Seeing a ‘leadership crisis’ in American health care

There’s not enough attention being focused on the biggest problems in the healthcare industry.

Margaret O’Kane, founder and president of the National Committee for Quality Assurance, and Sachin Jain, MD, president and CEO of SCAN Group & SCAN Health Plan

That’s the assessment of Sachin Jain, MD, president and CEO of SCAN Group & SCAN Health Plan, and Margaret O’Kane, founder and president of the National Committee for Quality Assurance. They both spoke with Chief Healthcare Executive® in a joint interview recently to discuss structural problems in health care and the need for bold change.

They didn’t hold back. They talked about affordability, accessibility, and the opportunities for change.

Beyond those challenges, Jain points to a glaring lack of leadership in the healthcare industry.

“We have a leadership crisis in U.S. health care,” Jain says.

“If you know something for decades and you choose not to act upon it, and you now have the policy vehicles that have been introduced over the last 20 years to actually create a sustainable business model, using that knowledge, and you're not acting on it, then what's the explanation? My view is it's a failure and a crisis of healthcare leadership,” he says.

‘Designed to drive up costs’

Americans are paying too much for their health care, and they say that’s a reflection of the system.

“We need to bring the cost down, and I think we've created a system that's perfectly designed to drive up costs,” O’Kane says.

“The current system has its own momentum, and it's actually accelerating in terms of cost increases,” she says. “So what do we need to do differently? I think we need to make it a little less comfortable to stay on the current course that you're on.”

Hospitals can get penalized for higher percentages of patients who are readmitted, but O’Kane says some hospitals are comfortable paying those costs.

She suggests the federal government should take a more aggressive approach, such as warning hospitals that if they don’t reduce readmissions, the penalties could be doubled.

“Do some things that are just going to make it really hard to kind of just coast along and play the current game,” O’Kane says. “This administration has shown a willingness to upset the apple cart in a number of ways, and I think this might be one that would …. have a big payoff.”

Both O’Kane and Jain see opportunities for substantive changes with President Trump’s administration. Jain acknowledges the administration has been “polarizing,” and cuts to healthcare funding and changes to vaccine policy have alarmed some healthcare leaders.

But Jain says the administration’s willingness to focus on chronic illnesses and promoting efforts to get healthier present opportunities.

“The work of everyone who wants to make health care better is to try to align what's right for patients with the policy imperatives coming out of this administration. That is the work over the next couple of years,” Jain says.

“I think that there's actually more courage in the system right now than there has been a long time to create change,” he adds. “I think we're taking a fresh look at a lot of very abnormal things that have been normalized in our industry right now. And I think there's lots of opportunity for positive change. The interesting thing about a positive change is it's not going to come out without some pain to the status quo.”

‘Value-based illusion’

Health systems have also squandered opportunities with value-based care, they argue.

“I think that the whole idea of fee for service, to me, is crazy,” O’Kane says.

O’Kane says her idea of value-based care “is really capitation.”

But she says there’s a public perception problem, with Americans thinking they won’t get what they need in a value-based system where providers are paid money upfront to cover the costs of a population and keep them healthy.

O’Kane sees value-based care as “living within a budget,” with a certain amount of risk adjustment.

Over the past decade, value-based care has been undermined by health systems finding ways to find ways to bill more, Jain says.

“I think value-based care really turned into the value-based delusion and the value-based illusion,” he says.

“I think what really happened over the last 10 years is really unfortunate, in that you took a concept that has that was really well grounded in something meaningful, and then, the entire industry kind of used a couple of loopholes to really exploit the broader system, and as a result, has created unsustainability of the very vehicles that were created to enable them to do the right thing more than the wrong thing,” he says.

Jain and O’Kane see an opportunity to improve value-based care, but they argue that the Centers for Medicare and Medicaid Services will need to take a different posture, and congressional action would be required.

‘Better preventive services’

Both Jain and O’Kane stress the need for greater investments in primary care.

“I think that if we can kind of get people focused on a longer term view of health care costs and a longer term view of health, then I think we can get to a world where we're … investing in outpatient care over inpatient care, investing in primary care over specialty care, investing in primary prevention as opposed to management of secondary complications,” Jain says. “If we can kind of get ourselves oriented around that, we will have a very different health care system.”

Primary care accounted for just 5% of all U.S. healthcare spending in 2022, according to a report from The Milbank Memorial Fund and The Physicians Foundation.

Physicians in specialty care earn far more than primary care doctors, so the system offers more incentive for aspiring physicians to pursue careers in specialty care. And it’s not a hard choice for students with high debt.

“People go to medical school, it costs a lot of money,” O’Kane says. “They have to take on debt, and then they have to decide, what do I want to do? Do I want to do this really low paid, really hard job, by the way, of coordinating everything and so forth, and having systems in my practice, etc., or do I want to be a dermatologist and sell face cream on the side, too? It is perfectly designed to give us what we've got.”

O’Kane points to diabetes as an example.

“You can really manage diabetes, and if you really manage it, you're really preventing the progression up to renal failure,” O’Kane says.

“We do need better preventive services, but we also need more aggressive management of people that need it,” she says. “And we have a lot of tools now for that.”

Jain points to the utilization of specialists where primary care physicians can serve patients better.

“There's lots of visits to specialists, for instance, post-cancer survivorship visits to oncologists that could be better performed by primary care doctors who have screening guidelines attached to them,” Jain says. “But instead, we're eating up a lot of appointments, expensive appointments with specialists that don't need to be carried out. So again, I think if medical groups were more at risk for the total cost of care, I think you'd see a different allocation of services.”

‘Manhattan Project’ for competition

With consumers seeing rising costs, Jain says there needs to be much more competition in the industry.

“I think we need a Manhattan project to improve the competitiveness of healthcare,” Jain says.

While health giants have led to more integration of care, they are exerting great enormous influence on pricing.

“As more and more groups consolidate, they do so almost explicitly, with the intent of exercising more pricing power,” Jain says. “It's part of the playbook. And again, I think that the sad part about it is that many of these organizations are not-for-profits, and they've lost sight of their original purpose, serving the community, and they've started acting more and more like big corporations than as service-oriented entities.”

O’Kane likened the current health care system to having all the parts of a car laid out on the lawn, and telling people to take the disassembled car for a drive. She echoes Jain’s call for more leadership.

“I think it is right that Sachin is challenging people to kind of find their spine and find their inventiveness and their courage and really go out there and do things,” she says. “And I think nothing is going to change without those elements.”