott Fisher 10. 10 passed in 10, I think.

Judson Howe Yeah. I think we just celebrated 15 years. Or some people probably didn't celebrate it. Yeah. But it's 15 years.

Elliott Fisher Yeah.

Judson Howe So we've had the concept of accountable care organizations for 15 years effectively.

Mm-hmm. How effective have they been at reducing variation and cost?

Elliott Fisher Uh, well, if you, if you read the Congressional Budget Office or you look at, you know, Mike cdu and his work, they would say that they do save money. Okay. For the populations that are enrolled in them. Um, and actually they're great examples of how effective they can be.

Um, with, you know, the most recent example I know of, uh, you know, for their 800,000 a CO enrollees, you know, saved 20 to 30% in their first year of operate in their, over their first few years of operation. Okay? So real savings. Um, the, the, the paradox and the thing that is a little hard to grapple with is, well, if they've saved money, why haven't we seen that reflected in the growth in healthcare spending?

And 53% of Medicare beneficiaries are now in an a CO. Amazing, okay? You know, in the fee for service. Medicare Advantages is, is a bit, is about half of Medicare, and some of them are using ACOs to contract with their provider groups. Um, but we're still only, so the, the, this is really what sort of sent me back to the drawing board about five years ago.

Um, what am I missing? What am I not understanding here? Yeah, and I think there are a couple of pieces that are, that contribute to why we're seeing limited success. Um, you know, first, um, they're not very prevalent yet, so for most organizations it's a small share of their revenue. Um, that's certainly true for physicians.

It's nowhere near, I think it's well under half for most physicians, so it's. It's, it's not, it, it's not covering everyone. So they still are under fee for service for everybody else. So some of the financial incentives for ACOs let's the way hospitals who are trying to maximize their revenue, which they all are, um, they can use ACOs to keep their sick, try to keep their sicker patients out of the hospital.

Okay. And then, you know, you are running a hospital. What do you do with those empty beds in your hospital when you've got a bunch of surgeons sitting around?

Judson Howe Yeah. You can't have idle surgeons. It's a very expensive resource to have sitting idle.

Elliott Fisher So you try to, the reason you like these ACOs isn't 'cause you're reducing cost for your community.

You're maybe making care better for those patients and keeping 'em outta the hospital, which is good. Yeah. But you then fill your beds with everybo, with other pa, with commercial patients, who, by the way, in most markets, pay lots more than Medicare patients do. So the, the dynamics in the system are one where.

You know, an effort to squeeze in one place. Yeah. Effectively. Mm-hmm. Um, with good result, good quality results. The outcomes are better for health. The quality measures are better for patients and ACOs than others, but you're leaving uncons, you know, unrestricted the rest of the fee for service system. So that's, that's one reason why healthcare costs didn't, you know, I didn't see the deflection in it.

None of us saw the deflection in the curve, even while some pop populations are getting better care and lower costs. So there's, so that's, that's really the first problem, is what I've come to refer to and others have as well, or they've noticed it for a long time of a balloon problem. You know, if you squeeze in one place in the American healthcare system, you can have healthcare costs pop out someplace else, and they're just, you, you, it's not hard to look for those other, other examples.

So what are, what have insurance companies done to try to keep their premiums down?

Judson Howe Um. I mean, I, I think that's a whole other conversation. I mean, the MLRs medical loss ratios were an interesting attribute of dcu. That's,

Elliott Fisher yeah. Limit, limit medical loss ratios. What, what else have we seen become absolutely the predominant form of health insurance in the United States?

Judson Howe Um, Medicare Advantage.

Elliott Fisher Mm-hmm. High deductible health plans. Okay. On the commercial side, high deductible health plans. I mean, almost all of us are in them, all of us who can afford them. So that's just high deductibles, you know, a higher annual deductible. Just Yep. So, and, and higher copayments. So you have to spend the first $6,000.

Why is that bad? Well, it's not nec, first of all, we, it's bad for several reasons. It's terrible.

Judson Howe It shifting

Elliott Fisher their, it's shifting

Judson Howe the risk threshold, right?

Elliott Fisher Shifting. Well, it it, it shifts expenses to, to the people, right? Yeah. To people who That, to the, to our insured. The insured population. Um, they have not reduced costs at all.

