Monday, September 24, 2012

No Skin in the Game - A Private Health System for the Very Rich

We have noted occasional hints that the very rich may have a separate health care system which may shield them from the vicissitudes of our dysfunctional health care system. A broader hint came in an interview in the Wall Street Journal.

The Company

 The subject of the interview was Leslie Michelson, the CEO of Private Health Management.  The activities of the company were defined somewhat vaguely,
an ultra high-end company that borrows from concierge medicine, managed care, applied-sciences research and information technology while fitting into no neat category. The best analogue might be the investment and tax specialists that the affluent employ to run their finances; Mr. Michelson does the same for their health care. 'Like private wealth management, just far more important,' he quips in his modern Beverly Hills offices, all green glass and steel, white walls, white floors.

The Clientele

The company manages health care for a select clientele:
Private Health caters to 'high net worth individuals' and to businesses that retain its services for their executives as a benefit. Mr. Michelson says he serves between 12,000 and 15,000 clients, 'principally in private equity, hedge funds, professional and financial services firms.'
Note that the clientele seem to come mainly from the ranks of top executives of financial firms, probably some of the richest of the rich in the US.

Rapid Response Team for Acute Illness

Private Health Management's most distinctive service is the rapid response team it can "parachute in" to provide care for an acute illness,
whenever one of its patients has a medical emergency or complex condition, say, a traumatic brain injury or newly diagnosed cancer. A personal-care team parachutes in, led by a clinician employed by the company, and compiles a brief on the patient. They centralize and digitize the patient's medical records, usually dog-eared paper piles that can run to thousands of pages. Research scientists immerse themselves in the latest findings and treatment regimens for the particular condition involved.
Tests are double-checked—biopsy tissues are sent to an outside pathologist, MRIs to another radiologist. For an era of targeted therapies, Private Health runs a full battery of molecular diagnostics 'to sequence the entire three billion base pairs of somebody's DNA in a couple of hours,' Mr. Michelson marvels.
The goal is to ensure an accurate diagnosis and lay out all the treatment options. Private Health functions as a kind of running, independent second opinion.
Physician Network

In addition, Private Health Management provides access to a network of ostensibly the very best physicians,
Mr. Michelson built a series of proprietary algorithms to distinguish 'the few who are the very best' from 'the many who are very good,' based on 'the factors that predict excellence.' For example, the premier caregivers for metastatic cancer are usually academic researchers on the cutting edge, not general oncologists. The best orthopedic surgeons perform many procedures as they master the clinical learning curve, ideally for a single injury.
His referral database includes 2,200 specialists across 160 medical fields, 'reified into far finer groupings of disease than is standard practice.' He says that 'the world becomes so much clearer when you are able to identify the physician with the deepest and narrowest expertise in exactly what you need.'
Mr. Michelson says doctors like to belong to his informal network because they're 'interested in excellence and what we stand for.'
However, next,
 He adds, with more than a little euphemism, 'In a world in which 98% of the conversations are about cost containment, it's a joy for them to have somebody who's focused on enhancing quality only.' No doubt true, though it probably doesn't hurt that providers also like to have a relationship with his client base, the sort of people who become university patrons or donate a hospital wing.
This raises the question of whether doctors in his network may exhibit some greed along with their putative excellence.

Questions Begged About How it Works

The article actually devoted more space to Mr Michelson rationalizing his business as part of his overall interest in reforming health care than to discussion of how it works and what its implications are.  The short description of the processes above actually raised more questions about how the Private Health System works than it answered.  Some examples are: how could an optimal rapid response team be quickly mobilized given that the nature of acute illnesses may not be immediately apparent?  How would such a team interact within a hospital setting, or does the company have its own parallel hospital system?  What about the rest of medicine and health care outside of acute and intensive care, particularly primary care and management of chronic disease?  How does the referral data base function, and how would a classification that seems focused on the "narrowest expertise" cope with patients with multiple common illnesses or patients with undefined or undiagnosed problems?  These begged questions suggest there may actually be much more to the Private Health Management system than was discussed in the article.

Perhaps instead the care provided by Private Health Management might not actually result in better outcomes for its patients.  Consider some other questions: given how hard it is to assess physician performance and measure quality of care, how can Private Health Management be assured that its physicians are really the best of the best?  Given the apparent financial incentives for participating in the system, would the doctors who most appreciate these incentives be likely to provide the best care?  Would the apparent bias of the system toward high technology and super specialized care, would the system over-treat most of its patients? 

Summary and Implications

Nonetheless, the article provides more evidence that the US has a secretive parallel health care system for the very rich.  The most important implication is that such a system could protect the very rich from the access problems and bureaucratic annoyances that plague ordinary patients in larger dysfunctional health care system.  By thus having "no skin in the game," those among the very rich who are not themselves directly involved with health care would have little reason to care or want to do anything about the problems besetting the larger health care system.  Since the very rich have become increasingly politically powerful, the absence of such interest or motivation for change among them would make true health care reform much more difficult. 

If there is a parallel health care system for the very rich, its real effects on health and health care are unknown.  As best as I can tell, the very concept is almost entirely anechoic except for our very limited discussions on Health Care Renewal.  The subject cries out for investigative reporting, and consideration by health care policy, research, and ethics experts. 


Steve Lucas said...

