Dr. Denis Cortese, Director of the Health Care Delivery and Policy Program at Arizona State University

How can we reduce costs, yet improve the healthcare delivery system? Dr. Denis Cortese, Director of the Health Care Delivery and Policy Program at ASU, says that there’s at least one third of waste in the system. He shares a comprehensive plan from the Mayo Clinic Health Policy Center that shifts health care from a hospital-centered, transactional model to a high-value, patient-centered system.

Dr. Denis Cortese is a champion of high-quality and patient-centered health care. He is currently Director of the Health Care Delivery and Policy Program at Arizona State University (ASU); Foundation Professor at ASU; and President of the Healthcare Transformation Institute, a non-profit organization dedicated to improving healthcare delivery and lowering health care costs. Dr. Cortese is also Chair of the Institute of Medicine’s Roundtable on Value and Science Driven Healthcare, and serves on the boards of Pinnacle West and RAND Health. From 2003 until his retirement in November 2009, he was President and Chief Executive Officer of Mayo Clinic. Prior to that, Dr. Cortese served in other administrative positions at Mayo, and worked in the organization’s pulmonary and critical care areas for nearly 30 years.

Show Notes

• A shift from practicing pulmonary medicine to reimagining the healthcare delivery system. [02:58]

• Three future healthcare domains that could shift the hospital from the epicenter of healthcare. [04:16]

• Comprehensive concepts developed by the Mayo Clinic Health Policy Center for a new healthcare delivery system. [10:53]

• Two elements of health care that need to change with cooperation from the government and other organizations. [16:30]

• Why would this new comprehensive health care system cost less? [19:16]

• The four levels of prevention. [21:26]

• Hospital administrators are trained to keep the hospital as full as possible for profit. [27:33]

• What’s in the way of wellness becoming beneficial to all? [32:22]

• Patients have a shared health care vision that doesn’t match the stakeholders.  [33:23]

Transcript

Bisi Williams: I'm Bisi Williams. You're listening to Health 2049.

Dr. Denis Cortese: When you call a group together, all the stakeholders, it's like bringing in all the orchestra members, but that they are all soloists and they are only interested in playing their music when they want to play it, and they want to play it as loud as possible and that's what happens in healthcare. The stakeholders have come to the table in healthcare, they're there to maximize their sector but whether that optimizes the output for the people is not number one in their mind. And the people who become members of an orchestra are very interested in having beautiful music be produced, and it's not about them. It's about the music.

Bisi Williams: [02:03] My guest today is a champion of high quality patient-centered healthcare. Dr. Denis Cortese is a physician and emeritus President and Chief Executive Officer of the Mayo Clinic. He is currently director of the Healthcare Delivery and Policy Program at Arizona State University and a Foundation Professor. He is also President of the Healthcare Transformation Institute, a nonprofit organization dedicated to improving healthcare delivery and lowering healthcare costs. 

His vision for healthcare demonstrates why synthesis and the creation of a learning model will be a win-win for everyone by eliminating gaps in friction within a designed healthcare system. I am pleased to have Dr. Cortese on our show to talk about his Mayo Clinic experience and how he sees healthcare delivery in 2049. Welcome to the show.

Dr. Denis Cortese: [02:51] I'm glad to be here.

Bisi Williams: [02:52] So how do you make the leap from practicing pulmonary medicine to reimagining healthcare system delivery?

Dr. Denis Cortese: [02:58] That's a very good question. It sort of evolved as I was practicing at the Mayo Clinic, did it for over 40 years, but around in the mid 1980s, an awful lot began to change with regard to focusing on payment for healthcare and the idea of getting more people coveraged. And when we talked about the issue of, what is it we're trying to accomplish, we began to talk about that back in the 80s, when I say we I mean a group at Mayo Clinic, and then we extended that out to a wider population.

And when we began to realize what we're really trying to work towards, we felt that the current payment model of fee-for-service would be a great distraction and in fact, an inhibitor to get to the new future state that you are hoping we will be at by 2049. And we are actually on that journey right now. But that's how it shifted because I began to realize that what was being done external onto the health system with regard to payment models would not get us to where we thought we really could be in this particular century.

Bisi Williams: [04:08] That's fascinating. So without further ado, I'd love to hear your vision for a healthcare delivery system in the year 2049.

