Podcast: When a Healthcare Expert Becomes a Patient

Dranove, a professor of strategy at Kellogg, would later learn he had bladder cancer.

Seeking treatment was anything but simple—which, for a healthcare economist, speaks volumes about the complexity of the market.

On this bonus episode of “Insight Unpacked: American Healthcare and Its Web of Misaligned Incentives,” Dranove reflects on his struggle to make informed decisions about his care, and what it would take to make better ones.

Podcast Transcript

Laura PAVIN: Hey! Laura Pavin here. We’ll get into today’s show in a second. But first:

Do you have advice on how to be a good healthcare consumer, advice that you wish you could scream from the rooftops for everyone to know? If so, healthcare economist David Dranove wants to hear from you and potentially help share it with others. Like, do you have some handy tips or tricks for figuring out what insurance plan to get? What do you wish you knew before you, say, got that X-ray? Before you paid that one bill? Before you got a certain procedure done at a certain hospital? Any advice for how to balance cost with care quality?

If you do—and I’ll put this in the show notes too—send an email to Dranove at d-dranove@kellogg.northwestern.edu and put in subject line “shopping for healthcare.” Again, that’s d-dranove@kellogg.northwestern.edu and put in subject line “shopping for healthcare.”

Okay! On to the show.

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PAVIN: David Dranove is a professor at Kellogg who studies the economics of healthcare. If you listened to our Insight Unpacked series exploring the American healthcare system, you might remember him as one of our experts.

And, unbeknownst to us, it was while we were talking to him for that series a couple of years ago that he was having his own run-in with the healthcare system. It started on this one day. He was visiting with family, wrestling around with his grandson, when he noticed something was off.

DRANOVE: I had to go to the bathroom and I noticed that there was blood in my urine. And I wasn’t sure what to make of it.

PAVIN: But Dranove already had his regular urologist appointment scheduled a month later, so he decided he’d just wait and see what his doctor had to say about it.

The day comes. He pees in a cup. His doctor takes a look.

DRANOVE: And within minutes he reports back that there is blood in my urine. And to make matters worse, studying it under a microscope, the cells looked abnormal.

PAVIN: His doctor tells him, ‘you need to do a CT scan tomorrow.’ So he does, and the doctor comes back with the news: it’s cancer.

DRANOVE: This is very surprising to me. I just … it’s bladder cancer, which I don’t know anything about.

PAVIN: And what’s kind of going through your mind? How are you feeling?

DRANOVE: There’s still the eternal optimist in me, but mostly what I’m thinking is, ‘okay, I’m going to do this stuff. I’m going to do a test. I’m gonna do another test. I’m probably gonna have a procedure.’ And suddenly I was engaged in the process.

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PAVIN: I’m Laura Pavin, and today we have a different kind of episode for you—an addendum to our second season of Insight Unpacked on the American healthcare system and its web of misaligned incentives, because Dranove’s experience makes crystal clear a point we made a lot in the series, which is that it’s really, really hard to be a consumer in this market. So hard, in fact, that not even the expert—the guy who studies it for a living—can make heads or tails of it, at times. And that’s bad for everyone! Because when consumers don’t have the right information or incentives to make decisions about their care ... well, they’re kind of left shooting from the hip.

Today, Dranove-the-patient and Dranove-the-healthcare-economist reflects on a couple of ways he saw the system working suboptimally.

Specifically, we see how insurance companies struggle to control our spending, and how patients struggle to find good data to make good care decisions. And we get Dranove’s take on how we might actually fix those problems.

That’s next.

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PAVIN: Before we get into what happened to Dranove after he received his cancer diagnosis, we’re going to rewind to the before part of his journey—starting with him needing that CT scan—because it gets us into the first flaw he noticed. With our insurance plans.

See, after his doctor told him he needed the scan, Dranove asked where he could get it done. As it turned out, they could do it at the hospital right by his house, which sounded good.

DRANOVE: I schedule it for the next day and that afternoon, after I get home, I get a phone call from my health-insurance company, and they tell me that the hospital where I’ve scheduled my CT scan is pretty expensive and I could save money if I go to some other location. Would I like a list of alternative locations?

PAVIN: Seems reasonable enough, right? Who wouldn’t want to save a little cash if the scan can be done just as well elsewhere? But Dranove being an economist, he does some quick math, and he realizes that because of his insurance plan, there’s not really a reason to switch locations.

DRANOVE: I have a 10 percent coinsurance rate, so whatever the price difference was between my hospital and some other place, I was only gonna pay 10 percent of that price difference. So let’s suppose my hospital was charging $1,500 for the scan and some other location was charging a thousand dollars. $500 price difference. To me, it’s $50.

