Alan Garber, MD '83, founding director of the health care program at the National Bureau of Economic Research, directs Stanford's Center for Health Policy at the Freeman Spogli Institute for International Studies and Stanford's Center for Primary Care and Outcomes Research at the School of Medicine. He's also, well, a genius: He graduated summa cum laude from Harvard, where he got his bachelor's degree and his PhD in economics. He talks about how to improve health care quality and costs--and about why the Farm is so special. Excerpts:
You have said that limiting costs is the key to health reform working. How can we do that? After all, most patients want the best care, no matter the cost.
There's a lot of care that's provided that doesn't offer the patient a lot of benefit. For example, physicians are paid, by and large, for the number of units of services they provide. Some doctors, if they own imaging facilities, earn more money if they order more CT and MRI scans.
Those scans can cost thousands of dollars?
That's right. And some doctors have clinical interests in some laboratories. So if they order more lab tests, they make money. One of the most important changes is to [switch] from a system that rewards volume of services to one that rewards better health outcomes. We're looking for payment that rewards performance rather than activity.
Are we getting that?
The short answer is we're still in the old health care system.
Will we get the system that rewards performance?
The features of health reform to promote payments that reward quality were watered down compared to what many advocates wanted. For example, Medicare still pays primarily on a fee-for-service basis. Many who are outside traditional Medicare are still getting fee-for-service medicine. The reform includes the recognition of "accountable care organizations," which are designed to get doctors and hospitals to work together to provide care and be paid on a shared basis so they have incentive to be efficient in their use of resources. Then there's the creation of the Center for Medicare and Medicaid Innovation. It will have a good deal of money to promote and test new approaches to payment. So there are steps in the direction of promoting payment changes. Not as many as some people would have liked, but more than some people would have liked. It's certainly a step in the right direction. People don't think Congress can stick to the plan that's laid out in the legislation, that they will undo some of the changes. There's a lot of skepticism about whether they will follow through with the cost-reducing features of the legislation. The big question is not really about what the legislation itself does but what Congress will do.
So Congress could easily eat away at health care reform legislation?
It could improve it, too. One argument is that as Medicare's financial situation gets worse, Congress will be pressed harder and harder to make changes. The U.S. level of debt is rising, and it's unsustainable. At some point, interest rates will rise, the cost of borrowing money for the federal government could rise. It could turn into a financial disaster. There are people who say the U.S. is basically Greece.
What do you think?
I do believe the current rate of spending is unsustainable. I'm not sure when the change will occur or what form it will take. The longer it takes us to do something significant about the deficit, the more painful the remedies will be.
How much of what happens will depend on which party is in control?
The best political strategy may have less to do with ideology than whether you're the party in power or the party in opposition. Whoever is in power is going to feel much more pressure to do something about the budget deficit. You see a lot of seemingly self-contradictory statements by politicians about this. They may say we need to do something about the deficit, but then they say, "Don't do anything to Medicare." Medicare is the most challenging aspect to the burgeoning federal debt. Social Security, which is the other major component of our rising debt, is much more readily controlled than Medicare.
It sounds depressing.
I like to think there will be an emerging consensus in the future, as the pressure gets greater. It's just the optimist in me.
You got your bachelor's degree and your PhD in economics from Harvard and your MD from Stanford. Why did you choose to work at the Farm?
It's a long story! I started out as an undergrad biochem major. I took economics my freshman year. I became a research assistant for a faculty member--I loved economics. I applied to both medical school and graduate school. I finished my dissertation while I was doing my ob/gyn [training]. That's why you wouldn't want me to deliver your baby! I went back to the East Coast, to Harvard, for my residency. And I discovered how much I missed Stanford. There are a lot of reasons for wanting to stay at Stanford. There are the obvious ones, like the weather! There was the presence of some truly exceptional people in economics and health economics--Victor Fuchs, Alain Enthoven ['52] and Kenneth Arrow. People in the medical school were extremely supportive of what I wanted to do, including the division chief, [Harold] Hal Sox ['61]. He left here later to become chair of medicine at Dartmouth. Then there was a succession of chairs at Stanford who were always supportive. This is a university that genuinely supports interdisciplinary research. This goes back decades, I think to the time that [Frederick] Terman ['20, Engr. '22] was provost. The institution has had a conscious policy of doing research that cuts across departments and schools. It's something that other universities try to emulate.
Like Bio-X, the interdisciplinary research program?