Dr. Denis Cortese: [04:16] Well, 2049 is a good year to sort of pick that even though I think we can find examples where we are almost there in some isolated pockets around this country. The idea goes like this, what is it that we want in healthcare in 2049? We asked many people these three questions, and I think the audience could ask themselves or answer for themselves because these questions set the strategy for the goals of what we want to attain. And then I'll explain maybe how we get there. 

The first question is who in the audience would like to be admitted to a hospital tomorrow? And most people don't actually stand up and volunteer to say, yeah, I can't wait to get into a hospital tomorrow. The second question is okay, if you don't want to go to a hospital who would actually like to be sick tomorrow, and you don't see many hands go up for that question either. And the third question is, okay, then you don't want to be sick, you don't want to have to be admitted to the hospital, who would like to consider themselves as a patient? A patient is someone defined by the dictionary as someone who long suffers and long endures.

If those are the goals of our new future, then by 2049, I think physicians will be serving the public and collaborating with them to maintain their activity to maintain their feeling of health. Even if they have chronic illnesses, you can feel quite healthy. I've got five chronic conditions, but I feel pretty healthy, pretty active. We will be involved in preventing illnesses. Well, in the fee-for-service payment model, you only get paid when people are sick. If you get into the business of preventing illness, you might lose money.

So we have to change the way the payment model goes to be able to help more and more preventive activities take place. Of course, we'll still be in the business of curing when possible. So we try to cure when possible. If not, we try to help people live and be active with their illness. And towards the end of life, we would be involved in much more in keeping people comfortable. Since people prefer not to be sick or think of themselves as patients, they really want to avoid hospitalization unless it's absolutely necessary. And there will be lots of cases that will be absolutely necessary.

But the idea is to maybe only go in the hospital once or twice in your life rather than once every three months or four months. We want to be active and feeling healthy as possible. Even people with chronic conditions, medical conditions like myself really want to think of themselves as being healthy and to live longer if possible. My job now, and it will be to serve the primary stakeholder in healthcare, and that is the person, the individual, the people or patients. That's the primary and actually the ultimate end user of our services.

So in my view, there really is basically only one, there should only be one stakeholder in healthcare and that's the individual or the patient. All the rest of us are vendors. All the rest of us are trying to help people to attain the goal they would like to have. In 2049, it's likely we will say something like this, that decades ago, many years ago, we realized making the hospital the epicenter of care was really financially untenable in the long term and that our physician-patient relationship with the people that we're taking care of or as some people would say, the clients or customers. In other words, we have to find a way to make money and be viable by keeping people healthier and keeping them out of the hospital.

That would be the design of the new healthcare system in which hospitals are no longer the center of the universe. But in other words, we will need them, but the whole purpose of what we're trying to do is keep people healthier. And then finally, how would we develop some kind of a healthcare system? What would it look like? 

And I would submit that it would look like a national learning organization where we're all learning together, inside of which there would be a number of domains. I'll just list three of them. It would be the knowledge domain. That's where all of the research takes place, the knowledge generation that domain would be if you just view it as its own system. It's like its own universe. And inside that universe are all the people who are doing the work, and they're funded pretty heavily by the federal government. We've just seen the benefit of having a knowledge domain that is quite functional in the fact that we've generated vaccines for COVID, and we will have to modify those vaccines. I think over time and we were able to do so as fast as we did, because we had been investing in this knowledge domain for decades and building up the basic knowledge on how to generate these kinds of vaccines so that's the knowledge domain.

The second domain would be where the patient resides, and that's where care delivery takes place. But it's where all the interactions take place between the individuals in healthcare and the patients who come to those locations periodically for care that they feel they might need.

And then the third big system or domain is the payer domain. And in that payer domain today, we have hundreds of different insurance models. We have the private sector. Then we have sort of the public domain, which would be the federal plans and state plans close to that is, of course, the VA and the military systems. Those are two other systems that are all funded by the government and applied by the government and supervised by the government. So you get the idea there are multiple various insurance plans in that system. None of them really ever communicate with each other and those of us who have to send bills to those systems have to use different paperwork for every single insurer. 