They've shifted costs from insurers and employers to employees. Okay. So that's part of the balloon. They get to keep the premiums down by shifting the cost, spending onto consumers. So that's another way that the balloon is shifted dramatically non scientifically. Like

Judson Howe when I'm walking around rural America.

Elliott Fisher Yeah. Which

Judson Howe I live, I live in rural America. I see a lot more people enthusiastic about these programs because I think they see it as a, again, this is, there's no science behind what I'm gonna tell you, but just some comments have been, they, they like the choice, they like almost like a restoration of their, um, ability to choose healthcare and have a direct ability to shop for healthcare.

Elliott Fisher Uhhuh. Well, I mean, I think, I think, I think choice is absolutely important. We talked about shared decision making. Yeah. It's fundamental there. I think choice of insurance plans is fundamental choice of providers. Wise, we should be choosing providers. Um, the, the question of whether high deductible health plans are the best way to make that happen.

Mm-hmm. Um, you know, if your healthcare were free, you still would have to choose. Right? You still have to choose which provider to go to. You might even have more choice because the, the, you wouldn't have this distinction between in-network providers

Speaker 3: Yeah.

Elliott Fisher And out-of-network providers. So if I want to go to, you know, some fancy place that's not in my network, it's actually much harder for me to choose.

And there are good reasons to think that the out-of-network places are gonna be more expensive. The last thing about high deductible health plans, then we should go on, you know, we continue on, yeah. Mm-hmm. Is that they don't help people make better decisions. We know that they make bad decisions.

Consumers make bad decisions using them. Yeah. They avoid necessary care, you know, before they hit their deductible. And then afterwards it's like. Why not get all this stuff done Now? I've hit my deductible, I've hit my annual, my deductible.

Judson Howe Yeah.

Elliott Fisher So they're terrible.

Judson Howe If you were presented with the same situation, you were in the early two thousands sitting in that same room, coming up with the name for ACOs, getting, getting buy-in from MedPAC.

Elliott Fisher Yep.

Judson Howe How would you be pitching the idea differently?

Elliott Fisher Um, I, well first and I did this with Mark, you know, all of that work was jointly with Mark McClellan, so I was not the, you know, I may have come up with a name with, with Glenn Hackbarth and, and done some of the math underlying documenting how doctors are in, doctors are in natural groups.

But the most important thing I did was realize I need help. You know? Yeah. This is a cool problem. There's this guy, mark McClellan, who I've heard of, who's that, who used to run Medicare. You know, he used to run the Food and Drug Administration. Let me see if he'll talk to me. And you know, I was off to a cross country ski race.

We managed the phone call from somewhere way Begon and you know, somewhere in Lake Wobegon.

Speaker 4: Yeah.

Elliott Fisher You know, on the way to the way to Northern Lakes. Uh, and he said, oh, that's a good idea. Let's see if we can work on that. He'd had a program just for large medical groups. It was quite similar. Okay. Um, and so we both decided and spent three years trying to get it into the law.

So if I had been, if I'd had my choice and we had had our choice, we had already thought it was important for everybody to be in these systems. All payers should be participating. Okay. And, you know, we had, so the answer still is all payers should participate in this. How would that change the efficacy of these programs then?

Then two things happen. One is essentially the medical group who's responsible, the physicians are now under capitation, essentially Capitation. Sure. And so what hap first they have a much more powerful incentive to save money on everybody. Mm-hmm. So they're not gonna play this balloon game of, oh, let's pay arbitrage our, you know, we're gonna make our, maximize our profits by keeping these people outta the hospital and doing more stuff to these people.

Um, so uniform incentives, and that lets you start to develop models of care that apply to all of your patients, which allows you to innovate. You know, you can't afford to develop cool new systems for 25% of your patients, or 50% of your patients. It's gotta be the vast majority of your patients for you to say, let's hire our own behavioral health specialists, et cetera, et cetera.

And that's been well shown. So, so it has to be an all-payer model. For these things to succeed and that, that's been the policy of the Biden administration, you know, will, will hope. I think there's strong interest I understand from the Trump administration.

Judson Howe So we've talked a bit about how effective ACOs were at, at the, you know, managing cost mm-hmm.

And bending the cost curve. Mm-hmm. What did they do in the quality space?

