Mark Smith, MD, MBA, was the founding CEO of the California HealthCare Foundation; he served in that role for 17 years before stepping down last year. I’ve known Mark since we were residents together at UCSF in the mid-1980s, and both of us were influenced by training at the epicenter of the AIDS epidemic. Mark continues to see AIDS patients at San Francisco General Hospital one day each week. He was the lead author of Best Care at Lower Cost, a major Institute of Medicine report, published in 2012. Mark is one of those rare people who can take complex and politically charged concepts and distill them into sensible nuggets – while managing to be hilarious and profound at the same time.
In the continuing series of interviews I conducted for my upcoming book, The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age, here are excerpts of my interview with Mark Smith, conducted on July 24, 2014.
Bob Wachter: Put yourself back about 10 or 15 years ago when you were thinking about the promise of healthcare IT. As you’ve watched the last 15 years play out, what’s been surprising to you?
Mark Smith: As with most of life, it’s a lot harder in fact than in theory. My first hint of this came with the implementation of computerized order entry at Cedars-Sinai in 2002. [In a story I tell in the book, Cedars’ physicians all but threatened to go on strike after they turned on the clunky system. Within a month, they pulled the plug on the system, a hiccup that cost the organization $34 million in 2002 dollars.] That was my first window into the gap between what sounds lovely in a policy paper, and what it means in practice to implement this stuff.Continue reading…
I attended a depressing forum on cost-saving ideas for Medicare to present to the Congressional “Super Committee” charged with coming up with $1.2 trillion in budget savings by the end of the year. The tone was ominous, best summed up by Mark Smith, president of the California HealthCare Foundation. “In times of crisis, meat-axes are taken to whole sectors. If you don’t believe me, ask the people who used to work for Lehman Brothers,” he said.
Here’s the backdrop. President Obama in his mid-September budget reduction plan called for coming up with an additional $320 billion in Medicare savings over the next decade, which would be on top of the half trillion dollars in Medicare cost reductions contained in the Affordable Care Act. The president would get there largely by cutting payments to hospitals and other providers, although the president also called for higher premiums on wealthier seniors for physician and drug coverage.
Will the Super Committee look for the same $320 billion in cuts to Medicare? A good case can be made that Medicare’s contribution to the $1.2 trillion recommendation should be less than what the president sought. The Congressional Budget Office’s current baseline projections for federal spending over the next decade has Medicare spending $7.4 trillion out of a total of $44 trillion. That’s 16.8% of ALL federal spending (defense, Social Security, discretionary domestic programs, you name it). Apply that 16.8% to $1.2 trillion and you get about $202 billion as Medicare’s “fair share,” not the $320 billion proposed by the president.
Still, there were precious few ideas at this morning’s forum that would come up with even a fraction of that total. Robert Berenson of the Urban Institute and Steve Phurrough of the Agency for Healthcare Research and Quality, both former top-ranking officials at the Center for Medicare and Medicaid Services, outlined a series of steps CMS could take to get better pricing, stop paying for uncalled for operations, and only pay the price of the “least costly alternative” when medical interventions are comparable. But most of those changes would require Congressional approval (fat chance), and none of the examples given (they spent a lot of time talking about implantable cardio-defibrillators, where an estimated 25% to 30% of the million operations each year are in patients who don’t really need them) raised more than a billion dollars.