PAVIN: For the convenience of going somewhere close to home, 50 bucks seemed worth it. So he rejects his insurance plan’s cheaper alternative. Good for Dranove. Bad for his employer, who foots most of the bill for this. And bad for the healthcare system overall, because, in a way, it sends a signal to the market that patients want more expensive CT scans. And that’s not going to help us lower healthcare costs, in the long run, is it?

But Dranove says they could have been more effective if, instead of the 10 percent coinsurance rate, they did something called reference pricing. In this specific case, that would mean his plan offered the following:

DRANOVE: A flat $1,000 payment for CT scans.

PAVIN: Mm-hmm.

DRANOVE: The hospital where I had my scan charged $1,500; I’d have to pay $500. And if I went to a place that only charged $1,000, I’d save 500 of my own dollars.

PAVIN: And this would save his employer money.

DRANOVE: ‘Cause they know they’re only paying a thousand regardless of where I went.

PAVIN: Mm-hmm. Now, are you happy that our employer doesn’t do that?

DRANOVE: I think if I was 30 years old, starting out in my career, and I knew that Northwestern was doing something to lower its health-insurance costs, I would like that very much because I would get some of the benefit. If Northwestern’s spending less on health insurers, they could spend more on my wages. As a 68-year-old who’s a big consumer of healthcare, I like having more-generous health insurance.

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PAVIN: So, observation number one from Dranove’s whole experience is that the entities that foot the insurance bills, like our employers, they aren’t making a strong-enough case for patients to spend less of their money. Which is bad if we’re trying to collectively spend less on healthcare, as a country.

But putting financials aside, let’s look at the actual care side of things. Specifically, what is navigating this system like if you’re just interested in getting quality care? And the answer is: it’s pretty challenging.

Dranove encountered this a couple of times on his journey, when he was looking for good information about the people and places he’d essentially be entrusting with his life.

Let’s talk about the first way Dranove-the-patient saw the system fail at giving patients the information they need to make good medical decisions.

So, after he gets his CT scan, and they learn it’s cancer, Dranove has to undergo a couple of surgeries to remove it. One happens at a hospital. But when it comes time for the second, his doctor says that, because of some scheduling constraints, they’ll remove it at a freestanding outpatient facility. And he was like, “oh, okay ... I mean, I liked the hospital, but let me see what this outpatient facility is all about.

DRANOVE: So, um, I decided to look it up online … try to find out the quality, and I’m afraid that you can’t really learn very much about the quality of outpatient facilities. It’s not the kind of data that you can get about hospitals, for example. So all I get is stuff from, like, Yelp and Google, and I quickly realized how this stuff is worse than useless.

PAVIN: Dranove is looking at these online reviews and there are a lots of single-star entries. Normally, this would be a red flag, right? If you looked up a restaurant or a salon and you saw a ton one-star reviews and complaints, you would probably try to avoid that place. But the problem is that healthcare isn’t like other services, because what makes an outpatient facility outstanding isn’t always what people pay attention to.

DRANOVE: The one that stood out was the following, it says, um, “the old linoleum flooring really bothered me.” They give one star.

Linoleum? Your life’s at stake! You could live or die based on the outcome of this thing, and you are gonna give them one star ’cause you wanted plus carpeting? Gimme a break.

PAVIN: More helpful would be information about things like the quality of the surgeons, patient outcomes, whether patients received the care information they needed after the operation. Instead, he got minor customer-service complaints. Which is unfortunate because a lot of procedures these days are done at these satellite outpatient facilities.

DRANOVE: We’re left relying on word of mouth from folks who are just as unknowledgeable about quality as you are.

PAVIN: Now, here’s the second way Dranove-the-patient saw the system fail at giving patients the information they need to make good medical decisions:

He goes into his surgery to remove that tumor, with his fingers crossed, and thankfully, it goes well. But they have to wait and see if it recurs, and they won’t know that for a few months.

While he’s waiting, Dranove decides it’s time to consider what would happen if it does recur. Because if it does, he may have to get his bladder removed. And that would mean he’d have a really big decision to make, which was: Where would he go to get that surgery, and who would perform it?

He liked and trusted his urologist, so he was on the table as one option. But it’s never a bad idea to have a couple of options to weigh. So, he starts digging around for a second option. And as he’s weighing each choice, he’s looking for a couple of pieces of information—information that’s deeper and more specific than just overall clinic quality.

The first piece of information he wants is the experience level of the doctor and nurses, and the second is the outcomes of their patients who had this surgery.

DRANOVE: I’d been reading that a real key to success with the surgery, the removing your bladder, is learning how to live without a bladder, and that’s really up to the nursing staff. They teach you.

PAVIN: For context, when you have your bladder removed, you either have it replaced with a neobladder, which you press on to pee, or you have a bag attached to you externally, and pee into that continuously. And learning how to function in this new way was an art form that the nurses would have to teach him. And some nurses were better than others at it.