Elliott Fisher Oh, they improved quality pretty substantially. Not hugely. I mean, we're, you know, the real challenge on qua on the quality side here is that we are still not even doing a great job on the basics of taking care of people with chronic illness.

Either diagnosing them or treating them effectively. You know, half of half of patients with blood diag with blood pressure are not diagnosed. And I think it's, you know, it's, it's 20 to 40% of patients with high blood pressure are not adequately treated depending upon which threshold you use. The one 40 over 90 or the 1 1 30 over 80.

Um, so, but there's hope there because integrated delivery systems that are really, or. Medical groups that are really paying attention to applying what we've learned from the science of improvement, modern improvement work launched by the Institute for Healthcare Improvement and Brent James at Intermountain.

Organizations that take that stuff seriously, can hit 90% scores on diagnosis and correct treatment of people with chronic illness. We're just not doing it everywhere else in the, in the system. Yeah, and, and I think the, the hopeful piece is that when you move to global payment, combined with a commitment to quality, where your underlying strategy is about delivering excellent care, you can both reduce the cost dramatically.

Speaker 4: Mm-hmm.

Elliott Fisher And imp and, and in large part, by improving health and doing a better job of treating people,

Judson Howe where, where you're seeing that the few pockets in country, are you seeing financial sustainability?

Elliott Fisher Yeah. No. The, well, yes and no. Right. So the Brent, you know, Intermountain Healthcare is a, is a really important case study of, of what's, what's possible.

I mean, they, um, they were, they had as a system adopted since the founding of the system, a commitment to quality. Brent James came there sometime in the late eighties, I think 1988. Um, and then they built the, you know, a whole organization around delivering outstanding care, applying Demings lessons from, of quality improvement from business.

And then they got really serious about it in the. Early 2000 tens, um, and decided that their strategy was going to be to both adopt quality as a strategy across the organization and, um, try to keep healthcare costs for their community at the Consumer Price index plus 1%. Okay. A target they hit, which is well below anywhere where anyone else was.

The reason they were able to pull it off is 'cause they had a, a, a health plan called Select Health, which they owned, and they achieved enough savings in select health to subsidize all the free riders in Medicare and other who were, who were getting, you know, having the utilization saved by having the decreased utilization that is associated with better quality.

Uh, and so they, they, you know, Brent James, and I think it's Greg Paulson wrote a, wrote a, um, Harvard Business School, Harvard Business Review article where they asserted. We achieved in three years, 18% savings on our per capita costs by taking cost out of the system. Yeah. And we could achieve 50% savings in the United States if we moved to capitation for everybody.

Okay. And we would have much better quality. Let's do it.

Speaker 4: Yeah,

Elliott Fisher exactly. How do we, how do we get there? Leaders? No, there are two ways to get there, I think. Um, one is we have to change the payment system, right? It you, we need to all move to these models where the incentives to the organization are to keep people healthy.

Or to improve their care or to make sure you don't have, you're not harming people, or you make sure you're not, that you're, your care is extraordinarily safe. We know what IHI and the patient safety movement has done. It's possible. We just do not have systems that have adopted this systematically. I can probably, and I've been crawling around to find, as you know, there're probably, it's certainly fewer than 10 systems in the world.

You know, and, and you'd, you'd put shipping, you'd put, um, NUCA, south Central, you'd put Intermountain for a period, they lost it. Maybe they'll come back. Now you'd, you'd, you'd put Virginia Mason trying to do this. You'd put Kaiser Permanente, you'd put Cincinnati Children's, but I don't know to the extent to which they've really focused on affordability for their community.

Um, so, so it's possible, but it takes a board that's committed to it and leadership that wants to pursue this as a goal.

Judson Howe How do you and your seat as an academic. Influence, maybe creating more leaders?

Elliott Fisher Uh, well, I teach a course in population health, you know, here at Dartmouth, and this is exact, you know, what we've walked through is a fair bit of what I'll, what I'll teach them and Okay, we'll come to the, the more political challenges, I'm sure.

Um, but I think, I think we need leaders to un to understand that clarity of purpose is essential, and serving your community has to be part of that. You know, how do you, how do you focus the work on the best possible care for your patients while serving the public good, which is cheaper, better care for our communities.

Um, and if that becomes your leadership mantra, um, then I think we start to be able to change this. But you can't do it by yourself. And that's where the policy ha you know, advocacy for policy on the part of by, you know, by leaders who want to move in the right direction becomes really important. And you have to have policies that start to make it possible.