So that gives you an idea that a new delivery system focused on keeping people healthier, out of the hospital, if we possibly can and keeping them well and comfortable and where we are trying to coordinate the efforts of the knowledge domain with the care delivery system and also the payer system.

Bisi Williams: [10:42] Wow. Okay. Dr. Cortese, that's phenomenal. I mean, that is really a complex system that you talk about. And my first question for you is, why do you think your vision will work?

Dr. Denis Cortese: [10:53] Bisi, I should be clear that this isn't just my vision. This is really a set of concepts that were evolved during about probably about a four year period of time, beginning around 2004. When I was working at Mayo Clinic, we launched a group called the Mayo Clinic Health Policy Center. And we engaged over these years, a couple of thousand people altogether, at a national level, we had multiple of some large meetings, and we had a whole series of small meetings with maybe 20 to 30 people. We called them forums where we debated and discussed many different concepts, out of which we did some voting and we prioritized what would be helpful.

And the ideas that came out became a cohesive set about what a new healthcare delivery system could look like. And the concepts that came out I can just list for you and describe briefly, the first concept is that whatever we have should be a learning organization, which means everyone within the system should know what the system knows with a click of a button and that we can integrate and coordinate. Now, I know that we're a long way from that, but we're a lot closer now than where we were maybe just 15 years ago.

So that's the big overarching concept. Then the first question is, what's the purpose of the system? Why do we exist? Why should we exist? And one item came up for that. And that was to produce value in healthcare. High value healthcare. To create the value, we found that there were at least three or four concepts that needed to be in place to make it work. 

Number one is the idea of integration and coordinated care. Without that base, you just can't build on anything. And integrated care is really what physicians, nurses, delivery systems and hospitals do as they work with each other. How integrated are they communicating among themselves?

The second component is basically the idea of coordination of care. Coordination of care is what we do around the patient. So, for instance, an integrated system would frankly look like a really good orchestra with a whole bunch of different people, each playing their role. They may be doctors, nurses, nurse practitioners. It could be community workers. It could be the allied health staff that are in hospitals or in outpatients. There's a long list of individuals who might, depending on the music we're trying to play for a particular patient, we may have one group of people doing it, and then they might hand off to the next group, whatever it takes to make the right music for that patient.

And then the other component is coordination. How do we actually organize the delivery of the care for that patient? When we studied all this, we found that delivery systems that for the last 50 years have been integrated and coordinated actually were as a byproduct of what they were doing, creating higher value care, getting better results at lower costs. 

Two other components came up and that was the idea of individualized medicine. You have to pay attention to the needs of every patient in a given population to improve the health of that population. So even though we talk about public health and population health, the fact is, you've got to get to every individual in that population to make them really healthier.

Second component, under the idea of individualized medicine is the novel diagnostic, novel therapeutics, genetics, genomics, proteomics, all the new stuff that's coming out this century. And this century, we know that we'll be able to tailor medications and treatments to maybe not the whole group of patients, but to subgroups. Maybe even just one person will have a special kind of treatment that will be developed for them as this century rolls out.

So that's individualized medicine and then the other major category, which is absolutely fundamental and which we have not looked at very hard over the last 50 years or longer. And that's what I call the science of healthcare delivery. In other words, it's not studying basic research or even translational research, developing new products or new ideas. It's really how do we take care of patients in new models of care? How do we do telemedicine? How do we have new models of payment, so it will foster our ability to offer patients telemedicine hospital care at home, direct care at home. We're trying to keep them out of the hospital, out of emergency rooms. 

The fee-for-service payment models do not allow payments for those things I just listed until COVID. Now COVID, we've got special permission to be able to get paid for doing telemedicine. If you can believe it, we needed a COVID to be able to start paying for people to do telemedicine. It's just insane, really. 

So when you look at the science of healthcare delivery, that is a fundamental key, because it's basically the end stage of taking an old idea or a new idea and using it in a new way to improve higher value. It's taking the current active ingredients and applying it in a much more effective way than we've done before.

So those are the fundamentals that came out of. Notice, there's nothing in there about IT or any particular products because those are nothing but tools. You need them to accomplish those big pictures. And then finally, Bisi, there are two other elements that came out that is really not, neither one of these are completely in the control of the delivery system, and we need help from government and other organizations to make it work. And these are the two.