I view this as mostly hype. A number of years ago I was offered an “Executive” physical and follow up with top flight specialist for a very substantial fee. A similar offer was extended by a major medical center.

Recently it was hinted that for a large donation I would receive “special” treatment at another major medical center. Again it all came down to money, money I do not have, but people are willing to ask.

There are many myths in this world. One is that people who make a lot of money are in control of every aspect of their life. This simply is not true. Mortality is an issue the rich suffer with since it is an area they cannot control.

Conversely, rich risk takers are seen as outliers since they are putting their wealth at risk by their actions. I was shocked by the comments after the tragic death of John Kennedy Jr. about how he could be allowed to fly. This was his choice.

My reality here is this guy is selling a service to a very small, very wealthy group of people who are not good at dealing with the medical community. The doctors involved are doing this for economic reasons and the institutions involved are looking for donations.

Like the oldest profession; if you got the money, I got the time.

Steve Lucas

Afraid said...

Um, there is a separate banking system, transportation system, police and security system, and personal service, excercise, nutrition etc. system for the ulta-wealthy.

Has been and always will be. They can pay so they get a different level of service. Nothing inherently wrong with that.

What I do see as unattainable is that regular folks could expect to get the same level of service or care. We should expect a two level healthcare system just like there are varying levels of all sorts of things.

Not everyone gets a Mercedes, some of us can not afford one. Not everyone gets personal diet planning or body guards etc.

It is what it is and many get motivation to achieve so that they can get the things they want, again, nothing inherently wrong with that ...

What is wrong with the system is that we the people are spat upon by our government as unimportant when in that one particular way we are all created equal.

So I agree that there are (reasonably) differing levels of care depending on how much one can pay. And I agree that it is wrong for government not to care about the needs of its citizens.

Roy M. Poses MD said...


Note that my post focused on the question of how having the very rich insulated from the standard health care system might affect attempts to really reform that system.

Note also that in theory the very rich are not supposed to be able to buy their way out of all systems. For example, they are supposed to be subject to the same laws as the rest of us. While they may be able to hire private security guards, those guards do not have the same powers as police, and the police are supposed to treat them the same way as they treat others. Obviously, in the real world, the theory may not hold. But most instances in which it would not hold we might call corruption.

Many physicians would probably still interpret their oaths as requiring them not to treat people based on their wealth or ability to pay. I do not see anything wrong with the very rich being able to buy an upgraded hospital room (flat screen TV, nice furniture, better good), but I am troubled that they could buy what they may think is better care. (Whether it really is better is another question.)

Business Administration Chicago said...

In every field people will get services depending upon the amount they pay for it. Different levels of services are meant for different people, its common and i feel nothing wrong about it.

Roy M. Poses MD said...

Business Administration Chicago,

You seem to assume that all services are equivalent. There are some important aspects to health care services that are not typical of many other services.

- Patients often cannot make decisions about health care using "cold cognition." It is hard to be unemotional even about elective treatments (like cancer screening.) It is nearly impossible to coldly and dispassionately make decisions when one is acutely ill.
- Patients often do not have clear information about the outcomes of health care decisions, because they are complex and difficult to understand, and because sometimes the information is unknown. Note that health care professionals may have better information or better understanding of the information that exists, hence there is information assymmetry.
- Prices in the current health care system are often obscure.

A long time ago, Kenneth Arrow, whose work now seems to be largely forgotten, made an argument based on some such considerations that health care could never be an ideal market. See:

One way to compensate for the inherent problems with the health care market is to have care provided by professionals who swear to put the interests of each individual patient first, and to have care provided in the setting of mission-oriented community non-profit organizations (which is how hospitals used to be described).

Of course, market fundamentalists have argued against the professional/ community mission-oriented non-profit model, and it is now largely falling apart.

Yet, pretending that health care is an ideal free market, and distributing services entirely based on price could lead to some very bad outcomes for human beings. Would you feel that there is nothing wrong with that?

Let's try an anecdote. Suppose one of your friends or relatives loses a job and health benefits, and then comes down with a serious chronic disease. Would you feel there is nothing wrong with him or her getting inadequate care, and then suffering horrible effects of the disease or dying prematurely - just because he or she lost his job and became temporarily unable to pay the "market" price for these services?

Afraid said...

I diagree Roy, they should be able to buy what they believe is better healthcare.

Frankly I think that part of the problem is that all folks believe that they should get the same benefit. It is bankrupting America to try and treat everyone as if they were rich folks who can pay for anything.

What if there was a basic level of care for everyone and then folks who have the means can get more.

Is that so wrong?

I mean I guess that the question will be well how much care is the basic level of care -- I'd say leave that to the doctors and patients. Fund public hospitals and let the doctors figure out how to allocate resources.

Roy M. Poses MD said...


I have no problem with people being able to buy better amenities or "frills" in conjunction with health care, e.g., nicer hospital rooms, gourmet hospital food, etc.

After that it gets complicated. As I noted above, it would make sense for people to make individual purchasing decisions for their health care needs were health care to be an ideal market. It is far from that.

To account for health care market failure, a traditional solution was for physicians, professionally dedicated to putting the needs of each patient ahead of all other concerns, to help patients make such decisions. Physicians who really believe in their oathes might have problems with either letting rich people submit to health care interventions the rich people believe to be worthwhile, but which do not have benefits shown to outweigh harms; or with not informing poor people of expensive interventions whose benefits clearly outweigh their harms.