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The first post discussing Robert Pearl, MD’s new book “Mistreated: Why We Think We’re Getting Good Health Care—and Why We’re Usually Wrong,” explored how the U.S. Healthcare system got so messed up. Titled “Think You’re Getting Good Healthcare, You’re Probably Not,” the post examined the four huge legacy players (insurers, hospitals, physician specialty societies, and drug and device manufacturers) that not only played a role in breaking the system, but also have a huge stake in maintaining the status quo. It also contains an embed of the audio interview I did with Dr. Pearl discussing these issues.

Just laying out the problems, however, is not enough. We need viable solutions to the problem cost and quality problems that plague U.S. healthcare. Dr. Pearl, the former Executive Director and CEO of the Permanente Medical Group, laid out his vision of how to transform healthcare in his book in a chapter aptly named, The Four Pillars of Transformation. Let’s take a look at them.

Pillar 1. Healthcare needs to be integrated

As is pointed out in Mistreated, much of the U.S. Healthcare system still resembles a 19th-century cottage industry. Many doctors are working out of small offices, in onesie or twosie practices. They may still be keeping paper records so information is not easily accessible to any of the other care providers that the patient may be seeing—unless they are copied or faxed to them (who besides doctors even has fax machines anymore??). Even if those small practices are using an electronic health record, the chances are quite high that the software does not communicate with other parts of the patient’s healthcare network. So once again, clunky, outmoded means of transferring the records must be resorted to. Would we tolerate this in any other critical industry?

If care were integrated both horizontally within specialties and vertically across primary, specialty, and diagnostic care, Dr. Pearl argues, costs would come down because of efficiencies related to economies of scale. Quality would also improve. He points out that independent organizations, like the National Committee for Quality Assurance and J.D. Powers and associates, that measure healthcare quality and service almost always have physician-led multi-specialty organizations, like Kaiser Permanente, at the top of their list.

But I want to insert the patient perspective here. I get my care at Kaiser Permanente in Northern California. I benefit greatly from the one-stop shopping experience offered by having most of my providers and ancillary services co-located in a single location. I do not have to drive from place to place to see my doctor, then get my tests, and finally pick up my prescriptions. I can walk or take the elevator. Because everyone at Kaiser is on the same Electronic Medical Record, all of my doctors can easily access all of my records—nothing has to be faxed (unless it is coming from an outside provider). I also know that my PCP knows what my specialists are thinking and doing.

Here is an example of how well the system works. I once needed some immunizations to go to Africa. There was some difference of opinion between the recommendations of the CDC and the WHO about exactly which shots were needed. I was able to make a phone appointment with the travel nurse who helped me decide what to do. She also made an appointment for me to get the shot and called the malaria prophylaxis prescription into the pharmacy. The total time that elapsed between getting my shot and walking out the clinic door with a prescription in hand was less than 30 minutes. Can your health system do that?


Pillar 2. Healthcare needs to be prepaid and pay for value and outcomes, not volume

Almost 15 years ago, I developed a concept that I called the “Gnu Gnu Thing”. The idea was that we should pay for what patients really want and need, that is good outcomes. I had a chance to present my ideas to a special committee looking at such issues for the then named Institute of Medicine (now called the National Academy of Medicine). I wasn’t exactly laughed out of the room, but I can relate that no one on the phone really got it. It was simply too early.

Change is slow in healthcare. In fact, it has been said that new approaches in medicine are not widely implemented until about 18 years after their introduction…so I guess we are now just about ready to stop paying for doctors doing things to patients (e.g., operations, physical exams, and so forth) and to start paying them for getting diabetes into control…or preventing it from occurring in the first place.

As Dr. Pearl says,

“Americans appreciate a doctor who can rescue them from a catastrophic event. But, of course, all patients would prefer not to have a heart attack, develop colon cancer, or suffer a stroke in the first place.”

In order to drive that behavior, we have to align physician payment with our desired outcomes. Prepaying healthcare (we used to use the word capitation before it became so maligned in the managed care backlash a number of years ago) means that providers as a group are paid a fixed amount to provide all the care that their patients need. Since taking care of catastrophic illnesses is much more expensive than providing effective preventive care, doctors practicing in Accountable Care Organizations or prepaid integrated delivery systems, such as Kaiser Permanente, are incented to keep people healthy, not just rescue them after they get very sick.

