Can Technology Fix American Health Care With 7investing Advisor Dana Abramovitz
June 17, 2021 – By Simon Erickson
America’s health care system is a complex beast.
It’s costing us $4 trillion per year — roughly $11,000 for every man, woman, and child in the country — and that’s nearly double the per capita spend of other developed nations. Even with the premium price tag, our health outcomes are still lagging many of those other countries.
However, there is still cause for optimism. We’ve diagnoses several of our health care’s symptoms, and higher-level changes are taking place to provide some much-needed improvements.
And while we’re all very excited about improving our country’s overall health, is there also a way to benefit from massive overhaul as investors?
To help us answer that question, we’ve looked to our own team for guidance! 7investing lead advisor Dana Abramovitz has dedicated her career to improving health care in America. From an undergrad in pharmacy to a PhD in biochemistry to an industry consultant who advised CEOs, she’s seen the industry from all angles and understands its biggest pain points.
In her conversation with 7investing founder and CEO Simon Erickson, Dana describes why value-based care, personalized medicines, and a transition in thinking about “patients” as “consumers” will all be vitally important in the upcoming changes to health care. The two allude several times to Dana’s new 7investing special report entitled “Can Technology Fix American Health Care”, which is now freely available by clicking on this link.
Publicly-traded companies mentioned in this interview include Alphabet (Nasdaq: GOOGL) and Apple (Nasdaq: AAPL). 7investing’s advisors or its guests may have positions in the companies mentioned.
00:00 – What’s the status of health care in America today?
01:25 – The important shift to Value-Based Care
05:28 – A focus on “consumers” rather than “patients”
08:11 – Can Technology Fix American Health Care?
10:08 – Potential solutions to health care’s complex problems
Simon Erickson 00:00
Hello everyone, and welcome to our 7investing podcast today. I’m 7investing founder and CEO Simon Erickson, and I’m here with my fellow colleague: 7investing advisor Dana Abramovitz. Dana, thank you for being the guest on our 7investing podcast!
Dana Abramovitz 00:14
Thank you for inviting me, this is fun.
Simon Erickson 00:15
It’s such an opportunity to be here in Houston, to hear your perspective on healthcare. I know you’ve spent your career in healthcare, you have a great perspective on this industry. It’s also something we spend $4 trillion a year on every year.
Simon Erickson 00:27
You just issued a special report for 7investing that’s all about the healthcare system and how we can fix some of the healthcare system. But my first question for you is “what’s the status quo of healthcare in America today?” What are some of the biggest pain points we really need to be fixing?
Dana Abramovitz 00:42
Yeah, and I think that the current situation, you know, with the pandemic has really shed some light on some of those big pain points. The cost is just exorbitant. People don’t know what they’re paying for, which is part of the problem. Physicians are burnt out. They’re spending all of their time updating medical records and not practicing medicine the way that they wanted to. And part of the problem is that people aren’t taking care of their health to begin with. And so it’s just this this reactive process.
Simon Erickson 01:25
So let’s talk about how we can fix something like that. Reactive. We’ve got the Physician Fee Schedules, right? You pay for volume.
Simon Erickson 01:32
We’ve been seeing a break from that. We’ve seen value based healthcare is kind of one of these topics we’ve been discussing. What does “value based care” mean? And how can this maybe help some of the healthcare problems we’re having?
Dana Abramovitz 01:44
Yeah, so value based care transitions from that fee for service, that revolving door of how you go to the doctor and the doctor gets paid every time you visit them. So they have no incentive for doing something useful for you. It switches it to focusing on the patient and providing value for the patients, for the amount of spend that the patient is doing. So are they getting that quality of care, and then putting in place different checkpoints to make sure that value is being provided.
Simon Erickson 02:19
And are the payers or insurers on board with this? It’s very different than just reimbursing for trips.
Dana Abramovitz 02:24
Yes, absolutely. So, so a lot of this initiated from the Center for Medicare and Medicaid Services, right? The largest payer of health care in the United States is Medicare. And so they’re paying all this money, especially if they’re paying for a procedure, and then 30 days or 90 days later, the patient has to come back and have their procedure happen again. So how do you fix that? So they are initiating a lot of the value based care programs and putting in those determinants. So that doctors and hospitals are accountable for making sure that the the patient gets that value. That they’re getting the care that they need. That the patient wants. And that all the procedures are successful. Because otherwise, Medicare’s not going to pay for it.
Dana Abramovitz 02:24
Yeah. Now, knowing that you’ve consulted in the healthcare industry for decades, and that you’ve seen this industry evolve for a long time, is this changing the mentality of companies and how they’re approaching healthcare? Knowing that it’s not just payments for service? You know, it’s not just volume based. We’re kind of shifting in the way that things getting paid for. Is that changing how companies are approaching hospitals?
Dana Abramovitz 03:48
Yes and no. In part, it’s hospitals are resistant to change. I mean, that’s kind of part of the problem. And the challenge with the healthcare industry and working with the healthcare industry is that they’ve been doing things a certain way. They have the Hippocratic Oath: to first do no harm. And so, if something’s not broken, you know, why change it?
Dana Abramovitz 04:17
So it’s really hard to see hospitals and healthcare systems to overhaul their practice to do something. But slowly but surely, that’s starting to happen. And what’s happening is different hospital systems are taking the initiatives. They’re working with different insurers to create those contracts that say, “Hey, if we don’t do a good job, we’re not going to get paid. We’re going to be held accountable to that.”
