Jonathan Bush, CEO of athenahealth, sat down with Business Insider global editor in chief Henry Blodget to discuss our nation’s current healthcare system. Following is a transcript of the video.
Blodget: Where does healthcare reform go from here?
Bush: I think the basic tension in healthcare is that there’s very, very weak market forces. You have massive excess capacity, massive price variation, people pay way more for what they get than they would have to in an efficient market and they get 1 bundle of things when some people would like a smaller bundle and some people would like a bigger bundle. So those two fundamental things make it feel broken, make us feel powerless, and make us typically pay a lot more than we think the thing is worth.
Blodget: Should your health insurance be tied to your company?
Bush: Absolutely not. These are very personal choices. The biggest problem with healthcare is not how much it costs. In my opinion, it’s that for all of that money, it’s not really ours. We can’t trick it out and meet people and say, “I go all the way, I buy everything…” or, “I’ve bought a farm with the money that I don’t buy cancer surgery with, and I’m going to die on it a little earlier, or maybe later because I won’t die of an infection.” Those choices are everywhere in the American experience except in this giant and growing block of our society.
Blodget: And you say that you might choose not to pay $US100k a year for a drug, especially if it doesn’t work, would you make the same decision for your parents or your kids?
Bush: Yes. Not my employees. I have similar values to my parents and my kids. Even if in our grand design we want everybody to have everything, the only market efficient way to do that is to make it possible for them not to have things if it’s too expensive or too lame.
Blodget: One of the knocks against Obamacare is the loss of freedom … you have to buy. What about the other side? “I want the freedom to be able to buy insurance for a reasonable price?”
Bush: I think the way you get those people what they want, which is the current benefit plan at a lower cost, is you allow markets to compete out the excess capacity. There are two entire healthcare systems running in the US right now. 38 per cent of hospital beds tonight will be empty, but fully funded. 50 per cent of doctors’ time will not be spent seeing patients, but will be spent filling out forms and doing other administrative things. If you take a look at the 50% they are seeing patients, a lot of it could be done by a midwife or a mid-level or telemedicine. Those things need to get into the system somehow. If we just cross subsidise and hold our nose, they never emerge.
Blodget: And it does seem like the market is starting to come up with companies like yours and others that are actually addressing pieces of the problem, offering cheaper solutions for basic healthcare…
Bush: A really important, sort of not-yet-covered anywhere, amazingly, element of this is … there is room for a massive increase in market type efficiency in the healthcare system regardless of whether the bill is changed or not. There is room within Obamacare, there was room before Obamacare. It’s hard, there’s many more hurdles and it’s a much more internecine struggle to get in and find a way to make markets work. but they work. They can work.
Blodget: What other companies are you seeing that are truly innovative where entrepreneurs are creating great service for less money in this market?
Bush: Inside of Medicare Advantage, there are a few, some of them private equity backed and venture backed, entities that are saying, “Listen. Give me the full cost of that senior, I’m going to sign up that senior and I’m going to follow that senior every day, and I’m going to make them use the hospital a lot less.” Those medicare advantage, fully delegated provider groups are really dramatically better outcomes, lower costs, and higher consumer engagement, higher scores from consumers about their experience. That’s an area that I’m very excited about and I think that if those groups take charge and grow up and become real players in the market, you’re going to see a much different cost and a much different allocation of that cost to things that actually matter to people more.
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