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Sept. 7, 2018 - Real Coffe - Scott Adams
56:13
Episode 210 Scott Adams: Talking to Dr. Shiva About How to Lower Healthcare Costs
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As soon as we hit a thousand, which is going to be in about 30 seconds, we're going to enjoy this simultaneous sip.
And then we're going to hear from Dr.
Shiva some ideas on lowering health care costs.
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Grab your glass, your mug, get ready.
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Alright, I'd like to introduce Dr.
Shiva. Most of you have already seen our first program, but we're going to do a little deeper dive into healthcare and healthcare costs.
Dr. Jeeva, you are running against Elizabeth Warren for the Senate in Massachusetts, correct?
Yes, I am, Scott. In fact, you know, we're already on the ballot.
Scott, we're running as independents.
And then the establishment, Republican Democratic parties, had their primaries on September 4th.
And what's interesting is, Scott, literally on the midnight of the primaries, Elizabeth Warren said that she was agreeing to have three debates.
But guess what? With the Republican, and I'm completely excluded from the debate.
So we're, a few people have seen on Twitter, we're about to sue the University of Massachusetts, which is a government-funded public institution, which colluded with warrant to allow this to occur.
We're not going to let them get away with it.
Because obviously, if I'm on the debate stage, Scott, no...
You know, hyperbole, I know I would give Elizabeth Warren a run for her money and be able to expose her on many, many levels, particularly on health care and how she's colluded with big pharma, big hospitals, big research to actually keep the cost of health care high.
Well, I for one would not want to be on the debate stage with you as my opponent.
Now, if you can do this as modestly as possible, because I think it's important for context to just list your academic Because when we start talking about healthcare, people are going to say, well, what do you know about things?
And this will help give us some context.
Could you just list just your degrees?
Sure. My degrees, Scott, are from MIT. My undergraduate degree is in electrical engineering and computer science.
My graduate degrees, which I have two degrees, Applied Mechanics from the Department of Mechanical Engineering, and another is actually in Architecture and Design out of the MIT Media Lab.
And my fourth degree, which is my PhD, is in the field of health in what's called Biological Engineering, or Systems Biology.
Alright, so I talk about talent stack all the time, and how if you combine the right set of talents, you can get something special.
And you've combined Not only the engineering way of thinking, what you might call a systems way of thinking, a very rigorous way of analyzing problems and solutions, with a pretty vast knowledge of the healthcare situation.
Would that be fair to say?
Yeah, I mean, I've had a deep interest in healthcare, Scott, since I grew up in India as a kid.
India has the Western system of healthcare, but it also has the traditional Eastern system of healthcare, which my grandmother actually practiced.
In a small village, and I saw her empirically heal lots of people.
So I was very, very interested in healthcare as a child.
When I came to the United States in 1970, by the time I was 14, I was doing medical research in what is now known as Rutgers Medical School.
And when I came to MIT, my entire search was actually to really look at the healthcare situation from a systems approach.
And only in 2003 did I have the opportunity to come back to MIT and do my PhD Alright, so before we get into it, just note how important this is.
Normally when you're talking about healthcare, you're talking to or you're listening to just a politician or maybe just a doctor.
Rarely are you going to get this many skills in the same person.
So you should pay attention to what Dr.
Shiva has to tell us today.
So jump right in.
Tell us what's broken about healthcare or what you plan What would be your ideal solution?
How can we get to a better situation?
Yeah, I think, Scott, where I want to start with is really help the viewers and your audience understand how do you actually look at healthcare.
You know, we call it the healthcare system.
You know, in the modern world right now, we have to recognize that the problems we have are very, very complex problems.
And I want to take about a few minutes Of course, in systems thinking at MIT, literally in about less than a minute.
I think I've figured out a way to do that.
But the point is, we need to be systems thinkers.
We can't be like the story of the king who brings six blind men to look at the elephant, and each person touches the parts of the elephant and has a very, very erroneous view of what they're looking at.
So one guy touches a tusk and thinks it's a spear.
Another guy touches a tail and thinks it's a brush.
But that's how politicians and lawyer lobbyists want us to look at the healthcare system.
They just want us to look at the parts of what is convenient for them at that point and then direct us to, frankly, quote-unquote solutions which really don't get us anywhere.
And that's the situation we're in.
So let's just take the viewers through what is systems thinking.
And the simple way to think about it is that a system is bigger than the sum of its parts, but more importantly, it's the interconnections of systems, or the parts of a system, where you actually can find the truth.
So let me just give you a really, really simple example.
So if you look at these, example of these five little balls here that I've drawn, and we're doing it in a very organic way, these five balls can be connected in very, very different ways, right?
We can connect them like this, You know, each ball has at least one connection or two, or we can connect them like this, right?
Where each ball has two or three connections, or we can connect them like this.
And so bottom line is you end up with very, very different systems based on how these parts are connected.