Dana Abramovitz 04:52
And then there are a lot of companies that were created to kind of fit into this space. To help those systems that provide value based care. And I think a lot of the telehealth components can be seen to be included in those types of discussions. Just helping hospitals and health systems stay connected to patients. And follow up, to make sure that their patients are recovering the way that they’re supposed to be.
Simon Erickson 05:28
So we’re seeing a shift. And you know, we’ve mentioned patients a couple of times there, but it seems like patients are becoming much more of the focal point. It’s not just the administration, it’s not just getting reimbursed and submitting the paperwork and all the systems that you have to do. It’s really more of a focus on the patient here.
Simon Erickson 05:42
We’re seeing a lot of what I guess you could call “consumer based healthcare”, right? It’s not so much a patient that just has the data that’s stored in the hospital. It’s wearable devices. We’re seeing people check smartphones. People are getting more involved in their own health. How do you see this evolve?
Dana Abramovitz 05:58
Well I think everybody’s heard of Dr. Google, right? You get whatever it is and you Google it. And unfortunately, there’s a lot of new diseases that are coming as a result of that. But I think that patients are going in and having a conversation after doing some research on their own, and are able to have a conversation and question their doctors. And I think that it might be generational. It might be what your specific background is, and if you’re experienced with the healthcare system, to really question your physician or have that conversation with physicians. But I think that to work, more and more people are taking that approach. And we’re seeing that from the physician end as well. Like I had mentioned, physician burnout, so many doctors went into medicine to practice medicine to provide care to help people. And with all the administration work that they have to do and and putting information to electronic health records and just spending all this time documenting information, they get 10 minutes with a patient. And the rest of their time they’re doing administrative work. How do we help that?
Dana Abramovitz 07:33
So, you know, some physicians are changing their practice to more a concierge type of solution. So that they can be more involved in spending an hour or two talking to a patient, rather than the typical 10 or 15 minutes that they’ll actually get paid for.
Simon Erickson 07:51
“I don’t want to do all the paperwork, I don’t want to do all the electronic health records. I don’t have to worry about the reimbursements. I just want to spend time with the patients and make sure that they’re okay.”
Dana Abramovitz 07:58
And I think that there are patients that are willing to pay for that. Or pay more out of pocket for that type of service. Just because that’s the type of care that they want.
Simon Erickson 08:11
The report that you wrote was called “Can Technology Fix American Health Care?”. Which I think is a great topic, because we’re hearing so much about big tech companies really, really wanting to get into healthcare. Apple wants to get into healthcare, Google wants to get into healthcare. It seems like and so many smaller tech companies, too, are really interested in this. Probably because it’s the next big frontier for them. Based on everything that we’ve just said though, can technology really help healthcare? Or is it just adding more complexity to an already very complex system?
Dana Abramovitz 08:40
Yeah, a really, really good question. And unfortunately, the way I see it is a lot of people from the outside — the technologists, entrepreneurs — if you’re a technologist, you’re you look for things to disrupt, right? Like, I have this technology and I can disrupt something.
Dana Abramovitz 09:04
Healthcare, everybody for decades has been talking about how the healthcare system is broken. So it’s great for disruption. Are you thinking like, “I have this technology. I can help the healthcare system.” The problem is, from the outside, you can’t just apply technology as a Bandaid. It doesn’t work.
Dana Abramovitz 09:28
And I’m not just saying this. Companies have proven it. They’ve tried and it’s failed. And it’s just because the technology isn’t adopted. It’s not coming and growing from within the system, to actually be created in a way that is usable by the system. And so I think that it feels that way.
Simon Erickson 09:54
Technology will help, but it’s not the cure all for everything. It’s much deeper than just a band aid can fix.
Dana Abramovitz 09:58
Yes, yeah. You have to work within the system in order to make that change and get full adoption.
Simon Erickson 10:08
Dana, you also have prescribed seven potential solutions on how we may be able to help healthcare, or at least nudge it in the right direction. In your report — we won’t go through all seven of those…you’ll need to read the special report that Dana wrote, which is fantastic for that — but what’s maybe one or two things that you’re excited about? What is the deeper fix for healthcare today? How can we fix this $4 trillion broken system that we’ve been trying for decades? Are there a couple of things, that we can at least have hope that things are going to get better out there?
Dana Abramovitz 10:36
You know, I think that the value based care adoption is great. That emphasis on the patients and the supporting structure in order to enable that to happen. So there’s this disconnect between running a business and helping people. I mean, I have that same problem, right? [laughs] So how do you do that? And I think that we’ve talked about some companies that are public benefit companies, so having a legal charter to not just have that fiduciary responsibility, but also to have responsibility to their customers, their employees and society in general. And, imagine a pharmaceutical company that was a public benefit company? So instead of a $100,000 price tag for a drug that you can help a small number of people, make that drug affordable to those people. And I’m sure that’s going to affect the bottom line of the company. But I think that there are other benefits.
Simon Erickson 12:08
The metric isn’t just financial. The system itself is getting smarter. It’s more about focusing on patient outcomes. The metrics are changing. It sounds like kind of an exciting time for healthcare right now.
Simon Erickson 12:20
I think so.
Simon Erickson 12:21
We’re really excited to have your perspective always with 7investing. Again, my guest Dana Abramovitz is a lead advisor here at 7investing. You can always see her stock market recommendations every month, as well as her special report on “Can Technology Fix American Healthcare, which is now available.” Dana, it’s been a lot of fun. Thanks for chatting with me.
Dana Abramovitz 12:37
Simon Erickson 12:38
And until next time, thanks for tuning into our podcast for today. We’re here to empower you to invest in your future. We are 7investing!
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