Dr. James Ogsbury REACTS to My Interview with Greg Vigdor

Dr. James Ogsbury is the author of About Not Losing, his thrilling memoir about his malpractice trial in the late 1980s and early 1990s.

Today, I watched The Cameron Journal interview with Greg Vigdor with interest, which highlighted a discussion with Greg Vigdor regarding “What’s Wrong with Healthcare in the US?”

With his background as a healthcare executive, Mr. Vigdor brings an interesting perspective to the discussion of healthcare. His method of writing novels and imbuing those with his perspectives of healthcare is unique indeed. I found his discussion most stimulating. I agreed with his opinion that healthcare must be delivered in a system-wide manner, prioritizing health care rather than disease care, that there should be an emphasis on prevention rather than just disease care, and that treatment must be patient and data-driven. I agree with his comment that healthcare is, by its nature, expensive. I also agreed with his point that the vertical integration of healthcare has only led to increased cost and lower quality of care.

However, after studying healthcare reform for many years, I think other issues must be addressed. First, an obvious problem is that a system that used to be primarily patient care-driven is now largely driven by financial decisions. Many, if not most, physicians are now employees of large companies, usually hospital systems, often with salaries that have grown exponentially in the last few years. Then, obviously, there follows pressure upon those employees to produce sufficiently costly medical care to justify the large salaries. Next, the use of computer management protocols and guidelines should largely lead to the elimination of inconsistent delivery of healthcare within the systems. Then, of course, the specter of legal challenges colors all of medicine, be it to physician care, surgery, or research and development of pharmaceuticals, leading to higher cost without, in my opinion, an obvious increase in quality. Given our political system, this will be a very difficult barrier to breach.

Finally, however, I believe the most important problem with healthcare today is that it is largely cost-driven and not quality/outcome-driven. A long personal experience with the Colorado Worker’s Compensation Medical Care Delivery System indicates to me that this system is uniquely outcome-based for a very simple and practical reason. When the system was semi-privatized in about 1994, the then head of Pinnacol Assurance, the largest Colorado worker’s compensation medical care insurance Company, investigated the nature of costs in his business, and found that indemnity costs far outweighed healthcare costs (in one other company there were as much as six dollars of indemnity costs per dollar of healthcare cost). He queried about how this cost could be alleviated and was informed that the investment in healthcare at the beginning of care should lower indemnity and, therefore, overall costs.

Of course, indemnity costs are an inverse measure of outcome, and thus, when decisions began to be made based primarily on disability costs, the system became, in essence, outcome-based. Interestingly, using this system, Pinnacol Assurance has thrived for many years. My main recommendation is that our entire healthcare delivery system should strive to become outcome-based and not primarily cost-based. I realize that there are no indemnity costs in regular healthcare, but it is hard for me to believe that there are not brilliant medical economists who can find ways to significantly incentivize improvements in quality and outcome that would bring about the goal of aligning cost, quality, and outcome.

James S Ogsbury III, MD