Judson Howe Why aren't we seeing more health systems, delivery systems, policy makers rally around what appears to be an obvious approach? Well, first

Elliott Fisher change is hard. Um, uh, the, it's so much easier in healthcare, especially as you get to be a larger system to, to grow your revenues and then you can. Because we, they've been trained how to do that, all these leaders.

Secondly, you can become a monopoly and then you can raise your prices. So it it, it's not if you're, if you grew up in what we'll call what we now increasingly recognized as a financialized system across the economy, but especially in healthcare, where you are measured, your performance is measured only on financial metrics.

You know, the both, which is judged both in how big your revenues are. You want to be a bigger system. You've run hospitals, you know, growth is sort of the mantra of, of health systems. Yeah. And, um, you know, so, so growth is where you're going and maybe some cost cutting, but that's really hard to do. You might have to lay people off or think about how you're gonna reorganize your administrative org system.

Yeah. And so the easy way is monopoly pricing and increasing your volumes. Getting another, you know, recruiting some more neurosurgeons to do more neurosurgery 'cause it pays well.

Judson Howe You know, one of the things, and I didn't know who you were in 2012, 13, but one of the things I was trained to do is to, uh, look for independent, private, private practice.

Speaker 4: Mm-hmm.

Judson Howe And to bring them into our employed models

Speaker 4: mm-hmm.

Judson Howe For purposes of being ready for ACOs.

Speaker 4: Hmm.

Judson Howe And, and, and by by 2000, uh, the ironies by 2017 18, uh, in the markets that my limited experience, my, my, my markets, there was so much in animosity between the hospital systems and the primary care providers because they felt that we were gobbling them all up.

Elliott Fisher Yeah. Well, you were, um, you were trying. How else should

Judson Howe we have done that?

Elliott Fisher Well, well, I think, you know, and the model that I is a, I think we would like hospitals to be focused on their job of delivering the best possible inpatient care. And physician groups to be focused on how to max. It is physicians, after all, who write the prescriptions, um, focused on, you know, the goal of keeping people healthy and out of the hospital.

Judson Howe Yeah.

Elliott Fisher And when, and we know this now about ACOs, hospital owned ACOs don't work. They use the, they have the incentives to keep the beds full are just too strong to get over. It's only, the only ones that the congressional budget offices that have are successful are either strongly primary care dominated groups.

Okay. Or groups that are run by medical, not groups that are run by physicians, not run, not, not run by hospitals.

Judson Howe You've been knee deep in for months. Medical pricing fiasco. What's the one place that we should be pushing on?

Elliott Fisher Well, you know, it, it's what a, it's a perfect question. 'cause I will say there is no one place, so the answer isn't.

The answer isn't. Here's the fix. The answer is how do we build a process, a system that can be maintained over ye the years it's gonna take to get us to reform our healthcare system so that it becomes high performing for everybody, so that we have better health, better care, and lower costs for everyone.

And I, and I think states are the right place to do it. It is terribly ironic and tragic that right now Vermont has suddenly become the most expensive health in place to get health insurance in the country for employers and for individuals. We used to be kind of below average health, pre insurance premiums in Vermont are now, you know, you know a hundred percent.

They're now double what they are. In the rest of the country and we're higher than Alaska, which had, where supplies turned out to be more expensive. You know, we are, it's outrageous. So it does, it is a, it is a canary in the coal mine for the, the problems. Um, I would usually refer to private equity as the problem, but we sort of have the epicenter of, I think, multiple factors contributing.

First. We've, we've had a hospital, um, that it became part of a hospital network with a new leader came in who really wanted to grow his network, um, and happened to be a powerful monopoly in a whole, in the whole northeast, northwest section of Vermont, covering 40% of the state. They provide 60% of the hospital care in Vermont.

Um, in, in, in those, in that network. Um, and they extended to New York now, so they wanted to grow the network and, and hire more people, become more of an academic medical center. They've got an associated medical school, uh, and they just went on a growth spurt. Um, they have monopoly prices, pricing power as well.

So they just started to set prices that were, you know, a 12 to 15% increase in prices each year. We have in Vermont, amazingly, you know, one of the most, you know, powerful state agencies in terms of its regulatory authority that it's been granted, um, in the country. But for many years they really were just approving hospital budgets as they came forward.

