When I was at HLTH last October Bradley Bostic invited me on his BoomBostic Health podcast. I was in the mood for ranting about the health care system and promoting my desire for getting everyone concierge level primary care. Bradley was very generous in giving me a mike and a lot of rope. I am embedding the youtube version and if you want just audio it’s here. (I was also losing my voice so there’s a cleaned up transcript below)–Matthew Holt
Bradley:
Well, hello and welcome back to another episode of Boombostic Health in the Wild here at HLTH 2025 in Las Vegas. I’m thrilled to have Matthew Holt with me, who is the leader at The Health Care blog, a blog I follow, and I appreciate you being here, Matthew.
Matthew
Bradley, thank you very much. I count my readers, you know, on about two hands, so I want to keep you in good health. I have a little joke. We used to have a podcast that actually wasn’t that well-followed called the THCB gang and one of my colleagues on THCB gang was at a conference and a guy in the row behind him said “oh I recognize your voice, my father used to listen to the podcast but then he died.” When my colleague told me the story I said, we don’t have enough listeners and subscribers to lose them like that – we’ve got to keep them alive in order to keep the podcast going!
Bradley
Well, Boombostic Health was really born out of my pension for building companies in the health tech world and investing in companies. When we first started this. I wasn’t sure if anybody would listen to it. My mom passed away from cancer 25 years ago. So, I knew she wouldn’t be listening to it unfortunately. But that was a big thing that inspired me to get into healthcare. And lo and behold, there is a really interested audience out there that wants to know how innovation is transforming our broken health care system. And clearly with your background with Health 2.0 and The Health Care Blog, this is an area that you’re focused on. And I think you said you have two easy steps. Oh no, two steps, not necessarily easy to fix healthcare.
Matthew
So the preamble to this is I’ve been doing this for a long time. I came to America in 1989.
By the middle of 1990, by some fluke of literal placement of where I sat in a lecture hall once, I ended up doing some work on health care. I got really into the health care system and then by the mid-90s I’m now a British guy with an American health care problem.
And I go through waves. Sometimes I’m optimistic that we can fix stuff. I think, oh, this great new technology is going to fix everything. Sometimes I think the political winds are lining up and we’re going to do this whole thing. But we all know the American health care system has massive complexity, massive differences in payers, an incumbent industry which has completely snowballed the payers and the consumers,and makes a ton of money for what it provides – which is hideously complex. There are some great parts across American health care, but in general on average, it’s a terrible system that sucks and costs 50 to 80% more than any other industrialized nation.
Plus, it puts the consumers – the American people – in this horrible position where they don’t know where their insurance is coming from year to year, where they may have to go and buy individual insurance each year with the chaos that you’re seeing right now for people who may or may not be buying on the ACA exchanges. If you lose your job, you can go on COBRA and you suddenly realize you’re paying $3,000 or $4,000 a month for your family’s insurance. And there is a lot of anxiety and fear just from that issue. And even then, when you get insurance, it doesn’t mean you actually get good access to care. And yet we lead the world in very expensive procedures in very profitable large institutions–many of which are nonprofits sitting on hedge funds, in fact bigger than hedge fund level financial reserves and, by the way, they pay their CEOs like hedge fund managers.
I like to pick on UPMC, which is a massive system in Western Pennsylvania. And the reason I pick on them is actually they’re the good guys. They actually released their 990, their nonprofit tax status report and they put in their 990 how their top 200 people get paid. So, let me give you two minor sound bites on that. The first one is there is also a baseball team in Pittsburgh, the Pittsburgh Pirates. The CEO of UPMC gets paid more than the highest paid star player on the Pittsburgh Pirates baseball team. And the top 40 employees cumulatively at UPMC get paid more than the 40 players on the payroll of the Pittsburgh Pirates. By the way UPMC loses money and they just bought themselves a corporate jet.
And I will give you a quiz question. How many people on the UPMC payroll make more than half a million dollars a year, which is a pretty damn good salary in Pittsburgh? Take a guess?
Bradley
100?
Matthew
You’re pretty good. 117. I don’t know what the 117th person does to deserve $500,000 a year, but there is a very well compensated set of people all across American healthcare in non-profits, for-profits, elsewhere all of whom are doing very comfortably out of this system that we’ve set up. So I am at this stage of my life I have no fucks left to give about who I piss off about this. So that’s the backdrop to where we are.