Number one is insurance for everybody. Everybody should have insurance. We think people should own it. In other words, it's not linked to their work. COVID has just proven this in a very strong way, as people lost their job, they lost their insurance. Rather insane, too. That should not be happening in a first world country. Then the other one is if we really want to get high value care, we need to change our payment models so that organizations that get the best outcomes at the lowest costs are paid appropriately enough that they stay in business.

Some significant delivery systems have begun to solve their own problem with this idea of paying for value and getting people insured. And that is, they offered their own insurance companies. Those groups can pay themselves to keep people out of the hospital and do telemedicine and do hospital care at home. So sometimes the providers are taking care of that problem. And it's kind of a shame, actually, that they shouldn't be distracted having to do that, they should be able to just focus and concentrate on patient care, in my view.

So that's pretty much the vision. And it was really an evolution of engaging with many people. But we did one thing that was unique. We had a few people who were involved who were patient advocates, who also participated and made some videos. They gave some audio statements about what they were hoping for in the future, and we actually paid attention to patients. So to me, this was a unique and eye opening exercise for me, so we're still working at it. It's a work in progress.

Bisi Williams: [18:37] I love your vision of this fully integrated work, and two things come to mind. One is communication, the other one is orchestration or design of these systems with things that don't talk to each other and creating unnecessary work and unnecessary burden for those within the system, there's a tremendous amount of friction. 

How much money do you imagine in 2049 when you create, and I'm not going to call it a governing body, but I'm going to just say maybe it's a third way for medical and related services to be delivered. How much money do you think you would need to see it and then to fund it?

Dr. Denis Cortese: [19:16] Okay. That's interesting. But first, let's take the easy one first. If we could snap our fingers and be there today, we would probably be spending, instead of $4 trillion a year, we'd probably be spending $3 trillion.

Bisi Williams: [19:32] Tell me why. What happened to the $1 trillion?

Dr. Denis Cortese: [19:35] Because there's at least one third of waste in our delivery system because we use things that we don't really use correctly. We're doing more testing than we need to because it isn't clear what's the best way to do it. There's so much variation around the country, and people aren't looking at what delivery systems are getting, the very best results and learning, what are they doing? How do they do it? 

We spend more time ringing our hands over the bad results we're getting without really focusing and say, forget the bad results. Everybody has to move and be standardized against the best results that we want. And you begin to pay in such a way that you incent those people to move in that direction. So let's say we save instead of 4 trillion today, we're spending 3 trillion. Okay, if we can magically make that happen. And if we can maintain that degree of a delivery system, we would be spending about you inflate the number in 2049, we'd be spending the same amount. It would be still equivalent to 3 trillion, but it would be at a later time, and all of that depends on individual desires in our country to invest in high value health care, how much do we want to spend for high value healthcare?

So that's the first thing to make that move to move in that direction, which is what you're saying, the seed funding, where is it going to come from? Well, the seed funding. I'm not a proponent of putting more money into the delivery system. We already got 4 trillion sitting out there. 

What I am a proponent of is to look at what goes on in the delivery system in the categories of prevention. And it's a little bit tricky. Now, stick with me on this one. Prevention. There's something called primary prevention. There's something secondary. There's tertiary and quaternary. There's four levels of prevention.

The levels basically go like this. If you have a population of people, we can identify some people who might be at risk for getting something sometime in their life. Maybe we identify it by the way they're behaving, maybe from their genetics or genomics, or just simply the fact that they're human. For instance, we know that people are going to get flu. We know that people are going to be exposed to COVID or other pandemics. We know that people used to get polio and smallpox. Well, a primary prevention technique was vaccines, if you get what I'm talking about. So that's primary. So you focus on those people.

The secondary prevention level is folks that you know that are really at risk for some kind of an illness. They're overweight. They have a tendency towards diabetes. They're not exercising, et cetera. And you know that if we don't intercede at that point, they may actually develop a condition, a chronic condition, so that's a subgroup of the whole population. It's a group of people because of certain identifying features. They're not wearing helmets and things like that. So secondary prevention is focusing on those that are at high risk for developing a chronic illness and trying to prevent the illness from occurring.

