Ric Speaker: True healthcare reform will come from within
I was fortunate to spend some time with Ric Speaker at the 2011 Healthcare Summit at Jackson Hole. Many of our readers know Ric from his early days at IDX and VERSYSS, and more recently from his eight year stint at Precision.BI. Ric retired last year, lives in Utah, teaches classes at UCLA, and labels himself an “endorphin junkie.” He’s still a triathloner, and this love of extreme workouts gives him yet another perspective on the state of the healthcare industry. Dodge: Ric, given your retirement last year, give our readers some of your thoughts on the overall healthcare industry, the impact of health reform and what you see as impending challenges.Speaker: For those of us that have been in this industry a long time—we saw the market freeze during the Clinton administration. Everybody stopped buying and licensing products and the providers said “hold up, let's see what’s going to go on.” To a lesser degree, I think we went through that too as Obama came in and sort of froze the market. The market now perceives that Obamacare has very little teeth to effectively provide cost savings and virtually all healthcare factions are back to playing their respective roles in a profoundly inefficient market. I don't have a perfect idea for driving costs out of the market, but I do have a very cynical impression for the government’s political will to have an assertive and positive effect on making it better. It’s such a complex industry—consumers over-consume services, payers provide less value than their margins deserve, provider organizations are operationally inefficient and there’s a lot of cost-shifting going on in an effort to mask real economic structural problems. The government doesn’t seem to grasp the fact that there’s such an acute misalignment of incentives in the industry, and for any effective governmental intervention to succeed dramatic changes to this paradigm with need to occur. For example, recent governmental EMR dollar incentives provide politicians with wonderful fictional hype, but it will have little effect in saving the industry real costs. I think that true, effective change will have to come from within the industry due to forceful demands from informed patients, employers, clinicians, and an independent governmentally tasked business group. We have other insurance based products and services that can used as better examples of risk and reward. The last dilemma facing the industry is the aging baby boomer population that will require increased healthcare services in an environment where there are too few primary care providers.