Why No One Can Really Fix US Healthcare

My letter to Andrew Witty, UnitedHealth Group CEO

Dear Andrew:

I read your opinion piece in the New York Times today.? And first, I want to say I am really sorry at Brian’s passing.? It should not have happened, and it is a tragedy.? As we never really know our purpose on this planet, maybe one of Brian’s was the uproar that has since ensued.? And maybe it will lead to some good.? However, if school shootings are any indication, this too will subside, and you can go back to your work leading a vastly profitable global company.? But while we are in the discussion, I wanted to add my two cents to the conversation.

I have had the blessing of working in the biotech and pharmaceutical industry my whole career, delivering life saving drugs to patients, and earning a good living.? I know the business, and I couldn’t agree more with your assessment that “healthcare in the US is a patchwork quilt built over decades”.? I have had the opportunity to be in many vital conversations of the good, the evil, and the waste of the industry.? I can say unequivocally that everyone wants to make healthcare work and help patients, from the warehouse worker to the CEO. However, due to the enormous nature of the beast, improving in one corner can actually cost someone else a lot more far away from where you are looking.? So simple improvements are hard to come by. And because this country has a strange fixation that socialism is evil, each piece of the quilt is a capitalistic entity looking to maximize its own profit.? Hmm, maybe the problems start there.

I spent five years running a small tech startup with big dreams to fix a corner of the mess (and as well looking to maximize its own profit!). Our idea was to create a neutral network where life science and healthcare companies could exchange data for transactions seamlessly, let the computers enforce the business rules of those transactions that all the companies had agreed upon, and win for everybody.? Transaction review goes away, mistakes go away, fraud goes away, transactions happen instantly, and every player reduces cost of operations (note:? this network focuses on sale of drugs between pharmaceutical companies, wholesalers, and hospitals, not approval of medical treatment, but it could do so much more!) - it seemed like a win all companies would buy into!? The company continues to grow this network and spread the dream of what is possible, but I had to leave two years ago due to burnout.? Bringing the industry together is immensely hard work, and I had hit my limit.

In my front row seat, I have some sad truths about why it is nearly impossible to fix this system that might provide some food for thought on what we can do:

?Profit seeking companies like yours, Andrew, sit in competitive environments which drive bad behavior:? Having worked on an “industry” solution, I got to see competitors come into the same room. As I already stated, Individuals in this industry really do want to fix things that benefit the whole industry, and there is a lot of effort for industry improvement.? I have seen great work across the industry in many instances, including?support during drug shortages, and the COVID vaccine rollout.???

However, your goodwill has limits, and? in the end your allegiance is with your own company, and aspects that make it easier for your competitors or new entrants are squashed.? That is how you and those that work for you get their bonuses.? Moats are designed for business success.??

You said: “We are willing to partner with anyone, as we always have - to find ways to deliver high quality care and lower costs”.? Is that really true? Practically you have a limited budget, so every crazy idea can’t be implemented.? And hence who gets to pick what gets fixed?? Everyone in the end focuses on their company's success from where they sit on the quilt.? You and your company don’t benefit if the quilt gets blown up for a better system.? People want improvements, as long as it doesn’t reduce or hurt their business. And those improvements end up being more quilt.

People sit too far away from healthcare expenses: Half of the people in this country get healthcare through their employer, and often have no idea of what treatment costs.? I went to the doctor once with a viral lung infection, and the doctor suggested x rays.? At the time I was on a high deductible plan being self employed, and so I asked for alternatives, and the doctor was shocked and embarassed, because most patients don’t ask or can’t ask what a treatment cost.? Yes, there was a much lower cost treatment.? It really isn’t socially acceptable (yet) to ask, and pricing is opaque.?

The patient is the one group not organized:? All costs in the system will eventually trickle down to the patient, through higher premiums or continued growing deductibles.? Any time you try to reduce the cost of the system, the one part whose pie will go away will fight the change or examine the complex rules to figure out how to get some other pie.? Doctors, pharmaceutical companies, hospitals, PBMs, and insurance companies have lobbying groups to protect their interests.? And if the patient doesn’t feel the immediate pain, they won’t get organized.

The system complexity is a feature, not a bug, for many:? Many, many companies benefit off the complexity and opacity.? If many people benefit, it is hard to drive change.? And in the case of healthcare, there is so much money, that new avenues of profit grow like invasive crabgrass, adding to the complexity.? If you just look at the history of PBMs and the last 15 years of their evolution adding to make the quilt even messier, you realize you can’t stop the beast.

Is there hope?? Well, the conversation is rather loud right now.? And there are great advocates for change that seem to be gaining some traction.? And we have a new administration coming that seems like it would be just fine blowing a few things up.? No one wants more regulation, but I do feel it will take some government level force to rewrite the system - it needs to be a body independent of the profit seeking companies. But in the meantime, I think some guiding principles for both companies and us as customers of the healthcare system that can help, :

• Require? transparency from everyone.? What do things cost, who is getting kick backs.? If people knew, they would demand change.? Andrew:? could your companies make the financial flows and costs public?

• Help design a system that incentivizes the right behavior. ?I don’t even know how to define “right” here, but maybe that deserves some reflection and thought by all the companies who play a role in healthcare.? And for all us customers in the system, how do we get incentivized to proactive, healthy behavior to keep us from getting sick in the first place???
• Organize.? Some folks might remember Haven - a joint venture between Amazon, Berkshire Hathaway, and JP Morgan that tried to do just that for their employees.? They failed for a variety of reasons, one being not big enough, and also because the system is incentivized to have sick people rather than healthy people.? Patients sit far away from healthcare structure choices (often made by their employer), but maybe in the current “blow it up” environment there might be some creative ways to make an impact.

I am sure, Andrew, all the feedback is giving you and your Board much to reflect on.? We are all hopeful, and watching what you do next. You are big enough (#4 on the Fortune 500!), that you can make decisions that make a difference for the whole industry.

After two years of rest, maybe I am ready to get back in the ring.? Please let me know if I can be of help.

Sincerely,

Susanne