Okay? And that happens in most, in many regulatory agencies. They get captured by the agency or the, the people are sympathetic and no one wants to turn down a budget request from a hospital if you can. But, but, but you know, it was only three years ago that we, a new chair came in, I think it was 22. Um, Owen Foster came in and, you know, said, hold it.

What's going on here? Let's start to slow this down. And it's been a nasty fight. But, but the, the consequences of UVMs irresponsible behavior, UVM medical networks irresponsible behavior on pricing has been that we now have a financially nearly insolvent, in short, major insurance company, blue Cross Blue Shield could go belly up.

We've savaged primary care practices because the cost of health insurance is one of their major costs. Mm-hmm. And so they can't afford to hire the people they need. So practices are having a hard, and, and that starts to be a vicious cycle, right? When you can't get people into primary care, they go to the hospital.

Right. They go to the emergency room. So we're, we we're, I mean, I think, and I, and I think there is an answer in this crisis, which is. You need a strong state agency that can tightly regulate hospitals 'cause they want to grow and you want them to deliver great care and you would like them. We actually would all like them to shrink a bit.

Yeah. So the recommendations that the four of us came up with, who wrote this paper where one you need a strong state agency that understands and tracks all the costs in the system, identifies the drivers of unnecessary costs, and then has the tools that allows them to do that. Would that

Judson Howe be unique in, in Vermont or No, there

Elliott Fisher are a bunch of state.

Oh there are a whole bunch of states are starting to set statewide spending targets. Sure. Keep, keep their, you know, and then start to control those costs when they can. California

Judson Howe went there voluntarily.

Elliott Fisher California's starting to Maryland's already there. Massachusetts has had it for a while. Rhode Island, you know, it's a, actually, does Rhode Island have a total cost of care?

Target? I can't remember right now. Um, but there are a bunch of states that 10, 10 or more states and so. Set the target and then have a strong agency that can say, how do we get there? Why can't we just use the existing

Judson Howe antitrust laws? '

Elliott Fisher cause it, you can't break these things up. You should, you should use them to try to keep new monopolies from forming.

But once they're formed, it's harder, it's very hard to break things up. And hospitals, I mean, I hope that happens. I mean, it would be good to have more competing hospitals. Um, but I think, I think we, the more likely way that competition could play out effectively is through, is through competing, you know, primary care focused medical groups.

You know, or even primary care groups where patients could choose, even in Vermont, whether there's a hospital in most markets, but there's only one. So you regulate the hospital so that it makes sure it's financially solvent and then you have thriving primary care practices. I mean, some

Judson Howe states do this for electrical utilities.

Elliott Fisher Yeah, no, every state I, you know, wonderful. Uh, you know, every single state and the District of Columbia, uh, regulates, regulates utilities have had public utility commissions since World War ii. 'cause they know that utilities are rife with market failure. The line, should we do the same thing in healthcare?

Yes, absolutely. We just had a colleague and I just had a piece in US News and World Report saying it's time to think about the public utility commission model for healthcare.

Judson Howe You recently wrote a paper on the financialization of healthcare. Even in this podcast series, we've seen quite a few conversations around private equity and other sources of, of, you know, the focus on financialization.

And even one guest talked about how even the nonprofits from 30 years ago to today have shifted from long arc, long horizon strategic planning to really the quarterly cycle that we were seeing in investment backed, um, enterprises. So tell us about that research and, and what you wrote about.

Elliott Fisher Well, I mean, I think I, I I think it's, you know, it's the most important, um, change that's happened in American policy and politics.

Judson Howe Not even just healthcare.

Elliott Fisher No, it's across the, it's across the board. Um, you know, wonderful book by Martin Wolf called the, you know, crisis of Democratic Capitalism Looks Back, you know, to 1980 and the Times, you know, and describes that period as when. American corporations became increasingly financialized with increasing attention on, you know, stock values as the, as the way you measure the value of a company.

Okay. Um, banking becoming involved in everything, everything is turned, you know, the mortgage that used to be held by your, you know, your local bank credit union Yeah. Your local credit union mm-hmm. Is now financialized and sold to a bunch of people.

Judson Howe Sure.