UPMC is the one I pick on because there are many other big hospital systems who hide their 990s. They are more transparent than many others and you can go down the list and you’ll see some of the big players who are on the stage here in HLTH. Then we have private equity companies making bank out of both healthcare IT companies and also healthcare providers. We have drug companies charging the highest prices in the world for their drugs by a factor of three to five and in some cases many more times than that.
Mark Cuban was on stage ranting–correctly–about it. He’s got the heft to try to do something about it. All I can do is shout from the sidelines.
All right, you asked for my two solutions. Two solutions which I think are relatively simple but very, very hard to implement.
The first solution is that we do a terrible job in primary care. Somewhere between 30 and 50% of Americans have no primary care doctor, no access to primary care. If you want to try to get to a primary care doctor, you may be waiting four to eight or many more weeks in most parts of America. Every policy wonk knows that if you have regular primary care, you do preventative care, you keep people with chronic disease in check for their diabetes, for their high blood pressure, for their high cholesterol. We have known for 30 years how to manage that stuff with very cheap drugs and check-ins and behavior modification. If you do that you will reduce all the complications that drive up health care costs. We are just completely crap at getting it done
Bradley
….because if you don’t have a primary care physician and some catastrophically bad health care thing happens, you end up in the emergency room. And there was no opportunity to get ahead of that versus if you have a primary care doc, they should be helping you navigate such that you don’t have as many or as soon of these catastrophic issues.
Matthew
And it gets worse – most primary care docs now are employed by health systems who view them as a feeder into the expensive stuff. And they actually lose money on them, substantial amounts of money, sometimes $200,000 a year per employed primary care doc. And they are putting massive pressure on the primary care docs to churn patients through
Bradley
….because they’re basically routing into high margin services. Exactly. And they’re just the they’re the lead qualifier.
Matthew
Exactly. And they have a term for people who go to the primary care doctor and don’t end up in their system which is called “leakage”. I don’t know if patients are aware of this but that means you didn’t show up. You know you were in the primary care office, you’re in their system and yet you went somewhere else for your specialty care. Every hospital has somebody who’s really concerned about that leakage number and is trying to drive more people to their system. That is good for the economics of that hospital and terrible for America. The incentives are completely screwed up.
So here’s what I think we should do. We have a small group of concierge primary care doctors who get paid money – usually by consumers – to actually have half an hour or hour-long visits to look after the whole patient and to manage them. There’s arguments back and forth about the real numbers but it looks like to the untrained eye and to some reporting from others that those doctors save about 25- 30% in downstream costs. It just costs about double in primary care. We spend roughly $13,000 per human in America on all of their care.
And if you save 30% of that, you’re saving roughly $4,000. We spend now roughly on average $1,000 per primary per person on primary care. And then a lot of this stuff ends up in the emergency room or ends up in urgent care or somewhere else that’s more expensive because those people couldn’t access primary care.
Here’s my solution. Give everybody a voucher on their head from the government. It’s $2,000. You give every primary care doctor, nurse practitioner, and converted primary care doctors who currently are internal medicine doctors, cardiologists, OBGYN, pediatricians, whatever. We are going to establish 600,000 primary care docs in various organizations. could be solo, could be working in groups, could be doing whatever. And each doctor is going to get 600 patients. Two grand per patient, that’s $1.2 million. Those primary care doctors can now pay themselves $500,000-$600,000, which is roughly double what they make now. And that’s roughly the same number that specialists make.
All the people in medical school who wanted to be primary care doctors but look at their medical still school debt and say, “Crap I can’t pay that off because I’m only going to make $200K a year as a primary care doctor but I’ll make $600K a year as a surgeon or a radiologist” or whatever the number is can now go, “okay I can become a primary care doc now”.
You can vary this if it’s in an inner city or a rural area you can make the number higher per head. If they’re working with geriatric populations you can make the number of people they have to serve lower and you can make the payment higher – you can play with this. There can be risk adjustment. There’s a bunch of stuff that the wonks can do to this.
But that gives you a well- paid primary care doctor and they are going – visibly by both the forces of the market but also by quality checks – to manage what is going on with those patients. So if those patients need stuff that they now can’t get and have to go to the emergency room, that happens in the primary care doctor’s office. They don’t pay, they don’t bill claims, there’s no insurance, there’s no utilization management. So now as a primary care doctor, I have eight people working for me struggling to bill insurance and fight with insurers about utilization management, to do all that administrative crap which I am removing from the system. By the way, I’m also removing health insurance companies. We don’t need them.
There are lots of parts within health insurance companies which will be around. There’s a lot of IT which could be useful in this system. There’s a lot of medical groups owned by health insurance companies that could play this role, but the actual insurance function is broken, stupid, we don’t need it, right?
Instead you have primary care docs looking after those 600 patients who are essentially members of a concierge practice and everybody in America now gets that level of concierge primary care.
It will cost us about double what we spend on primary care now. And if you just look at the numbers of how those practices work, we’ll save more than that on reduced spending in hospitals, emergency room visits, impatient admissions, and unnecessary surgery.
Now this will obviously cause two massive seizures. We have to get there and then we have to figure out what we do with the downstream people who are currently profiting.
So that is going to be tough love from me. We apparently like dictators now in America. So make me the dictator of Health and Human services –I won’t be doing crazy shit about vaccines. I’ll be encouraging more use of vaccines. In fact I think we should spend more money on public health.
But what we have to do is get the people who run health systems in America around the table and say “your life is changing”. You’ll no longer build these massive feed systems to your medical palaces. Instead, you are going to figure out how to provide the really great cutting edge care, the best possible care. We are going to need specialists. We’re going to need surgery. We’re going to need advanced drugs. We’re going to need oncology.
But you’re just going to have less money to do it with and we’re going to reduce the amount of people who are coming in your doors because we’ll have this great primary care instead and you’re no longer going to be at the top of the food chain. You’re going to be a partner.
I would suspect that many of these organizations in that kind of incentive structure, getting some kind of global budget will figure out a way to partner with primary care, not buy them and squeeze them out of the process like they do now, but be real partners.
Bradley
So there’s a layer of this also where we’re moving in certain pockets of health care of a value based care of model. What I’m hearing you talk about related to driving through primary care and focusing on keeping cost down seems to at least have some relationship to value.
Matthew
It’s very close. Value based care has been around a long time if you want to go back to 1937 when Kaiser Permanente started. It’s always struggled to grow and the main reason I think is that you are putting the pressure of having to manage global risk on medical groups and doctors who don’t have the actuarial structure set up to do it.
But the value based care ones are now all being given all the risk. They have to manage the contracts and the risk downstream and that is too complex and that breaks them. I don’t think you need to do that.
I would trust American physicians, nurse practitioners and their organizations to do the right thing because I think they’re here to do the right thing. You reward them very well and say you are responsible for these 600 people. You’re in charge of their health. You went to medical school to make a difference. You were the smartest kid in your class. You could have been a banker, you could have been a Bitcoin trader, but you wanted to be a doctor. I’m going to leave you alone. There’s no incentives for you to overbill. There’s no incentives for fraud in the system. You get paid a salary. It’s a good salary. Do the right thing. 99% of them will do the right thing. And you don’t need to do that managed care or take risk.
You save on the back end by having some kind of Fed-reserve type organization that has wise men and women who would manage how much we agree to spend on cancer care or whatever. You’d have to look at the price of drugs and have some kind of European NICE type cost effectiveness model for that. There’s a bunch of questions as to how you do this, but that’s how you should set up the system. That would fix excess cost and that would improve care dramatically and the care for most Americans would be so much better if we had a system like that.
People who are in concierge care love it. Most Americans just could not pay $2,000 out of pocket for this stuff. And so, you know, you have to figure out a way to get there.
Now politically getting there…..
Bradley
There’s a big mega huge change and a mega trend that needs to follow this but I do see promising areas of shifting the incentive and driving more through primary care. So it’s a pleasure to hear your point of view and hey look you’ve all heard it here there are a couple of steps we can take leveraging primary care in order to better run our US healthcare system. Really appreciate you sharing that, Matthew.
Matthew
I think the last thing I’d say is that I can’t say I approve or appreciate it, but we have now seen evidence that if you take over the reins of government as an aggressive executive leader, you can make radical changes. And why do the radical changes have to be the ones we’re seeing now? Why can’t they be good ones?
We need a revolution here. In my entire career, in fact frankly the last 150 years, we’ve shown incremental change to health care doesn’t work and has made stuff worse. And we have a bunch of people sitting in the middle getting fat and happy who really are adding precious little value.
I’m now a fire bomb throwing revolutionary! I encourage people to come to The Health Care Blog to read more about this stuff
Bradley
Matthew, it’s a true pleasure hearing your perspective. I think there are way too many people complaining about the broken health care system and not enough people coming to the table with solutions. Well, let’s keep the conversation going
Well, hey, thanks everybody for being here with Matthew Holt, an absolute legend in the space. Appreciate you being here and sharing your point of view. We’ll look forward to seeing you next time.
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