Yes. Also the international initiative. Also, there are things that are more subtle. It's how you allocate grants and how you handle faculty recruitment and faculty promotion. When you support interdisciplinary areas of research, that means you have to have a career path for people who don't fit squarely into a discipline. I honestly believe there was no place better for the kind of work I wanted to do.
You still manage to see patients at the VA Hospital. How often?
I just do Monday afternoon clinics, and then I basically cover inpatient ward services on the weekend.
You stay impartial in your research at Stanford and take no positions, right?
Right. We do think it's important to change how we pay for health insurance. But we like people who are on opposite sides of the question to feel confident in the information we provide--that we're going to be honest and objective, and that we'll get the answers right.
What are the right answers, when it comes to health care reform?
From a researcher's point of view, health care reform offers a great opportunity to study how these features will affect health outcomes. For example, we don't really know how an insurance expansion will affect health. I believe certainly that health outcomes will improve when uninsured people get better access to care. [But] we'd like to measure that.
You recently wrote a commentary in the New England Journal of Medicine about how the FDA "is known for its rigor in regulating drugs, not devices." You said, "Much more could be done to learn about experiences with devices after they are approved."
My article wasn't really meant to be about tightening up device regulation. It was about the need to shift to greater post-marketing surveillance, to make sure they [the devices] are effective. If you look at drugs, there have been many instances where serious side effects were not uncovered during the pre-approval studies. They became evident after hundreds of thousands or millions of people received the drugs. If you were to require gigantic trials for devices, you would make it very hard for any new device to come on the market. Instead of focusing on ever-tightening requirements, pre-market approval, we should be thinking about putting more into post-marketing data collection on safety and effectiveness. It's not just that you might find out unknown risks. You might also find out unexpected benefits.
Like Rogaine growing hair?
Right. The drug Rogaine is based on is Minoxidil. That was marketed for blood pressure control. That's a good example of something that does turn out differently than expected. You could find out the benefits are smaller or larger than you saw in the pre-approval studies.
Victor Fuchs has written that the three biggest health care problems are coverage (more than 45 million Americans lack health insurance), cost (it's high and increasing), and quality of care (gross lapses in it). How do we fix everything?
The reform legislation includes many features to improve quality. Many people would argue the main point of payment reform is not so much to control costs as to improve quality. It should do both.
What about dealing with end-of-life care, which is the most expensive?
The short answer is if you could perfectly predict who would die, you could avoid a lot of these expenditures. The problem is, we can't usually tell who's going to die in the next two months. Death is only inevitable near the very end. If you don't know which ones will survive, how can you reduce the intensity of treatment without increasing the mortality rate? The situations in which we can be reasonably certain somebody is going to die soon are limited. I don't think any of us would want arbitrary decisions to be made about withdrawing care from people who have a reasonable chance of survival. People would disagree about what constitutes a reasonable chance.
So everybody should get a living will?
People should get living wills simply to make sure their wishes are carried out. I don't think we should count on that as a way to reduce costs. I am a big proponent of having patients discuss with their physicians how aggressively they want to be treated if they're very sick and if they're in a position when they're not capable of making decisions--for example, if they're in a coma. But that's not really about saving money.
You've written about how younger people make health care decisions with their heads and older people make them with their hearts. What does that mean in terms of health care in this country?
This is based on work that Laura Carstensen, head of the Stanford Center on Longevity, has done for years on how decision making changes with age. We should be thinking about how to take into account decision-making styles to present information in a way that people find useful. Old people need information presented in different ways than younger people. You don't necessarily want to give a huge amount of quantitative detail to an elderly person. You might not say, "You have a 20 percent chance of this side effect and a 35 percent chance of this side effect, but there's also a 55 percent chance you'll live for one year."
What would you say instead?
Some people might be interested in what other people like them generally choose. Regardless of age, people differ in how they make decisions. We need to think about ways to tailor the information we present to people so it will be most useful to them as individuals. You could imagine that a venture capitalist on Sand Hill Road is going to be interested in the numbers. You could imagine that somebody who has spent her life doing studio art would like information presented in a different way. It's even better if we could give people a brief set of questions to find out what type of information they'd like.
What else is important for people to know?
The health care reform debate illustrates the importance of research. It's places like Stanford that will provide the hard information we need to make better policy decisions. If it weren't for universities like Stanford, it would be very hard to get information that really tries to be objective and complete.
So Stanford is helping the world?
Exactly. That's why there will always be a role for universities. When you look at think tanks, many of them are partisan. There are many other nonprofit organizations that are dedicated to carrying out a particular agenda. We really depend on universities to try to maintain impartiality and rigor.
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