Elliott Fisher So, you know, hospitals, you know, their board members are made up of people who, many of whom are chief financial officers or bankers, or all of whom think that lending money and making, you know, making money is the way to organize this system.

So, and the, the problem is that it's been aligned with this other, the political side of it, which we've just seen play out in this country, which is as those who are powerful gain more power, they want more power, and they use their influence to change the rules in their favor. So this is played out exactly over these, um, 50 years, uh, nearly 50 years, 45 years.

And you know, the share of wealth that's now concentrated, you know, is much more concentrated in the United States than anywhere else in the world. Share of income going to the top 1%. Mm-hmm. Much more concentrated than anywhere else. And all of this is a consequence of not only the financial, it's, it's contributed, it's a vicious cycle of things going, you know, contributing to further financialization where.

Powerful interests have influenced and changed the rules. And you see how this played out. Thomas Philippon has written a wonderful book, um, how America Gave Up On Markets as the sub gave up on Free Markets as the subtitle. And it walks exactly through the economic consequences of lack of competition and monopoly gen and development of monopolies, but how they've taken over the regulatory systems to make sure that things are in their benefit.

And it now takes longer to start to start a new company in the United States than it does in Europe. It, you know, we are, we are becoming mm-hmm. Um, a much less competitive and therefore much less productive and much less healthy country. How do we get back to free markets? So I I, well, we need much stronger oversight of markets.

Judson Howe So oversights could actually create the opportunities to get the pathways back to free markets.

Elliott Fisher Oh, you could, you could create, I mean, I. With good legislation, we could make it, you know, reduce the regulatory burden on new businesses entering the markets. Okay. We could set up structures in healthcare that allowed competition, better competition at the health plan level.

Judson Howe Yeah.

Elliott Fisher You know, if California's a great example under their exchange where they had, they required the benefits all to be similar. Mm-hmm. And so patients could choose which one was cheaper and they had quality measures. So you could choose the cheapest plan. Not being confused that the cheapness might be because of some funny thing with benefits.

Judson Howe Yeah.

Elliott Fisher But oh no, it's the delivery. It's how they're delivering care that that ought to, we ought to adopt that for all, all health plans ought to be required to have the same simple, let's just keep it to four flavors for Affordable Care Act. Had a pretty good idea there. Yeah. Choose your flavor and then within those flavors, choose the organization that you want to get your care from.

Judson Howe You sit in academic and policy circles and you're in some pretty interesting conversations. I imagine maybe it's really boring, I don't know, but what is the most, which single question in those meetings stirs up the most controversy currently in your circles

controversy?

Elliott Fisher I, I think it's, um,

I think it's around this question of competition and choice and I that because I, I just, I don't think we're coming to grips with where it's reasonable to have choice for people. Okay. And the free marketeers think, uh. Healthcare is like other commodities. You can choose your doctor, you can choose your treatment, you can choose, uh, and I know that's not right.

I think once you're sick, you're not gonna make wise choices. You're going to listen to whoever's nearest to you. Yeah. Once you're heading to the ICU, you're not gonna ask, which doctor should I see? You want to be in a great system. So the places to make choices are who should my primary care physician be?

What should my, the organization that's gonna take care of me and on, and then have great data about what those are. And then when you want to choose a specific treatment, when you can choose, you should know, you know, what are the outcomes of that treatment? How good is it? How cheap you know, can you know, can they do it both with excellent outcomes and low cost?

I want to go there. So, you know, I laid a ball this out in a, in, in an article that perhaps you can put on your, on the landing page for this thing if it, yeah. Uh, because I, I think if we think about what's needed as a single system

Speaker 3: Yeah.

Elliott Fisher Multiple payers in a single system, we could solve this all. Should we go multiple payers or single payer?

I, that's, that's a political choice. It, it's gonna be tough in the United States. Some places have done single payer beautifully,

Judson Howe but maybe you're saying if we're gonna go multiple, then let's make that competitive.

Elliott Fisher Well, it, and they have to and transparent to all be playing by the same rules. So I, I just laid out the insurance, you know, you have to great measures of quality and transparency and you have to structure it so that the choices can be made, informed choices can be made by consumers because there are patients, um, to the extent possible.

I, I think, uh, integrated delivery systems make most sense. Um, but I, I can imagine the competing primary care group, you know, a great primary care group and with an associated insurance company that lets you go where you you might choose, would, would, could work too.