The third level is tertiary prevention, which is for people who have chronic illness. Like me. I've got five of them. Other people have asthma, they have diabetes, they may have cancer, cancer in a lot of cases is a chronic illness now, which is good for some people, but they're long suffering. It's a very difficult condition to deal with. Okay, tertiary prevention is how do we keep them functioning? You're not going to cure it. But how do you keep them well and out of emergency rooms and out of hospitals? That's tertiary prevention.

And then the fourth level is when people are really sick in a hospital, how do we prevent complications, side effects, deaths, things that we don't want to happen in the hospital. That would be quaternary prevention, in other words, doing it right the first time and every time and don't get anything wrong. Those are all nice ideals to talk about. But there we are. 

So now, where do we spend that $4 trillion at those four levels? It's at levels, tertiary prevention and quaternary prevention. We're spending all of our money not necessarily preventing, but they're at that level. We're spending an awful lot of money for people to go in hospital. We spend an awful lot of money for the 20% to 25% of the population that has chronic conditions. That's where we're spending our $4 trillion. If we can do a better job at tertiary and quaternary prevention levels, we can save money. And you save money right now.

If you want to do more vaccines or primary or secondary prevention, if you want to do more of that, you need to invest money right now. You're not going to save anything by doing it. The saving of money will come 20 years later. But if you want to invest money now in primary and secondary prevention, you better start saving the money right now in tertiary and quaternary prevention, and keep that money in the system and reinvest that up at the upper levels of primary and secondary prevention.

So that is one sort of a strategic technique for at least making optimal use of your current $4 trillion that you're currently spending. And most of the time when I talk to people and they always ask a question, well, what about prevention? What they really mean is primary and secondary prevention, and I just ask them. I said, where's the money coming from? Who's going to put it in? The answer to my own question is it's got to come from the delivery system doing its job because the delivery system functions at the tertiary and quaternary levels, they focus much more on the sick people and those in the hospital.

And if we did a better job in improving everything we're doing, money will be saved. But if the money is saved and it goes into the military budget, that's not going to do as much good. It's got to be reinvested into taking care of our population. And it's a matter of security. A healthy population is fundamental to a country able to function very well. It's absolutely fundamental. It's the biggest security risk we've actually got. In my opinion. Of course, I'm not biased.

Bisi Williams: [26:15] Not at all. But I think what you talked about here, it's a question of will and mindset, this world that you paint for me. When you look at this third way of cohesively designing the system, it seems to me that the health and related fields that there's a tremendous opportunity for growth and exploration and fulfillment in service to people. 

And I'm going to use a terrible analogy, but I'm going to borrow this from Sir Richard Branson. But, you know, industries that are bloated are ripe for disruption, the wedding industry, for example, like the music industry. And so if a third party decides to come in and pick all that low hanging fruit with the orchestration overnight, those models will collapse. And so do people actually look at the flip side. Like what happens if I'm disrupted? In that sense, the lobbying doesn't really matter if people vote with their feet and their dollars to a more individualized care, where they get what they want when they want, that their interests are taken at heart, and they get good value for the money that they spend on their health and wellness.

Dr. Denis Cortese: [27:33] You're exactly right. But the disruptors, there are two things against the traditional concept of an outside new idea disrupting it and that is the medical profession and hospitals have their own credentialing processes. It's a cottage industry at the present time. So whoever wants to disrupt it probably not have a license to take care of patients. That's one of the problems. 

So the disruption that we're seeing is coming from inside. And it comes like this. You get organizations that begin to view their hospital as not the profit center. It still may be an area that makes money for sure, but it's not all about the hospital. Hospital administrators have no concept on how to manage a hospital if it isn't being filled up and have a full ER, the fact that there are four hour waits, some hospital administrators, they're fine with that. That's good. That means they're making money. A hospital is jam packed. You know, we've been measuring hospital occupancy all through this COVID, and we've been watching how the occupancy has been like 90%. And people say they're all full and the ICU's are running at 85% to 90%.

Well, when COVID is over, start looking at the same data. There's no change. Our data is we try to keep the hospitals full. What happened with COVID is the hospital was being managed to be full and they just flexed and they stopped doing more of the elective stuff that they could put off. But they're still full. And as the COVID numbers have come down, but you watch this in Arizona, it's fantastic. The number of ICU beds being occupied are identical. They're all running in the 85% to 90% range, because that's how we run a hospital. So if you disrupt that, what does a hospital administrator do, they would have to actually manage their expenses, which is not something that they are trained to do. They're trained to keep the hospital as full as possible. 