How do we know this will work to drive efficient quality care? Dr. Pearl points to data from the nationally reported Healthcare Effectiveness Data and Information Set, fondly known as HEDIS. He notes that “depending on the specific quality measure you examine, you’ll see a 20 to 30 percent gap between the organizations performing the best (most of which are prepaid) and the lower-performing organizations (reimbursed primarily through fee-for-service models.”


Pillar 3. Healthcare needs to be technologically enabled

Duh! Does anyone really think you can provide (or receive) good healthcare without sophisticated technology? Well-designed electronic medical records not only digitize health records but also have built in reminders so that preventive measures are not overlooked, guidelines are followed, and data from multiple providers is integrated. You simply can’t do that at scale if you are relying on paper records.

Advances in telemedicine allow high-quality care without an office visit. At Kaiser, depending on my issue, I can choose to drive to the medical center to see my doctor in person or I can have a telephone call or video visit with her. One of these choices burns up a half a day, the other less than an hour…hmm, now which one should I choose?

Kaiser also has a superb patient platform, My Health Manager, that allows me to access my test results as soon as they become available (usually the same day as the blood draw). I can also see all of my immunizations, a list of my ongoing health conditions, past visits and hospitalizations, and a health summary. I can click on a link and email information about my visits to other providers. I can also make and change appointments with my doctors. My most favorite feature is that I can secure email my doctors with questions or concerns that I have and get an answer, usually the same day. Kaiser doctors are on salary, so there is no disincentive for them to practice virtual medicine—it is all about the outcomes, which, of course, are monitored and measured.

Why wouldn’t you want to get all of these things from your healthcare providers? And, why aren’t we insisting that healthcare, one of the most critical of all the things we spend money on, have the latest in technology and not just in the OR, but also in the office?


Pillar 4. Healthcare should be physician-led

This pillar will undoubtedly give some healthcare (MBA-type) executives heartburn. They often view doctors as just another commodity that has to be managed, like hospital beds or operating room supplies. Doctors are fine, they think, for taking care of patients, but what do they really know about the business of healthcare? It turns out very little after medical school or residency (although this is starting to get better), but they can be trained in health policy, finance, and leadership just like their MBA counterparts. But they have a huge advantage over the business leaders: They really understand what it means to take care of patients.

This kind of training is built into the Permanente Medical Groups. Doctors are provided with opportunities to get formal training in everything including healthcare finance, data analytics, information technology, and leadership skills. I had a chance to get a “mini-MBA” at the University of North Carolina when I was a Permanente physician executive. It was practical, relevant to my work, and, best of all, had me studying not only with other doctors, but also with Kaiser Permanente business leaders.

It is heartening to see more and more physicians assume leadership at healthcare organizations, including health plans, hospitals, large medical groups, and government healthcare institutions. But we need a lot more of them if we are going to transform the system from the mess it is right now into something that really is the best healthcare in the world.


Can the Pillars be turned into action?

In my interview with Dr. Pearl, I asked him how he thought the Pillars could go from nice ideas to reality. After all, I know from experience that my great idea about Gnu Gnu healthcare has yet to be implemented across the country. He replied that he thought large employers who pay for a great deal of the care in the U.S. could be a driver. But he acknowledged that it won’t be easy to move the needle. The powerful legacy players in healthcare are simply doing far too well under the existing system—as broken as it is.

He did tell me that he intends to be a part of the solution by devoting the next part of his career to the transformation of our healthcare system. Having watched as Kaiser Permanente Northern California change from an O.K. system to one of the best in the nation under his leadership, this gives me hope that we can one day achieve the changes known as the Four Pillars of Healthcare Transformation.


  1. It sounds like Dr. Pearl is advocating that three or four for-profit mega-corporations take over ALL health care in the United States. How did that work out for consumers of cable television? Did we get the channels and programs we wanted, or did we have be pay for a lot of garbage that we don’t want and will never use?

    We’d have Great Britain’s National Health Service — but without the protections for consumers of oversight by elected officials who need to curb the worst abuses to keep their constituents happy.

    And I can’t imagine that a many doctors would be happy being cogs is a corporate machine, even if the machine IS being run by someone who once practiced medicine.


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