Judson Howe From where you sit today, what is the single most powerful leverage point that hospital administrators have and health policy makers have? Maybe some academics have to finally make a difference in the system we've been describing today.

Elliott Fisher Well, you know, I remember, you know, when, when I was. Had come up with the idea that became ACOs.

Okay. You know, I'd done the academic research. Yeah. And I'm sitting in a conference room at Harvard, you know, and this guy, Peter Senge is the, at the front of the conference room and there are a couple hundred people there. And I'm sitting in the back. I'm not paying attention as much as I probably should have, but I suddenly hear Peter say, so Elliott, stand up.

Okay. What do you stand for? Mm.

You know, he, he knew me. 'cause I was, I'd written some, you know, think the healthcare stuff I'd done. But that was quite a question. Uh, it ended up being the thing that prompted me to call Mark McClellan and see if we could, if together we might work on this idea of getting ACOs into legislation. What do you stand for?

I wanted to make care better for, for, for the American public. I didn't wanna just have my work sit on the shelf. Uh, you know, I guess I, publications got me well known. That wasn't

Speaker 3: what I wanted. I remember I've been driving that ambulance.

Elliott Fisher Yeah. Um, and so that's what made me decide to really devote three years, a lot of my time, not writing many more papers, focusing on trying to do the policy side.

So the question, you know, back to your question of what's the point of leverage? I think the point of leverage is the question of why are we here? Yeah. What's your purpose? What do you stand for?

Judson Howe How does the next generation of academics and administrators help that Elliott sitting in the ambulance accomplish what he set out to do?

Elliott Fisher I think, you know, I, I really think it comes back to

what is our purpose in this world? Yeah. If we all thought more carefully about that question, I think we'd all realize that. And we know this from all sorts of research. That purpose is what gives, you know, purpose and meaning is what leads to the, you know, the, the greatest satisfaction and of a life well lived, or a job well done.

And I think linking our work to the purpose of serving the public, after all, you know, why did we come to healthcare? Why are we working in this particular field where our purpose should be to reduce suffering? And healthcare right now in America is causing terrible suffering because of the financial burden it imposes on people.

When you look at the financial burden on individuals, 74% of Americans are worried about healthcare costs.

Speaker 3: 74%, you

Elliott Fisher know. You know, the burden of medical debt is riding. The suffering that people have fearing future healthcare costs, um, is, is just terrible. So many people are harmed by healthcare that they're probably too numerous to count when you look at the, the complications that are of, from avoidable, avoidable complications.

So we came to this work, um, to relieve suffering, to improve health, and,

Speaker 3: and I think we can do it if we continue to ask ourselves that question, why are you here? Why are we here? What do you stand for? What do you stand for?

Judson Howe Our last guest didn't know who you were, but I asked them to gimme a question to ask, ask the next guest.

And their question was, how do we make. Empathy and compassion, the pathway to sustainability in healthcare.

Elliott Fisher I, I think, I think it's exactly the, the, I'd ask exactly the same question. Yeah. What do you

Speaker 3: stand for? What do you

Elliott Fisher stand for? Why are you here? This question about how can we make this, um, this endeavor that is healthcare, um, more about compassion and empathy, and that's probably trying to see things as they are more of the time, spending time listening to people about what their experience is in healthcare.

As we wrap this up,

Judson Howe if you and I are talking in five years, having the same follow-up conversation, what is the single metric. That we would look to, to know that we've been successful in the last five years at moving the needle.

Elliott Fisher I'd never want one measure, and I'll tell you why. You, you can gimme multiples.

I'd wanna know that healthcare has become more affordable for every American, and that we've moved that needle on. Worry about the cost of healthcare. I'd want to know that everyone feels respected and valued when they're spending any time in a healthcare system. And that's for the people who work in the system and the people who are receiving care in the system.

And I'd want to know that people's health is improving. So we're reducing the burden of illness, we're keeping people healthier, that life expectancy is

Speaker 3: improving and we can do that. Um, and

Elliott Fisher I'd want care to be safe. There are multiple dimension because you, you, and we can, you have to focus on all of them to get any

Judson Howe of them right.

I believe Dr. Elliott Fisher, thank you for the last 40 years. Your research, it is making an impact in what, in this time you've given us today.

Elliott Fisher Well, thank you. What fun.