#HIMSS19: The first national coordinator for health IT says big names and good will aren’t enough to lower healthcare costs.
David Brailer, M.D., (right) said yesterday at the AMDISS HIMSS Physicians’ Executive Symposium in Orlando, Florida, that Amazon, JPMorgan and Berkshire Hathaway may well fail in their quest to lower healthcare costs.
When Amazon, JPMorgan and Berkshire Hathaway joined forces to take on healthcare more than a year ago, few understood their goals or how they planned to achieve them. Back then, even the companies seemed only to know that they wanted to lower healthcare costs and improve care — hardly a surprise. Since then, more details of the Amazon-JPMorgan-Berkshire healthcare push have emerged, and the health-tech hype machine has kicked into full gear.
But David Brailer, M.D., the country’s national coordinator for Health IT, isn’t holding his breath. Speaking yesterday at HIMSS19, the health-tech funding veteran offered no insights into the inner workings of the Amazon-JPMorgan-Berkshire company, but he gave his less-than-enthusiastic take on it.
“I would be shocked if they’re successful,” Brailer, chairman of Healthcare Evolution, an educational group, said. “And I say that only because I think the problem is bigger than what any commercial entity can do, no matter how powerful, no matter how much hype there is, no matter how committed.”
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The problem that Brailer described is familiar to anyone who’s worked or taken an interest in healthcare: costs. In Washington, D.C., Silicon Valley and health systems across the nation, physicians, executives and lawmakers say they are increasingly focused on curbing rising healthcare costs and moving toward value-based care.
While Brailer hears them talking, he doesn’t see many healthcare stakeholders walking.
Consider efforts by the Centers for Medicare & Medicaid Services and hospitals reduce readmissions among Medicare patients, which appear to have boosted mortality rates and driven up costs.
Brailer argued that this sort of breakdown is a symptom of a greater industrywide disease.
“We have this machine we have designed that is perfectly made to consume healthcare resources, to consume money from the budgets,” he said. “So, you have all the leaders of healthcare, and I think they genuinely are scared to death that this machine’s going to eat us all. And even in their own self-interest, they would turn it off if they could. There’s no off switch.”
In this world, accountable care organizations crop and find some level of success, in pockets. Value-based payment programs perform well for a health system and a payer, but the model doesn’t spread. The problem is, these initiatives have failed to scale, Brailer argued.
So, doesn’t that mean healthcare is fertile ground for outside disruption? Yes, and that’s why Amazon, JPMorgan and Berskhire teamed up to take a bite out of healthcare costs: They saw that the industry couldn’t enact change on its own. And that’s true of Brailer, who’s worked on health cost management since he was earning his Ph.D., and his colleagues who have “nothing to show” for a career spent tackling this challenge.
But big, powerful companies have tried to realize the Amazon-JPMorgan-Berkshire dream before. He pointed to Robert Galvin, M.D., MBA, who managed health benefits for General Electric long before the company had hit the rocks. He was “perhaps the most enlightened, forceful driver of health benefits,” Brailer said, and went on to a private equity firm, where he secured coverage for a staggering number of employees. Still, power and numbers only earned them roughly a percentage point better, Brailer noted.
So, what would make Amazon, JPMorgan and Berkshire any different?
“If they use their purchasing across all of their employees, how many markets can that actually move the needle in?” he asked. “I think nobody has credibility when it comes to health costs. …It’s not a problem you can solve by throwing good will at it.”
But Amazon, JPMorgan and Berkshire are staffing up, signing on blue-chip consultants and drafting action plans. They have the technology, capital and brainpower capable of producing some kind of motion. They can only hope that they’ll leave Brailer scratching his head.
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