DRANOVE: And I wanted to go to a place where they have lots of experience. So, I went on the internet, and I learned who the top bladder surgeons were at Northwestern Medicine, and I reached out to one of them.

PAVIN: The surgeon says, “yeah, sure, I could do it.” So Dranove has that first piece of information he wants on what’s looking to be a viable second option. He knows that the doctor and nurses who’d be handling him would be experienced. Great!

Now, he wants this second piece of information: the data on patient outcomes—what life was like for the people who got this specific procedure at this hospital. He sees they have that information for people who get other procedures, like heart procedures and joint-replacement procedures.

DRANOVE: But for the replacement of the bladder, you can’t find quality information specifically for that procedure.

PAVIN: So, they don’t have information on the patient outcomes he needs. And Dranove realizes that, if he does have to have his bladder removed, this would be another situation where he’d have to make the leap and hope it works out. This was terrifying, but there wasn’t a lot he could do to control that. So, he waits and just hopes his doctor doesn’t find cancer and that he doesn’t need bladder surgery.

...

PAVIN: From his first CT scan to his struggle to find good data up to this point, Dranove’s journey put him face-to-face with some issues he teaches about, issues that make it hard for anyone to maneuver in this healthcare system.

And before we hear where Dranove stands in his journey today, let’s first take a second to recap those imperfections and what Dranove thinks would help ameliorate them.

The first issue is that payers and insurance plans still aren’t doing a great job containing costs, which ultimately raises prices for everyone. In Dranove’s case, his 10 percent coinsurance rate didn’t hurt his wallet enough for him to choose the cheaper CT scan. But he says that reference pricing could have helped, which, again, would have his insurance paying a flat fee for the CT scan, no matter what, and he would have to make up the difference.

The second issue is that patients need better data to make better decisions as consumers. He thinks that the Centers for Medicare and Medicaid Services—the federal agency—could start collecting data on the real outcomes for most procedures.

DRANOVE: So you can get a measure of the patient’s quality of life after the procedure, and then you can line up the two doctors and say, whose patients have a better quality of life a year after their bladder was removed?

PAVIN: It would, indeed, have been helpful to see how patients fared, in the long term, after getting their bladders removed from a certain hospital.

In that same vein of giving patients quality data, Dranove thinks that tech companies like Google should really work on curating customer reviews for outpatient clinics.

DRANOVE: It ought to be possible for a computer to look through all of these ratings and sort out what’s what and sort out the ratings that say, “it was out of network.” Sort out the ratings that say, “I didn’t like the clothing that the receptionist was wearing” from the ratings that say, “the staff paid extra attention and gave me very good instructions.”

PAVIN: Improving data collection—collecting the right kind, at least—would make it easier to be a patient.

DRANOVE: It’s hard to be a good healthcare consumer. Especially when healthcare purchases are maybe the most important purchases you’re going to make. Where else is it a life-or-death decision? I think it’s important for the government or health insurers or employers … for somebody … to double down on their efforts to make it easier for us to make the right healthcare decisions.

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PAVIN: Talking to Dranove, I was struck by all of the torturous waiting he had to do. A constant limbo of not knowing what his life was going to look like, or how short or long it would be, or how pleasant or unpleasant it would be. This is what it’s like to be a cancer patient.

And it’s scary to think that we ask these same people, at the worst moment in their life, to also navigate the most-complex market we have.

After Dranove’s second surgery to remove the cancer, after he’d thrown in the towel on finding a surgeon to do this bladder-removal procedure, in case he needed it, he has to wait.

Finally, it comes time to visit his doctor for a recheck. He goes, the doctor looks and says he doesn’t see anything. But he takes some biopsies, just in case, and Dranove waits to find out the result.

DRANOVE: I’m now checking my phone religiously through my doctor’s website to see what the test results were, and about 24 hours later, the test results were posted and in bold print, the pathologist has typed, “there is no evidence of cancer.”

I saw that—I started shaking. I didn’t believe it. I read it again. It still said, “there is no evidence of cancer,” and I wept. I hadn’t cried that hard since Lord knows when.

PAVIN: He’s been clean ever since. He has one more check-up in June, and there’s still a 5 percent chance that the cancer will recur. But if that one goes well, his chance of recurrence becomes pretty small. He’ll still have to get checked, but if things keep going well?

DRANOVE: Then it’ll be once a year for the rest of my life, and I can get on with things.

PAVIN: Yes. Oh, I’m so happy. So happy for you.

DRANOVE: Thank you.

[CREDITS]

PAVIN: This episode of The Insightful Leader was written by Andrew Meriwether. It was produced and edited by Laura Pavin, Rob Mitchum, Abraham Kim, Fred Schmalz, Maja Kos, and Blake Goble. It was mixed by Andrew Meriwether. Special thanks to David Dranove.