Why the US health care system is broken and how it can be fixed

Today’s national health care system is so broken that it more closely resembles a 19th century medieval cottage industry in England than anything remotely close to modern and functional.

That is the opinion of Dr. Robert Pearl, a physician and former Kaiser Permanente CEO who has led thousands of physicians and staff, authored two books and currently serves on the faculty at Stanford University.

“We have (physicians) across the United States (who are) fragmented, isolated from each other and not even sharing a common electronic health record,” Pearl said. “We repay them through a piecemeal basis: The more they do, the more they earn, regardless of whether it adds any value.”

Pearl presented his views about where medicine fails and how it can change during the Business Journal’s 22nd annual Health Care Conference, held virtually on July 20.

One problem, he said, is technology. He stated the most common way U.S. physicians communicate vital patient information with each other is through a fax machine.

“When I tell my students at the Stanford Graduate School of Business this fact,” he said, “they look at me and they say, ‘What's a fax machine?’”

Pearl said the consequences of the antiquated U.S. health care system he described are poor patient care, doctors burning out and making mistakes, and health care costs that are nearly double compared to most other nations.

Pearl has written two books: “Mistreated: Why We Think We’re Getting Good Healthcare—And Why We’re Usually Wrong,” and “Uncaring: How the Culture of Medicine Kills Doctors and Patients.” All proceeds go to Doctors Without Borders, he said.

Pearl served for 18 years as CEO of The Permanente Medical Group, and was president for eight years of The Mid-Atlantic Permanente Medical Group. In those roles, he led 10,000 physicians, 38,000 staff and was responsible for the medical care of 5 million Kaiser Permanente members on the West and East coasts.

He currently serves as a clinical professor of plastic surgery at Stanford University School of Medicine and is on the faculty of the Stanford Graduate School of Business, where he teaches courses on strategy and leadership, and lectures on information technology and health care policy.

During his presentation at the Business Journal’s conference, Pearl offered several ways the health care system — and its culture — needs to change in order to thrive. The first is to change reimbursement from a fee-for-service method that pays for volume, to a set fee at the delivery system level for the doctors and hospitals providing the care.

“The wonderful part about changing that reimbursement (model) is when you do that, you start to value prevention and avoidance of complications,” he said. “You start to offer tools like telemedicine and opportunities to provide better care, and work quickly at a lower cost.”

Pearl also stated the structure of health care needs to change to improve collaboration.

“(Find) ways to create opportunities to bring the specialists into the exam room with a primary care physician while the patient is still there, in order to solve the patient's problem without delay,” he said. “And the last thing is to move the culture to understand that we're now in an era where patients are consumers (and) to change from a paternalistic view of the past, to a collaborative one of the present.”

Cheryl Sarfaty covers tourism, hospitality, health care and education. She previously worked for a Gannett daily newspaper in New Jersey and NJBIZ, the state’s business journal. Cheryl has freelanced for business journals in Sacramento, Silicon Valley, San Francisco and Lehigh Valley, Pennsylvania. She has a bachelor’s degree in journalism from California State University, Northridge. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.

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