I'll give you a simple example in the healthcare field where things really changed a lot was in 2003.
Since 1950, We thought that what made a human being complex versus a small worm was a number of parts called the genes.
So in the mid-1990s, when we started doing the Human Genome Project, we thought a human being had about a half a million genes or parts, and a worm we knew only had 20,000 genes.
The irony of this whole thing, Scott, is we have only 20,000 genes.
We have the same number of genes as a worm.
That's what's fascinating. I sometimes feel that way.
Go on. It's not the number of genes.
It's the fact that genes interact with other chemicals called proteins.
And in a human being, they interact in much more complex ways as that complex diagram I showed you versus in a worm.
So complexity of systems, bottom line, is a function of the interconnections.
And that's where truth emerges from understanding the interconnections.
So there, everyone's learned systems theory.
In one minute.
So that's a system's way of looking at the world.
We start looking at how things are connected.
Now, the other piece of this is a simple way to think about this also is how do we create a system to solve a problem?
Well, first of all, you have to have a goal.
You have to look at what properties you want in that system, and that determines the system that you get.
So we have to start with what the problem is.
So let's just take a big view at what the cost is.
Here's a diagram, and we didn't do it in PowerPoint here, but if you can see this, the cost of healthcare was about $1.2 trillion.
That's how much we were spending as the United States in 2000.
It jumped to around $2.6 trillion in 2011.
We're at about $3.3 trillion now.
And in 2040, it's expected that one out of three dollars we spent We'll be for healthcare spending.
One out of three dollars.
And today that 3.3 trillion dollars roughly is 17.8 or 18 percent of GDP. GDP is 20 trillion dollars.
So 18 percent of that is what we spend on healthcare.
Now when we talk about healthcare costs, it's not just Medicare and Medicaid.
That's just one piece A person here, you know, in the full scale, a person may be being serviced by Medicaid.
If they're, you know, destitute, have, you know, economic issues.
Medicare is a get older, out of pocket, and they may also have supplementary insurance.
So there's four different sources of spending in health care.
You and I talked earlier, if you remember, Scott, you said, hey, isn't the cost of health care, remember, end of life?
Remember that? Can you ask me?
Right. And I thought, so what happens is politicians have always said, okay, we've got to control the cost of healthcare.
Let's go after that thing that's really high cost and bring that down and then we've solved the area of healthcare.
This has been the lawyer lobbyist politician thinking.
So, you know, I do a lot of, I probably read probably 20, 30 medical papers every day, Scott.
In 2011 there was probably the best research done I'm really looking at the cost of end-of-life care.
The politicians have been promoting end-of-life care is the biggest thing.
We've got to control that, right?
We've all heard this. Well, it's sort of hard to see this diagram, but I think you can see part of it.
Well, we have about 300 million people in the United States, and it turns out that 18 million people, let's say 20 million roughly, about 18 million people are, on an annual basis, It's where the highest cost of healthcare goes, and nearly $1 trillion goes into that.
So if you take the $2.6 trillion that was spent in 2011, the $2.6 trillion, $1.7 trillion was for personal healthcare costs.
We take out all the stuff in healthcare programs, public health, but $1.7 trillion was the actual amount spent in actual personal healthcare costs.
$1 trillion was for these very High costly people were spending $20,000 per year, okay?
So when we say high cost, 5% of the public, 18 million people, were really consuming 60% of that cost.
And if you break that down in the circle, you find that only 2 million people are the end of life, Scott, which is about 10%.
50%, which is really 9 million people, were catastrophic events that took place in a year.
Sudden heart attack, right?
Or sudden kidney disease.
And then 40% were chronic.
So only 10% of that 18 million, which is 2 million people, were the people who had end of life.
You know, someone has one year left to live, and that's what they're doing.
So is the bottom line of that, that everything we're hearing about all the costs being an end of life, is deeply exaggerated?
Deeply exaggerated, and again it's based on the blind men touching the parts of the elephant, And people like to divert the issues to a problem where they say, this is where the high costs of healthcare are.
And by the way, end of life is where it's not prevention, it's not about wellness, it's about specialization, right?
When someone's at that end of life, they may be seeing 10 or 20 specialists.
They're probably on, the average by the way, 82 year old in the United States is on 12 different drugs.
12 different drugs.
Wow.
Okay?
So you're looking at a very small piece which are the high cost, lots of drugs, lots of specialization.
Now, what's interesting, this diagram is the 50% of people, the 9 million people among the people spending a lot in that year, those are people who, let's say, got a heart attack.
But what's fascinating is, in one year, they're able to rebound if they get on good health programs, change diets, etc., and actually go back to reducing costs into the lower percentile very, very quickly, Scott.
So I wanted to share with people that it's a very small set of people at this high cost, but the majority of that high cost people are chronic and catastrophic, much of which can be addressed through prevention.
I'll get back to that. The other thing is, you know, let's talk about innovation.
Again, the problem is, here's a very good graph that really talks about the fact how non-innovative this whole system is.
Year over year, you can see in this graph, We spend 30% every year in increased funding for pharmaceutical, drug development, etc.
But what you can actually see is a graph coming down.
We are finding less and less new discoveries.
In fact, every year, year over year, the FDA is not allowing or approving new drugs, which means we're spending a lot more on drug development and we're not discovering a lot of new drugs.
Okay? It's a broken system of innovation.
Now, is there anything to the fact that maybe the easy stuff you find first and then it's just harder to find new things?
Yeah, yeah. So it's a good question.
So, you know, one of the companies that I do right now is called Cytosol.
We're focused on drug development.
The way drug development works in the modern Western world is it's about a single synthetic compound.
We have about a library of around 30,000 synthetic compounds.
These are compounds that don't occur in nature.
And the way they do it is test it in a test tube.
You know, it takes two, three years for some disease.
If it works and you go kill a bunch of animals, that period is called preclinical work.
That takes around six years, Scott.
Then you have to file an allowance or an approval by the FDA to do clinical trials.
That takes another nine years, phase one, phase two, phase three.
and only 20 percent of the drugs going to phase one make it up.
Bottom line is five billion dollars to create a single drug and a lot of the stuff that comes out has a lot of side effects and to your point it's because you're looking at a synthetic single compound now the big area of research people are saying is we need to be able to combine compounds which is called combination therapy or cocktails but the current system of innovation cannot handle combinations if you did Two combinations of drugs,
or three or four, imagine the amount of test tube trials you'd have to do, and the amount of animals you'd have to kill, right?
It's a factorial problem.
So the modern system of drug discovery was designed for something about a hundred years ago.
It cannot handle combination therapy, so therefore they're stuck.
The other interesting problem is, again, these are just very interesting facts, is that how well is our care doing even When we're delivering care, well, the third leading cause of death is medical errors.
Okay? Number one being, you know, obviously people that have heart disease, second cancer, but the third is you go into a hospital and be careful what happens to you in that hospital.
You know, people have written books about this, but the reality is the hospital environment Because of big hospitals, the kind of care, the kind of mistakes that can occur is quite significant.
It's not something to be taken lightly.
The other aspect of the cost, this is a very interesting one, in the ER, a $30, you can go to the ER and you will pay $30 for one pill, aspirin.
$30 for one pill, which you can get at CVS for $5 for a bottle.
Now, the example I'm sharing here is, it seems pretty outrageous, but you can extrapolate this to, in a hospital, every supply that's coming to a hospital from the stapler, To catheters, to saline bags, the amount of 2x to 200x that they're being marked up is outrageous.
This is one example.
But is all that's happening is that the hospital is just spreading their overhead across all their costs and it wouldn't matter how they got their money, whether they overcharge you for the pill or overcharge you for the doctor, they still need to make the same amount of money to hit their profit goal, right? It's unprofitable.
Remember what quote-unquote Obamacare or Affordable Health Act did was it let insurance companies, remember they charged 15% above cost.
This is where it gets interesting.
So the goal was to bring the cost very high because you get 15%.
It's basically giving people easy money.
But to my question, even if you said we're going to pass a law and you have to give away all your pills for free, So the ER couldn't overcharge.
They would just move that charge to something else, wouldn't they?
That's one thing, Scott.
The other interesting thing is, irrespective of that, one of the important things to bring up is that is very rarely talked about in the media.
I think Trump was the first one, and his FDA guy brought this out, is what are called GPOs and PBMs, and I want to talk a little bit about that.
This is something I've learned recently.
In the 1970s, a In the 90s,
Two laws were passed that allowed GPOs, they started flipping it because now they were the central control in the supply chain for hospitals.
They flipped it where GPOs were controlling so much of the supply of hospital supplies as well as drugs into these hospitals, they artificially started cranking up the costs.
And those costs today add another half a trillion, Scott, to the cost, irrespective of the administrators.
So what a GPO does, they actually don't do anything.
They don't create anything.
They don't produce anything.
They don't, in fact, distribute anything.
They actually write the contracts between the supplier, a drug manufacturer, the catheter supplier, and a series of distributors by the time it gets to the hospital and similarly to the pharmacies.
These GPOs now, also in the 1990s, were allowed to get and give kickbacks.
So hospital administrators, for example, get seven-star hotel stays.
Seriously, okay? They get all sorts of perks, which they call, by the way, rebates, which is a code word for kickbacks.
So what we've done is the supply chain is owned and maintained by GPOs and PBMs.
So let me just summarize what I think I heard there.
So you had a bunch of hospitals and you had a bunch of suppliers of parts and products that hospitals use.
And the hospital said, hey, let's have a middleman that'll help us get bulk purchases and it'll be good for hospitals.
But the middleman became so powerful that the middleman just started taking huge profits and could control both the hospital buyers through kickbacks.
And write all the contracts and have exclusives probably with some of the suppliers until the solution, which was the middleman, became the problem.
Is that true? Exactly. I think you said it beautifully.
And I think the other part of that, Scott, was, remember generic drugs?
Remember, if you take drug prices, let's say I created a drug, I have a 20-year patent on it, Well, the goal was after 20 years, the cost of that drug should go considerably lower because many people could manufacture that drug at generic.
When GPOs got involved, let's say there were five manufacturers of that generic drug.
Well, in order to get that drug to the end user, be it through the hospital, which is inpatient, or through the pharmacy, outpatient, GPOs and PBMs wrote those exclusive contracts.
So one guy, one supplier, got access to that entire supply chain, which means they could crank up the cost of a $2, $3 generic, sometimes to $20,000, $30,000, literally.
So now that we know somewhat about the landscape of costs, what would be the approach to go after them?
What's the biggest lever?
Yeah, so great.
Little things I just want to share with you guys just to alert people.
The infant mortality rate, women's maternal mortality rate in the United States is the highest among all developed nations.
26 out of 100,000.
The others in the developed world is 8.4, okay?
So it's not like we're getting great care for women.
There's got to be something else behind that number, though.
There is. I just want to share, and also on the infant mortality rate in the United States, it's at 6 out of 1,000, others is 3.6.
So I wanted to share that, you know, on a broad level.
We could discuss, we could go into the details of a statistic like that and others, but the point is that it's not like with all this money we're spending, the $3.3 trillion, 18% of GDP, We're getting some amazing type of healthcare, right?
It's not like we're getting... So, to your point, how do we look at a system and how do we make it better, right?
Well, going back to basic systems theory, what are the properties of a system?
So here are some interesting properties we want to look at.
Well, obviously, cost.
We want... In an ideal system, we want low cost.
We want a lot of innovation taking place.
We want... A lot of responsive care.
We want great care. When you go visit a doctor, you want to feel like the person's really taking care of you.
We don't want care to always be crisis or specialized.
And the other piece is we want to focus on prevention where possible.
So if you look at it today, if you look at the middle part here, most of the care we have today is centralized.
And I will talk about this.
It's big hospitals, big pharma.
And what we have is we have high cost of healthcare, reduced innovation, lower responsive care, reduced increase.
We spend a lot of money on specialty and very little on prevention.
And where we really want to go is here, Scott.
We really want to lower the cost of healthcare.
We want to see more innovation.
We want to see more doctor-patient opportunity.
Right now, a doctor can only spend 5 to 15 minutes with a patient because of all the healthcare constraints.
We want to have less on crisis and more on prevention.
So how do we get there? There are other properties we can think about, but I would argue these are probably the most important ones.
So I think most people would agree with those objectives.
What do we do about it?
Yeah, so right now, this is how the system, when we talk about the system as a connection of the parts, if you're a patient, to get access to the doctor, to get access to medicines, or by the way, food, we don't talk about great food, right?
We have all this huge layering of middlemen, insurance companies, PBMs, GPOs, We've created all these middlemen, and I think what people really want is this, okay?
And new technology allows us to do that.
Patients should be directly able to go to a doctor.
Patients should be directly able to get medicine from the manufacturers.
And by the way, I include food in this, which people may not, but I think the idea of direct local is what people really want to go.
And if you can do a system like this, very different interconnected system, Versus this one, you can significantly lower the cost.
Because this middle layer...
Well, hold on. Just getting back to your earlier point.
The chart you showed where people could get direct access to a doctor without the middleman isn't going to help them for the crisis things, the end-of-life things, the big thing.
Yeah. So the important point is, you make a really...
Right now...
The entire basis of the conventional medical model is always focused on crisis and specialization.
What that means is, when you go to see a doctor, the incentive here is always to send you to a specialist.
If you have a headache, you may end up seeing three or four specialists, Scott.
A neurologist, an endocrinologist, a psychiatrist, etc.
But don't you need them?
Well, here's the interesting thing.
There's a huge movement right now, a growing movement, called Direct You know, direct pay to a doctor where people are saying 80% of the things that you have, you don't need to go to a hospital, can be handled by the primary care physician.
The 20% is the specialty stuff.
Okay, so when we looked at the high cost people, you know, obviously if you get a heart attack, you need to go, right?
You get into an awful accident, right?
You do need that very specialized care.
But the majority of healthcare You know, the 80% can be handled by the primary care physician.
So we have evidence that would suggest that there are people seeing specialists when the primary care doctor would have handled it easily.
Yeah, and I think, you know, it's a longer discussion, but to put it simply, you know, if you trace back the history of our modern Western medical care system, it goes back to the 1800s, and there's a great piece of work that Florence Nightingale did.
By the way, she wasn't just a nurse.
She was a member of the Royal Society of Statistics.
Florence Nightingale was one of the great big data visualization people.
She did a beautiful piece of data visualization in the 1800s, looking at the Crimean War, and she saw that soldiers were not dying from being shot, Scott, but they were dying when they came to the hospitals, because the hospitals in those days were where people went to die.
So she had The vision of creating the modern healthcare system, which is fundamentally a specialization to put the soldier back on the field.
So philosophically, our conventional modern healthcare system really came out of wartime medicine.
Okay, someone gets hit, I've got to get them back on the field, antibiotics, steroids, surgery.
It wasn't based on prevention, by and large.
So... Yeah, okay.
So I think I'm watching some of the comments coming in from the folks, and they're hungry for specific solutions.
So I think they have a good sense of the background.
And one of my questions is, let's say if we change things so that people started going directly to doctors, cut out the middleman.
A lot of those middlemen are hospitals and such.
Wouldn't those hospitals either have to stop operating because they would lose so much income, but isn't there a secondary effect where if you suck a bunch of money into one part of the system, that part of the system gets smaller and less accessible?
And it might be hospitals, it might be pharmaceutical companies making drugs, etc.
Can we be sure that the economics won't have an unintended consequence?
Yes, so let's talk I said there's this movement now among a set of primary care physicians, which is you do direct pay.
We're not talking about concierge service only for the wealthy, where you pay a doctor 75 bucks a month.
In fact, when we had our town hall, we had a great doctor called Jeff Gold who talked about who's a direct pay physician.
He doesn't take insurance.
It's direct pay. You pay 50 to 75 dollars a month and he completely takes care of you.
You can call him You can Skype to him, email him, chat to him, whatever you need.
That movement is basically saying that 80% of the things that a patient needs can be done by a doctor.
And he gave many, many, many examples of this, Scott.
And this is not something that takes away from anyone to actually enhance his health care.
So the direct pay model is one thing that I'm very, very supportive of and is actually a solution for this.
If you look at this here, this is really why the costs are high.
Right? We have this collusion between big insurance, big pharma, and big hospitals to keep costs high.
So the solution that I see emerging is that you have a direct relationship with your doctor.
You know, today I pay about $800 a month for insurance.
I don't even use most of it, knock on wood.
In the old days, I used to just pay $15, $20 when I saw my doctor.
You know, I used to be right down the street a primary care physician.
But in the modern model, I have a copay plus I have a deductible, and I'm also shelling out $800 a month.
A new model looks like this.
You have your direct pay where we as citizens make good choices to find good primary care physicians for that 80%, and then you have a catastrophic insurance as reinsurance where you pay a certain amount for those catastrophic situations, and it's nowhere $800 a month.
Some of the estimates say that can be as low as around $100 to $120 a month.
So that fee is used when you want to handle those catastrophic situations.
That's sort of what it looks at the individual level.
But separate from that, Scott, we actually need to lower the cost because irrespective of how much we're paying, the costs are frankly too high.
Hold on. Let's pause.
So if we were to go to the model you're suggesting, which is everybody has a direct pay doctor, say $75 a month, and let's say they've got $120 a month on top of that of catastrophic insurance, which would cover everything else, so they're somewhere in the under $300 for what might have cost $800?
Is that fair? Exactly.
And right now we're heading to the average person spending about $10,000 per year per person.
That's where we're at right now. Okay.
So just so the audience gets a sense of the magnitude of that, this is just one suggestion that could take your healthcare from $800 a month down to $300 a month.
And that we haven't even talked about lowering costs beyond that.
So go ahead. Right.
So that's just what you would pay.
We haven't talked about the fundamental issue of lowering costs.
And so part of it is this collusion, what I call this cost collusion, needs to be busted up.
Elizabeth Warren knows about GPOs and PBMs, which are the middlemen, as we talked about, which control this entire collusion between big insurance, big pharma, and big hospitals.
By the way, Scott, as an aside, there are only three GPOs in the United States.
It's a monopoly. And the biggest interesting thing is these three GPOs...
This year or next year we'll be merging with the three biggest insurance companies.
So, this collusion will become so institutionalized.
Elizabeth Warren knows about this.
Elizabeth Warren is actually okay with GPOs getting kickbacks.
This is something we're going to bring up, and in fact probably both political parties are.
It's one of those subjects that no one wants to talk about.
Trump was the first guy to bring this out to the public.
Can I make a suggestion?
Yeah. The average person is overwhelmed by this kind of discussion.
Most of the people on this periscope can hang with you because it's a smarter group.
But if you're trying to convince people, I think you're going to have to start with the outcome, which is, hey, I think I can take your insurance from $800 a month down to $300, and then tell them how.
Because they'll hear the first part, and they'll say, I like that.
I don't really understand the details, but it looks like you're smart, so you probably do.
So I would start with the answer and then tell them why in terms of...
That's a great idea. So you're saying start with the fact, hey, look, right now you're paying about $10,000 a year.
I can bring that down to $2,000 or $2,500.
Yeah. And then explain why, because even if people's eyes glaze over in the explanation, and that would be most people who can't handle complexity, they can still say, okay, I'd rather pay less.
And he seems to have an idea that makes sense.
I don't see anything wrong with it.
Yeah, great.
And in fact, Scott, in that model of going from 10,000 to 2,000, the philosophy there also is that we as individuals are more involved in our healthcare.
We're not outsourcing probably one of the most important things for our own personal existence to some other centralized entity.
And that's part of the idea of taking our power back.
One more suggestion just came through on...
On the comments and I liked it.
Somebody said talk about the cost in terms of per month because I think we're just a little bit more organized to think about our monthly expenses.
Yeah, so in that model you're looking at $200 a month or less.
So around $200 a month in my case versus $800 a month.
Yeah, that number knocks my socks off.
And then I'm already on your side, and I want to hear what you want to say.
Since I want that to be true, and I want to spend less money, I'm already pre-sold, and then you give me the reasons.
Great. Okay, we'll do that.
Well, we're sort of riffing here on this, and I think the idea is to refine the communication of people to get it better, so I appreciate we're doing this, and the audience feedback.
I want to move also to the cost of innovation.
We talk about innovation, innovation, innovation.
The reason I put this triangle up is, again, we have a pretty smart audience out there, but I want to show also the innovation collusion that takes place in the United States.
This is something I'm privy to because I've applied for grants through MIT, been an innovator in the medical world, but there's a very, very seething and deep collusion between the NIH The National Institute of Health, by the way, which is the one that funds billions of dollars in scientific research, the big universities, Yale, Harvard, MIT, you know, the big guys, Stanford, and what I call peer-reviewed journals.
All right? By the way, peer-reviewed journals are so, Scott, if you're And I are researchers at an institution, and we're both competing to become a tenured professor.
Our future is determined by how many papers we publish in these peer-reviewed journals, and how many people said we did great work, and how much funding we got from the NIH. So that's what a researcher in big medical hospitals or big medical universities in Senate.
Get funding, publish, publish, publish, because that determines your Presence as an academic.
So that's what they define as innovation.
Now what's interesting is, to get an NIH grant, it's become highly non-innovative.
It's all based on this click, which makes a decision.
So the NIH grant fund, people who make the scores when you apply for an NIH grant, are the same people who sit on the journal review boards, or the editors, and the same people who run the major universities.
70% of the NIH funding flows back to the big, big universities.
And so there's a big discussion in medical research saying we're not really doing a lot of innovation because most of the money, most of the ideas, and most of the science is controlled by a very small click.
And one of my views is that the NIH funding system needs to really be explored.
We need to also look at what we call peer-reviewed journals.
Einstein, by the way, never published one journal, one paper in a peer review journal.
He thought the whole concept of peer review was a way of choking scientific innovation.
Well, if we can be fair, Einstein didn't really have a peer.
Well, here's the point Einstein was making.
He said, when you do innovative work, your peers are the first ones who are going to be against the innovative work.
Correct. So he made a central point.
It was around the 70s where we started really pushing peer review to really control scientific discourse and his model was if it's publicly funded, publish it and let the public decide.
Let the public discourse take place.
Well, but the public can't tell the difference.
Well, the public meaning the broad mass of researchers except a finite set of people Who control the peer review boards.
There's a lot of smart people who may be at a small state university somewhere, who may write a very important research paper, but that research paper may never get cited because of the few who control, let's say, the narrative on how Alzheimer's takes place.
How does Alzheimer's occur?
Well, there's actually, it's not just one scientific truth, there's various approaches.
And if you're the head of one journal and you're the 800-pound gorilla, you're very, very, very fearful that a new theory may come which may oust you, Scott, because that determines the funding that you get, which graduate students you get.
So that whole model of innovation is a very medieval, feudal model on how we innovate.
So is the answer to go to more of a public, anybody can publish and let the public weigh in?
Right. So there's open source publishing.
There's also the concept that the NIH, you know, not all 70%, 80% of the funding should go to big universities, that it should be much more dispersive on where that funding goes.
There's a lot of innovative research.
In fact, when you apply for an NIH grad school, The first thing that you have to show is, have you already done this before?
Okay? It's called Specific Aim 1.
So you're already submitting for a research grant which is truly not innovative, so they don't really support really new, uncertain research.
It's already pre-rigged research.
So the innovation that they allow is the innovation that's just like the thing you did before.
Exactly.
In fact, so when you apply for an NIH grant, you have to submit what are called, let's say, three specific aims.
Specific aim one, two, and three.
And specific aim one, you already submit preliminary data to show that you're going to already achieve specific aim one.
So it's a non-innovative system.
So what I've heard so far, this conversation and then the earlier one, I don't see anything that couldn't be run as a parallel process or something that you would do in one state or one location.
Every bit of this doesn't require changing anything.
It just requires having just a new thing and let the new thing live on its own.
So I agree with you, Scott.
So I think just to reiterate what you said is The government model of trying to modulate this and regulate this, which is what they've been doing, if anything, it has actually concentrated more power and it is actually supporting the growth of this collusion, right? That's what it's really doing.
So that's what's happening, Scott.
Doctors are getting together in consortiums.
They're saying, let's do direct pay.
You have innovators coming.
I know the app that you built, for example, which lets people go direct is an interesting example.
That's an enabling application where I, as a doctor, can use that application to come up with a way that I can offer direct service.
So that's where I see the real innovation coming.
What we don't want to see happen in So given all the things we've talked about so far, is there anything that government even needs to do?
Because I haven't even seen a role for government yet.
Well, I'll give you one thing that government can do.
It's in this diagram.
So today, you know, we have about 972,000 doctors in the United States.
If you're a doctor, you typically, you're in this ecosystem of a big, you have to go to a big university or a university.
You have to go to a medical school and you have to get your specialization training in a hospital.
The average doctor goes through four years of university training, four years of medical school, and two to four years of some specialization.
One of my solutions is we should eliminate the need to go to four years of university.
Why am I saying that?
We don't produce enough primary care physicians in the United States.
Primary care physician is two to three times that of other equal developing nations in the world.
So we need to lower the cost and we need to have more primary care physicians doing local, smaller practices than going to hospitals.
So my sister, for example, went to Harvard Medical School, right?
Four years undergraduate, another four years medical school, and then two to four years specialization.
And she says, Shiva, I can't, the amount of regulations I have It basically incensed me to go and join a big hospital, and they're also having a massive debt burden.
So a simple solution here, Scott, is why do we have to go from high school?
A number of countries do this.
You go from high school right to medical school.
So who's stopping anybody from having the solution that you're suggesting?
Is there a law, or is it AM or something?
Yeah, so right now...
There are some set of laws and there's some set of incentives, right?
The educational industrial complex really wants to suck people into this concept of you have to do the four-year because the way it's structured before you can go to medical school, you have to pass a series of MCAT exams, right?
Which they force you to get...
Think that you have to do that in the university system, right?
You have to have so many years of organic chemistry, chemistry...
Who is forcing anybody to do anything?
Who is the authority that...
Yeah, so the American Medical Association, the AMA, as you know, is probably one of the strongest lobbies in the world, you know, for that matter, in the United States.
So... And should be, probably, but go ahead.
Yeah, so the AMA... Controls a lot of these processes now there are some programs that have just recently emerged where you can go from high school it's called a six-year program you do two years and then you do your four-year program and I think there are certain things that government can do that can eliminate those barriers for example accreditation of certain you know accreditation is an interesting thing right that accreditation of particular universities particular types of schools And other things like that,
those rules put barriers where we don't allow that to happen in a frictionless way.
So I think it's, to your point, it's not what government can do, it's what government should get out of the way of doing.
So who does accreditation right now for university?
I think it's done at the state level, and if it's federally funded, there's, I think, some other rules involved in that, which So, but there might be some set of rules that the government could just, do you think an executive order could wipe some away or their state rules?
I think so, but I think it's also articulating philosophically why do you need to, in some ways, waste or spend four years of undergraduate education And this is part of, you know, a solution that I think is important is the whole concept of skills-based more vo-tech.
The concept of medicine in many ways is a vocational training as engineering is.
But who would have to change what they're doing in order to get say a six-year accredited medical degree?
Is that the states would have to change some laws?
I think it's state and federal, Scott.
It's state and federal. Okay.
It's probably a variety of things.
It's a variety of things because you get certified as an MD in a particular state.
You take board exams in a particular state.
You can practice in a particular state only.
So it's a combination. So would it be possible, and by the way, we've got just a few more minutes here because I don't like to go over an hour because then the replays are much lower.
Let's finish up. Do you have other specific suggestions?
I think in summary, what I want to say is, the key is, to your earlier feedback, if we can bring down the cost of healthcare from, in my case, $800 a month down to $200, let's say that is what I'm really proposing.
And that solution means people taking control of their own healthcare by doing direct pay with doctors and then having this form of crisis care.
That's sort of the core of the solution.
Around that, and we cannot forget, is actually lowering the cost of healthcare.
And lowering the cost of healthcare is a function of recognizing, putting more emphasis on prevention, I think the incentives we can do,
I think that's what government can do versus getting involved, incentivizing that parallel development process of innovation, startups, which can offer the ability for the patient A couple of quick questions.
If we could lower individual healthcare costs as much as you say, say from 800 a month to 200 or 300 a month, would the system have produced enough excess to cover everybody?
In other words, could you get to something like universal health coverage just through cost reductions without increasing anybody's taxes?
Can you get there? When I do the numbers, Scott, as an innovator, as an engineer, I see we can do both.
Because what I just said also involves unleashing innovation to lower these costs and doing things to eliminate the corruption in the system.
So when you look at the numbers and that multi-tiered process I just proposed, it's not outlandish to think we can do this.
It's just a matter of doing it because if you recognize that there are many, many innovations which can reduce that cost the way that innovation is done, I think both are completely feasible and plausible.
Alright, let me ask you a couple of quick questions that I know people are just going to wonder about.
Legalization or decriminalization of marijuana, yes or no?
I'm a big proponent of medical cannabis, and I'm a big proponent of putting in a lot more research into it.
I mentioned my sister, she's one of the top leading cannabis doctors in the country, and she and I have arguments on this, but I think definitely we should decriminalize it, but we should also put a lot more research on it.
Cannabis is a medicine, and we need to put more emphasis on doing research on it to understand, you know, there's about 80 different cannabinoids, I'm just watching the comments go by and it looks like you picked up some votes.
Well, by the way, in Massachusetts, on, I think, September 14th, 15th, there's the biggest freedom rally.
I'll be speaking at it.
All the people who support cannabis are going to be at it.
So I'll be speaking at it.
In fact, I have two speaking spots at it.
Oh, great. And...
All right.
So I think we hit our big points.
I'm going to look at the comments here and see if we've got any closing comments from people.
Uh... So if anybody has a final question to ask, they're all making comments about marijuana now.
Oh, what do you think of the Bezos-Buffet-JP Morgan Healthcare Initiative?
Do we know enough about that yet?
I don't think we know enough.
I just don't want it to be version 2.0 of GPOs.
You know what I'm saying? It's a much more consolidated version of the GPOs doing what they were doing.
Like if GPO was version 1.0 to screw all of us as middlemen.
My concern is this version 2.0 of doing it in a much more efficient manner.
Bezos is very good at controlling supply chains.
Somebody asked in the comments here, how would we start to get some of this going?
The start would be to put you in the Senate, right?
The thing is we need people like myself who understand that these systems are complex and being able to articulate it as we just started doing on this call.
And I don't think Elizabeth Warren can even come anywhere near articulating this.
But more importantly, Elizabeth Warren actually wants the current centralized system.
She wants more regulation.
She wants less innovation.
Hey Scott, I'm about to run out of battery.
So either I can connect if you just give me two seconds.
Is that alright? Yeah, go ahead and connect.
What's that? Go ahead and connect and I'll make a comment while you're doing that.
So here's my comment about the Senate in general.
Even if, let's say you're in Massachusetts, you're a Massachusetts voter and you're choosing between Elizabeth Warren and Dr.
Shiva here, even if you thought Elizabeth Warren was a better candidate because she matched your social preferences or whatever...
I'm back. It doesn't make sense to have everybody in Senate the same kind of person or two kinds of people.
Traditional Republican, traditional Democrat.
You're going to have to diversify the talent stack within Senate to get anything done.
That's why I'm always so appreciative of Rand Paul, for example.
Because it's so obvious that what he brings to the mix is not what the mix already had.
So even if you agree or disagree with Rand Paul, he's bringing something new all the time.
So what I see in you, Dr.
Shiva, is even if you were running against a candidate that somebody preferred, think about the whole.
You're putting a senator in who's not just taking care of your pork projects in your state or something.
If you want the Senate to work well, you're going to have to inject some new kind of thinking, otherwise you're going to get the same result every time.
And I don't think you've seen more innovative thinking than we just saw here over the last 45 minutes or so.
So we should probably wrap up here in the next 60 seconds.
Is there anything else you'd like to say as a...
Yeah, I just want to, I think what I want to say, Scott, is we're in a world now, in the modern century here, that the problems of the world are not going to be understood or solved by politicians who are essentially, as I've said before, sort of, I want to clarify this, sort of, the convenience store retail checkout clerk, right?
Serving special interests.
And their goal is to stay in office and stay in office and stay in office.
The goals of people who are listening or like myself is actually to solve problems.
And those problems can only be solved when you take this systems approach, a much more deeper approach, and you really tease out what's really done, as we just did in this conversation.
I believe deserve this kind of conversation with their elected officials.
And that's how solutions and truth is going to emerge by having this open discourse in a very prudent way of looking at these interconnections.
So, Shiva for Senate, if people want to go find out more for ourselves.
I'll be putting this up, Scott, and a white paper up shortly.
It's almost done. Up on the website and I'll send a link out to you guys.
Oh, great. Then we'll tweet around and we'll have something to look at.
I'm going to wrap up. Thank you so much.
Thank you. I think people are going to agree this was insanely useful in terms of what I understood before versus what I understand now.
I feel like I made just a huge move forward.
So thank you for that, and I'll stay in touch.
Thank you, Scott. Be well. Thanks to all your audience, too.
All right. Back to us.
I'll probably do another Periscope a little bit later this morning on politics, because I know you love your politics.
But I'm going to sign off for this.
I'll look for your comments on Twitter.
I hope this was as useful to you as I felt like it was to me.
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