Dr. Robert Pearl’s 4 Pillars of Healthcare Transformation

By Patricia Salber, MD, MBA | Published 9/14/2017 3

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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.


Patricia Salber, MD, MBA

Website: https://thedoctorweighsin.com

Patricia Salber, MD, MBA is the Founder. CEO, and Editor-in-Chief of The Doctor Weighs In (TDWI). Founded in 2005 as a single-author blog, it has evolved into a multi-authored, multi-media health information site with a global audience. She has worked hard to ensure that TDWI is a trusted resource for health information on a wide variety of health topics. Moreover, Dr. Salber is widely acknowledged as an important contributor to the health information space, including having been honored by LinkedIn as one of ten Top Voices in Healthcare in both 2017 and 2018.

Dr. Salber has a long list of peer-reviewed publications as well as publications in trade and popular press. She has published two books, the latest being “Connected Health: Improving Care, Safety, and Efficiency with Wearables and IoT solutions. She has hosted podcasts and video interviews with many well-known healthcare experts and innovators. Spreading the word about health and healthcare innovation is her passion.

She attended the University of California Berkeley for her undergraduate and graduate studies and UC San Francisco for medical school, internal medicine residency, and endocrine fellowship. She also completed a Pew Fellowship in Health Policy at the affiliated Institute for Health Policy Studies. She earned an MBA with a health focus at the University of California Irvine.

She joined Kaiser Permanente (KP)where she practiced emergency medicine as a board-certified internist and emergency physician before moving into administration. She served as the first Physician Director for National Accounts at the Permanente Federation. And, also served as the lead on a dedicated Kaiser Permanente-General Motors team to help GM with its managed care strategy. GM was the largest private purchaser of healthcare in the world at that time. After leaving KP, she worked as a physician executive in a number of health plans, including serving as EVP and Chief Medical Officer at Universal American.

She consults and/or advises a wide variety of organizations including digital start-ups such as CliniOps, My Safety Nest, and Doctor Base (acquired). She currently consults with Duty First Consulting as well as Faegre, Drinker, Biddle, and Reath, LLP.

Pat serves on the Board of Trustees of MedShare, a global humanitarian organization. She chairs the organization’s Development Committee and she also chairs MedShare's Western Regional Council.

Dr. Salber is married and lives with her husband and dog in beautiful Marin County in California. She has three grown children and two granddaughters with whom she loves to travel.


  • As a RURAL primary care general internist here is my opinion:

    There are 4 pillars of Internal Medicine Healthcare in RURAL settings where independent solopractice physicians as follows:

    1) cost-effectiveness
    2) clinically skilled care
    3) continuity of care
    4) community entrepreneurship

    Under cost-effectiveness:

    1) subscription for value of care = Direct Primary Care (DPC) + catastrophic health insurance + progressively subsidized HSA’s that are tax free in and tax free out PLUS incentives for self-care, family-care and community care participation by ALL
    2) comparative effectiveness studies using an EMR / EHR / HIE / CDSS that unites all rural DPC practices in the USA with the capability of clinical cohort identification at the time of the visit that is derived from a modification of the public domain version of VA’s VisTa / CPRS
    3) dynamic translation of innovation coming from rural care teams identifying, studying and meeting human need not burdened by middlemen, government bureaucrats or hospital system profiteers (e.g., with facility coded visits)
    4) human-need focused with PBM’s, MBA’s, CEO’s, QPP’s, MIPS….etc thrown to the curb PLUS wariness that human need can become easily separated from technological imperatives, thereby freeing technology/technique to have a life of its own at variance with human need

    Under clinically skilled care:

    1) BioPsychoSocial…..etc model of observation, evaluation, hypothesis formulation, hypothesis testing-study, outcome determination and continuous quality improvement
    2) combined Public & Population Health
    3) clinical prevention with integration of risk factor & protective factor modulation of Onset, Progression, Recovery (bounce-back), Complication, Palliation of (from) disease & illness
    4) clinical differential diagnosis using extensive and timely knowledge of clinical manifestations at the time of presentation
    5) deductive & inductive reasoning using self-reported, chronological, historical, pathophysiological, epidemiological, epigenetic, evidence-based, social determinant, patient- / family- / community-goal data
    6) evidence-based & integrated interventions with the help of community-trained personnel such as caregivers (“Every person is a caregiver & care receiver”), clinical medical assistants, community health workers, psychiatric social workers, comparative effectiveness and continuity of care facilitators, midwives, coaches/health care navigators, community pharmacists, tele-nurses / NP’s, mesh-networking of HIT & energy production/distribution…etc
    7) continuous quality improvement driven by patient, family, community priorities

    Under continuity of care:

    1) comparative effectiveness
    2) coaching & health care navigation
    3) clinical outcome determination & improvement

    Under community entrepreneurship:

    1) health care team member motto: “I never interacted with a person from whom I did not learn a lot AND make good use of what I learned to the sake of the community”
    2) the overwhelming majority of money spent on healthcare should remain in the community versus be outsourced to profiteers
    3) pathophysiological reasoning (mainly of oxidative stress & redox imbalance implications) should be transformed into medical food interventions within a food self-reliant rural community
    4) use a biomass / biofuel (e.g. levulinic acid biochemically produced from switch grass) burning engine generator with very high BTU/burn / very low emission internal combustion to direct flywheel generation of electricity (off the GRID) to brighten the future of rural folk across the planet with integration of transportation, manufacturing & agricultural productivity (e.g., with the production of CO2 sequestering Biochar as an effective soil amendment).
    5) climate stress, international stress, national stress, state stress, community stress, family stress, personal stress, epigenetic stress, oxidative stress, endothelial dysfunction, microvascular dysregulation, regional blood flow abnormalities, neuropsychiatric / cardiovascular / oncological / pain disorders & disabilities, premature cognitive decline, premature death managed and improved
    6) promote rural world peace through multilingual singing and medical care starting in international / discovery-oriented / Montessori type pre-school settings.
    7) community entrepreneurial prevention of miscarriage, premature birth, infant mortality, maternal mortality, behavioral disorders, MDD, MDD with psychotic features, bipolar disorder, schizoaffective disorders, schizophrenic mental decline, motivation impairment, borderline personality disorder, anger going postal, incarceration, chronic disease onset & progression, pain related disabilities, stroke, heart attack, cognitive decline, wound healing / fracture healing / post-surgery healing / post-injury healing impairment, delirium in the hospitalized elderly, Wernicke’s encephalopathy, ASD social interactional impairment, influenza-induced sudden death, ebola deaths, delirium in the institutionalized elderly, sepsis induced demise, carcinogenesis, metastasis, autoimmune disease, systemic inflammatory disease……etc because of common signaling pathway aberrancies due to redox imbalance caused by competition between NF-kB & Nrf2 gene promotion.

    I challenge Dr. Robert Pearl to a debate before the Stanford School of Business MBA students concerning the question:

    Are MBA’s helpful or harmful to USA and international health care?

    Charles Beauchamp MD, PhD
    Stanford U. undergraduate class of 1968
    cbeauchamp dot stanfordalumni dot org

  • 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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