How Transparent Pricing Drives Healthcare Change

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4.2 • 1.2K Ratings

🗓️ 15 July 2020

⏱️ 30 minutes

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Summary

with @MartyMakary and @julesyoo Dr. Marty Makary—surgical oncologist at Johns Hopkins University School of Medicine, and health policy and innovation expert—has long been a passionate advocate for transparent pricing in the healthcare system. We don’t talk enough (or really at all) about price in healthcare, says Makary (instead, we talk about cost). But shedding a light on prices in healthcare—from not just what those prices are but how prices are set and the value we all receive as consumers of the system overall—can help us measure quality in medicine, and be a driver for real behavioral change in the healthcare system, correcting many of the unintended consequences of a fee-for-service system like surprise billing or unnecessary medical procedures. In this conversation with a16z General Partner Julie Yoo, Makary and Yoo discuss what price transparency in the healthcare system could really do; how we can "steer" towards the good physicians who are not just highly skilled, but make the right judgment calls based on need and holistic health, not cost; how we might distinguish between high value and low value through medical appropriateness; and how we might gain clinical wisdom from other kinds of scientific discovery beyond randomized controls, especially during the wartime protocol of COVID-19.

Transcript

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0:00.0	Welcome to the A16Z podcast. This is Julie Yu and I'm really excited to have Dr. Marty Macquery on the
0:06.1	podcast with us today, someone who has been a advisor, mentor, colleague, friend for many years and also someone that many of us have seen on the public sphere in the last few months speaking about the impact of COVID and what we as a society need to do to respond to it and also be prepared for similar
0:25.0	situations in the future. Marty is also an expert on health policy, has written a
0:29.7	number of books, and you know specifically wanted to open up with a bit of context on his
0:34.6	latest book which is called the price we pay. So much of the book is really like
0:39.0	a call to arms on transparency and you know incentive and instructions and particularly price
0:44.6	transparency in health care as a driver for behavior change. Really what it gets
0:49.2	at is how incentives drive behavior in health care and oftentimes very
0:53.2	unintuitive behaviors in health care?
0:55.7	The fundamental problem in my opinion that's always bothered me is that we don't
0:59.3	talk about price and we don't use the right lexicon. For example, we talk about health care costs. We should be talking
1:07.6	about medical prices. We talk about preventable adverse events. We should be talking about medical care gone wrong.
1:17.2	It's ironic with COVID-19 that health care costs are actually one of the major reasons we are massively under prepared.
1:25.5	And that's because why are we shopping in China for medical supplies and PPE?
1:32.0	Why are half of antibiotics made in India and China?
1:36.8	It's because of health care costs.
1:39.7	And right now we've got this entire industry, like other industries right now asking themselves
1:44.8	do we really need to be doing everything that we do? Part of the challenge is that when you
1:49.8	do transparently display what is quote unquote price it just opens a whole
1:54.8	can of worms about like how does that link to value and perhaps that's one of the
1:58.9	the tripping points that previous efforts have had is even when you are able to display a number that somebody
2:04.9	interprets at the price, it really doesn't get at the core of the issue that you're describing.
	...

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