A friend of mine who practices medicine in New York had shared an article about Dr.Atul Gawande chosen as the CEO of the new medical initiative jointly started by Dimon – Buffett – Bezos trio.
As luck would have it, I stumbled upon the link to The Cost Conundrum, an amazing article written in 2009 by Dr.Gawande (link available at the end) about how a small town called McAllen, in Texas, had one of the highest healthcare cost per person. Dr.Gawande goes on to explain in detail about his experiences while trying to understand the rationale behind such high costs. It leads him to come across various factors such as corruption, healthcare-as-a-business thought process which leads to seeing the patient as an ATM.
The patterns that emerge are just mind boggling. It is not about doing anything unethical. Some of his observations even shows that based on where you practiced or how you were taught, the prescriptions varied and hence the cost. I have always thought of LTV (Life Time Value of a customer) costs in SaaS models that I work on every day, but this article made me think of a new term, LSV (Lifetime Squeezable Value) of a patient. LSV might be too harsh when you look at it from one angle about the noble profession, but the minute you step into the shoes of a number driven game played by many doctors around the world, LSV might not look so bad.
He also compares it with his experience with a health care provider called Mayo, where in one incident he says how a surgeon just came by to sit and discuss the options available for the patient to make sure the best possible care and solution is given. When money is not the primary driving factor, the noble profession seems to get back its honour that we always attributed physicians with.
The news is that Charlie Munger sent him a check for 20K USD after reading the article, which was sent to a charity by Dr.Gawande. I am sure Charlie must have become a big fan of his and told him: Please implement all your ideas here in the new venture. I wish Dr.Gawande was recognised much earlier by the Govt and pushed him to do the same for the country instead of coming up with ‘same wine in a new bottle’-care every four to eight years.
The events at McAllen in the healthcare sector is so similar to what is happening in the private hospitals in India. The public hospitals in India are in step one, while step two involves bringing world class setup and doctors to public hospitals and then step three is about how to make sure we do not go the McAllen way. Meanwhile, at the moment, the private hospitals are in step three and it makes me ponder what would it take to get India to have Mayo kind of experience. Time to think about the opportunities here to make the profession noble again.
Link to the 2009 article: https://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum