High Stakes

Calling the Shots: Six Healthcare Insights from Dr. Mike Schatzlein

Dr. Mike Schatzlein

In the healthcare game, Dr. Michael Schatzlein is one of those rare professionals who can play almost any position. As an industry thought leader, he brings a particularly unique perspective, having spent his four-decade career as both a cardiothoracic surgeon and senior administrator with leading healthcare organizations across the nonprofit and investor-owned sectors.

Now principal at The Schatzlein Solutions Group, he is a trusted advisor to investors and healthcare companies on acquisitions, population health, joint ventures, interoperability and process improvement. His innovative and frank thinking on healthcare has been shaped by his time as a senior leader at healthcare organizations including Ascension Healthcare, where he served as a health system CEO and oversaw regional health ministries; the Center for Medical Interoperability of which he is chairman; and MissionPoint Health Partners of Tennessee, one of the state’s first Accountable Care Organizations.

We sat down with him recently and are happy to share some of his observations:

  1. The sky is always falling, but it rarely does. Healthcare is rife with uncertainty; there are no two ways about it. But there’s also a propensity within the industry for unnecessary handwringing. In part, due to the collective inefficiency of the industry, there has historically always been fat to trim — which has a stabilizing effect on margins, regardless of reimbursement rates. That’s not to say there aren’t major, needed changes on the horizon. But the sky isn’t in danger of falling.
  2. Part of why our system is so challenged is that it was never designed as a “system”. The view that the American healthcare system is broken mistakenly assumes that there is a “system” to malfunction. As healthcare in America has grown, its disjointed nature has given rise to many of the foundational problems it faces today. Issues of, say, interoperability are born of the absence of a system. Increasing systemization moves American healthcare in a positive direction.
  3. A pure retail market for healthcare won’t work for anyone other than the very young. Amid all the talk of shopping for care, it’s easy to forget that many consumers know precious little about which care protocol is best. A pure retail model breaks down for patients as soon as they develop their first chronic condition. Americans tend to want the biggest and best care – and they want it now. Faced with a choice of complete symptom relief by taking an inexpensive pill for the rest of their life or surgery with a two percent probability of death, many Americans will opt for the surgery.
  4. We have normalized the over-utilization of healthcare through advertising, etc. Case in point: Medications designed to treat opioid-induced constipation. Amid an ongoing crisis of opioid abuse and over-prescription, are ubiquitous television ads for medications to ease the ill effects of long-term dependence.
  5. Going forward, hospitals and health systems need to move toward being responsible for populations. That means managing care across the continuum. Addressing issues before they become complex and expensive is the best way to drive down costs while also increasing quality.
  6. Medicaid expansion won’t drive healthier populations, but it’s a necessary step for scale. By growing the population base through Medicaid expansion, states will be better able to leverage block grants to address the population health and costs within their own communities.