On public health, Medicaid and Medicaid managed care, and profit seeking in healthcare.
Don Hall, M.P.H., who joined the Managed Healthcare Executive editorial advisory board in 2007, is winding down his consulting business, DeltaSigma LLC, and stepping down from the board. We caught up with him recently and asked him to discuss his career and reflect on the condition of U.S. healthcare.
Peter Wehrwein, the managing editor, conducted this interview. This transcript has been edited for clarity and length.
I took a look at your LinkedIn profile and saw that you majored in zoology and psychology and then got your master’s degree in public health. What motivated you to go into public health?
I worked my way through college, which you could do back in the ’70s; I don’t think you could now. One of the jobs I had was I drove an ambulance in Norman, Oklahoma, and that was before the EMT era, so it was really load and go. I was struck by a number of things. One was most of our calls were not emergency calls. We were taking people from nursing homes to the hospital and back again. We would pick somebody up at a nursing home, take them in to have their kidneys checked, and they would stay the number of days they were allowed, and then we’d pick them up and take them back. Many of these people — and I don’t mean to be negative at all — were not fully cognizant of what was going on. I mean, we were basically picking up a body — a living, breathing body — taking [them] to the hospital, getting [them] checked and taking [them] back. I thought, “This is not healthcare.”
I also remember one intersection where there were multiple very serious traffic accidents. The intersection begged for a stoplight. But the city didn’t have the money for a stoplight. But there was no end to the money to pay for all the chaos, damage [and] injuries from that.
Between those two, it seemed like we needed a more global look at where we were putting our dollars.
At that point in time, many children were not covered by insurance. The very people who would grow up and take care of us … were not being taken care of. But the people in the nursing homes were getting care upon care.
I’ve heard that from other people who trained in public health — that their motivation came from something that showed so much illness or injury could be prevented. But your career wasn’t in traditional public health.
When I got out of graduate school, I went into public health and maternal/child health and spent three years there. But there was one incident that was really exciting to me, and it made me move out of public health. Jimmy Carter was president, and he thought that people should start paying for family planning services based on their income, so I was charged with helping to set up this fee system that was graduated based on income and so on.
We were collecting absolutely no money; the nurses and social workers who go into public health are not there to collect money. But there was this one county in Oklahoma where I noticed we had lots of people who were fairly well off. I looked at where they worked, and they worked at this Uniroyal tire plant in Ardmore, Oklahoma. So I contacted the tire plant, and I said, “You know, you have a lot of people who come to our clinic for care.” And at that time, when you went to the clinic, it took about a day. They ended up saying, “Well, I’ll tell you what: We’ll give you money to put a clinic in our building.” We were able to get patients through in an hour, and the program made more money in that one county than it made in the rest of the state.
It was a business that was saying, “This makes sense.” In the public health mindset, you don’t … [create clinics in businesses]. It made me aware of the role that business plays in healthcare. If you can save time and can get people to care, it’s in the interest of the organization, the company, to do that. So that got me going.
You worked for several different companies before hanging your shingle as a consultant.
Over time, I went from one company to another. The companies would build up and sell, build up and sell, and I got frustrated.
I ended up at Blue Cross and Blue Shield of Texas, and they had no managed care, and I was head of managed care, product development [and] market development. That’s really where I got stung by the Medicaid bug. Ross Perot had worked at Blue Cross and Blue Shield of Texas at the time that Medicaid came out, and he put together an organization that basically bid against the organization even though he was working for them and took the contract away from them. And our president wanted to get back into Medicaid, so I was charged with that. I realized that Medicaid could have so much impact on the healthcare of this country. The way Medicaid was set up then, it was truly for the poorest people.
At the time, deliveries were barely paid for, so medical schools and public hospitals were handling them. Because there were so many problems with pregnancies, Medicaid started paying the rate that commercial would pay for them, and suddenly, every hospital was taking care of women covered by Medicaid.
I do want to say that one of the frustrations I’ve always had — and Medicaid is part of it — is that as we start to move into really doing something, oftentimes you see companies coming into that space and they go, “Whoa, look at the money we can make here.” They start getting into it, but not for the reason of taking care of people but for the reason that they can figure out how to make it to their advantage economically.
