Dr. Vivian Lee's Book: "The Long Fix"... Summary and Implications on Healthcare and the Economy

This video provides an in-depth exploration of Dr. Vivian Lee's book, "The Long Fix," focusing on the necessary reforms in healthcare payment models to improve quality and decrease costs. Dr. Eric Bricker, the presenter, introduces Dr. Lee as a highly credible and influential figure in healthcare, highlighting her background as President of Health Platforms for Verily (Alphabet/Google's healthcare arm) and former CEO and Dean of University of Utah Health. The core argument presented is the imperative shift away from the traditional fee-for-service model towards a system that prioritizes value and outcomes, a concept Dr. Lee has not only theorized but also implemented in her career.

The discussion delves into Dr. Lee's pioneering work at the University of Utah Health, where she instituted a cost accounting system – a revolutionary step in an industry where basic cost knowledge was often lacking. This initiative, which aimed to understand the true cost of medical procedures like orthopedic surgery or MRI scans, garnered significant attention, including from Michael Porter of Harvard Business School and even the government of Singapore, known for its highly efficient healthcare system. Dr. Lee's extensive background, including 20 years of NIH-funded research and the establishment of a health insurance company at the University of Utah, underscores her authority in advocating for systemic change, particularly in payment reform.

A significant portion of the video is dedicated to the historical context and economic implications of such reforms. Dr. Bricker draws parallels between Dr. Lee's vision and the century-old ideas of Dr. Ernest Codman, a Harvard physician who founded the "End Results Hospital" in 1911, advocating for an outcomes-based, continuous improvement model. The video emphasizes that the medical profession has resisted such changes for over a century. Furthermore, Dr. Bricker explores the economic impact of reducing healthcare waste, estimated by Dr. Lee at 30%, which would shrink healthcare's contribution to the US GDP from 18% to 12%. This contraction, while leading to improved health outcomes, would inevitably result in a significant reduction of the 20 million healthcare jobs currently in the US, posing a major barrier to reform, akin to the decimation of farming jobs in the US from 1950 to 2010 despite increased agricultural output.

Key Takeaways:

• Mandatory Reading for Healthcare Professionals: Dr. Vivian Lee's book, "The Long Fix," is presented as essential reading for anyone in the healthcare or health insurance sectors due to her immense credibility and practical experience in implementing reforms.
• Importance of Cost Accounting: Dr. Lee's initiative at the University of Utah Health to implement a cost accounting system highlighted the critical need for healthcare organizations to understand their true operational costs to effectively control expenses and improve efficiency.
• Critique of Fee-for-Service Model: The video strongly advocates for moving away from the fee-for-service payment model, arguing that it incentivizes volume over value and is a primary driver of inefficiency and high costs in healthcare.
• Value-Based Care as the Solution: While avoiding the "V-word" due to its sometimes deceptive use, the core message aligns with value-based care principles, emphasizing payment models that reward outcomes, quality, and efficiency.
• ChenMed as a Successful Example: The video highlights ChenMed's full-risk model for Medicare Advantage plans as a highly successful case study demonstrating the effectiveness of alternative payment structures in delivering high-value care.
• Historical Precedent for Outcomes-Based Care: Dr. Ernest Codman's "End Results Hospital" from 1911 serves as a powerful historical example, illustrating that the concept of outcomes-based, continuous improvement in healthcare is over a century old, yet widely resisted.
• Significant Economic Impact of Waste Reduction: Reducing healthcare waste by 30% would dramatically decrease healthcare's share of the US economy from 18% to 12% of GDP, leading to improved health outcomes but also profound economic shifts.
• Job Displacement as a Major Barrier to Reform: The potential loss of a significant number of the 20 million healthcare jobs due to increased efficiency is identified as the biggest political and social obstacle to implementing widespread healthcare reforms.
• Healthcare is Not Unique in Economic Transformation: The video draws a parallel to the farming industry's transformation from 1950-2010, where increased output coincided with a drastic reduction in jobs, suggesting that healthcare can undergo similar efficiency-driven changes.
• Ethical Dilemma: Patients vs. Jobs: The presenter, as a physician, explicitly states the ethical imperative to prioritize patient outcomes and health improvement over the preservation of healthcare jobs, despite the difficult societal implications.
• Military Healthcare Payment Model: The military's practice of paying doctors a salary rather than fee-for-service is cited as an example of an institution prioritizing appropriate care over volume incentives for its personnel.

Key Concepts:

• Cost Accounting: A method of managerial accounting that aims to capture a company's total cost of production by assessing the variable and fixed costs associated with each step of production. In healthcare, this means understanding the true cost of specific procedures, treatments, or services.
• Fee-for-Service: A payment model where healthcare providers are paid for each service they provide, such as a doctor's visit, test, or procedure. This model is criticized for incentivizing volume over value.
• Value-Based Care: A healthcare delivery model where providers are paid based on patient health outcomes, quality of care, and efficiency, rather than the volume of services.
• Healthcare Waste: Refers to spending on services that do not improve health or are inefficiently delivered, estimated by Dr. Lee to be 30% of total healthcare expenditure.

Examples/Case Studies:

• University of Utah Health: Dr. Vivian Lee's tenure as CEO and Dean, where she successfully implemented a cost accounting system and started a health insurance company, demonstrating practical application of reform principles.
• ChenMed: Highlighted as a successful example of a full-risk model for Medicare Advantage plans, showcasing how a different payment structure can lead to superior patient outcomes and cost efficiency.
• US Farming Industry (1950-2010): Used as a historical analogy to illustrate how an industry can dramatically increase output and efficiency while significantly reducing its workforce and economic contribution to GDP.