Episode 413

EP413: The Intersection of Healthcare Waste, Value-Based Care, and the Potential Rising Power of PCPs, With Will Shrank, MD

Oct 5, 2023

35:24

Episode Description

Estimates suggest the US healthcare system wastes upward of a trillion dollars a year, split across two broad categories: administrative failures (fraud/waste/abuse, administrative complexity, pricing failures) and clinical failures (care coordination, care delivery, and low-value care). In this episode, Stacey Richter talks with Will Shrank, MD, a venture partner at Andreessen Horowitz and former chief medical officer at Humana, CVS Health, and UPMC's health plan, about where that waste actually goes, why it's so hard to cut (someone's waste is someone else's profit), and why primary care physicians organizing and demanding better models might be an underrated lever for change.

WHAT YOU'LL LEARN

✅ The six categories of healthcare waste, split between administrative failures (fraud/waste/abuse, administrative complexity, pricing failures) and clinical failures (care coordination, care delivery, and low-value care)

✅ Why cutting healthcare waste is so politically and economically difficult: nearly every dollar of waste is somebody else's revenue, which means constituencies exist to protect it

✅ Why aligning financial incentives with quality — paying for the longitudinal patient journey and for outcomes rather than volume — is Dr. Shrank's broad-stroke fix for the clinical-failures side of waste

✅ Why value-based care's slow pace of change is, per Dr. Shrank, more a reflection of how young the model still is than a sign it isn't working

✅ Why PCPs organizing and pushing back against being treated as RVU referral machines could become a meaningful source of leverage, especially if self-insured employers start demanding the same kind of value-based accountability

WHY THIS MATTERS

A trillion dollars of annual waste sounds like an obvious target, but as Will Shrank lays out, most of that waste is embedded in somebody's business model, which means fixing it requires realigning incentives, not just identifying the problem. Value-based care is the mechanism most likely to make that realignment happen, because it's the rare structure where reducing waste actually benefits the people positioned to reduce it. In the meantime, physicians and employers who are tired of waiting on that broader shift may have more collective leverage than they realize.

MENTIONED IN THIS EPISODE

EP363 with David Scheinker, PhD: Apple Podcasts | Spotify | Other Apps

Books: Robert Pearl's Uncaring

EP409 with Larry Bauer, MSW, MEd: Apple Podcasts | Spotify | Other Apps

EP359 with Dan O'Neill: Apple Podcasts | Spotify | Other Apps

Summer Shorts 2 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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