As a consulting group, one of the things we did was help companies expand what they were doing in healthcare: private health plans and public health plans. [We got calls] from foreign investors who looked at healthcare in the United States as easy pickings — people from Europe, from the Middle East — who wanted to buy into some company or start something to make money.
With our system, unfortunately, the more money we put into trying to take care of things, the more money gets sucked out in the form of profits for things that may not benefit anybody.
You see Medicaid expansion as a great thing. Despite your background in managing Medicaid, do you now see managed Medicaid as being counterproductive and another avenue for profiteering?
I don’t think managed Medicaid, per se, is bad, and I will tell you why. If somebody wanted to go to the doctor, we were required to make sure they could get to the doctor in so many days. We were required to follow up on certain conditions. We were required to make sure if they needed a specialist, they could get a specialist. We were required to provide behavioral health.
Without a managed care system, those things fall apart. I mean, poor people are just out there without
I’ve studied a number of healthcare systems around the world. We’re the only one that is for profit. I think when you put the for-profit element into healthcare, you change the dynamic greatly. There are a number of not-for-profit Medicaid plans that I think are really focused on the population. But the for-profit plans are focused pretty much on profit, and I think that’s been [a] detriment.
I recall being at a meeting when I was with HCA [Healthcare] of all the hospitals in the Southeast region. The chairman of the board was there, and they had people stand up who had an average of 80% census during the year — 80% of the beds were full. Wild applause. 90% and then 95%. Well, there were a few hospitals where there was over 100% [census] because the hospitals didn’t have enough beds, and they were using the ER [emergency room] to supplement beds. Those people got wild ovations. I kept thinking, do these people not have grandmothers? Do they not have people who are sick? Do they not understand that every bed is filled with somebody who has had cancer, has had a heart attack, has been in a bad accident? We had shifted the hospital’s role of taking care of these people to how much profitable bed space you
I feel like healthcare is a different industry and should not be profit based. And with a lot of the nonprofit health plans and nonprofit hospitals, as you know, it’s just a tax twist. It’s not really nonprofit. I mean, there are nonprofit CEOs who make a
ton of money.
The theory that you can go in and economize, figure out twists that make things work, makes sense. But it becomes more for the profit than doing it to economize.
When I went to Colorado Access, it was nonprofit. We had presidents of the biggest hospitals, all nonprofit, on board, and it was driven by money. The sense was no money, no mission. Well, money became the mission. I have seen that too much in
I’ll tell you an interesting story. We had some issues with our reserves at Colorado Access. We had a meeting with the division of insurance, and we had this $3 million claim. We had a premature baby who did not have fully functioning organs and needed multiple organ transplants. We ended up sending the child to Little Rock [Arkansas] because that was where they could do whatever was needed. Our reinsurance wouldn’t cover it because it was experimental; we went ahead and covered it because it did look like the baby would survive. I looked up as I was talking about it, and this division of insurance auditor was crying and asked whether the baby was alive, and I said, “Oh, the baby is doing fine.” She said, “I’ve never heard a story like that where an insurance company would do that.” And the truth is too many times we don’t. The measure [is often] are we making money, and she actually jumped over it and said, “You saved the baby’s life.” I think we forget that’s what it should be all about.
One couldn’t banish for-profit enterprises in healthcare. Do you have any notions about practical steps that could be taken to counteract some of these tendencies?
I’m an optimist, so I don’t think there’s nothing we can do. I mean, frankly, one of the worst things is the Supreme Court allowing so much money to go into elections, which then allows pharmaceutical companies, insurance companies to really dominate the discussion. I do feel like there’s grassroots activity going on; that could change that. I also think that states can start picking it up on their own and move the ball
a little bit.
I think we’re going to enter a period where money simply isn’t going to be there. As the population ages, we don’t have as many people working and putting money into the system.You’re going to face a crisis in healthcare because there’s just not going to be enough money to do everything
you need to do.
If we could make healthcare truly a nonprofit industry, I think that would change things greatly. If we could make health plan boards include more people who are the ones being taken care of, I think that would change things. How many boards have investors on them? When you have an investor sitting on the board, it’s all about what we are going to make this month. You don’t have a discussion about the quality care, about excess deaths, about surgical infections and things like that.