And so the disruptor comes like this, one, groups like Mayo Clinic, but others have no hospital administrators on their staff. We run the hospitals by our clinical practice. If we need beds, we use them. If we don't, you have them. We just close them down. And we've shifted to doing so many more things in the outpatient environment.

You look at transplantation when we were doing liver transplants, around 1990, liver transplants, for instance, required a hospital stay for about three, four weeks, usually about 30 days, also in the intensive care unit for maybe two of those weeks for recovery. That was about 1990. By 2002, 12 years later, liver transplants, no stop in the ICU out of the hospital in four days, up out of bed the day of surgery and walking around. Liver transplants with much better outcomes. People doing very well.

What made that happen so fast? It's because of the way we were paid. We were paid on a capitated box payment. It's like buying a car. You buy the whole car, you don't buy the engine, you don't buy the wheels. Here it is, that's what you get paid. 

And all transplants, the whole field of transplant grew up with this what we call bundled payments. So the better you did in caring for the people and the better they perform, the better they got out and the better the organ function. And you didn't have to redo an operation. And the better that they survive in the longer term, the more money you'll be able to be making and you get your costs covered. You compete on value. And actually, the cost of transplants have come down from where they were very much like we see with automobiles. This is the kind of stuff that can be done with the right goals in mind. This transplant stuff had all the incentives identically laid out. And that is, patients wanted to be healthier, they wanted to be better, they wanted to live longer. And the payment model was such that we were driven to make sure all of that came true. And the better we did it, the more money we actually kept, because that's all you're going to get paid.

Bisi Williams: [32:00] So I'm going to ask you this question. You can see this vision and it's fully materialized and synthesized. In your view, you've got the three domains which you've explained and how they need to work together. What's getting in our way from orchestrating this vision for wellness that's a benefit to all.

Dr. Denis Cortese: [32:22] I think it's the design of the system of developing policy and engaging, quote, stakeholders, unquote. There is a complete lack, the fundamental problem is there's a complete lack of what we really want as a vision. No President has said it, and we haven't really made a commitment to working towards better results. The overarching idea of value is not there. It certainly is not a shared vision. But most people will say, yeah, that's exactly what they want to do. And because of that, the quote, stakeholders have a great opportunity to just work, to optimize their own deal. And the doctors are just as bad. Each doctor group, when there's new price changes that are going to take place, let's say, in Medicare, they're all in their lobbying for themselves, every one of them.

Bisi Williams: [33:15] It seems to me, though, that we have a shared vision. Nobody wants to go to the hospital, nobody wants to be sick.

Dr. Denis Cortese: [33:23] Yeah, we do. But not among the people who come to the table. This is why our work is so interesting because we brought patients in. If you were to grab 400 patients off the street and put them in a room, you'll get a shared vision in three minutes. But that's not who actually makes the decisions. Look at it this way, if all of the current shareholders came to the table and actually fixed the system and agreed to fix it, many of them, including physicians, would lose something. They're all going to lose something.

When you call a group together, and I have run several of these groups of all the stakeholders, quote, unquote, all the stakeholders, it's like bringing in all the Orchestra members, but that they are all soloists, and they are only interested in playing their music when they want to play it, and they want to play it as loud as possible and do all the grandstanding. And that's what happens in health care. The stakeholders that come to the table in health care, they all want to be there, they all want to sit there. But their driving vision, they're there to maximize their sector.

Whether that optimizes the output for the people is not number one in their mind, because if they did, they would realize that none of them shouldn't even be at the table, they're basically vendors. And the people who become members of an Orchestra, and a really fine Orchestra, are very interested in having beautiful music be produced. And it's not about them. It's about the music.

Bisi Williams: [34:52] Dr. Cortese, I'm so inspired by your vision of health care in 2049, thank you so much for joining us today.

Dr. Denis Cortese: [34:59] Well, you're welcome. Good luck to you and take care.

Bisi Williams: [35:01] And that wraps our show with Dr. Denise Cortese. Thank you for listening. If you enjoyed our show, please subscribe or share with a friend. Until next time, I'm Bisi Williams.